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Ugro Capital Ltd.

BSE: 511742 Sector: Financials
NSE: UGROCAP ISIN Code: INE583D01011
BSE 00:00 | 12 Aug 180.90 1.15
(0.64%)
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182.20

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184.90

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179.25

NSE 00:00 | 12 Aug 181.00 1.15
(0.64%)
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182.00

HIGH

184.25

LOW

179.10

OPEN 182.20
PREVIOUS CLOSE 179.75
VOLUME 830
52-Week high 229.00
52-Week low 110.20
P/E 63.25
Mkt Cap.(Rs cr) 1,276
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 182.20
CLOSE 179.75
VOLUME 830
52-Week high 229.00
52-Week low 110.20
P/E 63.25
Mkt Cap.(Rs cr) 1,276
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Ugro Capital Ltd. (UGROCAP) - Auditors Report

Company auditors report

To The Members of UGRO CAPITAL LIMITED Report on the Audit of the Financial StatementsOpinion

We have audited the financial statements of UGRO Capital Limited ("theCompany") which comprise the Balance Sheet as at March 31 2022 and the Statementof Profit and Loss Statement of Changes in Equity and Statement of Cash Flows for theyear then ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards ("the Ind AS")prescribed under section 133 of the Act read with Companies (Indian Accounting Standards)Rules 2015 as amended and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2022 and profit changes in equity andits cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor’s Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (the "ICAI")together with the ethical requirements that are relevant to our audit of the financialstatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements for the year ended March 31 2022.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

Sr. No. Key Audit Matter How the Key Audit Matter was addressed in our audit
1 Impairment of loans including Expected Credit Losses Total Loans as at March 31 2022: Rs 2450.48 Crores Impairment Provision as at March 31 2022: Rs. 40.64 Crores (Refer Note 6 of the Ind AS financial statements) In view of the significance of the matter our audit procedures performed included but not limited to the following:
Ind AS 109 – ‘Financial Instruments’ requires the Company to provide for impairment of its financial assets using the expected credit loss (the "ECL") approach involving an estimation of probability of loss on financial assets over their life considering reasonable and supportable information about past events current conditions and forecasts of future economic conditions which could impact the credit quality of the Company’s loans and advances. 1. Understood the Company’s accounting policies for impairment of loan and other receivables and evaluate the appropriateness of the same with the principle of Ind AS 109 - ‘Financial Instruments’.
In the process a significant degree of judgement has been applied by the management including but not limited to the following matters: 2. Verified the assumptions used by the Company for grouping and staging of loan portfolio into various categories according to the internal rating grade size and geography of the loan and then determining the probability of default and loss given default rates.
a) Qualitative and quantitative factors used in staging the loan assets; 3. Obtained an understanding of Management’s process of ECL computation and verified the design and effectiveness of internal controls over the:
b) Basis used for estimating Probabilities of Default ("PD") and Loss Given Default ("LGD"); and completeness and accuracy of the Exposure at Default and the classification thereof into stages consistent with the definitions applied in accordance with the policy approved by the Board of Directors including the appropriateness of the qualitative factors to be applied. scorecards developed by the Company using Probability of Default rates sent by the external credit rating agencies.
c) Staging of loans and estimation of behavioural life. 4. Verified on a test check basis underlying data related to estimates and judgements: completeness and accuracy of information used in the estimation of the ECL for the different stages depending on the nature of the portfolio.
The Company has Board approved policy on ECL to ensure the compliance with Ind AS 109 requirements and the basis of all assumptions for underling inputs to ECL model. PD is as per the scorecards provided by the External Credit Rating agency.
The Company has developed models that derive key assumptions used within the provision calculation such as probability of default and loss given default. Loss Given Default is as per the Foundational-Internal Rating Based (F-IRB) approach including the appropriateness of the use of collateral and the resultant arithmetical calculations. determined be
The output of these models is then applied to the provision calculation with other information including the exposure at default (the "EAD"). Exposures to individually impaired examined management’s estimate of future cash flows assessed their reasonableness and checked the resultant provision calculations.
Given the high degree of management’s judgement involved in estimation of ECL it is a key audit matter. Verified the computation of ECL to ensure arithmetical accuracy. Reconciled the total financial assets considered for ECL estimation with the books of account to ensure the completeness.
5. Verified on test check basis whether appropriate staging of assets have been performed basis their days past due.
6. Verified the adequacy of the adjustment including management’s assessment of additional provision on stressed loan.
7. Performed inquiries with the Company’s management and its risk management function to assess the impact of Covid-19 including the fourth wave on the business activities of the Company.
8. Verified the ECL provision on restructured cases pursuant to the Reserve Bank of India ("the RBI") circular on a sample basis.
9. Assessed the adequacy and appropriateness of the related presentation disclosures in accordance with the requirements of applicable Ind AS.

