Director's Report
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UPL LtdIndustry : Pesticides / Agrochemicals - Indian
BSE Code:512070
ISIN Demat:INE628A01036
Book Value(Rs):154.78
NSE Symbol:UPL
Div & Yield %:0.91
Market Cap (Rs Cr.):38832.65
P/E(TTM):65.96
EPS(TTM):11.58
Face Value(Rs):2
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To,

The members of

UPL Limited

Your Directors have pleasure in presenting their report and audited accounts for the year ended on 31st March, 2017.

Financial Results

(Rs. In crores)

Consolidated Standalone
Current Year Previous Year Current Year Previous Year
Total Revenue 17124 14660 7602 6758
Earnings before interest, tax, depreciation, amortisation, exceptionals, prior period adjustments and minority interest 3429 2711 1268 1319
Depreciation/amortisation 672 676 655 619
Finance Cost 735 704 149 192
Exceptional items 81 129 46 -
Prior period adjustments - - - -
Loss from Associates 19 85 - -
Profit before tax 1922 1117 418 508
Provision for taxation - - - -
Current tax 298 342 89 107
MAT credit entitlements - - - -
Deferred tax (109) (177) 84 16
Tax effect of earlier year - - - -
Profit after tax 1733 952 245 385
Minority Interest 6 12 - -
Net profit for the year 1727 940 245 385

OPERATIONAL PERFORMANCE

The Company has delivered another year of good results.

Some of the financial highlights of the Company's global performance are as under:

a) Revenue from operations increased by 16% to Rs. 16,680 crores.

b) EBIDTA improved by 23% to Rs. 3223 crores

c) Profit before taxes have gone up by 52% to Rs. 2,022 crores.

d) Profit after taxes have gone up by 57% to Rs. 1,833 crores.

Region wise performance highlights are as under.

In India, the market for agrochemicals grew by about 9%. While cotton acreage reduced, mainly in the North, there was significant increase in pulses and oilseed planted area. In some parts of the country like Karnataka, Tamil Nadu, Andhra Pradesh and Maharashtra erratic rainfalls adversely affected the sales. Due to good rains elsewhere, agrochemical usage in both Kharif and Rabi seasons increased. The Company increased its strategic focus on vegetable and fruit crops, apart from traditional food crops. Due to all of this, some of its brands recorded highest ever sales. During the year, the Company introduced new bio-based and nutritional products. Company's policy to engage with customers was implemented very successfully. The Company sprayed 2 lakh acres of farm land in various parts of the country. It has also enrolled 14 lakh farmers under its Adarsh Kisan Centre programme and this number is likely to increase significantly in coming years. All these initiatives made the Company achieve above industry average growth in India. During the year, demonetization of high value currency notes affected the collections for a brief period but now, the market has rebounded.

In Latin America, the market saw de-growth of 6%. However, the Company's sales were significantly higher in all the key countries in this region. During the year, the Company launched six herbicides, one fungicide and one insecticide. The year also witnessed significant currency volatility. In Brazil disease pressure in soyabean was low, resulting in reduced consumption of fungicides.

North America market remained steady, with very marginal growth. The western parts which had witnessed three successive years of drought had excellent rainfalls and due to good rains across the region, it had a good harvest. The company launched two herbicides and one fungicide in this market. The aquatic business grew significantly with new launches. However, the income of farmers in this region did not go much higher and hence the spending on agri-inputs remained low. However the Company recorded good growth in the region.

European Market also remained steady, with very marginal growth. However as quotas for sugar beet ended, the area for its plantation went up, which helped the Company to increase its sales in this market. In Northern Europe, there was high disease pressure on potatoes. In southern Europe, dry weather prevailed which affected sale and consumption of fungicides on rice and vegetable crops. Overall the Company's performance in Europe was much better.

In rest of the world also, the market recorded de-growth marginally. However, the Company, due to its strategic marketing moves, improved its sales. After several years of drought, Australia had very good rains. In some of the key markets, recovery in rice crops resulted in increase in sales of the Company's products. The Company also expanded its non-selective herbicides share to key markets, including China. In Nigeria, the Company has established partnership to grow its business. In Africa the Company has created a regional base in Kenya to service its customer needs regionally.

