DIRECTORS REPORT

TO

THE MEMBERS,

The Directors of Master Trust Limited (MTL) have great pleasure in presenting the Annual Report of the company with audited statements of accounts for the financial period ended 31st March, 2015 along with report of the Statutory Auditors thereon.

2. Performance Highlights

On a consolidated basis, the Company's gross income increased by 26.16 % to Rs.1146.09 million as compared to Rs. 908.45 million in the previous year. The Net worth of the Company has increased by 5.94 % to Rs. 1673.05 million as compared to Rs. 1579.25 million in the previous year. The Net Profit after tax increased by 11.60 % to Rs. 93.79 million as compared to Rs. 84.04 million in the previous year. The basic and diluted earning per share for the current year increased by 11.51% to Rs. 8.62 per share as compared to Rs. 7.73 per share in the previous year.

3. Dividend

Keeping in view the present economic situations, the board recommends retaining the earnings in the Company; hence, the Board has not recommended any dividend on the equity share capital of the Company.

4. Outlook

India is today one of the most vibrant global economies, on the back of robust financial sector. Several measures have been outlined in the Union Budget 2014-15 that aim at reviving and accelerating investment which, inter alia, include fiscal consolidation with emphasis on expenditure reforms and continuation of fiscal reforms with rationalization of tax structure; fillip to industry and infrastructure, fiscal incentives and concrete measures for transport, power, and other urban and rural infrastructure; measures for promotion of foreign direct investment (FDI) in selected sectors and, steps to augment low cost long-term foreign borrowings by Indian companies. All this will bring a slew of opportunities across sectors and in such a scenario; equities can provide investors good returns. Global liquidity inflows will continue to remain strong as investors prefer growth. With China and most commodity-driven economies slowing, India will be a preferred choice for global investors and this will attract a lot of FDI (foreign direct investment) and FII money over the coming years. Consequently, the equity broking business is likely to show considerable growth over the next few years.

5. Reserves

During the period under review there was a net transfer of Rs. 6.65 million to Statutory Reserve.

6. Management Discussion and Analysis

The Management Discussion and Analysis Report for the year under review as required under Clause 49 of the Listing Agreement, is given as a separate statement forming part of the Annual Report.

7. Adequacy of Internal Control

The Company has a proper and adequate system of internal control, to ensure that all assets are safeguarded, properly utilized and protected against loss from un-authorized use or disposition and those transactions are authorized and recorded by the concerned departments properly and reported to the Audit Committee/Board correctly.

The Company has also in place adequate internal financial controls with reference to financial statements. Such controls are tested from time to time and no reportable material weakness in the design or operation has been observed so far.

8. Audit Committee

The Audit Committee of the Board of Directors of the Company consists of 3 Non-Executive Independent Directors viz. Mr. Ashwani Kumar, Mr. Sudhir Kumar and Mr. Anil Kumar Malhotra. All the Members of Audit Committee are financially literate and have accounting knowledge to interpret and understand the financial statements. No recommendation of the Audit Committee has been rejected by the Board of Directors of the Company during the period under review.

9. Human Resource Development

The Company has a team of able and experienced professionals and is always following the policy of creating a healthy environment and work culture resulting into harmonious inter-personnel relations. The relations at all levels of the Company have remained very cordial throughout the year.

10. Directors/Key Management Personnel (KMPs)

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and in accordance with Article 103 of the Articles of Association of the Company, Mrs. Harneesh Kaur Arora and Mr. G. S. Chawla, Directors of the Company retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment. Notice convening the Annual General Meeting includes the proposal for their re-appointment as the Director.

