TO THE MEMBERS,
The Board of Directors of UGRO Capital Limited have great pleasure in
presenting the Annual Report together with the Audited Balance Sheet as on 31st
March, 2023, Statement of Profit and Loss and Cash Flow Statement for the financial year
ended 31st March, 2023.
FINANCIAL HIGHLIGHTS
The key highlights of the audited standalone financial statements of
your Company for the financial year ended 31st March, 2023 and comparison with
the previous financial year ended 31st March, 2022 are summarized below:
(Rs. in Lakhs)
Particulars |
Year ended 31st March, 2023 |
Year ended 31st March, 2022 |
Total Income |
68,376.28 |
31,211.21 |
Total Expenditure |
59,993.44 |
29,193.43 |
Profit before Tax and exceptional items |
8,382.84 |
2,017.78 |
Exceptional items |
- |
- |
Profit before tax |
8,382.84 |
2,017.78 |
Provision for Tax |
4,405.20 |
562.72 |
Profit after tax |
3,977.64 |
1,455.06 |
Other comprehensive income |
15.10 |
24.58 |
Profit available for appropriation |
3,992.74 |
1,479.64 |
Appropriations: |
|
|
Transfer to Reserve Fund under Section 45-IC of the RBI Act,
1934 |
795.53 |
291.01 |
Balance carried forward to Balance Sheet |
3,197.21 |
1,188.63 |
DIVIDEND
The Board of Directors have not recommended any dividend for the
financial year 2022-23.
Pursuant to Regulation 43A of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") the
Board of Directors of the Company have adopted a Dividend Policy ('Policy'). The Policy is
available on the website of the Company under the 'Investor Relations' section at website
of the Company at https://www.ugrocapital. com/corporate-governance#subcategorv-policies
REVIEW OF OPERATIONS
During the year under review, your Company's total revenue, amounted to
Rs. 68,376.28 lakhs compared to Rs. 31,211.21 lakhs in the previous year.
Profit before tax was Rs. 8,382.84 lakhs compared to Rs. 2,017.78 lakhs
for the previous year. Profit after tax stood at Rs. 3,977.64 lakhs compared to Rs.
1,455.06 lakhs in the previous year.
Over FY23 your Company has established itself as one of the leading
NBFCs in "Lending as a Service" business model and has successfully
operationalized and scaled Co-lending
partnerships with 10+ partners including large PSU Banks, as a result
Company's Off-book Asset Under Management proportion increased to 40% as on March 2023 vis
a vis 16% as on March 2022. Strong Asset Under Management growth momentum continued in
FY23 on the back of our large distribution infrastructure (98 branches, 1,200+ GRO
partners, 105+ Anchors and original equipment manufacturers and 1,200+ employees), AUM as
on March 2023 stood at Rs. 6,081 Crores registering a 105% year on year growth. Your
Company has upgraded its proprietary scoring model to GRO Score 3.0 thereby automating the
data tripod of Banking, Bureau and GST. The Company continues to focus on maintaining the
credit quality of our portfolio, our Gross NPA and Net NPA as on March 2023 stood at 1.60%
and 0.90% respectively whereas our provision coverage ratio improved to 48.6% as on March
2023 as compared to 26.9% as on March 2022. The Company maintains disbursement to login
ratio at 30% despite high pace of overall AUM growth. Your Company continues to focus on
shifting its AUM mix towards high yield products and as a result the portfolio weighted
average yield improved from 16.4% as on March 2022 to 17.3% as on March 2023. Your Company
strengthened its liability franchise by adding 11 new lenders and our overall liabilities
stood at Rs. 3,149 Crores with a leverage of 3.2 times. Our overall profitability improved
with increasing operating leverage and our cost to net total income ratio decreased from
72% in FY22 to 62% in FY23.
SUBSIDIARY COMPANIES
As on 31st March 2023, your Company has no subsidiaries.
