Future fit

Simplified processes and faster decision-making

Improved productivity and cost efficiency
Better channel management
Higher accountability and ownership at the grassroots

For stronger customer connect

Magma Fincorp Limited | Annual Report,

2015-16
Inside cover

Inside this report

The Magma Story

Governance Reports
Directors Report
Report of the Directors
on Corporate
Governance
Management
Discussion and
Analysis Report

Assets under
Management (AUM)

8.08%

Financial
Statements
Standalone
Consolidated

Revenue

Profit after tax

NIM growth

18.33%

22.25%

292bps

5-year CAGR

5-year CAGR

5-year period

5-year CAGR
5-year CAGR period (2011-12 to 2015-16)
Page 1

At a time of unusual volatility in the global economic environment, India

stands out as a beacon of hope and opportunity.
The countrys economic growth is among the highest in the world; helped
by a reorientation of government spending towards needed public
infrastructure and empowerment at the grassroots.
At Magma, we realigned our operating model during FY 2015-16 to help
catalyse Indias inclusive growth story.
We simplified our processes, up-skilled the team, consolidated the sales
and collection (0-90 days) team decentralised operations and enhanced
technology engagement at the grassroots.

The result is that today we are reaching out to more customers, faster
turnaround time, better credit decisions, reducing operating cost and cost
of finance; and improving return on assets and equity
Our strategy has made us fleet-footed, flexible and future fit to attract,
service and retain a large customer base for the long term.
Page 2-5

Magma on the Move

Magma Fincorp has emerged as one of Indias leading and preferred financial
services companies. Our focus has been to provide affordable credit to the
millions of under-banked and under serviced population residing in the Rurban
India, providing equality of opportunity to the disenfranchised.
We built(build) our business through the quality of our people the excellent
service that they provide and their strong relationships that is forged with our
customers.
Ever since inception, our focus has been to fulfil the dreams of millions of first-time
entrepreneurs, catalyzing local economies and helping the nation grow. We are
constantly enriching our repertoire of bespoke financial solutions.

Vision
To become Indias largest retail asset finance company

Mission
Continue service excellence in retail financing to bring happiness and prosperity to all

Values
Openness and transparency: We will foster honesty and frankness in all our dealings and
be clearly discernable with 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.

Products portfolio
First Time
Buyers
FINANCI
NG

Commercial
Finance

CUSTOMER SEGMENTS
Self
Small &
Employed
Medium
Non
Entrepreneur
Professionals
s
*
*

Limited
banking /
credit history
*

SOLUTIO
NS

Agri Finance
SME Finance
Mortgage
Finance
General
Insurance

*
*

*
*

Pan-India presence
We are headquartered in Kolkata (India) with an extensive network comprising 252 234
branches across 20 21 states and one union territoryterritories.
We operate through a hub-and-spoke model with wide coverage leading to
presence in point of sales, enabling sourcing from 1,900 talukas and 2,900
locations.
We have a state-of-the-art toll free inbound/outbound customer delivery centre for
customer servicing and cross-selling.

Region-wise distribution of
branch network

Rural-urban break-up of branch

network

North 26%
Rural - 35%
West 26%
Semi-Rural Urban 44%
South 25%
Urban - 21%
East 23%
As on 31 March 2016 [Pie chart representation with above data]

Business partners

We are a preferred financing partner for over 25 leading automotive OEMs like Eicher
Motors, Tata Motors, Honda, Mahindra & Mahindra, JCB, Volvo, TAFE, Maruti, John
Deere, Caterpillar and Escorts among others.

Trust among borrowers

We have a diversified liability profile comprising bank lines (22 25 banks), capital
markets and securitization transactions. Our evenly spread profile across all three
funding channels allows us to balance channel-wise exposure.

Listing information

We are listed on the National Stock Exchange (NSE Ticker: MAGMA) and the Bombay
Stock Exchange (BSE Ticker: 524000).

Rs. 19,607 Rs. 7,180

crore
crore

Rs. 18,183
crore

Assets under
management as on
March 31, 2016

Disbursements in
2015-16

Loan book as on
March 31, 2016

94.84%

AA+

Collection efficiency
as on March 31,
2016

Credit rating by CARE

under Basel II guideli
nes

Rs. 1,771.48
crore
Market capitalization as
on March 31, 2016

Re. 0.80
Dividend per share
for a face value of
Rs. 2
Page 6-7

Key performance indicators

Total disbursements
2011-12
7,404

-29%

2012-13
8,678

2014-15
10,115

(` in Crores)
2015-16
7,180

2013-14
19,703

2014-15
21,175

(` in Crores)
2015-16
19,607

2013-14
17,877

2014-15
19,567

(` in Crores)
2015-16
18,183

2013-14
2,117

(` in Crores)
2014-15
2,386

2013-14
9,081

Y-o-Y

Assets under management

2011-12
13,293

2012-13
18,378

-7.4%

Y-o-Y

Total loan assets

2011-12
12,036

7.1%

2012-13
16,240
Y-o-Y

Revenue
2011-12
1,080

5.0%

2012-13
1,701
Y-o-Y

2015-16
2,506

Profit after tax

2011-12
78

2012-13
145

14.0%

Y-o-Y

2013-14
160

2014-15
187

(` in Crores)
2015-16
213

2014-15
16.3

(%)
2015-16
18.7

2014-15
95.2

(%)
2015-16
94.8

2014-15
6.16

2015-16
6.97

2014-15
232

(No.)
2015-16
234

2014-15
490,000

(No.)
2015-16
[475,000]

Capital adequacy ratio

2011-12
21.2

2012-13
16.8

2013-14
16.6

+240 bps
Collection efficiency
2011-12
100.5

2012-13
98.2

2013-14
95.7

-38 36 bps
Net interest spreadmargin
2011-12
4.05

2012-13
5.48

2013-14
5.51

(%)

+81 bps
Branch network
2011-12
200

2012-13
275

2013-14
274

Customer base
2011-12
289,600

2012-13
390,000

2013-14
440,000

Employee strength
2010-11
5,700

2011-12
7,300

2012-13

2013-14

9,760

9,790

Product-wise loan
book

Break-up of asset
under management

Car and Utility Vehicle

24.90%
Commercial Vehicle
9.07%
Construction

Car and Utility

Vehicle 24.90%
Commercial Vehicle
9.07%
Construction

(No.)
2014-15
[9070]

Geographic breakup of total loan

assets
North 29.9538%
West 2225.35%
South 2623.23%
East 21.4715%

Equipment 7.99%
Equipment 7.99%
Tractor 18.76%
Tractor 18.76%
Mortgage 18.52%
Mortgage 18.52%
Used Vehicles
Used Vehicles
11.24%
11.24%
SME Loans 9.52%Car SME Loans 9.52%
and Utility Vehicle
4.90%
Commercial Vehicle
9.07%
Construction
Equipment 7.99%
Tractor 18.76%
Mortgage 18.52%
Used Vehicles
11.24%
SME Loans 9.52%
As on 31 March 2016 [Pie chart representation with above data]
Page 8-9

Strengths that define Magma

Respect and recall: We have been investing in the smallest dreams for close to
three decades. In the course of this exciting journey, we have empowered millions of
people, emerging as a reliable brand in the NBFC space.
Connected locally: We recruit local talent in our branch offices, enhancing
employability and building strong customer engagement through 5000+ field officers.
Asset-light model: Our field officers visit their respective branch offices once a
week; technology solutions enable them to conduct business from channel/customer
location.
Hassle free: People in semi-urban and rural markets are often discouraged by
cumbersome processes of loan documentation. Therefore, we have simplified the
process, building relationships anchored in trust, comfort and confidence.
Extensive reach: We are present across 20 21 states and union territories. Nearly
20% of our branch offices are urban, 44% semi-urban and 35% rural; and we aim to
penetrate deeper.
Customer base: We have over 4.75 lakh active customer base; of which more than
[19]% of customers comprise first-time vehicle buyers.
Dynamic workforce: At Magma, over 70% people are below 35, while almost 5% has
over 25 years of experience. Our team has a fine blend of youth and experience.
Consistent innovation: Our technology deployment has resulted in superior sales
productivity, better market coverage, improved channel and customer experience.
Transparent approach: We have always valued transparency while engaging with
employees, investors, business associates and the wide fraternity of stakeholders.

