To
The Members,
Your Directors have pleasure in presenting the Thirty Seventh Annual Report on the
business of your Company, together with the Audited Financial Statements of the Company
for the year ended 31st March, 2023 along with Auditors Report thereon.
1. FINANCIAL HIGHLIGHTS
(Rupees in lakhs)
| Particulars |
2022-2023 |
2021-2022 |
| Gross income |
40.26 |
36.35 |
| Profit/(Loss) before Depreciation. Finance Costs and Tax |
13.04 |
12.32 |
| Depreciation |
6.01 |
0.52 |
| Finance costs |
— |
— |
| Profit/(Loss) before tax |
7.03 |
11.80 |
| Current Tax |
2.04 |
1.41 |
| Deferred Tax |
(8.54) |
(9.64) |
| Net Profit/(Loss) |
13.53 |
20.03 |
2. OPERATING RESULTS
Your company has generated total Gross Income of Rs.40.26 lakhs during the financial
year 2022-2023 as against Rs.36.35 lakhs during the financial year 2021-2022 and has
earned a net profit of Rs.13.53 lakhs as against profit of Rs.20.03 lakhs respectively as
per Indian Accounting Standards (Ind AS).
3. DIVIDEND
With a view to conserve resources for long term needs of the Company and inadequate
profits, your directors do not recommend any dividend for the Financial Year 2022- 2023.
4. TRANSFER TO RESERVE
The Company did not transfer any amount to the General Reserve for the Financial Year
ended 31st March, 2023.
5. CHANGE IN THE NATURE OF BUSINESS
During the year under review, there has been no change in the nature of business of the
Company.
6. CHANGES IN THE SHARE CAPITAL
The paid up share capital of the company as on 31st March, 2023 is
Rs.2,54,45,000/- consisting of 25,44,500 Equity Shares of Rs.10/- each. During the year
under review, the company has not issued any fresh shares.
7. DIRECTORS
During the year under review, Sri. T Adinarayana, Director will retire at the ensuing
Annual General Meeting and being eligible offers himself for re-appointment and the Board
recommends his reappointment.
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 down
under Section 149 (6) of the Companies Act, 2013 and the Rules made there under and also
as per applicable regulations of the SEBI (LODR) Regulations, 2015. Further, they have
also confirmed that they are not aware of any circumstances or situations, which exist or
may be reasonably anticipated, that could impair or impact their ability to discharge the
duties with an independent judgment and without any external influence.
None of the Directors are disqualified from being appointed or holding office as
Directors, as stipulated under Section 164 of the Companies Act, 2013.
8. BOARD MEETINGS
During the financial year 2022-2023, Five Board Meetings were properly convened and
held on 30th May, 2022, 13th August, 2022, 4th November,
2022, 14th February, 2023 and 31st March, 2023. The intervening gap
between the Meetings was within the period prescribed under the Companies Act, 2013 and
the SEBI (LODR) Regulations, 2015.
9. BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, the Board has carried out the annual
performance evaluation of the Board and has carried out the annual performance evaluation
of its own performance, the directors individually as well as the evaluation of the
working of its Audit, Nomination and Remuneration and all other committees.
A structured questionnaire was prepared after taking into consideration inputs received
from the Directors, covering various aspects of the Boards functioning such as adequacy
of the composition of the Board and its Committees, board culture, execution and
performance of specific duties, obligations and governance.
A separate exercise was carried out to evaluate the performance of individual
Directors, who were evaluated on parameters such as level of engagement and contribution,
independence of judgment, safeguarding the interest of your Company and its minority
shareholders etc., The performance evaluation of the Independent Directors was carried out
by the entire Board, excluding the Independent Director being evaluated.
