TO THE SHAREHOLDERS
The Directors have pleasure in presenting the Thirty First Annual Report together withthe audited accounts for the year ended 31st March 2016.
|1. FINANCIAL RESULTS || ||Rs./Lakhs |
|Particulars ||2015-16 ||2014-15 |
|Income from Operations ||127.47 ||174.68 |
|Profit / (Loss) before interest & depreciation ||52.77 ||103.93 |
|Less: Interest ||0.03 ||1.54 |
|Less: Depreciation ||- ||- |
|Profit / (Loss) before tax ||52.74 ||102.39 |
|Less: exceptional items provision for diminution in investments ||- ||0.01 |
|Add / (Less): Provision for Tax (including Deferred Tax) ||7.42 ||23.36 |
|Profit / (Loss) after tax ||45.32 ||79.02 |
|Add / (Less): Balance brought forward ||(82.78) ||(146.00) |
|Amount available for appropriation ||(37.46) ||(66.98) |
|Less: Appropriations ||9.06 ||15.80 |
|Balance carried forward ||(46.52) ||(82.78) |
The income from operations of the company for the year under review was atRs.127.47lakhs as against Rs 174.68 lakhs during the previous year.
b) Profit after tax
The profit after tax of the company for the year under review was Rs. 45.32 lakhs asagainst Rs.79.02 lakhs during the previous year.
3. MANAGEMENT DISCUSSION AND ANALYSIS
a) Classification by Reserve Bank of India (RBI)
The company is registered with RBI as Non Deposit taking Non-Banking Financial Company(NBFC-ND) and has a valid certificate of Registration.
b) Business Review
The Company continues to concentrate upon recovery of overdue receivables. Even whilepursuing the legal route the company attempts negotiations with customers for earlyrecovery of debts. During the year the company has collected an amount of Rs.10 lakhs.
(c) Future Outlook
The Company is not entering into fresh contracts for business and is continuing toconcentrate upon recovery of overdue receivables and is hopeful that the impact of thisapproach on the net worth will be more beneficial to the Company.
In view of accumulated losses the Directors do not recommend any dividend for the yearunder review.
5. TRANSFER TO RESERVES
An amount of Rs.906498/-(Last year Rs.1580370/-) has been transferred to SpecialReserve as per the requirement under Section 45 IC of the Reserve Bank of India Act 1934.The company has not transferred any amount to the general reserves.
6. EXTRACT OF ANNUAL RETURN
An extract of the annual return in Form MGT-9 is appended as Annexure I to this Report.
7. CORPORATE GOVERNANCE
Annexure to SEBI circular CIR/CFD/Policy CELL/2014 dated September 15 2014 applicableupto 30th November 2015 prescribes that the compliance with the provisions of clause 49shall not be mandatory in respect of companies having paid up equity share capital notexceeding Rs.10 crore and Net worth not exceeding Rs.25 crore as on the last day of theprevious financial year. Clause 15(2)(a) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (LODR Regulations) with effect from 1st December 2015prescribes that corporate governance provisions as specified in regulations 17 181920212223 242526 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46and paras C D and E of Schedule V shall not apply in respect of listed entity having paidup equity share capital not exceeding Rs.10 Crores and Net worth not exceeding Rs.25Crores as on the last day of the previous financial year. As the Equity Share Capital ofthe Company is Rs. 4.28 Crores and Net worthis Rs. 11.71 Crores as on 31st March 2015 thecorporate governance clauses are not applicable to the Company. Hence the Company is notproviding separate report on corporate governance and also a certificate confirming thecompliance of Corporate Governance Requirements
The existing composition of the companys board is fully in conformity with theapplicable provisions of the Companies Act 2013 with regard to Independent Directors andwomen directors.
Smt. Nalini Rajesh (DIN 07140228) of the company is liable to retire by rotation atthe ensuing Annual General Meeting (AGM) and being eligible offers herself forre-appointment. Necessary resolution for the re-appointment is being placed for approvalof the members at the AGM. The board therefore recommends her re-appointment as adirector of the Company. A brief resume of her and other relevant information have beenfurnished in the notice convening the AGM.
