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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

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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) - Director Report

Company director report

TO THE MEMBERS

The Directors of your Company have the pleasure in presenting the 29thAnnual Report together with the Audited Financial Statements for the financial year("FY") ended 31st March 2022.

In compliance with the applicable provisions of the Companies Act 2013 ("theAct") and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015("SEBI Listing Regulations") this Board’s Report is prepared based on thestandalone financial statements of the Company for the year under review.

FINANCIAL HIGHLIGHTS

Particulars Year ended 31st March 2022 Year ended 31st March 2021
Total Income 31341.59 15333.84
Total Expenditure 29323.81 14120.93
Profit before Tax and exceptional items 2017.78 1212.91
Exceptional items - -
Profit before tax 2017.78 1212.91
Provision for Tax 562.72 (1659.84)
Profit after tax 1455.06 2872.75
Other comprehensive income 24.58 13.60
Profit available for appropriation 1479.64 2886.35
Appropriations:
Transfer to Reserve Fund under Section 45-IC of the RBI Act 1934 291.01 574.55
Balance carried forward to Balance Sheet 1188.63 2311.80

DIVIDEND

The Board of directors have not recommended any Dividend for the Financial Year2021-22.

Pursuant to Regulation 43A of the SEBI Listing Regulations the Board of Directors ofthe Company has adopted a Dividend Policy (‘Policy’). The Policy is available onthe website of the Company under the ‘Investor Relations’ section athttps://www. ugrocapital.com/sites/default/files/2021-05/Dividend%20 Policy.pdf

RESERVES

The amounts if any proposed to be transferred to general reserve and statutoryreserve Employee Stock Option Scheme are mentioned in financial statements.

REVIEW OF OPERATIONS

During the year under review your Company’s total revenue amounted to INR 313.42Crores compared to INR 153.34 Crores in the previous year.

Profit before tax was INR 20.17 Crores compared to INR 12.13 Crores for the previousyear. Profit after tax stood at INR 14.55 Crores compared to 28.73 INR Crores in theprevious year. Our Loan assets under management (AUM) grew 125.45% y-o-y to INR 2969Crores compared to INR 1317 Crores in the previous year. Over FY22 we have builtformidable distribution channel to support our next phase of growth. Your Company is oneof the fastest growing NBFCs with 125% AUM growth in FY22 (AUM increased from INR 1317Crore in FY21 to INR 2969 Crore in FY22). As we transitioned the company towards lendingas service by leveraging Co-lending model the composition of our off book AUM increasedto 17% as on March 2022. Your Company had Eight live Co-lending partnerships withmarquee Banks and Financial Institution (FI) and another eighteen were in the pipeline ason Mar-22. We continued our endeavour to build a granular and high credit qualityportfolio on account of which our overall average ticket size reduced from INR 23 lakhs ason March 2021 to INR 18 Lakhs as on March 2022 and our GNPA% decreased from 2.7% as onMarch 2021 to 2.3% on March 2022. On the back of our strong underwriting capabilities wehave been able to shift our AUM mix towards higher yielding products on account of whichour weighted Avg. AUM ROI improved to 16.4% as on Mar-22 from 15.5% on March 2021.We strengthened our liability franchise by adding twenty six new lenders and raised1900+ Cr of total liabilities across products in FY22. We strengthened our focus onimpact and sustainability and were able to attract DFI interest in our company andcompleted our first ever DFI funding from ResponsAbility.

CAPITAL ADEQUACY RATIO

Your Company’s Capital Adequacy Ratio as of 31st March 2022 stood at34.37% of the aggregate risk weighted assets on balance sheet and risk adjusted value ofthe off-balance sheet items which is well above the regulatory minimum of 15% and out oftotal CRAR the Tier 1 capital stood at 33.61% and Tier II Capital at 0.76%

PUBLIC DEPOSITS

The Company did not hold any public deposits at the beginning of the financial year norhas it accepted any public deposit during the financial year under review.

COVID-19 PANDEMIC

The COVID-19 pandemic which is once in a lifetime occurrence has brought with it anunimaginable suffering to people and to almost all sections of the economy. The nationwidelockdowns to curtail the transmission of disease had put the global economy in extremestress of the level not seen since the Great Depression and would have a long-lastingeconomic impact. Countries across the globe continued to face drastic economic and socialdisruptions along with tragic loss of lives and livelihoods. Eruptions of new waves andvariants of the virus necessitated restrictions and lockdowns.

