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Ushakiran Finance Ltd.

BSE: 511507 Sector: Financials
NSE: N.A. ISIN Code: INE697C01011
BSE 09:18 | 17 Jan 60.95 -3.20
(-4.99%)
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NSE 05:30 | 01 Jan Ushakiran Finance Ltd
OPEN 60.95
PREVIOUS CLOSE 64.15
VOLUME 3
52-Week high 74.10
52-Week low 3.52
P/E 53.94
Mkt Cap.(Rs cr) 15
Buy Price 0.00
Buy Qty 0.00
Sell Price 60.95
Sell Qty 21511.00
OPEN 60.95
CLOSE 64.15
VOLUME 3
52-Week high 74.10
52-Week low 3.52
P/E 53.94
Mkt Cap.(Rs cr) 15
Buy Price 0.00
Buy Qty 0.00
Sell Price 60.95
Sell Qty 21511.00

Ushakiran Finance Ltd. (USHAKIRANFIN) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting the Thirty Fifth Annual Report on thebusiness of your company together with the Audited Financial Statements of the Companyfor the year ended 31st March 2021 along with Auditors' Report thereon.

FINANCIAL HIGHLIGHTS

(Rupees in Lakhs)

Particulars 2020-2021 2019-2020
Gross income 47.25 11.93
Profit /(Loss) before Depreciation Finance Costs and Tax 27.43 (9.27)
Depreciation 0.09 0.12
Finance costs
Profit/(Loss) before tax 27.34 (9.39)
Current Tax 0.97
Deferred Tax 0.07 0.11
Net Profit/(Loss) 26.30 (9.50)

2. OPERATING RESULTS

Your company has generated total Gross Income of Rs.47.25 Lakhs during the financialyear 2020-2021 as against Rs.11.93 Lakhs during the financial year 2019-2020 and hasearned a profit of Rs.26.30 Lakhs as against loss of Rs. 9.50 Lakhs respectively as perInd AS.

3. DIVIDEND

With a view to conserve resources for long term needs of the Company your directors donot recommend any dividend for the Financial Year 2020-2021.

4. TRANSFER TO RESERVE

The Company did not transfer any amount to the General Reserve for the Financial Yearended 31st March 2021.

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 3151 March 2021 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 Sri. T Adinarayana Director will retire at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment.

All the Independent Directors of your Company have given declarations under Section 149(7) of the Companies Act 2013 that they meet the criteria of independence as laid downunder Section 149 (6) of the Companies Act 2013 and the Rules made there under and alsoas per applicable regulations of the SEBI (LODR) Regulations 2015. Further they havealso confirmed that they are not aware of any circumstances or situations which exist ormay be reasonably anticipated that could impair or impact their ability to discharge theduties with an independent judgment and without any external influence.

None of the Directors are disqualified from being appointed or holding office asDirectors as stipulated under Section 164 of the Companies Act 2013.

8. BOARD MEETINGS

During the financial year 2020-2021 Five Board Meetings were properly convened andheld on 31st July 2020 15th September 2020 13thNovember 2020 10th February 202130th March 2021.

9. 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/non-executive/independent directorsthrough a peer- evaluation excluding the director being evaluated through a Boardeffectiveness survey. The questionnaire of the survey is a key part of the process ofreviewing the functioning and effectiveness of the Board and for identifying possiblepaths for improvement. Each Board member is requested to evaluate the effectiveness of theBoard dynamics and relationships information flow decision-making of the directorsrelationship to stakeholders company performance company strategy and the effectivenessof the whole Board and its various committees on a scale of one to five. Feedback on eachdirector is encouraged to be provided as part of the survey. Independent directors havethree key roles: governance control and guidance.

A separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgment safeguarding the interests of theCompany and its minority shareholders etc. The performance evaluation of the IndependentDirectors was carried out by the entire Board. The performance evaluation of the Chairmanand the NonIndependent Directors and the Manager was carried out by the IndependentDirectors.

