BOARD'S REPORT

To

The Members,

Your Directors are presenting the Twenty first Annual Report of the Company together with the Audited Accounts for the Financial Year ended 31st March 2015.

DIVIDEND

In view of insufficient profit and brought forward losses, the directors do not recommend any dividend for the year ended March, 31, 2015.

PERFORMANCE

The Company is mainly engaged into investment and finance activities. During the year under review, the total revenues for the year were Rs. 2823.94 lacs, as compared to Rs. 954.10 lacs last year. Company has reported that, net profit for the year stood at Rs.12.53 lacs as compare to Rs. 9.79 lacs last year.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A. INDUSTRY STRUTURE & DEVELOPMENT

The Central and State elections were a mixed bag. India has a single party majority at the Centre after a long time, resulting in high policy intent, but, moderate action due to constraints. The Government's recent usage of the ordinance route to pass reforms in key issues such as land acquisition, coal auctions, mining and FDI in Insurance, reflect its conviction behind reforms and willingness to act outside of conventional avenues. The Government's flagship initiative 'Make in India' aims to promote manufacturing, which currently constitutes approximately 18% of GDP versus a targeted 25%. India's unique combination of democracy, demography and demand would also help make it a suitable manufacturing destination

India's growth story got a boost with the rebasing of GDP data. Based on the new series, the Real GDP growth stands at 7.4% in F.Y. 2014-15 and 6.9% in FY2013-14 i.e. approximately 180 bps higher than earlier estimates. While the data shows that growth recovery has been swift and substantial, several on-ground indicators like growth in industrial output, credit and net tax revenues suggest that activity is still sub-par. Even within the revised GDP data, fixed capital formation has been week at 4% YOY in FY 2015.

Non-Banking Financial Companies ("NBFCs") in India, have evolved over the last fifty years to emerge as notable alternate sources of credit intermediation, especially for the last mile credit delivery. Regulation of the NBFC sector over the last decade and a half has been incremental. As and when risks have been detected, they were sought to be addressed. RBI has taken major step in F.Y. 2014-15 to align asset classification norms with that of banks ( 90 days norms phased in over 3 years). Higher standard asset provisioning has been put in place (0.40% against the existing 0.25% phased in over 3 years). The sector will report higher NPAs in the initial period, however, the sector as a whole will emerge stronger after the implementation of these initiatives.

The year ahead will be challenging on the credit quality front. However, if the government and private spending revive, partially assisted by interest rate cuts, FY 2015-16 could witness an improvement in asset quality and growth.

B. OPPORTUNITY & TREATS

A significant proportion of the Indian population still languishes outside the periphery of formal channels of financial services. This is both a challenge and an opportunity. It is a challenge, because India's financial architecture needs to be strengthened with urgency to reinforce the message of inclusiveness. It is an opportunity, because the NBFC sector can play a pivotal role in India's economic development by meeting the credit requirements of Indian corporate and a wide cross section of population. NBFC players have already focused on enhancing their financial products and services.

The Reserve Bank of India's enhancement of the credit limits through securitization transactions for both banks and NBFCs shall provide better opportunities to NBFC's meet their ongoing capital/funding requirements.

Growth of the Company's asset book, quality of assets and ability to raise funds depend significantly on the economy. Unfavorable events in the Indian economy can affect consumer sentiment and in turn impact consumer decision to purchase financial products. Competition from a broad range of financial services providers, unstable political environment and changes in Government policy/ regulatory framework could impact the Company's operation.

C. RISKS AND CONCERNS

Your Company is subject to both internal and external risk. External risk due to fluctuation in interest rates, market volatility and decline in foreign exchange reserves etc. Internal factors including investment in specific projects, NPA's in portfolio, upcoming changes in rules and regulation governing the industry, contingent liabilities etc.

Your Company has directed its effort towards risk management by employing the expertise people and technology to mitigate the risks affecting the growth and profitability of the Company. The Company is constantly engaged in innovating its methods and procedures of risk management.

D. OUTLOOK

Today, India has vibrant NBFC sector and industry players have established an identity of their own, with presence in niche market segments. NBFCs have registered steady and consistent growth by maintaining a strong through the cycle operating performance, stable asset quality, adequate capital buffers and diversified funding profits.

