Notes to Accounts of Ugro Capital Ltd.

Mar 31, 2025

(9) Provisions, contingent liabilities and contingent assets

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable
that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end
of the reporting period, considering the risks and uncertainties surrounding the obligation. When a provision is measured using the
cash flows estimated to settle the present obligation, it''s carrying amount is the present value of those cash flows (when the effect
of the time value of money is material).

A contingent liability is disclosed unless the possibility of an outflow of resources embodying the economic benefits is remote.
Contingent assets are neither recognised nor disclosed in the financial statements.

Provisions, contingent liabilities, and contingent assets are reviewed at each balance sheet date and adjusted to reflect the current
best estimates.

(10) Commitments

Commitments are future liabilities for contractual expenditure, classified and disclosed as follows:

(a) estimated amount of contracts remaining to be executed on capital account and not provided for;

(b) uncalled liability on shares and other investments partly paid;

(c) funding related commitment to associate companies; and

(d) other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of the
management.

(11) Foreign currencies

(i) The functional currency and presentation currency of the Company is Indian Rupee (Rs.). Functional currency of the Company
has been determined based on the primary economic environment in which the Company operates considering the currency
in which funds are generated, spent and retained.

(ii) Transactions in currencies other than the Company''s functional currency are recorded on initial recognition using the exchange
rate at the transaction date. At each balance sheet date, foreign currency monetary items are reported at the prevailing closing
spot rate. Non-monetary items that are measured in terms of historical cost in foreign currency are not retranslated.

Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each balance sheet date at
the closing spot rate are recognised in the statement of profit and loss in the period in which they arise.

(12) Cash and cash equivalents

Cash and cash equivalents include cash at banks and cash on hand, demand deposits with banks, other short-term highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.

(13) Segment reporting

Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating
decision making body in the Company to make decisions for performance assessment and resource allocation. The reporting of
segment information is the same as provided to the management for the purpose of the performance assessment and resource
allocation to the segments. Segment accounting policies are in line with the accounting policies of the Company.

(14) Financial instruments

(a) Recognition of financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the
financial instruments.

(b) Initial measurement of financial instruments

Financial assets and financial liabilities are initially measured at fair value. However, trade receivables that do not contain a significant
financing component are measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue
of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted
from their respective fair value on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or
financial liabilities at FVTPL are recognised immediately in the statement of profit and loss.

A financial asset and a financial liability is offset and presented on a net basis in the balance sheet when there is a current legally
enforceable right to set-off the recognised amounts and it is intended to either settle on net basis or to realise the asset and settle
the liability simultaneously.

(c) Classification and subsequent measurement of financial instruments
Financial assets

All regular way purchases or sales of financial assets are recognised and derecognised on a trade-date basis. Regular way
purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by
regulation or convention in the marketplace.

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the
classification of the financial assets.

- Financial assets carried at amortised cost (AC)

A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to
collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.

Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for debt instruments that
are designated as at fair value through profit or loss on initial recognition).

• the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and

• the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.

Effective Interest Rate Method

The Effective Interest Rate Method is a method of calculating the amortized cost of a debt instrument and of allocating interest income
over the relevant period. The Effective Interest Rate is the rate that exactly discounts estimated future cash receipts (including all
fees that form an integral part of the effective interest rate, transaction costs and premiums or discounts) through the expected life
of the instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

- Financial assets at fair value through other comprehensive income (FVTOCI)

A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets and the contractual terms of the financial asset gives rise on specified dates to
cash flows that are solely payments of principal and interest on the principal amount outstanding.

Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income
(except for debt instruments that are designated as at fair value through profit or loss on initial recognition):

• the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling
financial assets; and

• the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.

Movements in the carrying amount of such financial assets are recognised in other comprehensive income (OCI). When the
investment is disposed-off, the cumulative gain or loss previously accumulated in this reserve is reclassified to the statement of
profit and loss.

- Financial assets at fair value through profit or loss (FVTPL)

A financial asset which is not classified in any of the above categories is measured at FVTPL.

Debt instruments that do not meet the amortised cost criteria or FVTOCI criteria are measured at FVTPL. In addition, debt instruments
that meet the amortised cost criteria or the FVTOCI criteria but are designated at FVTPL are measured at FVTPL.

A financial asset that meets the amortised cost criteria or debt instruments that meet the FVTOCI criteria may be designated at
FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency
that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases.

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on
remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest
earned on the financial asset and is included in the ''Revenue from operations'' line item.

Impairment of financial assets

The Company applies the expected credit loss model for recognising impairment loss on financial assets measured at amortised
cost, debt instruments at FVTOCI and other contractual rights to receive cash or other financial assets.

Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit
loss is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the
cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate (or credit-
adjusted effective interest rate for purchased or originated credit-impaired financial assets). The Company estimates cash flows by
considering all contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) through
the expected life of that financial instrument.

For loans, cash credit and term loans measured at amortised cost

(1) Definition of default:

A default shall be considered to have occurred when any of the following criteria are met:

i) An account shall be tagged as NPA once the day end process is completed for the 91^st day past due.

ii) If one facility of borrower is NPA, all the facilities of that borrower are to be treated as NPA.

For the purpose of counting of days past due for the assessment of default, special dispensations in respect of any class of assets,
if any (e.g. under COVID-19 relief package of RBI) are applied in line with the notification by the RBI in this regard.

(2) Portfolio segmentation:

The entire portfolio is segmented into homogenous risk segments. Common factors for segmentation includes asset classes,
internal rating grade, size, geography, product etc.

(3) Probability of Default (PD):

An internally developed statistical model that computes rating at a loan level and categorizes them from Least Risk to High Risk
is used for the computation of PD. These internal credit score bands along with external default performance from bureau have
been observed and calibrated to derive benchmarked 12-month PD rates. These benchmarked 12-month PD rates have been
categorized across 5 Bands viz Risk Band 1 (RB1 - Least Risk) to Risk Band 5 (RB5 - Highest Risk) for secured and unsecured
asset types respectively.

Since, PD benchmarks for each Risk band have been determined separately for “Secured” and “Unsecured” category, therefore,
from a segmentation point, all the business segments are classified into either Secured or Unsecured category. Business segments,
wherever risk coverage is available, is factored over and above the PD benchmarks depending on the nature of coverage.

The PD applied in the ECL (Expected Credit Loss) computation model is based on the recomputed/refreshed/updated Risk band/
rating at a loan level. All the loans are rated and Risk Bands are recomputed every quarter using the latest credit bureau scrub. For
the loan disbursed in the current/latest quarter, wherever the band from credit bureau scrub is not available, the Risk Band at point
of origination is applied. Wherever the band is not available at a loan level (either at origination/scrub), the average PD across the 5
Risk Bands shall be applicable for the respective Secured and Unsecured categories.

The 12-month PD shall continue to be applicable in calculating expected credit loss for Stage 1 assets and Lifetime PD shall be
applicable for Stage 2 assets.

Life-time PD:

Life-time PD is applied for Stage 2 accounts.

Life-time PDs are computed based on survival approach. Survival analysis is statistics for analysing the expected duration of time
until default event happens.

(4) Loss given default:

Loss given default (LGD) is defined as the expected/estimated amount or percentage of exposure that may not be recovered when
a loan defaults. UGRO Capital Limited calculates LGD at a loan level considering the type of advance (Secured/Unsecured) & the
collateral (financial/ property/ machine/ physical) available.

Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire or when it transfers
the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

If the Company enters into transactions whereby it transfers assets recognised on its balance sheet but retains either all or
substantially all of the risks and rewards of the transferred assets, the transferred assets are not de-recognised, and the proceeds
received are recognised as a collateralised borrowing.

On derecognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the
consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income
and accumulated in equity is recognised in the statement of profit and loss.

Financial liabilities and equity instruments

- Classification as debt or equity

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the
substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

- Equity instruments

An Equity Instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its
liabilities.

- Compound financial instruments

The component parts of compound financial instruments issued by the Company are classified separately as financial liabilities and
equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity
instrument. A conversion option that will be settled by the exchange of a fixed amount of cash or another financial asset for a fixed
number of the Company''s own equity instruments is an equity instrument.

At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar non¬
convertible instruments. This amount is recognised as a liability on an amortised cost basis using the effective interest rate method
until extinguished upon conversion or at the instrument''s maturity date.

Financial liabilities

A financial liability is any liability that is:

> Contractual obligation:

• to deliver cash or another financial asset to another entity; or

• to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the
entity; or

> a contract that will or may be settled in the entity''s own equity instruments.

All financial liabilities are subsequently measured at amortised cost using the effective interest rate method or at FVTPL.

- Derecognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have
expired. An exchange with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of
the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an
existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment
of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the
financial liability derecognised and the consideration paid and payable is recognised in the statement of profit and loss.

Write-off

Loans and debt securities are written-off when the Company has no reasonable expectations of recovering the financial asset
(either in its entirety or a portion of it). This is the case when the Company determines that the borrower does not have assets or
sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. A write-off constitutes a
de-recognition event. The Company may apply enforcement activities to financial assets written-off. Recoveries resulting from the
Company''s enforcement activities will result in impairment gains.

(15) Derivative financial instruments

The Company enters into derivative financial instruments to manage its exposure to interest rate risk and foreign exchange rate risk.
Derivatives held include interest rate swaps and cross-currency interest rate swaps.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured
to their fair value at each balance sheet date. The resulting gain/loss is recognised in the statement of profit and loss immediately
unless the derivative is designated and is effective as a hedging instrument, in which event the resulting gain/loss is recognised
through other comprehensive income (OCI). The Company designates certain derivatives as hedges of highly probable forecast
transactions (cash flow hedges). A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a
negative fair value is recognised as a financial liability.

(16) Hedge

The Company makes use of derivative instruments to manage exposures to interest rate and foreign currency. In order to manage
particular risks, the Company applies hedge accounting for transactions that meet specific criteria. At the inception of a hedge
relationship, the Company formally designates and documents the hedge relationship to which the Company wishes to apply hedge
accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes the Company''s
risk management objective and strategy for undertaking hedge, the hedging/ economic relationship, the hedged item or transaction,
the nature of the risk being hedged, hedge ratio and how the Company would assess the effectiveness of changes in the hedging
instrument''s fair value in offsetting the exposure to changes in the hedged item''s fair value or cash flows attributable to the hedged
risk. Such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash flows and are assessed
on an on-going basis to determine that they actually have been highly effective throughout the financial reporting periods for which
they were designated.

(17) Cash flow hedge

A cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with
a recognised asset or liability (such as all or some future interest payments on variable rate debt) or a highly probable forecast
transaction and could affect the statement of profit and loss. For designated and qualifying cash flow hedges, the effective portion of
the cumulative gain or loss on the hedging instrument is initially recognised directly in OCI within equity (cash flow hedge reserve).
The ineffective portion of the gain or loss on the hedging instrument is recognised immediately in finance cost in the statement
of profit and loss. When the hedged cash flow affects the statement of profit and loss, the effective portion of the gain or loss
on the hedging instrument is recorded in the corresponding income or expense line of the statement of profit and loss. When a
hedging instrument expires, is sold, terminated, exercised, or when a hedge no longer meets the criteria for hedge accounting, any
cumulative gain or loss that has been recognised in OCI at that time remains in OCI and is recognised when the hedged forecast
transaction is ultimately recognised in the statement of profit and loss. When a forecast transaction is no longer expected to occur,
the cumulative gain or loss that was reported in OCI is immediately transferred to the statement of profit and loss.

The Company''s hedging policy only allows for effective hedging relationships to be considered as hedges as per the relevant Ind
AS. Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness
assessments to ensure that an economic relationship exists between the hedged item and hedging instrument. The Company
enters into hedge relationships where the critical terms of the hedging instrument match with the terms of the hedged item, and so
a qualitative and quantitative assessment of effectiveness is performed.

(18) Non-current assets held for sale

Assets acquired in satisfaction of debt (SOD) are treated as non-current assets held for sale. Assets acquired in satisfaction of debts
are disclosed in the balance sheet at outstanding principal loan amount or fair market value (as per valuation reports) whichever is
lower. In case the fair market value of assets acquired is lower than the outstanding principal loan amount, difference is charged to
the statement of profit and loss under impairment on financial instruments. In case of sale of repossessed assets, the gain/ loss on
sale is adjusted in the statement of profit and loss under impairment on financial instruments.

(19) Earnings per share

Basic earnings per share is computed by dividing the profit/ (loss) after tax by the weighted average number of equity shares
outstanding during the year. Diluted earnings per share is computed by dividing the profit/ (loss) after tax as adjusted for dividend,
interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the
weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of
equity shares which could have been issued on the conversion of all dilutive potential equity shares.

Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share
from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period,
unless they have been issued at a later date.

(20) Statement of cash flows

The Statement of cash flows shows the changes in cash and cash equivalents arising during the year from operating activities,
investing activities and financing activities.

The cash flows from operating activities are determined by using the indirect method. Net income is therefore adjusted by non-cash
items, such as measurement gains or losses, changes in provisions, impairment of property, plant and equipment and intangible
assets, as well as changes from receivables and liabilities. In addition, all income and expenses from cash transactions that are
attributable to investing or financing activities are eliminated.

Cash and cash equivalents (including bank balances) shown in the statement of cash flows exclude items which are not available
for general use as on the date of the Balance Sheet.

(21) Recent accounting pronouncements

The Ministry of Corporate Affairs (''MCA'') notifies new standards or amendments to the existing standards under the Companies
(Indian Accounting Standards) Rules, 2015 as amended from time to time. For the year ended March 31, 2025, the MCA has notified
Ind AS 117, Insurance Contracts, and amendments to Ind AS 116, Leases, relating to sale and leaseback transactions, applicable
to the Company, w.e.f., April 1, 2024. The Company has reviewed the new pronouncements and based on its evaluation, has
determined that the new pronouncement is not applicable to the Company.

The Company has total External Commercial Borrowings (ECBs) of Rs.3,495.53 lakh, Rs. 14,014.80 lakh, Rs. 8,205.00 lakh and
Rs.67,613.50 lakh having original maturity of two, three, four and five years respectively (Previous year Rs.17,124.23 lakh, Rs.8,205.00
lakh and Rs. 12,365.00 lakh having maturity of three, four and five years respectively) for financing prospective borrowers as per
the ECB guidelines issued by the Reserve Bank of India (“RBI”) from time to time. In terms of the RBI guidelines, the borrowings
has been swapped into rupees and fully hedged for the entire maturity by way of cross currency swaps and full currency swaps. The
charges for raising of the aforesaid ECBs have been amortised over the tenure of such ECBs.

Notes:

1) The rate of interest on the above borrowings vary from 9.00% to 13.00% for the year ended March 31,2025 and for the year ended March 31,
2024.

2) The above secured borrowings are secured by hypothecation of receivables under financing activities. The Company has maintained the
required security cover.

3) Out of the above, the Company holds sanctioned borrowings amounting to Rs.213,062 lakh as at March 31,2025 (Previous year: 120,500
lakh) which is guaranteed by a director.

4) Term Loans were used fully for the purpose for which the same were obtained.

5) There was no defaults in the repayment of the borrowings.

6) The balance tenure on the above borrowings is upto 5 years.

7) The amount disclosed above represent the principal outstanding as at 31st March, 2025 and as at 31st March, 2024.

8) The quarterly returns or statements filed by the Company with banks or financial institutions or trustees are in agreement with books of
account.

An Employee Benefit Trust (''Trust'') had 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. Treasury shares are recognised at face value and deducted from Equity Share Capital to the tune of Rs. 123.83
lakh. The amount received in excess of the face value is deducted from the Securities Premium Account. Pursuant to the same, the
Company had granted 1,111,929 options on October 10, 2022 during the year ended March, 31 2023. During the year ended March
31, 2025 and March 31, 2024, there has been no secondary market acquisition by the trust.

Nature and purpose of reserves :

(i) Securities premium

Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provision
of the Companies Act, 2013.

(ii) Employee stock options scheme outstanding

The shares options outstanding is used to recognise the grant date fair value of options issued to employees under stock
option schemes of the Company.