There are no associate companies or joint venture companies within the meaning of Section
2(6) of the Companies Act, 2013 ("the Act").
RESERVES
The amounts, if any, proposed to be transferred to statutory reserve
and ESOS reserve are mentioned in financial statements.
CHANGE IN SHARE CAPITAL
The issued, subscribed and paid-up Equity Share Capital as on 31st
March, 2023 was Rs. 70,55,93,190/- consisting of 7,05,59,319 Equity Shares of the face
value of Rs. 10/- each, fully paid-up.
There was no change in Share Capital during the year under review.
Further, during the financial year the Company implemented new ESOS
Scheme viz. UGRO Employee Stock Option Scheme 2022 under which an Employee Benefit Trust
("Trust") has been constituted. The objective of the Trust is to distribute
shares to employees under the employee benefit program. The Trust is responsible for the
purchase of shares of the Company from the secondary market for the purpose of this
program. The Trust is treated as an extension of the Company, hence the shares held by the
Trust are treated as treasury shares. Own equity instruments so reacquired (treasury
shares) are recognised at face value and deducted from Equity Share Capital to the tune of
Rs. 123.83 lakhs. The amount received in excess of the face value is deducted from the
Securities Premium Account.
As on 31st March, 2023, there are no outstanding instruments
convertible into equity shares of the Company.
FUND RAISING
Your Company being a Non-Banking Financial Company is required to raise
funds for its business requirements. During the year under review, your Company has
borrowed funds through diverse methods viz. term loans, commercial papers, market linked
debentures, non convertible debentures, co-lending/co- origination of loans, assignment of
portfolio, external commercial borrowing etc. from various private and public Banks/
Financial Institutions/ Development Financial Institutions/ through External Commercial
Borrowings. Your Company has further augmented its capital base by raising Rs. 340.50
crores through a combination of Preferential Issue and Qualified Institutions Placement in
April/May 2023.
CREDIT RATING
The Company has availed credit ratings from Crisil Ratings Limited,
India Ratings & Research Private Limited and Acuite Ratings & Research Limited
with respect to the financial facilities availed/instruments issued by the Company from
time to time. The details of ratings granted to the Company have been given in the
Corporate Governance Report for information of the shareholders.
CAPITAL ADEQUACY RATIO
Your Company's Capital Adequacy Ratio as of 31st March 2023,
stood at 20.23% of the aggregate risk weighted assets on balance sheet and risk adjusted
value of the off-balance sheet items, which is well above the regulatory minimum of 15%
and out of total CRAR the Tier 1 capital stood at 19.63% and Tier II Capital at 0.60%.
PUBLIC DEPOSITS
The Company has not accepted any deposits from public and as such, no
amount on account of principal or interest on deposits from public was outstanding as on
the date of the balance sheet.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
The Nomination and Remuneration Committee ('NRC') engages with the
Board to determine the appropriate characteristics, skills and experience for the Board as
a whole as well as for its individual members with the objective of having a Board with
diverse background 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 personal
and professional ethics, sound business judgement, ability to participate constructively
in deliberations and willingness to exercise authority in a collective manner. The Company
has in place a Policy on appointment & removal of Directors viz. Nomination and
Remuneration Policy.
Board of Directors:
The Board of your Company comprised of eminent persons with proven
competence and integrity. Besides the experience, strong financial acumen, strategic
astuteness and leadership qualities, they have a significant degree of commitment towards
the Company and devote adequate time to the meetings and preparations. In terms of
requirement of the SEBI Listing Regulations the Board has identified core skills,
expertise and competencies of the Directors in the context of the Company's businesses for
effective functioning, which are detailed in the Corporate Governance Report.
As on 31st March 2023, your Company has 11 (Eleven)
Directors on the Board, out of which 7 (Seven) are Independent Directors including one
Woman Director, 1 (one) Executive Director and 3 (Three) Non-Executive Directors. The
Board composition is in compliance with the requirements of the the Act and the SEBI
Listing Regulations.
