| Dear Members,
The Directors have pleasure in presenting the Thirtieth Annual Report,
together with the audited accounts for the year ended 31st March 2015.
1. FINANCIAL RESULTS
Rs./Lakhs
Particulars 2014-15 2013-14
Income from Operations 174.68 263.93
Profit / (Loss) before interest & 103.93 208.08
depreciation
Less: Interest 1.54 -
Less: Depreciation - -
Profit / (Loss) before tax 102.39 208.08
Less: exceptional items - provision 0.01 -
for diminution in investments
Add / (Less): Provision for Tax 23.36 49.01
(including Deferred Tax)
Profit / (Loss) after tax 79.02 159.07
Add / (Less): Balance brought forward (146.00) (273.26)
Amount available for appropriation (66.98) (114.18)
Less: Appropriations 15.80 31.81
Balance carried forward (82.78) (146.00)
2. OPERATIONS
a) Income
The income from operations of the company was at Rs.174.68 lakhs as
against Rs,.263.93 lakhs during the previous year.
b) 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.
c) Business Review & Outlook
The Company continues to concentrate upon recovery of overdue
receivables. Even while pursuing the legal route, the company attempts
negotiations with customers for early recovery of debts. During the
year, the company has collected an amount of Rs.55.50 lakhs during the
year. The Company is not entering into fresh contracts for business and
is continuing to concentrate upon recovery of overdue receivables and
is hopeful that the impact of this approach on the net worth will be
more beneficial to the Company.
3. DIVIDEND
In view of accumulated losses, the Directors do not recommend any
dividend for the year under review.
4. TRANSFER TO RESERVES
An amount of Rs.15,80,370/-(Last year Rs.31,82,482/-) is transferred to
Special Reserve as per the requirement under Section 45 IC of the
Reserve Bank of India Act, 1934. The company does not propose to
transfer any amount to the general reserves for the year.
5. EXTRACT OF ANNUAL RETURN
An extract of the annual return in Form MGT-9 is appended as Annexure I
to the Board Report.
6. CORPORATE GOVERNANCE
As per the annexure to SEBI circular CIR/CFD/Policy CELL/2014 dated
September 15,2014 the compliance with the provisions of clause 49 shall
not be mandatory in respect of companies having paid up equity share
capital not exceeding Rs.10 crore and Net worth not exceeding Rs.25
crore as on the last day of the previous financial year. As Upasana
Finance Limited's(UFL) Equity Share Capital is Rs.4.28 Crs. and
Networth is Rs.10.92 crs as on 31st March 2014, the clause 49 is not
mandatory for UFL with effect from 1st October 2014. Hence, the company
is not providing a separate report on corporate governance, management
discussion and analysis and also a certificate from the Company's
Auditors confirming the compliance of Corporate Governance.
7. DIRECTORS
The existing composition of the company's board is fully in conformity
with the applicable provisions of the Companies Act, 2013 and clause 49
of the Listing Agreement with regard to Independent Directors and women
director.
Smt. Nalini Rajesh (DIN 07140228) was appointed as additional director
pursuant to Section 161 of the Companies Act, 2013 on 31st March 2015.
Smt. Nalini Rajesh holds office upto the forthcoming annual general
meeting in accordance with Section 161 of the Companies Act, 2013. As
required by Section 160 of the Companies Act, 2013 the Company has
received a notice from a member along with requisite deposit signifying
his intention to propose Smt Nalini Rajesh as a candidate for the
office of Director.
Sri R Ramakrishnan, (DIN 00236673), Sri S Ramkrishnan, (DIN 00270433)
and Sri S E S Mani, (DIN 00686011) were appointed as non-executive
independent directors of the Company, not liable to retire by rotation,
by the members at the 29th Annual General Meeting held on 26th
September 2014 , to hold office for a term of five consecutive years
from 26th September 2014 to 25th September 2019.
8. DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm that:-
a) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
b) the directors have 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 of
the Company for that year.
c) the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
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 are operating effectively.
f) the directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
9. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER
SUB-SECTION (6) OF SECTION 149
All the independent directors have submitted the declaration of
independence, as required pursuant to Section 149(7) of the Companies
Act, 2013 stating that they meet the criteria of independence as laid
down section 149(6) of the Companies Act, 2013..
10. BOARD MEETINGS
During the financial year 2014-2015, there were six board meetings,
which were held on 21st April 2014, 30th May 2014, 7th August 2014,
26th September, 2014, 6th November 2014 and 4th February 2015..
11. COMMITTEES OF THE BOARD
Currently, the Board has three committees namely the audit committee,
nomination and remuneration committee and stakeholders relationship
committee.
a) Audit Committee
The committee consists of Sri R Ramakrishnan, Sri S Ramakrishnan and
Sri S E S Mani all independent non-executive directors.
b) Nomination and Remuneration Committee
The committee consists of Sri R Ramakrishnan, Sri S Ramakrishnan and
Sri S E S Mani all independent non-executive directors.
c) Stakeholders Relationship Committee
The committee consists of Sri R Ramakrishnan, Sri S Ramakrishnan and
Sri S E S Mani all independent non-executive directors.
12. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Board has adopted a Whistle Blower Policy (vigil mechanism) in
accordance with the provisions of the Companies Act, 2013, which
provides a formal mechanism for all directors, individual employees and
other stakeholders of the Company, to report their genuine concerns or
grievances about unethical behavior, actual or suspected fraud, or
violation of the Company's code of conduct and ethics. The policy also
provides for adequate safeguards against victimisation of director(s)/
employees(s) who avail of the mechanism and provide direct access to
the Chairman of the audit committee. The whistle blower policy is
available in our website at the link
http://www.upasanafinance.com/pdf/WHISTLE-BLOWER-POLICY.pdf
13. NOMINATION AND REMUNERATION POLICY
The Board has, on the recommendation of the Nomination & Remuneration
committee framed a policy for selection and appointment of Directors,
Senior management and key managerial personnel and the remuneration of
directors, key managerial personnel and other employees. The Nomination
and Remuneration Policy is attached in Annexure II of this report.
14. CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY AND IMPLEMENTATION
The company was not required to constitute a CSR Committee as the
company has not met any of the thresholds mentioned in Section 135 of
the Companies Act, 2013 during the financial year under review. Hence
reporting about policy on Corporate Social responsibility and the
initiatives taken are not applicable to the company.
15. DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL APPOINTED OR HAVE
RESIGNED DURING THE YEAR
Sri R Ramakrishnan, Director, Sri S Ramkrishnan, Director and S E S
Mani, Director, were appointed as Independent Directors by the members
at the 29th Annual General Meeting held on 26th September 2014, to hold
office for a term of five consecutive years from 26th September 2014 to
25th September 2019. Smt Nalini Rajesh was appointed as additional
director on 31st March 2015 to hold office till the ensuing 30th Annual
General Meeting.
Sri R Somasundaram was appointed as Chief Executive Officer of the
Company with effect from 26th September 2015. Sri R Krishnan, who was
the Company Secretary from 17th June 1997 was recognized as Company
Secretary- KMP as per the provisions of Section 203 of the Companies
Act, 2013.. Sri R Krishnan was also appointed as Chief Financial
Officer of the Company with effect from 26th September 2015.
16. BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013, evaluation of
all the Board members, its committees and the Board as a whole was done
on an annual basis, as per the criteria for performance evaluation
framework laid down by the Nomination and Remuneration Committee and
approved by the Board. During the year, the Board adopted a formal
mechanism for evaluating its performance and as well as that of its
committees and individual directors. The exercise was carried out
through an evaluation process covering various aspects of the Board's
functioning such as composition of the Board and Committees, frequency
of meetings, administration of meeting, flow of information to the
Board, experience and competencies, performance of specific duties and
obligations, disclosure of information to the Board and Stakeholders
etc. A separate exercise was carried out to evaluate the performance of
individual directors who were evaluated on parameters such as
attendance, contribution at the meetings and independence judgment The
Directors expressed 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 a separate meeting of the Independent Directors of the
Company was held on 4th February, 2015 to review the frequency and
procedures for conducting the separate meetings of the Independent
Directors and to review the performance of the Board as a whole. The
independent Directors also reviewed the quality, content and timeliness
of the flow of information between the Management and the Board and its
committees, which is necessary to effectively and reasonable perform
and discharge their duties. The directors were satisfied with the
evaluation results.
18. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
OF THE COMPANIES ACT, 2013
The provisions of section 186 are not applicable to the company.
19. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
REFERRED TO IN SUB-SECTION (1) OF SECTION 188 OF THE COMPANIES ACT,
2013
All related party transactions were entered at arms' length basis and
in the ordinary course of business. There were no material contracts or
arrangements with related parties referred to in sub-section (1) of
Section 188. Hence, Form AOC-2 pursuant to the Companies (Accounts)
Rules 2014 is not enclosed.
20. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The particulars 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 is annexed to this
Report as Annexure II and forms part of this report,
None of the employees were in receipt of remuneration in excess of the
limit prescribed under Rule 5(2) of the Companies (Appointment and
Remuneration) of Managerial Personnel) Rules, 2014.
21. CONSERVATION OF ENERGY/TECHNOLOGY ABSORPTION / FOREIGN EXCHANGE
EARNINGS AND OUTGO
The Company is a Non-Banking Finance Company and is not engaged in
manufacturing activity of any kind. The Company has nothing to report
on conservation of energy. There were no foreign exchange earnings or
outgo for the company during the year. The Company has nothing to
report with regard to technology absorption.
22. AUDITORS
a) STATUTORY AUDITORS
Pursuant to Section 139 of the Companies Act, 2013, M/s Sundaram &
Srinivasan, Chartered Accountants, Chennai, (Registration No. 004207S
with the Institute of Chartered Accountants of India), were appointed
as Auditors of the Company at the twenty ninth annual general meeting
of the company for a consecutive period of three years commencing from
26th September, 2014 till the conclusion of the Annual general meeting
of the Company for the financial year 2016-17, subject to ratification
at every annual general meeting.. The Company has received a
certificate from the statutory auditors to the effect that ratification
of their appointment, if made, would be in compliance with the
requirements of the Companies Act, 2013 and the rules made thereunder.
