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Ushakiran Finance Ltd.

BSE: 511507 Sector: Financials
NSE: N.A. ISIN Code: INE697C01011
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NSE 05:30 | 01 Jan Ushakiran Finance Ltd
OPEN 4.30
PREVIOUS CLOSE 4.30
VOLUME 6
52-Week high 5.10
52-Week low 4.30
P/E 9.35
Mkt Cap.(Rs cr) 1
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 4.30
CLOSE 4.30
VOLUME 6
52-Week high 5.10
52-Week low 4.30
P/E 9.35
Mkt Cap.(Rs cr) 1
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Ushakiran Finance Ltd. (USHAKIRANFIN) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting the Thirty First Annual Report on thebusiness of your company together with the Audited Financial Statements of the Companyfor the year ended 31st March 2017 along with Auditors' Report thereon:

FINANCIAL HIGHLIGHTS
(Rupees in Lakhs)
Particulars 2016-2017 2015-2016
Gross income 50.48 19.86
Profit /(Loss) before Depreciation
36.94 (47.18)
Finance Costs Provisions and Tax
Add/(Less):
Depreciation 0.82 0.99
Finance costs -- --
Provision for standard and substandard assets and diminution in value of investments 3.15 9.61
Excess provision for diminution in value of Investments written back -- (53.26)
Profit/(Loss) before tax 32.97 (4.52)
Taxation (Net) 3.49 (3.05)
Net Profit/(Loss) 29.48 (1.47)
Profit/(Loss) available for appropriation 29.48 (1.47)
Carried to Statutory Reserve Fund 6.78 --
Surplus/(Loss) carried to Balance
22.70 (1.47)
Sheet

2. OPERATIONS

During the year 2016-2017 the company has earned gross income of Rs.50.48 Lakhs asagainst gross income of Rs.19.86 Lakhs during the year 2015-2016 and earned a net profitof Rs.29.48 Lakhs during the year 2016-2017 as against net Loss of Rs.(1.47) Lakhs duringthe year 2015-2016.

3. DIVIDEND

In view of the accumulated losses your directors do not recommend any dividend for theFinancial Year 2016-2017.

4. TRANSFER TO RESERVE

The Company did not transfer any amount to the General Reserve for the Financial Yearended 31st March 2017 however your company has transferred an amount ofRs.6.78 lakhs to Statutory Reserve Fund.

5. CHANGE IN THE NATURE OF BUSINESS

During the year under review there has been no change in the nature of business of theCompany.

6. CHANGES IN THE SHARE CAPITAL

The paid up share capital of the company as on 31st March 2017 isRs.25445000/- consisting of 2544500 Equity Shares of Rs.10/- each. During the yearunder review the company has not issued any fresh shares.

7. DIRECTORS:

During the year under review Mr. Y. Bala Krishna Murthy Director of the Company willretire by rotation at the ensuing Annual General Meeting and being eligible offers himselffor re-appointment. The Board recommends his re-appointment.

Pursuant to Sections 149 (6) & 149 (7) of the Companies Act 2013 the Independentdirectors of the company gave a declaration that they have complied with the criteria ofindependence as set out under sub section (6) of section 149 of the Companies Act 2013.

During the financial year 2016-2017 Six Board Meetings were properly convened and heldon 28th May 2016 13th August 2016 27th September2016 12th November 2016 11th February 2017 and 31stMarch 2017. The maximum interval between any two meetings did not exceed 120 days.

8. BOARD EVALUATION

One of the key functions of the Board is to monitor and review the board evaluationframework. The Board works with the nomination and remuneration committee to lay down theevaluation criteria for the performance of executive (Manager) / non-executive/independent directors. Pursuant to the provisions of the Companies Act 2013 and SEBI(LODR) Regulations 2015 the Board has carried out an annual performance evaluation ofits own performance the directors individually as well as the evaluation has been carriedout as per the Nomination and Remuneration Policy. A structured questionnaire was preparedafter taking into consideration the various aspects of the Board's functioningcomposition of the Board and its committees. The performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors.