In accordance with the provisions of the Act and the Articles of
Association of the Company, Mr. Chetan Kulbhushan Gupta (DIN: 07704601), Non-Executive
Director, retires by rotation and being eligible has offered himself for re-appointment.
The Board recommends the same for the approval of the shareholders.
The necessary resolution for re-appointment of Mr. Chetan Kulbhushan
Gupta forms part of the Notice convening the Annual General Meeting. The profile and
particulars of experience that qualify Mr. Gupta for Board membership, are disclosed in
the said Notice.
Pursuant to requirements of Regulation 17 (1) (C) of SEBI Listing
Regulations, the shareholders vide special resolutions passed through postal ballot on 5th
May 2022, regularized appointment of Mr. Karnam Sekar and Mr. Hemant Bhargava as
Independent Directors w.e.f. 8th February 2022 and Mrs. Smita Aggarwal as
Independent Director w.e.f. 31st March 2022.
Key Managerial Personnel:
During the year, Ms. Namrata Sajnani was appointed as the Company
Secretary and Compliance Officer of the Company w.e.f. 22nd July 2022, in place
of Mr. Aniket Karandikar who resigned as Company Secretary w.e.f. 13th June
2022 and Mr. Kishore Lodha was appointed as the Chief Financial Officer of the Company
with effect from 15th September 2022, in place of Mr. Amit Gupta who resigned
as Chief Financial Officer w.e.f. 1 st September 2022.
The details of key managerial personnel of the Company during the year
is given below:
Key Managerial Personnel |
Designation |
Mr. Shachindra Nath |
Vice Chairman and Managing Director |
Mr. Amit Gupta* |
Chief Financial Officer |
Mr. Kishore Lodha** |
Chief Financial Officer |
Mr. Aniket Karandikar# |
Company Secretary |
Ms. Namrata Sajnani## |
Company Secretary and Compliance Officer |
COMPLIANCE OF RBI REGULATIONS/GUIDELINES
The Company continues to comply with all the applicable
regulations/guidelines/directions prescribed by the Reserve 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 governance guidelines and practices that are required to be followed while taking
decision on various matters. We consider it our inherent responsibility to disclose timely
and accurate information regarding the operations and performance, leadership and
governance of the Company.
Pursuant to the SEBI Listing Regulations, Management Discussion and
Analysis and Corporate Governance Report forms part of this Annual Report. The
Certificates from M/s Pankaj Nigam and Associates, Practicing Company Secretaries,
regarding compliance of the conditions of Corporate Governance as stipulated by the SEBI
Listing Regulations are attached to this report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Pursuant to Regulation 34(2)(f) of the SEBI Listing Regulations, the
'Business Responsibility and Sustainability Report' of the Company for FY 2022-23 forms
part of the Annual Report.
FAMILIARISATION PROGRAMME FOR DIRECTORS
The Company has established a Familiarisation Programme for Independent
Directors. The framework together with the details of the Familiarisation Programme
imparted during the financial year under review has been uploaded on the website of the
Company.
Periodic presentations were made at the Board meetings apprising the
Board Members about the finer aspects of the Company's businesses, the challenges posed
and an overview of future business plans including:
1) Macro-economic view of the industry in which the Company operates;
2) Budgets, operations and performance of the businesses and relevant
regulatory/legal updates in the statutes applicable to the Company;
3) Business model of the Company, risks and opportunities for the
businesses and the growth levers for them;
4) Strategic future outlook and the way forward
CRITERIA FOR DETERMINING QUALIFICATIONS. POSITIVE ATTRIBUTES AND
INDEPENDENCE OF A DIRECTOR
In terms of the provisions of Section 178(3) of the Act and Regulation
19 of the SEBI Listing Regulations, the Nomination and Remuneration Committee has
formulated the criteria for determining qualifications, positive attributes and
independence of Directors, the key features of which are as follows:
Qualifications - The Board nomination process encourages
diversity of thought, experience, knowledge, age and gender. It also ensures that the
Board has an appropriate blend of functional and industry expertise.