Prices of some of the inputs had increased, but the Company had taken effective cost reduction measures to counter any adverse effects arising out of such price increases.

FUTURE OUTLOOK

For the year 2017, the monsoon in India is predicted to be normal. This shall improve farm and economic growth, and increase agricultural production in the country.

The Indian economic growth is on higher trajectory. The reforms undertaken by the Central Government, in this regard, are most laudable and should result into overall improved performance in all the sectors.

In this year's Union Budget, the government has announced a number of proposals which will result into improvement in credit flow to farmers, increase in irrigation acreage crop insurance and giving boost for farm incomes. The government initiatives for irrigation will result in higher crop yields and water security. With these measures the income of farmers will increase, leaving them with higher disposable income and this in turn will benefit all agri-input companies.

The Company is also exploring new markets for its products. It is gaining a foothold in African market. Latin American market also looks very promising for the Company's products.

Overall the Company expects the coming year to be very promising.

DIVIDEND

Your Directors have recommended dividend of 350% i.e. Rs. 7 per Equity Share of Rs. 2 each for the financial year ended 31st March, 2017, which if approved at the forthcoming Annual General Meeting, will be paid to all those Equity Shareholders of the Company whose names appear in the Register of Members as on 8th July, 2017 and whose names appear as beneficial owners as per the beneficiary list furnished for the purpose by National Securities Depository Limited and Central Depository Services (India) Limited.

DIVIDEND DISTRIBUTION POLICY

Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR") requires top 500 listed companies, based on the market capitalization, to formulate Dividend Distribution policy. In compliance of the said requirement, the Company has formulated its Dividend Distribution Policy. The Policy is uploaded on the website of the Company which can be accessed at www.uplonline. com

FINANCE

(a) Fixed Deposits

The Company has not accepted fixed deposits during the year. There are no fixed deposits outstanding as at 31st March, 2017.

(b) Particulars of Loans, Guarantees or Investments

The details of Loans, Guarantees or Investments are given in the notes to the Financial Statements.

(c) Changes in Paid-up Share Capital

During the year the Company has issued and allotted the following shares:

(i) 78313422 equity shares of Rs. 2 each to the shareholders of erstwhile Advanta Limited pursuant to Scheme of Amalgamation;

(ii) 108628440 Convertible Preference Shares of Rs. 10 each to the shareholders of erstwhile Advanta Ltd. pursuant to Scheme of Amalgamation;

(iii) 43429 equity shares of Rs. 2 each on conversion of Convertible Preference Shares and

(iv) 55993 equity shares of Rs. 2 each to Employees under Employee Stock Option Plan of the Company.

AMALGAMATION

The Honorable High Court of Gujarat vide its Order dated 23rd June 2016, sanctioned the Company's scheme of Amalgamation with Advanta Limited. In pursuance of the scheme, all the business, assets and liabilities of Advanta Limited were transferred to the Company. New equity and preference shares were issued to the erstwhile shareholders of Advanta Limited.

CREDIT RATING

The Company enjoys a good reputation for its sound financial management and ability to meet in financial commitments. CARE, a reputed Rating Agency, has re-affirmed the credit rating of CARE AA+ for the long term and CARE AI+ for the short term Bank facilities. For Non-Convertible Debentures, CARE and Brickwork Ratings have re-affirmed the credit rating of CARE AA+ and BWR AA+ respectively.

UPL Corporation Limited, wholly-owned subsidiary was rated by S&P, Moody's and Fitch for its USD 500 mn bond issuance under 144A/Reg. S as BBB-, Baa3 and BBB- respectively with stable outlook.

ESOP

Erstwhile Advanta Limited, which has now merged with the Company, had come out with two stock option plans in 2006 and 2013. Upon amalgamation, the shares were allotted to the option holders during the year. The disclosures in respect of these two plans are as per "Annexure 1"

The Company is proposing ESOP 2017 plan and enabling resolutions are proposed as item nos. 8 and 9 at the forthcoming Annual General Meeting.

SAFETY AND ENVIRONMENT

The Company has taken significant steps to ensure improvement in the operating safety conditions and standards in its manufacturing units as well as project sites.