(iii) Statutory reserves u/s 45-IC of the RBI Act, 1934

Statutory reserve fund is required to be created by a Non-Banking Financial Company as per Section 45- IC of the Reserve
Bank of India Act, 1934. The Company is not allowed to use the reserve fund except with authorisation of Reserve Bank of
India.

(iv) Capital reserve

Capital reserve comprises of the amount received on share warrants & which are forfeited by the Company for non-payment
of call money.

(v) Retained earnings - other than Remeasurement of Post Employment Benefit Obligations

Retained earnings represents surplus of accumulated earnings of the Company and which are available for distribution to
shareholders.

(vi) Retained earnings - Remeasurement of Post Employment Benefit Obligations

The Company recognises change on account of remeasurement of the net defined benefit liability (asset) as part of retained
earnings.

(vii) Cash flow hedges reserve

It represents the cumulative gains/(losses) arising on revaluation of the derivative instruments designated as cash flow hedges
through OCI.

(viii) Equity component of compound financial instruments

It represent the residual amount after deducting from the fair value of the instrument as a whole the amount separately
determined for the liability component.

(ix) Money received against share warrants

Money received against share warrant represents 25% of the total consideration received towards warrants which entails the
warrant holders, the option to apply for and be allotted equivalent number of equity shares of the face value of Rs. 10 each
by paying the remaining 75% of the total consideration within 18 months from the date of allotment of the Share Warrants.

f) Nature of CSR activities:

The Company is required to contribute towards corporate social responsibility activities as per CSR Rules under the Compa¬
nies Act, 2013. During the year, the Company has spent Rs. 1.00 lakh against Rs. 6.92 lakh after setting off the total excess
amount of Rs. 6.57 lakhs of previous years. The amount is spent towards poverty alleviation program.

II. Disclosure in relation to Undisclosed Income

There have been no transactions which have not been recorded in the books of accounts, that have been surrendered or dis¬
closed as income during the year ended March 31, 2025 and March 31, 2024 in tax assessments under the Income tax act,
1961. There have been no previously unrecorded income and related assets which were to be properly recorded in the books
of accounts during the year ended March 31, 2025 and March 31, 2024.

III. Details of Crypto currency or Virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the year ended March 31, 2025 and March
31, 2024.

39. Additional Regulatory Information (to the extent applicable and reportable)

I. Title deeds of immovable property not held in the name of the Company as at March 31, 2025:

*The borrowers had mortgaged the immovable properties with the Company to secure the loan facility. Consequent to default
in repayment of secured loan upon classification of the account as Non-Performing Asset (“NPA”), the proceedings under the
provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“The
SARFAESI Act, 2002”) are initiated, whereby the immovable property mortgaged by the borrower, is taken into possession
of the Company with or without intervention of the Court. The said properties will be sold to the prospective buyer(s) and the
sale proceeds shall be appropriated towards the dues in the respective loan account. Meanwhile, if the borrower/co-borrower
approaches to settle the dues and closes the loan account, the property may be released to them.

II. Details of Benami Property held:

No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami
Transactions (Prohibition) Act, 1988 and rules made thereunder, as at March 31, 2025 and March 31, 2024.

III. Wilful Defaulter:

The Company is not declared wilful defaulter by any bank or financial institution or other lender, in accordance with the guidelines
on wilful defaulters issued by the Reserve Bank of India during the year ended March 31, 2025 and March 31, 2024.

IV. Details pertaining to transactions with the companies struck off under section 248 of the Companies Act, 2013 or
section 560 of the Companies Act, 1956 is as follows:

The Company does not have any transactions with the struck off companies during the year ended March 31, 2025 and March
31, 2024.

VI. Analytical Ratios

(a) Capital to risk-weighted assets ratio (CRAR) - Refer Note No. 59 (a)

(b) Tier I CRAR - Refer Note No. 59 (a)

(c) Tier II CRAR - Refer Note No. 59 (a)

(d) Liquidity Coverage Ratio - Refer Note no. 50(b). Liquidity Risk.

VN.Disclosure under rule 11(e) of the Companies (Audit and Auditors) Rules, 2014:

(a) - The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources
or kind of funds) to any other person(s) or entity(ies), including foreign entities (intermediaries) with the understanding
(whether recorded in writing or otherwise) that the Intermediary shall

- directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Company (ultimate beneficiaries) or

- provide any guarantee, security or the like to or on behalf of ultimate beneficiaries.

(b) - The company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party) with the
understanding (whether recorded in writing or otherwise) that the company shall

- directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Company (ultimate beneficiaries) or

- provide any guarantee, security or the like to or on behalf of ultimate beneficiaries.

40. Earnings per share

Basic and diluted earnings per share [EPS] computed in accordance with the Ind AS 33 ‘Earnings per share'' :

Basic EPS is calculated by dividing the net profit for the year attributable to equity holders by the weighted average number of equity
shares outstanding during the year.

Diluted EPS is calculated by dividing the profit attributable to equity holders (after adjusting the profit impact of dilutive potential
equity shares, if any) by the aggregate of weighted average number of equity shares outstanding during the year and the weighted
average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at
the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the Defined Benefit Obligation as it is
unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the Defined Benefit Obligation has been calculated
using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the
Defined Benefit Obligation as recognised in the balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
c. Compensated absences

(i) The principal assumptions used for the purposes of the actuarial valuations towards Privilege Leave liability were as
follows :

46. Disclosure relating to employee stock option scheme

The Company has two employee stock option schemes viz. CSL Employee Stock Option Scheme 2017 (“ESOS 2017”) and UGRO
Capital Employee Stock Option Scheme 2022 (“ESOS 2022”).

The ESOS 2017 was approved by the Board of Directors on August 13, 2018 and by the shareholders through postal ballot on May
7, 2018. Further, the shareholders of the Company at the Extraordinary General Meeting held on September 18, 2018 approved
ratification of the number of Options under the ESOS 2017.

The ESOS 2022 was approved by the Board of Directors on July 22, 2022 and by the shareholders through postal ballot on
September 4, 2022.

During the year, the Company had issued 120,000 (previous year 691,980) options representing equal numbers of equity shares of
Rs. 10 each.

50. Financial risk management

The Company has exposure to the following risks from financial instruments:

a. Credit Risk

b. Liquidity Risk

c. Market Risk

d. Operational Risk

The Company is exposed to a variety of risks such as credit risk, liquidity risk, market risk, operational risk etc. The Company has
therefore, invested in talent, processes and emerging technologies for building advanced risk and underwriting capabilities. The
Board of Directors has constituted a Risk Management Committee to address these risks. The Risk Management Committee''s
mandate includes periodic review of the risk management policy, risk management planning, implementation and monitoring of
the risk management plan and mitigation of key risks. The risk owners are accountable to the Risk Committee for identification,
assessment, aggregation, reporting and monitoring of risks. The board of directors are responsible for providing overall risk
oversight, approving risk appetite, risk management policies and frameworks and providing adequate oversight for the decisions.

Risk Management team is engaged in defining a framework, overseeing enterprise wide risks and building a portfolio within
the risk appetite of the Company. The effective management of credit risk requires the establishment of appropriate credit risk
policies and processes. The Company has comprehensive and well-defined credit policies across various businesses, products
and segments, which encompass credit approval process for all businesses along with guidelines for mitigating the risks
associated with them. Credit underwriting is driven by a deep understanding of the selected segments, which forms proprietary
risk models and approaches. The Company believes in positive sector/sub-sector selection to source its business. The same
is done primarily through analytics and survey. Further, the Company has also developed sophisticated sector/sub-sector
scorecards, both statistical and expert. The proposals are appraised based on the understanding of these sector/sub-sectors.
A fine balance of sector knowledge, data analytics, touch and feel and digital process is used for underwriting the proposals.

Given the dynamic nature of the market, the credit policies are regularly reviewed and amended.

Management of Credit Risk

Write-off policy:

Financial assets are written-off either partially or in their entirety only when the Company has stopped pursuing the recovery.
Any subsequent recoveries are credited to impairment on financial instruments in the Statement of profit and loss. The write¬
off decisions are taken by the management which would be based on suitable justification notes presented by the responsible
business / collections team.

Credit quality analysis:

The Company''s policies for computation of expected credit loss (ECL) are set out below:

(I) ECL on Loans and advances

ECL is computed for loans portfolio of the Company:

Loan portfolio:

UGRO Capital Ltd is primarily engaged into SME lending and has segmented its lending portfolio based on the homogenous
nature of the group of borrowers.

Definition of default:

A default shall be considered to have occurred when any of the following criteria is met:

a) An account shall be tagged as NPA once the day end process is completed for the 91st day past due.

b) If one facility of a borrower is NPA, all the facilities of that borrower are to be treated as NPA.

Significant increase in credit risk (SICR) criteria:

(a) External credit rating going below investment grade rating.

(b) Significant changes in the expected performance and behaviour of the borrower, including changes in the payment
status of borrowers.

(c) Other qualitative parameters :

- existing or forecast adverse changes in business, financial or economic conditions that are expected to cause a
significant change in the borrower''s ability to meet its debt obligations.

- an actual or expected significant adverse change in the regulatory, economic, or technological environment of the
sector that results in a significant change in the sector''s ability to meet its debt obligations.

(d) Any other qualitative parameter.

A case which has scores above cut-off norms as set by the Company from time to time and current status is Stage 1 is termed
as low credit risk.

Forward looking factors:

Forward looking factors are considered while determining the significant increase in credit risk.

Staging criteria:

Following staging criteria is used for loans:

(i) Stage 1: 0-30 DPD;

(ii) Stage 2: 31-90 DPD and

(iii) Stage 3: > 90 DPD

Any deviation to the above classification, except as per the RBI Circular RBI/2021-2022/125 DOR.STR.REC.68/21.04.048/2021-
22 on Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances - Clarification
dated November 12, 2021 shall be approved by the audit committee of the board (ACB).

Probability of default (PD%)

PDs are determined using internally developed model, which is a dynamic evaluation based on repayment history, corporate
ratings, specific market estimates as applicable to the respective portfolio segments from time to time.

Loss given default (LGD%)

Loss given default (LGD) is defined as the expected/estimated amount or percentage of exposure that may not be recovered
when a loan defaults.

LGD computation for secured loans is based on an internal model which factors post default recovery rates and collateral
value; for unsecured loans, LGD is taken as a standard estimate in line with the Foundational-Internal Rating Based (F-IRB)
approach. LGD for stage 1 & 2 assets, thus determined, is subject to a minimum floor of 20%. For Stage 3 loans, the Company
determines ECL requirement based on cash flows expected over the future time period.

Exposure at default (EAD)

Exposure at default represents the outstanding balance at the reporting date taking into account expected drawdowns on
committed facilities, including repayments of principal and interest, and accrued interest from missed payments.

(II) ECL on fixed deposits, investments, trade and other receivables

With respect to the fixed deposits and investments held by the Company, ECL provisioning has been computed taking guidance
from the RBI''s IRB approach.

The Company has followed simplified approach of ECL provisioning on its trade and other receivables.

Applicable provisions for NBFCs covered under Ind AS:

The Company has prepared the financial statements in accordance with Ind AS and complied with the regulatory guidance
specified by the Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation)
Directions, 2023 issued by the Reserve Bank of India (RBI) vide their Notification No. RBI/DoR/2023-24/106 DoR.FIN.REC.
No.45/03.10.119/2023-24 dated October 19, 2023, as amended.

b. Liquidity Risk

Liquidity risk arises from the Company''s inability to meet its cash flow commitments on time. Prudent liquidity risk management
implies maintaining sufficient stock of cash and marketable securities and maintaining availability of standby funding through an
adequate line-up of committed credit facilities. The Treasury team actively manages asset and liability positions in accordance with
the overall guidelines laid down by the regulator in the Asset liability management framework. The Company continues to maintain
a positive ALM.

The Company''s ALCO monitors asset liability mismatches to ensure that there are no imbalances or excessive concentrations
on either side of the Balance Sheet. The Company continuously monitors liquidity in the market and as a part of its ALCO
strategy.

(vi) Institutional set-up for liquidity risk management :

We have an asset liability management committee (ALCO) that is formed in accordance with the Directions issued by the Reserve
Bank of India. Our Asset Liability Committee takes into account interest rate forecasts and spreads, the internal cost of funds,
operating results, projected funding needs, projected loan disbursements, liquidity position, loan loss reserves to outstanding loans,
funding strategies. This committee reviews the fund position, asset liability maturity profile, variance between forecast and actuals
of the concluded quarter, analysis of sensitivity of interest rates variation in various buckets, what if scenario analysis, etc. As far
as structural liquidity position is concerned, the Company maintained a positive cumulative mismatch across all the time buckets.

The Company has disclosed the below information as required by the Master Direction - Reserve Bank of India (Non¬
Banking Financial Company - Scale Based Regulation) Directions, 2023 issued by the Reserve Bank of India (“RBI”)
vide their Notification No. RBI/DoR/2023-24/106 DoR.FIN.REC.No.45/03.10.119/2023-24 dated October 19, 2023 (the
“Notification”), as amended, that enables the market participants to make an informed judgment about the soundness of
its liquidity risk management framework and liquidity position.

Liquidity Coverage Ratio (LCR)

C. Market Risk :

Market risk is the risk that the fair value of the future cash flows of financial instruments will fluctuate due to changes in market
variables such as interest rates.

The Company primarily deploys funds in bank deposits and liquid debt securities as a part of its liquidity management
approach. The Company regularly reviews its average borrowing/ lending cost including proportion of fixed and floating rate
borrowings/ loans so as to manage the impact of changes in interest rates.

Exposure to price risk:

The Company''s exposure to price risk arises from investments held by the Company and is classified in the Balance Sheet
through fair value through statement of Profit and Loss.

Interest rate risk:

Interest rate risk is the risk where changes in market interest rates might adversely affect the Company''s financial conditions.
The interest rate risk can be viewed from the two perspectives as mentioned below:

a. Earnings perspective - change in net interest income (NII) or net interest margin (NIM) due to change in interest rates.

b. Economic value perspective - change in market value of the company due to change in the company''s assets, liabilities
and off-balance sheet positions due to variation in interest rates.

The board has established limits on the interest rate gaps for stipulated periods. The management monitors these gaps on a
regular basis to ensure that the positions are maintained within the established limits.

* The Principal outstanding amount as on March 31, 2025 and as on March 31, 2024 respectively is considered above.

** Impact on Statement of Profit and Loss up to 1 year, holding all other variables constant.

Foreign Currency Risk

Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. Foreign
currency risk for the Company arises mainly on account of the foreign currency borrowings. The Company manages this foreign
currency risk by entering into cross-currency interest rate swaps/ full currency swaps and forward contracts. When a derivative is
entered into for the purpose of being as hedge, the company negotiates the terms of those derivatives to match with the terms of the
hedge exposure. The Company''s policy is to fully hedge its foreign currency borrowings at the time of drawdown and remain so till
repayment.

The Company holds the derivative financial instruments such as full currency swaps to mitigate the risk of changes in exchange rate
in foreign currency and floating interest rate. The counterparty for these contracts is generally a bank. These derivative financial
instruments are valued based on the quoted prices for similar assets and liabilities in active markets or inputs that are directly or
indirectly observable in the market place.

d. Operational Risk

Operational risk is the risk of loss arising from systems failure, human error, fraud or external events. When controls fail to operate
effectively, operational risks can cause damage to reputation, have legal or regulatory implications, or may lead to financial loss. The
Company cannot expect to eliminate all operational risks, but it endeavours to manage these risks through a control framework and
by monitoring and responding to potential risks. Controls include maker-checker controls, effective segregation of duties, access,
authorisation and reconciliation procedures, staff education and assessment processes, such as the use of internal audit.

Capital Management:

The Company''s capital management objective is primarily to safeguard the business continuity. The Company''s capital raising
policy is aligned to the macro-economic situations and incidental risk factors. The Company''s cashflows are regularly monitored in
sync with the annual operating plans and the long-term and other strategic investment plans. The operational funding requirements
are met through debt and operating cash flows generated. The company believes that this approach would create shareholder value
in the long run. Also, the company has adopted a conservative approach for ALM management with primacy to adequate liquidity.
At present, a large portion of the company''s resource base is equity. Therefore, the company enjoys a low gearing.

