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Upasana Finance Ltd.

BSE: 511764 Sector: Financials
NSE: N.A. ISIN Code: INE819K01014
BSE 00:00 | 22 Aug 36.90 -2.00
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NSE 05:30 | 01 Jan Upasana Finance Ltd
OPEN 40.50
PREVIOUS CLOSE 38.90
VOLUME 10723
52-Week high 69.95
52-Week low 31.00
P/E 102.50
Mkt Cap.(Rs cr) 16
Buy Price 35.20
Buy Qty 100.00
Sell Price 40.00
Sell Qty 90.00
OPEN 40.50
CLOSE 38.90
VOLUME 10723
52-Week high 69.95
52-Week low 31.00
P/E 102.50
Mkt Cap.(Rs cr) 16
Buy Price 35.20
Buy Qty 100.00
Sell Price 40.00
Sell Qty 90.00

Upasana Finance Ltd. (UPASANAFINANCE) - Director Report

Company director report

TO THE SHAREHOLDERS

The Directors have pleasure in presenting the Thirty Third Annual Report together withthe audited accounts for the year ended 31st March 2018.

1. FINANCIAL HIGHLIGHTS

(Rs. In Lakhs)

Particulars 2017-18 2016-17
Income from Operations 108.31 133.70
Less: Expenditure 70.14 67.61
Profit Before Tax and Extraordinary Items 38.17 66.09
Less: Extraordinary Items - -
Less: Current Tax 9.83 7.50
Less: Earlier Tax - (0.25)
Profit After Tax 28.34 58.84

2. OPERATIONS

a) Income: The income from operations of the company for the year under review was atRs.108.31 lakhs as against Rs. 133.70 lakhs during the previous year.

b) Profit after tax: The profit after tax of the company for the year under review wasRs. 28.34 lakhs as against Rs. 58.84 lakhs during the previous year.

3. MANAGEMENT DISCUSSION AND ANALYSIS

a) Classification by Reserve Bank of India (RBI): The Company is registered with RBI asNon Deposit taking Non-Banking Financial Company (NBFC-ND) and has a valid certificate ofRegistration.

b) Business Review: The Company continues to concentrate upon recovery of overduereceivables. Even while pursuing the legal route the company attempts negotiations withcustomers for early recovery of debts. Also the Company has disinvested the securitiesheld and the amounts realized therein have been deployed into the business of short term /long term financing.

c) Future Outlook: The Company is confident of doing better business in the form ofshort term and long term financing.

4. DIVIDEND

In view of inadequate profit the Directors do not recommend any dividend for the yearunder review.

5. TRANSFER TO RESERVES

An amount of Rs. 566748/-(Last year Rs. 1176807/-) has been transferred to SpecialReserve as per the requirement under Section 45 1C 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

Pursuant to Clause 15(2)(a) of SEBI (Listing Obligations and Disclosure Requirements)(LODR) Regulations 2015 prescribes that Clause 27 (submission of Quarterly CorporateGovernance Report) of LODR Regulations is not applicable for Companies having paid upequity share capital not exceeding Rs.10 Crores and Net worth not exceeding Rs.25 Croresas on the last day of the previous year. As the Equity Share Capital of Upasana FinanceLimited is Rs. 4.28 Crores and Net worth is Rs. 7.49 Crores as on 31st March2018 Clause 27 is not applicable to the Company.

8. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The existing composition of the company's board is fully in conformity with theapplicable provisions of the Companies Act 2013 with regard to Independent Directors andwomen directors during the year ended 31st March 2018.

Ms. Rekha Jain Director is liable to retire by rotation at the ensuing Annual GeneralMeeting being eligible offers herself for re-appointment.

Ms. Bhavaika Jain Director is liable to retire by rotation at the ensuing AnnualGeneral Meeting being eligible offers herself for re-appointment.

Mr. Naressh Jain (DIN: 08102162) was appointed as Additional / Independent Director ofthe Company with effect from 4th April 2018 based on the recommendations madeby the Nomination and remuneration committee. Necessary resolutions are placed before themembers in the notice convening Annual General Meeting for confirmation of hisappointment.

Ms. Monika Keida having Membership No. A26726 was appointed as Company Secretary andCompliance Officer with effect from 18.06.2018.

Necessary resolution for their re-appointment / confirmation is being placed forapproval of the members at the AGM. The board recommends their re-appointment /confirmation as directors of the Company. A brief resume of theirs and other relevantinformation will be furnished 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 under section 149(6) of the Companies Act 2013.

11. BOARD MEETINGS

Ten Board Meetings were held during the Current Financial year on 28th April2017 26th May 2017 29th May 2017 14th August 2017 29thAugust 2017 5th September 2017 4th October 2017 13thNovember 2017 21st November 2017 and 14th February 2018 and the gapbetween two meetings were not more than 120 days.