Diversified portfolio: Our product portfolio comprises products across asset finance,
agri finance, SME finance, mortgage finance and general insurance. No single product
contributes over [25]% to our overall income, minimising risk exposure.
Page 10-11

Future belongs to the nimble-footed

Customer aspirations are fast changing in a dynamic business landscape.
Customers today want faster turnaround time, better technology-enabled
services, sound credit advice backed by data analytics and higher
accountability throughout the relationship span. At Magma, here is how
we are addressing these trajectories with urgency to sustain and thrive
for the long-term.
Do-more approach
We are leveraging the experience and expertise of our team to emerge as a customercentric organization. We have merged sales, credit processes and low bucket
collections of up to 90 Days Past Due (DPD) for our frontline officers. The result is that
now our customers instead of dealing with multiple people at magma have to deal
with one-point contact.
We have put in place a proper training mechanism, process alignment and a highperformance work culture for our frontline executives and managers.
Delegation of authority
Each branch manager is now responsible and accountable for his/her branchs overall
performance across all product categories. Each branch will also have area managers
who will drive support field officers.
Technology is playing an important role in our drive for empowerment. Field officers
now have the requisite data at their fingertips (through tablets) to check the credit
worthiness of a customer; and process a proposal accordingly much faster than
before. Besides, our officers are now spending more time in delegated clusters,
addressing queries and concerns of customers. The consequence is decentralised
processes, higher credit quality and faster disbursement.
Deeper and wider footprint
We now have presence in 2000 clusters (covering 30 sq kms) across India. We recruit
local talent from particular clusters, who are in constant touch with customers, dealers
and local channel partners. The outcome is that we are now more productive and costeffective.

Outcome

We are now more integrated with our customers and their changing
aspirations
There is more accountability and ownership across the organization
Decision-making is now more well-informed and quick
Learning and productivity curves are rising
Cost structure is more rationalised
Channel management is seamless
Direct business has increased, leading to higher yields

Increasing customer touch points

(3600+ field officers)
Reduced Feet on Street (FOS)
service radius from 75 kilometres to
30 kilometres
Delegating decision making to all

Simplified credit screens

Implemented immediate risk hindsighting
Process simplified and enabled in
tablets

PEOPLE

PROCESS

Growth drivers
Customers with informal income sources and low
eligibility for bank loans
Customers with no established credit track record
Customers with limited banking transactions
Small factory owner/contractor, trader/shop owner
with working capital needs ( SME/LAP customer)
Small fleet operator (taxi/truck/equipment buyer)

Self employed customer with informal income

sources (Home/Car buyer)

Farmers with small landholdings (<4 acres)

(Tractor buyer)
First time buyer with prior relevant experience
(taxi/truck/machine driver/operators)

Self
employed
non
professional
s
Small &
medium
entrepreneu
rs
Limited
banking /
credit
history
First time
buyers

Focus on underserved Rurban India

Overarchi
ng
Objective

Bringing equality of opportunity to

the economically disenfranchised

Strategic
Imperativ
es

Improved customer service

Empowerment at the grassroots
Better and faster credit decisions
Higher productivity and cost efficiency
Seamless channel management
More direct business and higher yields

New business architecture

Page 12-13

branch managers
Incentives aligned to drive direct
business / cross-sell and customer
service

TECHNOLOGY

CUSTOMER

High level of technology adoption

by field officers and supervisors,
improving efficiency and
productivity
Daily journey plan and visit calendar
enabled in tablets
Technological innovation led faster
customer acquisition, portfolio
servicing and effective cross-sell

All FOS tagged to 8000 channels for

service and business
Rigour of daily market activity
implemented
IRR grids, doc charges, pay-out
structures & escalation matrices
revised

Page 14-15

Chairmans statement
Dear Shareholders,
In my last letter to you, I had dwelt extensively on how we are focusing on our
fundamentals to bring equality of opportunity to the economically disenfranchised. As
a part of that long-term initiative, we restructured our business model during the year
to strengthen customer connect, help accelerate financial inclusion, and remain future
fit.
The global economic scenario is still volatile, leading to slow credit offtake and an
overall environment of caution. The countrys macro-economy is stable and anchored
in the governments commitment to fiscal consolidation. The government has
undertaken multiple initiatives to revive the economy. These initiatives will augur well
for the overall financial ecosystem, going forward.
The expected normal monsoon, implementation of the Seventh Pay Commission
Recommendations and the One Rank One Pension are expected to bolster
consumption in the rural and semi-urban India, leading to more credit offtake. In
addition, the revamped Mahatma Gandhi National Rural Employment Guarantee Act
(MGNREGA) and direct cash transfers will also lead to better cash flows in the hands of
those close to the bottom of the pyramid.
Over the years, we have built a distinct capability for providing financial solutions to
the underserved and under-banked customers. These customer segments have very
limited access to the formal lending ecosystem, mainly because they do not have
adequate documentation and knowledge of banking procedures. We have developed a
well-diversified product portfolio and a widespread pan-India distribution coverage
that primarily caters to these customer segments.
We have significantly enhanced the depth and breadth of our pan-India footprint, right
up to the taluka level, with over 7,000 field force straddling 1600 talukas and 2900
locations in the country. We are providing financial solutions right at their doorsteps.
Our technological innovation helps accelerate faster customer acquisition, portfolio
servicing and effective cross-sell.
We are merging operations, simplifying processes and migrating to a paradigm of
better and faster credit decision by delegation of authority and enhanced use of

technology at the field level. Better channel management, local accountability and
ownership and finally more direct business and cross-selling are some of the other
areas in which we are putting a lot of emphasis upon. The broad levers that drive our
sustained and profitable growth are ROA enhancement, OPEX reduction, low cost of
finance?? and robust asset quality.
Our performance
During FY 2015-16, we reported ` 2,506 Crore revenue compared to ` 2,386 Crore in
FY 2014-15 owing to our customer-centric strategy, deeper pan-India reach and
enriched product basket. Our consolidated PAT for the year was` 213 Crore --- 14%
growth vis--vis 187 Crore last year ---- owing to improvement in efficiency (lower
opex ratio) and higher contribution of profitable products. Moreover, the Board has
recommended a dividend at a payout ratio of [10]% as in the previous years, subject
to the approval of shareholders.
Growing profitably
Improving asset quality: We calibrated our portfolio according to product-customergeography mix. We implemented a refined credit screening and processes to optimize
portfolio performance; and put in place product-wise early warning indicators and loss
tracking mechanisms to reduce delinquencies.
Declining operating cost: We enhanced productivity through technology enablers,
automation and process simplification. We reduced customer acquisition cost by
focusing on direct sourcing, improving cross-sell and elevating customer services.
Reducing Cost of Fund (COF): We put in place a judicious mix of non-convertible
debentures (NCDs), commercial papers, bank lines and securitisation to reduce COF,
limit concentration and minimise liquidity risk. We diversified our mix of debt market
investors and increased the share of priority sector lending (PSL).
Bettering Return on Assets (ROA): We have undertaken multiple initiatives to
strengthen profitability across products and branches. We have increased the share of
higher risk-adjusted yield products (Used Assets /SME /Mortgage Finance), enabling us
to better our ROA.
Future preparedness
Future preparedness at Magma is ultimately about a shift in mindset. Our people
performed commendably in a difficult macro scenario, because each one of us
believed that a tougher and fitter Magma needed to be built. We stood our ground,
despite headwinds and focused on incremental innovation to bring consistency in
service delivery. Going forward, we will continue to focus on innovation and
digitization of business processes to bring globally-benchmarked services to the
doorsteps of customers in need.
Our commitment remains unwavering to the underserved Rurban India. Have we
accomplished our task? Not yet. We are, however, well on our way.
In this context it is pertinent to iterate that being future fit is not a decorative
wordplay for us. We test our competitiveness everyday on ground, battling rain and
shine, across large parts of a diverse nation, reaching out to people in need; and
helping them take firm strides forward.

The journey is long and arduous; nevertheless, exciting. On behalf of the entire
leadership team, I would like to thank all Magmaites for their contribution. I am also
grateful to all our stakeholders for supporting our vision and for their good wishes.
Sanjay Chamria
Vice Chairman and Managing Director

Our Board of Directors

Mayank Poddar
Chairman
Mr. Poddar is the Chairman of Magma Fincorp and he offers strategic guidance in framing
business policies. Besides, he also directs corporate governance and law. Mr. Poddar is a
commerce graduate.
Total years with Magma: 37
Board committee membership and chairmanship: Nil
Other companys directorships:9
Sanjay Chamria
Vice-Chairman & Managing Director
As the Vice Chairman and Managing Director of Magma, he steers policy formation, strategy
planning and execution. He has represented the BFSI and NBFC industry at various forums,
including RBI, and before the finance ministry and other government bodies.
Total years with Magma: 21
Board committee membership and chairmanship: 3
Other companys directorships: 8
Sanjay Nayar
Non-Independent Director
Mr.Nayar is the CEO and Country Head of Kohlberg Kravis Roberts & Co (KKR) in India. He is a
B Sc (Hons) and holds a PGDM (Finance) degree from IIM, Ahmedabad.
Total years with Magma: 4
Board committee membership and chairmanship: 2
Other companys directorships: 17
Narayan K Seshadri
Independent Director
Mr. Seshadri is a fellow Chartered Accountant and specialises in corporate strategy,
organisational transformation, financial restructuring and risk management. He has held
leadership positions in Andersen and KPMG before establishing his business value
management, investment advisory and private equity business.
Total years with Magma: 9
Board committee membership and chairmanship: 6
Other companys directorships: 15
Nabankur Gupta
Independent Director
Mr. Gupta has rich experience in the field of marketing, business development and general
management. He is the founder of Nobby Brand Architects & Strategic Marketing Consultants.