The Company maintains its capital structure in line with the economic conditions and the risk characteristics of its activities and the
board reviews the capital position on a regular basis.

d. Unrecognised deductible temporary differences, unused tax losses and unused tax credits :

There are no deductible temporary differences, unused tax losses and unused tax credits for which deferred tax assets have not
been recognised.

53. Fair value of financial instruments :

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or
most advantageous) market at the measurement date under current market conditions, regardless of whether that price is directly
observable or estimated using a valuation technique.

Ind AS 107, ''Financial Instruments - Disclosure'' requires classification of the valuation method of financial instruments measured
at fair value in the Balance sheet using a three-level fair-value-hierarchy (which reflects the significance of inputs used in the
measurements). The hierarchy gives the highest priority to un-adjusted quoted prices in active markets for identical assets or
liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair-
value-hierarchy under Ind AS 107 are described below:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques

There were no transfers between Level 1 and Level 2 during the year.

Valuation methodologies of financial instruments not measured at fair value :

Short-term financial assets and liabilities :

For financial assets and financial liabilities that are of short-term nature, the carrying amount itself is considered as its fair value.
Such instruments include: other financial assets and other financial liabilities.

Cash and cash equivalents and Bank balances other than cash and cash equivalents:

The carrying amount itself is considered as its fair value. Impairment loss allowance is not part of above disclosure.

Loans and advances to customers:

The fair values of loans and receivables are calculated using a portfolio-based approach, grouping loans as far as
possible into homogenous groups based on similar characteristics. The fair value is then extrapolated to the portfolio using
discounted cash flow models that incorporate interest rate estimates considering all significant characteristics of the loans.
For loans having contractual residual maturity less than one year, the carrying value has been considered as fair value.
Impairment loss allowance and adjustments related to effective interest rate are not part of above disclosure.

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Mar 31, 2024

(9) Provisions, contingent liabilities and contingent assets

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, considering the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, it''s carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

A contingent liability is disclosed unless the possibility of an outflow of resources embodying the economic benefits is remote. Contingent assets are neither recognised nor disclosed in the financial statements.

Provisions, contingent liabilities, and contingent assets are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

(10) Commitments

Commitments are future liabilities for contractual expenditure, classified and disclosed as follows:

(a) estimated amount of contracts remaining to be executed on capital account and not provided for;

(b) uncalled liability on shares and other investments partly paid;

(c) funding related commitment to associate companies; and

(d) other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of the management.

(11) Foreign currencies

(i) The functional currency and presentation currency of the Company is Indian Rupee (Rs.). Functional currency of the Company has been determined based on the primary economic environment in which the Company operates considering the currency in which funds are generated, spent and retained.

(ii) Transactions in currencies other than the Company''s functional currency are recorded on initial recognition using the exchange rate at the transaction date. At each balance sheet date, foreign currency monetary items are reported at the prevailing closing spot rate. Non-monetary items that are measured in terms of historical cost in foreign currency are not retranslated.

Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each balance sheet date at the closing spot rate are recognised in the statement of profit and loss in the period in which they arise.

(12) Cash and cash equivalents

Cash and cash equivalents include cash at banks and cash on hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(13) Segment reporting

Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating decision making body in the Company to make decisions for performance assessment and resource allocation. The reporting of segment information is the same as provided to the management for the purpose of the performance assessment and resource allocation to the segments. Segment accounting policies are in line with the accounting policies of the Company.

(14) Financial instruments

(a) Recognition of financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the financial instruments.

(b) Initial measurement of financial instruments

Financial assets and financial liabilities are initially measured at fair value. However, trade receivables that do not contain a significant financing component are measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial

liabilities at FVTPL) are added to or deducted from their respective fair value on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in the statement of profit and loss.

A financial asset and a financial liability is offset and presented on a net basis in the balance sheet when there is a current legally enforceable right to set-off the recognised amounts and it is intended to either settle on net basis or to realise the asset and settle the liability simultaneously.

(c) Classification and subsequent measurement of financial instruments

Financial assets

All regular way purchases or sales of financial assets are recognised and derecognised on a trade-date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

- Financial assets carried at amortised cost (AC)

A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for debt instruments that are designated as at fair value through profit or loss on initial recognition).

• the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and

• the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Effective Interest Rate Method

The Effective Interest Rate Method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The Effective Interest Rate is the rate that exactly discounts estimated future cash receipts (including all fees that form an integral part of the effective interest rate, transaction costs and premiums or discounts) through the expected life of the instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

- Financial assets at fair value through other comprehensive income (FVTOCI)

A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income (except for debt instruments that are designated as at fair value through profit or loss on initial recognition):

• the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and

• the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Movements in the carrying amount of such financial assets are recognised in other comprehensive income (OCI). When the investment is disposed-off, the cumulative gain or loss previously accumulated in this reserve is reclassified to the statement of profit and loss.

- Financial assets at fair value through profit or loss (FVTPL)

A financial asset which is not classified in any of the above categories is measured at FVTPL.

Debt instruments that do not meet the amortised cost criteria or FVTOCI criteria are measured at FVTPL. In addition, debt instruments that meet the amortised cost criteria or the FVTOCI criteria but are designated at FVTPL are measured at FVTPL.

A financial asset that meets the amortised cost criteria or debt instruments that meet the FVTOCI criteria may be designated at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases. The Company has not designated any debt instrument at FVTPL.

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the ''Revenue from operations'' line item.

Impairment of financial assets

The Company applies the expected credit loss model for recognising impairment loss on financial assets measured at amortised cost, debt instruments at FVTOCI and other contractual rights to receive cash or other financial assets.

Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). The Company estimates cash flows by considering all contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) through the expected life of that financial instrument.

For loans, cash credit and term loans measured at amortised cost

(1) Definition of default:

A default shall be considered to have occurred when any of the following criteria are met:

i) An account shall be tagged as NPA once the day end process is completed for the 91^st day past due.

ii) If one facility of borrower is NPA, all the facilities of that borrower are to be treated as NPA.

For the purpose of counting of days past due for the assessment of default, special dispensations in respect of any class of assets, if any (e.g. under COVID-19 relief package of RBI) are applied in line with the notification by the RBI in this regard.

(2) Portfolio segmentation:

The entire portfolio is segmented into homogenous risk segments. Common factors for segmentation includes asset classes, internal rating grade, size, geography, product etc.

(3) Probability of Default (PD):

An internally developed statistical model that computes rating at a loan level and categorizes them from Least Risk to High Risk is used for the computation of PD. These internal credit score bands along with external default performance from bureau have been observed and calibrated to derive benchmarked 12-month PD rates. These benchmarked 12-month PD rates have been categorized across 5 Bands viz Risk Band 1 (RB1 -Least Risk) to Risk Band 5 (RB5 - Highest Risk) for secured and unsecured asset types respectively.

Since, PD benchmarks for each Risk band have been determined separately for “Secured” and “Unsecured” category, therefore, from a segmentation point, all the business segments are classified into either Secured or Unsecured category. Business segments, wherever risk coverage is available, is factored over and above the PD benchmarks depending on the nature of coverage.

The PD applied in the ECL (Expected Credit Loss) computation model is based on the recomputed/refreshed/ updated Risk band/rating at a loan level. All the loans are rated and Risk Bands are recomputed every quarter using the latest credit bureau scrub. For the loan disbursed in the current/latest quarter, wherever the band from credit bureau scrub is not available, the Risk Band at point of origination is applied. Wherever the band is not available at a loan level (either at origination/scrub), the average PD across the 5 Risk Bands shall be applicable for the respective Secured and Unsecured categories.

The 12-month PD shall continue to be applicable in calculating expected credit loss for Stage 1 assets and Lifetime PD shall be applicable for Stage 2 assets.

Life-time PD:

Life-time PD is applied for Stage 2 accounts.

Life-time PDs are computed based on survival approach. Survival analysis is statistics for analysing the expected duration of time until default event happens.

(4) Loss given default:

Loss given default (LGD) is defined as the expected/estimated amount or percentage of exposure that may not be recovered when a loan defaults. UGRO Capital Limited calculates LGD at a loan level considering the type of advance (Secured/Unsecured) & the collateral (financial/ property/ machine/ physical) available.

Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

If the Company enters into transactions whereby it transfers assets recognised on its balance sheet but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not de-recognised, and the proceeds received are recognised as a collateralised borrowing.

On derecognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in the statement of profit and loss.

Financial liabilities and equity instruments

- Classification as debt or equity

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

- Equity instruments

An Equity Instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.

- Compound financial instruments

The component parts of compound financial instruments issued by the Company are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. A conversion option that will be settled by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Company''s own equity instruments is an equity instrument.

At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible instruments. This amount is recognised as a liability on an amortised cost basis using the effective interest rate method until extinguished upon conversion or at the instrument''s maturity date.

Financial liabilities

A financial liability is any liability that is:

> Contractual obligation:

• to deliver cash or another financial asset to another entity; or

• to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the entity; or

> a contract that will or may be settled in the entity''s own equity instruments.

All financial liabilities are subsequently measured at amortised cost using the effective interest rate method or at FVTPL.

- Derecognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired. An exchange with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in the statement of profit and loss.

Write-off

Loans and debt securities are written-off when the Company has no reasonable expectations of recovering the financial asset (either in its entirety or a portion of it). This is the case when the Company determines that the borrower does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. A write-off constitutes a de-recognition event. The Company may apply enforcement activities to financial assets written-off. Recoveries resulting from the Company''s enforcement activities will result in impairment gains.

(15) Derivative financial instruments

The Company enters into derivative financial instruments to manage its exposure to interest rate risk and foreign exchange rate risk. Derivatives held include interest rate swaps and cross-currency interest rate swaps.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each balance sheet date. The resulting gain/loss is recognised in the statement of profit and loss immediately unless the derivative is designated and is effective as a hedging instrument, in which event the resulting gain/loss is recognised through other comprehensive income (OCI). The Company designates certain derivatives as hedges of highly probable forecast transactions (cash flow hedges). A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a negative fair value is recognised as a financial liability.

(16) Hedge

The Company makes use of derivative instruments to manage exposures to interest rate and foreign currency. In order to manage particular risks, the Company applies hedge accounting for transactions that meet specific criteria. At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which the Company wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes the Company''s risk management objective and strategy for undertaking hedge, the hedging/ economic relationship, the hedged item or transaction, the nature of the risk being hedged, hedge ratio and how the Company would assess the effectiveness of changes in the hedging instrument''s fair value in offsetting the exposure to changes in the hedged item''s fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash flows and are assessed on an on-going basis to determine that they actually have been highly effective throughout the financial reporting periods for which they were designated.

(17) Cash flow hedge

A cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with a recognised asset or liability (such as all or some future interest payments on variable rate debt) or a highly probable forecast transaction and could affect the statement of profit and loss. For designated and qualifying cash flow hedges, the effective portion of the cumulative gain or loss on the hedging instrument is initially recognised directly in OCI within equity (cash flow hedge reserve). The ineffective portion of the gain or loss on the hedging instrument is recognised immediately in finance cost in the statement of profit and loss. When the hedged cash flow affects the statement of profit and loss, the effective portion of the gain or loss on the hedging instrument is recorded in the corresponding income or expense line of the statement of profit and loss. When a hedging instrument expires, is sold, terminated, exercised, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss that has been recognised in OCI at that time remains in OCI and is recognised when the hedged forecast transaction is ultimately recognised in the statement of profit and loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in OCI is immediately transferred to the statement of profit and loss.

The Company''s hedging policy only allows for effective hedging relationships to be considered as hedges as per the relevant Ind AS. Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument. The Company enters into hedge relationships where the critical terms of the hedging instrument match with the terms of the hedged item, and so a qualitative and quantitative assessment of effectiveness is performed.

(18) Non-current assets held for sale

Assets acquired in satisfaction of debt (SOD) are treated as non-current assets held for sale. Assets acquired in satisfaction of debts are disclosed in the balance sheet at outstanding principal loan amount or fair market value (as per valuation reports) whichever is lower. In case the fair market value of assets acquired is lower than the outstanding principal loan amount, difference is charged to the statement of profit and loss under impairment on financial instruments. In case of sale of repossessed assets, the gain/ loss on sale is adjusted in the statement of profit and loss under impairment on financial instruments.

(19) Earnings per share

Basic earnings per share is computed by dividing the profit/ (loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit/ (loss) after tax as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date.

(20) Statement of cash flows

The Statement of cash flows shows the changes in cash and cash equivalents arising during the year from operating activities, investing activities and financing activities.

The cash flows from operating activities are determined by using the indirect method. Net income is therefore adjusted by non-cash items, such as measurement gains or losses, changes in provisions, impairment of property, plant and equipment and intangible assets, as well as changes from receivables and liabilities. In addition, all income and expenses from cash transactions that are attributable to investing or financing activities are eliminated.

Cash and cash equivalents (including bank balances) shown in the statement of cash flows exclude items which are not available for general use as on the date of the Balance Sheet.

(21) Recent accounting pronouncements

The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Amendment Rules, 2023 dated 31^st March 2023 to amend the following Ind-AS which are effective for annual periods beginning on or after 1^st April 2023. The Company has applied these amendments for the first time in the financial statements.

(a) Amendments to Ind-AS 1 - disclosure of accounting policies

The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their ''significant'' accounting policies with a requirement to disclose their ''material'' accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.

The amendments have had an impact on the disclosures of accounting policies, but not on the measurement, recognition or presentation of any items in the financial statements.

(b) Amendments to Ind-AS 8 - definition of accounting estimates

The amendments clarify the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors. It has also been clarified how entities use measurement techniques and inputs to develop accounting estimates.

The amendments had no impact on these financial statements.

(c) Amendments to Ind-AS 12 - deferred tax related to assets and liabilities arising from a single transaction

The amendments narrow the scope of the initial recognition exception under Ind-AS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as leases.

The Company has previously recognized deferred tax on leases on a net basis. As a result of these amendments, the Company has recognized a separate deferred tax asset in relation to its lease liabilities and a deferred tax liability in relation to its right-of-use assets. Since these balances qualify for offset as per the requirements of paragraph 74 of Ind-AS 12, there is no impact on the balance sheet. There was also no impact on the opening retained earnings as at 1^st April 2022.

Nature and purpose of reserves :

(i) Securities Premium Account:

Securities premium account is used to record the premium on issue of shares. The reserve is utilised in accordance with the provision of the Companies Act, 2013.

(ii) Employee stock options scheme outstanding:

The shares options outstanding account is used to recognise the grant date fair value of options issued to employees under stock option schemes of the Company.

(iii) Statutory reserves u/s 45-IC of the RBI Act, 1934:

Statutory reserve fund is required to be created by a Non-Banking Financial Company as per Section 45- IC of the Reserve Bank of India Act, 1934. The Company is not allowed to use the reserve fund except with authorisation of Reserve Bank of India.

(iv) Capital Reserve:

Capital reserve comprises of the amount received on share warrants and which are forfeited by the Company for non-payment of call money.

(v) Retained earnings - other than remeasurement of post employement benefit obligations:

Retained earnings represents surplus of accumulated earnings of the Company and which are available for distribution to shareholders.

(vi) Retained earnings - Remeasurement of post employement benefit obligations:

The Company recognises change on account of remeasurement of the net defined benefit liability (asset) as part of retained earnings.

(vii) Cash Flow Hedges Reserve:

It represents the cumulative gains/ (losses) arising on revaluation of the derivative instruments designated as cash flow hedges through OCI.

f) Nature of CSR activities

The Company is required to contribute towards corporate social responsibility activities as per CSR Rules under the Companies Act, 2013. During the year, the Company has spent Rs. 35.44 lakh against Rs. 34.12 lakh which was the required amount to be spent under CSR activities. The amount is spent towards renovation, construction and restoration of Prem Mahavidhyalaya Inter College in Vrindavan, Uttar Pradesh.

II. Disclosure in relation to Undisclosed Income

There have been no transactions which have not been recorded in the books of accounts, that have been surrendered or disclosed as income during the year ended March 31, 2024 and March 31, 2023 in tax assessments under the Income tax act, 1961. There have been no previously unrecorded income and related assets which were to be properly recorded in the books of accounts during the year ended March 31,2024 and March 31,2023.

