Ugro Capital Ltd

TO THE MEMBERS,

Your Directors have pleasure of presenting the 31^st Annual Report of the Company together with the audited financial statements for the Financial Year (FY) ended 31^st March, 2024 ("Financial Statements").

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

(Rs. in Lakhs)

The Directors do not recommend payment of any dividend on the Equity Shares for the financial year ended 31^st March, 2024, to conserve capital for future growth and business expansion.

Pursuant to Regulation 43A of the SEBI Listing Regulations the Board of Directors of the Company have adopted a Dividend Policy. The said policy is available on the website of the Company under the ‘Investor Relations? section at website of the Company at https://www.ugrocapital.com/investor-relations/ corporate-governance#subcategory-policies.

During the year under review, your Company?s total revenue amounted to Rs. 1,08,168.12 lakhs compared to Rs. 68,376.28 lakhs in the previous year.

Profit before tax was Rs. 17,876.25 lakhs compared to Rs. 8,382.84 lakhs for the previous year. Profit after tax stood at Rs. 11,934.48 lakhs compared to Rs. 3,977.64 lakhs in the previous year.

As on 31^st March 2024, 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").

The amounts, if any, proposed to be transferred to the general reserve, statutory reserve and ESOS reserve are mentioned in financial statements.

During the financial year, the Authorized Share Capital of the Company was increased twice as under:

i. Rs. 125,00,00,000/- divided into 10,45,00,000 equity shares of Rs. 10/- each and 2,05,00,000 preference shares of Rs. 10/- each from Rs. 102,00,00,000/- divided into 8,15,00,000 equity shares of Rs. 10/- each and 2,05,00,000 preference shares of Rs. 10/- each, vide special resolution passed by the shareholders of the Company through postal ballot on 11^th May 2023. ii. Rs. 175,00,00,000/- divided into 15,45,00,000 equity shares of Rs. 10/- each and 2,05,00,000 preference shares of Rs. 10/- each from Rs. 125,00,00,000/- divided into 10,45,00,000 equity shares of Rs. 10/- each and 2,05,00,000 preference shares of Rs. 10/- each, vide special resolution passed by the shareholders of the Company at Extra-Ordinary General Meeting of the Company held on 22^nd March 2024.

Further, during the financial year, the Company issued and allotted equity shares as per following: i. 4,21,082 fully paid-up equity shares of face value of Rs. 10/- each, to employees on exercise of stock options under "CSL Employee Stock Option Scheme 2017" of the Company. ii. 66,11,325 fully paid-up equity shares of face value of Rs. 10/- each aggregating to Rs. 10,049.21 lakhs, to qualified institutional buyers under Qualified Institutional Placement. iii. 1,52,38,095 fully paid-up equity shares of face value of Rs. 10/- each aggregating to Rs. 2400 lakhs, to Danish Sustainable Development Goals Investment Funds through Preferential Issue.

The issued, subscribed and paid-up Equity Share Capital as on 31^st March, 2024 was Rs. 92,82,98,210/- consisting of 9,28,29,821 Equity Shares of the face value of Rs. 10/- each, fully paid-up.

As on 31^st March, 2024, there are no outstanding instruments convertible into equity shares of the Company.

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, non convertible debentures, external commercial borrowing co-lending/co-origination of loans, assignment of portfolio etc. from various private and public Banks/ Financial Institutions/ Development Financial Institutions/ through External Commercial Borrowings.

YourCompanyhadtotalborrowings(includingNCDs)ofRs.4,64,949 lakhs as on 31^st March, 2024. Your Company also raised Rs.81,905 lakhs and Rs. 3,390 lakhs through direct assignment and PTC route respectively during the financial year 2024.

Pursuant to the provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 and the Act and considering the growth aspirations, your Company successfully completed:

(i) Qualified Institutions Placement ("QIP") of 66,11,325 equity shares of face value of Rs. 10 each at an issue price of Rs. 152 per Equity Share (including a security premium of Rs. 142 per Equity Share) on subscription by Qualified Institutional Buyers ("QIB") aggregating to Rs. 10,049.21 lakhs. The issue was opened on 10^th April, 2023 and allotment of Equity shares were made on 13^th April, 2023.

(ii) Preferential issue of 1,52,38,095 equity shares of face value of Rs. 10 each at an issue price of Rs. 157.50 per Equity Share (including a security premium of Rs. 147.50 per Equity Share) aggregating to Rs. 2400 lakhs to Danish Sustainable Development Goals Investment Funds. The issue was opened on 12^th May, 2023 and allotment of Equity shares were made on 17^th May, 2023.