Besides, Mr. Gupta also co-founded Blue Ocean Capital & Advisory Services. He is a B.Tech
and AMP.
Total years with Magma: 7
Board committee membership and chairmanship: 6
Other companys directorships: 10
Satya Brata Ganguly
Independent Director
Mr. Ganguly is on the Boards of various reputed Indian corporate and public bodies as an
Independent Director. He was the Chairman and CEO of Exide Industries Limited and was
awarded the title of Chairman Emeritus of Exide Industries. Mr. Ganguly is a chemical
engineer by profession.
Total years with Magma: 5
Board committee membership and chairmanship: 8
Other companys directorships: 6
Ritva Laukkanen
Non-Independent Director
Ms. Laukkanen has over 30 years of experience in international investment and financial
markets with focus on emerging markets and development finance. She is an alumnus of
Helsinki School of Business Administration, London Business School and Harvard University.
Total years with Magma: 1
Board committee membership and chairmanship: Nil
Other companys directorships: Nil
Srenik Singhvi
Additional Director
Mr. Singhvi is an advocate with nearly four decades of experience handling Civil and Criminal
cases. He is enrolled with the West Bengal Bar Council and currently practices at the High
Courts all over India, the Supreme Court of India, DRT, Consumer Forums, FEMA and conduct
Arbitrations. He is a legal counsel to a large number of corporate houses.
Board committee membership and chairmanship: Nil
Other companys directorships: 1

Our Board of Directors

Mayank Poddar
Chairman
Mr. Poddar is the Chairman of Magma Fincorp and he offers strategic guidance in framing
business policies. Besides, he also directs corporate governance and law. Mr. Poddar is a
commerce graduate.
Total years with Magma: 37
Board committee membership and chairmanship: Nil
Other companys directorships:9
Sanjay Chamria
Vice-Chairman & Managing Director
As the Vice Chairman and Managing Director of Magma, he steers policy formation, strategy
planning and execution. He has represented the BFSI and NBFC industry at various forums,
including RBI, and before the finance ministry and other government bodies.
Total years with Magma: 21
Board committee membership and chairmanship: 3

Other companys directorships: 8

Sanjay Nayar
Non-Independent Director
Mr. Nayar is the CEO and Country Head of Kohlberg Kravis Roberts & Co (KKR) in India. He is a
B Sc (Hons) and holds a PGDM (Finance) degree from IIM, Ahmedabad.
Total years with Magma: 4
Board committee membership and chairmanship: 2
Other companys directorships: 17
Narayan K Seshadri
Independent Director
Mr. Seshadri is a fellow Chartered Accountant and specialises in corporate strategy,
organisational transformation, financial restructuring and risk management. He has held
leadership positions in Andersen and KPMG before establishing his business value
management, investment advisory and private equity business.
Total years with Magma: 9
Board committee membership and chairmanship: 6
Other companys directorships: 15
Neil Graeme Brown
Director
Mr. Brown is an expert in the US and European mergers, acquisitions and international private
equity markets. He is also the co-founder of Subito Partners, a UK-based advisory and
investment business. He is a Chartered Accountant from ICAEW and holds an MA degree as
well.
Total years with Magma: 9
Board committee membership and chairmanship: Nil
Other companys directorships: Nil
Nabankur Gupta
Independent Director
Mr. Gupta has rich experience in the field of marketing, business development and general
management. He is the founder of Nobby Brand Architects & Strategic Marketing Consultants.
Besides, Mr. Gupta also co-founded Blue Ocean Capital & Advisory Services. He is a B.Tech
and AMP.
Total years with Magma: 7
Board committee membership and chairmanship: 6
Other companys directorships: 10
Satya Brata Ganguly
Independent Director
Mr. Ganguly is on the Boards of various reputed Indian corporate and public bodies as an
Independent Director. He was the Chairman and CEO of Exide Industries Limited and was
awarded the title of Chairman Emeritus of Exide Industries. Mr. Ganguly is a chemical
engineer by profession.
Total years with Magma: 5
Board committee membership and chairmanship: 8
Other companys directorships: 6
Ritva Laukkanen
Non-Independent Director

Ms. Laukkanen has over 30 years of experience in international investment and financial
markets with focus on emerging markets and development finance. He is an alumnus of
Helsinki School of Business Administration, London Business School and Harvard University.
Total years with Magma: 1
Board committee membership and chairmanship: Nil
Other companys directorships: Nil
Page 18-19

Our leadership profile

Atul Bansal
Chief Financial Officer
Mr. Atul Bansal an ACA, CFA, MBA (Finance) joined Magma Fincorp Limited as the Chief
Financial Officer. He has three decades of corporate experience across investment, financial
and business due diligence, corporate restructuring and M&A. He has worked across multiple
industries, including financial services, tea, IT, hotels and entertainment.
Total years with Magma:
Ashutosh Shukla
Chief Credit & Operating Officer
Mr. Shukla is a Magma veteran who has worked with the Company since its inception.
As Chief Credit & Operations Officer, he works to drive seamless integration in the credit, risk
and operations team.
Total years with Magma:
Janet Gasper Chowdhury
Chief People Officer
Ms. Chowdhury has 17 years of rich in HR Consulting cutting across various industry sectors
including government ministries, banking, insurance, oil & gas, steel, chemicals, engineering,
aeronautics & defence, IT and FMCG. An alumnus of XLRI, Jamshedpur, St. Xaviers College,
Kolkata and Trinity College, London, Ms. Chowdhury is a regular speaker at industry forums.
She has recently been nominated to the Board of the National HRD Network.
Total years with Magma:
Kailash Baheti
Chief Strategy Officer
Mr. Baheti is the Companys chief strategy officer. He helps strategise the Companys future
growth and heads the accounts, taxes, budgeting, legal and secretarial functions.
Total years with Magma:
Mahender Bagrodia
Chief of Receivables Management
Mr. Bagrodia joined Magma in his late twenties. Over these years, he has played an
instrumental role in developing the Companys operations across India.
Total years with Magma:
Raj Kumar Kapoor
Chief Internal Auditor
Mr. Kapoor, Magmas chief internal officer is responsible for third line of defence. He provides
assurance on internal controls through periodic review of design and operative effectiveness.
Mr. Kapoor is a chartered accountant and a certified internal auditor.
Total years with Magma:

Ram Kalyan Kumar Medury

Chief Information Officer
Mr. Medury joined Magma with IT leadership experience on both sides of the table as CIO of
financial services major and business unit leader at IT services major. This combination has
helped him communicate and deliver strategic changes to the businesses.
Total years with Magma:
Sachin Khandelwal
Chief Sales Officer
Mr. Sachin Khandelwal has nearly two decades of experience in banking, finance and
automobile industry. As chief sales officer, his endeavour is to understand the evolving needs
of the customers in a systematic and scientific way, leveraging the best possible technology
and processes. This helps the Company offer right products and services at the right place
and at the right time.
Total years with Magma:
Sumit Mukherjee
Head- Products & Programmes
Mr. Mukherjee has been instrumental in establishing the tractor finance segment and has also
helped in developing the majority of the construction equipment sales team. His focus has
been on strategic segments, product & segment profitability, OEM relationships, competition
benchmarking, product training and internal initiatives to drive product performance.
Total years with Magma:
Swaraj Krishnan
CEO Magma HDI General Insurance
Mr. Krishnan is the MD & CEO of the Insurance Joint Venture, Magma HDI General Insurance
Company Limited. Magma HDI offers all general insurance products across market segments,
especially in the retail segment, catering to semi-urban and rural markets. Mr. Krishnan holds
a masters degree in business economics from the University of Delhi.
Total years with Magma:
Vikas Mittal
Chief Sales Officer - Magma HDI General Insurance
Mr. Mittal has over 20 years of rich experience in banking & finance, across institutional &
retail equity brokerage, private banking, retail banking, wealth management, lending and
general insurance. He is a chartered accountant and a cost & works accountant.
Total years with Magma:
Jashobrata Bose
Page 16-17

It's been a rewarding year!

Mr. Sanjay Chamria (Managing Director) was recognised as the CEO with HR Orientation of
the Year by Genius Consultants Ltd., in association with The Times of India.
Magma Fincorp was awarded the prestigious ET Bengal Corporate Awards 2016 in the
category of Highest Job Creator (above Rs. 1000 Crores).
Mr. Kaushik Sinha (Vice President Corporate Communication, CSR &admin) was
recognised as one of the 100 most Impactful CSR Leaders in India by World CSR Day.
Magma Fincorp was honoured with the prestigious Asia Pacific HRM Congress Awards 2015
in the category of Best Corporate Social Responsibility Practices.