IN. Details of Crypto currency or Virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the year ended March 31,2024 and March 31,2023.

*The borrowers had mortgaged the immovable properties with the Company to secure the loan facility. Consequent to default in repayment of secured loan upon classification of the account as Non-Performing Asset (“NPA”), the proceedings under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“The SARFAESI Act, 2002”) are initiated, whereby the immovable property mortgaged by the borrower, is taken into possession of the Company with or without intervention of the Court. The said properties will be sold to the prospective buyer(s) and the sale proceeds shall be appropriated towards the dues in the respective loan account. Meanwhile, if the borrower/co-borrower approaches to settle the dues and closes the loan account, the property may be released to them.

II. Details of Benami Property held:

No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder, as at March 31, 2024 and March 31, 2023.

III. Wilful Defaulter:

The Company is not declared wilful defaulter by any bank or financial institution or other lender, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India during the year ended March 31, 2024 and March 31, 2023.

IV. Details pertaining to transactions with the companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956 is as follows:

a. The Company does not have any transactions with the struck off companies during the year ended March 31, 2024.

VI. Analytical Ratios

(a) Capital to risk-weighted assets ratio (CRAR) - Refer Note No. 60 (a)

(b) Tier I CRAR - Refer Note No. 60 (a)

(c) Tier II CRAR - Refer Note No. 60 (a)

(d) Liquidity Coverage Ratio - Refer Note no. 51(b). Liquidity Risk.

VN.Disclosure under rule 11(e) of the Companies (Audit and Auditors) Rules, 2014:

(a) The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall

- directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (ultimate beneficiaries) or

- provide any guarantee, security or the like to or on behalf of ultimate beneficiaries;

(b) The company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party) with the understanding (whether recorded in writing or otherwise) that the company shall

- directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (ultimate beneficiaries) or

- provide any guarantee, security or the like to or on behalf of ultimate beneficiaries;

41. Earnings per share

Basic and diluted earnings per share [EPS] computed in accordance with the Indian Accounting Standard (Ind AS) 33 ‘Earnings per share'' :

Basic EPS is calculated by dividing the net profit for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.

Diluted EPS is calculated by dividing the profit attributable to equity holders (after adjusting the profit impact of dilutive potential equity shares, if any) by the aggregate of weighted average number of equity shares outstanding during the year and the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

Exercise pricing formula

The exercise pricing formula for CSL employee stock option scheme 2017 and UGRO Capital employee stock option scheme 2022 is as under :

The nomination and remuneration committee shall have the authority to determine the exercise price having regard to the valuation report of an independent valuer, if any. The said committee shall in its absolute discretion, have the authority to grant the options at such discount / premium as it may deem fit.

Fair value methodology :

The binomial model of valuation is more advanced and involves the use of computational techniques. In this model, the share price is projected from the date of grant to the date of exercise using upward and downward probabilities. The probabilities are estimated from the share price volatility assumption.

The key assumptions used in Binomial model for calculating fair value under CSL employee stock option scheme 2017 and UGRO Capital employee stock option scheme 2022 with respect to various grants :

51. Financial risk management

The Company has exposure to the following risks from financial instruments:

a. Credit Risk

b. Liquidity Risk

c. Market Risk

d. Operational Risk

The Company is exposed to a variety of risks such as credit risk, liquidity risk, market risk, operational risk etc. The Company has therefore, invested in talent, processes and emerging technologies for building advanced risk and underwriting capabilities. The Board of Directors has constituted a Risk Management Committee to address these risks. The Risk Management Committee''s mandate includes periodic review of the risk management policy, risk management planning, implementation and monitoring of the risk management plan and mitigation of key risks. The risk owners are accountable to the Risk Committee for identification, assessment, aggregation, reporting and monitoring of risks. The board of directors are responsible for providing overall risk oversight, approving risk appetite, risk management policies and frameworks and providing adequate oversight for the decisions.

Risk Management team is engaged in defining a framework, overseeing enterprise wide risks and building a portfolio within the risk appetite of the Company. The effective management of credit risk requires the establishment of appropriate credit risk policies and processes. The Company has comprehensive and well-defined credit policies across various businesses, products and segments, which encompass credit approval process for all businesses along with guidelines for mitigating the risks associated with them. Credit underwriting is driven by a deep understanding of the selected segments, which forms proprietary risk models and approaches. The Company believes in positive sector/sub-sector selection to source its business. The same is done primarily through analytics and survey. Further, the Company has also developed sophisticated sector/sub-sector scorecards, both statistical and expert. The proposals are appraised based on the understanding of these sector/sub-sectors. A fine balance of sector knowledge, data analytics, touch and feel and digital process is used for underwriting the proposals.

Given the dynamic nature of the market, the credit policies are regularly reviewed and amended.

Management of Credit Risk

Write-off policy:

Financial assets are written-off either partially or in their entirety only when the Company has stopped pursuing the recovery. Any subsequent recoveries are credited to impairment on financial instruments in the Statement of profit and loss. The writeoff decisions are taken by the management which would be based on suitable justification notes presented by the responsible business / collections team.

Credit quality analysis:

The Company''s policies for computation of expected credit loss (ECL) are set out below:

(I) ECL on Loans and advances

ECL is computed for loans portfolio of the Company:

Loan portfolio:

UGRO Capital Ltd is primarily engaged into SME lending and has segmented its lending portfolio based on the homogenous nature of the group of borrowers.

Definition of default:

A default shall be considered to have occurred when any of the following criteria is met:

a) An account shall be tagged as NPA once the day end process is completed for the 91st day past due.

b) If one facility of a borrower is NPA, all the facilities of that borrower are to be treated as NPA.

Significant increase in credit risk (SICR) criteria:

(a) External credit rating going below investment grade rating.

(b) Significant changes in the expected performance and behaviour of the borrower, including changes in the payment status of borrowers.

(c) Other qualitative parameters :

- existing or forecast adverse changes in business, financial or economic conditions that are expected to cause a significant change in the borrower''s ability to meet its debt obligations.

- an actual or expected significant adverse change in the regulatory, economic, or technological environment of the sector that results in a significant change in the sector''s ability to meet its debt obligations.

(d) Any other qualitative parameter.

A case which has scores above cut-off norms as set by the Company from time to time and current status is Stage 1 is termed as low credit risk.

Forward looking factors:

Forward looking factors are considered while determining the significant increase in credit risk.

Staging criteria:

Following staging criteria is used for loans:

(i) Stage 1: 0-30 DPD;

(ii) Stage 2: 31-90 DPD and

(iii) Stage 3: > 90 DPD

Any deviation to the above classification, except as per the RBI Circular RBI/2021-2022/125 DOR.STR.REC.68/21.04.048/2021-22 on Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances - Clarification dated November 12, 2021 shall be approved by the audit committee of the board (ACB).

Probability of default (PD%)

PDs are determined using internally developed model, which is a dynamic evaluation based on repayment history, corporate ratings, specific market estimates as applicable to the respective portfolio segments from time to time.

Loss given default (LGD%)

Loss given default (LGD) is defined as the expected/estimated amount or percentage of exposure that may not be recovered when a loan defaults.

LGD computation for secured loans is based on an internal model which factors post default recovery rates and collateral value; for unsecured loans, LGD is taken as a standard estimate in line with the Foundational-Internal Rating Based (F-IRB) approach. LGD for stage 1 & 2 assets, thus determined, is subject to a minimum floor of 20%. For Stage 3 loans, the Company determines ECL requirement based on cash flows expected over the future time period.

Exposure at default (EAD)

Exposure at default represents the outstanding balance at the reporting date taking into account expected drawdowns on committed facilities, including repayments of principal and interest, and accrued interest from missed payments.

(II) ECL on fixed deposits, investments, trade and other receivables

With respect to the fixed deposits and investments held by the Company, ECL provisioning has been computed taking guidance from the RBI''s IRB approach.

The Company has followed simplified approach of ECL provisioning on its trade and other receivables.

Applicable provisions for NBFCs covered under Ind AS:

The Company has prepared the financial statements in accordance with Ind AS and complied with the regulatory guidance specified by the Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 issued by the Reserve Bank of India (RBI) vide their Notification No. RBI/DoR/2023-24/106 DoR.FIN.REC. No.45/03.10.119/2023-24 dated October 19, 2023, as updated on March 21, 2024.

b. Liquidity Risk

Liquidity risk arises from the Company''s inability to meet its cash flow commitments on time. Prudent liquidity risk management implies maintaining sufficient stock of cash and marketable securities and maintaining availability of standby funding through an adequate line-up of committed credit facilities. The Treasury team actively manages asset and liability positions in accordance with the overall guidelines laid down by the regulator in the Asset liability management framework. The Company continues to maintain a positive ALM.

The Company''s ALCO monitors asset liability mismatches to ensure that there are no imbalances or excessive concentrations on either side of the Balance Sheet. The Company continuously monitors liquidity in the market and as a part of its ALCO strategy.

54. Fair value of financial instruments :

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions, regardless of whether that price is directly observable or estimated using a valuation technique.

Ind AS 107, ''Financial Instruments - Disclosure'' requires classification of the valuation method of financial instruments measured at fair value in the Balance sheet using a three-level fair-value-hierarchy (which reflects the significance of inputs used in the measurements). The hierarchy gives the highest priority to un-adjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair-value-hierarchy under Ind AS 107 are described below:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and place limited reliance on the entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

There were no transfers between Level 1 and Level 2 during the year.

Valuation methodologies of financial instruments not measured at fair value :

Short-term financial assets and liabilities :

For financial assets and financial liabilities that are of short-term nature, the carrying amount itself is considered as its fair value. Such instruments include: other financial assets and other financial liabilities.

Loans and advances to customers:

The fair values of loans and receivables are calculated using a portfolio-based approach, grouping loans as far as possible into homogenous groups based on similar characteristics. The fair value is then extrapolated to the portfolio using discounted cash flow models that incorporate interest rate estimates considering all significant characteristics of the loans. For loans having contractual residual maturity less than one year, the carrying value has been considered as fair value. Impairment loss allowance and adjustments related to effective interest rate are not part of above disclosure.

Debt securities and Borrowings:

The fair values of these instruments are estimated by determining the price of the instrument taking into consideration the origination date, maturity date, coupon rate, actual or approximation of frequency of interest payments and incorporating the actual or estimated/ proxy yields of identical or similar instruments through the discounting factor. For instruments, having contractual residual maturity less than one year, the carrying value has been considered as fair value.

Qualitative Disclosures

I. The Company undertakes the derivative transactions to prudently hedge the risk in context of a particular borrowing or diversify sources of borrowing and to maintain fixed and floating borrowing mix. The Company does not indulge into any derivative trading transaction. The Company reviews the proposed transaction and outlines any consideration associated with the transaction, including identification of the benefits and potential risks (worst case scenario) ; an independent analysis of potential savings from the proposed transaction. The Company evaluates all the risks inherent in the transaction viz. , counter party risk , market risk, operational risk, basis risk etc.

II. Credit risk is controlled by restricting the counter parties that the Company deals with, to those who either have banking relationship with the Company or are internationally reowned or can provide sufficient information. Market/ price risk arising from the fluctuation of interest rates and foreign exchange rates or from other factors shall be closely monitored and controlled. Normally transaction entered for hedging, will run over the life of the underlying instrument, irrespective of profit or loss. Liquidity risk is controlled by restricting counter parties to those who have adequate facility, sufficient information and sizable trading capacity and capability to enter into transactions in any market around the world.

III. The respective functions of trading, confirmation and settlement should be performed by different personnel. The front-office and the back-office roles are well defined and segregated. All the derivative transactions are quarterly monitored and reviewed. All the derivative transactions have to be reported to the Board of Directors on every quarterly board meetings including their financial positions.

j. Corporate Governance (refer Corporate Governance section in the annual report)

k. Breach of covenant

During the year ended March 31, 2024 there is no breach of covenant.

Breach in terms of covenant in respect of loan availed by the Company for the year ended March 31, 2023 is as follows: JM Financial Products Limited had sanctioned a Term Loan of Rs. 4,000 lakh and had stipulated to maintain a CRAR of >20.24%, which was marginally breached by 0.01%, since the CRAR of the Company stood at 20.23% as of March 31, 2023. However, the Company has raised fresh Equity in April 2023 and therefore considering the impact of this event occurring after the Balance Sheet date (Refer Note 60 of Annual Report FY 2022-2023), there is no breach of the covenant. The maturity of the term loan is due on September 29, 2023. There is no material impact on the cost or liquidity of the Company as the Company has already complied with the covenant on a post balance sheet event basis.

l. Divergence in asset classification and provisioning

During the year ended March 31, 2024 no divergence in asset classification and provisioning has been reported.

During the year ended March 31, 2023 the Company underwent routine RBI supervision for the year ended March 31, 2019, March 31, 2020 and March 31, 2021 and no divergence in asset classification and provisioning has been reported.

70 Previous year figures have been reclassified/ regrouped wherever necessary to conform to/ with the current year classification/ disclosure.

The accompanying notes are an integral part of the financial statements.

For Sharp & Tannan Associates For and on behalf of the Board of Directors of

Chartered Accountants UGRO CAPITAL LIMITED

Firm''s Registration Number : 109983W

Tirtharaj Khot Shachindra Nath Hemant Bhargava

p_art_ner Vice Chairman & Independent Director & Chairman - Audit

Membership No : (F) 037457 ^Managⁱⁿg ^{Director Committee}

DIN : 00510618 DIN : 01922717

Kishore Kumar Lodha Satish Kumar Chelladurai

Chief Financial Officer Company Secretary

Place : Mumbai ^{Place : Mumbai}

Date : May 02,2024 Date : May 02,2024

---

Mar 31, 2023

(15) Provisions, contingent liabilities and contingent assets

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, considering the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

A Contingent liability is disclosed unless the possibility of an outflow of resources embodying the economic benefits is remote. Contingent assets are neither recognised nor disclosed in the Financial Statements.

Provisions, contingent liabilities, and contingent assets are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

(16) Commitments

Commitments are future liabilities for contractual expenditure, classified and disclosed as follows:

(a) estimated amount of contracts remaining to be executed on capital account and not provided for;

(b) uncalled liability on shares and other investments partly paid;

(c) funding related commitment to associate companies; and

(d) other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of the management.

(17) Foreign Currencies

(i) The functional currency and presentation currency of the Company is Indian Rupee (INR/ Rs.). Functional currency of the Company has been determined based on the primary economic environment in which the Company operates considering the currency in which funds are generated, spent and retained.

(ii) Transactions in currencies other than the Company''s functional currency are recorded on initial recognition using the exchange rate at the transaction date. At each Balance Sheet date, foreign currency monetary items are reported at the prevailing closing spot rate. Non-monetary items that are measured in terms of historical cost in foreign currency are not retranslated.

Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the closing spot rate are recognised in the Statement of Profit and Loss in the period in which they arise.

(18) Cash and cash equivalents

Cash and cash equivalents include cash at banks and cash on hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(19) Segment reporting

Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating decision making body in the Company to make decisions for performance assessment and resource allocation. The reporting of segment information is the same as provided to the management for the purpose of the performance assessment and resource allocation to the segments. Segment accounting policies are in line with the accounting policies of the Company.

(20) Financial Instruments

(20.1) Recognition of financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the financial instruments.

(20.2) Initial measurement of financial instruments

Financial assets and financial liabilities are initially measured at fair value. However, trade receivables that do not contain a significant financing component are measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from their respective fair value on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in the statement of profit and loss.

A financial asset and a financial liability is offset and presented on a net basis in the balance sheet when there is a current legally enforceable right to set-off the recognised amounts and it is intended to either settle on net basis or to realise the asset and settle the liability simultaneously.

(20.3) Classification and subsequent measurement of financial instruments

(20.3.1) Financial assets

All regular way purchases or sales of financial assets are recognised and derecognised on a trade-date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

(20.3.1.1) Financial assets carried at amortised cost (AC)

A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for debt instruments that are designated as at fair value through profit or loss on initial recognition).