Positive Attributes - Apart from the duties of Directors as
prescribed in the Act, the Directors are expected to demonstrate high standards of ethical
behavior, communication skills, and independent judgment. The Directors are also expected
to abide by the respective Code of Conduct as applicable to them.
Independence - A Director will be considered independent if
he/she meets the criteria laid 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 the Section 149(7) of the Act and Regulation 16 (1) (b) of the SEBI
Listing Regulations and the Board is satisfied that all the Independent Directors meet the
criteria of independence as mentioned in Section 149(6) of the Act and Regulation 16 (1)
(b) of the SEBI 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 its Notification dated October 22,
2019, regarding the requirement relating to enrollment in the data bank created by MCA for
Independent Directors, had been received from all Independent Directors.
In the opinion of the Board, there has been no change in the
circumstances which may affect their status as independent directors of the Company and
the Board is satisfied of the 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, Independent
Directors of the Company have included their names in the data bank of Independent
Directors 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 of individual Directors, pursuant to the provisions of the Act and the SEBI
Listing Regulations. 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 contribute in development of risk management strategy.
understanding of governance, regulatory, financial, fiduciary
and ethical requirements of the Board / Committee.
demonstration of level of integrity including maintaining utmost
confidentiality and identifying, disclosing and managing conflicts of interest.
devotion of time to determining the emerging issues that could
affect the organization in future.
The above criteria are broadly based on the Guidance Note on Board
Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.
In a separate meeting of the Independent Directors, the performance of
the Non-Independent Directors, the Board as a whole and Chairman and Vice Chairman and
Managing Director of the Company were evaluated taking into account the views of other
Non-Executive Directors. The NRC reviewed the performance of the individual directors and
the Board as a whole. In the subsequent Board meeting after the meeting of the Independent
Directors and the meeting of the NRC, the performance of the Board, its Committees and
individual directors were discussed.
Meeting of the Independent Directors pursuant to Schedule IV of the
Act: the Independent Directors met on 24th February, 2023 without the presence
of Non-Independent Directors and Members of the Management. The meeting of Independent
Directors was chaired by Mr. Hemant Bhargava. The Independent Directors, inter alia,
evaluated the performance of the Non-Independent Directors, the Board of Directors as a
whole, evaluated the performance of the Chairman and Vice Chairman and Managing Director
of the Board after taking into account the views of NonExecutive Directors and discussed
aspects relating to the quality, quantity and timeliness 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 of Directors and Senior Managerial Personnel.
The confirmation of compliance of the same is obtained from all
concerned on an annual basis. All Board Members and
Senior Managerial Personnel have given their confirmation of
compliance. A declaration duly signed by the Vice Chairman and Managing Director is given
under Corporate Governance Report as a separate section in this Annual Report. The Code of
Business Conduct and Ethics for Board of Directors and Senior Managerial Personnel is also
posted on the website of the Company.
BOARD MEETINGS HELD DURING THE FINANCIAL YEAR
The Board meets at regular intervals to discuss and decide on the
Company's business policy and strategy apart from other Board businesses. The Board
exhibits strong operational oversight with regular presentations in quarterly meetings.
The Board / Committee meetings are pre-scheduled well in advance to help them plan their
schedule and ensure meaningful participation in the meetings. Only in case of special and
urgent business, if the need arises, the Board's or Committee's approval is taken by
passing resolutions through circulation or by calling the Board/ Committee meetings at
short notice, as permitted by law. The agenda for the Board and Committee meetings
includes detailed notes on the items to be discussed to enable the Directors to make an
informed decision.