Information Other than the Financial Statements and Auditor’s Report Thereon

The Company’s Board of Directors are responsible for the other information. Theother information comprises the Director’s Report but does not include the financialstatements and our auditor’s report thereon. The Director’s report is expectedto be made available to us after the date of this auditor’s report.

Our opinion on the financial statements does not cover the other information and wewill not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. When we read the Director’s report if we conclude that there is amaterial misstatement therein we are required to communicate the matter to those chargedwith governance.

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

The Company’s Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance changes in equityand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the Ind AS specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror. In preparing the financial statements the Board of Directors is responsible forassessing the Company’s ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so. Those Board of Directorsare also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor’s report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements. As part of an audit in accordance with SAs weexercise professional judgment and maintain professional skepticism throughout the audit.We also:

l Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

l Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasinternal financial controls with reference to financial statements in place and theoperating effectiveness of such controls.

l Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

l Conclude on the appropriateness of management’s use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany’s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor’s report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor’s report. However future events or conditions may cause theCompany to cease to continue as a going concern.

l Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation. Wecommunicate with those charged with governance regarding among other matters the plannedscope and timing of the audit and significant audit findings including any significantdeficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements for theyear ended March 31 2022 and are therefore the key audit matters. We describe thesematters in our auditor’s report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2020 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss the Statement of Changes inEquity and the Statement of Cash Flow dealt with by this Report are in agreement with thebooks of account.

(d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2015.

(e) On the basis of the written representations received from the directors as on March31 2022 taken on record by the Board of Directors none of the directors are disqualifiedas on March 31 2022 from being appointed as a director in terms of Section 164 (2) of theAct.

(f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(g) With respect to the other matters to be included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company does not have any pending litigations which would impact its financialposition.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts – Refer Note 55 (p) to the financial statements; and

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

iv. (1) The Management has represented that to the best of it’s knowledge andbelief no funds have been advanced or loaned or invested (either from borrowed funds orshare premium or any other sources or kind of funds) by the Company to or in any otherperson(s) or entity(ies) including foreign entities ("Intermediaries") withthe understanding whether recorded in writing or otherwise that the Intermediary shalldirectly or indirectly lend or invest in other persons or entities identified in anymanner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") orprovide any guarantee security or the like on behalf of the Ultimate Beneficiaries –Refer Note 68 (a) to the financial statements;

(2) The Management has represented that to the best of it’s knowledge and beliefno funds have been received by the Company from any person(s) or entity(ies) includingforeign entities (Funding Parties) with the understanding whether recorded in writing orotherwise as on the date of this audit report that the Company shall directly orindirectly lend or invest in other persons or entities identified in any mannerwhatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") orprovide any guarantee security or the like on behalf of the Ultimate Beneficiaries –Refer Note 68(b) the financial statements; and

(3) Based on the audit procedures which we have considered reasonable and appropriatein the circumstances and according to the information and explanations provided to us bythe Management in this regard nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (i) and (ii) of Rule 11(e) as providedunder (1) and (2) above contain any material misstatement.

v. The Company has neither declared nor paid any dividend during the year.