Mr. Suryakant Mishra (Team Member Corporate Communication) won an award for Best
Corporate Presentation in Corporate Communications Segment at Asia Pacific Conference
on Changing Business Practices in Current Environment, 2016.
Magma Fincorp received the HR Excellence Award, 2015 for Strong Commitment,
recognised by Confederation of Indian Industry.
Magma Fincorp was awarded at the Dataquest Business Technology Awards in the
Analytics category for its business intelligence solution, BEAM.
Magma Fincorp Annual Report, 2015 bagged the Gold Award and ranked 39th at the LACP
Spotlight Awards 2015 (USA). Magma has been rated as one of the best among top brands
for the 5th year in a row.
Magma Fincorp received the prestigious FINNOVITI Award 2016 in the mobility segment
for Magma Sales Mobility Solution project. It was jointly organised by Banking Frontiers and
Deloitte.
Ms. Janet Gasper Chowdhury (Chief People Officer) was recognised as one of the 100 Most
Talented Global HR Leaders at the 23rd edition of the World HRD Congress, hosted by
CHRO Asia.
Ms. Janet Gasper Chowdhury (Chief People Officer) was honoured as one of the 100 Most
Influential HR Leaders in India by CHRO Asia.
Details of our LACP for Mission India and Auto Lease Award (Sarmistha to share)

Page 18-19-20-21-22

Dominant levers of sustainable

growth
We are getting simpler, sharper and more competitive every day.
Here we showcase our operational canvas; and the levers that
drive our sustainable growth in a volatile world.
Operational Framework
Calibrate productRefine credit screens
customer -geography & processes
mix
OEM, End-Use and
Customised screens to
Resale demand driven
consider Informal
product classification
income streams with
Informal segment
relevant experience
Asset gradation as per
with relevant
experience
customer profile
Differentiated offering Online Process
in various markets
Automation at
considering Net
sourcing / underAdjusted Return
writing stages for
fraud mitigation

Early warning
indicators (EWI)

In house team

Past portfolio based

terminal losses as key
indicator for
developing Early
Warning Indicators
(EWI)
Credit hind sighting of
early delinquent cases
to resolve them and
use them as feedback
mechanism in credit
screens
Branch level tracking
involving local
business teams

Supported by strong analytics

Credit bureau modelling
Competitive analysis

Judicious credit management

At Magma, credit management plays a significant role in appraising asset quality and
ensuring profitability. It provides an insight into customer credibility, since a major
portion of our customers consists of the countrys rural and semi-urban population.
Product risk, along with the capability and intention to service the instalments are
core to our lending process.
We are consistently upgrading our credit screens comprising customer selection and
credit acceptance criteria to address a wide range of customers. This also helps us
taking prompt and uniform actions. The credit appraisal process comprises de-dupe,
field investigation, risk containment exercises, evaluation of financial documents,
visits to the customers and reference checks, among others. Technological
upgradation and frequent visits have further facilitated the process.
The risk management department provides rich data analytics support to credit
management, which helps it frame credit policies.
Key features, 2015-16
Addressed 114,712 proposals within limited timelines during FY 2015-16
Reduced turnaround time from [9.74] days in FY 2014-15 to [9.75] days in
FY 2015-16
Conducted market analysis to measure demand and delinquency trends
Analysed the market trends on the basis of three parameters product categories,
customer profile and geographies
Institutionalised the audit of customer files at the branch levels following disbursal
Fastened the process by providing technological back-up
Strengthened monitoring to enhance portfolio strength, irrespective of the external
environment
Conducted periodic portfolio quality and credit screen appraisals in line with
evolving market conditions
Took prompt preventive measures according to Early Warning Indicators (EWI),
provided by the risk-governance team
Visited customers more frequently to understand their problems and customised
the instalments in case of problems
Implemented a monthly review mechanism to improve credit effectiveness in line
with external realities, and a bottom-up approach from the zones to the national
level involving the risk management team
Way forward

Strengthen our framework to control delinquencies

Enhance our efficiency and expertise to address more proposals within limited
timelines
Make the team members more responsible to provide end-to-end accountability
Strengthen the risk team to acquire quality business by taking preventive
measures at the right time

5.9%

11.2%

9,559+

Early delinquency in FY
2015-16

Infant delinquency in
FY 2015-16

Average cases per

month

Stronger treasury management

At Magma, treasury management plays a very critical role as lending is our core
business. It ensures sufficient liquidity at the best cost to meet business requirements.
Our diversified fund sources minimise concentration risk and allow smooth and
consistent flow of funds, subsequently improving the credit rating.
Magmas treasury function comprises three core operational areascore treasury,
securitisation and banking operations.
Core treasury: It focuses on procurement of low-cost funds through short-term and
long-term financial instruments from the banking sector, financial institutions and debt
capital markets.
Securitisation: It is responsible for securitisation and assignment of our loan asset
portfolio and receivables to banks and institutions in exchange for superior rates.
Banking operations: It manages the physical and electronic flow of funds from
multiple locations to the head office and vice versa.
We have the choice to borrow from a consortium of 22 public and private sector
banks. Besides, we have the access to capital market funding from a wide spectrum of
lenders, including mutual funds, insurance companies, pension/provident funds and
corporate, among others. Moreover, other unsecured debt includes commercial
papers, perpetual debt, subordinate debt and preference capital.
Key features, 2015-16
Grew the loan portfolio to Rs. 18,183 cr as on 31st March, 2016, compared to Rs.
19,567 cr as on 31st March, 2015
Maintained a judicious mix of short term and long term borrowings to ensure
minimal gaps in Asset Liability Mix (ALM)
Net Interest Margin (NIM) stood at around 6.97%, as against 6.16% in FY 2014-15,
owing to efficient treasury management
Capital adequacy ratio stood at 18.7% and Tier-I capital adequacy stood at 14.6%
Maintained NIS at around 6.3%, as against 5.9% in 2014-15 by way of efficient
treasury management
Sold `1,838 Crores of portfolio during FY 2015-16, of which 5761% is qualified for
priority sector lending to banks, easing capital requirement
Tie-up with banks for direct cash deposits improved operational efficiency and
reduced risk
Borrowing cost stood at 9.99% as a result of proactive negotiation
Way forward

Continue to look at new borrowing proportions to reduce our cost of capital

Reduce the dependence on banks and expand to other sources
Maintain the overall cost of funds in a strengthening-interest-rate-regime
Augment our Tier I and Tier II capital

2011-12 2012-13
Capital Adequacy
Ratio (%)
21.19
16.77
Tier 1 (%)
14.08
10.59
[Create worm graph with above data]

Rs 19.67 crore

2013-14

2014-15 2015-16

16.62
11.52

16.3
11.09

9.99%

18.7
14.60

Average disbursements per day

Average cost of borrowings

in FY 2015-16

Credit ratings
Instrument
Short term Debt
Long term Debt
Subordinate
Debt
Perpetual Debt

Rating
A1+
AAAAAA-/A+A+

Stringent collections management

Collections management is critical to Magma as it ensures regular cash inflow,
reduces debt and improves the profitability margin. With the realignment of our
business model, we have further strengthened the collection management process.
Now we have a bigger team, which is end-to-end responsible for the entire process
from sales to collections.
Our team is supported by advanced technological tools, which help our people to work
seamlessly. Our people have increased the frequency of visit to customers, which has
not only brought them closer to customers but has also helped in the collections
management process.
We engage with our customers through multiple channels. Direct visits and phone
calls are the two major communication platforms. We communicate with them during
their entire lifecycle, instead of contacting them just before the instalment due date.
We send reminders to our customers, and the defaulters are followed up through site
visits, tele-calling, and legal reminders. In cases of prolonged default, assets are
retrieved through corresponding legal support.
Key features, 2015-16
Collection efficiency stood at 94.84%, compared to 95.22% in FY 2014-15
Merged our sales and collections teams, making everyone equally accountable for
the overall process from sales to collections
Increased the frequency of visits to go closer to customers and smoothen the
collections process
Provided technological advantage like online apps as well as conducted trainings to
make our people attuned to their new roles
Created a team called field and forum across states to track the areas where the
team members are facing difficulties in collection, subsequently, offering bespoke
solutions
Empowered field executives with tablets enabling us to track their visit and
collection efficiencies
Offered customised payment solutions to delinquent customers with genuine
concerns like crop failure and business crisis, among others
Placed our people in proximity to customers (within 35-40 km for lower buckets) to
increase visit per customer, resulting in enhanced collection efficiency
Instilled payment discipline among customers by regular visits
Embedded business intelligence system for transforming field data into valued
information to drive better collection efficiency

Way forward

Enhance capabilities to manage large acquired portfolios across multiple products

and geographies
Strengthen our legal framework to efficiently handle the delinquencies
Reduce systemic wastages through process improvements
Maintain a high collection efficiency and reduce net credit loss

94.84%
Collection efficiency in
FY 2015-16
Page 23

The great Indian opportunity

The government has undertaken multiple initiatives (Make in
India, Digital India, Skill India and Startup India) to usher in
sweeping transformation across India. We, at Magma, are helping
catalyse the governments agenda by providing aspirational
entrepreneurs the access to capital, technology and ease of
transacting. We are empowering them; and at the same time
partnering their growth.