With respect to disclosure under Regulation 32(7A) of SEBI Listing Regulations, the Audit Committee of the Board at its meeting held on 1^st August, 2023 had reviewed, and confirmed that the funds raised through QIP and Preferential issue during the financial year have been fully utilised for the intended object as mentioned in their private placement documents and there was no deviation or variation in utilisation of the said funds. Further, no allotment was made to Promoter and Promoter Group under QIP and Preferential Issue.

The Company has availed credit ratings from Crisil Ratings Limited and India Ratings & Research Private 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.

Your Company?s Capital Adequacy Ratio as of 31^st March 2024, stood at 20.75% 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 19.50% and Tier II Capital at 1.25%.

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.

The Board of your Company is comprised of eminent persons with proven competence and integrity. Besides their experience, strong financial acumen, strategic astuteness, and leadership qualities, they have a significant degree of commitment towards the Company and devote adequate time. 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.

During the financial year, there have been changes in the composition of the Board of Directors. As on 31^st March 2024, your Company has 10 (Ten) Directors on the Board, out of which 6 (Six) are Independent Directors including 2 (Two) Woman Director, 1 (One) Executive Director and 3 (Three) are Non-Executive (Nominee) Directors. The Board composition is in compliance with the requirements of the Act and the SEBI Listing Regulations.

In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Manoj Sehrawat (DIN: 02224299), Non-Executive (Nominee) Director, retires by rotation and, being eligible has offered himself for reappointment. The Board recommends the same for the approval of the shareholders.

The necessary resolution for the reappointment of Mr. Manoj Sehrawat forms part of the Notice convening the Annual General Meeting. The profile and particulars of experience that qualify Mr. Sehrawat for Board membership are disclosed in the said Notice.

Mr. Shachindra Nath was re-appointed as Vice Chairman and Managing Director of the Company for term of 3 years w.e.f. with effect from 22^nd June, 2023. The Shareholders through postal ballot approved the said appointment on 11^th May 2023.

Mrs. Deepa Hingorani was appointed as Non-Executive

(Nominee) Director w.e.f. 12th May 2023. The shareholders at the Annual General Meeting held on 8^th August 2023 approved the said appointment.

Ms. Tabassum Inamdar was appointed as Independent

Director, w.e.f. 1^st August 2023. The shareholders through postal ballot approved the said appointment on 28^th September 2023.

Mr. Satyananda Mishra, Mr. Rajeev Agarwal and

Mr. Karuppasamy Singam were re-appointed as Independent Directors for their second term w.e.f. 5^th July 2023 and the shareholders at the Annual General Meeting held on 8^th August 2023 approved the said re-appointments.

During the financial year, pursuant to Regulation 17(1A) of the SEBI Listing Regulations, shareholders approved continuation of Directorship of Mr. Satyananda Mishra, as a Non-Executive Chairman and Independent Director of the Company, who has attained age of 75 years till the expiry of his current term, through special resolution.

Mrs. Smita Aggarwal resigned as an Independent Director w.e.f. 4^th July 2023 as would be taking up a full-time position at the United Nations in New York.

Mr. Abhijit Sen completed his term as an Independent

Director w.e.f. 4^th July 2023.

Mr. Amit Gupta resigned as Non-Executive (Nominee)

Director w.e.f. 23^rd January 2024 due to his significant obligations to other personal and professional commitments.

Mrs. Deepa Agar Hingorani resigned as Non-Executive

(Nominee) Director w.e.f. on 25^th April 2024 due to to pursue another opportunity and in view of the same Mr. Rohit Goyal, appointed as Non-Executive (Nominee) Director w.e.f. on 26^th April 2024, as per nomination given by Danish Sustainable Development Goals Investment Fund ("IFU").

During the year, Mr. Satish Kumar was appointed as the Company Secretary and Compliance Officer of the Company with effect from 1^st November 2023, in place of Ms. Namrata Sajnani who resigned as Company Secretary and Compliance Officer w.e.f. 31^st October 2023.

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

Your Company is a non-deposit taking non-banking financial company registered with the Reserve Bank of India ("RBI") and classified as NBFC - Middle Layer under RBI ‘Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023.

The Company continues to comply with all the applicable regulations/guidelines/directions prescribed by the RBI, from time to time.

During the financial year the Company has obtained Certificate of Registration, issued by RBI, authorizing the Company to commence and carry out the factoring business.

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.