The dynamic and evolving nature of the pandemic with its resurgence (third wave) at themid of the financial year 2021-2022 once again created uncertainty including economicimpact. Hopefully the outreach of vaccination drives across the country additionalefforts to set up medical infrastructure and obtain required medical supplies in additionto continued adherence to COVID-19 specific protocols will help in overcoming this testingsituation. The Government of India has also taken various steps and provided relaxation tosupport companies during COVID-19 pandemic. Ministry of Corporate Affairs extendedtimelines for filing of various returns without any additional fees. SEBI extendedtimelines for filing of various returns permitted Companies to hold Board MeetingsCommittee Meetings General Meetings through video conferencing. The physical andemotional wellbeing of employees continues to be a top priority for UGRO. Accordingly theCompany has taken various measures to provide support to its employees. The number ofCOVID-19 positive employees and their family members are being tracked on a daily basis toprovide them support as and when required. The Company has also provided specific groupinsurance policy and home care insurance cover to employees and their families whocontracted COVID-19.

CHANGE IN SHARE CAPITAL

During the financial year 2021-22 the Company has allotted 30769 fully paid up equityshares of face value of ` 10/ each to an employee of the Company on exercise of stockoptions under Employee Stock Option Scheme.

As on 31st March 2022 the paid up equity share capital of your Companystood at ` 705593190/- comprising of 70559319 Equity Shares of face value ` 10/- each.

FUND RAISING

During FY 2021-22 the Company met its funding requirements through a combination ofShort Term debt (comprising Commercial Papers and Bank Loans) and Long Term debt(comprising Non-Convertible Debentures Bank Loans and External Commercial Borrowings)Direct Assignment.

The aggregate debt outstanding as at March 31 2022 was

` 1801.84 crore (of which ` 750.64 crore was payable within one year). The Debt /Networth ratio as on March 31 2022 was 1.86 times. The Company has been regular inservicing all its debt obligations.

CREDIT RATING

The Company has been engaging with Acuite Ratings and Research Limited and CRISILRatings Limited for grant of rating for our instruments issued by the Company from time totime. The details of ratings granted to the Company have been given in the CorporateGovernance Report for information of the shareholders.

SUBSIDIARY COMPANIES

Your Company has no subsidiaries as on 31st March 2022. There are noassociate companies or joint venture companies within the meaning of Section 2(6) of theCompanies Act 2013 ("the Act").

Further pursuant to the provisions of Section 136 of the Act the financial statementsof the Company along with relevant documents are available on the website of the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

Selection of New Directors and Board Membership Criteria:

The Nomination and Remuneration Committee (‘NRC’) engages with the Board todetermine the appropriate characteristics skills and experience for the Board as a wholeas well as for its individual members with the objective of having a Board with diversebackgrounds and experience in business finance governance and public service.Thereafter the NRC recommends to the Board the selection of new Directors.Characteristics expected of all Directors include independence integrity high personaland professional ethics sound business judgement ability to participate constructivelyin deliberations and willingness to exercise authority in a collective manner. The Companyhas in place a Policy on appointment & removal of Directors.

Board of Directors:

The Board of your Company comprised of eminent persons with proven competence andintegrity. Besides the experience strong financial acumen strategic astuteness andleadership qualities they have a significant degree of commitment towards the Company anddevote adequate time to the meetings and preparations. In terms of requirement of SEBIListing Regulations the Board has identified core skills expertise and competencies ofthe Directors in the context of the Company’s businesses for effective functioningwhich are detailed in the Corporate Governance Report.

As on 31st March 2022 your company has 11 (Eleven) Directors on the Boardout of which 7 (Seven) are Independent Directors including one Woman Director and 3(Three) are Non-Executive Directors. The Board composition is in compliance with therequirements of the Act and the SEBI Listing Regulations.