In a separate meeting of Independent Directors, performance of Non-Independent
Directors, the Board as a whole and the Chairman of your Company was evaluated, taking
into account the views of the Manager & Non-Executive Directors. The Nomination and
Remuneration Committee reviewed the performance of individual directors on the basis of
criteria such as the contribution of the individual director to the Board and Committee
meetings like preparedness on the issues to be discussed, meaningful and constructive
contribution and inputs in meetings etc.,
10. FAMILIARIZATION PROGRAMMES IMPARTED TO INDEPENDENT DIRECTORS
The Members of the Board have been provided opportunities to familiarize themselves
with the Company, its Management and its operations. All the Independent Directors of the
Company are made aware of their roles and responsibilities at the time of their
appointment through a formal letter of appointment, which also stipulates various terms
and conditions of their engagement. Manager and Senior Management provide an overview of
the operations and familiarize the Directors with matters related to the Companys values
and commitments. They are also introduced to the organization structure, constitution of
various committees, board procedures etc.,
11. KEY MANAGERIAL PERSONNEL
The Board designated the following as Key Managerial personnel of the Company under the
provisions 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 Managerial
personnel of the company.
12. NAMES OF THE COMPANIES WHICH HAVE BECOME/CEASED TO BE SUBSIDIARIES, JOINT VENTURES
OR ASSOCIATE COMPANIES DURING THE YEAR
The Company did not have any subsidiaries, associates or joint ventures during the
year.
13. FIXED DEPOSITS
The Company has not accepted any Fixed Deposits and as such no principal or interest
was outstanding as on the date of the balance sheet.
14. SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the regulators or courts which would
impact going concern status and its operations in future.
15. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has in place proper and adequate internal control systems commensurate with
the nature of its business and size and complexity of its operations. Internal control
systems comprising of policies and procedures designed to ensure reliability of financial
reporting, timely feedback, compliance with policies, procedures, applicable laws and
regulations. The Company is following all the applicable Accounting Standards (Ind As) for
properly maintaining the books of accounts and reporting financial statements. The Audit
committee actively reviews the adequacy and effectiveness of the Internal Financial
control and suggests the improvements for the same.
16. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 134 (3) (c) and read with Section 134 (5) of
the Companies Act, 2013, in respect of Directors responsibility statement, Your Directors
state that:
(i) In the preparation of the annual accounts for the financial year ended 31st
March, 2023, the applicable accounting standards have been followed along with proper
explanation relating to material departures;
(ii) Appropriate accounting policies had been selected 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 31st
March, 2023 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
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;
(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 and
that such internal financial controls are adequate and were operating effectively, and
(vi) That proper systems have been devised to ensure compliance with the provisions of
all applicable laws and that such systems were adequate and operating effectively.
17. AUDITORS
M/s. NSVR & Associates LLP, Chartered Accountants, Hyderabad (ICAI Firm
Registration No. 008801S/S200060), were appointed as statutory auditors of the Company for
a period of 5 years at the 36th Annual General Meeting held on 28th September,
2022, till the conclusion of 41st Annual General Meeting.
The Statutory Auditors were present in the last AGM held on 28th September,
2022.
18. AUDITORS REPORT
There are no qualifications, or adverse remarks made by M/s. NSVR & Associates LLP,
Chartered Accountants, Statutory Auditors in their report for the Financial Year ended 31st
March, 2023.
The Statutory Auditors have not reported any incident of fraud to the Audit Committee
of the Company under sub-section (12) of section 143 of the Companies Act, 2013, during
the year under review.
19. 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 has
appointed M/s. P.S. Rao & Associates, a firm of Practicing Company Secretaries to
undertake the Secretarial Audit of the Company. The Secretarial Audit report for the
financial year 2022-2023 is annexed herewith as Annexure - I to this Report.
20. SECRETARIAL AUDIT REPORT
There are no qualifications, reservations or adverse remarks made by M/s. PS. Rao &
Associates, Practicing Company Secretaries in their report for the financial year ended 31st
March, 2023.
21. INTERNAL AUDITORS
The Board on the recommendations of the Audit Committee has appointed M/s. Suresh and
Babu, Chartered Accountants as internal auditors of the Company. The Internal Auditors are
submitting the reports on quarterly basis.
22. AUDIT COMMITTEE
The audit committee of the Company is constituted in line with the provisions of
Regulation 18 of SEBI (Listing Obligations and Disclosure requirements) regulations, 2015
read with Section 177 of the Companies Act, 2013.
The following is the composition of Audit Committee as at 31st March, 2023:
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 considered
and accepted by the Board of Directors of the Company.