NBFCs are likely to sustain a steady growth, owing to their capability for product innovation and high customer reach. Moreover, increased income in the semi-urban and rural markets is also expected to drive industry demand. There is a recent surge in economic activities with stalled projects getting clearances and growing prospects of investment revival. Such a scenario is expected to drive credit demand and augurs well for the industry as a whole.

E. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Internal Control measures and systems are established to ensure the correctness of the transactions and safe guarding of the assets. Considering the size and nature of activities, the company has adequate internal control system covering both accounting and administrative control. In addition the internal audit is carried out periodically. The management ensuring an effective internal control system so that the financial statements and reports give a true and fair view.

F. HUMAN RESOURCES

The Company always regards human resources as its most valuable asset and continuously evolves policies and process to attract and retain its substantial pool of managerial resources through friendly work environment that encourages initiatives by individuals and recognizes their performance.

G. CAUTIONARY NOTE

Certain Statements in the Management Discussion and Analysis describing the company's views about the industry, expectations, objectives, etc may be understood 'forward looking statement' within the meaning of applicable laws and regulations. Factors like changes in Government regulations, tax laws and other factors such as industrial relations and economic developments etc. may further influence the company's operations or performance. Actual results may differ substantially or materially from those expressed or implied.

DIRECTOR'S

In accordance with the provisions of section 152 of the Companies Act, 2013 Mr. D.K.Goyal, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment.

Pursuant to Clause 49 of the Listing Agreement, the background of the Director proposed to be appointed/ re-appointed at the annual General Meeting is given in the Corporate Governance report.

NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

During the year four Board Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

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 their remuneration. The appointment and Remuneration Policy is stated in the Corporate Governance Report.

DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

INDEPENDENT DIRECTORS MEETING

During the year under review, the independent Directors of the Company met on January 15, 2015 inter-alia, to discuss:

a) Evaluation of performance of Non-Independent Directors and the Board of Directors of the Company as a whole.

b) Evaluation of performance of the Chairman of the Company, taking into views of Executive and Non Executive Directors.

c) Evaluation of the quantity, content and timelines of flow of information between the Management and the board that is necessary for the Board to effectively and reasonably perform its duties.

INDUCTION AND TRAINING OF THE BOARD MEMBERS

Directors are issued a detailed appointment letter which inter alia sets out terms of appointment, duties, responsibilities etc. of such director. Each independent director of the Company on appointment is given such letter of appointment and also briefed by the Managing Director/ Executive Director about the nature of business of the Company, its finances, operations etc. The Compliance Officer of the company also assists the Independent Director in understanding their statutory duties, obligations and responsibilities as a Director/ Independent Director of the Company.

EVALUATION OF PERMORMANCE OF THE BOARD MEMBERS

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the evaluation of the performance of the Board as well as of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee has been carried out.

The performance evaluation of the Independent Directors was carried out by the entire Board and the performance evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors.

BOARD COMMITTEES

The Board of Directors of your Company had already constituted various Committees in compliance with the provisions of the Companies Act, 2013 /Listing Agreement viz. Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Finance Committee.

During the year under review, in compliance with the provisions of Clause 49 of the Listing Agreement, the board has also constituted the Risk Management Committee.

All decisions pertaining to the constitution of Committees, appointment of members and fixing of terms of reference / role of the Committees are taken by the Board of Directors.

Details of the role and composition of these Committees, including the number of meetings held during the financial year and attendance at meetings, are provided in the Corporate Governance section of the Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 your directors confirm that:—

i. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii. the directors had 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 as at March 31, 2015 and of the profit of the company for that period;

iii. the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv. the directors have prepared the annual accounts on a going concern basis.

v. the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively

vi. the directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Pursuant to Section 186(11)(a) of the Companies Act,2013 (the 'Act') read with Rule 11(2) of the Companies (Meetings of Board and its Powers) Rules, 2014, the loan made, guarantee given or security provided in the ordinary course of business by a Non- Banking Financial Company (NBFC) registered with Reserve Bank of India are exempt from the applicability of provisions of Section 186 of the Act.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict of interest with the company at large.