In accordance with the provisions of the Act and the Articles of Association of theCompany Mr. Manoj Sehrawat (DIN: 02224299) Non-Executive Director retires by rotationand being eligible has offered himself for re-appointment. The Board recommends the samefor the approval of the shareholders. The necessary resolution for re-appointment of Mr.Manoj Sehrawat forms part of the Notice convening the AGM. The profile andparticulars of experience that qualify Mr. Sehrawat for Board membership aredisclosed in the said Notice.

Mr. Navin Kumar Maini Mr. Navin Puri and Mrs. Ranjana Agarwal Independent Directorsresigned from the Company with effect from 8th February 2022 and Mr. AbhijitGhosh Whole time Director and Chief Executive Officer resigned from the Company witheffect from 30th April 2021.

The resignation of above Independent Directors was on account of restrictions containedin Master Circular-Loans and Advances - Statutory and Other issued by the Reserve Bank ofIndia ("Master Circular") wherein banks are restricted from advancing creditfacilities to any company in which any of the directors of other banks is a directorwithout approval of the lending bank’s Board of Directors/Management Committee.Accordingly all of UGRO’s term loan and other financing proposals with banks arerequired to be approved by the Board of Directors / Management Committee of respectivebanks. This was resulting into procedural delay for UGRO Capital in getting financialfacilities. The Board at its meeting held on 8th February 2022 deliberated onthe issue and Mr. Maini Mr. Puri and Mrs. Agarwal expressed that they hold interest ofUGRO Capital of paramount importance and did not want to be obstacle in the growth path ofthe Company and hence agreed to step down from Board of the Company and wished good luckto the Company for all future endeavors On 8th February 2022 based on therecommendations of Nomination and Remuneration Committee Mr. Karnam Sekar and Mr. HemantBhargava were appointed as Additional Independent Directors. Thereafter based on therecommendations of Nomination and Remuneration Committee Mrs. Smita Aggarwal wasappointed as an Additional Independent Director with effect from 31st March2022.

Pursuant to requirements of Regulation 17 (1) (C) of the SEBI Listing Regulations theshareholders vide special resolutions passed through postal ballot regularized theirappointment as Independent Directors.

Key Managerial Personnel:

During the year Mr. Amit Gupta was appointed as the Chief Financial Officer of theCompany with effect from 2nd November 2021 in place of Mr.Sandeepkumar Zanvar who resigned as Chief Financial Officer w.e.f. 2nd November2021.

The details of key managerial personnel of the Company during the year is given below:

Key Managerial Personnel Designation
Mr. Shachindra Nath Executive Chairman and Managing Director
Mr. Abhijit Ghosh* Whole-time Director and Chief Executive Officer
Mr. Sandeepkumar Zanvar ** Chief Financial Officer
Mr. Amit Gupta *** Chief Financial Officer
Mr. Aniket Karandikar Company Secretary

* resigned w.e.f. 30th April 2021 ** resigned w.e.f. 2nd November2021

*** appointed as Chief Financial Officer w.e.f. 2nd November 2021

RBI GUIDELINES

The Company continues to comply with all the applicable regulations prescribed by theReserve Bank of India ("RBI") from time to time.

REPORT ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS

Your Company has adopted Corporate Governance Code which lays down in detail governanceguidelines and practices that are required to be followed while taking decision on variousmatters. We consider it our inherent responsibility to disclose timely and accurateinformation regarding the operations and performance leadership and governance of theCompany. Pursuant to the SEBI Listing Regulations Management Discussion and Analysis andCorporate Governance Report are part of this Annual Report. The Certificates from PankajNigam and Associates Practicing Company Secretaries regarding compliance of theconditions of Corporate Governance as stipulated by the SEBI Listing Regulations areattached to this report.

BUSINESS RESPONSIBILITY REPORT

Pursuant to Regulation 34(2)(f) of the SEBI Listing Regulations the ‘BusinessResponsibility Report’ (BRR) of the Company for FY 2020-21 is forming part of theAnnual Report.

FAMILIARISATION PROGRAMME FOR DIRECTORS

On a quarterly basis detailed presentations are made by Senior Management toprovide an overview of the operations various products offered by the Company financialperformance fund raising strategy various risks/ challenges faced during the quarterchanges in IT Infrastructure landscape etc. as part of Board Meeting. The suggestionsreceived from Directors are noted for implementation. A familarization programme was heldon 25th April 2022 and 27th April 2022 for all the Directors ofthe Company to present overview of activities of the Company and provide update on changesbrought out by the regulatory authorities. The program was well attended and appreciatedby the Directors.