9. KEY MANAGERIAL PERSONNEL

The Company had already appointed Mr. N. Swaroop Kumar as Manager Miss. Y. Vasavi asChief Financial Officer and Mr. G. Sandeep Kumar as the Company Secretary. The Boarddesignated them as Key Managerial personnel of the Company under the provisions of theCompanies Act 2013. There were no changes in the office of Key Managerial personnel ofthe company.

10. NAMES OF THE COMPANIES WHICH HAVE BECOME/CEASED TO BE SUBSIDIARIES JOINT VENTURESOR ASSOCIATE COMPANIES DURING THE YEAR

The Company did not have any subsidiaries associates or joint ventures during theyear.

11. FIXED DEPOSITS

The Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of deposits) Rules 2014.

12. SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators or courts which wouldimpact going concern status and its operations in future.

13. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has in place proper and adequate internal control systems commensurate withthe nature of its business and size and complexity of its operations. Internal controlsystems comprising of policies and procedures designed to ensure reliability of financialreporting timely feedback on achievement of operational and strategic goals compliancewith policies procedures applicable laws and regulations and that all assets andresources are acquired are used economically. During the year such controls were testedand no reportable material weaknesses in the design or operation were observed.

14. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirements under Section 134 (3) (c) and read with Section 134 (5) ofthe Companies Act 2013 in respect of Directors' responsibility statement Your Directorsstate that: i. In the preparation of the annual accounts the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures; ii. Appropriate accounting policies had been selected and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year 2016-2017 and of the Profit and loss of the Company for that period; iii.Proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities; iv.The annual accounts for the year 2016-2017 have been prepared on a going concern basis; v.Internal financial controls have been laid down to be followed by the company and thatsuch internal financial controls are adequate and were operating effectively and vi. Thatproper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

15. AUDITORS:

M/s Janardhan Rao Deshmukh & Co. Chartered Accountants Hyderabad were appointedas statutory auditors for a period of 3 years at the annual general meeting held on 26thSeptember 2014. Their term will be ending at the conclusion of the 31st Annualgeneral meeting. The Board has recommended the appointment of M/s. Niranjan & NarayanChartered Accountants Hyderabad as the Statutory Auditors of the Company with effect fromthe conclusion of the 31st Annual General Meeting for a period of 5 years. TheBoard of Directors seek your approval for their appointment. The Company has received theconsent from the above auditors to the effect that if the appointment is approved itwould be in accordance with the provisions of section 141 of the Companies Act 2013.

16. AUDITORS' REPORT

There are no qualifications reservations or adverse remarks made by M/s. Janardhan RaoDeshmukh & Co. Chartered Accountants Statutory Auditors in their report for theFinancial Year ended 31st March 2017.

The Statutory Auditors have not reported any incident of fraud to the Audit Committeeof the Company under sub-section (12) of section 143 of the Companies Act 2013 duringthe year under review.

17. SECRETARIAL AUDITORS

Pursuant to the provisions of section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. P.S. Rao & Associates a firm of Practicing Company Secretaries toundertake the Secretarial Audit of the Company. The Secretarial Audit report for thefinancial year 2016-2017 is annexed herewith as Annexure - I to this Report.

18. SECRETARIAL AUDIT REPORT

There are no qualifications reservations or adverse remarks made by M/s. P.S. Rao& Associates Practicing Company Secretaries in their report for the financial yearended 31st March 2017.

19. INTERNAL AUDITORS

The Board on the recommendations of the Audit Committee has appointed M/s. Suresh andBabu Chartered Accountants as internal auditors of the Company. The Internal Auditors aresubmitting the report on quarterly basis.

20. AUDIT COMMITTEE

The audit committee of the Company is constituted in line with the provisions ofRegulation 18 of SEBI (Listing Obligations and Disclosure Requirements) regulations 2015read with Section 177 of the Companies Act 2013.

The following is the composition of Audit Committee as at 31st March 2017:

1. Mr. P.R.K. Murthy

2. Mrs. S. Jhansi Kumari

3. Mr. Y.B.K. Murthy

All the recommendations made by the Audit Committee of the Company have been consideredand accepted by the Board of Directors of the Company.