• the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and

• the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Effective Interest Rate Method

The Effective Interest Rate Method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The Effective Interest Rate is the rate that exactly discounts estimated future cash receipts (including all fees that form an integral part of the effective interest rate, transaction costs and premiums or discounts) through the expected life of the instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

(20.3.1.2) Financial assets at fair value through other comprehensive income (FVTOCI)

A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income (except for debt instruments that are designated as at fair value through profit or loss on initial recognition):

• the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and

• the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Movements in the carrying amount of such financial assets are recognised in other comprehensive income (OCI). When the investment is disposed-off, the cumulative gain or loss previously accumulated in this reserve is reclassified to the statement of profit and loss.

(20.3.1.3) Financial assets at fair value through profit or loss (FVTPL)

A financial asset which is not classified in any of the above categories is measured at FVTPL.

Debt instruments that do not meet the amortised cost criteria or FVTOCI criteria are measured at FVTPL. In addition, debt instruments that meet the amortised cost criteria or the FVTOCI criteria but are designated at FVTPL are measured at FVTPL.

A financial asset that meets the amortised cost criteria or debt instruments that meet the FVTOCI criteria may be designated at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases. The Company has not designated any debt instrument at FVTPL.

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the ''Revenue from operations'' line item.

(20.4) Impairment of financial asset

The Company applies the expected credit loss model for recognising impairment loss on financial assets measured at amortised cost, debt instruments at FVTOCI and other contractual rights to receive cash or other financial assets.

Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). The Company estimates cash flows by considering all contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) through the expected life of that financial instrument.

A) For loans, cash credit and term loans measured at amortised cost

a) Definition of default:

A default shall be considered to have occurred when any of the following criteria are met:

a) An account shall be tagged as NPA once the day end process is completed for the 91st day past due.

b) If one facility of borrower is NPA, all the facilities of that borrower are to be treated as NPA.

For the purpose of counting of days past due for the assessment of default, special dispensations in respect of any class of assets, if any (e.g. under COVID-19 relief package of RBI) are applied in line with the notification by the RBI in this regard.

b) Portfolio segmentation:

The entire portfolio is segmented into homogenous risk segments. Common factors for segmentation includes asset classes, internal rating grade, size, geography, product etc.

c) Probability of Default (PD):

An internally developed statistical model that computes rating at a loan level & categorizes them from Least Risk to High Risk is used for the computation of PD. These internal credit score bands along with external default performance from bureau have been observed & calibrated to derive benchmarked 12-month PD rates. These benchmarked 12-month PD rates have been categorized across 5 Bands viz Risk Band 1 (RB1 - Least Risk) to Risk Band 5 (RB5 - Highest Risk) for secured & unsecured asset types respectively.

Since PD benchmarks for each Risk band have been determined separately for “Secured” and “Unsecured” category, therefore, from a segmentation point, all the business segments are classified into either Secured or Unsecured category. Business segments, wherever risk coverage is available, is factored over and above the PD benchmarks depending on the nature of coverage.

The PD applied in the ECL (Expected Credit Loss) computation model is based on the recomputed/refreshed/ updated Risk band/rating at a loan level. All the loans are rated & Risk Bands are recomputed every quarter using the latest credit bureau scrub. For the loan disbursed in the current/latest quarter, wherever the band from credit bureau scrub is not available, the Risk Band at point of origination is applied. Wherever the band is not available at a loan level (either at origination/scrub), the average PD across the 5 Risk Bands shall be applicable for the respective Secured & Unsecured categories.

The 12-month PD shall continue to be applicable in calculating expected credit loss for Stage 1 assets & Lifetime PD shall be applicable for Stage 2 assets.

Life-time PD:

Life-time PD is applied for Stage 2 accounts.

Life-time PDs are computed based on survival approach. Survival analysis is statistics for analysing the expected duration of time until default event happens.

Life-time PD is computed = (1 - (Probability of surviving in year 1) ^A remaining tenure)

d) Loss given default:

Loss given default (LGD) represents recovery from defaulted assets. Foundational-Internal Rating Based (F-IRB) approach is used for the LGD computation.

(20.5) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

If the Company enters into transactions whereby it transfers assets recognised on its balance sheet but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not de-recognised and the proceeds received are recognised as a collateralised borrowing.

On derecognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in the statement of profit and loss.

(20.6) Financial liabilities and equity instruments (20.6.1) Classification as debt or equity

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

(20.6.2) Equity instruments

An Equity Instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.

(20.6.3) Compound financial instruments

The component parts of compound financial instruments issued by the Company are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. A conversion option that will be settled by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Company''s own equity instruments is an equity instrument.

At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible instruments. This amount is recognised as a liability on an amortised cost basis using the effective interest rate method until extinguished upon conversion or at the instrument''s maturity date.

(20.6.4) Financial Liabilities

A financial liability is any liability that is::

> Contractual obligation:

• to deliver cash or another financial asset to another entity; or

• to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the entity; or

> a contract that will or may be settled in the entity''s own equity instruments.

All financial liabilities are subsequently measured at amortised cost using the effective interest rate method or at FVTPL. (20.6.4.1) Derecognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired. An exchange with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in the statement of profit and loss.

(20.6.5) Write-off

Loans and debt securities are written-off when the Company has no reasonable expectations of recovering the financial asset (either in its entirety or a portion of it). This is the case when the Company determines that the borrower does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. A write-off constitutes a de-recognition event. The Company may apply enforcement activities to financial assets written-off. Recoveries resulting from the Company''s enforcement activities will result in impairment gains.

(21) Derivative financial instruments

The Company enters into derivative financial instruments to manage its exposure to interest rate risk and foreign exchange rate risk. Derivatives held include interest rate swaps and cross-currency interest rate swaps.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each balance sheet date. The resulting gain/loss is recognised in the statement of profit and loss immediately unless the derivative is designated and is effective as a hedging instrument, in which event the resulting gain/loss is recognised through other comprehensive income (OCI). The Company designates certain derivatives as hedges of highly probable forecast transactions (cash flow hedges). A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a negative fair value is recognised as a financial liability.

(22) Hedge accounting policy

The Company makes use of derivative instruments to manage exposures to interest rate and foreign currency. In order to manage particular risks, the Company applies hedge accounting for transactions that meet specific criteria. At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which the Company wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes the Company''s risk management objective and strategy for undertaking hedge, the hedging/ economic relationship, the hedged item or transaction, the nature of the risk being hedged, hedge ratio and how the Company would assess the effectiveness of changes in the hedging instrument''s fair value in offsetting the exposure to changes in the hedged item''s fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash flows and are assessed on an on-going basis to determine that they actually have been highly effective throughout the financial reporting periods for which they were designated.

(23) Cash flow Hedges

A cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with a recognised asset or liability (such as all or some future interest payments on variable rate debt) or a highly probable forecast transaction and could affect the statement of profit and loss. For designated and qualifying cash flow hedges, the effective portion of the cumulative gain or loss on the hedging instrument is initially recognised directly in OCI within equity (cash flow hedge reserve). The ineffective portion of the gain or loss on the hedging instrument is recognised immediately in Finance Cost in the statement of profit and loss. When the hedged cash flow affects the statement of profit and loss, the effective portion of the gain or loss on the hedging instrument is recorded in the corresponding income or expense line of the statement of profit and loss. When a hedging instrument expires, is sold, terminated, exercised, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss that has been recognised in OCI at that time remains in OCI and is recognised when the hedged forecast transaction is ultimately recognised in the statement of profit and loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in OCI is immediately transferred to the statement of profit and loss.

The Company''s hedging policy only allows for effective hedging relationships to be considered as hedges as per the relevant Ind AS. Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument. The Company enters into hedge relationships where the critical terms of the hedging instrument match with the terms of the hedged item, and so a qualitative and quantitative assessment of effectiveness is performed.

(24) Non-current assets held for sale

Assets acquired in satisfaction of debt (SOD) are treated as non-current assets held for sale. Assets acquired in satisfaction of debts are disclosed in the Balance Sheet at outstanding principal loan amount or fair market value (as per valuation reports) whichever is lower. In case the fair market value of assets acquired is lower than the outstanding principal loan amount, difference is charged to the statement of Profit and loss under impairment on financial instruments. In case of sale of repossessed assets, the gain/ loss on sale is adjusted in the statement of profit and loss under impairment on financial instruments.

(25) Key accounting judgements and key sources of estimation uncertainty

The preparation of financial statements in conformity with Ind AS requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates include useful lives of property, plant and equipment & intangible assets, expected credit loss on loan books, future obligations in respect of retirement benefit plans, fair value measurement etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are known.

(26) Earnings per share

Basic earnings per share is computed by dividing the profit/ (loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit/ (loss) after tax as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive

potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date.

(27) Cash Flow Statement

The Cash Flow Statement shows the changes in cash and cash equivalents arising during the year from operating activities, investing activities and financing activities.

The cash flows from operating activities are determined by using the indirect method. Net income is therefore adjusted by non-cash items, such as measurement gains or losses, changes in provisions, impairment of property, plant and equipment and intangible assets, as well as changes from receivables and liabilities. In addition, all income and expenses from cash transactions that are attributable to investing or financing activities are eliminated.

Cash and cash equivalents (including bank balances) shown in the Cash Flow Statement exclude items which are not available for general use as on the date of the Balance Sheet.

(28) Standards issued but not yet effective

No new standard as notified by the Ministry of Corporate Affairs (“MCA”), through Companies (Indian Accounting Standards) Amendment Rules, 2019 and Companies (Indian Accounting Standards) Second Amendment Rules are effective for the current year.

2. Corporate Information

UGRO Capital Limited (''the Company''), is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is a systemically important non-deposit taking Non-Banking Financial Company (''NBFC-ND-SI'') as defined under Section 45-IA of the Reserve Bank of India Act, 1934 under registration no. 13.00325. The Company is engaged in the business of lending and primarily deals in financing MSME sector with focus on Healthcare, Education, Chemicals, Food Processing/FMCG, Hospitality, Electrical Equipment & Components, Auto Components and Light Engineering segments.

Nature and purpose of reserves :

(i) Securities Premium Account:

Securities premium account is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

(ii) Employee stock options scheme outstanding:

The shares options outstanding account is used to recognise the grant date fair value of options issued to employees under the stock option schemes of the Company.

(iii) Statutory reserves u/s 45-IC of the RBI Act, 1934:

Statutory reserve fund is required to be created by a Non-Banking Financial Company as per Section 45- IC of the Reserve Bank of India Act, 1934. The Company is not allowed to use the reserve fund except with authorisation of the Reserve Bank of India.

(iv) Capital Reserve:

Capital reserve comprises of the amount received on share warrants and which are forfeited by the Company for non-payment of call money.

(v) Retained earnings - other than remeasurement of post employement benefit obligations:

Retained earnings represents surplus of accumulated earnings of the Company and which are available for distribution to shareholders.

(vi) Retained earnings - Remeasurement of post employement benefit obligations:

The Company recognises change on account of remeasurement of the net defined benefit liability (asset) as a part of the retained earnings.

(vii) Cash Flow Hedges Reserve:

It represents the cumulative gains/ (losses) arising on revaluation of the derivative instruments designated as cash flow hedges through OCI.

The Company is exposed to a variety of risks such as credit risk, liquidity risk, market risk, operational risk etc. The Company has therefore, invested in talent, processes and emerging technologies for building advanced risk and underwriting capabilities. The Board of Directors has constituted a Risk Management Committee to address these risks. The Risk Management Committee''s mandate includes periodic review of the risk management policy, risk management planning, implementation and monitoring of the risk management plan and mitigation of key risks. The risk owners are accountable to the Risk Committee for identification, assessment, aggregation, reporting and monitoring of risks. The board of directors are responsible for providing overall risk oversight, approving risk appetite, risk management policies and frameworks and providing adequate oversight for the decisions.

a. Credit Risk

Risk Management team is engaged in defining a framework, overseeing enterprise wide risks and building a portfolio within the risk appetite of the Company. The effective management of credit risk requires the establishment of appropriate credit risk policies and processes. The Company has comprehensive and well-defined credit policies across various businesses, products and segments, which encompass credit approval process for all businesses along with guidelines for mitigating the risks associated with them. Credit underwriting is driven by a deep understanding of the selected segments, which forms proprietary risk models and approaches. The Company believes in positive sector/sub-sector selection to source its business. The same is done primarily through analytics and survey. Further, the Company has also developed sophisticated sector/sub-sector scorecards, both statistical and expert. The proposals are appraised based on the understanding of these sector/sub-sectors. A fine balance of sector knowledge, data analytics, touch and feel and digital process is used for underwriting the proposals.

Given the dynamic nature of the market, the credit policies are regularly reviewed and amended.

Management of Credit Risk

Write off policy :

Financial assets are written-off either partially or in their entirety only when the Company has stopped pursuing the recovery. Any subsequent recoveries are credited to impairment on financial instruments in the Statement of profit and loss. The write-off decisions are taken by the management which would be based on suitable justification notes presented by the responsible business / collections team.

Credit quality analysis :

The Company''s policies for computation of expected credit loss (ECL) are set out below:

(I) ECL on Loans and advances

ECL is computed for loans and investments portfolio of the Company:

Loan portfolio :

UGRO Capital Ltd is primarily engaged into SME lending and has segmented its lending portfolio based on the homogenous nature of the group of borrowers.

Definition of default :

A default shall be considered to have occurred when any of the following criteria is met:

a) An account shall be tagged as NPA once the day end process is completed for the 91st day past due.

b) If one facility of a borrower is NPA, all the facilities of that borrower are to be treated as NPA.

Significant increase in credit risk (SICR) criteria :

(a) External credit rating going below investment grade rating.

(b) Significant changes in the expected performance and behavior of the borrower, including changes in the payment status of borrowers.

(c) Other qualitative parameters :

- existing or forecast adverse changes in business, financial or economic conditions that are expected to cause a significant change in the borrower''s ability to meet its debt obligations.

- an actual or expected significant adverse change in the regulatory, economic, or technological environment of the sector that results in a significant change in the sector''s ability to meet its debt obligations.

(d) Any other qualitative parameter.

Definition of low credit risk :

A case which has scores above cut-off norms as set by the Company from time to time and current status is Stage 1 is termed as low credit risk.

Forward looking factors :

Forward looking factors are considered while determining the significant increase in credit risk.

Staging criteria :

Following staging criteria is used for loans :

(i) Stage 1: 0-30 DPD;

(ii) Stage 2: 31-90 DPD and

(iii) Stage 3: > 90 DPD

Any deviation to the above classification, except as per the RBI Circular RBI/2021-2022/125 DOR.STR.REC.68/21.04.048/2021-22 on Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances - Clarification dated November 12, 2021 shall be approved by the audit committee of the board (ACB).

Probability of default (PD%)

PDs are determined using internally developed model, which is a dynamic evaluation based on repayment history, corporate ratings, specific market estimates as applicable to the respective portfolio segments from time to time.

Loss given default (LGD%)

Loss given default (LGD) represents recovery from defaulted assets.

LGD computation for secured loans is based on an internal model which factors post default recovery rates and collateral value; for unsecured loans, LGD is taken as a standard estimate in line with the Foundational-Internal Rating Based (F-IRB) approach. LGD for stage 1 & 2 assets, thus determined, is subject to a minimum floor of 20%. For Stage 3 loans, the Company determines ECL requirement based on cash flows expected over the future time period.

Exposure at default (EAD)

Exposure at default represents the outstanding balance at the reporting date taking into account expected drawdowns on committed facilities, including repayments of principal and interest, and accrued interest from missed payments.

(II) ECL on fixed deposits, investments, trade and other receivables

With respect to the fixed deposits and investments held by the Company, ECL provisioning has been computed taking guidance from the RBI''s IRB approach.

The Company has followed simplified approach of ECL provisioning on its trade and other receivables.

Applicable provisions for NBFCs covered under Ind AS:

RBI vide circular no. RBI/2019-20/170 DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated March 13, 2020, provides that NBFCs which are required to comply with Indian Accounting Standards (Ind AS) shall, as hitherto, continue to be guided by the guidelines duly approved by their board and as per the ICAI guidelines for recognition of the impairments. The Company follows the aforesaid circular.