13-15%

9-10%

US$ 22.7
bn

Growth expected
in the M&HCV
(Truck) segment
in FY 2017

Growth expected
in the passenger
vehicle (domestic
+ exports)
segment over
the medium term

19-22%

17%

20-22%

Rs. 4.7 trillion

NBFC retail credit
pie likely to
expand by 1922% in FY 2017,
owing to
improvement in
commercial
vehicles (CVs),
microfinance,
unsecured loans
and loan against
property

Indias general
insurance
business is
currently at US$
11.7 billion
premium per
annum; and is
growing at a
healthy rate of
17%.

Long-term
growth outlook
for the Housing
Finance sector
remains
favourable owing
to the
Government of
Indias focus on
Housing for All by
2022; and
favourable
regulations
pushing overall
housing credit
growth to 20-

Indias
construction
equipment
industry's
revenues are
estimated to
reach US$ 22.7
billion by 2020

8-9%
Growth expected
in tractor
segment over

the next five

years

22% from FY
2017 onwards
(Source: ICRA and IBEF)
For design, we need to give icons to the relevant industry in the boxes, the number has to be
in the context of the specific industry/ sector we are speaking of.

Page 24-25-26-27-28-29

Diversity is the key

We have a diverse mix of product portfolio. We reach out to more and
more customers with our offerings. Our realigned business strategy will
ensure equal focus on all products, greater efficiency and cross-selling.
Our processes focus on customer convenience. We ensure easy and
hassle-free documentation through transparent and fair dealings. Quick
processing and prompt customer service make us a reliable brand.
Besides, we offer competitive interest rates, along with flexible and
customised loan payment options. Our well-trained team provides end-toend doorstep service, which further eases the procedure.
Product portfolio
Commercial
Passenger
vehicles (CV)
cars and
multi-utility
vehicles
Suvidha
SME loans
(Refinance)

Construction
equipment
(CE)

Tractors

Insurance

Housing
finance

Product 1

Commercial Vehicles (CV)

Magma is one of the most prominent players in the CV sector, offering secured new
commercial vehicle finance to customers. The CV segment includes Light Commercial
Vehicle (LCV), Small Commercial Vehicle (SCV) and Medium and Heavy Commercial
Vehicle (M&HCV). Primarily, we provide loans to first-time buyers and small
entrepreneurs, who own less than five vehicles. We offer loans ranging from 80%100% of the asset value, depending on customer profiling. Besides, our strategic
partnerships with leading OEMs like Mahindra & Mahindra Limited, Mahindra
International Limited, Tata Motors Limited, Ashok Leyland Limited and Mahindra First
Choice make us an even more promising player.
Key features, 2015-16
Magmas consolidated CV finance market share stood at 0.32%
Average ticket size per transaction was Rs. 15.21 lac; average repayment tenure
was 46 months
Total disbursement stood at Rs. 299 Crores, compared to Rs. 934 Crores in FY
2014-15
Collection efficiency stood at 98.6% ([96.5] in FY 2014-15) and net interest spread
stood at 4.8% (4.29 in FY2014-15)

First-time buyers accounted for the major business share of 65% of vehicles
financed by us

Outlook
Our realigned business model will improve our profitability in each segment
We aim to boost our profitability by enhancing the quality of our CV portfolio
We want to penetrate deeper into rural areas to touch more customers
We will proactively increase our retail business in this segment as it provides higher
returns
We will consistently strengthen our relationship with OEM partners
Going forward, the commercial vehicle segment is poised to grow owing to continuing
trend towards replacement of ageing fleet and pre-buying before BS-IV is
implemented across India.
Performance review
CV business disbursement (Rs
Crores)
Contribution to the total
disbursement (%)
y-o-y Magma growth (%)
y-o-y industry growth (%)
Average ticket size (Rs000)
Average loan to value (%)

2014-15
934

2015-16
299

9.23

4.17

(12.00)
-(22.47)
733
85

(67.96)
8.37
15.21
89

Product 2

Passenger cars and multi-utility vehicles

We provide secured finance for new and used cars, along with multi-utility vehicles in
entry level and mid-size cars in rural, semi-urban and urban markets. Our business is
executed through a chain of regional, branch and chain offices. To promote our
business, we conduct frequent promotional activities among dealers and
manufacturers, along with endorsing pre-funding options for dealers. We have
strategic alliances with leading OEMs like Maruti Suzuki India Ltd., General Motors
India Pvt. Ltd., Hyundai Motor India Limited, Toyota and Mahindra & Mahindra.
Key features, 2015-16
The portfolio comprised 82% passenger cars and 18% multi-utility vehicles
Average ticket size per transaction was Rs. 4.33 lac; average repayment tenure
was 47 46 months
Collection efficiency stood at 95.13% (96.30% in FY 2014-15) and net interest
spread stood at 5.33% (4.95% in FY 2014-15)
Strengthened our presence in rural and semi-rural India through deeper market
penetration for achieving a first-mover advantage in new emerging opportunity
pockets
Our improved portfolio quality positions us as a key player in the car financing
market
Proportion of disbursements in rural markets stood at around 32%
Outlook

We will strengthen our presence in deeper geographies, leveraging our cluster

system
We intend to improve portfolio quality and position ourselves as a key player in the
segment
Growing incomes, increasing middle-class population, changing lifestyles and rising
aspirations will drive Indias passenger-car and small car demand

Going forward, Indian PV industrys domestic volume growth is expected remain

moderate, mainly driven by new model launches, replacement demand as well as new
launches in mini segment which will attract first time buyers.
Performance review
PC and MUV business (Rs Crores)
Contribution to the total
disbursement (%)
y-o-y Magma growth (%)
y-o-y industry growth (%)
Average ticket size (Rs000)
Average loan to value (%)

2014-15
2,479
24.51

2015-16
1689
23.52

6.77
3.89
446
71

(31.88)
7.24
(433)
73

Product 3

Construction Equipment (CE)

We offer finance for construction equipment including backhoe loaders, excavators,
crane and dumpers, among others, and a fleet of machines for bigger projects across
the retail and strategic customer segments. We provide customised and unique
schemes to cater to different segments of equipment buyers. Our retail customer
profile comprises small contractors, mine operators, first-time buyers and mid-size
customers, among others. We work with some of the leading OEMs like L&T, Ace,
Caterpillar and Volvo, among others.
Key features, 2015-16
Collection efficiency of this segment stood at 95.11%, compared to 94.30 in FY
2014-15
Average ticket size per transaction was Rs. 19.70 lac
Average repayment tenure was 43 months
We strengthened relationships with the OEM partners by aligning promotional
activities and customer engagement programmes
Outlook
We will further strengthen our business by focusing on profitability rather than
volume.
We aim to get in touch with new customers, along with ensuring repeat business
from our existing customers.
Going forward, the Governments focus on building roads, airport infrastructure,
railways, sanitation facilities, urban and rural housing, office spaces and numerous
other projects indicates the need for an improved infrastructure. This signifies the
demand and growth of the construction equipment industry in India.
Performance review
2014-15

2015-16

CE business (Rs Crores)

Contribution to the total
disbursement (%)
y-o-y Magma growth (%)
y-o-y industry growth (%)
Average ticket size (Rs000)
Average loan to value (%)

828
8.19

379
5.28

(12.59)
(13.53)
2,206
80

(54.24)
14.89
1,970
81

Product 4

Tractors
At Magma, we offer tractor finance for agricultural, as well as commercial use. As an
extension of our semi-urban and rural focus policy, we concentrated on farmers
owning less than six acres of agricultural land. Although we have witnessed de-growth
in the tractor sector, generally the yield on tractor financing is higher than some of
our other products. We work with some of the most reputed industry players like
Mahindra &Mahindra, TAFE, John Deere, New Holland and ITL, among others.
Key features, 2015-16
We encountered de-growth in tractor segment, owing to crop failure across various
geographies in India
Financed over 34,953 tractors, compared to 48,900 in FY 2014-15
Average loan size in this segment was around Rs. 3.52 lac with average loan tenure
of 68 44 months
Net interest spread stood at 9.48%, compared to 9.05% in 2014-15
Collection efficiency stood at 89%, as against 91.67% in the previous year
Outlook
We aim to deepen our penetration, leveraging our realigned business model.
We will also strengthen distribution network, strategic OEM relationships,
enhancing dealer experience and increasing product offerings.
Going forward, the Governments thrust towards uplifting the nations rural sector is
expected to boost rural Indias economic health, consequently improving its
consumption capacities. Shortening of replacement cycle, coupled with other factors
such as increasing rural wages, scarcity of farm labour as well as long-term trend of
improvement in minimum support prices (MSPs) is also likely to aid growth in industry
volumes.
Performance review
Tractor business (Rs Crores)
Contribution to the total
disbursement (%)
y-o-y Magma growth (%)
y-o-y industry growth (%)
Average ticket size (Rs000)
Average loan to value (%)