3. As required by the Companies (Amendment) Act 2017 in our opinion according toinformation and explanations given to us the remuneration paid by the Company to itsdirectors is within the limits laid prescribed under Section 197 of the Act and the rulesthereunder.

For MSKA & Associates
Chartered Accountants
ICAI Firm Registration Number: 105047W
Swapnil Kale
Partner
Membership Number: 117812
UDIN: 22117812AJMCIV7951
Place: Mumbai
Date: May 24 2022

ANNEXURE A TO INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE FINANCIALSTATEMENTS OF UGRO CAPITAL LIMITED FOR THE YEAR ENDED MARCH 31 2022

[Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements’ in the Independent Auditor’s Report]

i. (a) A) The Company has maintained proper records showing full particularsincluding quantitative details and situation of Property Plant and Equipment.

B) The Company has maintained proper records showing full particulars of intangibleassets.

(b) The Company is in the process of conducting the physical verification of all theProperty Plant and Equipment of the Company as on the date of this report. Accordinglymaterial discrepancies if any could not be ascertained and therefore we are unable tocomment on whether such material discrepancies have been properly dealt with in the booksof account.

(c) According to the information and explanations given to us there are no immovableproperties and accordingly the requirements under paragraph 3(i)(c) of the Order are notapplicable to the Company.

(d) According to the information and explanations given to us the Company has notrevalued its property plant and Equipment (including Right of Use assets) and itsintangible assets. Accordingly the requirements under paragraph 3(i) (d) of the Order arenot applicable to the Company.

(e) According to the information and explanations given to us no proceeding has beeninitiated or pending against the Company for holding benami property under the BenamiTransactions (Prohibition) Act 1988 and rules made thereunder. Accordingly theprovisions stated in paragraph 3(i)(e) of the Order are not applicable to the Company.

ii. (a) The Company is involved in the business of rendering services. Accordingly theprovisions stated in paragraph 3(ii)(a) of the Order are not applicable to the Company.

(b) The Company has been sanctioned working capital limits in excess of Rs. 5 crores inaggregate from banks on the basis of security of loans. Quarterly returns / statements arefiled with such banks/ financial institutions are in agreement with the books of account.

iii. (a) Since the Company’s principle business is to give loans the provisionsstated in paragraph 3(iii)(a) of the Order are not applicable to the Company.

(b) According to the information and explanations given to us and based on the auditprocedures performed by us we are of the opinion that the investments made guaranteesprovided securities given and the terms and conditions of all loans and advances in thenature of loans and guarantees provided are not prejudicial to the interest of theCompany.

(c) The Company being a Non-Banking Financial Company is registered under provisionsof the RBI Act 1934 in pursuance of its compliance with provisions of the said Actparticularly the Income Recognition Asset Classification and Provisioning Norms andgenerally accepted business practices by the lending institutions repayments scheduledare stipulated basis the nature of the loan products. The repayment of the principal andthe payment of interest by the borrower’s are as per the stipulated repaymentschedule except in case of default cases.

(d) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the details of amount overdue for more thanninety days are as follows:

No. of Cases * Total overdue (Rs. In lakh) Remarks (specify whether reasonable steps have been taken by the Company for recovery of principal amount and interest)
606 5641.15 Yes#

* Amount overdue classified under stage 3 - Refer Note 48 (a) C to the financialstatements.

# The Company has taken all reasonable steps including legal actions to ensure recoveryof the principal and interest.

(e) Since the Company’s principle business is to give loans the provisions statedin paragraph 3(ii)(e) of the order are not applicable to the Company.