Pursuant to Regulation 34(2)(f) of the SEBI Listing Regulations, the ‘Business Responsibility and Sustainability Report' of the Company for FY 2023-24 is forming part of the Annual Report.

The Company has put in place 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.

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.

The Company has received Declaration of Independence as stipulated under section 149(7) of the Act, and Regulation 25(8) of the SEBI Listing Regulations from Independent Directors confirming that he/she is not disqualified from being appointed/ re-appointed/ continue as an Independent Director as per the criteria laid down in section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations. The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act.

The Independent Directors of the Company have registered themselves with the data bank maintained by Indian Institute of Corporate Affairs (IICA).

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 5^th January, 2017.

In a separate meeting of the independent directors, the performance of the Non-Independent Directors, the Board as a whole, Chairman and Vice Chairman of the Company were evaluated taking into account the views of other Non-Executive Directors. The Board at its meeting held after the meeting of the Independent Directors, 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 28^th March, 2024 without the presence of Non-Independent Directors and members of the Management. The meeting of Independent Directors was chaired by Mr. Satyananda Mishra, Non-Executive Chairman and Independent Director. 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 of the Board after taking into account the views of Non-Executive Directors and discussed aspects relating to the quality, quantity and timeliness of the flow of information between the Company, the Management and the Board.

Your Company has formulated a Code of Business Conduct and Ethics for Board of Directors and Senior Managerial Personnel. The confirmation on 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 the Board of Directors and Senior Managerial Personnel is also posted on the website of the Company.

The Board meets at regular intervals to discuss and decide on the Company's business policy and strategy apart from other Board business. 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 the 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 6 (six) times during the financial year 2023-24. The details of the Board meetings and the attendance of the Directors are given in the Corporate Governance Report, which forms part of this Annual Report.

As required under the Act, 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 7) IT Strategy Committee and 8) Customer Service Committee. The Company also has non mandatory committee like Securities Allotment and Transfer Committee, Investment and Borrowing Committee and Compliance Committee. In addition to the above, the Company has an Executive Committee of the management to review specific business operational matters and other items that the Board/Committees 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.

The Company has an Internal Financial Controls (‘IFC?) framework, commensurate with the size, scale, and complexity of the Company?s operations and it is in line with requirements of the Companies Act, 2013. The Board of Directors of the Company is responsible for ensuring that IFC have been laid down by the Company and that such controls are adequate and operating effectively. The internal control framework has been designed to provide reasonable assurance with respect to recording and providing reliable financial and operational information, complying with applicable laws, safeguarding assets from unauthorised use, executing transactions with proper authorisation and ensuring compliance with corporate policies.

The Company has laid down standard operating procedures and policies to guide the operations of each of its functions.

Pursuant to the provisions of Section 134(5) of the Act, the Board of Directors confirms that, to the best of its knowledge and belief: a) in the preparation of the annual accounts for the financial year ended 31^st March 2024 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 31^st March 2024 and of the profit and loss 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 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 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.

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

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. The Audit Committee is periodically on quarterly basis 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 and required to the Company. Further, during the year under review, the Company had not entered transactions with related parties which could be considered as ‘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. Disclosure of the related party transactions as required under Regulation 34(3) and 53 (f) of the SEBI Listing Regulations and IndAS - 24 are reported in Notes of the audited financial statements of the Company for the financial year ended 31^st March 2024.

The policy on ‘Related Party Transactions? is available on the Company?s website https://www.ugrocapital.com/ investor-relations/corporate-governance#subcategory-policies.

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:

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

*Mr. Satish Kumar appointed as Company Secretary and Compliance Officer during FY 2023-24. c) Percentage of increase in the median remuneration of employees during the financial year ended 31^st March, 2024: 1% d) Number of permanent employees on the rolls of the Company as on 31^st March, 2024: 1678 employees e) Average percentage increase made in the salaries of employee other than the Managerial Personnel in the financial year was 16% vis a vis an increase of 10% in the salaries of Managerial Personnel. f) Affirmation that the remuneration is as per remuneration policy of the Company: Yes

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, is available at registered office of the Company. The said statement is open for inspection at the registered office of the Company. Any member interested in obtaining these particulars will be provided with the same, upon receipt of a written request delivered at the registered office of the Company.

There are no material changes and commitments affecting the financial position of the Company subsequent to the close of the FY 2023-24 till the date of this report.