The Board of Directors of the Company met 7 (Seven) times during the
financial year 2022-23. The details of the Board meetings and the attendance of the
Directors are given in 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, the Company 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 and 7) IT Strategy Committee. The Company also has non mandatory
committees viz. Securities Allotment and Transfer Committee, Investment and Borrowing
Committee and Compliance Committee. In addition to the above, the Company has an Executive
Committee to review specific business, operational matters and other items that the Board
may decide to delegate. Details of all the statutory committees such as terms of
reference, composition and meetings held during the year under review are provided in the
Report on Corporate Governance, 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 and efficient conduct of its business, including adherence to the Company's
policies, safeguarding its assets, prevention and detection of frauds and errors, accuracy
and completeness of the accounting records and timely preparation of
reliable financial disclosures. The Company's internal control systems are commensurate
with the nature of its business, the size and complexity of its operations. The internal
control system is supplemented by extensive internal audits, regular reviews by the
management and standard policies and guidelines, which ensure reliability of financial and
all other records. The Management periodically reviews the framework, efficacy and
operating effectiveness of the Internal Financial Controls of the Company. Internal Audit
Reports are discussed with the Management, and they undertake corrective action, if any,
in their respective areas and thereby strengthen the controls. Significant audit
observations and corrective actions thereon are presented to the Audit Committee of the
Board. The Company has, in material respect, an adequate internal financial control over
financial reporting and such controls are operating effectively.
DIRECTOR?S RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(3)(c) read with
Section 134(5) of the Act, and based on the information provided by the Management, the
Board of Directors report that:
a) in the preparation of the annual accounts for the financial year
ended 31st March 2023 the applicable accounting standards had been followed
along with proper explanations relating to material departure;
b) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company as at 31st
March 2023 and of the profit of the Company for that year;
c) proper and sufficient care had been taken for the maintenance of
adequate accounting records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the financial statements 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 which are adequate and were operating effectively; and
f) they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems are adequate and operating
effectively.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER 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 WITH RELATED PARTIES
In terms of the provisions of the Act, the SEBI Listing Regulations and
the RBI Directions, the Board of Directors adopted 'Related Party Transaction Policy' to
ensure obtaining of proper approvals and reporting of transactions with related parties.
In terms of Section 177 of the Act and Regulation 23 of the SEBI
Listing Regulations read with the Related Party Transaction Policy of the Company,
transactions with related parties were placed before the Audit Committee for its approval
and omnibus approval of the Audit Committee was obtained for related party transactions of
repetitive nature, within the limits prescribed by the Board of Directors. The Audit
Committee is periodically updated with respect to related party transactions executed
under omnibus approval. All contracts/arrangements/ transactions entered into by the
Company during the financial year with related parties were in the ordinary course of
business and on an arm's length basis.
During the year under review, no material related party transactions as
prescribed in Section 188 of the Act read with Companies (Meetings of the Board and its
Powers) Rules, 2014, were entered by your Company. Accordingly, the disclosure of related
party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not
applicable to the Company. Further, during the year under review, the Company had not
entered into transactions with related parties which could be considered to be 'material'
in accordance with the Related Party Transaction Policy of the Company. All other
transactions with related parties, during the year under review, were in compliance with
the Related Party Transaction Policy of the Company.
Further, the Company has not entered into transactions requiring
disclosures in terms of Regulation 53(f) of the SEBI Listing Regulations.
Disclosure of the related party transactions as required under IndAS -
24 are reported in Notes of the audited financial statements of the Company for the
financial year ended 31st March 2023.
The policy on 'Related Party Transactions' is available on the
Company's website https://www.ugrocapital.com/ corporate-governance#subcategorv-policies.
PARTICULARS OF EMPLOYEES AND REMUNERATION:
A. Information as per Rule 5 (1) of Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014
a) The ratio of remuneration of each director to median remuneration of
the employees of the Company for the financial year:
Name of Director |
Ratio to median |
|
remuneration |
Mr. Shachindra Nath |
48.84 |
b) The percentage of increase in remuneration of each Director, Chief
Financial Officer, Company Secretary
in the financial year: Except the Vice Chairman
and Managing Director, none of the Directors drew any remuneration and
during the year, there was no increase in remuneration of the Vice Chairman and Managing
Director.