In addition, the manufacturing sites have taken on the challenge to decrease the utility consumptions – overall, as well as, on a unit production basis.

As a result of these initiatives, external bodies both governmental as well as non-government organisations, associated with enhancing the industrial safety and environment standards, have recognised the efforts of our manufacturing units.

During the year 2016-17, UPL manufacturing units won multiple awards in the areas of Safety, Environment, Energy Conservation and good manufacturing practises.

Major Award Details:

Award Category No. of Awards Awarded by
Business 3 National Business Success Award Institute, Exame Magazine, Icontec
Energy Conserva- tion 3 FICCI, BEE Ministry of Power
Environ- ment 4 Vietnam Association of Environmental Economics, International Reserarch Institute for Manufacturing (IRIM)
Manufac- turing 10 IMEA, International Reserch Institute for Manufacturing, Frost & Sullivan, QCFI [Quality Circle Forum of India] agency
People 1 Epoca Magazine
Safety 8 Institute of Directors, Department of industrial safety and fire protection police-vietnam, OSHAI, international fundation ORP, Occupational Risk insurance COLMENA, NSCI, EKDKN

The Company had introduced measurement criteria in the areas of Safety and Environment Management at each of its factories in the previous year, namely, measurement of Lost Time Accidents (LTI), Total Recordable Frequency Rate (TRFR), Major Process Safety Incidents (MPSI) etc.

The organisation has been able to improve upon these metrics over a period of time. In addition, the larger group of indirect employees including contract workmen employed for ancillary work as well as capital projects have been brought under the umbrella of safety oversight and continuous training initiatives.

In addition, the following initiatives have been spearheaded at most manufacturing and construction sites:

a. Safety Induction and orientation of new employees :

Upon joining, all new employees at our manufacturing sites are taken through a level 0 and Level 1 program which essentially talks about the layout of the factory, processes within the site, safety procedures, usage of personnel protective equipment (PPE) etc. This process ensures a basic level of awareness for all new employees and makes them understand the potential hazards that might exist within the factory.

b. Employee Education process:

Before the employee is allowed to work in a process area within the manufacturing site, he/ she is taken through a Level 2 training which includes details of processes, details of materials being handled, material safety data sheets (MSDSs), design and operation of key equipment etc. This training lasts for at least four man days per employee before he is allowed to work. We have started a program by which the employee's performance is evaluated on a periodic basis to ensure that the levels of training and compliance are continuously enhanced.

Over a period of time this will be extended to all categories of contract employees.

c. Hazard and operability study (HAZOP):

For each new project and/or process modification, it is now mandatory to conduct a HAZOP study which in turn throws up potential hazards due to changes and process, process parameters, equipment design and equipment changes.

d. Emergency Response Team (ERT) program:

Specific Emergency Teams which are trained by accredited agencies like St John Ambulance are available at all sites to handle emergencies and medical procedures. Likewise, trained firefighting teams which are able to understand and handle specific material related fire emergencies at specific plant sites, are available round the clock at all manufacturing units.

e. Safety Self Recognition Program (SSRP):

This program was set up with the objective of empowering own as well as contract employees to recognize their achievements towards predefined safety goals in their respective plants and operational areas. This works with the concept of motivating own as well as contract employees to carry out their jobs in a safe manner and ensure the highest safety standards for the collective team.

f. Near Miss Reporting:

One of the essential ingredients of reducing major safety incidents is to continuously monitor and oversee smaller and less significant incidents. It helps the teams address potential risks through detection of a combination of unsafe acts and conditions. A total of Rs. 14 crores has been invested specifically to enhance the operating safety standards at the factories in addition to the above mentioned initiatives.

Major improvements have been initiated to enhance the environmental footprint of our units both in India as well as for the international sites. The overall utility consumptions for the major Indian manufacturing sites has shown an encouraging trend:

The following major steps have been initiated at our factories: a. Reduction of effluent discharge at Jhagadia by way of segregation and better recycling of different effluent streams. This is expected to result in better effluent management especially during the monsoon seasons. b. Operation of formulation and few active ingredients manufacturing units in a "Zero Liquid Discharge" (ZLD) mode. c. Dedicated technology groups work to enhance the environmental compliance and management standards thereby resulting in reduction of the utility and effluent footprint. d. Implemented metering, monitoring and targeting (MMT) to ensure the efficient performance of system.