Suvidha (Refinance)

2014-15
1706
16.87

2015-16
12.19
16.97

7.91
(13.04)
349
63

(28.57)
(10.61)
352
68

Our Suvidha programme finances used commercial vehicle. Primarily, we finance firsttime buyers and 2-15-years-old commercial vehicles through a number of schemes,

catering to the lower-end customer segment. We utilise established credit filters,

leading to quality assets and timely debt repayment. Besides, we also provide
valuable advice to customers on vehicle sustainability to ensure enduring customer
relationships.
Key features, 2015-16
Net interest spread stood at 9.26%, compared to 9.28% in FY 2014-15.
Average ticket size per transaction was Rs. 4.20 lac; average repayment tenure
was 35 months
Collection efficiency of the refinance segment was 95.69%, as against 94.36% in
the previous year
Our disbursements stood at 1,014 Cr, following our new business structure
Outlook
We plan to increase average disbursement and cater to a larger section of the
refinance market.
We also propose to refinance existing quality customers.
Going ahead, rising need for freight transport, healthy profitability and availability of
finance will accelerate the demand for used CVs. Besides, there will be a rise in
demand from small fleet operators (SFOs) and first-time users (FTUs).
Performance review
Re-financing business (Rs Crores)
Contribution to the total
disbursement (%)
y-o-y Magma growth (%)
Average ticket size (Rs000)
Average loan to value (%)

2014-15
1,418
14.02

2015-16
1014
14.0212

12.82
450
73

(28.51)
420
75

Product 6

SME loans
We are among the top five players in the market to service SME unsecured loans. We
offer need-based unsecured financing to small-and-medium enterprise customers for
capital as well as project funding requirements. We cater to requirement limit up to Rs
35 lacs. We analyse the financials of prospective customers based on their cash flows
(achieved and prospective) as well their reputation, location, industry and
delinquencies.
Key features, 2015-16
Collection efficiency of the refinance segment was 97.66%, compared to 97.81% in
FY 2014-15.
Net interest spread stood at 8.09%, as against 7.93% in FY 2014-15.
Average ticket size per transaction was Rs 19.61 lac; average repayment tenure
was 32 months
We penetrated into new regions and encouraged cross-selling to enhance
profitability
Outlook
We want to leverage the emerging opportunities in India that will support the
development and diversification of the SME sector.

We aim to penetrate deeper into rural and semi-urban areas to increase the
customer base
Offer more customised loans to ensure customer satisfaction

Going forward, we will reach out to more bottom-of-the-pyramid, hard-working

entrepreneurs who find it difficult to access the formal systems of credit.
Performance review
SME loans (Rs Crores)
Contribution to the total disbursement
(%)
Y-o-Y Magma growth (%)
Average ticket size (Rs000)

2014-15
1,018
10.07

2015-16
1,151
16.02

26.14
2,417

12.99
1,961

Product 7

Following the liberalisation of the insurance sector, we entered into a joint

venture with HDI-Gerling International to form Magma HDI General
Insurance. HDI-Gerling International is a part of the Talanx Group,
Germanys third biggest insurance group. Our products and services range
from liability, motor, accident, fire and property insurance to marine and
special lines.
Key features, 2015-16
Our claim settlement ratio was over [86]% (claims received by claimed
settled)
Investment assets stood at Rs [866] crores compared to [766] crores in
the previous year
Higher degree of process automation helped improve turnaround time
(TAT)
Over [35984] claims received and [34686] claims settleddisposed off
Complete automation of process enabled higher claim settlement
Undertook relevant initiatives to address fraud control and management
Rationalised branches in the northern region to improve profitability from
the region
Improved our business portfolio to ensure long-term sustainable growth
Improved pan-India reach with Magmas proactive branch expansion
Reached out to non-Magma customers to strengthen business portfolio
Implemented technology solutions that support service excellence and
improve profitability
Increased online sales by integrating with online/offline aggregators and
online policy renewal
Introduced Data Warehouse and Predictive Analytics to support business
functions
Re-architected infrastructure to enable better performance and adopted
security standards to support business demand
Defined architectural standards and principles to enable safe and faster
communication between applications
Way forward
We will expand our footprint and size. But on the retail side we are not
going to expand.

We are in a transformational journey, and aim to ensure an enhancement

of all processes (like under writing processes)
Focus on the expanding heath and liability insurance
Enhance a secured mobile technology platform and infrastructure
Replace/upgrade applications and hardware to reduce the cost of
supporting older, unsupported technology and minimise the risk of failure
or loss of service
Consolidate database, SMS gateway to reduce operational cost

Rs 427.37
crore

[96.4]%

Magmas
settlement Claim
Premium income
Disposal ratio
in 2015-16
(claims received
settled by
claimed
settledrecieved)

80

[381]

Branches
as on 31st
March 2016

Team size
as on 31st
March 2016

Product 8

Housing finance
Magma forayed into the housing finance business with the acquisition of GE Money
Housing Finance in February 2013. We started with the aim to leverage the mortgage
opportunities in the rural and semi-urban areas, catering to people with informal
sources of income. We offer loans for residential and commercial collaterals, both
inside and outside municipal limits, covering he entire reach and netowrk of Magma
group, with 88 dedicated offices for the Magma Housing Finance company. Loans are
available for existing as well as new to Magma customers through our entire network
of MFL branches and channle partners.
We provide home loans for builder flats, resale transactions, residential plot purchase,
and home improvement purpose. We offer Loan Against Property (LAP) to support a
wide range of personal and business loan purposes. Besides, we also cater to
developers in small markets through financing small-ticket projects at various stages
of construction.
Key features, 2015-16
Assets Under Management (AUM) increased to Rs [3368] Crores, compared to Rs
[2848] Crores in FY 2014-15
Disbursements touched Rs 1430 Crores, compared to Rs 1732 Crores in FY 201415, however, in terms of number of units, there was a growth from [5858] units to
[7384] units.
Average ticket size per transaction was Rs 19.90 Lac
Net interest spread stood at 3.94%, compared to 3.38% in FY 2014-15
We targeted small builders and projects in outskirts or upcountry markets to cater
to the affordable housing space
The key marketing activities was driven through a lot of in branch events. We
regularly invited existing and referral customers to our branches every month and
offered them spot loan sanctions, which lead to almost one in six loans coming
from these cross sell activities

Outlook
We want to leverage existing rurban branch network and unique over 5 lakh
customers, for their unmet Home loans and Loan against property needs with a
deeper penetration.
The objective is to make Magma an Affordable housing loan company, with our
focus on small locations, small loans, mostly for captive home or working capital
needs of informal income customers, with properties being within municipal limits
as also in Town and Country planning zones as well as Gram Panchayat areas.
With the introduction of tablets provided to our business executives, we should be
able to reduce the processing and turnaround times, besides a juch superior
service to our channels and customers.
We have already reduced the turnaround time (TAT) from 22 days to 15 19 days.
And now we want to bring it to down further this year, with simplified, robust and
technology driven processes.
We will be focusing on rurban SENP customer, with average ticket size in sub-Rs 20 lakh
range this year, increasing our home loans penetration, getting more direct business form
existing customers and new customers, leveragin the entire Magma network. We intend

capturing the growth in the smaller locations, with smaller ticket affordable housing
segment and the still untapped demand from Tier II/III cities, where customers of
this profile are not adequately catered to, due to informal and partly documented
income sources.

[18]%

[26]%

Increase in AUM for

housing finance
business

Increase in number of
disbursements of
housing finance
business

[149]
Number of housing
finance branches

Page 30-31

People count at every step

At Magma, our people are the key drivers in making our brand prominent
and promising. We aim to enhance their skills in every possible way, so
that they can add more value for the Company; and at the same time
accelerate their career progression.
This has been an eventful year for us as we fine-tuned our HR strategies to ensure
sustainable growth. We focused on building a versatile team, capable of efficiently
managing multiple business functions, thereby increasing productivity.
Learning and development
As a progressive organisation, we restructured our business model to ensure
Profitable Growth. Recognising the challenges faced by our people in performing
their new roles, we invited them to a two-day workshop. We focused on upgrading
their skills to make them attuned to the new role. During the workshop, expert
trainers spent time with two of the key stakeholders in the new business structure
regional business heads and regional credit heads to train them on finesse,
knowledge and nuances of facilitation skills. The workshop focused on overcoming
stage fright, managing training participants, improving non-verbal skills and
handling participant queries, using appropriate communication codes.

Post restructuring, our field officers were made responsible to perform all three
functions sales, credit and collections, together. We conducted training exercises
for 3600 field officers at their respective branch offices to equip them and make
them understand the importance of executing all three roles with similar efficiency.
They were trained on sales, credit and collections to develop their functional skills
and domain knowledge, making them ready for the transformational journey. The
objective was to develop end-to-end accountability among the workforce.
We have provided our field officers with user-friendly tabs to streamline the process
and save time. Therefore, relevant training has also been given to them to utilise
this technology in the best possible way.
We also conducted trainings through our online channel portal to ensure all-round
development, anytime, anywhere.