Further, since the Company Secretary and Chief Financial Officer were
appointed during FY 2022-23, increase in remuneration is not applicable to them.
c) Percentage of increase in the median remuneration of employees
during the financial year ended 31st March, 2023: 42.38%
d) Number of permanent employees on the rolls of the Company as on 31st
March, 2023: 1261 employees
e) Average percentage increase made in the salaries of employee other
than the Managerial Personnel in the financial year was 18.90% whereas the increase in the
managerial remuneration for FY 2023 was Nil.
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 of Managerial Personnel) Rules, 2014:
The statement containing particulars of top ten employees in terms of
remuneration drawn and the particulars of employees as required under Section 197(12) of
the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, will be made available during 21 days before the Annual
General Meeting in electronic mode to any Shareholder upon request sent at the Email ID:
cs@ugrocapital.com
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE
COMPANY OCCURRED AFTER 31st MARCH. 2023
There are no material changes and commitments affecting the financial
position of the Company subsequent to the close of the FY 2022-23 till the date of this
report.
Further, after closure of the financial year 2022-23, the Company has
raised funds to the tune of Rs. 340.50 crores through qualified institutional placement
('QIP') and preferential allotment. Marquee domestic investors viz. SBI Life, GoDigit and
SBI General etc. participated in the QIP and equity shares were allotted to them and
Danish Sustainable Development Goals Investment Fund K/S ('IFU'), represented by
Investment Fund for Developing Countries, an investment fund incorporated under the laws
of Kingdom of Denmark was allotted shares through preferential issue.
Foreign exchange earnings and Outgo- |
(Rs. in lakhs) |
|
|
Year ended |
Year ended |
|
31st March, |
31st March, |
|
2023 |
2022 |
Other Expenses |
533.81 |
79.49 |
Exchange earned |
- |
- |
REMUNERATION POLICY OF THE COMPANY
The remuneration policy of the Company comprising of the appointment
and remuneration of the Directors, Key Managerial Personnel and Senior Managerial
Personnel of the Company including criteria for determining qualifications, positive
attributes, independence of a Director and other related matters have been provided in the
Corporate Governance Report which is which forms part of the Annual Report and is also
available on Company's website at https://www.ugrocapital.com/ corporate-governance
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 the SEBI
Listing 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 at
https://www.ugrocapital.com/ corporate-governance#subcategorv-policies
This Policy, inter alia, provides a direct access to the Chairman of
the Audit Committee. Your Company hereby affirms that no Director / employee has been
denied access to the Chairman of the Audit Committee. During FY23, 2(two) complaints were
received by Company and which were investigated and as per the Company's Policy resolved
by the Company. As on 31st March, 2023 no complaint is pending.
PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider
Trading with a view to regulate trading in securities by the Directors and designated
employees of the Company.
The Company has also taken software containing structural digital
database for maintaining names of persons with whom unpublished price sensitive
information is shared. The software contains details of information shared and the names
of such persons with whom information is shared under this regulation along with the
Permanent Account Number.
The Code requires pre-clearance for dealing in the Company's securities
and prohibits the purchase or sale of Company securities by the Directors and the
designated employees while in possession of unpublished price sensitive information in
relation to the Company and during the period when the trading window is closed. The Board
is responsible for implementation of the Code. The Code is available on the website of the
company at https://www.ugrocapital.com/corporate-governance
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION-
PROHIBITION AND REDRESSAL) ACT, 2013
The Company follows a strict zero tolerance sexual harassment at
workplace and adopted the policy on prevention, prohibition and redressal of sexual
harassment at workplace in line with the provisions of Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules thereunder for
prevention and redressal of complaints of sexual harassment at work place.