Environment and Sustainability

The Company believes that Sustainability is the best opportunity for business to drive smarter innovation and profitable growth. Sustainability ensure a fair society, living within environmental limits and creating a sustainable profitable business. It is constantly working to reduce environmental footprint and find innovative product solutions that benefit the environment. Its environmental standards apply worldwide.

The Company's commitment to environmental protection extends beyond the scope of legal requirements. It is committed to the chemical industry's Responsible Care™ initiative and have set out the basic principles of this commitment in our Global Environmental Footprint Reduction Plan. Certified HSEQ management systems control its operational implementation.

This year company has formulated "UPL Sustainable Development Plan" to reduce environmental footprint of company. UPL Sustainable Development Plan is fully aligned with UN Sustainable Development Goals.

Reducing Environmental Impact

Our target is to reduce 30% environmental footprint in our manufacturing plants by 2020 compared to last year across all the four parameters a. water consumption, b. carbon emission c. waste disposal and d. waste water discharge.

Water Consumption Performance Carbon Emissions Performance Waste Disposal Performance Wastewater Discharge Performance
In 2016-17, water consumption per tonne of production in UPL manufacturing plants reduced by 19% compared to 2015-16. In 2016-17, CO2 emissions per tonne of production in UPL manufacturing plants reduced by 22% compared to 2015-16. In 2016-17, waste disposal per tonne of production in UPL manufacturing plants reduced by 6% compared to 2015-16. In 2016-17, wastewater discharge per tonne of production in UPL manufacturing plants reduced by 27% compared to 2015-16.

Major improvements have been initiated to reduce the environmental footprint of our units both in India as well as for the international sites. The overall sustainability performance for the major Indian manufacturing sites has shown an encouraging trend:

The Company has taken following initiatives to make the operating plants sustainable:

Specific Water Reduction Initiatives

Sustainable industrial water management plays a vital role in achieving future water security in a world where water stress will increase. The optimum utilization of all natural resources is an integral part of UPL's commitment to sustainable development. Aiming to decrease abstracted water demand in our operating plants, following initiatives has been taken this year:

• Reduced 19% specific water consumption by operational excellency.

• Achieved Zero Liquid Discharge (ZLD) in our Unit 04 at Halol by implementing world class effluent reuse & recycling system.

• Completed piloting of Scaleban technology to reuse treated wastewater into cooling towers. This will reduce cooling water demand and decrease treated wastewater discharge in our operating plants.

• Developed controlled discharge facilities at Unit 05 for effective surface runoff management.

Specific Carbon Emissions Reduction Initiatives

Greenhouse gases trap heat and make the planet warmer. Human activities are responsible for almost all of the increase in greenhouse gases in the atmosphere. Climate change due to greenhouse gas emissions will have a growing impact on our business. Aiming to decrease carbon emissions in our operating plants, following initiatives has been taken this year:

• Reduced 13 % specific energy consumption by operational excellency.

• Reduced 22 % CO2 emissions by changing energy mix and by reducing specific energy consumption.

Specific Waste Reduction Initiatives

We have taken special care to reduce, recycle and eliminate hazardous as well as non-hazardous solid waste. Aiming to decrease waste disposal from our operating plants, following initiatives have been taken this year:

• Reduced 6 % specific waste disposal from our operating plants by operational excellency.

• Reduced waste from packaging process by improvement in packing material

• Implemented waste segregation practices for efficient waste management

• Implemented the practices of 4R (reduce, recycle, reuse, reprocess) concept in Hazardous waste management

• Recovered value added products from waste.

Specific Wastewater Reduction Initiatives

Aiming to decrease wastewater discharge from our operating plants, following initiatives have been taken this year:

• Reduced 27% specific wastewater discharge by operational excellency.

• Achieved Zero Liquid Discharge (ZLD) in our Unit 04 at Halol by implementing world class effluent reuse & recycling system.

• Reduction of effluent discharge in our Unit 05 at Jhagadia by way of segregation and better recycling of different effluent streams. This is expected to result in better effluent management specially during the monsoon seasons.