9. DIRECTORS RESPONSIBILITY STATEMENT
The Directors confirm that:-
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
b) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that year.
c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.
d) the directors have prepared the annual accounts on a going concern basis.
e) the directors have laid down internal financial controls which are adequate and areoperating effectively.
f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
10. DECLARATION BY INDEPENDENT DIRECTORS
All the independent directors have submitted the declaration of independence asrequired pursuant to Section 149(7) of the Companies Act 2013 stating that they meet thecriteria of independence as laid down section 149(6) of the Companies Act 2013.
11. BOARD MEETINGS
During the financial year 2015-2016 five board meetings were held respectively on 30thApril 2015 29th May 2015 14th August 2015 2nd November 2015 and 8th February 2016. SriS Ramakrishnan Director Sri S E S Mani Director and Smt Nalini Rajesh Directorattended all the meetings. Sri S Ramakrishnan Director attended two meetings.
12. COMMITTEES OF THE BOARD
Currently in line with the statutory requirement the Board has three committeesnamely the audit committee nomination and remuneration committee and stakeholdersrelationship committee.
a) Audit Committee
The committee consists of Sri R Ramakrishnan Sri S Ramakrishnan and Sri S E S Mani allindependent non-executive directors. Sri R Ramakrishnan is the Chairman of the Committee.Mr. R Krishnan CFO & Company Secretary is the Secretary of the Committee. The AuditCommittee met four times during the financial year on29th May 2015 14thAugust 2015 2ndNovember 2015 and 8th February 2016.Sri R Ramakrishnan and Sri S E S Mani attended allthe meetings. Sri S Ramakrishnan attended two meetings. The terms of reference interaliainclude the recommendation for appointment remuneration and terms of appointment ofauditors of the company examinations of the financial statement and the auditorsreport thereon and other matters specified for audit committees under Section 177 ofthe CompaniesAct 2013.
b) Nomination and Remuneration Committee
The committee consists of Sri R Ramakrishnan Sri S Ramakrishnan and Sri S E S Mani allindependent non-executive directors. Sri R Ramakrishnan is the Chairman of the Committee.The Committee met once during the financial year on 29th May 2015.
c) Stakeholders Relationship Committee
The committee consists of Sri R Ramakrishnan Sri S Ramakrishnanand Sri S E S ManiDirector all independent non-executive directors. Sri R Ramakrishnan Director is theChairman of the Committee. The committee metonceduringthefinancialyear on 29th March 2016.All the members attended the meeting.
13. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Board has adopted a policy on Whistle Blower Policy (vigil mechanism) in accordancewith the provisions of the Companies Act 2013 which provides a formal mechanism for alldirectors individual employees and other stakeholders of the Company to report theirgenuine concerns or grievances about unethical behavior actual or suspected fraud orviolation of the Companys code of conduct and ethics. The policy also provides foradequate safeguards against victimisation of director(s)/ employees(s) who avail of themechanism and also provides direct access to the Chairman of the audit committee. Thewhistle blower policy is available in our website at thelinkhttp://www.upasanafinance.com/pdf/WHISTLE-BLOWER-
14. NOMINATION AND REMUNERATION POLICY
The Board has on the recommendation of the Nomination andRemuneration Committee frameda policy for selection and appointmentof Directors Senior management and key managerialpersonnel and the remuneration of directors key managerial personnel and other employees.The Nomination and Remuneration Policy is attached in Annexure II of this report.
15. CHANGES IN DIRECTORS/ KEY MANAGERIAL PERSONNEL
Smt. Nalini Rajesh was appointed a non-executive director of the company liable forretirement by rotationby the members at the 30th Annual General Meeting held on 10thSeptember 2015.