As on the date of this report, the Company's Board consists of the following Independent Directors:-

1) Mr. Pavan Chhabra

2) Mr. Anil Kr.Malhotra

3) Mr. Anil Kr. Bhatia

4) Mr. Ashwani Kumar

5) Mr. Sudhir Kumar

During the period under review, there was no change in the Board of Directors of the Company. The Board, however, appointed Mr. Mohan Singh as the Company Secretary of the Company w.e.f 14.11.2014 in place of Mr. Rajiv Kumar Aggarwal who resigned from the services of the Company. The Board appointed Mr. Sunil Kumar as the Chief Financial Officer(CFO) of the Company w.e.f 22.09.2014. In terms of the provisions of Section 203 of Companies Act, 2013, Mr. Harjeet Singh Arora, Managing Director, Mr. Mohan Singh, Company Secretary and Mr. Sunil Kumar, CFO are the KMPs of the Company.

Statement on Declaration by Independent Directors Under Section 149(6)

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchange.

11. Fixed Deposits

The Company has not accepted any public deposits within the meaning of Section 58A of the Companies Act, 2013 and Section 73 of the Companies Act, 2013 and the Rules made there under and as such, no amount on account of principal or interest on Public Deposits was outstanding on the date of the Balance Sheet.

12. Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report

There are no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company i.e. 31st March , 2015 and the date of the directors' report i.e. 14th August , 2015.

13. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future

As per an Ex-Parte Ad- Interim Order by SEBI (WTM/RKA/ISD/162/2014) in the matter of First Financial Services Limited, amongst others, Master Trust Limited has been restrained from accessing the securities market and buying, selling or dealing in securities, either directly or indirectly, in any manner, till further directions.

The Order is being contested by the Company and is sub-judice. In view of the management and as per the legal advice, no liability is likely to arise. Even, the amount of liability, if any, is indeterminate. Though the Order has affected one of Company's activity i.e. Trading/investment in securities, it however does not affect the going concern, the Company being an NBFC and having its core business of financing.

14. Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has also implemented several best Corporate Governance practices as prevalent globally.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

The requisite Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is attached to this Report.

15. Directors' Responsibility Statement

Pursuant to the provisions of Section 134 of the Companies Act 2013, the Directors confirm that

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the Directors had 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 of the Company for that period;

c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors had prepared the annual accounts on a going concern basis; and

e) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

16. Listing / De-listing of Shares

The Shares of your Company are presently listed on The Bombay Stock Exchange Limited, Mumbai (BSE) and the Annual Listing Fees for the year 2015-16 has already been paid to it.

17. Auditors Statutory Auditors

The Statutory Auditor, namely, M/s. Manjeet Singh & Co., Chartered Accountants, Firm Registration No. 011831N, Ludhiana, hold office until the conclusion of 32nd Annual General Meeting (AGM) subject to annual ratification by the members at the respective AGM.

The Auditor has furnished a certificate to the effect that their re-appointment, if made, at the ensuing AGM, will be within the limits prescribed under Section 141 of the Companies Act, 2013 and that they are not beneficially holding any security or interest in the Company as defined under Companies Act, 2013. The Board on recommendation of the Audit Committee recommends the ratification of M/s. Manjeet Singh & Co. as Statutory Auditors for the Financial Year 2015-16 by the members at the AGM.

Members are requested to consider the ratification of their re-appointment and authorize the Board of Directors to fix their remuneration for the year 2015-16.

Secretarial Auditors

M/s. Rajeev Bhambri & Associates, Ludhiana were appointed as the Secretarial Auditor for conducting the audit of the Secretarial Compliances of the Company. The Secretarial Audit for the year 2014-15 which, inter alia, includes audit of compliance with the Companies Act, 2013, and the Rules made under the Act, Listing Agreement and Regulations and Guidelines prescribed by the Securities and Exchange Board of India and Foreign Exchange Management Act, 1999 has been completed by M/s. Rajeev Bhambri & Associates, Ludhiana. The Secretarial Audit Report given by M/s. Rajeev Bhambri & Associates, Ludhiana is a part of this Annual Report.

18. Auditors' Report

No qualification, reservation or adverse remark or disclaimer has been made by the Statutory Auditors or the Secretarial Auditors in their reports. The Auditors' Report on the Accounts and the Secretarial Compliances of the Company for the period under review are self - explanatory and no comments are required.