Recruitment and reallocation

Post restructuring of the business model, we split some of our large branches into
smaller branches, leading to opening of new branches to go closer to talukas and
tehsils. We reallocated people from the existing branches to new smaller branches.
We also recruited local people with relevant domain knowledge and awareness
about local market trends.
Driven by technology
We implemented the People Soft software to recalibrate HR practices by
developing the employee service levels. This software is used to support multiple
HR functions like recruitment; employee engagement; organisation, leadership and
development; learning and development; and appraisals. Consequently, it has
resulted in delivering more promising business outcomes.
Incentive schemes
We have refined our incentive scheme and sharpened the key performance
indicators (KPIs) for people to ensure better accountability and understanding.
People are now aware of what they really need to achieve in terms of disbursement
numbers, portfolio quality and cross selling, among others. There is a monthly
incentive scheme based on the monthly performance of employees.
We launched a competitive programme, Magma Yoddha Championship for our
employees. In this challenging event, people had to work smart and achieve their
target to get attractive rewards, including cash prizes, cars, foreign trips and many
more.
Employee-engagement activities
Mission India: On 1st December 2015, over 9000 Magmaites across 220+
locations celebrated the launch of Mission India. The programme began with a
Puja, hosted by the newly appointed branch managers at each of the locations. An
audio-visual message of our MD was shown simultaneously at all branch offices to
communicate Magmas transformational journey. Members from the leadership
team and other senior members visited various locations, took part in the
celebrations and handed over letters signed by the MD to the branch managers.
Alaap: We conducted a programme called Alaap at the launch of the Mission India
event. As a part of this programme, our senior members initiated informal
interaction with everyone present in the event. This day also witnessed the launch
of our social impact initiative, Swayam. Besides, Magmaites shared their wish
through I Wish activity, where they wrote their wishes on a card, tied it up with a
gas balloon and released it. The event concluded with the handing over of tablets,
printers, and upgradation of POC and POS applications.

We continued our marquee event, Rendezvous across [18+3] locations with over
[4116] participants.
We also celebrated important days of the year like Womens Day and Diwali to
emphasise on work-life balance, as well as to strengthen the bond between
employees.
Quarterly, we identify about 50-60 field officers who perform outstandingly, and
they are called by our Managing Director (MD). He personally congratulates them
for their achievements and this direct acknowledgement motivates them.
We send regular videos to people and have started communicating in vernacular
languages to strengthen the communication process.

Thank you note

This year, we took a special initiative to thank the family members of our
employees for supporting them to contribute to Magma. Appraisal letters were thus
sent to parents or wives of our employees to make them feel special.
Employee retention endeavours
Employee retention has always remained one of our most significant focus areas. To
strengthen the process, we primarily emphasised on:
Maintaining work-life balance
Personally communicating with our employees to understand their problems
Conducting frequent counselling sessions
In the last few months a large number people have rejoined Magma.
Outlook
In the coming year, we will focus on three specific areas:

Upgrading HR service: We want to upgrade our technology to make the HR

system more efficient, quick and effective.
Driving performance and productivity: We will continue to train our
employees, and make them aware of the incentives to increase their performance
level.
Restructuring HR: We are also restructuring our HR, aligned to the new business
model. With the growth in Insurance and Housing segments, we are strengthening
HR initiatives in these two sections.

[9000]+
Team strength
as on 31st
March, 2016

[410]

[17143]

Number of
training
programmes
conducted
during FY
2015-16

Person day of
training
imparted
during FY
2015-16

Page 32-33

Robust IT creates new possibilities

At Magma, we are consistently upgrading our technology to support
informed decision-making. Our robust IT architecture is helping us

streamline operations, improve efficiency, maximise profit and provide

better services to customers.
Technology integrated business processes
Pre-sales and sales
customer acquisition
process
Tablet-equipped field
executives are
capable of operating
from any location
(virtual office)
Electronic transfer of
loan application with
all documents from
the point of sale
Usage of data
analytics for
customised cross sell
and up sell offering
Result: Increased
penetration, faster
turnaround time and
better lead conversion
Centralised
Disaster
Data Centre
Recovery
Centre

Channel servicing and

customer engagement
process
Channel portal allows
automatic tracking of
files/process
Call centre provides
real-time support for
complaints/enquiries
Frontline decision
support for better
understanding of
customer
requirements

Collections and risk

management process

Online submission of
field investigation
reports
Cash collection at
customer location, on
spot money receipts
and instant reporting
of collections to
central database
External credit
databases embedded
in BI/sales interfaces

Result: Improved
Result: Enhanced
customer experience,
customer service, faster
better product design
credit appraisal and
inputs
robust cash management
BI & Data
Document
Portals for
Analytics
Management Channel
Support
Partners and
INS Agency

We undertook the following initiatives to strengthen our framework.

Technologically aligned to transformation
FY 2015-16 witnessed a number of transformations in our business strategies,
supported by relevant technological back-up. We have empowered our field force with
various technological tools to not only collect real-time information from customers,
but also to sell the right product at the right time.
We equipped our people with user- friendly tabs to maintain one-point contact with
customers. Daily journey plan and visit calendar in tablets eased the entire process
and saved the time that gets wasted in preparing work schedules.
Decision-support tools
We have introduced decision-support tools, which help field officers to address
customer queries following a specified questionnaire. This unique and dynamic
initiative suggests appropriate products to customers.
Business intelligence tools
We introduced business intelligence tools, which supported real-time access to
business data and reports. Our elaborate business intelligence tools have been rolled
out across the organisation to support the decision-making process.
We have implemented a technology for business development, which helps in
identifying unique customers and repeat customers from millions of our customer
database.

Core business operating system

We are implementing Finnone-Neo for our core business operating system, replacing
our legacy system. This industry-standard system will make us future proof, enriching
future capability. This will systematise the entire workflow with approvals, alerts and
notifications. This technological upliftment will also enable us to comprehensively
track deviations in the field.
Ready with apps
We have launched customised mobile Android apps for sales and collection. Right
from sales log in to collections the entire process is executed through this
application.
We launched an app for our insurance vertical, enabling our insurance agents to sell
policies on their tablets.
Other initiatives
We rolled out an internal ticketing system for our support functions IT, HR and
admin, among others. It basically manages internal services, internal support
requests and complaint management, among others.
We continue to invest in our data centre and information security system to ensure
business confidentiality and data security.
Outlook
We aim to conduct predictive analysis based on data we have in our repository;
and will build a team that specialises in this domain.
We will integrate more business intelligence tools to strengthen various business
functions.

4000+
Tablets distributed
during FY 2015-16
Page 34-35

Strengthening brand prominence

At Magma, we have developed a unique corporate brand identity
through a mix of various marketing channels to enhance the
brand visibility and achieved planned relevance among targeted
stakeholders.
Our long-term communication strategy Aapke Sapne Hamara Saath, in-line with our
core positioning of Investing in a smallest dream, is based on deep consumer/
channel insights focussing on focussed products. This revised strategy has helped us
to connect with our RURBAN target audience through a vernacular based distinctive
and clutter free communication.
We have also upgraded our existing signature tune as per the latest industry
standards and launched Magma Dhun - the first of its kind of audio mnemonic in

NBFC category. This would also help us to establish our brand & create high brand
recall in long run.
We follow a three-pronged marketing strategy, focusing mostly on below the line (BTL)
& relevant digital initiatives supported by strong internal activities.
BTL activities
During the year, we deepened our penetration into clusters and villages, with our
sales team now present in about 1,800 Talukas. At a ground level, we took a host of
marketing initiatives to engage existing consumers by streamlining direct, cross
selling and up selling to the customer base at one side, whereas on the other side, we
have constantly improved our relationships with channels/ intermediaries &
strengthen OEM partnerships.
In-branch activities: We conducted activation campaigns at our branches for our
existing customers. We also took several initiatives to educate and update people
about our financial products and solutions. These measures helped us to stay close to
our customers and strengthened our relationship with them.
Large format loan melas: We organised several loan melas in collaboration with
15-20 OEMs (passenger cars, utility vehicles, construction equipment and tractors).
We conducted these across various locations covering the entire Magma spread and
offered entire bouquet of financial products and solutions of Magma in order to
provide one stop solutions to end consumers. We have experienced high footfalls in
these kind of activations and earned lot of local media coverage
In line with large format events, we have also organised series of small scale
activation campaigns e.g. health check-up camps, promotional canopy events camps,
etc across targeted geographies to build brand awareness amongst the target
audience and introduced Magma to them through local opinion leaders.
Digital Initiatives
Digital marketing is one of the most important pillar of marketing at Magma. Digital
has complimented BTL by creating thought leadership in online domain in respective
product categories. In recent times with our significant efforts on Search Engine
Optimisation (SEO), we have significantly improved our ranking in google search and
have created positive effects on web based target audience.
Apart from SEO, our cutting edge social media campaigns based on core thought
process of Celebrating Dreams during peak business seasons has helped us to
maximise brand recall & enhanced emotional brand connect with stakeholders,
consumers & channel partners. One of our social media campaign '#27YrsOfCelebratingDreams - Disha Ki Kahani' with 92K+ views was a 1st of its kind
in Magma which went viral in online social media framework & increased our brand
awareness.
In order to provide best-in-class customer service, we have also positioned our major
social media platforms i.e. Facebook & Twitter, as a Listening Platform for our end
customers. This is in line with latest digital trends which has opened up another
channel for customers to connect with us and improved service delivery level towards
maximum customer satisfaction.
Engagement through internal activities

Constant internal engagement and hands-on trainings to our sales teams, equipped
with latest tools and technologies were pillars behind the success of our business.
Frequent communication helps them to stay updated about their business targets and
access to tools & knowledge which helps them to promote any particular offer in a
customised manner, aligned to specific clusters. The core idea here is to realign our
strategies according to region-specific offerings.
Engaging channel partners through channel portal
Considering Channels as one of the most important contributor to our business, we
have made a state of art web-based channel portal https://magmapartner.magma.co.in/
to provide maximum convenience & improve our service delivery to our channel partners.
Several engagement activities have been carried out to strengthen our relationship with
channel partners.

