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Ugro Capital Ltd.

BSE: 511742 Sector: Financials
NSE: N.A. ISIN Code: INE583D01011
BSE 00:00 | 21 Jun 125.00 1.55
(1.26%)
OPEN

124.50

HIGH

125.50

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120.10

NSE 05:30 | 01 Jan Ugro Capital Ltd
OPEN 124.50
PREVIOUS CLOSE 123.45
VOLUME 10545
52-Week high 166.00
52-Week low 70.00
P/E 18.55
Mkt Cap.(Rs cr) 882
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 124.50
CLOSE 123.45
VOLUME 10545
52-Week high 166.00
52-Week low 70.00
P/E 18.55
Mkt Cap.(Rs cr) 882
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Ugro Capital Ltd. (UGROCAPITAL) - Director Report

Company director report

Your Directors have pleasure in presenting the 27th AnnualReport and the Audited Statement of Accounts of your Company for the financial year ended31st March 2020.

FINANCIAL HIGHLIGHTS

Particulars Year ended Year ended
31st March 2020 31st March 2019
Total Income 10514.37 4393.60
Total Expenditure 10182.58 3872.21
Profit Before Tax and exceptional items 331.79 521.39
Exceptional items 0.00 366.67
Profit before tax 331.79 154.72
Provision for Tax (1620.07) (239.92)
Profit after tax 1951.86 394.64
Other comprehensive income 0.02 0.15
Profit available for appropriation 1951.88 394.79
Appropriations:
Transfer to Reserve Fund under Section 45-IC of the RBI Act 1934 390.37 29.11
Dividend paid for F.Y. 2018-19 0.00 164.45
Dividend Tax thereon for F.Y. 2018-19 0.00 33.80
Transfer to General Reserve 0.00 0.00
Share conversion expenses 32.31 0.00
Balance carried forward to Balance Sheet 1529.20 167.43

DIVIDEND

Directors have not recommended any Dividend for the Financial Year2019-20.

REVIEW OF OPERATIONS

Your Company completed its first full financial year of lendingoperations in FY2019-20 with a total of INR 1284 crores disbursed across a broad rangeof products in this financial year. This year saw the launch of our Ecosystem and DirectDigital channels in addition to the traditional branch-led channel and BFSI channelcompleting the initiation of all four prongs of our distribution model. Your Company hasalso launched an associated technology module for each distribution channel to facilitateand digitalize the lending process.

Your Company recorded total income of INR 10514.37 lakhs for the yearended 31st March 2020 as compared to INR 4393.60 lakhs for the year ended 31stMarch 2019. The Company recorded a net profit of INR 1951.85 lakhs for the year ended 31stMarch 2020 as compared to INR 394.64 lakhs for the year ended 31st March 2019.

COVID-19 PANDEMIC

The COVID-19 Pandemic has disrupted global economy and createdunprecedented challenges. The COVID-19 Pandemic has caused nationwide closures which hasled to work and supply shortages the earnings of all the revenue generating bodies(whether individual small businesses or body corporate) have been hugely hindered.

The work from home was fully made operational form 20thMarch 2020. Since the systems are cloud enabled all the functions can be carried outwithout reaching office. All systems like risk operations banking technology weretested much before the work from home was implemented. the routine work takes place inseamless manner the focus of management continues to ensure safety of its employees.

The Government of India and RBI has introduced several liquidity andstimulus measures to support the NBFC industry however those are yet to show tangibleresults. We expect post lockdown period measures will start reaching end - customers andeconomic recovery will commence.

We have taken lockdown as an opportunity to interact with our customersto understand the impact ground feel and decide on future line of sight. Two round ofsurveys were conducted first soon after onset of first lockdown and second afterannouncement of moratorium 1.0 and onset of second lockdown when relaxation was allowed.Major outcome of second survey are below:

a. Time to restore normal business - 93% expect to return tonormalcy in < 6 months

b. Manufacturers - 86% feel they can restart production in<30 days post lockdown

c. Service - 90% feel they will get advances or with a cashconversion cycle of < 60 days

d. Traders - 88% feel they will have cash conversion cycle of< 60 days

e. Need of funds - ~60% respondents mention need of extra funds(own/ borrowed)

Information collected during survey shall be used to implement anyschemes announced by Government as a part of any financial stimulus and any futureofferings wherein assessment is based on business resilience and futuristic cashflows.