The disclosure in relation to the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013 for the financial year ended
31st March 2023 is as follows:
Number of complaints filed during the financial year |
0 |
Number of complaints |
0 |
disposed during the |
|
financial year |
|
Number of complaints |
0 |
pending at the end of the |
|
financial year |
|
STATUTORY AUDITOR?S AND THEIR REPORT
M/s MSKA & Associates, Chartered Accountants (Firm Registration No.
105047W) were appointed as Statutory Auditors at the 27th (Twenty Seventh)
Annual General Meeting ("AGM") held on 18th September, 2020 for a
period of five years commencing from the conclusion of the 27th (twenty
seventh) AGM till the conclusion of the 32nd (Thirty Second) AGM of the
Company.
Further, the report of the Statutory Auditors is provided in the
financial section of the Annual Report. The Statutory Auditor's report does not contain
any qualifications, reservations, adverse remarks or disclaimers.
In terms of the guidelines issued by RBI on 27th April, 2021
for appointment of statutory auditors for NBFCs which was applicable from second half of
financial year 2021-22 which, inter- alia, mandates tenure of statutory auditors to be for
a continuous period of three years subject to satisfying the eligibility criteria each
year, the term of existing Statutory Auditors will conclude at the conclusion of the 30th
AGM.
The approval of Members of the Company is sought for appointment of
M/s. Sharp and Tannan, Chartered Accountant (Firm Registration No. 109983W) as the
Statutory Auditors of the Company, for a period of 3 (three) consecutive years, to hold
office from conclusion of the 30th AGM till conclusion of the 33rd AGM
of the Company to be held in the year 2026.
M/s. Sharp and Tannan, Chartered Accountants have given a confirmation
to the effect that they are eligible to be appointed and not disqualified from being
appointed as the Statutory Auditors. Necessary resolution(s) seeking members approval for
appointment of M/s. Sharp and Tannan, Chartered Accountant as statutory auditors forms
part of the Notice convening the 30th AGM.
INTERNAL AUDITORS
Your Company has in place sophisticated internal control structures,
proportionate to the size, scope and complexity of operations of the Company. Further, the
Company has an internal auditor and is developing the inhouse internal audit function.
Internal audits are conducted on a regular basis to review and ensure that
responsibilities are duly carried out efficiently. The internal audit department monitors
and assesses the effectiveness and adequacy of our Company's internal control mechanisms.
Internal audits are accompanied, if required, by audits performed by specialised
consultants/audit firms. During the year, KKC & Associates, Chartered Accountants had
been re-appointed to assist internal audit department of the Company.
SECRETARIAL AUDITOR
In terms of Section 204 of the Act and Rules made thereunder, M/s
Pankaj Nigam and Associates, Company Secretaries, have been appointed as Secretarial
Auditor of the Company. The report of the Secretarial Auditor for the financial year
2022-23 is enclosed as Annexure-II to this report.
The report is self-explanatory and does not contain any qualification
or adverse remark. Therefore, it does not call for any further comments.
Further, the Company has received certificate of NonDisqualification of
Directors from M/s Pankaj Nigam and Associates, Company Secretaries. The same is enclosed
as Annexure III to this report.
CHANGE IN NATURE OF BUSINESS
There has been no change in the nature of business of the Company
during the financial year ended 31st March 2023.
DETAILS AND STATUS OF ACQUISITION. MERGER- EXPANSION AND
DIVERSIFICATION
During the year, your Company has not carried out any acquisition,
merger, expansion, modernization and diversification.