23. NOMINATION AND REMUNERATION COMMITTEE
The following is the constitution of Nomination and Remuneration Committee as at 31st
March, 2023:
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 of
the company on directors appointment and remuneration, including criteria for determining
qualifications, positive attributes, independence of director and other matters and to
frame proper systems for identification, appointment of Directors and KMPs, payment of
remuneration to them and evaluation of their performance and to recommend the same to the
board from time to time and any other function as may be mandated by the Board or
stipulated by the Companies Act, 2013, SEBI, Stock Exchanges or any other regulatory
authorities from time to time. The policy is also posted on the companys website
www.uflfinance.com.
24. STAKE HOLDERS RELATIONSHIP COMMITTEE
The following is the composition of Stake Holders Relationship Committee as at 31st
March, 2023:
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 investor
relations. The committee looks after the services of the Registrars and share transfer
agents and recommends measures for providing efficient services to investors. The
Committee specifically looks into investor complaints like transfer/transmission/
transposition of shares, and other related issues. There were no complaints pending for
redressal as at 31st March, 2023.
25. 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 the
Companies Act, 2013 during the financial year under review. Hence reporting about the
policy on Corporate Social Responsibility and initiatives taken are not applicable to the
company.
26. MEETING OF INDEPENDENT DIRECTORS
The Independent Directors of the company have met separately on 31st March,
2023 inter-alia, reviewed the performance of the Chairman, Non Independent Directors and
Manager. The Independent Directors in the said meeting also assessed the quality, quantity
and timeliness of flow of information between the Company Management and the Board to
effectively and reasonably perform its duties.
27. RISK MANAGEMENT POLICY
The Company has developed and is implementing a risk management policy which includes
the identification therein of elements of risk, which in the opinion of the board may
threaten the existence of the Company.
28. VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES OF THE COMPANY
Pursuant to the applicable provisions of the Companies Act, 2013 and applicable
Regulations of SEBI (LODR) Regulations, 2015, a Vigil Mechanism for directors and
employees to report genuine concerns has been established.
The Company has a Whistle Blower Policy to deal with instances of fraud and
mismanagement, if any in the Company. The Vigil Mechanism/Whistle Blower policy may be
accessed on the Companys website at www.uflfinance.com.
29. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Company has adopted a Policy on Prevention, Prohibition and Redressal of Sexual
Harassment at workplace as per the provisions of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder.
The policy aims to provide protection to employees at the workplace and prevent and
redress complaints of sexual harassment and for matters connected or incidental thereto,
with the objective of providing a safe working environment, where employees feel secure.
During the financial year 2022-2023, the Company has not received any complaint of
sexual harassment against any employees of the Company.
30. ANNUAL RETURN
As required pursuant to Section 92(3) read with section 134 (4)(a) of the Companies
Act, 2013, a copy of the Annual Return of the Company has been placed on the Website of
the Company at www.uflfinance.com.
31. RELATED PARTY TRANSACTIONS
As a matter of policy, your company carries out transactions with related parties on an
arms-length basis. Disclosures as required under form AOC-2 are annexed as Annexure - 11
and also contained in Notes to Financial Statements. There are no materially significant
related party transactions made by the company with promoters, directors, key managerial
personnel which may have a potential conflict with the interests of the company at large,
except payment of remuneration to Key Managerial Personnel. The policy on the related
party transactions is also posted at the Companys website www.uflfinance.com.
32. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The Company being a non banking finance company registered with Reserve Bank of India,
mainly deals in the business of Investments and financing activities, is exempt from
complying with the provisions of Section 186 of the Companies Act, 2013. Accordingly, the
disclosures of the loans given and Investments made as required under the aforesaid
section have not been given in this report. However, information regarding loans and
investments are detailed in the notes to the financial statements.
33. LISTING OF EQUITY SHARES
Your company shares are listed with the BSE Limited. The listing fee has been paid for
the financial year 2023-2024.