(vi) Institutional set-up for liquidity risk management :

The Company has an asset liability management committee (ALCO) that is formed in accordance with the Directions issued by the Reserve Bank of India. The asset liability committee takes into account interest rate forecasts and spreads, the internal cost of funds, operating results, projected funding needs, projected loan disbursements, liquidity position, loan loss reserves to outstanding loans, funding strategies. This committee reviews the fund position, asset liability maturity profile, variance between forecast and actuals of the concluded quarter, analysis of sensitivity of interest rates variation in various buckets, what if scenario analysis, etc. The Company maintains a positive cumulative mismatch in all buckets.

C. Market Risk :

Market risk is the risk that the fair value of the future cash flows of financial instruments will fluctuate due to changes in market variables such as interest rates.

The Company primarily deploys funds in bank deposits and liquid debt securities as a part of its liquidity management approach. The Company regularly reviews its average borrowing / lending cost including proportion of fixed and floating rate borrowings / loans so as to manage the impact of changes in interest rates.

Exposure to price risk :

The Company''s exposure to price risk arises from investments held by the Company and is classified in the Balance Sheet through fair value through statement of Profit and Loss.

Interest rate risk :

Interest rate risk is the risk where changes in market interest rates might adversely affect the Company''s financial conditions. The interest rate risk can be viewed from the two perspectives as mentioned below:

a. Earnings perspective - change in net interest income (NII) or net interest margin (NIM) due to change in interest rates.

b. Economic value perspective - change in market value of the company due to change in the company''s assets, liabilities and off-balance sheet positions due to variation in interest rates.

The board has established limits on the interest rate gaps for stipulated periods. The management monitors these gaps on a regular basis to ensure that the positions are maintained within the established limits.

Foreign Currency Risk

Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. Foreign currency risk for the company arises mainly on account of the foreign currency borrowings. The Company manages this foreign currency risk by entering into cross-currency interest rate swaps / full currency swaps and forward contracts. When a derivative is entered into for the purpose of being as hedge, the company negotiates the terms of those derivatives to match with the terms of the hedge exposure. The Company''s policy is to fully hedge its foreign currency borrowings at the time of drawdown and remain so till repayment.

The Company holds the derivative financial instruments such as cross-currency interest rate swaps, full currency swaps to mitigate the risk of changes in exchange rate in foreign currency and floating interest rate. The counterparty for these contracts is generally a bank. These derivative financial instruments are valued based on the quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the market place.

d. Operational Risk

Operational risk is the risk of loss arising from systems failure, human error, fraud or external events. When controls fail to operate effectively, operational risks can cause damage to reputation, have legal or regulatory implications, or may lead to financial loss. The Company cannot expect to eliminate all operational risks, but it endeavors to manage these risks through a control framework and by monitoring and responding to potential risks. Controls include maker-checker controls, effective segregation of duties, access, authorisation and reconciliation procedures, staff education and assessment processes, such as the use of internal audit.

Capital Management :

The Company''s capital management objective is primarily to safeguard the business continuity. The Company''s capital raising policy is aligned to the macro-economic situations and incidental risk factors. The Company''s cashflows are regularly monitored in sync with the annual operating plans and the long-term and other strategic investment plans. The operational funding requirements are met through debt and operating cash flows generated. The company believes that this approach would create shareholder value in the long run. Also, the company has adopted a conservative approach for ALM management with primacy to adequate liquidity. At present, a large portion of the company''s resource base is equity. Therefore, the company enjoys a low gearing.

D. Corporate Governance (refer Corporate Governance section in the annual report)

E. Breach of covenant

Breach in terms of covenant in respect of loan availed by the Company is as follows.

JM Financial Products Limited had sanctioned a Term Loan of Rs. 4,000 lakh and had stipulated to maintain a CRAR of >20.24%, which was marginally breached by 0.01%, since the CRAR of the Company stood at 20.23% as of March 31, 2023. However, the Company has raised fresh Equity in April 2023 and therefore considering the impact of this event occurring after the Balance Sheet date (Refer Note 60), there is no breach of the covenant. The maturity of the term loan is due on September 29, 2023. There is no material impact on the cost or liquidity of the Company as the Company has already complied with the covenant on a post balance sheet event basis.

F. Divergence in asset classification and provisioning

During the current year the Company underwent routine RBI supervision for the year ended March 31, 2019, March 31, 2020 and March 31, 2021 and no divergence in asset classification and provisioning has been reported.

G. There is no modification of opinion, expressed by the auditors.

H. There are no items of income and expenditure of exceptional nature.

60 Events after the reporting period

Non-adjusting events after the reporting period that require disclosure are as follows:

The Company raised equity share capital through Qualified Institutional Placement (QIP) in April 2023. The issue remained open from April 10, 2023, to April 13, 2023, and Rs. 10,049.21 lakh was raised in lieu of the same. The Company issued and allotted 66,11,325 equity shares (face value of Rs. 10 per share) at a premium of Rs. 142 per share. These shares were allotted on April 13, 2023.

The Company has entered into definitive investment agreement interalia with Danish Sustainable Development Goals Investment Fund K/S, a limited liability partnership incorporated under the laws of Denmark, represented by Investment Fund for Developing Countries, an investment fund incorporated under the laws of Kingdom of Denmark, to the tune of Rs. 24,000 lakh (''Issue''). It is a Danish Development Finance Institution (independent Denmark government-owned fund) and an impact investor which invests to support sustainable development in developing countries and contributes to the realization of the sustainable development goals (SDGs) by creating better opportunities for people in low and middle-income countries. The said Issue has been approved by the Board on April 11, 2023, and the shareholders through postal ballot on May 11, 2023. The allotment of shares under the said issue will be done within 15 days from the date of passing resolution by the shareholders.

70 The Company has not traded or invested in crypto currency or virtual currency during the year ended March 31, 2023 and March 31, 2022.

71 Disclosure under rule 11(e) of the Companies (Audit and Auditors) Rules, 2014:

(a) - The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall

- directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (ultimate beneficiaries) or

- provide any guarantee, security or the like to or on behalf of ultimate beneficiaries;

(b) - The company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party) with the understanding (whether recorded in writing or otherwise) that the company shall

- directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (ultimate beneficiaries) or

- provide any guarantee, security or the like to or on behalf of ultimate beneficiaries;

77 Previous year figures have been reclassified/ regrouped wherever necessary to conform to/ with the current year classification/ disclosure.

As per our report of even date attached

For M S K A & Associates For and on behalf of the Board of Directors of

Chartered Accountants UGRO CAPITAL LIMITED

Firm''s Registration Number : 105047W

Sd/- Sd/- Sd/-

Swapnil Kale Shachindra Nath Abhijit Sen

Partner Vice Chairman & Independent Director and Chairman -

Managing Director Audit Committee

Membership Number : 117812 DIN : 00510618 DIN : 00002593

Place : Mumbai Mumbai Mumbai

Date : May 15, 2023 May 15, 2023 May 15, 2023

Sd/- Sd/-

Kishore Kumar Lodha Namrata Sajnani

Chief Financial Officer Company Secretary

Mumbai Mumbai

May 15, 2023 May 15, 2023

---

Mar 31, 2022

The Company had availed total External Commercial Borrowing (ECBs) of USD 4.125 million for financing prospective borrowers as per the ECB guidelines issued by the Reserve Bank of India ("RBI”) from time to time.The borrowing has a maturity of three years. In terms of the RBI guidelines, the borrowing has been swapped into rupees and fully hedged for the entire maturity by way of cross currency swaps .The charges for raising of the aforesaid ECB have been amortised over the tenure of the ECB.

Security and other terms of the loans are as follows :

(a) Rate of interest of the bank overdraft ranges from 730% per annum to 9.70% per annum and the same is secured against fixed deposits.

(b) The above borrowings other than Bank overdraft and unsecured borrowings are secured by specific charge on receivables under financing activities. The Company has maintained the required security cover with respect to its secured borrowings.

(c) Out of the the above, borrowings amounting to '' 30,714 lakh as at March 31, 2022 are guaranteed by directors.

(d) Term Loans were used fully for the purpose for which the same were obtained.

(e) There were no default in the repayment of borrowings.

(f) Periodic statements of securities filed with the lending institutions are as per the books of accounts.

c. Rights, preferences and restrictions attached to equity shares :

The Company has only one class of equity shares having a face value of Rs 10 each. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the company, the holders of equity shares will be entitled to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their holding. .

f. Objectives for managing capital :

The Company maintains an actively managed capital base to cover risks inherent in the business and is meeting the capital adequacy requirements as prescribed by the Reserve Bank of India (RBI). The adequacy of the Company''s capital is monitored using, among other measures, the regulations issued by the RBI.

Nature and purpose of reserves :(i) Securities Premium Account

Securities premium account is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

(ii) Employee stock options scheme outstanding

The shares options outstanding account is used to recognise the grant date fair value of options issued to employees under the stock option schemes of the Company.

(iii) Statutory reserves u/s 45-Ic of the RBI Act, 1934

Statutory reserve fund is required to be created by a Non-Banking Financial Company as per Section 45- IC of the Reserve Bank of India Act, 1934. The Company is not allowed to use the reserve fund except with the authorisation of the Reserve Bank of India.

(iv) capital Reserve

Capital reserve comprises of the amount received on share warrants & which are forfeited by the Company for nonpayment of call money.

(v) Retained earnings - other than Remeasurement of Post Employment Benefit Obligations

Retained earnings represents surplus of accumulated earnings of the Company and which are available for distribution to shareholders.

(vi) Retained earnings - Remeasurement of Post Employment Benefit Obligations

The Company recognises the change on account of remeasurement of the net defined benefit liabilities (assets) as a part of the retained earnings.

(vii) cash Flow Hedges Reserve

It represents the cumulative gains/(losses) arising on revaluation of the derivative instruments designated as cash flow hedges through the other comprehensive income (OCI).

36. Earnings per shareBasic and diluted earnings per share [EPS] computed in accordance with Indian Accounting Standard (indAS) 33 ‘Earnings per share'' :

Basic EPS calculated by dividing the net profit for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders (after adjusting profit impact of dilutive potential equity shares, if any) by the aggregate of weighted average number of equity shares outstanding during the year and the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

The dilutive effect on the earnings per share is caused by the potential shares that would be issued upon the exercise of the ESOP options. As a result of the dilution, the denominator increased by 5,73,817 shares (Previous year : nil). During the year ended March 31, 2021 the potential equity shares were anti-dilutive in nature, hence the impact of the same was ignored for the purpose of computation of the diluted earnings per share.

37. Contingent liabilities and capital commitments:a. Contingent liabilities

All tax related liabilities till July 05, 2018 are covered by a deed of indemnity entered by existing promoters with erstwhile promoters. Further, there are no other contingent liability other than those covered under deed of indemnity.

b. Capital commitments		(Rupees in lakh)
Particulars	As at March 31, 2022	As at March 31, 2021
Commitments not provided for :
- Commitments related to loans sanction but undrawn	882.60	1,381.88
- Commitments related to loans sanction but partially undrawn	872.99	-
- Amount of contracts remaining to be executed on capital account	185.00	4700
Total	1,940.59	1,428.88

*Other commitments represent financial guarantees given for Co-lending arrangement entered by the Company during the year.

38. Segment Reporting

There is no separate reportable segment as per the Ind AS 108 "Operating Segments” specified under Section 133 of the Act. The Company operates in a single segment only. There are no operations outside India and hence, there are no reportable geographical segments.

39. corporate Social Responsibility

The average profit before tax of the Company for the last three financial years was '' 1,956.03 lakh, basis which the Company was required to spend Rs.39.12 lakh towards Corporate Social Responsibility (CSR) during the current financial year.

e) The additional disclosure with regard to CSR activities are summarized below:

(i) The amount of shortfall at the end of the year out of the amount required to be spent by the Company during the year - Nil

(ii) The total of previous years'' shortfall amounts - Nil

(iii) The reason for above shortfalls - Not applicable.

f) Nature of CSR activities

The Company is required to contribute to corporate social responsibility activities as per CSR Rules under the Companies Act, 2013. During the year the Company has spent '' 39.12 lakh which was the required amount to be spent under CSR activity. The amount is spent towards healthcare and education of the under-priviledged through an NGO.

The sensitivity analysis has been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the projected benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the projected benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the projected benefit obligation as recognised in the Balance Sheet.

The Company has one stock option scheme ''CSL Employee Stock Option Scheme 2017''. The said scheme was approved by the board of directors on August 13, 2018 and by the shareholders in the EGM dated September 18, 2018.

During the year the Company has issued 270,769 (previous year 3,530,759) options representing equal numbers of equity shares of Rs. 10 each.

The nomination and remuneration committee shall have the authority to determine the exercise price having regard to the valuation report of an independent valuer if any. The said committee shall in its absolute discretion, have the authority to grant the options at such discount / premium as it may deem fit.

Fair value methodology :

The binomial model of valuation is more advanced and involves the use of computational techniques.In this model, the share price is projected from the date of grant to the date of exercise using upward and downward probabilities. The probabilities are estimated from the share price volatility assumption.

Keeping in view the multiple rules and events during vesting period, the Company switched to binomial method for valuation of it''s Share Options as the model is robust model and allows for more complicated rules and events during the vesting period. The fair value of options have been estimated on the date of the grant using Black-Scholes Model (For Grants XVI and XVII) and Binomial model(For Grants XVIII onwards) :

The Company as a lessee, recognises the right-of-use asset and lease liability at the lease commencement date. The right-of-use asset is measured by applying cost model i.e. right-of-use asset at cost less accumulated depreciation /impairment losses. The Company has entered into leasing arrangements for premises. Majority of the leases are cancellable by the Company. ROU asset has been included after the line "Property, Plant & Equipment” and lease liabilities has been included under "Other Financial Liabilities” in the Balance Sheet..

The entity has adequate liquidity for payment of lease liabilities. The Company regularly monitors and pays lease rentals on a timely manner as per the terms of the respective leave and license agreement.

The Company has the right to extend lease term as per mutually agreed terms laid down in the respective leave and license agreement. The Company takes into account effect of extended lease term while recording the lease assets and lease liabilities accordingly.

48. Financial risk managementThe Company has exposure to the following risks from financial instruments:

a. Credit Risk

b. Liquidity Risk

c. Market Risk

d. Operational Risk

The Company is exposed to a variety of risks such as credit risk, liquidity risk, market risk, operational risk, etc. The Company has therefore invested in talent, processes and emerging technologies for building advanced risk and underwriting capabilities. The Board of Directors has constituted a Risk Management Committee to address these risks. The Risk Management Committee''s mandate includes periodic review of the risk management policy, risk management planning, implementation and monitoring of the risk management plan and mitigation of key risks. The risk owners are accountable to the Risk Committee for identification, assessment, aggregation, reporting and monitoring of risks.The board of directors are responsible for providing overall risk oversight, approving risk appetite, risk management policies and frameworks and providing adequate oversight for the decisions.

(A) credit Risk

Risk Management team is engaged in defining a framework, overseeing enterprise wide risks and building a portfolio within the risk appetite of the company. The effective management of credit risk requires the establishment of appropriate credit risk policies and processes. The company has comprehensive and well-defined credit policies across various businesses, products and segments, which encompass credit approval process for all businesses along with guidelines for mitigating the risks associated with them. Credit underwriting is driven by a deep understanding of the selected segments, which forms proprietary risk models and approaches. The company believes in positive sector/sub-sector selection to source its business. Same is done primarily through Analytics and survey. Further the company has also developed sophisticated sector/sub-sector scorecards both statistical and expert. The proposals are appraised based on understanding of these sector/sub-sectors. Fine balance of sector knowledge, data analytics, touch and feel and digital process is used for underwriting the proposals. Given the dynamic nature of the market, the credit policies are regularly reviewed and amended.

Management of credit Risk Write off policy :

Financial assets are written off either partially or in their entirety only when the Company has stopped pursuing the recovery. Any subsequent recoveries are credited to impairment on financial instrument in Statement of profit and loss. The write off decisions will be taken by management which would be based on suitable justification notes presented by the responsible business / collections team.

credit quality analysis :

The Company''s policies for computation of expected credit loss are set out below:

(I) EcL on Loans and advancesEcL is computed for loans and investments portfolio of the company :Loan portfolio :

UGRO Capital Ltd is primarily engaged into SME lending and has segmented its lending portfolio based on the homogenous nature of group of borrowers.