Pursuant to section 203 of the Companies Act 2013 the following continue to be theWhole time Key Managerial Personnel of the company: Sri R Somasundaram Chief ExecutiveOfficer Sri R Krishnan Chief Financial Officer and Secretary
16. BOARD EVALUATION
Pursuant to the provisions of the Companies Act 2013 evaluation of all the Boardmembers its committees and the Board as a whole was done on an annual basis as per thecriteria for performance evaluation framework laid down by the Nomination and RemunerationCommittee and approved by the Board. During the year the Board adopted a formal mechanismfor evaluating its performance and as well as that of its committees and individualdirectors. The exercise was carried out through an evaluation process covering variousaspects of the Boards functioning such as composition of the Board and Committeesfrequency of meetings administration of meeting flow of information to the Boardexperience and competencies performance of specific duties and obligations disclosure ofinformation to the Board and Stakeholders etc. A separate exercise was carried out toevaluate the per -formance of individual directors who were evaluated on parameters suchas attendance contribution at the meetings and independence judgment The Directorsexpressed their satisfaction with the evaluation results.
17. SEPERATE MEETING OF INDEPENDENT DIRECTORS
As stipulated by the Code for Independent Directors under the Companies Act 2013 aseparate meeting of the Independent Directors of the Company was held on 29th March2016to review the performance of the Board as a whole taking into account the views of thenon-executive director. The independent Directors also reviewed the quality content andtimeliness of the flow of information between the Management and the Board and itscommittees which is necessary to effectively and reasonable perform and discharge theirduties. The directors were satisfied with the evaluation results. All the threeindependent directors namely Sri R Ramakrishnan Sri S Ramakrishnan and Sri S E S Maniattended the meeting on 29th March 2016.
18. PARTICULARS OF EMPLOYEES AND RELATED DICCLOSURES
The particulars required under Section 197(12) of the Companies Act 2013 read withrule 5(1) of the (Companies Appointment and Remuneration of Managerial Personnel) Rules2014 is annexed to this Report as Annexure III and forms part of this report. None of theemployees were in receipt of remuneration in excess of the limit prescribed under Rule5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
a) STATUTORY AUDITORS
Pursuant to Section 139 of the Companies Act 2013 M/s Sundaram & SrinivasanChartered Accountants Chennai (Registration No. 004207S with the Institute of CharteredAccountants of India) were appointed as Auditors of the Company at the 29th AnnualGeneral Meeting(AGM) of the shareholders of the company held on 26th September 2014 forthe transition period of three consecutive years commencing from the conclusion of the29th AGM to the conclusion of the 32nd AGM for the financial year 2016-17 subject toratification at every annual general meeting.. Their appointment for the financial year2015-16 was duly ratified at the 30th AGM held on 10th September 2015. The Company hasreceived a certificate from the statutory auditors to the effect that ratification oftheir appointment for the financial year 2016-17 if made would be in compliance with therequirements of the Companies Act 2013 and the rules made thereunder. Accordingly theBoard of Directors based on the recommendation of the Audit Committee propose torecommend the said ratification by the members at the ensuing 31st AGM. The Auditorsreport for the financial year ended 31st March 2016 does not contain any qualificationreservation or adverse remarks.
b) SECRETARIAL AUDITORS
Pursuant to Section 204 of the Companies Act 2013 read with Companies (Appointment andRemuneration of Managerial personnel) Rules 2014 the Board of Directors have appointedM/s. Krishnamurthy & Co Company secretaries Chennai as the Secretarial Auditors ofthe Company to conduct the Secretarial Audit for the financial year 2015-2016. TheSecretarial Audit Report issued by Sri K Sriram Practising Company Secretary (CPNo.2215) Partner M/s. S Krishnamurthy & Co. Company Secretaries Chennai in FormMR-3 is enclosed vide Annexure IV and forms part of this report. The Secretarial AuditReport does not contain any qualification reservation observation or any other adverseremarks
The Board has re-appointed M/s. S Krishnamurthy & Co Company Secretaries Chennaias Secretarial Auditor of the Company for the financial year 2016-17 as per the provisionsof Section 204 of the Companies Act 2013 read with Companies (Appointment andRemuneration of Managerial personnel) Rules 2014.