CRITERIA FOR DETERMINING QUALIFICATIONS POSITIVE ATTRIBUTES AND INDEPENDENCE OF ADIRECTOR

In terms of the provisions of Section 178(3) of the Act and Regulation 19 of the SEBIListing Regulations the Nomination and Remuneration Committee has formulated the criteriafor determining qualifications positive attributes and independence of Directors the keyfeatures of which are as follows:

Qualifications - The Board nomination process encourages diversity of thoughtexperience knowledge age and gender. It also ensures that the Board has an appropriateblend of functional and industry expertise.

Positive Attributes - Apart from the duties of Directors as prescribed in the Act theDirectors are expected to demonstrate high standards of ethical behavior communicationskills and independent judgment. The Directors are also expected to abide by therespective Code of Conduct as applicable to them.

Independence - A Director will be considered independent if he/she meets the criterialaid down in Section 149(6) of the Act the Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations as amended from time to time.

DECLARATION OF INDEPENDENCE

The Company has received the declarations from all the Independent Directors as per theSection 149(7) of the Act and Regulation 16 (1) (b) of the SEBI Listing Regulations andthe Board is satisfied that all the Independent Directors meet the criteria ofindependence as mentioned in Section 149(6) of the Act and Regulation 16 (1) (b) of theSEBI Listing Regulations. Further declaration on compliance with Rule 6(3) of the

Companies (Appointment and Qualification of Directors) Rules

2014 as amended by Ministry of Corporate Affairs ("MCA") vide itsNotification dated October 22 2019 regarding the requirement relating to enrollment inthe data bank created by MCA for Independent Directors had been received from allIndependent Directors.

In the opinion of the Board there has been no change in the circumstances which mayaffect their status as independent directors of the Company and the Board is satisfied ofthe integrity expertise and experience (including proficiency in terms of Section 150(1)of the Act and applicable rules thereunder) of all Independent Directors on the Board.Further in terms of Section 150 read with Rule 6 of the Companies

(Appointment and Qualification of Directors) Rules 2014 as amended IndependentDirectors of the Company have included their names in the data bank of IndependentDirectors maintained with the Indian Institute of Corporate Affairs.

ANNUAL EVALUATION BY THE BOARD OF DIRECTORS

The Board evaluated the effectiveness of its functioning of the Committees and ofindividual Directors pursuant to the provisions of the Act and the SEBI ListingRegulations. The Board sought the feedback of Directors on various parameters including:

Existence of sufficient skill experience time and resources to undertake their duties

understanding the risks associated with the business ability to proactively contributein development of risk management strategy

understanding of governance regulatory financial fiduciary and ethical requirementsof the Board / Committee

demonstration of level of integrity including maintaining utmost confidentiality andidentifying disclosing and managing conflicts of interest

devotion of time to determining the emerging issues that could affect the organizationin future The above criteria are broadly based on the Guidance Note on Board Evaluationissued by the Securities and Exchange Board of India on January 5 2017.

In a separate meeting of the IDs the performance of the Non-Independent Directors theBoard as a whole and Chairman of the Company were evaluated taking into account the viewsof other Non-Executive Directors. The Nomination and Remuneration Committee reviewed theperformance of the individual directors and the Board as a whole. In the subsequent Boardmeeting after the meeting of the Independent Directors and the meeting of the NRC theperformance of the Board its Committees and individual directors were discussed.

Pursuant to Schedule IV of the Act the Independent Directors met on 3rdFebruary 2022 without the presence of Non-Independent Directors and Members of theManagement. The meetings of Independent Directors were chaired by Mr. SatyanandaMishra Independent Director. The Independent Directors inter alia evaluated theperformance of the Non-Independent Directors the Board of Directors as a whole evaluatedthe performance of the Chairman of the Board after taking into account the views ofNon-Executive Directors and discussed aspects relating to the quality quantity andtimeliness of the flow of information between the Company the Management and the Board.

CODE OF CONDUCT

Your Company has formulated a Code of Business Conduct and Ethics for Board ofDirectors and Senior Managerial Personnel.