The Board of Directors at their meeting held on 2^nd May 2024 subject to shareholder approval, considered and approved:

raising funds through issuance of compulsory convertible debentures of face value of Rs. 10/- each and convertible warrants of face value of Rs. 10/- ("Securities") to the identified investors on a Preferential basis ("Preferential Issue") for an amount upto Rs. 275 crores and upto Rs. 1,058 crores respectively, aggregating upto Rs. 1,333 crores at an issue price of Rs. 264/- each.

acquisition of "MyShubhLife" i.e., Datasigns Technologies

Private Limited ("DTPL") a leading embedded finance fintech platform based in Bangalore. Subsequent to the completion of the acquisition of 100% shares of DTPL from its existing shareholders, DTPL will become a wholly owned subsidiary of the Company.

A. Conservation of energy and Technology absorption- Since your Company is engaged in financial services activities, its operations are not energy intensive nor does it require adoption of specific technology and hence information in terms of Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 is not provided in this Board?s Report. Your Company is vigilant on the need for conservation of energy.

The Nomination and 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/ investor-relations/corporate-governance#subcategory-policies.

The Company has a Whistle blower Policy in compliance with the provisions of Section 177(10) of the Act and Regulation 22 of the SEBI Listing Regulations and the same has been hosted on the website of the Company at https://www.ugrocapital.com/ investor-relations/corporate-governance#subcategory-policies. Any incidents that are reported are investigated and suitable action is taken in line with the said Policy. A report indicating the number of cases reported, investigations conducted including the status update is presented before the Audit Committee, on a quarterly basis. All incidents that are reported are investigated and suitable action is taken in line with the Whistle Blower Policy. 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.

The Company has adopted a Code of Conduct for the 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 Code requires pre-clearance for dealing in the Company?s shares and prohibits the purchase or sale of Company shares 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 the implementation of the Code. The Code is available on the website of the company at https://www.ugrocapital.com/corporate-governance.

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 31^st March 2024 is as follows:

M/s Sharp and Tannan, Chartered Accountants (Firm Registration No. 109983W) was appointed as Statutory Auditors at the 30^th Annual General Meeting ("AGM") held on 8^th August 2023 for a period of three years commencing from the conclusion of the 30^th AGM till the conclusion of 33^rd 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.

The internal audit function provides an assurance to the Audit Committee/Board of Directors and the Senior Management on the quality and effectiveness of Company?s internal controls, risk management and governance related systems and processes. At the beginning of each financial year, an audit plan is rolled out after approval of the Audit Committee. The Audit Committee on a quarterly basis reviews the internal audit reports based on the approved plan, which includes significant audit observations, and action taken reports. The Committee also has independent meetings with the internal auditors without the presence of Management.

Your Company has engaged KKC & Associates, Chartered Accountants, to support the internal audit department of the Company in performing internal audit as per the scope approved by the Audit Committee of the Company.

In terms of Section 204 of the Act and Rules made there under, Pankaj Nigam & Associates, Company Secretaries, has been appointed as the Secretarial Auditor of the Company. The report of the Secretarial Auditor for the financial year 2023-24 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 Non- Disqualification of Directors from Pankaj Nigam & Associates, Company Secretaries. The same is enclosed as Annexure III to this report.

There has been no change in the nature of business of the Company during the financial year ended 31^st March 2024.

Duringtheyear,yourCompanyhasnotcarriedoutanyacquisition, merger, expansion, modernization and diversification.

Pursuant to Section 92(3) read with Section 134(3) (a) of the Act, the Annual Return as on 31^st March, 2024 is available on the Company?s website at https://www.ugrocapital.com/ investor-relations/annual-reports.

The Board of Directors of the Company has formed a Risk Management Committee ("RMC") 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/investor-relations/corporate-governance#subcategory-policies. Further details on RMC are furnished in the Corporate Governance Report.

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 financial year 2023-24, the Company has granted 4,90,000 stock options under ESOS 2017 and 2,01,980 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 ("SBEB"), 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/annual-reports.

The certificate from secretarial auditor, M/s Pankaj Nigam & Associates, Company Secretaries confirming implementation of the ESOS Schemes in accordance with the SBEB will be available for inspection of the shareholders at the ensuing Annual General Meeting.

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/investor-relations/ corporate-governance#subcategory-policies.

During the year, the Company has spent Rs. 35.44 lakhs on CSR activities. A report pursuant to Section 135 of the Act & Rules made thereunder is annexed to this report as an Annexure I.

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

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

Your Company is not required to maintain cost records in terms of Section 148(1) of the Act.

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.

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.

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 one-time settlement with any Bank or Financial Institution.

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.