We have also proposed to transform from traditional to fully digitaltouchpoint with borrowers. We aim to develop a robust digital interaction model which willbe a revolution. The success of which is largely dependent upon digital platformtechnology Artificial Intelligence Machine Learning and surrogate verification ofbusiness model. This is first of its kind in Indian lending industry. There are additionalrisk factors associated which is proposed to be mitigated by stringent validation checksand use of technology.

SUBSIDIARY COMPANIES

Your Company has no subsidiaries as on 31st March 2020.There are no associate companies or joint venture companies within the meaning of Section2(6) of the Companies Act 2013 ("the Act”).

Further pursuant to the provisions of Section 136 of the Act thefinancial statements of the Company along with relevant documents are available on thewebsite of the Company.

RESERVES

The amounts proposed to be transferred to general reserve statutoryreserve and ESOS reserve are mentioned in financial statements.

CHANGE IN SHARE CAPITAL

During the financial year 2019-20 the Company has allotted followingequity shares upon conversion of Compulsory Convertible Debentures (CCDs) CompulsoryConvertible Preference Shares (CCPs) and Warrants:

a) Conversion of 13837210 CCDs into equal number of equity shares.

b) Conversion of 13837210 CCPs into equal number of equity shares.

c) Conversion of 5956757 Convertible Warrants into equal number ofequity shares.

The Hon'ble National Company Law Tribunal Mumbai Bench ('Hon'bleNCLT') vide order dated 13th June 2019 had approved the Scheme of Arrangementbetween Asia Pragati Capfin Private Limited ("APCPL”) and U GRO Capital Limitedand as per terms of Scheme of Arrangement the Company has allotted 13565891 equityshare of INR 10 each to DBZ (Cyprus) Limited shareholder of the APCPL.

As on 31st March 2020 the issued subscribed and paid upshare capital of your Company stood at INR 705285500/- comprising of 70528550 EquityShares of INR 10/- each.

FUND RAISING

During the year under review your Company has raised funds throughdiverse methods in addition to regular borrowings in the form of term loan facilitiesfrom Banks/financial institutions.

Your Company has issued Secured Redeemable listed NonConvertibleDebentures ("NCDs”) aggregating to INR 50 Crores on a private placement basis.The said NCDs were listed on the BSE Limited. As per the terms of the offer document thefunds raised from NCDs were utilised for the purpose of onward lending. These NCDs havebeen redeemed at par on 13th April 2020.

The Company has securitized a loan portfolio of INR 5820 lacs byissuing Pass Through Certificates (PTCs) for INR 5239 lacs @ 10% to 10.48 % via SME190930Series 1 trust and SME200130 Series 2 trust managed by Beacon Trusteeship Limited with acredit enhancement of 20% portfolio in the form of cash collateral andover-collateralization and excess interest spread of 4% - 12%.

PUBLIC DEPOSITS

The Company has not accepted any deposits from public and as such noamount on account of principal or interest on deposits from public was outstanding as onthe date of the

balance sheet.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

Board of Directors:

The Company has 13 (Thirteen) Directors on the Board out of which 7(Seven) are Independent Directors including one Woman Director as on 31st March2020. The Board composition is in compliance with the requirements of the Act SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBI ListingRegulations”) and RBI Master Directions.

Mr. Nisheeth Saran has been appointed as an Alternate Director to Mr.Kanak Kapur Non-Executive Director at the Board Meeting held on 20th May 2020with effect from that date.

In accordance with the provisions of the Act and the Articles ofAssociation of the Company Mr. Amit Gupta (DIN: 02282600) Non-Executive Directorretires by rotation and being eligible has offered himself for re-appointment. The Boardrecommends the same for the approval of the shareholders.

Key Managerial Personnel:

Mr. Shachindra Nath Executive Chairman & Managing Director Mr.Abhijit Ghosh Whole-time Director & Chief Executive Officer Mr. Kalpeshkumar OjhaChief Financial Officer and Mr. Aniket Karandikar Company Secretary of the Company havebeen designated as the Key Managerial Personnel of the Company (KMP) pursuant to theprovisions of the Act.

There has been no change in the KMP during the financial year 2019-20.