The confirmation of compliance of the same is obtained from all concerned on an annualbasis. All Board Members and Senior Managerial Personnel have given their confirmation ofcompliance. A declaration duly signed by the Executive Chairman and Managing Director isgiven under Corporate Governance Report as a separate section in this Annual Report. TheCode of Business Conduct and Ethics for Board of Directors and Senior Managerial Personnelis also posted on the website of the Company.

BOARD METINGS HELD DURING THE FINANCIAL YEAR

The Board meets at regular intervals to discuss and decide on the Company's businesspolicy and strategy apart from other Board business. The Board exhibits strong operationaloversight with regular presentations in quarterly meetings. The Board / Committee meetingsare pre-scheduled well in advance to help them plan their schedule and ensure meaningfulparticipation in the meetings. Only in case of special and urgent business if the needarises the Board’s or Committee’s approval is taken by passing resolutionsthrough circulation or by calling the Board/Committee meetings at short notice aspermitted by law. The agenda for the Board and Committee meetings includes detailed noteson the items to be discussed to enable the Directors to make an informed decision.

The Board of Directors of the Company met 5 (Five) times during the financial year2021-22. The details of the Board meetings and the attendance of the Directors are givenin Corporate Governance Report which forms part of this Annual Report.

COMMITTEES OF THE BOARD

As required under the Act the SEBI Listing Regulations and RBI Master Directions theCompany has constituted the following statutory committees:

1) Audit Committee

2) Nomination and Remuneration Committee

3) Stakeholders Relationship Committee

4) Risk Management Committee

5) Corporate Social Responsibility Committee

6) Asset Liability Committee

7) IT Strategy Committee. The Company also have non mandatory committee like SecuritiesAllotment and Transfer Committee Investment and Borrowing Committee and ComplianceCommittee. Details of all the statutory committees such as terms of reference compositionand meetings held during the year under review are provided in the Report on CorporateGovernance a part of this Annual Report.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Board has adopted policies and procedures for the governance of orderly andefficient conduct of its business including adherence to the Company’s policiessafeguarding its assets prevention and detection of frauds and errors accuracy andcompleteness of the accounting records and timely preparation of reliable financialdisclosures. The Company’s internal control systems are commensurate with the natureof its business the size and complexity of its operations. The internal control system issupported by an internal audit process for reviewing the design adequacy and efficacy ofthe Company’s internal controls including its systems and processes and compliancewith regulations and procedures. Internal Audit Reports are discussed with the Managementand are reviewed by the Audit Committee of the Board which also reviews the adequacy andeffectiveness of the internal controls in the Company.

DIRECTOR’S RESPONSIBILITY STATEMENT

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

a) in the preparation of the annual accounts for the financial year ended 31stMarch 2022 the applicable accounting standards had been followed along with properexplanations relating to material departure;

b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 31st March 2022 and of the profitand loss of the Company for that year;

c) proper and sufficient care had been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;

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

e) they have laid down internal financial controls to be followed by the Company whichare adequate and were operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT2013

Details of loan guarantee and investments covered if any are provided in the notesto the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

All the related party transactions during the financial year were at arm’s lengthbasis and are in compliance with the applicable provisions of the Act and the SEBI ListingRegulations. There were no material significant related party transactions entered into bythe Company with Promoters Directors or Key Managerial Personnel etc. which may havepotential conflict of interest with the Company at large.

All the related party transactions are presented to the Audit Committee and Board fortheir approval. A statement of all related party transactions is presented before AuditCommittee on quarterly basis specifying the nature value and terms and conditions of thetransactions.

The related party transaction policy of the Company as approved by the Board isavailable on website of the Company. The information on transactions with related partiespursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts)Rules 2014 are given in Annexure-I in Form No. AOC-2 and the same forms part of thisreport.