As a result, Portfolio Segmentation considered for ECL computation for seventeen segments.

Definition of default :

A default shall be considered to have occurred when any of the following criteria are met:

a) An asset is more than 90 DPD.

b) If one facility of borrower is NPA, all the facilities of that borrower are to be treated as NPA.

Significant increase in credit risk (SICR) criteria :

(a) External credit rating going below investment grade rating.

(b) significant changes in the expected performance and behavior of the borrower, including changes in the payment status of borrowers.

(c) Other Qualitative parameters :

- existing or forecast adverse changes in business, financial or economic conditions that are expected to cause a significant change in the borrower''s ability to meet its debt obligations.

- an actual or expected significant adverse change in the regulatory, economic, or technological environment of the sector that results in a significant change in the sector''s ability to meet its debt obligations.

(d) Any other qualitative parameter.

Definition of low credit risk :

A case which has scores above cut-off norms as set by the Company from time to time and current status is Stage 1 is termed as low credit risk.

Forward looking factors :

Forward looking factors are considered while determining the significant increase in credit risk.

Staging criteria :

Following staging criteria is used for loans :

(i) Stage 1: 0-30 DPD;

(ii) Stage 2: 31-89 DPD and

(iii) Stage 3: >= 90 DPD

Any deviation to the above classification shall be approved by the audit committee of the board (ACB).

Probability of Default (PD%)

PDs are determined depending on the risk profile of the pool of loans based on the internal rating models, credit bureau models, corporate ratings, specific market estimates as applicable to the respective portfolio segments.

Loss given default (LGD%)

Loss given default (LGD) represents recovery from defaulted assets.

LGD computation is based on the Foundational-Internal Rating Based (F-IRB) approach or basis cashflows from post default workout and collections, as applicable to the respective portfolio segments.

LGD is determined based on F-IRB approach for Stage 1 and Stage 2 loans. For Stage 3, loans the Company estimates the cash flows expected over a time period.

Exposure at Default (EAD)

Exposure at default represents the outstanding balance at the reporting date plus expected drawdowns on committed facilities. UGRO Capital Ltd has considered the following for EAD computation :

a. On books principal exposure

b. Accumulated interest exposure

c. Excluding FLDG amount, if any

The Company actively participates in co-lending with other NBFC partners. In many of these deals there is a FLDG in the form of FD (or equivalent) or corporate guarantee. In such scenarios, while arriving at EAD, FLDG amount is subtracted. In case of default in such arrangements, if the trigger event occurs for both unsecured and secured loans on the 89th day, the POS plus accumulated interest would be adjusted from the FLDG. The interest accumulation to stop in the accounting books for such assets in case there is no principal outstanding.

(II) ECL on fixed deposits, investments, trade and other receivables

With respect to the Fixed Deposits and Investments held by the Company, ECL provisioning has been computed taking guidance from the RBI''s IRB approach.

The Company has followed Simplified Approach of ECL provisioning on its Trade and other receivables.

Applicable provisions for NBFcs covered under Ind AS:

RBI vide circular no. RBI/2019-20/170 DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated 13 March, 2020 provides that NBFCs which are required to comply with Indian Accounting Standards (Ind AS) shall, as hitherto, continue to be guided by the guidelines duly approved by their board and as per the ICAI guidelines for recognition of the impairments. The Company follows the aforesaid circular.

Portfolio default and loss estimates :

To arrive at an early estimation of loss, an internally developed methodology has been adopted.

i) For term loans, the method combines macroeconomic outlook of the sector demand, entities'' cash in hand and losses incurred during/immediately after the lockdown period, to arrive at a projection of delinquency and loss.

ii) For SCF portfolio, the assessment is based on evaluation of anchors basis personal interviews conducted by the Company officers, focussing on the key business aspects such as capacity utilization, production impact, fixed costs v/s cash flow.

iii) For onward lending , the estimates are based on a client level assessment.

iv) For direct assignment, the estimates are based on partner assessment and high-level multipliers.

Further, the management will continue to review the situation and do this analysis at regular intervals during FY 2023 as the Company will have more data points and keep updating the analysis and make appropriate adjustments, as warranted and reflect the same in the financials also considering further regulatory guidance as may be forthcoming.

Impact of covid - 19 on expected credit loss :

The impact of COVID-19, including changes in customer behaviour and pandemic fears, as well as restrictions on business and individual activities, led to significant volatility in global and Indian financial markets and a significant decrease in global and local economic activities. The disruptions following the outbreak, impacted loan originations, MSME lending and the efficiency in collection efforts resulting in increase in the delinquency rates and consequent increase in provisions therefor.

India has now emerged from the COVID-19 pandemic and we have witnessed significant revival in the MSME sector in terms of demand resulting in increased disbursements and improved collection efficiency. The extent to which any new wave of COVID-19 will impact the Company''s results is estimated to be minimal with the increasing vaccination coverage in the country which will help in mitigating the risks associated with the pandemic and its impact thereof.

In view of the above, the Management estimates that in future there would be minimal impact of the pandemic on the Company.

Management Overlay :

The Company has maintained management overlay of '' 273.79 lakh towards its restructured loans and advances as at March 31, 2022.

b. Liquidity risk

Liquidity risk arises from the Company''s inability to meet its cash flow commitments on time. Prudent liquidity risk management implies maintaining sufficient stock of cash and marketable securities and maintaining availability of standby funding through an adequate line up of committed credit facilities. Our Treasury team actively manages asset and liability positions in accordance with the overall guidelines laid down by the regulator in the Asset Liability management framework. Company continues to maintain positive ALM.

The Company''s ALCO monitors asset liability mismatches to ensure that there are no imbalances or excessive concentrations on either side of the Balance Sheet. The Company continuously monitors liquidity in the market; and as a part of its ALCO strategy.

(vi) Institutional set-up for liquidity risk management :

The Company monitors its inflows and outflows in various buckets and ensures that there are no major mismatches in the assets and liabilities in various buckets. The ALM is tabled and evaluated in the ALCO on a monthly basis. The Company ensures that there is adequate liquidity cushion available in the form of investments in G-Secs/T-Bills/Mutual Funds etc. and unavailed Bank lines. The Company issues various instruments including Term Loans, Lines of Credit, Non-Convertible Debentures, External Commercial Borrowings and other market instruments.

c. Market Risk

Market risk is the risk that the fair value of the future cash flows of financial instruments will fluctuate due to changes in market variables such as interest rates. The Company does not have any direct exposure to foreign currency (refer foreign currency risk note below).

The Company primarily deploys funds in bank deposits and liquid debt securities as a part of its liquidity management approach. The Company regularly reviews its average borrowing / lending cost including proportion of fixed and floating rate borrowings / loans so as to manage the impact of changes in interest rates.

Exposure to price risk :

The Company''s exposure to price risk arises from investments held by the Company and is classified in the Balance Sheet through fair value through profit and loss account.

Interest rate risk :

Interest rate risk is the risk where changes in market interest rates might adversely affect the Company''s financial conditions. The interest rate risk can be viewed from the two perspectives as mentioned below:

a. Earnings perspective - change in net interest income (NII) or net interest margin (NIM) due to change in interest rates.

b. Economic value perspective - change in market value of the company due to change in the company''s assets, liabilities and off-Balance Sheet positions due to variation in interest rates.

The board has established limits on the interest rate gaps for stipulated periods. The management monitors these gaps on a regular basis to ensure that the positions are maintained within the established limits.

Foreign Currency Risk

Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. Foreign currency risk for the company arises mainly on account of the foreign currency borrowings. The company manages this foreign currency risk by entering into cross currency interest rate swaps and forward contract. When a derivative is entered into for the purpose of being as hedge, the company negotiates the terms of those derivatives to match with the terms of the hedge exposure. The company''s policy is to fully hedge its foreign currency borrowings at the time of drawdown and remain so till repayment.

The company holds the derivative financial instruments such as cross currency interest rate swaps to mitigate the risk of changes in exchange rate in foreign currency and floating interest rate. The counterparty for these contracts is generally a bank. These derivative financial instruments are valued based on the quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the market place.

d. Operational Risk

Operational risk is the risk of loss arising from systems failure, human error, fraud or external events. When controls fail to operate effectively, operational risks can cause damage to reputation, have legal or regulatory implications, or may lead to financial loss. The Company cannot expect to eliminate all operational risks, but it endeavors to manage these risks through a control framework and by monitoring and responding to potential risks. Controls include maker-checker controls, effective segregation of duties, access, authorisation and reconciliation procedures, staff education and assessment processes, such as the use of internal audit.

The Company''s capital management objective is primarily to safeguard the business continuity. The Company''s capital raising policy is aligned to the macro-economic situations and incidental risk factors. The Company''s cashflows are regularly monitored in sync with the annual operating plans and the long-term and other strategic investment plans. The operational funding requirements are met through debt and operating cash flows generated. The company believes that this approach would create shareholder value in the long run. Also, the company has adopted a conservative approach for ALM management with primacy to adequate liquidity. At present, a large portion of the company''s resource base is equity. Therefore, the company enjoys a low gearing.

Unrecognised deductible temporary differences, unused tax losses and unused tax credits :

There are no deductible temporary differences, unused tax losses and unused tax credits for which no deferred tax assets have been recognised.

51. Fair value of financial instruments :

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions, regardless of whether that price is directly observable or estimated using a valuation technique.

Ind AS 107, ''Financial Instruments - Disclosure'' requires classification of the valuation method of financial instruments measured at fair value in the Balance Sheet using a three-level fair-value-hierarchy (which reflects the significance of inputs used in the measurements). The hierarchy gives the highest priority to un-adjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair-value-hierarchy under Ind AS 107 are described below:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and place limited reliance on the entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

Valuation methodologies of financial instruments not measured at fair value :Short-term financial assets and liabilities :

For financial assets and financial liabilities that have a short-term nature, the carrying amounts, which are net of impairment, are a reasonable approximation of their fair value. Such instruments include: cash and bank balances, trade receivables, other receivables, balances other than cash and cash equivalents ,payables, debt securities, other financial assets and other financial liabilities .

Loans and advances to customers :

The fair values of loans and receivables are calculated using a portfolio-based approach, grouping loans as far as possible into homogenous groups based on similar characteristics. The fair value is then extrapolated to the portfolio using discounted cash flow models that incorporate interest rate estimates considering all significant characteristics of the loans. Impairment loss allowance and adjustments related to effective interest rate are not part of above disclosure.

Borrowings :

The fair values of these instruments are estimated by determining the price of the instrument taking into consideration the origination date, maturity date, coupon rate, actual or approximation of frequency of interest payments and incorporating the actual or estimated / proxy yields of identical or similar instruments through the discounting factor. For instruments, having contractual residual maturity less than one year, the carrying value has been considered as fair value.

2. Exchange traded interest rate (IR) derivatives

The Company has not entered into any exchange traded derivative.

3. Disclosures on risk exposure and derivativesQualitative Disclosures

II. The Company undertakes the derivative transactions to prudently hedge the risk in context of a particular borrowing or diversify sources of borrowing and to maintain fixed and floating borrowing mix. The Company does not indulge into any derivative trading transaction. The Company reviews the proposed transaction and outlines any consideration associated with the transaction, including identification of the benefits and potential risks (worst case scenario) ; an independent analysis of potential savings from the proposed transaction. The Company evaluates all the risks inherent in the transaction viz. , counter party risk , market risk, operational risk, basis risk, etc.

II. Credit risk is controlled by restricting the counter parties that the Company deals with, to those who either have banking relationship with the Company or are internationally reowned or can provide sufficient information. Market/ price risk arising from the fluctuation of interest rates and foreign exchange rates or from other factors shall be closely monitored and controlled. Normally transaction entered for hedging, will run over the life of the underlying instrument, irrespective of profit or loss. Liquidity risk is controlled by restricting counter parties to those who have adequate facility, sufficient information and sizable trading capacity and capability to enter into transactions in any market around the world.

56 Note on Social Security Code

The Code on Social Security 2020 (''the Code'') relating to employee benefits, during the employment and post-employment, has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued. The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

57 Events after the reporting period

There have been no events after the reporting date that require disclosure in these financial statements.

58 Total Fixed Deposits stand at '' 762.29 lakh as at March 31, 2022 (Previous year '' 630.10 lakh) on account of securitisation transactions.

60 The company has not purchased any credit impaired financial assets during the financial year 2021-22. However, the company has transferred certain credit impaired assets to the Asset Reconstruction Company in terms of guidelines issued by RBI circular number DOR.STR.REC.51/21.04.048/2021-22 dated September 24, 2021. Further, the company has not sold any credit impaired financial asset to institutions other than to securitization/reconstruction Company (SC/RC) [refer note no. 71(c)].

61 The Company does not hold any immovable property as at 31st March 2022 and 31st March 2021. All the lease agreements are duly executed in the favour of the Company for properties where the Company is the lessee.

62 The Company does not have any transactions with the Companies struck off under section 248 of Companies Act, 2013 or section 560 of Companies Act, 1956 during the year ended 31 March 2022 and 31 March 2021.

63 No proceedings have been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder, as at 31 March 2022 and 31 March 2021.

64 The Company is not a declared wilful defaulter by any bank or financial institution or other lender, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India, during the year ended 31 March 2022 and 31 March 2021.

66 There have been no transactions which have not been recorded in the books of accounts, that have been surrendered or disclosed as income during the year ended 31 March 2022 and 31 March 2021, in tax assessments under the Income Tax Act, 1961. There have been no previously unrecorded income and related assets which were to be properly recorded in the books of account during the year ended 31 March 2022 and 31 March 2021.

67 The Company has not traded or invested in crypto currency or virtual currency during the year ended 31 March 2022 and 31 March 2021.

68 Disclosure under rule 11(e) of the Companies (Audit and Auditors) Rules, 2014:

(a) - The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall

- directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

- Provide any guarantee, security or the like to or on behalf of Ultimate Beneficiaries:

(b) - The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall

- directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

- Provide any guarantee, security or the like to or on behalf of Ultimate Beneficiaries:

69 Gold Loans

The Company does not provide any loans on collateral of gold and gold jewellery.

73 Previous year figures have been reclassified / regrouped wherever necessary to conform to / with the current year classification / disclosure.

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Mar 31, 2015

Note 1 Segment Reporting

The Company treats Share Trading Activity, Commodity Trading Activity, Inter-Corporate Deposits and Loan Given and taken to company (under the same Management) as single segment. Therefore, no Segment Reporting is required.

Note 2

In the opinion of the Board of Directors, Current Assets, Loans and Advances have the value at which these are stated in the Balance Sheet to be realized in the ordinary course of business and the provision for all known liabilities is adequate and not in excess of or less than the amount reasonably necessary.

Note 3 - Deferred Tax Asset/Liability

There are no Deferred Tax Asset or Liability in current and previous year.

Note 4 - Related Party Disclosures

Name of the Party Relationship

Ramakant R. Chokhani Key Management Personnel

Manish Chandrahas Parikh Key Management Personnel (CFO)

Transaction during the year

For the year ended For the year ended Particulars 31 March, 2015 31 March, 2014

Managerial Remuneration to Manish Chandrahas Parikh for the month of March, 2015 26,000 -

Note 5

Previous year''s figures have been regrouped or rearranged or reclassified wherever necessary.

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Mar 31, 2014

Note 1 Segment Reporting

The Company treats Share Trading Activity, Commodity Trading Activity, Inter-Corporate Deposits and Loan Given and taken to company (under the same Management) as single segment. Therefore no Segment Reporting is required.

Note 2

In the opinion of the Board of Directors, Current Assets, Loans and Advances have the value at which these are stated in the Balance Sheet, if realized in the ordinary course of business and the provision for all known liabilities is adequate and not in excess of or less than the amount reasonably necessary.

Note 3 - Deferred Tax Asset/Liability

There are no Deferred Tax Asset or Liability in current and previous year.

Note 4

Previous year''s figures have been regrouped or rearranged or reclassified wherever necessary.