PUBLIC DEPOSITS

Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

SUBSIDIARY COMPANIES

The Company does not have any Subsidiary.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company in order to maintain highest standards of ethical, moral and legal conduct, adopted Vigil Mechanism/Whistle Blower policy to provide an avenue to its employees to raise concerns of any violations of legal or regulatory requirements, incorrect or misrepresentations of any financial statements and reports, etc. The Audit committee of the company oversees the said mechanism from time to time. None of the Company personnel has been denied access to the Audit Committee.

RISK MANAGEMENT

Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Clause 49 of the listing agreement, the company has constituted a business risk management committee. The details of the committee and its terms of reference are set out in the corporate governance report forming part of the Board's report.

At present the company has not identified any element of risk which may threaten the existence of the company.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The report on Corporate Governance as stipulated under the Listing Agreement forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance.

STATUTORY AUDITORS

The Shareholders at their 20th Annual General Meeting held on 30th September 2014 approved appointment of M/s. Bansal Bansal & Co., Chartered Accountants, as the Auditors of the Company for a term of consecutive three years, subject to ratification by the shareholders every year, as per the provisions of section 139 of the companies act 2013 read with Rules made there under. Accordingly ratification of the members for the appointment of M/s Bansal Bansal & Co, Chartered Accountants as the Auditors of the Company from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting is being obtained at the ensuing Annual General Meeting. The Company has obtained a written consent from the Auditors to such continued appointment and also a certificate from them to the effect that their appointment, if ratified, would be in accordance with the conditions prescribed under the Companies Act, 2013 and the rules made there under, as may be applicable.

AUDITORS' REPORT

The Auditors' Report to the members on the Accounts of the Company for the financial year ended March 31, 2015 does not contain any qualification, reservation or adverse remark.

SECRETARIAL AUDIT

Pursuant to provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Board has appointed Pankaj & Associates, Practicing Company secretary to conduct the Secretarial Audit of the Company for the Financial Year 2014-15. The Secretarial Audit report is annexed herewith as Annexure-1 to this report.

The Secretarial Audit Report does not contain any qualification or adverse remark. Observations in the Secretarial Audit Report have been noted.

CORPORATE SOCIAL RESPONSIBILITY

The provisions of Corporate Social Responsibility are not applicable to the company. PARTICULARS OF EMPLOYEES:

The information required under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is attached herewith as Annexure-2. There are no employees covered under Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of whom particulars are required to be furnished.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is annexed herewith as Annexure-3 to this Report.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY

No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year to which these financial statements relate and on the date of this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS/COURTS IF ANY.

There are no significant or material orders passed by the Regulators / courts which would impact the going concern status of the Company and its operations.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to the requirement under Section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014.

i. The company has no activity involving conservation of energy or technology.

ii. Foreign exchange earning Rs. Nil.

iii. Foreign Exchange outgo: Rs. Nil

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The company has in place an Anti Harassment policy in line with the requirements of The sexual harassment of women at the workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year under review, company has not received any Sexual Harassment Complaints.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has Internal Control Systems, commensurate with the size, scale and complexity of its operations. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies within the Company. Based on the report of internal audit function process, owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant observations and corrective actions thereon are presented to the Audit Committee from time to time.

SHARES

a) The Company has not bought back any of its securities during the year under review.

b) The Company has not issued any Sweat Equity Shares during the year under review.

c) No Bonus Shares were issued during the year under review.

EMPLOYEES STOCK OPTION PLAN

The Company has not provided any Stock Option Scheme to the employees.

RBI GUIDELINES

The company continues to comply with all the requirements prescribed by the Reserve Bank of India from time to time as applicable.

ACKNOWLEDGEMENT

The Directors takes this opportunity to thank all their colleagues at Upsurge Investment & Finance Ltd. for their professionalism and dedication to the task at hand. The board also wishes to place on record their appreciation for valuable support given by the Bankers, Clients and Shareholders.

For and on behalf of the Board of Directors

D. K. GOYAL

Managing Director

Place : Mumbai,

dated 10th August 2015