PARTICULARS OF EMPLOYEES AND REMUNERATION:

A Information as per Rule 5 (1) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 a) The ratio of remuneration of each director tomedian remuneration of the employees of the Company for the financial year:

Name of Director Ratio to median
remuneration
Mr. Shachindra Nath 69.53
Mr. Abhijit Ghosh * 2.86

*Since Mr. Ghosh resigned from the Board as Whole Time Director & ChiefExecutive Director w.e.f. 30th April 2022 hence median has been calculatedaccordingly.

b) The percentage of increase in remuneration of each Director Chief FinancialOfficer Company Secretary in the financial year: 8%

c) Percentage of increase in the median remuneration of employees during the financialyear ended 31st March 2022: 8.48%

d) Number of permanent employees on the rolls of the Company as on 31stMarch 2022: 1111 employees

e) Average percentage increase made in the salaries of employee other than theManagerial Personnel in the financial year was 8.48% vis a vis an increase of 8.00% in thesalaries of Managerial Personnel

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

B. Information as per Rule 5 (2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014:

The statement containing particulars of top ten employees in terms of remunerationdrawn and the particulars of employees as required under Section 197(12) of the Act readwith Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is available at registered office of the Company. The saidstatement is open for inspection at the registered office of the Company. Any memberinterested in obtaining there particulars will be provided with the same upon receipt ofa written request delivered at the registered office of the Company.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY OCCURREDAFTER 31ST MARCH 2022

There are no material changes and commitments affecting the financial position of theCompany subsequent to the close of the FY 2021-22 till the date of this report.

CONSERVATION OF ENERGY

A. Conservation of energy-

i. The steps taken or impact on conservation of energy; UGRO Capital Limited ("the Company") is engaged in providing financial services and as such it’s operations do not account for substantial energy consumption. However the Company is taking all possible measures to conserve energy. Several environment friendly measures were adopted by the Company such as:
ii. The steps taken by the company for utilizing alternate sources of energy; Installation of capacitors to save power;
iii. The capital investment on energy conservation equipment’s; Introduction of Tablets in branches;
Installation of Light Emitting Diode ("LED") lights for new branches;
Reducing electricity demand wherever under-utilized;
Creating environmental awareness by way of distributing the information in electronic/digital form;
Minimizing air- conditioning usage;
Shutting off all lights when not in use; and
The Management frequently puts circulars on the corporate intranet workplace for its employees educating them on ways and means to conserve electricity and other natural resources and ensures strict compliance of the same.
i. The efforts made towards technology absorption; Company has undertaken several new initiatives for adoption of the latest technologies for ensuring faster TAT’s while minimizing errors and mitigating risks across all standard processes. This has also significantly contributed to optimization of resources through reduced use of paper as well as travel of field staff.
We have launched e-signing of system generated loan documents through an end-to-end digital journey for all lines of businesses.
This has had a significant positive impact on the scope of error in document filling on the overall paper and ink consumption delays and costs on account of travel to client locations as well as maintaining highest standard of document repository through a digital audit trail.
Customer Care team has been strengthened and augmented with a Digital Customer Service Platform as well as a WhatsApp based chatbot to handle majority of the standard complaints/requests such as account statement repayment details and payment links repayment schedule branch and RM locator etc.
All loans are required to attempt an E-NACH registration and in the absence of the same a physical NACH mandate is obtained.
This has substantially reduced the requirement of physical security post-dated cheques to be obtained from the customer helping to mitigate the risk of cheques getting bounced or misplaced.
In addition to this several initiatives such as D2C customer acquisition platforms digital and video KYC functionalities MSME-Udyam information API driven credit assessment through banking bureau and GST have also been implemented and/or are in pipeline.
ii. The benefits derived like product improvement cost reduction product development or import substitution; Above benefits have had a noticeable impact on the overall costs in terms of consumption of stationery and fuel costs on improving TAT’s by removing scope of human errors as well as on mitigating the risk through maintaining a digital repository and audit trails.
Initiatives such as digital KYC and API based D2C journeys have also immensely increased the business growth potential by opening new inorganic channels of sourcing and underwriting MSME loans.
iii. In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) Not applicable
a) the details of technology imported;
b) the year of import;
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 Development.

