Upasana Finance Ltd Directors Report.

TO THE SHAREHOLDERS

The Directors have pleasure in presenting the Thirty Fifth Annual Report, together with the audited accounts for the year ended 31st March 2020.

1. FINANCIAL HIGHLIGHTS

(Rs. In Lakhs)

Particulars 2019-20 2018-19
Income from Operations 128.58 105.73
Less: Expenditure 68.45 42.21
Profit 60.13 63.52
Less: Statutory Provision on Debts 48.95 -
Profit Before Tax and Extraordinary Items 11.18 63.52
Less: Extraordinary Items - -
Less: Current Tax 8.29 19.82
Profit After Tax 2.90 43.70

2. OPERATIONS

a) Income: The income from operations of the company for the year under review was Rs. 128.59 lakhs as against Rs. 105.73 lakhs during the previous year.

b) Profit after tax: The profit after tax of the company for the year under review was Rs. 2.90 lakhs as against Rs. 43.70 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 holds a valid certificate of Registration.

b) Business Review: The Company is currently carrying on the business of short term and long term financing to both corporate and non-corporate entities. Further 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.

c) Future Outlook: The Company is confident of doing better business in the form of short term and long term financing (both secured and unsecured).

4. DIVIDEND

In order to plough back the profits, your directors do not recommend any dividend for the year under review.

5. TRANSFER TO RESERVES

An amount of Rs. 57,857/- (previous year Rs. 8,73,977/-) has been transferred to Special Reserve 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

Clause 15(2)(a) of SEBI (Listing Obligations and Disclosure Requirements) (LODR) Regulations 2015 prescribes that, Clause 27 (submission of Quarterly Corporate Governance Report) of LODR Regulations is not applicable for Companies having paid up equity share capital not exceeding Rs.10 Crores and Net worth not exceeding Rs.25 Crores as on the last day of the previous year. The paid up capital of the company is Rs.4.28 Crores and the networth is less than Rs.25 Crores as at 31.03.2020. Hence, clause 27 is not applicable to the Company and the report on Corporate Governance is not provided.

8. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The composition of the companys board is in conformity with the applicable provisions of the Companies Act, 2013 with regard to Independent Directors and women directors as on 31st March 2020.

Ms. Rekha M Jain (DIN: 07704034) and Ms. Khushbu Mohan Kumar Jain (DIN: 07704023), Directors are liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers themselves for re-appointment.

Mr. Biswajit Chaudhury (DIN: 08611223) was appointed as Additional / Independent Director of the Company with effect from 14th day of November 2019 based on the recommendations made by the Nomination and remuneration committee and holds office upto the date of ensuing AGM and is eligible to continue as director of the Company. The board recommends his continuation as director as set forth in the notice convening AGM

Mr. Naressh Mahendra Kumar Jain (DIN: 08102162) is proposed to be appointed as Independent Director of the Company for term of five years with effect from the date of ensuing AGM based on the recommendations made by the Nomination and remuneration committee.

Necessary resolution for the re-appointment / confirmation is being placed for approval 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 relevant information is 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 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.

10. DECLARATION BY INDEPENDENT DIRECTORS

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. In the opinion of the board, the independent directors fulfill the conditions specified in the Act and the rules made there under for appointment as independent directors and confirm that they are independent of the management.

11. 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 to review the performance of the Board as a whole taking into account the views of the non-executive director. 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.

12. BOARD MEETINGS

Five Board Meetings were held during the Current Financial year on 8th April 2019, 30th May 2019, 14th August 2019, 14th November 2019, and 14th February 2020 and the gap between two meetings were not more than 120 days.

Name of Director

No. of Meetings

Entitled to attend Attended
1 Ms. Bhavika M Jain 5 5
2 Ms. Rekha M Jain 5 5
3 Ms. Khushbu Mohan Kumar Jain 5 5
4 Mr. Bharat Kumar Dughar 5 5
5 Mr. Velu 5 5
6 Mr. Biswajit Chaudhury* 1 1

*Appointed with effect from 14th November 2019.

13. COMMITTEES OF THE BOARD

Currently, in line with the statutory requirement, the Board has three committees namely the audit committee, nomination and remuneration committee and stakeholders relationship committee.

a) Audit Committee

The Committee as on 31st March 2020 comprised of the following Directors as its Members:

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

The terms of reference of the Audit Committee interalia include the recommendation for appointment, remuneration and terms of appointment of auditors of the company, examinations of the financial statement and the auditors report thereon and other matters specified for audit committees under Section 177 of the Companies Act, 2013 and SEBI Listing Regulations, 2015.

The Committee met four times during the financial year on 30th May 2019, 14th August 2019, 14th November 2019 and 14th February 2020. The details of attendance in Committee meetings are as follows:

S. No Name of Director

Designation

Category

No. of Meetings

Entitled to attend Attended
1 Mr. Bharat Kumar Dughar Chairman NEID 4 4
2 Mr. Velu Member NEID 4 4
3 Ms. Bhavika M Jain Member NED 4 4

b) Nomination and Remuneration Committee

The Committee as on 31st March 2020 comprised of the following Directors as its Members:

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

The Committee met once during the financial year on 14th November 2019.

The Board has, on the recommendation of the Nomination and 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.