10. KEY MANAGERIAL PERSONNEL

The Board designated the following as Key Managerial personnel of the Company under theprovisions of the Companies Act 2013:

Mr. Omprakash Koyalkar - Manager
Mr. T Ramesh Babu - Chief Financial Officer
Mrs. Sanjana Jain - Company Secretary and Compliance officer

During the year under review there were no changes in the office of Key Managerialpersonnel of the company.

11. 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.

12. FIXED DEPOSITS

The Company has not accepted any Fixed Deposits and as such no principal or interestwas outstanding as on the date of the balance sheet.

13. 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.

14. 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 compliance with policies procedures applicable laws andregulations. The Company is following all the applicable Accounting Standards for properlymaintaining the books of accounts and reporting financial statements. The Audit committeeactively reviews the adequacy and effectiveness of the Internal Financial control andsuggests the improvements for the same.

15. 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 for the financial year ended 31stMarch 2021 the applicable accounting standards have been followed along with properexplanation relating to material departures;

(ii) Appropriate accounting policies had been selected 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 31stMarch 2021 and of the Profit and Loss of the Company for that period;

(iii) Proper and sufficient care has been taken 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;

(iv) The annual accounts have been prepared on a going concern basis;

(v) Internal financial controls have been laid down to be followed by the company andthat such internal financial controls are adequate and were operating effectively and

(vi) That proper systems have been devised to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

16. AUDITORS

M/s. Niranjan & Narayan Chartered Accountants Hyderabad were appointed asstatutory auditors of the Company for a period of 5 years at the 31st AnnualGeneral Meeting held on 29th September 2017 and will hold office till the conclusion of36th Annual General Meeting.

17. AUDITORS’ REPORT

There are no qualifications reservations or adverse remarks made by M/s. Niranjan& Narayan Chartered Accountants Statutory Auditors in their report for the FinancialYear ended 31st March 2021.

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.

18. 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 20202021 is annexed herewith as Annexure - I to this Report.

19. 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 2021.

20. 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 reports regularly.

21. 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 2021:

1. Mr. P.R.K. Murthy Chairman

2. Mrs. S. Jhansi Kumari

3. Mr. T. R. Sekhar

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

22. NOMINATION AND REMUNERATION COMMITTEE

The following is the constitution of Nomination and Remuneration Committee as at 31stMarch 2021:

1. Mr. P.R.K. Murthy Chairman

2. Mrs. S. Jhansi Kumari

3. Mr. T. R. Sekhar

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.

23. STAKE HOLDERS RELATIONSHIP COMMITTEE

The following is the composition of Stake Holders Relationship Committee as at 31stMarch 2021:

1. Mr. P.R.K. Murthy Chairman

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 2021.

24. 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 initiatives taken are not applicable to thecompany.

25. MEETING OF INDEPENDENT DIRECTORS

The Independent Directors of the company have met separately on 30th March2021 inter- alia reviewed the performance of the Chairman Non Independent Directors andManager. The Independent Directors in the said meeting also assessed the quality quantityand timeliness of flow of information between the Company Management and the Board toeffectively and reasonably perform its duties.

26. RISK MANAGEMENT POLICY

The Company has developed and is implementing a risk management policy which includesthe identification therein of elements of risk which in the opinion of the board maythreaten the existence of the Company.

27. VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES OF THE COMPANY

Pursuant to the applicable provisions of the Companies Act 2013 and applicableRegulations of SEBI (LODR) Regulations 2015 a Vigil Mechanism for directors andemployees to report genuine concerns has been established.

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.

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

The company has adopted policy on prevention of sexual harassment of women at workplacein accordance with The Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013. During the financial year ended March 312021 the company hasnot received any complaints pertaining to sexual harassment.

29. EXTRACT OF ANNUAL RETURN

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

30. 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 Notes to Financial Statements. There are nomaterially significant related party transactions made by the company with promotersdirectors key managerial personnel which may have a potential conflict with the interestsof the company at large except payment of remuneration to Key Managerial Personnel. Thepolicy on the related party transactions is also posted at the Company's websitewww.uflfinance.com

31. 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. However information regarding loans andinvestments are detailed in the notes to the financial statements.