19. Details of Subsidiary/JointVentures/Associate Companies

The Company has the following six(6) subsidiary companies :

? Master Infrastructure And Real Estate Developers Limited (Subsidiary)

? Master Capital Services Limited (Subsidiary)

? Master Insurance Brokers Limited (Step down Subsidiary)

? Master Commodity Services Limited (Step down Subsidiary)

? Master Portfolio Services Limited (Step down Subsidiary)

? H.A. Shares & Stock Brokers Ltd. (Subsidiary)

The Company however does not have any Joint Venture or Associate Company.

20. Performance and financial position of each of the subsidiaries, associates and joint venture companies included in the consolidated financial statement

The summary of performance of the subsidiaries of the Company is provided below:

a. MASTER CAPITAL SERVICES LIMITED (MCSL)

In the current year of operations FY 2014-15, MCSL posted significant increase in revenues. Master Capital Services Limited's revenue during the year under review increased to Rs. 867.79 million from Rs. 616.51 million in the previous year FY 2013-14 registering an increase of 40.75 %. Master Capital Services Limited's net profit, during the current year, increased to Rs.46.26 million from Rs.32.24 million registering a increase of 43.47 %.

b. MASTER COMMODITY SERVICES LIMITED (MCOML)

In the current year of operations FY 2014-15, MCOML posted significant decrease in revenues. MCOML's revenue during the year under review decreased to Rs. 127.65 million from Rs. 202.47 million in the previous year FY 2013-14 registering a decrease of 36.95%. MCOML's net profit, during the current year, decreased to Rs. 14.36 million from Rs. 34.23 million registering a decrease of58.05 %.

c. MASTER INFRASTRUCTURE AND REAL ESTATE DEVELOPERS LIMITED (MIREL)

In the current year of operations FY 2014-15, MIREL posted a decrease in revenues. MIREL's revenue during the year under review decreased to Rs.4.57 million from Rs.11.85 million in the previous year FY 2013-14 registering a decrease of 61.43% mainly due to a sluggish demand in the real estate sector. MIREL's net profit, during the current year, decreased to Rs.0.55 million from Rs.0.68 million registering a decrease of 19.12%.

d. H. A. SHARES & STOCK BROKERS LTD (HASSBL)

In the current year of operations FY 2014-15, HASSBL posted exponential growth in revenues. HASSBL's revenue during the year under review increased to Rs. 42.27 million from Rs. 8.52 million in the previous year FY 2013-14 registering an increase of 396.12%. HASSBL company's net profit, during the current year also increased to Rs. 1.24 million from Rs. 0.76 million registering an increase of 63.15%.

e. MASTER INSURANCE BROKERS LTD (MIBL)

In the current year of operations FY 2014-15, MIBL posted significant increase in revenues. Your company's revenue during the year under review increased to Rs. 8.36 million from Rs. 6.26 million in the previous year FY 2013-14 registering an increase of 33.54%. MIBL company's net profit during the current year, decreased to Rs. 0.68 million from Rs. 0.71 million registering a decrease of 4.47%.

f. MASTER PORTFOLIO SERVICES LIMITED (MPSL)

In the current year of operations FY 2014-15, MPSL posted significant increase in revenues. MPSL's revenue during the year under review increased to Rs. 7.61 million from Rs. 4.27 million in the previous year FY 2013-14 registering an increase of 78.22%. MPSL's net profit, during the current year, decreased to Rs. 0.16 million from Rs. 0.20 million register ing a decrease by 20%.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing salient features of financial statements of subsidiaries in Form AOC 1 is attached to the Accounts. The separate audited financial statements in respect of each of the subsidiary companies shall be kept open for inspection at the Registered Office of the Company during working hours for a period of 21 days before the date of the Annual General Meeting. Your Company will also make available these documents upon request by any Member of the Company interested in obtaining the same. The separate audited financial statements in respect of each of the subsidiary companies is also available on the website of your Company at <http://mastertrust.co.in/invester.aspx>.