S.No Name of Director

No. of Meetings

Entitled to attend Attended
1 Mr. R Ramakrishnan* 7 6
2 Mr. S Ramakrishnan * 7 7
3 Ms. S E S Mani* 7 7
4 Ms. Nalini Rajesh* 7 6
5 Ms. Rekha Jain** 4 4
. 6 Ms. Bhavika Jain** 4 4
7 Ms. Khushbu Jain** 4 4
8 Mr. Bharat Jain*** 2 2
9 Mr. Velu Jain*** 2 2
10 Mr. Naressh Jain**** 0 0

* resigned with effect from 4th October 2017.

** appointed with effect from 4th October 2017.

*** appointed with effect from 21st November 2017.

**** appointed with effect from 4th April 2018.

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 stakeholder'srelationship committee. The committee meetings held upto 4th October 2017 wereattended by Mr. R Ramakrishnan Mr. S E S Mani and Mr. S Ramakrishnan.

a) Audit Committee

The Committee as on 31st March 2018 comprised of the following Directors asits Members:

Name of Member Designation In Committee Category
Mr. Bharat Kumar Dughar Chairman NEID
Mr. Velu Member NEID
Ms. Bhavika Jain Member NED

The Committee as on date comprises of the following Directors as its Members:

Name of Member Designation In Committee Category
Mr. Naressh M Jain Chairman NEID
Mr. Bharat Kumar Dughar Member NEID
Ms. Bhavika Jain Member NED

The terms of reference of the Audit Committee interalia include the recommendation forappointment remuneration and terms of appointment of auditors of the companyexaminations of the financial statement and the auditors' report thereon and other mattersspecified for audit committees under Section 177 of the Companies Act 2013 and SEBIListing Regulations 2015.

The Committee met four times during the financial year on 26th May 2017 14thAugust 201713th November 2017 and 14th February 2018. The detailsof attendance in Committee meetings are as follows:

S. No Name of Director Designation In Committee Category

No. of Meetings

Entitled to attend Actually attended
1 Mr. Bharat Kumar Dughar* Chairman NEID 1 1
2 Mr. Velu* Member NEID 1 1
3 Ms. Bhavika Jain** Member NED 2 2
4 Mr. Naressh M Jain*** Chairman NEID 0 0

* appointed with effect from 21st November 2017.

** appointed with effect from 4th October 2017.

***appointed with effect from 4th April 2018.

b) Nomination and Remuneration Committee

The Committee as on 31st March 2018 comprised of the following Directors asits Members:

Name of Member Designation In Committee Category
Mr. Bharat Kumar Dughar Chairman NEID
Mr. Velu Member NEID
Ms. Bhavika Jain Member NED

The Committee as on date comprises of the following Directors as its Members:

Name of Member Designation In Committee Category
Mr. Naressh M Jain Chairman NEID
Mr. Bharat Kumar Dughar Member NEID
Ms. Bhavika Jain Member NED

The Committee met thrice during the financial year on 26th May 201714thAugust 2017 and 21st November 2017.

The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Senior management and keymanagerial personnel and the remuneration of directors key managerial personnel and otheremployees. The Nomination and Remuneration Policy is attached in Annexure II of thisreport.

The details of attendance in Committee meetings are as follows:

S. No Name of Director Designation In Committee Category

No. of Meetings

Entitled to attend Actually attended
1 Mr. Bharat Kumar Dughar* Chairman NEID 0 0
2 Mr. Velu* Member NEID 0 0
3 Ms. Bhavika Jain** Member NED 1 1
4 Mr. Naressh M Jain*** Chairman NEID 0 0

* appointed with effect from 21st November 2017.

** appointed with effect from 4th October 2017.

***appointed with effect from 4th April 2018.

c) Stakeholders Relationship Committee

The Committee as on 31st March 2018 comprised of the following Directors asits Members:

Name of Member Designation In Committee Category
Mr. Bharat Kumar Dughar Chairman NEID
Mr. Velu Member NEID
Ms. Bhavika Jain Member NED

The Committee as on date comprises of the following Directors as its Members:

Name of Member Designation In Committee Category
Mr. Naressh M Jain Chairman NEID
Mr. Bharat Kumar Dughar Member NEID
Ms. Bhavika Jain Member NED

The Committee met thrice during the financial year on 26th May 201714thAugust 2017 and 14th February 2018. The details of attendance in Committeemeetings are as follows:

S. No Name of Director Designation In Committee Category

No. of Meetings

Entitled to attend Actually attended
1 Mr. Bharat Kumar Dughar* Chairman NEID 1 1
2 Mr. Velu* Member NEID 1 1
3 Ms. Bhavika Jain** Member NED 1 1
4 Mr. Naressh M Jain*** Chairman NEID 0 0

* appointed with effect from 21st November 2017.

** appointed with effect from 4th October 2017.

*** appointed with effect from 4th April 2018.

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 Company's 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 the linkhttp://www.upasanafinance.com/pdf/WHISTLE-BLOWER-POLICY.pdf

14. 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 Board's 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 performance of individual directors who were evaluated on parameters such asattendance contribution at the meetings and independence judgment The Directors expressedtheir satisfaction with the evaluation results.