• Adopted new technologies which use continuous manufacturing processes as against the current batch mode of manufacturing reactions. This not only reduces the footprint and consequent capex spends of the plant but also results in significant reduction in the quantity of effluent generated.

• Completed piloting of volute technology for efficient dewatering of sludge. This will help us in efficient management of sludge generated from our wastewater treatment plants.

RESEARCH AND DEVELOPMENT

Company has been always striving to be world class organization while caring for its customers, employees and environment. Company is also setting up new standards of performance, quality assurance and innovation.

In accomplishing the company's mission of manufacturing and supplying crop protection and specialty chemicals and providing solutions to optimize farm productivity through innovative and cost-effective products, the Research and Development Centres of the Company have been playing a very vital role.

The Research and Development Centres located in various geographical locations with state-of-the art facilities have been further strengthened with additional skilled manpower and equipment/instruments.

The Research and Development Centres are engaged in development of technical active products as well as pre-mix formulations which are introduced in the market after due safety and bio evaluations.

Highly skilled scientists work on the new active ingredients for future launches and also work on the products which have been commercialized to manufacture them in a better cost-effective way and to achieve better quality.

New projects for Speciality Chemicals and Industrial Chemicals are taken up in the Research and Development Centres to take them to manufacturing scale in a highly cost-effective manner.

There are conscious efforts to develop the pre-mix formulations which are safe, less hazardous and less toxic, environmentally friendly, and at the same time affordable to the farmers.

Since company is delivering innovative products and follows innovative processes, the products and the processes are safe guarded against copying by way of creating and protecting the intellectual property.

Patent protections are obtained in the countries where the products are launched. Appropriate measures are taken to create and safe guard the intellectual property.

Registration of the active ingredients and the final products is an important activity. R&D also generates the data like chemical composition, physico-chemical properties, toxicity, bio-efficacy, residue and packaging required for submission to the authorities in various countries.

CORPORATE SOCIAL RESPONSIBILITY

The Company believes in contributing to harmonious and sustainable development of society and that a company's performance must be measured not only by its bottom line but also with respect to the social contributions made by the company while achieving its financial goals! During the year, the CSR expenditure incurred by the Company was INR 23,79 Crore (9.7% of Profit after tax). Our CSR activities focus not just around our factory and Offices, but also in other backward locations based on the needs of the communities. Before undertaking any program, a sound assessment of the scope, need, projected benefits are carried out. Based on need assessment our commitment to CSR have translated into 6 key focus areas. They are:

• Agriculture Development

• Employability & Entrepreneurship

• Education & Empowerment

• Environment & Nature Conservation

• Health & Sanitation

• National & Local Area needs

Every year brings with it, its own set of challenges and along comes opportunities to meet those challenges and create something more meaningful together with the community. The focus in current year has been to create sustainable, replicable and transformative solutions, where impacts are measurable, so as to bring in more accountability and transparency in our system. Earlier, we had conducted a need assessment study and arrived at a list of needs prioritized by the community. With the Impact Assessment study, the Company intends to meet the needs of the community. The results have been very encouraging.

The Company continues to work with renewed vigour and commitment on all the programs undertaken. The Agriculture Development interventions are today impacting the lives of around 4500 farmers in Dang, Ankleshwar and Vapi. There are around 1200 women who have become a part of the micro finance movement and are leading a better life today. 5000 students are today members of Eco Clubs and working on preserving our flora and fauna. Around 45,000 trees have been planted and taken care under social forestry project.

During the year, we initiated a couple of new programmes to either strengthen the old ones or add completely new dimensions of growth to them. This year we started Unnati Project with 6 CBOs from Mumbai with an objective to provide hand holding and mentoring support to 6 organizations located in Mumbai. Project aim was to improve the functional efficiency and effectiveness of said 6 CBOs and hence enabled a large slum community, access to quality education, better sanitation, employability & entrepreneur skill and livelihood support. Social Forestry Project, Mangrove plantation. Goatery project, Global Parli, Vandri Cluster development, Artificial insemination (AI) Centre etc are other new initiatives undertaken during the year.

