Marg

The Directors of your Company have great pleasure in presenting the
 thirteenth Annual Report, together with the audited accounts for the
 financial year ended March 31, 2008. Members would be happy to note
 that your Company had a good year of operations, resulting in a total
 income of Rs. 2,783.97 million, an increase of 96.71% over the last
 year. Operations resulted in after tax profit of Rs. 674.43 million, an
 increase of 125.46% over the last year.
 
 Operations
 
 The Companys financial results for the year ended March 31, 2008 is
 summarised below:
 
                                                        (Rs in million)
 
                                                 Year ended Year ended
 
 Income from operations                            2,427.48  1,242.08
 
 Non-operating Income                                356.49    173.20
 
 Total income                                      2,783.97  1,415.28
 
 Total expenditure                                 1,865.56    947.95
 
 Profit before depreciation, interest and taxation   918.41    467.33
 
 Interest & finance charges                           51.28     62.61
 
 Depreciation                                         31.77     19.15
 
 Profit before tax                                   835.37    385.57
 
 Provision for current taxes                         144.00     80.00
 
 Provision for deferred taxes                         15.36      5.69
 
 Fringe benefit tax                                    1.58      0.74
 
 Profit after tax                                    674.43    299.14
 
 Balance in Profit & Loss Account                    358.04    112.57
 
 Amount available for appropriation                1,032.47    411.71
 
 Interim Dividend                                     51.22     20.84
 
 Dividend tax                                          8.70      2.92
 
 Transfer to general reserve                          70.09     29.91
 
 Balance carried to Balance Sheet                    902.46    358.04
 
 During the year, the basic earning per share is Rs. 31.88 and diluted
 earning per share is Rs. 31.76 for equity share of Rs. 10 each.
 
 The year 2007-08, witnessed excellent results as your Company achieved
 an operational income of Rs. 2,427.48 mn for the financial year 2007-08
 compared with Rs. 1,242.08 mn in 2006-07. The total turnover also
 increased to Rs. 2,783.97 mn for the current year as against Rs.
 1,415.28 mn of the previous year. Profit before depreciation, interest
 and tax stood at Rs. 918.41 mn compared to last years Rs. 467.33 mn,
 registering an increase of 96.52%. Profit before tax stood at Rs 835.37
 mn, an increase of 116.66% over the last year.
 
 Name change
 
 The Companys Shareholders at their Annual General Meeting held on
 September 25, 2007, approved the change in name of the Company from
 MARG Constructions Limited to MARG Limited. The same was approved by
 the Registrar of Companies and a fresh certificate of incorporation was
 issued on December 17, 2007.
 
 The Company has included one more objective, i.e. setting up of
 infrastructural facilities, industrial projects, tourism projects, etc.
 while continuing in the business of construction and infrastructure
 development.
 
 Projects
 
 Your Company has progressed well in all its current projects in
 different verticals, handled by dedicated teams. The average age of the
 employees is 34 years. These teams are highly skilled, motivated and
 are led by professionals who are experts in their respective fields.
 The projects are discussed in detail in the Management Discussion and
 Analysis Report which forms part of this report.
 
 Dividend
 
 The Directors recommend a dividend of 20% (Rs. 2 per equity shares of
 Rs. 10 each) for the year ended March 31, 2008. The aggregate amount of
 dividend on equity shares for the financial year 2007-08 would be Rs.
 59.92 mn, including dividend tax and surcharge thereon. The company
 proposes to transfer Rs.70.09 million to the General Reserves out of
 the amount available for appropriation.
 
 Future prospects
 
 Going forward, we maintain our positive outlook to maintain the growth
 momentum for the year 2008-09. Infrastructure and realty sectors
 cemented its path and witnessed significant growth.
 
 The envisaged GDP by the Government of India need to be supported by
 creating further infrastructural facilities. The avenues are abundant
 and the Company is trying to capitalise on the opportunities available
 through all the concerns.
 
 Your Company is pursuing growth opportunities, strategic to its intents
 and operations. It has all available resources leading to the future,
 leveraging on all available infrastructural development opportunities.
 Future prospects and projects of the Company are provided in detail in
 the Managements Discussion and Analysis Report.
 
 Your company aims at capturing 5% of the market shares in all the
 business verticals.
 
 Challenges
 
 Your Company has set a vision to be a trusted market leader in
 providing infrastructure solutions and is thus set for an exponential
 growth, while gearing up to take challenges.
 