The details of attendance in Committee meetings are as follows:

S. No Name of Director

Designation

Category

No. of Meetings

Entitled to attend Attended
1 Mr. Bharat Kumar Dughar Chairman NEID 1 1
2 Mr. Velu Member NEID 1 1
3 Ms. Bhavika M Jain Member NED 1 1

c) Stakeholders Relationship Committee

The Committee as on 31st March 2020 comprised of the following Directors as its Members:

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

The Committee met twice during the financial year on 30th May 2019 and 14th February 2020. The details of attendance in Committee meetings are as follows:

S. No Name of Director

Designation

Category

No. of Meetings

Entitled to attend Attended
1 Mr. Bharat Kumar Dughar Chairman NEID 2 2
2 Mr. Velu Member NEID 2 2
3 Ms. Bhavika M Jain Member NED 2 2

14. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Board has adopted a policy on 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 Companys 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 also provides direct access to the Chairman of the audit committee.

15. 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 Boards 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.

16. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

None of the employees draws remuneration of Rs. 8,50,000/- or above per month and Rs.1,02,00,000/- or above per year. Hence, details of the employees of the Company as required pursuant to 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are not furnished.

Having regard to the provisions of Section 136(1) read with its relevant proviso of the Companies Act, 2013, the disclosure pertaining to remuneration and other details as required under Section197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, forming part of the Annual Report, is available for inspection at the registered office of the company during working hours. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished without any fee and free of cost

17. AUDITORS

a) STATUTORY AUDITORS

M/s. S. JAWAHAR & ASSOCIATES., Chartered Accountants, Statutory Auditors, were appointed, as the Statutory Auditors of the Company to fill the casual vacancy caused by the resignation of M/s. Kalyanasundaram & Co, Chartered Accountants, Chennai at the Board Meeting held on 14.07.2020. Necessary resolution is placed before the members in the notice convening Annual General Meeting for confirmation of their appointment.

Further, M/s. S. JAWAHAR & ASSOCIATES., Chartered Accountants, Statutory Auditors, retire at the ensuing Annual General Meeting and are eligible for re-appointment. In terms of Section 139 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, M/s. S. Jawahar & Associates., are eligible to be reappointed for a period of 5 years from the conclusion of the ensuing Annual General Meeting until the conclusion of the Annual General Meeting of the Company to be held in the year 2025. The Company has received consent and confirmation that their appointment will be within the limits specified u/s. 139 of the Companies Act, 2013. The Board recommends their re-appointment.

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. A.K. JAIN & ASSOCIATES, Company Secretaries in Practice, Chennai as the Secretarial Auditors of the Company to conduct the Secretarial Audit for the financial year 2019-2020. The Secretarial Audit Report in Form MR - 3 is enclosed vide Annexure III and forms part of this report. The reply given by the board on remarks made by the Secretarial Auditor are as follows:

Auditors Observation Reply to Observation
The un-audited results for the quarter ended 30th June 2019 & 31st December 2019 were intimated to the Stock Exchange beyond the prescribed limits as specified in Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 (LODR Regulations) on 16.08.2019 and 17.02.2020 respectively. The Company had inadvertently omitted to intimate the un-audited results of the Company for the quarter ended 30th June 2019 and 31st December 2019. The Company will ensure that the necessary intimations are made to BSE on time
The Company does not maintain a functional website as prescribed under Regulation 46 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 The company is taking necessary steps to develop a functional website and will be deployed at the earliest.

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 Internal Auditor.

19. 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 its 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.

20. 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. 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.

21. 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.

22. GENERAL

The company has complied with the provisions of secretarial standards issued by the Institute of Company Secretaries of India in respect of meetings of the board of directors and general meetings held during the year.

The application filed by the company for change in control/management was rejected by Reserve Bank of India (RBI) vide their letter dated 24.09.2019. The acquirer has accordingly decided to withdraw the takeover offer and an Open offer withdrawal advertisement was published on 05.11.2019

COVID-19 pandemic, that hit the entire country towards the later part of March 2020, is an unprecedented event and may have far-reaching ramification on the economy as a whole and also on the prospect of the company. The Directors will continue to track the events closely and will take appropriate actions as warranted by the situation. 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.

The Company has nothing to report/disclose in respect of the following items as detailed below:

a) 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.

b) There is no change in the nature of business of the Company during the year.

c) No company have become or ceased to be its subsidiaries, joint ventures or associates during the year under review.

d) 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

e) There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future.

f) The company has not issued any equity shares with differential rights during the year under review.

g) The company has not issued any shares including sweat equity shares to the employees under any scheme during the year under review.

h) 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.

i) The provisions of section 186 is not applicable to the company and hence reporting under section 186 on loans, guarantees and investments does not arise.

j) There were no contracts or arrangements with related parties referred to in subsection (1) of Section 188. Hence, Form AOC-2 pursuant to the Companies (Accounts) Rules 2014 is not enclosed

k) The Company has nothing to report on conservation of energy and technology absorption. There were no foreign exchange earnings or outgo for the company during the year.

23. 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.

By Order of the Board
For UPASANA FINANCE LIMITED

 

31.07.2020 -SD- -SD-
Chennai Bhavika M Jain Khushbu M Jain
Director Director
DIN:07704015 DIN: 07704023