C. Foreign exchange earnings and Outgo-

Year ended 31st March Year ended 31st March
2022 2021
Other Expenses 79.49 0.87
Exchange earned 0 0

REMUNERATION POLICY OF THE COMPANY

The remuneration policy of the Company comprising of the appointment and remunerationof the Directors Key Managerial Personnel and Senior Managerial Personnel of the Companyincluding criteria for determining qualifications positive attributes independence of aDirector and other related matters has been provided in the Corporate Governance Reportwhich is attached to this Report and is also available on Company’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 of the Companies(Meetings of Board and its Powers) Rules 2014 and Regulation 22 of SEBI ListingRegulations the Board of Directors have approved the Policy on Vigil Mechanism / WhistleBlower and the same has been hosted on the website of the Companyhttps://www.ugrocapital.com/ investor-relations.

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

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Company has also taken software containing structural digital database formaintaining names of persons with whom unpublished price sensitive information is shared.The software contains details of information shared and the names of such persons withwhom information is shared under this regulation along with the Permanent Account NumberThe Code requires pre-clearance for dealing in the Company’s shares and prohibits thepurchase or sale of Company shares by the Directors and the designated employees while inpossession of unpublished price sensitive information in relation to the Company andduring the period when the trading window is closed. The Board is responsible forimplementation of the Code.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013

The Company follows a strict zero tolerance sexual harassment at workplace and adoptedthe policy on prevention prohibition and redressal of sexual harassment at workplace inline with the provisions of Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and Rules thereunder for prevention and redressal ofcomplaints of sexual harassment at work place.

The disclosure in relation to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 for the financial year ended 31st March2022 is as follows:

Number of complaints filed during the financial year 0
Number of complaints disposed during the financial year 0
Number of complaints pending at the end of the financial year 0

STATUTORY AUDITOR AND THEIR REPORT

MSKA & Associates Chartered Accountants (Firm Registration No. 105047W) wasappointed as Statutory Auditors at the 27th (Twenty Seventh) Annual GeneralMeeting ("AGM") held on 18th September 2020 for a period of fiveyears commencing from the conclusion of the 27th twenty seventh AGM till theconclusion of the 32nd (Thirtieth Second) AGM of the company. Further the report of theStatutory Auditors is provided in the financial section of the Annual Report. Theobservations made in the Auditors’ Report are self-explanatory and do not contain anyqualification reservation or adverse remark. Therefore it does not call for any furthercomments.

The RBI has vide its Circular No. RBI/2021-22/25 Ref. No.DoS.CO.ARG/SEC.01/08.91.001/2021-22 dated April 27 2021 issued the Guidelines forAppointment of Statutory Central Auditors (SCAs)/Statutory Auditors (SAs) of CommercialBanks (excluding RRBs) UCBs and NBFCs (including HFCs) ("RBI Guidelines"). Asper para 8.1 of the said circular the NBFCs were required to appoint the SAs for acontinuous period of three (3) years subject to the firms satisfying the eligibilitynorms each year. Whereas the audit firm which had already completed tenure of one (1)year were permitted to complete the balance tenure only i.e. two (2) years.

INTERNAL AUDITORS

Your Company has a sophisticated internal control structure proportionate to the sizescope and complexity of operations. Internal audits are conducted on a regular basis toreview and ensure that responsibilities are duly carried out efficiently. The internalaudit department monitors and assesses the effectiveness and adequacy of ourCompany’s internal control mechanisms. Internal audits are accompanied if requiredby audits performed by specialised consultants/audit firms. During the year KhimjiKunverji & Co LLP Chartered Accountants have been appointed to assist internal auditfunction of the Company.

SECRETARIAL AUDITOR

In terms of Section 204 of the Act and Rules made there under Pankaj Nigam andAssociates Company Secretaries has been appointed as Secretarial Auditor of the Company.The report of the Secretarial Auditor for the financial year 22021-22 is enclosed asAnnexure-III to this report.

The report is self-explanatory and does not contain any qualification or adverseremark. Therefore it does not call for any further comments.

Further the Company has received certificate of Non- Disqualification of Directorsfrom Pankaj Nigam and Associates Company Secretaries. The same is enclosed as Annexure IVto this report.

CHANGE IN NATURE OF BUSINESS

There has been no change in the nature of business of the Company during the financialyear ended 31st March 2022.

DETAILS AND STATUS OF ACQUISITION MERGER EXPANSION MODERNIZATION AND DIVERSIFICATION

During the year your Company has not carried out any acquisition merger expansionmodernization and diversification.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3) (a) of the Act the Annual Return ason 31st March 2022 is available on the Company’s website athttps://www.ugrocapital.com/ investor-relations.