CAPITAL ADEQUACY RATIO:

Your Company's total Capital Adequacy Ratio (CAR) as of 31stMarch 2020 stood at 88.25% of the aggregate risk weighted assets on balance sheet andrisk adjusted value of the off-balance sheet items which is above the regulatory minimumof 15%.

RBI GUIDELINES

The Company continues to comply with all the applicable regulationsprescribed by the Reserve Bank of India ("RBI”) from time to time.

REPORT ON CORPORATE GOVERNANCE AND MANAGEMENTDISCUSSION AND ANALYSIS

Pursuant to SEBI Listing Regulations Management Discussion and Analysisand Corporate Governance Report are part of this Annual Report. The Certificates from M/s.Pankaj Nigam and Associates Practicing Company Secretaries regarding Compliance of theconditions of Corporate Governance as stipulated by SEBI Listing Regulations are attachedto this report.

BUSINESS RESPONSIBILITY REPORT

Pursuant to Regulation 34(2)(f) of SEBI Listing Regulations read withSEBI Circular No. CIR/ CFD/CMD/10/2015 dated 4th November 2015 the 'BusinessResponsibility Report' (BRR) of the Company for FY 2019-20 is forming part of the AnnualReport.

FAMILIARIZATION PROGRAMME FOR

INDEPENDENT DIRECTORS

The Company familiarizes its Independent Directors with the Companytheir roles rights responsibilities in the company nature of the industry in which thecompany operates business model of the company etc. through various programs. The detailsof such familiarization programme are disclosed on the Company's website viz.www.ugrocapital.com.

DECLARATION OF INDEPENDENCE

The Company has received the declarations from all the IndependentDirectors as per the Section 149(7) of the Act and Regulation 16 (1) (b) of the SEBIListing Regulations and the Board is satisfied that all the Independent Directors meet thecriteria of independence as mentioned in section 149(6) of the Act and Regulation 16 (1)(b) of the SEBI Listing Regulations.

ANNUAL EVALUATION BY THE BOARD OF DIRECTORS

The Board of Directors have carried out annual evaluation of its ownperformance performance of the Committees of the Board Executive Chairman & ManagingDirector Whole-time Director & Chief Executive Officer and individual Directorpursuant to the provisions of the Act and SEBI Listing Regulations. The performance of theBoard was evaluated by the Board after seeking inputs from all the Directors on the basisof predefined criteria such as the Board composition and structure effectiveness of Boardprocesses information and functioning etc. The performance of the Committees was alsoevaluated by the Board after seeking inputs from the Committee

members on the basis of criteria such as the composition of Committeeseffectiveness of Committee meetings fulfilment of roles & responsibilities as per theCharter of each Committee and adherence to defined policies and internal procedures etc.The above criteria are based on the Guidance Note on Board Evaluation issued by theSecurities and Exchange Board of India on 5th January 2017 A separate meetingof Independent Directors of the Company was held on 30th January 2020.Performance evaluation of Independent Directors was carried out by the entire Boardexcluding the Independent Director being evaluated.

CODE OF CONDUCT

U GRO Capital has formulated a Code of Business Conduct and Ethics forBoard of Directors and Senior Managerial Personnel.

The confirmation of compliance of the same is obtained from allconcerned on an annual basis. All Board Members and Senior Managerial Personnel have giventheir confirmation of compliance. A declaration duly signed by Whole Time Director andChief Executive Officer is given under Corporate Governance Report as a separate sectionin this Annual Report. The Code of Business Conduct and Ethics for Board of Directors andSenior Managerial Personnel is also posted on the website of the Company.

BOARD MEETINGS HELD DURING THE YEAR

The Board of Directors of the Company met 6 (Six) times during thefinancial year 2019-20. The details of the Board Meetings and the attendance of theDirectors are given in Corporate Governance Report which forms part of this AnnualReport.

COMMITTEES OF THE BOARD

Your company has constituted various Committees required under the Actread with applicable Rules made there under and the SEBI Listing Regulations and as perRBI Master Directions.