21. Remuneration to Directors/Employees and related analysis

During the period under review, no employee of the Company received salary in excess of the limits as prescribed under the Act. Accordingly, no particulars of employees are being given pursuant to Section 134 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The details pertaining to the ratio of the remuneration of each director to the median employee's remuneration and other prescribed details as required under section 197(12) of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment And Remuneration of Managerial Personnel) Rules, 2014 are annexed herewith and form part of the Directors' Report.

22. Conservation of energy, technology absorption, foreign exchange earnings and outgo

Information with respect to Conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134 of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is not applicable because there are no manufacturing activities in the Company and/or its subsidiaries.

23. Extract of the annual return

The extract of the annual return in Form No. MGT - 9 annexed herewith forms part of the Board's report.

24. Number of meetings of the Board of Directors

Regular meetings of the Board are held to discuss and decide on various business policies, strategies and other businesses. Due to business exigencies, certain business decisions are taken by the Board through circulation from time to time.

The Board met (6) times during the FY 2014-15 viz. on 02.04.2014, 30.05.2014, 14.08.2014, 22.09.2014, 14.11.2014 and 14.02.2015.

25. Particulars of loans, guarantees or investments under section 186

Pursuant to Section 186(11) of the Companies Act, 2013 the investment and lending activities of a Non Banking Financial Company in the ordinary course of its business are exempted.

26. Particulars of contracts or arrangements with related parties

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. Since all related party transactions entered into by the Company were in the ordinary course of business and were on an arm's length basis, form AOC-2 is not applicable to the Company.

Your Directors, however, draw attention of the members to Note 25 to the financial statement which sets out related party disclosures.

27. Vigil Mechanism/Whistle Blower Policy

Pursuant to the provisions of Section 177 (9) & (10) of the Companies Act, 2013 and Clause 49(II) of the Listing Agreement, a Vigil Mechanism/Whistle Blower Policy for Directors and employees to report genuine concerns has been established. A copy of the Vigil Mechanism/Whistle Blower as approved by the board may be accessed at <http://mastertrust.co.in/invester.aspx>.

28. Corporate Social Responsibility (CSR)

The provisions of Section 135 of Companies Act, 2013 are not applicable on the Company. However, the Company recognising its responsibility towards the society has contributed an amount of Rs.1.5 million to M/s. Sri Aurobindo Socio Economic & Management Research Institute, A registered charitable trust working in the field of education.

29. Familiarization programme for Independent Director

The Board Members are provided with necessary documents/brochures, reports and internal policies to enable them to familiarise with the Company's procedures and practices. The details of such familiarization programmes for Independent Directors are posted on the website of the Company and can be accessed at <http://mastertrust.co.in/invester.aspx>.

30. Policy on dealing with related party transactions and the policy for determining 'material' subsidiaries

The Policy on dealing with related party transactions and the Policy for determining material subsidiaries as approved by the Board of Directors may be accessed on the Company's website at <http://mastertrust.co.in/invester.aspx>.

31. Insider Trading Regulations

Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended

from time to time, the Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information ("Code of Fair Disclosure") and the Code of Conduct to regulate, monitor and report trading by employees and other connected persons ("Code of Conduct") as approved by the Board on 14.05.2015 are in force by the Company. The objective of this Code is to protect the interest of shareholders at large, to prevent misuse of any price sensitive information and to prevent any insider trading activity by dealing in shares of the Company by its Directors, Designated employees and Specified Persons. The Company also adopts the concept of Trading Window Closure, to prevent its Directors, Designated employees and Specified Persons from trading in the securities of the Company at the time when there is unpublished price sensitive information.

32. Nomination and Remuneration Policy

The Company's Nomination and Remuneration Policy formulated by the Nomination and Remuneration Committee deals with the appointment and remuneration of Directors and KMPs of the Company. The policy also covers the criteria for determining qualifications, positive attributes, independence of a Director and KMP. In terms of Section 134(3)(e) of Companies Act, 2013 the Nomination and Remuneration Policy of the Company is annexed herewith and forms part of the Directors' Report.