Toilet construction (Sanitation) remained a focus area this year, more emphasis was laid on spearheading social and cultural changes related to sanitation. Volunteer participation during the year saw more than 3800 hours of voluntary service across locations.

All CSR projects undertaken in 6 key focus areas are according to company's CSR policy and are in line with Schedule VII of the Companies Act 2013. The Annual Report on CSR activities is annexed to this report as "Annexure 2"

VIGIL MECHANISM / WHISTLEBLOWER POLICY

The Company has in place whistleblower policy to deal with any fraud, irregularity, or mismanagement in the Company. The Company has posted this policy on its website and the link is http:/www.uplonline.com/pdf/ policies/UPL_whistleblowerpolicy.pdf. The Chairman of the Audit Committee oversees this policy. As per the policy, any employee or director can directly communicate with the Chairman of the Audit Committee to report any actual/ suspected fraud or non-compliance.

During the year, the Company made all efforts to create awareness among the employees about the Policy. The policy ensures complete protection and no victimization or discrimination to the whistleblower. Total confidentiality of the proceedings of the Policy is maintained.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

The Company has implemented a policy as required under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder. This policy covers all women-permanent, temporary or contractual workers. The policy is very strictly enforced by the Company. The Policy is communicated to all the employees by placing it on the website of the Company and all the employees have confirmed their abidance.

Workshops were arranged, conducted by an esteemed agency, to educate the employees across the Company to uphold dignity of their colleagues at the workplace and prevent sexual harassment.

An internal committee, consisting of mainly women staff and one woman from an NGO, is formed to attend and redress complaints relating to sexual harassment. At each unit of the Company, sub-committees are formed to receive any such complaints and address and redress the same, in consultation with the main committee.

Strict implementation of the policy is to ensure women staff to work with dignity in a safe environment free from sexual harassment at the workplace and provide equality in working conditions. During the year, the Company has not received any complaint of sexual harassment.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an in-house internal audit team, headed by a qualified professional, which carries out audits of various functions of the Company. The report prepared by them is placed before the Audit Committee at every quarterly meeting. The internal audit function reports to the Audit Committee. Internal Audit plan for the year is worked out and the same is approved by Audit Committee. The plan is worked out to ensure adequacy of internal control system, compliance of various regulations and adherence of correct accounting procedures at all locations of the Company. The Company engages services of external professional agencies to ensure all legal compliances. In case any weaknesses are observed by the internal audit team in any of the processes or compliances, necessary corrective action is immediately taken by the process owner to ensure strengthening of the controls.

The Internal audit team form the basis of certification by the Managing Director and Chief Financial Officer for financial reporting.

Internal Controls over Financial Reporting:

The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. During the year, all these controls were tested and no reportable material weaknesses in any operating areas were observed. The company strives to ensure robust internal financial controls.

The Company has laid down various policies and procedures for efficient conduct of its business, safeguard the assets of the Company, prevention and detection of any frauds and errors, maintenance of accounts and complete accounting records and timely availability of reliable information for the management.

INDIAN ACCOUNTING STANDARD (IND AS)

Pursuant to the Notification issued by the Ministry of Corporate Affairs dated February 16, 2015, relating to the Companies (Indian Accounting Standard) Rules 2015, the Company, its subsidiaries, associates and Joint Venture Companies have adopted "IND AS" with effect from 1st April, 2015 with comparatives for the previous year ending 31st March 2016. This transition has happened very smoothly. The impact of the change on adoption of IND AS is given in the notes to the financial statements.

RISK MANAGEMENT FRAMEWORK

The Company has a robust Risk Management Framework to identify and evaluate various business risks faced by the Company. Pursuant to Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Risk Management Committee is appointed, consisting of three Executive/Promoter Directors of the Company. Regular Committee meetings are held every quarter. Inputs are taken from senior executives and thereafter various risks are identified and mitigating plans are developed to resolve such risks.

Some of the key business risks and their mitigation plans are as under: Industry Risks: The demand for Company's products depend on various factors, such as rainfall, pest attacks, weather conditions, drought or insufficient rains, etc. In case of drought or less pest attacks, the product off take will be adversely affected, resulting in inventory pileup. To mitigate this risk, the Company strengthened its supply chain, and product mix. A number of subsidiaries, mainly marketing arms for the parent company, are set up across the globe. The product portfolio of the Company is enlarged year after year, to ensure regular supply of products for diverse applications at all times across the world.