Details regarding mandatory and non-mandatory Committees as on 31stMarch 2020 are provided in the report in the Corporate Governance Section which forms partof this Annual Report.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIRADEQUACY

The Company has in place adequate internal controls with reference tofinancial statements and operations and the same

are operating effectively. The internal auditors tested design andeffectiveness of key controls and no material weaknesses were observed in theirexamination. The details in respect of internal financial control and their adequacy areincluded in the Management Discussion and Analysis which forms part of this AnnualReport.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Act the Board ofDirectors confirms that to the best of its knowledge and belief:

a) in the preparation of the annual accounts for the financial yearended 31st March 2020 the applicable accounting standards had been followedalong with proper explanations relating to material departure;

b) we have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31stMarch 2020 and of the profit and loss of the Company for that year;

c) proper and sufficient care had been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;

d) the financial statement of the Company had been prepared on a goingconcern basis;

e) we have laid down internal financial controls to be followed by theCompany which are adequate and were operating effectively; and

f) we have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTSUNDER SECTION 186 OF COMPANIES ACT 2013

Details of loan guarantee and investments covered if any are

provided in the notes to the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITHRELATED PARTIES

All the related party transactions during the financial year were atarm's length basis and are in compliance with the applicable provisions of the Act andSEBI Listing Regulations. There were no material significant related party transactionsentered into by the Company with Promoters Directors or Key Managerial Personnel etc.which may have potential conflict of interest with the Company at large.

All the related party transactions are presented to the Audit Committeeand Board for their approval. A statement of all related party transactions is presentedbefore Audit Committee on quarterly basis specifying the nature value and terms andconditions of the transactions.

The related party transaction policy of the Company as approved by theBoard is available on website of the Company.

The information on transactions with related parties pursuant toSection 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014are given in Annexure- I in Form No. AOC-2 and the same forms part of this report.

PARTICULARS OF EMPLOYEES AND REMUNERATION:

The information required in terms of Section 197 (12) of the Act readwith Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rule2014 is given below:

A. Information as per Rule 5 (1) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014

a) The ratio of remuneration of each director to median remuneration ofthe employees of the Company for the financial year:

Name of Director Ratio to median remuneration
Shachindra Nath 25.2:1
Abhijit Ghosh 12.4:1

b) The percentage of increase in remuneration of each Director ChiefFinancial Officer Company Secretary in the financial year:

Role % increase in compensation
Executive Chairman & Managing Director 5%
Whole-time Director & Chief Executive Officer 3.5%
Chief Financial Officer 0% (was not eligible for performance appraisal for the year)
Company Secretary 0% (was not eligible for performance appraisal for the year)

c) Percentage of increase in the median remuneration of employeesduring the financial year ended 31st March 2020: (-) 19.3%

d) Number of permanent employees on the rolls of the Company as on 31stMarch 2020: 165 employees

e) Average percentage increase made in the salaries of employee otherthan the Managerial Personnel in the financial year was 5.89% vis a vis an increase of3.39% in the salaries of Managerial Personnel.

f) Affirmation that the remuneration is as per remuneration policy ofthe Company: Yes.

B. Information as per Rule 5 (2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014:

The statement containing names of top ten employees in terms ofremuneration drawn and the particulars of employees as required under Section 197(12) ofthe Act read with Rule 5 (2) and 5 (3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is provided in a separate annexure forming part of thisreport. Further the report and the accounts are being sent to the Members excluding theaforesaid annexure. In terms of Section 136 of the Act the said annexure is open forinspection and any Member interested in obtaining a copy of the same may write to theCompany Secretary (cs@ugrocapital.com).

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE

COMPANY OCCURRED BETWEEN 31st MARCH2020

There is no material change and commitments which affected financialposition of the Company which occurred after 31st March 2020.

CONSERVATION OF ENERGY

A. Conservation of energy-

i. The steps taken or impact on conservation of energy; Not Applicable
ii. The steps taken by the Not Applicable
company for utilizing alternate
sources of energy;
iii. The capital investment Not Applicable
on energy conservation
equipment's;