 The Company is facing normal market competition from domestic and
 international companies. It has successfully maintained its operating
 efficiencies and constantly improved its financial performance.
 
 Joint venture agreement
 
 Signa Infrastructure (India) Limited was incorporated as a subsidiary
 of MARG Limited (then MARG Constructions Limited), a joint venture of
 the Company.
 
 This company was formed with a view to take up larger projects in
 infrastructure development. The joint venture partner, Housing and
 Urban Development Corporation Limited (HUDCO), holds 26% of shares and
 74% share are held by your Company. This company is executing certain
 projects and is also bidding larger projects in infrastructure segment
 including Government projects.
 
 Fixed deposits
 
 The Company has not invited or accepted any fixed deposits from the
 public.
 
 Directors
 
 In accordance with the provisions of the Companies Act, 1956, and the
 Articles of Association of the Company, Mr.  Saibaba Vutukuri, was
 appointed as the Additional Director on Board on October 24, 2007. The
 Company has received a notice under Section 257 of the Companies Act,
 relating to his re-appointment at this Annual General Meeting.
 
 Mr. P M Shivaraman and Mrs. V P Rajini Reddy, Directors retire by
 rotation and being eligible offer themselves for re- appointment.
 
 Directors responsibility statement
 
 Pursuant to the requirement under Section 217(2AA) of the Companies
 Act, 1956, the Directors hereby confirm that:
 
 i) In the preparation of the Annual Accounts for the financial year
 ended March 31, 2008 the applicable accounting standards had been
 followed and there are no material departures;
 
 ii) They have selected such accounting policies and applied them
 consistently and made judgments 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 financial year and of the profit and loss
 account of the Company for that period;
 
 iii) They have taken proper and sufficient care to the best of their
 knowledge and ability for the maintenance of adequate accounting
 records in accordance with the provisions of the Act for safeguarding
 the assets of the Company and for preventing and detecting fraud and
 other irregularities;
 
 iv) They have prepared annual accounts on a going concern basis.
 
 Auditors
 
 M/s K Ramkumar and Co., Chartered Accountants, Auditors of the Company,
 holds office upto conclusion of the forthcoming Annual General Meeting
 and have given their consent for the reappointment. The company has
 received a certificate under Section 224(1B) regarding their
 eligibility for re-appointment as the Companys auditors for the year
 2008-09.
 
 Corporate social responsibility - approach towards society
 
 At MARG we want progress to be inclusive; we would like our communities
 and our people to grow along with us, to have access to equal
 opportunity and the power to make their dreams a reality. Your company
 has started programmes to usher in a ‘Chain of Change through three
 aspects - education, health & nutrition and the environment.
 
 In the field of education and skill development, Your Company proposes
 to upgrade school infrastructure, balwadis and aanganwadis, and
 providing educational aids like charts, globes and libraries. Your
 company will also enable skill development in association with CII and
 local NGOs. Your company has established a Grassroots Level Skill
 Development Initiative (GLSDI) that offer a 20-day training program to
 prepare these youths to the world of work. This initiative shall impart
 training at the pre-employment level, covering areas such as workplace
 culture, communication skills, hygiene, safety, time management, etc.
 and industry- specific training program to equip people with specific
 industries like construction, manufacturing units, and so on.  Through
 this initiative so far 1035 youth have been placed.
 
 Providing communities with access to healthcare allows a community to
 grow strong. Towards this end, Your Company plans to upgrade Primary
 Health Centres with medical equipment, proper sanitation facilities for
 children at schools, setting up a multi speciality hospital at
 Koovathur, besides conducting routine medical camps.
 
 A good environment will foster a better quality of life. Your companys
 initiative in this direction involves creating ponds, water collection
 infrastructure in anticipation of the monsoons, provide for piping of
 water, filling of OHT during the summer and to plant trees for a
 cleaner and greener city.
 
 Besides the above, your company has undertaken various outreach
 programmes like an Ability Fest, conducted in association with Ability
 Foundation, for the disabled. Another programme was conducted for 240
 under privileged children, studying in a residential school, as an
 educational tour.
 
 Industrial relations
 
 Your Company believes in maintaining cordial industrial relations with
 workers at all project sites. Your company strives in augmenting and
 developing human assets. At present we have around 25 contractors
 employing around 1500 contract workmen at various projects.
 