34. CORPORATE GOVERNANCE
Since the paid up capital of the company is less than Rs.10 Crores and the net worth of
the Company is less than Rs.25 Crores, the provisions of Regulations 17,17A, 18,
19,20,21,22,23,24,24A,25,26,27 and clauses (b) to (i) and (t)of sub-regulation 2 of
Regulation 46 and para C, D & E of Schedule V of the Securities and Exchange Board of
India (Listing Obligations and Disclosures Requirements) Regulations, 2015, are not
applicable to the Company, hence corporate governance report has not been enclosed to
directors report.
35. INSIDER TRADING REGULATIONS
The Company has adopted an Internal Code of Conduct for Regulating, Monitoring and
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 other
connected persons who are expected to have access to unpublished price sensitive
information relating to the Company. The Company Secretary is the Compliance Officer for
monitoring adherence to the SEBI (Prohibition of Insider Trading) Regulations, 2015.
The Company has also formulated The Code of Practices and Procedures for Fair
Disclosure of Unpublished Price Sensitive Information (UPSI) in compliance with the PIT
Regulations. This Code is displayed on the Companys website viz., www.uflfinance.com.
36. DECLARATION OF COMPLIANCE OF CODE OF CONDUCT
The Company has adopted a Code of Business Conduct (the Code) which applies to all the
employees and Directors of the Company. Under the Code, it is the responsibility of all
the employees and directors to familiarize themselves with the code and comply with its
standards and that the Board of Directors and Senior Management Personnel of the Company
have affirmed compliance with the Code of Conduct of the Company for the year 2022-2023. A
Declaration in this regard is annexed as Annexure III.
37. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Post Covid-19 pandemic, the global economy is gradually recovering from a series of
disruptions with supply-chain disruptions easing and energy and food markets stabilizing
after the Russia-Ukraine crisis. Additionally, most central banks have tightened monetary
policy extensively and synchronously, which is expected to result in inflation, the most
pressing issue in 2022, moving back towards its target range. According to the
International Monetary Funds latest forecast, global growth is expected to reach 2.8% in
2023 and will rise to 3.0% in 2024.
Industry Structure and Developments
The Indian financial services sector is a vital component of the countrys economy,
comprising a diverse range of players such as commercial banks, insurance companies,
non-banking financial companies, pension funds, mutual funds, and other smaller financial
entities. The sector has been evolving over the years, coupled with changes and reforms by
the Government and regulatory bodies to strengthen the industry, enhancing its growth
prospects.
One of the key growth drivers for the sector has been the increasing focus on financial
inclusion and providing better access to finance for the under banked and under privileged
sections of society. This has led to the emergence of digital banking, micro finance, and
fintech collaborations disrupting traditional banking models.
Despite the uncertain global environment since early 2020, the Indian financial sector
has remained stable and resilient. Furthermore, the Non-Banking Financial (NBFC) sector
has played a crucial role in bridging the credit gap and supporting the growth of various
sectors such as micro, small, and medium enterprises (MSMEs), agriculture and affordable
housing, among others.
Opportunities and Threats
Your Company, being mainly an investment Company seeks opportunities in the capital
market. The volatility in stock indices in the financial year under report represents both
an opportunity and challenge for the Company. As a long-term strategy, the Company has
made investments in equities and mutual funds and is looking forward for a sustainable
growth in its investee Companies in the coming years which may enhance the shareholders
value.
Business Outlook
The Company is mainly engaged in the business of investment in bodies corporate in
order to yield greater revenue for its stakeholders. The company is also having exposure
to financing.
Risks and areas of concerns
As your companys business is mainly into investment activities, the capital market
developments may affect the gains and profitability of the Company. The company is also
undertaking financing activity and defaults and NPAs may adversely affect profitability of
the Company. The Company continuously evaluates its investments in investee companies to
ensure that the same meets the objective of ensuring maximization of value to all its
stakeholders in a prudent manner.
Internal Control Systems and Adequacy
The Company has satisfactory internal control system. The adequacy of the internal
control system is reviewed by the Audit Committee of the Board of Directors. Your Company
has taken proper and sufficient care for the maintenance of adequate accounting records as
required by various Statutes. Internal Auditors, the Audit Committee and Statutory
Auditors have full and free access to all the information and records as considered
necessary to carry out their responsibilities.