15. 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 4thJuly 2017 to review the performance of the Board as a whole taking into account the viewsof the nonexecutive director. The independent Directors also reviewed the quality contentand timeliness of the flow of information between the Management and the Board and itscommittees which is necessary to effectively and reasonable perform and discharge theirduties.

16. PARTICULARS OF EMPLOYEES AND RELATED DICCLOSURES

None of the employees draws remuneration of Rs. 850000/- or above per month and Rs.10200000/- or above per year. Hence details of the employees of the Company asrequired pursuant to 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are not furnished.

Having regard to the provisions of Section 136(1) read with its relevant proviso of theCompanies Act 2013 the disclosure pertaining to remuneration and other details asrequired under Section 197(12) of the Companies Act 2013 read with Rule 5(1) and Rule5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is appended as Annexure III to this report and is available for inspection at theregistered office of the company during working hours. Any member interested in obtainingsuch information may write to the Company and the same will be furnished without any feeand free of cost.

17. AUDITORS

a) STATUTORY AUDITORS

M/s. Kalyanasundaram & Co Chartered Accountants (FRN: 0001676S) were appointed asStatutory Auditors of the Company in the 32nd Annual General Meeting of theCompany held on 23rd December 2017 until the conclusion of 37thAnnual General Meeting subject to ratification by shareholders in every consecutiveAnnual General Meeting. The Directors recommend ratification of appointment of StatutoryAuditors from the conclusion of the 33rd Annual General Meeting until theconclusion of the 37th Annual General Meeting. The Statutory Auditors haveconfirmed their eligibility under Section 141 of the Companies Act 2013 and rules framedthere under for their re-appointment as Statutory Auditors of the Company. The necessaryresolution is being placed before the shareholders for approval. The reply given by theboard on remarks made by the Statutory Auditor are as follows:

i) Reply to point number 5 of the Audit Report:

Pursuant to change in management of the Company during the year under review the CSCEO and CFO had resigned with effect from 04.10.2017. The Company had appointed CS witheffect from 18.06.2018 and is looking for suitable candidate to be appointed as CEO &CFO of the Company.

ii) Reply to Point number 7 (i) of Annexure A to the Audit Report:

The Board of Directors will ensure that the dues will be remitted in time in future.

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. A.K. Jain & Associates Company Secretaries in Practice Chennai as theSecretarial Auditors of the Company to conduct the Secretarial Audit for the financialyear 2017-2018. The Secretarial Audit Report in Form MR - 3 is enclosed vide Annexure IVand forms part of this report. The reply given by the board on remarks made by theSecretarial Auditor are as follows:

i) Reply to observation number (i) and (ii) of the Secretarial Audit Report:

In view of the resignation of Sri. R Krishnan the Company has been looking for asuitable person to be appointed as the Company Secretary of the Company and Mrs. MonikaKedia was appointed as the Company Secretary of the Company with effect from 18.06.2018.

ii) Reply to observation number (iii) of the Secretarial Audit Report:

In view of the resignation of Sri. R Somasundaram Chief Executive Officer and of Sri.R Krishnan Chief Financial Officer and Company Secretary dated 04.10.2017 the Companyhas been looking for suitable person to fill in the position of Chief Executive Officerand Chief Financial Officer of the Company. Further Mrs. Monika Kedia was appointed as theCompany Secretary of the Company with effect from 18.06.2018.

iii) Reply to observation number (iv) of the Secretarial Audit Report:

The Company had inadvertently omitted to intimate the un-audited results of the Companyfor the quarter ended December 31 2017 on time. The Company will ensure that thenecessary intimations are made to BSE on time.

iv) Reply to observation number (v) of the Secretarial Audit Report:

Mr. R Ramakrishnan Mr. S E S Mani and Mr. S Ramakrishnan members of the AuditCommittee have resigned with effect from 4th October 2017 this requirementcould not be complied with for a brief period till 20.11.2017 during the Financial Year2017-18. This Committee was reconstituted as per the requirements w.e.f. 21.11.2017 incompliance of the requirements.

c) INTERNAL AUDITORS

The Board of Directors as per the recommendation of Audit Committee appointed M/s.Sidharth Mehta & Co. Chartered Accountants Chennai (FRN: 008108S) as InternalAuditor for the year 2017-18.

18. 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.

19. 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. However thecompany faces operational risks relating to people process legal environment andexternal factors investment risk and regulatory risks. The company manages these risks byprudently investing its funds managing its people and complying with all the regulations.These risks are continuously reviewed and monitored by the management. The Board alsoreviews the risks and corrective actions and mitigation measures are taken as and whenneeded.

20. 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 atWorkplace (Prevention Prohibition and Redressal) Act 2013.

21. GENERAL

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 financial 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 financial position of them as per AOC 1 and preparationof consolidated 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 company's operations 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.

22. ACKNOWLEDGEMENT

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.

By Order of the Board For UPASANA FINANCE LIMITED

14.08.2018

Chennai

Bhavaika Jain Rekha Jain
Director Director
DIN:07704015 DIN: 07704034