B. Technology absorption-

i. The efforts made towards technology absorption; Digital content generation and processing of the financials of a prospective customer - all types of financials which can be collected from a customer i.e. balance sheets P&L statements GST returns and bank statements are collected through the system and converted into digital content which is further used to derive the different evaluations through the system which usually are done manually otherwise in the credit underwriting process.
Building a comprehensive business rules engine for evaluation - the first level of credit underwriting is done through the technology platform itself where all the policies for credit worthiness checks and eligibility calculations are coded in the platform for a direct evaluation based on the digital content extracted from the financial details and other sources during the profile submission process.
Extending the automated flow in all new initiatives and partnerships - the core technology platform built for profile evaluation is now extended to all the new initiatives such as onward and self-initiated co-lending where the co-lending partners also get to review the digitized credit underwriting process used for evaluation and further the end-to-end processing till loan disbursal is enabled through the system itself.
Implementation of Gro Direct Channel to onboard the Customers on Self Service Model. This is a powerful channel to Onboard a Customer Digitally without requirement of any Sales Channel. Significant progress has been made on this channel and we are seeing positive traction and growth over this channel.
ii. The benefits derived like product improvement cost reduction product development or import substitution; Reduced Turn Around Time (TAT) on credit underwriting process - since the first level of profile evaluation and loan eligibility calculation is done by the technology platform and that too in a time-frame of maximum 1 hour post profile submission on any type of profile the overall TAT for loan sanctions has reduced significantly.
Enhanced digitization technology platforms - with an aim to reduce costs and TAT and enable more efficient processes programs such as KYC and PD in video mode complete digital framework for documents collections etc. are being implemented.
iii. In case of imported technology (imported during the last three years reckoned from the beginning of the financial year-
a) the details of technology imported;
b) the year of import; Not applicable no imported technology
c) whether the technology been fully absorbed;
d) if not fully absorbed areas where absorption has not taken place and the reasons thereof; and
iv. The expenditure incurred on Research and

C. Foreign exchange earnings and Outgo-

Year ended Year ended
31st March 31st March
2020 2019
Other Expenses 1.30 -
Exchange earned - -

REMUNERATION POLICY OF THE COMPANY

The remuneration policy of the company comprising of the appointmentand remuneration of the Directors Key Managerial Personnel and Senior ManagerialPersonnel of the Company including criteria for determining qualifications positiveattributes independence of a Director and other related matters has been provided in theCorporate Governance Report which is attached to this Report and is also available onCompany's website. Remuneration Policy is enclosed herewith as Annexure II.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Pursuant to the Section 177(9) and 177 (10) of the Act and Rule 7 ofthe Companies (Meetings of Board and its Powers) Rules 2014 and Regulation 22 of SEBIListing Regulations the Board of Directors have approved the Policy on Vigil Mechanism /Whistle Blower and the same has been hosted on the Website of the Company.https://www.ugrocapital.com/ investor-relations

This Policy inter alia provides a direct access to the Chairman of theAudit Committee. Your Company hereby affirms that no Director / employee have been deniedaccess to the Chairman of the Audit Committee and that no complaints were received duringthe year.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of InsiderTrading with a view to regulate trading in securities by the Directors and designatedemployees of the Company. The Code requires pre-clearance for dealing in the Company'sshares and prohibits the purchase or sale of Company shares by the Directors and thedesignated employees while in possession of unpublished price sensitive information inrelation to the Company and during the period when the Trading Window is closed. The Boardis responsible for implementation of the Code.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

The Company follows a strict zero tolerance sexual harassment atworkplace and adopted the policy on prevention prohibition and redressal of sexualharassment at workplace in line with the provisions of Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and Rules thereunder forprevention and redressal of complaints of sexual harassment at work place.

The disclosure in relation to the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 for the year ended 31stMarch 2020 is as follows:

Number of complaints filed during the financial year NIL
Number of complaints disposed during the financial year NIL
Number of complaints pending at the end of the financial year NIL

STATUTORY AUDITOR'S AND THEIR REPORT

M/s Deloitte Haskins & Sells LLP Chartered Accountant (FirmRegistration No. 117366W/W-100018) was appointed as Statutory Auditors at the twenty fifthAGM held on 3rd July 2018 for a period of five years commencing from theconclusion of the Twenty Fifth AGM till the conclusion of the Thirtieth Annual GeneralMeeting of the company.

Further the report of the Statutory Auditors is provided in thefinancial section of the Annual Report. The observations made in the Auditors' Report areself-explanatory and do not contain any qualification reservation or adverse remark.Therefore it does not call for any further comments.

INTERNAL AUDITORS

Pursuant to the provisions of Section 138 of the Act 2013 the Boardof Directors of the Company has appointed M/s PricewaterhouseCoopers as an InternalAuditor of the Company from 1st April 2020 to 31st March 2021 andInternal Audit is carried out on a quarterly basis.

SECRETARIAL AUDITOR

In terms of Section 204 of the Act and Rules made there under M/s.Pankaj Nigam and Associates Company Secretary in Practice has been appointed asSecretarial Auditor of the Company. The report of the Secretarial Auditor is enclosed asAnnexure-III to this report.