 Employee wellness
 
 Your Company believes in work life balance; we have family interaction
 programmes which are combined with national festival holidays. We
 celebrate these festivals with great pomp and grandeur.
 
 Leverage human potential
 
 Your Company recognizes the potential in each employee and it
 endeavours to capitalize on this potential through innovative reward
 and recognition programmes.
 
 Particulars of employees
 
 Particulars of the employees of the Company who were in receipt of
 remuneration, which in aggregate exceed the limits fixed under Section
 217 (2A) of the Companies Act, 1956, and Companies (Particulars of
 Employees) Rules, 1975, is separately provided marked as Annexure I.
 
 Conservation of energy, technology absorption, foreign exchange earning
 and outgo As the Company is not an industrial undertaking, accordingly,
 particulars with regard to conservation of energy and technology
 absorption and adaptation required to be given under these heads in
 accordance with the provisions of Section 217(1)(e) of the Companies
 Act, 1956, read with the Companies (Disclosure of Particulars in the
 Report of Board of Directors) Rules, 1988, are not applicable.
 
 The information on foreign exchanges earnings and outgo is contained in
 the note 14 schedule 18 Notes to Account, forming part of the accounts.
 A separate list is also attached as Annexure II.
 
 Subsidiaries
 
 The Company has 69 subsidiaries as on March 31, 2008. Brief details of
 the subsidiaries are attached as Annexure IV. The Company has been
 granted exemption by the Central Government vide their letter bearing
 number 47/313/2008- CL-III dated May 23, 2008 as per provisions of
 Section 212 (8) of the Companies Act, 1956, from attaching the accounts
 and other information of subsidiaries as required under Section 212 (1)
 of the Companies Act, 1956. However a statement is attached in
 consolidated Balance Sheet providing the following information for each
 subsidiary (a) capital, (b) reserves, (c) total assets, (d) total
 liabilities, (e) details of investment (except in case of investment in
 subsidiaries), (f) turnover, (g) profit (loss) before taxation, (h)
 provision for taxation, (i) profit (loss) after taxation and (j)
 proposed dividend” as per the exemption of the Central Government.  The
 same forms part of the annual accounts of the Company.
 
 The consolidated financial statements of the subsidiaries duly audited
 are presented along with the accounts of your Company. The annual
 accounts of subsidiary company are kept at the Companys registered
 office and also at the respective registered office of the subsidiaries
 for inspection and shall be made available to the any members/
 investors of Company or any subsidiary, seeking such information at any
 point of time.
 
 Employee stock option scheme
 
 Your Company had implemented MARG Constructions Limited Employee Stock
 Option Scheme 2006 (ESOP 2006) and MARG Constructions Limited Employee
 Stock Option Scheme 2007 (ESOP 2007) for the benefit of employees of
 the Company and its subsidiaries. The aforesaid Scheme was approved by
 the members of the Company at the Annual General Meeting held on
 September 30, 2006 and September 25, 2007 respectively and the scheme
 is monitored under the guidance of the members of Compensation
 Committee of the Board of Directors.
 
 The Disclosures required to be made under SEBI (Employees Stock Option
 Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 is given
 as Annexure III to this report including details on the grant, vesting,
 exercise, and lapsed under the aforesaid scheme ESOP 2006 and ESOP
 2007.
 
 Management discussion and analysis report
 
 The Management discussion and analysis report for the year under
 review, as stipulated under Clause 49 of the Listing Agreements is
 presented in a separate section forming part of the Directors Report.
 This segment also contains detailed information of projects executed
 under each vertical.
 
 Corporate governance
 
 Your Company is committed to maintain the highest standards of
 Corporate Governance. Your Directors adhere to the requirements set out
 by the Securities Exchange Board of Indias, Corporate Governance
 Practices and have implemented all the stipulations prescribed. Report
 on Corporate Governance as stipulated in Clause 49 of the Listing
 Agreement is presented in a separate section, forming part of the
 Directors Report.
 
 Acknowledgement
 
 Your Directors would like to express their grateful appreciation for
 assistance and co-operation received from the financial institutions,
 banks, government authorities, customers and members, during the year
 under review.
 
 Your Directors also wish to place on record their deep sense of
 appreciation for committed and dedicated services of the workers,
 staff, and officers of the Company.
 
                            For and on behalf of the Board of Directors
 
 Place: Chennai                                             G R K Reddy
 Date : June 18, 2008                      Chairman & Managing Director