33. Risk Management

The Board of Directors of your Company has constituted a risk management policy which seeks to identify risks inherent in business operations of the Company and provides guidelines to define, measure, report, control and mitigate the identified risks. The objective of Risk Management is to create and protect shareholder value by minimizing threats or losses, and identifying and maximizing opportunities. An enterprise-wide risk management framework is applied so that effective management of risks is an integral part of every employee's job.

The Board's role under the policy is to ensure framing, implementing and monitoring risk management plan, having in place systems for risk management as part of internal controls. It is the duty of Independent Directors to bring unbiased angle to the Board's deliberations on making risk management systems more robust. On the other hand, Audit Committee's role is Evaluate the risk management systems.

As a financial intermediary, the Company is exposed to risks that are particular to its lending business and the environment within which it operates. Company's goal in risk management is to ensure that it understands, measures and monitors the various risks that arise and that the organization adheres strictly to the policies and procedures which are established to address these risks. The Company is primarily exposed to credit risk, market risk, liquidity risk, operational risk and legal risk.

The Company has a structured and standardized credit approval process, which includes a well-established procedure of comprehensive credit appraisal. In addition, the Company attempts to mitigate operational risk by maintaining a comprehensive system of internal controls, establishing systems and procedures to monitor transactions, maintaining key back-up procedures and undertaking regular contingency planning. As regards legal risk, the Company seeks to minimize legal risk by using stringent legal documentation, employing procedures designed to ensure that transactions are properly authorized and consulting internal and external legal advisor. The Company also conducts a comprehensive analysis of our loan portfolio on a periodic basis. The analysis considers both qualitative and quantitative criteria including, among others, the account conduct, future prospects, repayment history and financial performance. This comprehensive analysis includes an account by account analysis of the entire loan portfolio, and an allowance is made for any probable loss on each account. In estimating the allowance, we consider the net realizable value on a present value basis by discounting the future cash flows over the expected period of recovery. Further, we also consider past history of loan losses and value of underlying collateral.

34. Board Evaluation

The Board of Directors of your Company recognises and accepts that Boards are accountable to the public to ensure that they are operating in an effective manner. Care is taken to avoid that the Board does not fall into the "same old way of doing things". Therefore, one of the few ways to identify and address the problem is for the Board to conduct a self-evaluation.

The Nomination and Remuneration Committee of the Company has approved the Annual Evaluation Plan for the Board, Committees and Individual Directors. The Board including its committees and members shall evaluate itself once a year, whether there are apparent major problems or not. Each member of the Board shall complete a form which comprises of objective questions on certain parameters such as their own roles and responsibilities in the Company, Strategic Leadership, Accountability, Board Processes and Board Performance. The responses shall be discussed among members of Board, Committees and at Individual level. The exercise shall be led by the Chairman alongwith a Senior Independent Director of the Company.

The results of the Evaluation shall be shared with the Board, Chairman of respective Committees and individual Director Based on the outcome of the Evaluation, the Board and Committees shall agree on the action plan to improve on the identified parameter. The first evaluation in terms of the plan has been completed during the period under review.

35. Prevention of Sexual Harassment at Workplace

The Company has Zero tolerance towards any action on the part of any employee which may fall under the ambit of 'Sexual Harassment' at workplace, and is fully committed to uphold and maintain the dignity of every women working in the Company. The Policy provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints. No complaints were pending at the beginning of the year and no such complaints were filed during the year.

36 Acknowledgment

Your Directors are pleased to place on record their appreciation and express their gratitude to the Company's Bankers, Clients, Advisors and Business Associates for their continued and valuable co-operation and support to the Company from time to time.

Your Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company. Your Directors would also like to place on record their appreciation for committed services rendered by the employees at all levels of your Company and its subsidiary companies.

For and on behalf of the Board of Directors

(Harjeet Singh Arora)

Managing Director DIN :00063176

Place : Ludhiana

Date : 14.08.2015