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Mar 31, 2013

Note 1 Segment Reporting

The Company treats Share Trading Activity, Commodity Trading Activity, Inter-Corporate Deposits and Loan Given and taken to company (under the same Management) as single segment. Therefore no Segment Reporting is required.

Note 2

In the opinion of the Bozard of Directors, Current Assets, Loans and Advances have the value at which these are stated in the Balance Sheet, if realized in the ordinary cours eof business and the provision for all known liabilities is adequate and not in excess of or less than the amount reasonably necessary.

Note 3 - Deferred Tax Asset/Liability

There are no Deferred Tax Asset or Liability in current and previous year.

Note 4

Previous year''s figures have been regrouped or rearranged or reclassified wherever necessary.

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Mar 31, 2012

1 Segment Reporting

The company treats Share Trading Activity and Inter-Corporate Deposits and Loan given and taken to company (under the same Management) as single segment. Therefore no Segment Reporting is required.

2 Contingent Liabilities

(a) Contingent Liabilities on account of contracts remaining to be executed on capital account NIL

(b) Claims not acknowledged by the Company relating to cases contested by the Company :

(Rs in lakhs)

Particulars 2011-12 2010-11

Income Tax Matter (Pending before Appellate Authorities in 111.77 NIL respect of which the Company is in appeal)

3 In the opinion of the Board of Directors, Current Assets, Loans and Advance have the value at which these are stated in the Balance Sheet, if realized in the ordinary course of business and the provisions for all known liabilities is adequate and not in excess of or less than the amount reasonably necessary.

4. Deferred Tax

Deferred tax is recognized on timing differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period in accordance with AS 22- Accounting for Taxes on Income issued by The Institute of Chartered Accountants of India.

5. Previous year''s figures have been regrouped or rearranged or reclassified wherever necessary.

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Mar 31, 2011

1. SEGMENT REPORTING:

The company treats Share Trading Activity And Inter-Corporate Deposits as single segment. Therefore no Segment Reporting is required.

2) DEFERRED TAX:

Deferred tax is recognized on timing differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period in accordance with AS 22- Accounting for Taxes on Income issued by The Institute of Chartered Accountants of India.

3) CONTINGENT LIABILITIES :

a) Contingent Liabilities on account of contracts remaining to be executed on capital account NIL

b) Claims against the Company not acknowledged as debts NIL.

OTHER NOTES:

a) In the opinion of the Board of Directors, Current Assets, Loans and Advance have the value at which these are stated in the Balance Sheet, if realized in the ordinary course of business and the provisions for all known liabilities is adequate and not in excess of or less than the amount reasonably necessary.

b) During the year, management conducted test for impairment of fixed assets as per guideline given under Accounting Standard 28 "Impairment of Assets" and accordingly management impaired full value of fixed assets of company since the future cash flow from assets impaired and net realizable value as on date of balance sheet is negligible.

c) Previous years figures have been regrouped or rearranged or reclassified wherever necessary.

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Mar 31, 2010

1. SEGMENT REPORTING:

The Company treats the Share Trading as a Single Business Segment and hence segment wise information is not given.

2. DEFERRED TAX :

Deferred tax is recognized on timing differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period in accordance with AS 22- Accounting for Taxes on Income issued by The Institute of Chartered Accountants of India.

3. CONTINGENT LIABILITIES :

a) Contingent Liabilities on account of contracts remaining to be executed on,capital account NIL

b) Claims against the Company not acknowledged as debts NIL.

OTHER NOTES:

a) In the opinion of the Board of Directors, Current Assets, Loans and Advance have the value at which these are stated in the Balance Sheet, if realized in the ordinary course of business and the provisions for all known liabilities is adequate and not in excess of or less than the amount reasonably necessary.

b) In the opinion of the Management the fixed assets of the Company can reasonably fetch the amount at which they are carried in the books. Therefore the assets are not impaired and do not call for recognizing loss in accordance with the AS-28 issued by the Institute of Chartered Accountants of India.

c) Previous years figures have been regrouped or rearranged or reclassified wherever necessary.

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Mar 31, 2009

1. SEGMENT REPORTING:

The Company treats the Share Trading as a Single Business Segment and hence segment wise information is not given.

2. CONTINGENT LIABILITIES :

a) Contingent Liabilities on account of contracts remaining to be executed on capital account NIL

b) Claims against the Company not acknowledged as debts NIL. OTHER NOTES:

a) In the opinion of the Board of Directors, Current Assets, Loans and Advance have the value at which these are stated in the Balance Sheet, if realized in the ordinary course of business and the provisions for all known liabilities is adequate and not in excess of or less than the amount reasonably necessary.

b) In the opinion of the Management the fixed assets of the Company can reasonably fetch the amount at which they are carried in the books. Therefore the assets are not impaired and do not call for recognizing loss in accordance with the AS-28 issued by the Institute of Chartered Accountants of India.

c) Previous years figures have been regrouped or rearranged or reclassified wherever necessary.

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Mar 31, 2008

1. SEGMENT REPORTING:

The Company treats the Share Trading as a Single Business Segment and hence segment wise information is not given.

2. CONTINGENT LIABILITIES :

a) Contingent Liabilities on account of contracts remaining to be executed on capital account NIL

b) Claims against the Company not acknowledged as debts NIL.

I. OTHER NOTES:

a) In the opinion of the Board of Directors, Current Assets, Loans and Advance have the value at which these are stated in the Balance Sheet, if realised in the ordinary course of business and the provisions for all known liabilities is adequate and not in excess of or less than the amount reasonably necessary.

b) In the opinion of the Management the fixed assets of the Company can reasonably fetch the amount at which they are carried in the books. Therefore the assets are not impaired and do not call for recognizing loss in accordance with the AS-28 issued by the Institute of Chartered Accountants of India.

c) Previous years figures have been regrouped or rearranged or reclassified wherever necessary.

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Mar 31, 2007

1. SEGMENT REPORTING:

The Company treats the Share Trading as a Single Business Segment and hence segment wise information is not given.

2. EARNINGS PER SHARE :

Computation for the basic earning 2006-2007 2005-2006 per share of Rs.10 each. Amount (Rs.) Amount (Rs.)

1 Net profitless) available for Equity Shareholders. 2.27,42,124 62,03,716

2 Number of equity shares for baste earning per share 46,98,500 46,98,500

3 Basic Earning Per Share Rs. 4.84 Rs. 1.32

There are no Diluted Equity Shares and hence no working for diluted earnings per share.

3. DEFERRED TAX :

Deferred tax is recognized on timing differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period in accordance with AS 22- Accounting for Taxes on Income issued by The Institute of Chartered Accountants of India.

The deferred tax asset as at 31st March 2007 comprise of the following:

2006-2007 2005-2006 Rs. Rs.

Opening Deferred Tax Assets 6,882/- 21,882/-

Deferred Tax (Assets)/Liability: -

On Depreciation AND Public issue exps difference 18160/- 15,000/-

Prior year Deferred Tax Adjustment 32,000/- -

Closing Deferred Tax Asset/(Liability) 57,042/- 6,882/-

4. CONTINGENT LIABILITIES :

a) Contingent Liabilities on account of contracts remaining to be executed on capital account NIL

b) Claims against the Company not acknowledged as debts NIL.

II. OTHER NOTES:

a) In the opinion of the Board of Directors, Current Assets, Loans and Advance have the value at which these are stated in the Balance Sheet if realised in the ordinary course of business and the provisions for all known liabilities is adequate and not in excess of or less than the amount reasonably necessary.

b) In the opinion of the Management the fixed assets of the Company can reasonably fetch the amount at which they are carried in the books. Therefore the assets are not impaired and do not call for recognizing loss in accordance with the AS-28 issued by the Institute of Chartered Accountants of India.

c) Previous years figures have been regrouped or rearranged or wherever necessary.

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Mar 31, 2006

1. SEGMENT REPORTING:

The Company treats the Share Trading as a Single Business Segment and hence segment wise information is not given.

2. EARNINGS PER SHARE :

Computation for the basic earning per 2005-2006 2004-2005 share of Rs.10 each Amount (Rs.) Amount (Rs.)

1 Net profit/(loss) available for Equity 62,03,716 64,27,045 Shareholders.

2 Number of equity shares for basic earning 46,98,500 46,98,500 per share

3 Basic Earning Per Share Rs.1.32 Rs.1.37

There are no Diluted Equity Shares and hence no working for diluted earnings per share.

4. DEFERRED TAX :

Deferred tax is recognized on timing differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period in accordance with AS 22- Accounting for Taxes on Income issued by The Institute of Chartered Accountants of India.

The deferred tax asset as at 31st March 2006 comprise of the following:

2005-2006 2004-2005 Rs. RS.

Opening Deferred Tax Assets 21,882/- 38,882/-

Deferred Tax (Assets) Liability:-

On Depreciation difference 15,000/- 17,000/-

Closing Deferred Tax Asset/(Liability) 6,882/- 21,882/-

5. CONTINGENT LIABILITIES :

a) Contingent Liabilities on account of contracts remaining to be executed on capital account NIL

b) Claims against the Company not acknowledged as debts NIL.

II. OTHER NOTES:

a) In the opinion of the Board of Directors, Current Assets, Loans and Advance have the value at which these are stated in the Balance Sheet, if realised in the ordinary course of business and the provisions for all known liabilities is adequate and not in excess of or less than the amount reasonably necessary.

b) In the opinion of the Management the fixed assets of the Company can reasonably fetch the amount at which they are carried in the books. Therefore the assets are not impaired and do not call for recognizing loss in accordance with the AS-28 issued by the Institute of Chartered Accountants of India.

c) Previous years figures have been regrouped or rearranged or reclassified wherever necessary.

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Mar 31, 2004

1. SEGMENT REPORTING:

The Company treats the Share Trading as a Single Business Segment and hence segment wise information is not given.

2. EARNINGS PER SHARE :

March 31.2004 March 31.2003

A. Profit (After Tax) as per Profit & Loss Account Rs. 1,96,73,203/- Rs. (1,569,951)

B. Reconciliation for No. of calculating the Earnings Shares (Basic) used Per each for Share of Rs. 10/-

3. DEFERRED TAX :

The deferred tax asset as at 31st March 2004 comprise of the following:

2003-2004 2002-2003 Deferred Tax Liability: -

Depreciation difference Rs.6,937/- Rs.8,937/-

Deferred Tax Asset: -

Preliminary & Public Issue Expenses Rs.45,929/- Rs 27,819/-

Net Deferred Tax Asset Rs.38,882/- Rs. 18.882/-

4. CONTINGENT LIABILITIES :

a) Contingent Liabilities on account of contracts remaining to be executed on capital account NIL

b) Claims against the Company not acknowledged as debts NIL.

E. OTHER NOTES:

a) In the opinion of the Board of Directors, Current Assets, Loans and Advance have the value at which these are stated in the Balance Sheet, if realised in the ordinary course of business and the provisions for all known liabilities is adequate and not in excess of or less than the amount reasonably necessary.

b) Previous years figures have been regrouped or rearranged or reclassified wherever necessary.

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Mar 31, 2003

1 SEGMENT REPORTING:

The Company treats the Share Trading as a Single Business Segment and hence segment wise information is not given.

2 EARNINGS PER SHARE :

March 31. 2003 March 31. 2002

A. Profit (After Tax) as per Profit & Loss Rs. (1,569,951) Rs. 13,083,464 Account

There are no Diluted Equity Shares and hence no working for diluted earnings per share.

3. DEFERRED TAX :

The deferred tax asset as at 31st March 2003 comprise of the following:-

2002-2003 2001-2002

Deferred Tax Liability: Depreciation difference Rs. 8,937/- Rs.11,773/- Deferred Tax Asset:

Preliminary & Public Issue Expenses Rs.27,819/- Rs.41,232/-

Net Deferred Tax Asset Rs.18.882/- Rs. 29,459/-

4 CONTINGENT LIABILITIES :

a) Contingent Liabilities on account of contracts remaining to be executed on capital account NIL

b) Claims against the Company not acknowledged as debts NIL.

5. OTHER NOTES:

a) In the opinion of the Board of Directors, Current Assets, Loans and Advance have the value at which these are stated in the Balance Sheet, if realised in the ordinary course of business and the provisions for all known liabilities is adequate and not in excess of or less than the amount reasonably necessary.

b) Previous years figures have been regrouped or rearranged or reclassified wherever necessary.

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Mar 31, 2002

1. SEGMENT REPORTING:

The Company treats the Share Trading as a Single Business Segment and hence segment wise information is not given.

2. DEFERRED TAX:

During the year, the Company has for the first time accounted for Deferred Tax in accordance with Accounting Standard 22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India. Consequently, the Company has recognised in these financial statements the deferred tax assets/liabilities accumulated prior to April 1, 2001 and credited the net deferred tax assets of Rs. 39,862/- to Profit & Loss Account as on April 1, 2001 and has charged the Profit & Loss Account with the Deferred Tax Liability relating to the year net of Rs. 10,403/-. However no deferred tax assets/liabilities accumulated prior to April 1, 2001, has been recognised on the assets sold/written off during the year.

Deferred Tax Asset on account of Preliminary & Public Issue Expenses has been recognised, as the Company is of the opinion that there is virtual certainty of realisation of the same in view of the profits of the Company.

3. CONTINGENT LIABILITIES:

a) Contingent Liabilities on accouct of contracts remaining to be executed on capital account NIL

b) Claims against the Company not acknowledged as debts NIL.

4. OTHER NOTES:

a) In the opinion of the Board of Directors; Current Assets, Loans and Advance have the value at which these are stated ia the Balance Sheet, if realised in the ordinary course of business and the provisions for all known liabilities is adequate and not in excess of or less than the amount reasonably necessary.

b) Previous years figures have been regrouped or rearranged or reclassified wherever necessary.

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Mar 31, 2001

A) In the opinion of the Board of Directors, Current Assets, Loans and Advance have the value at which these are stated in the Balance Sheet, if realised in the ordinary course of business and the provisions for all known liabilities is adequate and not in excess of or less than the amount reasonably necessary.

b) Previous year's figures have been regrouped or rearranged or reclassified wherever necessary.

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Mar 31, 1999

CONTINGENT LIABILITIES :

a) Contingent Liabilities on account of contracts remaining to be executed On capital account NIL

b) Claims against the Company not acknowledged as debts NIL.

1. Y2K Issue :

The Company has taken appropriate and effective steps to be Y2K compliant. The expenditure to ensure Y2K compliance is not material

2. In the opinion of the Board of Directors, Current Assets, Loans and Advance have the value at which these are stated in the Balance Sheet, if realised in the ordinary course of business and the provisions for all known liabilities is adequate and not in excess of or less than the amount reasonably necessary.

3. Previous years figures have been regrouped or rearranged or reclassified wherever necessary.

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Mar 31, 1998

A. In the opinion of the Board of Directors, Current Assets, Loans and Advance have the value at which these are stated in the Balance Sheet, if realised in the ordinary course of business and the provisions for all known liabilities is adequate and not in excess of or less than the amount reasonably necessary.

b. A sum of Rs. 20,46,600/- has been disclosed under VDIS 1997 by way of reversal of depreciation claimed of Rs. 15,38,600/- for the accounting year 1994-95 and Rs. 5,08,000/- for the accounting year 1995-96 and VDIS Tax of Rs. 7,16,310/- has been paid thereof.

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Mar 31, 1997

CONTINGENT LIABILITIES :

a) Contingent Liabilities on account of contracts remaining to be executed on capital account NIL

b) Claims against the Company not acknowledged as debts NIL.

OTHER NOTES :

a. In the opinion of the Board of Directors, Current Assets, Loans and Advance have the value at which these are stated in the Balance Sheet, if realised in the ordinary course of business and the provisions for all known liabilities is adequate and not in excess of or less than the amount reasonably necessary.

b. Previous years figures have been regrouped or rearranged or reclassified wherever necessary.

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Sep 30, 1995

1. Previous years figures have been regrouped/rearranged wherever considered necessary.

2. AUDITORS FEES :

Current Previous Year Year Rupees Rupees ------- -------- a) Statutory Audit Fees 10,000 5,000 b) Tax Audit Fees 7,500 - ------- --------- 17,500 5,000 ------- ---------

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Sep 30, 1994

No Information Available.