Human Resources
The current activities of the company may not require significant human resources,
however to the extent possible requisite personnel have been engaged to take care of
organization need of human resources. The Company will engage requisite human resource as
and when required.
Future Outlook
The after effects of the pandemic, rising inflation and the Russia-Ukraine conflict
created global financial risks. Central banks across the world resorted to increasing
interest rates and reduce systemic liquidity. The RBI was no exception: it increased the
repo rate six times in FY 2022-2023 from 4.0% to 6.5%, an increase of 250 bps. and this
increase in repo led to an upward repricing of loans, resulting in temporary higher spread
for all types of loans in finance sector. After carefully prevailing over the COVID-19
years, your company will continue with the strategy of investment in equities, mutual
funds and fixed income securities, adopting a very conservative approach to such
investments.
PERFORMANCE HIGHLIGHTS:
During the year 2022-2023 the company has earned Gross Income of Rs.40.26 lakhs as
against Rs.36.35 lakhs during the financial year 2021-2022 and has earned a net profit of
Rs.13.53 lakhs for financial year 2022-2023 as against profit of Rs. 20.03 lakhs during
the financial year 2021-2022 respectively.
Details of Key Financial Ratios:
| Particulars |
As at 31.3.2023 |
As at 31.3.2022 |
% 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) |
23.46 |
17.13 |
36.95 |
| 5 Debt Equity Ratio |
NA |
NA |
NA |
| 6 Operating Profit Margin (%)(PBIT/Total Revenue) |
21.90 |
32.46 |
(32.53) |
| 7 Net Profit Margin (%)(Net Profit/Total Revenue) |
42.16 |
55.10 |
(23.48) |
| 8 Return on Net Worth (%)(Net Profit/Net Worth) |
1.16 |
1.62 |
(28.40) |
1) The increase in current ratio by more than 25% is mainly due to better recoveries of
loans.
2) The reduction in operating margin and return on net worth by more than 25% is mainly
due to reduction in fair value gains.
i. CAUTIONARY STATEMENT:
Statements in the Management Discussion and Analysis that addresses expectations about
the future, including but not limited to statement about Companys strategy for growth,
expenditures and financial results are forward looking statements and these forward
looking statements are based on certain assumptions and expectations of future events. The
Company cannot guarantee that these assumptions and expectations are accurate or will be
realized. Actual results could differ materially from those expressed or implied.
Important factors that could make a difference to the Companys operations, include among
others, economic conditions affecting demand/supply and price conditions in global and
domestic markets, changes in government regulations, Tax laws and other statutes and
incidental factors.
38. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUT
GO
The Company has not engaged in any manufacturing activity and thus its operations are
not energy intensive. However, adequate measures are always taken to ensure optimum
utilization and maximum possible saving of energy.
There were no Foreign Exchange earnings and out go during the year.
39. PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 of the Companies Act, 2013 read with
Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
in respect of employees of the company is annexed as Annexure - IV.
In terms of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company does not have any employee who is employed throughout
the financial year and in receipt of remuneration of Rs.102 Lakhs or more, or employees
who are employed for a part of the year and in receipt of Rs.8.50 Lakhs or more per month.
40. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments, affecting the financial position
of the company which occurred during and between the end of the financial year to which
the financial statements relate and the date of this report.
41. MAINTENANCE OF COST RECORDS
The Company is not required to maintain cost records as specified by the Central
Government 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 the
Institute of Company Secretaries of India.
43. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND
BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END
OF THE FINANCIAL YEAR
No application was made or any proceedings pending under the IBC, 2016 during the year
ended on 3151 March, 2023.
44. DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE-TIME
SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL
INSTITUTIONS ALONG WITH THE REASONS THEREOF
Not Applicable
45. ACKNOWLEDGEMENTS
Your Directors gratefully acknowledge the continued assistance and co-operation
extended by various Government Authorities, RBI, SEBI, Stock Exchange, other regulatory
authorities and bankers. The Board expresses its appreciation of the understanding,
dedication and support extended by the employees of the Company. Your Directors also
sincerely 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 : 14.08.2023 |
DIN:00917498 |
+91-9892691696