Accordingly, the Board of Directors propose to recommend to the members
at the ensuing 30th Annual General Meeting to ratify the appointment of
M/s Sundaram & Srinivasan, Chartered Accountants, Chennai,
(Registration No. 004207S with the Institute of Chartered Accountants
of India), as Auditors of the Company for the second consecutive year
(in the term of three consecutive years approved at the Twenty Ninth
Annual General Meeting held on 26th September, 2014). The Auditors'
report does not contain any qualification, reservation or adverse
remarks.
b) SECRETARIAL AUDITORS
Pursuant to Section 204 of the Companies Act, 2013 read with
Companies(Appointment and Remuneration of Managerial personnel) Rules,
2014, the Board of Directors have appointed M/s. Krishnamurthy & Co,
Company secretaries, Chennai as the Secretarial Auditor of the Company
to conduct Secretarial Audit in relating to the financial year
2014-2015. Secretarial Audit Report issued by Sri K Sriram, Practicsing
Company Secretary (CP No.2215) , Partner, M/s. S Krishnamurthy & Co.,
Company Secretaries , Chennai in Form MR-3 is enclosed vide Annexure IV
and forms part of this report. The Secretarial Audit Report does not
contain any qualification, reservation, observation or any other
adverse remarks.
The Board has appointed M/s. S Krishnamurthy & Co, Company secretaries,
Chennai, as Secretarial Auditor of the Company for the financial year
2015- 16 as per the provisions of Section 204 of the Companies Act,
2013 read with Companies (Appointment and Remuneration of Managerial
personnel) Rules, 2014.
c) INTERNAL AUDITORS
The Board of Directors, as per the recommendation of Audit Committee,
appointed Smt Latha Raghunathan (membership No.22689 with the Institute
of Chartered Accountants of India (ICAI), Partner L R Associates (Firm
Regn. No.001881S with ICAI) as Internal Auditors of the Company
pursuant to Section 138 read with Rule 13 of the Companies (Accounts)
Rules, 2014. The internal audit report is reviewed by the audit
committee.
23. INTERNAL FINANCIAL CONTROLS
The Company has adequate system of internal financial controls to
safeguard and protect from loss, unauthorized use or disposition of its
assets. All the transactions are properly authorized, recorded and
reported to the Management. The Company is following all the applicable
Accounting Standards for properly maintaining the books of accounts and
reporting financial statements. The internal auditor of the company
checks and verifies the internal control and monitors them. The Company
confirms that there are proper and adequate internal control systems
and procedures commensurate with it size and nature of its business for
ensuring the orderly and efficient conduct of its business for
safeguarding its assets, the prevention and detection of frauds and
errors, the accuracy and completeness of the accounting records and
timely preparation of reliable financial information. The company has
not noticed any major weakness in the internal financial control
procedures.
24. RISK MANAGEMENT
The Company had identified certain business risks and also the measures
for dealing with such risks which it faces in day to day operations of
the Company. As the company is concentrating in collection of overdues
the traditional risks associated with Non-Banking Financial Companies
like Credit risk, currency risk, liquidity risk and interest rate risk
are not applicable to the company. However the company faces
operational risks relating to people, process, legal environment and
external factors, investment risk and regulatory risks. The company
manages these risks by prudently investing its funds, managing its
people and complying with all the regulations. These risks are
continuously reviewed and monitored by the management. The Board also
reviews the risks and corrective actions and mitigation measures are
taken as and when needed.
25. DELISTING OF SHARES FROM MADRAS STOCK EXCHANGE
Consequent to voluntary de-recognition of Madras Stock exchange Limited
(MSE) in terms of the circular dated 30th May 2012 issued by the
Securities and Exchange Board of India and in furtherance to the
Company's application for voluntary delisting of equity shares from
MSE, MSE vide its letter dated 20th February 2015 had informed that the
equity shares of the Company have been delisted from MSE with effect
from 23rd February 2015.
The Company's Equity shares are continues to be listed at BSE Limited,
Mumbai and the listing fees for the year 2015 - 16 has been paid.
26. DISCLOSURE UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
There were no complaints/cases pursuant to the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
27. GENERAL
The company has nothing to report/disclose in respect of the following
items as detailed below:
a) There were 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 to which the financial statements
relate and the date of the report.
b) The Company has no subsidiary, associate or Joint venture companies
and hence reporting on the performance and financial position of them
as per AOC 1 and preparation of 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 or associates during the year under review.
e) During the year under review, the Company has not accepted any
deposits from the public within the meaning of Section 73 of the
Companies Act, 2013
f) There are no significant and material offers passed by the
regulators or courts or tribunals impacting the going concern status
and company's operations in future.
g) The company has not issued any equity shares with differential
rights during the year under review.
h) The company has not issued any shares including sweat equity shares
to the employees under any scheme during the year under review.
28. ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation for the
continued support from all those assisting the recovery of over dues.
The Directors also wish to thank the employees for their co-operation
On Behalf of the Board
Chennai R Ramkrishnan S Ramkrishnan
May 29, 2015 Director Director
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