The report is self-explanatory and does not contain any qualificationor adverse remark. Therefore it does not call for any further comments.

Further the Company has received certificate of NonDisqualification ofDirectors from M/s. Pankaj Nigam and Associates Company Secretary in Practice. The sameis enclosed as Annexure IV to this report.

CHANGE IN NATURE OF BUSINESS

There has been no change in the nature of business of the Companyduring the financial year ended 31st March 2020.

DETAILS AND STATUS OF ACQUISITION

MERGER EXPANSION MODERNIZATION AND

DIVERSIFICATION

The Hon'ble National Company Law Tribunal Mumbai Bench ('Hon'bleNCLT') vide order dated 13th June 2019 had approved the Scheme ofArrangement("Scheme”) between Asia Pragati Capfin Private Limited("APCPL”) and U GRO Capital Limited and their respective shareholders andcreditors under Section 230-232 read with Section 52 and Section 66 of the the Act andother relevant provisions of the Act and as per the scheme approved by NCLT 1stApril 2018 was the appointed date. APCPL is also a Non-Banking Financial Company thelending business of APCPL has been transferred to U GRO Capital.

The Scheme is effective from date of obtaining requisite approval orfiling of certified true of the order of the Hon'ble NCLT with the Registrar of Companieswhichever is later. The certified copy of NCLT order was filed with Registrar ofCompanies Mumbai on 30th June 2019 therefore the scheme became effective from30th June 2019.

EXTRACT OF ANNUAL RETURN

As per the requirements of Section 92(3) of the Act and Rules framedthereunder the extract of the annual return in Form MGT-9 as on 31st March2020 is attached as Annexure V of this report.

RISK MANAGEMENT

The Board of Directors of the Company has formed a Risk ManagementCommittee to frame implement and monitor the risk management plan for the Company. TheCommittee is responsible for monitoring and reviewing the risk management plan andensuring its effectiveness. The Audit Committee has additional oversight in the area offinancial risks and controls. The major risks identified by the businesses and functionsare systematically addressed through mitigating actions on a continuing basis. The variousrisks are categorized as High risk Medium risk and Low risk and appropriatesteps/measures are taken/initiated to mitigate the identified risks from time to time.

EMPLOYEE STOCK OPTIONS DISCLOSURE

During the financial year 2019-20 the Company has granted 270768stock options to the eligible employees. The Board of Directors hereby confirm that thereis no material change in Employee Stock Option Scheme (ESOS) of the Company and the schemeis in compliance with the SEBI (Share Based Employee Benefits) 2014.

Disclosure in compliance with the SEBI (Share Based Employee Benefits)Regulations 2014 and the Act is available on the website of the Company at the followinglink: www.ugrocapital.com.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to the provisions of Section 135 of the Companies Act 2013read with the Companies (Corporate Social Responsibility Policy) Rules 2014 your Companyas part of its CSR initiatives has undertaken projects/programs in accordance with the CSRPolicy. The details of the CSR activities are given as Annexure 'IV' forming part of thisReport. The CSR Policy of the Company is available on the website of the Company atwww.ugrocapital.com

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the Secretarial Standards issued by theInstitute of Company Secretaries of India.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

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

DETAILS OF FRAUD REPORTED BY AUDITORS

No frauds have been reported by auditors under sub-section (12) ofsection 143 of the Act.

DETAILS OF SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS /COURTS / TRIBUNAL IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION INFUTURE

There are no significant material orders passed by the Regulators /Courts / Tribunal which would impact the going concern status of the Company and itsfuture operations. Hence disclosure pursuant to Rule 8 (5) (vii) of Companies (Accounts)Rules 2014 is not required.

ACKNOWLEDGMENT

Your Directors place on record their sincere appreciation for theassistance and guidance provided by the Reserve Bank of India Ministry of CorporateAffairs the Securities and Exchange Board of India and other Regulatory AuthoritiesStock Exchange other statutory bodies companies bankers members and employees of theCompany for the cooperation and encouragement and continued support extended to theCompany.

For and on behalf of Board of Directors
sd/-
Shachindra Nath
Executive Chairman and Managing Director
DIN: 00510618
Place: Mumbai
Date: 20th May 2020