(f) According to the information and explanations provided to us the Company has notgranted any loans and / or advances in the nature of loans which are either repayable ondemand or without specifying any terms or period of repayment. Hence the requirementsunder paragraph 3(iii)(f) of the Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us theCompany has not either directly or indirectly granted any loan to any of its directors orto any other person in whom the director is interested in accordance with the provisionsof section 185 of the Act and the Company has not made investments through more than twolayers of investment companies in accordance with the provisions of section 186 of theAct. Accordingly provisions stated in paragraph 3(iv) of the Order are not applicable tothe Company.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the meaning of Sections 7374 75 and 76 of the Act and the rules framed there under. Hence the provision stated inparagraph 3(v) of the Order are not applicable to the Company. vi. The provisions ofsub-section (1) of section 148 of the Act are not applicable to the Company as the CentralGovernment of India has not specified the maintenance of cost records for any of theproducts of the Company. Accordingly the provisions stated in paragraph 3 (vi) of theOrder are not applicable to the Company.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion undisputed statutory dues including goods andservices tax provident fund employees’ state insurance income-tax and cess havegenerally been regularly deposited with the appropriate authorities though there has beena slight delay in a few cases.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of income tax goods and service tax cess andany other statutory dues which have not been deposited on account of any dispute. ReferNote 37(a) to the financial statements.

viii. According to the information and explanations given to us there are notransactions which are not accounted in the books of account which have been surrenderedor disclosed as income during the year in Tax Assessment of the Company. Also there areno previously unrecorded income which has been now recorded in the books of account.Hence the provision stated in paragraph 3(viii) of the Order is not applicable to theCompany.

ix. (a) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or borrowings or in payment ofinterest thereon to any lender.

(b) According to the information and explanations given to us and on the basis of ouraudit procedures we report that the Company has not been declared wilful defaulter by anybank or financial institution or other lender.

(c) In our opinion and according to the information and explanations provided to usmoney raised by way of term loans during the year have been applied for the purpose forwhich they were raised.

(d) According to the information and explanations given to us and the proceduresperformed by us and on an overall examination of the financial statements of the Companywe report that no funds raised on short-term basis have been used for long-term purposesby the Company.

(e) The Company does not have any subsidiaries associates or joint ventures.Accordingly the provisions stated in paragraph 3(ix)(e) of the Order are not applicableto the Company.

(f) The Company does not have any subsidiaries associates or joint ventures.Accordingly the provisions stated in paragraph 3(ix)(f) of the Order are not applicableto the Company.

x. (a) In our opinion according to the information and explanations provided to usmoney raised by way of initial public offer or further public offer (including debtinstruments) during the year have been applied for the purpose for which they were raised.Hence there are no such instances.

(b) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully partly or optionally convertibledebentures during the year. Accordingly the provisions stated in paragraph 3 (x)(b) ofthe Order are not applicable to the Company.

xi. (a) During the course of our audit examination of the books and records of theCompany carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of material fraud by the Company nor on the Company.

(b) In our opinion and according to the information and explanations given to us noreport under section 143(12) of the Act has been filed by the auditors in Form ADT-4 asprescribed under Rule 13 of the Companies (Audit and Auditors) Rules 2014 with theCentral Government.

(c) As represented to us by the management there are no whistle-blower complaintsreceived by the Company during the course of audit. Accordingly the provisions stated inparagraph 3(xi)(c) of the Order is not applicable to company.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly the provisions stated in paragraph 3(xii) (a)to (c) of the Order are not applicable to the Company.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableInd AS.

xiv. (a) In our opinion and based on our examination the Company has an internal auditsystem commensurate with the size and nature of its business.

(b) We have considered internal audit reports issued by internal auditors during ouraudit in accordance with the guidance provided in SA 610 – ‘Using the work ofInternal Auditors’.

xv. According to the information and explanations given to us in our opinion duringthe year the Company has not entered into non-cash transactions with directors or personsconnected with its directors and hence provisions of section 192 of the Act are notapplicable to Company. Accordingly the provisions stated in paragraph 3(xv) of the Orderare not applicable to the Company.

xvi. (a) The Company is required to and has been registered under Section 45-IA of theReserve Bank of India Act 1934 as Non-Banking Financial Company.