21. NOMINATION AND REMUNERATION COMMITTEE

The following is the constitution of Nomination and Remuneration Committee as at 31stMarch 2017:

1. Mr. P.R.K. Murthy

2. Mrs. S. Jhansi Kumari

3. Mr. Y.B.K. Murthy

The Nomination and Remuneration Committee has been constituted to recommend a policy ofthe company on directors' appointment and remuneration including criteria for determiningqualifications positive attributes independence of director and other matters and toframe proper systems for identification appointment of Directors and KMPs Payment ofremuneration to them and evaluation of their performance and to recommend the same to theboard from time to time and any other function as may be mandated by the Board orstipulated by the Companies Act 2013 SEBI Stock Exchanges or any other regulatoryauthorities from time to time. The policy is also posted on the company's websitewww.uflfinance.com.

22. STAKE HOLDERS RELATIONSHIP COMMITTEE

The following is the composition of Stake Holders Relationship Committee as at 31stMarch 2017:

1. Mr. P.R.K. Murthy

2. Mrs. S. Jhansi Kumari

3. Mr. T. Adinarayana

The Committee focuses on shareholders' grievances and strengthening of investorrelations. The committee looks after the services of the Registrars and share transferagents and recommends measures for providing efficient services to investors. TheCommittee specifically looks into investor complaints liketransfer/transmission/transposition of shares and other related issues. There were nocomplaints pending for redressal as at 31st March 2017.

23. CORPORATE SOCIAL RESPONSIBILITY

The Company was not required to constitute Corporate Social Responsibility (CSR)Committee as the company has not met any of the thresholds mentioned in section 135 of theCompanies Act 2013 during the financial year under review. Hence reporting about thepolicy on Corporate Social Responsibility and initiative taken are not applicable to thecompany.

24. MEETING OF INDEPENDENT DIRECTORS

The Independent directors of the company have met separately without the attendance ofNon-Executive Directors on 31st March 2017 inter-alia review the performanceof the Chairman Non Independent Directors and Manager. The independent Directors in thesaid meeting also assessed the quality quantity and timeliness of flow of informationbetween the Company Management and the Board to effectively and reasonably perform itsduties.

25. RISK MANAGEMENT POLICY

The Company has a Risk Management policy and an internal control framework which isused to mitigate the risks. The Board and Audit Committee on regular intervals are updatedon the risk management systems processes and minimization procedure of the Company.General risks the company is exposed to are: (i) Financial Risks (ii) Regulatory Risks(iii) Capital markets Risks (iv) Human Resource Risks (v) Strategic Risks.

26. VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES OF THE COMPANY

The Company has a Whistle Blower Policy to deal with instances of fraud andmismanagement if any in the Company. The Vigil Mechanism/Whistle Blower policy may beaccessed on the Company's website at www.uflfinance.com.

27. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

During the financial year 2016-2017 the Company has not received any complaint ofsexual harassment against women employees of the Company.

28. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT-9 are annexedherewith as Annexure "II".

29. RELATED PARTY TRANSACTIONS

As a matter of policy your company carries out transactions with related parties on anarms-length basis. Disclosures as required under form AOC-2 are annexed herewith asAnnexure – III and also contained in Note 28 (Other Notes to Financial Statements).There are no materially significant related party transactions made by the company withpromoters directors key managerial personnel which may have a potential conflict withthe interests of the company at large except payment of remuneration to Key ManagerialPersonnel.

30. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The Company being a non banking finance company registered with Reserve Bank of Indiait mainly deals in the business of Investments and financing activities is exempt fromcomplying with the provisions of Section 186 of the Companies Act 2013. Accordingly thedisclosures of the loans given and Investments made as required under the aforesaidsection have not been given in this report.

31. LISTING OF EQUITY SHARES

Your company shares are listed with the BSE Limited. The listing fee has been paid forthe financial year 2017-2018.

32. CORPORATE GOVERNANCE

Since the paid up capital of the company is less than Rs.10 Crores and the net worth ofthe Company is less than Rs.25 Crores the provisions of Regulations 17 18192021222324252627 and clauses (b) to (i) of sub-regulation 2 of Regulation 46and para C D & E of Schedule V of the Securities Exchange Board of India (ListingObligations and Disclosures

Requirements) Regulations 2015 are not applicable to the Company hence corporategovernance report has not been enclosed to directors report.

33. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

a. INDUSTRY STRUCTURE AND DEVELOPMENTS.