32. LISTING OF EQUITY SHARES

Your company shares are listed with the BSE Limited. The listing fee has been paid forthe financial year 2021 -2022.

33. 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 and Exchange Board of India (ListingObligations and Disclosures Requirements) Regulations 2015 are not applicable to theCompany hence corporate governance report has not been enclosed to directors report.

34. INSIDER TRADING REGULATIONS

The Company has adopted an ‘Internal Code of Conduct' for Regulating Monitoringand Reporting of Trades by Insiders ("the Code") in accordance with the SEBI(Prohibition of Insider Trading) Regulations 2015 (The PIT Regulations).

The Code is applicable to all Directors and such Designated Employees and otherconnected persons who are expected to have access to unpublished price sensitiveinformation relating to the Company. The Company Secretary is the Compliance Officer formonitoring adherence to the SEBI (Prohibition of Insider Trading) Regulations 2015.

The Company has also formulated ‘The Code of Practices and Procedures for FairDisclosure of Unpublished Price Sensitive Information (UPSI)' in compliance with the PITRegulations. This Code is displayed on the Company's website viz. www.uflfinance.com.

35. DECLARATION OF COMPLIANCE OF CODE OF CONDUCT

The Company has adopted a Code of Business Conduct and Ethics (the Code) which appliesto all the employees and Directors of the Company. Under the Code it is theresponsibility of all the employees and directors to familiarize themselves with the codeand comply with its standards and that the Board of Directors and Senior ManagementPersonnel of the Company have affirmed compliance with the Code of Conduct of the Companyfor the year 2020-2021. A Declaration in this regard is herewith attached as Annexure IV.

36. 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 Covid-19 continues to spread across the globe and India which has contributed to asignificant decline and volatility in global and Indian Financial Markets and a decreasein the economic activities.

b. OPPORTUNITIES & THREATS:

The pandemic has severally affected small and large businesses alike. Here again thesmall-scale industries (SMEs) with lack of easy access for credit were the ones mostimpacted. Many companies have been adversely affected while others have been dependent oncredit for their survival. The world is still reeling with the virus but the discovery ofvaccine rollout has raised morale infused hope and ushered the economy going intorevival.

The global markets are looming with uncertainty. The slow growth in the advancedeconomies and rising constraint on certain emerging economies can result in volatilecapital inflows and currency fluctuations. The increasing restrictions on migration andglobal trade is likely to hurt productivity and incomes. Together this may take animmediate toll on the market sentiment. The Current significant threat for any lendinginstitution is slow implementation of regulatory reforms and lack of consensus onimportant legislations is further likely to delay growth.

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. Your Company being aninvestment Company seeks opportunities in the capital market. The volatility in stockindices in the financial year under report represents both an opportunity and challengefor the Company. Further the impact of stress in the NBFC sector spills over to this yearas well it may lead to lower credit off take from NBFCs which may dampen growth inconsumption spending.

Phasing out of lockdown/social distancing measures at a slower pace coupled withrelatively tepid policy response may adversely affect the NBFC sector in the FinancialYear 2021-2022. The most significant threat for any lending activity is to constantlyexhibit operational excellence and contain the loss and mitigate the risks.

c. FUTURE OUTLOOK:

Post the COVID-19 induced slowdown businesses have gradually started picking up pacewith the roll out of vaccines and economic revival. Co-lending andassignment/securitization are likely to remain the catalysts of the next financial year.Together these will help boost the non banking lending and with reduced interest ratesand modernization.