(b) In our opinion the Company has not conducted any Non-Banking Financial activitywithout any valid Certificate of Registration from Reserve Bank of India. Hence thereporting under paragraph clause 3 (xvi)(b) of the Order are not applicable to theCompany.

(c) The Company is not a Core investment Company (CIC) as defined in the regulationsmade by Reserve Bank of India. Hence the reporting under paragraph clause 3 (xvi)(c) ofthe Order are not applicable to the Company.

(d) The Company does not have any group. Hence the provisions stated in paragraphclause 3 (xvi) (d) of the order are not applicable to the Company.

xvii. According to the information and explanations provided to us the Company has notincurred cash losses in the current financial year and in the immediately precedingfinancial year. Hence the provisions stated in paragraph 3 (xvii) of the Order are notapplicable to the Company.

xviii. There has been no resignation of the statutory auditors during the year. Hencethe provisions stated in paragraph 3 (xviii) of the Order are not applicable to theCompany.

xix. According to the information and explanations given to us and based on ourexamination of financial ratios ageing and expected date of realisation of financialassets and payment of liabilities other information accompanying the financialstatements our knowledge of the Board of Directors and management plans we are of theopinion that no material uncertainty exists as on the date of audit report and the Companyis capable of meeting its liabilities existing at the date of balance sheet as and whenthey fall due within a period of one year from the balance sheet date. We however statethat this is not an assurance as to the future viability of the Company. We further statethat our reporting is based on the facts up to the date of the audit report and we neithergive any guarantee nor any assurance that all liabilities falling due within a period ofone year from the balance sheet date will get discharged by the Company as and when theyfall due.

xx. According to the information and explanations given to us the provisions ofsection 135 of the Act are applicable to the Company. The Company has made the requiredcontributions during the year and there are no unspent amounts which are required to betransferred to the special account as on the date of our audit report. Accordingly theprovisions of paragraph 3(xx)(a) to (b) of the Order are not applicable to the Company.

xxi. According to the information and explanations given to us the Company does nothave any Subsidiary Associate or Joint Venture. Accordingly reporting under clause3(xxi) of the Order is not applicable.

For MSKA & Associates
Chartered Accountants
ICAI Firm Registration Number: 105047W
Swapnil Kale
Partner
Membership Number: 117812
UDIN: 22117812AJMCIV7951
Place: Mumbai
Date: May 24 2022

ANNEXURE B TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE FINANCIALSTATEMENTS OF UGRO CAPITAL LIMITED

[Referred to in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements’ in the Independent Auditor’s Report of even date to the Members ofUGRO Capital Limited on the Financial Statements for the year ended March 31 2022]

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act") Opinion

We have audited the internal financial controls with reference to financial statementsof UGRO Capital Limited ("the Company") as of March 31 2022 in conjunction withour audit of the financial statements of the Company for the year ended on that date. Inour opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls withreference to financial statements were operating effectively as at March 31 2022 basedon the internal control with reference to financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India (the "ICAI") (the "GuidanceNote").

Management’s Responsibility for Internal Financial Controls

The Company’s Management is responsible for establishing and maintaining internalfinancial controls based on the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note. These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to Company’s policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under the Act.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing issued by ICAI anddeemed to be prescribed under section 143(10) of the Act to the extent applicable to anaudit of internal financial controls. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether an adequate internal financial controls with reference tofinancial statements was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls withreference to financial statements assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor’s judgementincluding the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company’s internal financial controlswith reference to financial statements.

Meaning of Internal Financial Controls With reference to Financial Statements

A Company's internal financial control with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls With reference to financialstatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

For MSKA & Associates
Chartered Accountants
ICAI Firm Registration Number: 105047W
Swapnil Kale
Partner
Membership Number: 117812
UDIN: 22117812AJMCIV7951
Place: Mumbai
Date: May 24 2022

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