ANNUAL RETURN
Pursuant to Section 92(3) read with Section 134(3) (a) of the Act, the
Annual Return as on 31 st March, 2023 is available on the Company's website at
https://www.ugrocapital.com/ investor-relations/annual-reports
RISK MANAGEMENT
The Board of Directors of the Company has formed a Risk Management
Committee to frame, implement and monitor the risk management plan of the Company. The
Committee is responsible for reviewing the risk management plan and ensuring its
effectiveness. The Committee considers the risks that impact the mid-term to the long-term
objectives of the business, including those reputational in nature. The Company has an
elaborate risk charter and risk management policy. The Audit Committee has additional
oversight in the area of financial risks and controls. The Risk Management Policy is
available on the website of the Company at https://www.ugrocapital.com/
corporate-governance#subcategory-policies
EMPLOYEE STOCK OPTIONS DISCLOSURE
Your Company believes that its success and ability to achieve its
objectives is largely determined by the quality of its workforce and recognises that not
only good employment opportunities but also additional motivating mechanisms are needed to
incentivize employees and aligning their interest with the interest of the Company. In
recognition of the said objective, the Company adopted and implemented CSL Employee Stock
Option Scheme 2017 ("ESOS 2017") and UGRO Employee Stock Option Scheme 2022
("ESOS 2022") ("collectively ESOS Schemes") to attract, retain,
motivate and incentivize employees of the Company.
During the year, the shareholders approved new Scheme viz. "UGRO
Capital Employee Stock Option Scheme - 2022", for implementation of the Scheme, the
UGRO Employee Benefit Trust ("Trust") was set up. The shareholders approved the
same through postal ballot on 4th September, 2022.
During the year, the shareholders approved amendment in ESOS 2017 by
introducing new vesting conditions, which is now linked with internal rate of return (IRR)
as more particularly defined in the Scheme. The shareholders approved the same though
postal ballot on 5th May 2022.
During the financial year 2022-23, the Company has granted 3,90,000
stock options under ESOS 2017 and 11,11,929 stock options under ESOS 2022.
The Board of Directors confirm that the ESOS 2017 and ESOS 2022 are in
compliance with the provisions of the act and Securities and Exchange Board of India
(Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended.
Disclosure in compliance with the SEBI (Share Based Employee Benefits
and Sweat Equity) Regulations, 2021 is forming part of this annual report which is
available on the website of the Company at the following link:
https://www.ugrocapital.com/investor-relations/disclosures
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 a
CSR policy which provides guidelines to conduct CSR activities of the Company. The CSR
policy is available on the website of the Company at https://www.
ugrocapital.com/corporate-governance#subcategory-policies
During the year, the Company has spent Rs. 52.50/- lakhs on CSR
activities through agencies. A report pursuant to Section 135 of the Act & Rules made
thereunder is annexed to this report (Annexure IV).
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with the Secretarial Standards issued by the
Institute of Company Secretaries of India.
INVESTOR EDUCATION AND PROTECTION FUND
During the year under review, there were no amounts which were required
to be transferred to the Investor Education and Protection Fund by the Company.
DETAILS OF FRAUD REPORTED BY AUDITORS
During the year under review, no frauds have been reported by the
Auditor (Statutory Auditor, Secretarial Auditor) to the Audit Committee/ Board, under
Section 143(12) of the Act.
MAINTENANCE OF COST RECORDS
Your Company is not required to maintain cost records in terms of
Section 148(1) of the Act.
DETAILS OF SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS /
COURTS / TRIBUNAL IMPACTING THE GOING CONCERN STATUS AND COMPANY?S OPERATION IN
FUTURE
There are no significant material orders passed by the Regulators /
Courts / Tribunal which would impact the going concern status of the Company and its
future operations.
GENERAL DISCLOSURES
(i) There is no proceeding initiated/ pending against the Company under
the Insolvency and Bankruptcy Code, 2016.
(ii) There was no instance of onetime settlement with any Bank or
Financial Institution.
ACKNOWLEDGMENT
Your Directors would like to place on record, their gratitude for the
cooperation and guidance received from all the statutory bodies, especially the RBI. Your
Directors also thank the shareholders, clients, vendors, investors, banks and other
stakeholders for placing their faith in the Company and contributing to its growth. We
would also like to appreciate the hard work put in by all our employees, and we look
forward to their continuing patronage, going forward.
sd /- |
Satyananda Mishra |
Non-Executive Chairman (Independent Director) |
DIN-01807198 |
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