The Board of Directors as per the recommendation of Audit Committee appointed SmtLatha Raghunathan (membership No.22689 with the Institute of Chartered Accountants ofIndia (ICAI) Partner L R Associates (Firm Regn. No.001881S with ICAI) as InternalAuditors of the Company pursuant to Section 138 read with Rule 13 of the Companies(Accounts) Rules 2014.The internal audit report has been reviewed by the audit committee.
20. INTERNAL FINANCIAL CONTROLS
The Company has adequate system of internal financial controls to safeguard and protectfrom loss unauthorized use or disposition of its assets. All the transactions areproperly authorized recorded and reported to the Management. The Company is following allthe applicable Accounting Standards for properly maintaining the books of accounts andreporting financial statements. The internal auditor of the company checks and verifiesthe internal control and monitors them. The Company confirms that there are proper andadequate internal control systems and procedures commensurate with its size and nature ofits business for ensuring the orderly and efficient conduct of its business forsafeguarding its assets the prevention and detection of frauds and errors the accuracyand completeness of the accounting records and timely preparation of reliable financialinformation. The company has not noticed any major weakness in the internal financialcontrol procedures.
21. RISK MANAGEMENT
The Company had identified certain business risks and also the measures for dealingwith such risks which it faces in day to day operations of the Company. As the company isconcentrating in collection of over dues the traditional risks associated with Non-BankingFinancial Companies like Credit risk currency risk liquidity risk and interest rate riskare not applicable to the company. However the company faces operational risks relating topeople process legal environment and external factors investment risk and regulatoryrisks. The company manages these risks by prudently investing its funds managing itspeople and complying with all the regulations. These risks are continuously reviewed andmonitored by the management. The Board also reviews the risks and corrective actions andmitigation measures are taken as and when needed.
22. DISCLOSURE UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
There were no complaints/cases pursuant to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
The company has nothing to report/disclose in respect of the following items asdetailed below:
a) There were no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the finan-cial year of the Company towhich the financial statements relate and the date of the report.
b) The Company has no subsidiary associate or Joint venture companies and hencereporting on the performance and financialposition of them as per AOC 1 and preparation ofconsolidated financial statements are not applicable to the company.
c) There is no change in the nature of business of the Company during the year.
d) No company have become or ceased to be its subsidiaries joint ventures orassociates during the year under review.
e) During the year under review the Company has not accepted any deposits from thepublic within the meaning of Section 73 of the Companies Act 2013
f) There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and companys opera -tions in future.
g) The company has not issued any equity shares with differential rights during theyear under review.
h) The company has not issued any shares including sweat equity shares to the employeesunder any scheme during the year under review.
i) The company was not required to constitute a CSR Committee as the company has notmet any of the thresholds mentioned in Section 135 of the Companies Act 2013 during thefinancial year under review. Hence reporting about policy on Corporate Socialresponsibility and the initiatives taken are not applicable to the company.
j) The provisions of section 186 is not applicable to the company and hence reportingunder section 186 on loans guarantees and investments does not arise.
k) All related party transactions were entered at arms length basis and in theordinary course of business. There were no material contracts or arrangements with relatedparties referred to in sub-section (1) of Section 188. Hence Form AOC-2 pursuant to theCompanies (Accounts) Rules 2014 is not enclosed
l) The Company has nothing to report on conservation of energy and technologyabsorption. There were no foreign exchange earnings or outgo for the company during theyear.
Your Directors wish to place on record their appreciation for the continued supportfrom all those assisting the recovery of over dues. The Directors also wish to thank theemployees for their co-operation.
| || ||On behalf of the Board |
|Chennai ||R Ramkrishnan ||S Ramkrishnan |
|May 20 2016 ||Director ||Director |
| ||DIN: 00236673 ||DIN: 00270433 |