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. anycompany which is in the business of lending the entire proposition of the Company(providing finance to various segments of the economy) is on the fundamentals of managingthe risk rather than avoiding it. Further the risk of market fluctuation will be a majorrisk associated with the company.

e. INTERNAL CONTROL:

Effective internal controls is crucial for reducing the risk of financial loss. Ithelps to ensure accuracy completeness and reliability in financial statements. Yourcompany has in place adequate internal financial control system. The Company's internalcontrol systems including internal financial controls are commensurate with the natureof its business and the size and complexity of its operations and same are adequate andoperating effectively. The Audit Committee reviews adequacy and effectiveness of theCompany's internal control system including internal financial control. The Company hasput in place enhanced risk-based supervision systems and ensures continuous monitoring.Your company has taken proper care for the maintenance of adequate accounting records asrequired by various statutes.

f. PERFORMANCE HIGHLIGHTS:

During the year 2020-2021 the company has earned Gross Income of Rs.47.25 Lakhs asagainst Rs.11.93 Lakhs during the financial year 2019-2020 and has earned a net profit ofRs.26.30 Lakhs for financial year 2020-2021 as against loss of Rs. 9.50 Lakhs during thefinancial year 2019-2020 respectively.

g. HUMAN RESOURCES:

The current activities of the company may not require significant human resourcehowever to the extent possible requisite personnel have been engaged to take care oforganization need of human resources. Accordingly your company attributes importance tohuman resource development activities.

h. Details of Key Financial Ratios:

Sl. Particulars No. As at 31.3.2021 As at 31.3.2020 % Change
1 Debtors Turnover NA NA NA
2 Inventory Turnover NA NA NA
3 Interest Coverage Ratio NA NA NA
4 Current Ratio (Current assets/Current liabilities) 26.44 40.08 (34.03)
5 Debt Equity Ratio NA NA NA
6 Operating Profit Margin (%) (PBIT/Total Revenue) 57.86 (78.73) 173.49
7 Net Profit Margin (%) (Net Profit/Total Revenue) 55.66 (79.59) 169.93
8 Return on Net Worth (%) (Net Profit/Net Worth) 3.89 (2.14) 281.78

The percentage change (more than 25%) in the ratios are mainly due to change in FairValue Gains except in current ratio.

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 may differ from those expressed or implied. The Company undertakes noobligation to publicly update or revise any forward looking statements whether as aresult of new information future events or otherwise. Readers are cautioned not to placeundue reliance on these forward looking statements.

37. 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.

38. 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 - V.

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 a part of the year and in receipt of Rs.8.50 Lakhs or more per month.

39. 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.

40. IMPACT OF COVID-19 PANDEMIC

The COVID-19 pandemic is a once in a lifetime occurrence that has brought with itunimaginable suffering to people and to almost all sections of the economy and continuityof it will have micro and macro level implications like unusual lockdowns resulting ineconomic uncertainty for your company. The carrying value of the company's Investments asat 31st March 2021 have been effected by the severity and duration of theoutbreak; however the Company believes that it has taken into account all the possibleimpact of known events arising out of Covid19 pandemic in the preparation of financialresults resulting out of fair valuation of these investments. The Loans have also beensubjected to impairment losses. The NBFC Sector is staring at another bout of liquiditychallenges due to the side effects of COVID-19.

The impact of the epidemic may be different from that estimated as at the date ofapproval of these financial results and the Company will continue to closely monitor anymaterial changes and future economic conditions.

41. MAINTENANCE OF COST RECORDS

The Company is not required to maintain cost records as specified by the CentralGovernment under sub-section (1) of section 148 of the Companies Act 2013.

42. SECRETARIAL STANDARDS

Your Company complies with all applicable mandatory Secretarial Standards issued by theInstitute of Company Secretaries of India.

43. ACKNOWLEDGEMENT AND APPRECIATION

Your Directors gratefully acknowledge the continued assistance and co-operationextended by various Government Authorities RBI SEBI Stock Exchange other regulatoryauthorities and bankers. The Board expresses its appreciation of the understandingdedication and support extended by the employees of the Company. Your Directors alsosincerely acknowledge the confidence and faith reposed by the shareholders in the Company.

for and on behalf of the Board
(T. Adinarayana)
Place : Hyderabad Chairman
Date : 31.07.2021 DIN:00917498

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