Your company is essentially an investment and finance company and registered with theReserve Bank of India under the category of Non-Systematically Important Non-Deposittaking NBFC i.e. Non-Deposit taking NBFC with assets less than Rs. 100 crores.

The Indian economy suffered the jolts of demonetization with a lag effect as the fourthquarter took a toll on productivity and consumer demand. Sectors such as constructionhotels and tourism unorganized manufacturing segments etc. were the ones most impacted.

b. OPPORTUNITIES & THREATS:

The biggest opportunity for the Indian financial system today is the Indian consumer.Demographic shifts in terms of income levels and cultural shifts in terms of lifestyleaspirations are changing the profile of the Indian consumer. There are vagaries in theCapital markets due to Macroeconomic policies.

c. FUTURE OUTLOOK:

With the expected growth in the GDP and improvement in export momentum coupled withthe growing service industry good monsoon etc there may be opportunities for the financecompanies to improve their business. Further improvements in the capital markets may alsopositively impact the finance and investment companies. However the continueddeterioration in assets quality is haunting the finance companies.

d. RISKS & CONCERNS:

In the normal course of business finance and investment companies are exposed tovarious risks namely Credit Risk Market Risk and Operational Risk besides otherresidual risks such as Liquidity Risk Interest Rate Risk Strategic Risk etc. With aview to efficiently manage such risks your company has put in place some risk managementsystems.

e. INTERNAL CONTROL:

The company has in place adequate internal financial controls with reference tofinancial statements. The Company's internal control systems including internal financialcontrols are commensurate with the nature of its business and the size and complexity ofits operations and same are adequate and operating effectively. The Audit Committeereviews adequacy and effectiveness of the Company's internal control system includinginternal financial control.

f. PERFORMANCE HIGHLIGHTS:

During the year 2016-2017 the company has earned gross income of Rs.50.48 Lakhs andearned a net profit of Rs.29.48 Lakhs.

g. NON-PERFORMING ASSETS:

During the year the Company has made a provision of Rs. 3.15 Lakhs towardsnon-performing assets.

h. HUMAN RESOURCES:

The Financial Sector across the country is now being exposed to various changes whichhave a direct impact on the existing systems and sphere of activities. The survival andprosperity of any industry depends upon the quality of its human resource and financesector is not an exception to this. Accordingly your company attributes importance tohuman resource development activities.

i. CAUTIONARY STATEMENT:

The statements in this Management Discussion and Analysis describing the Company'sobjects projections estimates expectations may be construed as"forward-looking" statements within the meaning of applicable securities lawsand regulations and such forward looking statements involve risks and uncertainties.Actual results could differ materially from those expressed or implied. Important factorsthat could make a difference to the company's operations include economic conditionsaffecting demand/supply and price conditions in the domestic and global market in whichthe company operates changes in the Government regulations policies tax laws and otherstatutes and other incidental factors. The Company undertakes no obligation to publiclyupdate or revise any forward looking statements whether as a result of new informationfuture events or otherwise. Readers are cautioned not to place undue reliance on theseforward looking statements.

34. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company has not engaged in any manufacturing activity and thus its operations arenot energy intensive. However adequate measures are always taken to ensure optimumutilization and maximum possible saving of energy.

There were no Foreign Exchange earnings and out go during the year.

35. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014in respect of employees of the company is herewith annexed as Annexure "IV".

In terms of Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the Company does not have any employee who is employed throughoutthe financial year and in receipt of remuneration of Rs.102 Lakhs or more or employeeswho are employed for part of the year and in receipt of Rs.8.5 Lakhs or more per month.

36. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments affecting the financial positionof the company which occurred during and between the end of the financial year to whichthe financial statements relate and the date of this report.

37. ACKNOWLEDGEMENTS

Your Directors gratefully acknowledge the continued assistance and cooperation extendedby various Government Authorities SEBI other regulatory authorities and bankers. TheBoard expresses its appreciation of the understanding dedication and support extended bythe employees of the Company. Your Directors also sincerely acknowledge the confidence andfaith reposed by the shareholders in the Company.

for and on behalf of the Board
Place : Hyderabad (T. Adinarayana)
Date : 30.05.2017 Chairman
DIN: 00917498