Outlook
Going forward, we want to create market leaderships in terms of activating targeted
geographies where we have limited foothold and creating Thought Leadership in
respective online categories.
Our core objective is to become bigger, better and stronger.

Page 36-37

Widening community participation

Our business priority is to support the aspirations of underprivileged
sections of our society. We also focus on separate CSR initiatives to
ensure social, economic and environmental wellbeing.
Corporate social responsibility at Magma starts with shared values that form the
foundation of our culture: openness and transparency; integrity and credibility;
fairness and impartiality; trust and respect for people; and demanding excellence.

Social Initiatives
Aiding truck drivers
We have been encouraging millions of truck drivers to turn into entrepreneurs by
financing their purchase of commercial vehicles. Our focus is to help truckers derive
superior mileage, gain better earnings and prosper.
We collaborated with Petroleum Conservation Research Association (PCRA), a
Government of India undertaking to launch a nation-wide training programme on best
driving practices. This initiative provides training to a batch of 15 truckers, resulting in
energy and oil saving. The sessions range from theoretical to practical lessons,
comprising road experiments, videos and dialogue in local languages. The truckers are
honoured with Certification of Excellence at the end of the programme.
As we focused on some transportation hubs, we noticed inadequate toilet facilities
and lack of hygiene in many transport nagars. In the first phase, we installed porta
cabins and e-toilets in 13 such transport nagars. Regular workshops are held in these

porta cabins to help improve driving habits for better mileage and fuel conservation.
Besides, we also organise bi-monthly free consultation, diagnosis and basic
medication, posture correction and de-stress workshops at these cabins.
M-Scholar Supporting talent
We initiated a scholarship scheme for bright students, M-Scholar, as a part of our
commitment to encourage education. We are providing financial assistance to 50
meritorious students from economically-marginalised families, whose parents are daily
wage earners. This will enable them to meet their education-related expenses, while
pursuing higher studies.
The scholarship is applicable for Indian students who have appeared in senior
secondary board exams and wish to pursue undergraduate and postgraduate studies
at any recognised college/ university in India. Despite hardships, these students have
managed to enrol in reputed institutes like IIT, ISM and NIT, among others.
Annamrita Sponsoring midday meal programme
The Government of India instituted midday meal programme to feed thousands of
disadvantaged children and bring them to schools.
ISKCON Food Relief Foundation (IFRF) implemented this programme under the brand
name Annamrita in select schools in Delhi, Maharashtra, Rajasthan, Andhra Pradesh,
Madhya Pradesh, Uttaranchal, Haryana, Jharkhand, Assam and West Bengal. IFRF has
already served 20 lac meals to underprivileged students and supported midday meal
scheme in 134 schools under Kolkata Municipal Corporation (KMC).
In support of Annamrita, we are sponsoring meals for 750 students from KMC schools
for a complete school year.
Ekal Vidyalaya Project Promoting education
Education is the foundation that strengthens the future of the young generation and
nurtures their leadership ability.
We have partnered with the Friends of Tribal Society for their literacy project and have
adopted several rural schools across the country. Ekal Vidyalaya is an innovative
concept of One Teacher Schools (OTS), where a single trained teacher regularly
educates children between 6-14 years for three hours using informal methods. The
school curriculum is tailored to teach basic literacy and life skills to children and help
them develop self-confidence to succeed in life.
M-ART Encouraging art and artists
At Magma, we organise a two-day workshop called M-ART across various cities in the
country to encourage upcoming talented artists. Promising artists participate in this
programme and colour the canvases with great enthusiasm.
Providing financial assistance
We offer financial assistance to economically-disadvantaged people suffering from
various diseases like leukaemia, cancer and tuberculosis, among others.
We have been supporting victims of natural calamities like Aila in Bengal, Uttarakhand
tragedy, Nepal earthquake and Chennai floods, among others.
Swayam Fostering social benefits
At Magma, we run a volunteering programme, Swayam that encourages employees to
drive social wellbeing. We encourage our employees to contribute their time and

expertise in a variety of forms to support social initiatives. At present, Swayam is

operative in 13 locations and the impact made by us has received due
recommendation. We have been honoured with the Asia Pacific HRM Congress Awards
2015 in the category of Best CSR practices.
Inside back cover

Corporate information
Board of Directors
Mr. Mayank Poddar
Chairman
Mr. Sanjay Chamria
Vice Chairman and Managing Director
Mr. Narayan K Seshadri
Non Executive Independent Director
Mr. Nabankur Gupta
Non Executive Independent Director
Mr. Satya Brata Ganguly
Non Executive Independent Director
Mr. Sanjay Nayar
Non Executive Director
Ms. Ritva Kaarina Laukkanen
Non Executive Director
Mr. Srenik Singhvi
Additional Director
Chief Financial Officer
Mr. Atul Bansal
Mr. Mayank Poddar
Chairman
Mr. Sanjay Chamria
Vice Chairman and Managing Director
Mr. Neil Graeme Brown
Non Executive Independent Director
Mr. Narayan K Seshadri
Non Executive Independent Director
Mr. Nabankur Gupta
Non Executive Independent Director
Mr. Kailash Nath Bhandari
Non Executive Independent Director (up to
14th May, 2014)
Mr. Satya Brata Ganguly
Non Executive Independent Director

Mr. Sanjay Nayar

Non Executive Non Independent Director
Ms. Ritva Kaarina Laukkanen
Non Executive Non Independent Director
w.e.f 14.10.2014
Company Secretary
Ms. Shabnum Zaman Girish Bhatia upto
06.09.2014
Kailash Baheti from 07.09.2014
Bankers
Punjab National Bank
State Bank of India
ICICI Bank Limited
Axis Bank Limited
The Hong Kong and Shanghai Banking
Corporation Limited (HSBC)
UCO Bank
Oriental Bank of Commerce
United Bank of India
Corporation Bank
IDBI Bank Ltd
Indian Bank
Bank of Baroda
Union Bank of India
Bank of India
Dena Bank
Andhra Bank
State Bank of Hyderabad
Syndicate Bank
Central Bank of India
Bank of Maharashtra
Indian Overseas Bank
Canara Bank
Vijaya Bank
Allahabad Bank
Development Credit Bank
Punjab National Bank
State Bank of India
ICICI Bank Limited
Axis Bank Limited
The Hong Kong and Shanghai Banking
Corporation Limited (HSBC)
UCO Bank
Oriental Bank of Commerce
United Bank of India
Corporation Bank

IDBI Bank Ltd

Indian Bank
Bank of Baroda
Union Bank of India
Bank of India
Dena Bank
Andhra Bank
State Bank of Hyderabad
Syndicate Bank
Central Bank of India
Bank of Maharashtra
Indian Overseas Bank
Statutory Auditors
B S R & Co. LLP
Chartered Accountants
Firms Registration No.-101248W/W-100022
Maruthi Info-Tech Centre
11-12/1 Inner Ring Road
Koramangala
Bangalore 560071
B S R & Co. LLP
Chartered Accountants
Maruthi Info-Tech Centre
11-12/1 Inner Ring Road
Koramangala
Bangalore 560071
Secretarial Auditor
M/s. MKB & Associates
Practicing Company Secretaries
Manoj Kumar Banthia(Proprietor)
COP No.-7596

Shantiniketan, 5th Floor, Room No. 511, 8,

Camac Street, Kolkata-700 017
Registered Office
MAGMA HOUSE
24, Park Street, Kolkata-700 016
Tel: +91 33 4401 7350/7200
Fax: +91 33 4401 7731
Email Id: secretary@magma.co.in
Website: www.magma.co.inMAGMA
HOUSE
24, Park Street, Kolkata-700 016
CIN:L51504WB1978PLC031813
www.magma.co.in

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