RISK MANAGEMENT

The Board of Directors of the Company has formed a Risk Management Committee to frameimplement and monitor the risk management plan for the Company. The Committee isresponsible for reviewing the risk management plan and ensuring its effectiveness. TheCommittee considers the risks that impact the mid-term to the long-term objectives of thebusiness including those reputational in nature. The Company has an elaborate riskcharter and risk policy. The Audit Committee has additional oversight in the area offinancial risks and controls.

EMPLOYEE STOCK OPTIONS DISCLOSURE

During the financial year 2021-22 the Company has granted 1378039 stock options tothe eligible employees.

The shareholders through postal ballot notice dated 31st March 2022 theresults of which were declared on 6th May 2022 have approved amendment to thevesting conditions of CSL Employee Stock Option Scheme.

The Board of Directors hereby confirm that except afore stated there is no materialchange in Employee Stock Option Scheme (ESOS) of the Company and the scheme is incompliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations2021.

Disclosure in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity)Regulations 2021 and the Act is available on the website of the Company at the followinglink: www.ugrocapital.com.

CORPORATE SOCIAL RESPONSIBILITY

The objective of the Company’s Corporate Social Responsibility (‘CSR’)initiatives is to improve the quality of life of communities. The Company has in place aCSR policy which provides guidelines to conduct CSR activities of the Company. TheCSR policy is available on the website of the Company at www.ugrocapital.com. The Companyhad tie up with HEAL Foundation is a not for profit organisation registered under IndianTrust Act. HEAL Foundation has been working diligently for the past one and half yearsunder its flagship initiative ‘COVID Fighters Public Health Safety Movement’.Pursuant to the provisions of Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 your Company as part ofits CSR initiatives has undertakenngoing ‘Preventive Screening Drive via MobileHealth Clinic’ in different geographies aims to inculcate the habit of preventivescreening which will bring long-term positive health impact on the Indian population. TheCompany also given donation to Muktangan Education Trust and to Our Lady’s Home (forBoy’s). Your Company is in receipt of requisite certifications for expending the CSRbudget as contemplated by Ministry of

Corporate Affairs in their FAQs dated 25th August 2021. The CSR Policy ofthe Company is available on the website of the Company.

COMPLIANCE WITH SECRETARIAL STANDARDS

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

INVESTOR EDUCATION AND PROTECTION FUND

There were no amounts which were required to be transferred to the Investor Educationand Protection Fund by the Company.

DETAILS OF FRAUD REPORTED BY AUDITORS

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

DETAILS OF SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS / TRIBUNALIMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATION IN FUTURE

There are no significant material orders passed by the Regulators / Courts / Tribunalwhich would impact the going concern status of the Company and its future operations.Hence disclosure pursuant to Rule 8 (5) (vii) of Companies (Accounts) Rules 2014 is notrequired.

LISTING ON NATIONAL STOCK EXCHANGE OF INDIA LIMITED

During the year your Company has been listed on National Stock Exchange of IndiaLimited w.e.f. 11th August 2022.

OTHER DISCLOSURES i. No application has been made under the Insolvency andBankruptcy Code; hence the requirement to disclose the details of application made or anyproceeding pending under the Insolvency and Bankruptcy Code 2016 (31 of 2016) during theyear along with their status as at the end of the financial year is not applicable; and.ii. The requirement to disclose the details of difference between amount of the valuationdone at the time of onetime settlement and the valuation done while taking loan from theBanks or Financial Institutions along with the reasons thereof is not applicable

ACKNOWLEDGMENT

The Directors wish to convey their deep appreciation to all the employees customersvendors and investors of the Company for their sincere and dedicated services as well astheir collective contribution to the Company’s performance. The Directors thank theGovernment of India Governments of various States and regulators in India and concernedGovernment departments for their cooperation and guidance. The Directors regret the lossof life due to Covid pandemic and are deeply grateful and have immense respect for everyperson who risked their life and safety to fight this pandemic.

For and on behalf of Board of Directors
sd/-
Shachindra Nath
Executive Chairman and Managing Director
DIN: 00510618
Place: Mumbai
Date: 24th May 2022

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