BOARD'S REPORT TO THE SHAREHOLDERS

1. The Directors have pleasure in presenting the Thirtieth Annual Report, together with the audited accounts for the year ended 31st March 2015

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 2015­16 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 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.

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

R Ramkrishnan Director

S Ramkrishnan Director

May 29, 2015

Chennai