R&D Risk: The effective life of agrochemicals gets reduced over a period of time as the insects become immune and develop resistance to them. Constant innovation is necessary and introduction of newer agrochemicals on continuous basis is essential for effectively eliminating pest attacks. To mitigate this risk, the Company has set up a very big R&D team, consisting of chemists, chemical engineers and other experts to work constantly on innovation of new products and processes. The Company protects some of its products by getting them patented.

Currency Fluctuation Risk: The Company's business is expanding in many geographies beyond India. The Company's agrochemicals are marketed in almost all the countries of the world. The Company's import bill is also quite significant. It is exposed to almost all the foreign currencies of the World. Any volatile fluctuations in the exchange rates of the foreign currencies can result into huge losses for the Company. To mitigate this risk, the Company takes adequate insurance cover for open exposures. Company's huge exports act as natural hedge against imports. The Company carries out its business into major currencies such as USD, Euro, Yen and Pound sterling. These currencies are comparatively more stable. Hence the Company, is adequately protected against these risks.

Demonetization Impact: The Company caters to the rural market, mainly farmers of the country. To encourage cashless payment methods and to aim at greater transparency, the Prime Minister had declared in November 2016, demonetization of high currency notes of Rs. 1000 and Rs. 500. This impacted the collections for a short time as the liquidity was squeezed temporarily. But thereafter, the re-monetization by issue of new currency notes resulted in slackening of demonetization effect. The Company is encouraging cashless payment methods and the customers are also getting used to the new methods and the Company expects that in the coming years, its performance will improve further.

SUBSIDIARY COMPANIES / ASSOCIATE COMPANIES

Shroffs United Chemicals Limited:

This is engaged in trading activities in a very limited way.

SWAL Corporation Limited:

SWAL Corporation limited is engaged in distribution and marketing of agro chemical formulations and organic fertilizers in India. The Sales Turnover for the year is Rs. 607 Cr and the Profit before tax is Rs. 8 Cr.

Optima Farm Solutions Ltd:

Optima farm solutions ltd is engaged in the manufacture of agrochemicals in Jammu. The Company has made sales of Rs. 115 Cr in the current year.

UPL Europe Ltd. (Formerly known as United Phosphorus Limited, U.K.):

UPL Europe is engaged in the production and distribution of Agrochemicals in UK & Europe. The company has a formulation production site at Sandbach, UK and a sales Office at Warrington, UK. The Turnover for the year ended 31st March 2017 is Rs. 778 Cr and the Profit before tax is Rs. 89 Cr.

UPL Deutschland GmbH (Formerly Known as United Phosphorus GMBH - Germany):

UPL Deutschland GmbH is engaged in the distribution of formulated products in Germany & Austria. The Turnover for the year is Rs. 201 Cr and the Profit before tax is Rs. 7 Cr.

UPL Polska Sp z o o (Formerly Known as United Phosphorus Polska Sp.z o.o - Poland):

UPL Polska is engaged in the sales and marketing of formulated products in Poland. The business in this Company has been on a very low scale.

UPL Benelux B.V. (Formerly Known as Agri Chem B.V.):

UPL Benelux BV is engaged in the distribution of formulated products in Benelux and Switzerland. The Turnover for the year is Rs. 221 Cr and the Profit before tax is Rs. 19 Cr.

Cerexagri B.V. – Netherlands:

Cerexagri BV is a manufacturing entity specializing in EBDC based fungicides. It has a technical and formulation facility based in Rotterdam. The Sales Turnover for the year ended 31st March 2017 is Rs. 556 Cr and the Profit before tax is Rs. 19 Cr.

Blue star BV:

Blue Star BV is the Holding company for Neo Fog SA.

United Phosphorus Holdings Cooperatief U.A.:

United Phosphorus Holdings Cooperatief U.A. is the holding company for United Phosphorus Holdings B V Netherlands.

United Phosphorus Holdings B.V, Netherlands:

United Phosphorus Holdings BV is the holding company for entities in Europe & Rest of the world.

United Phosphorus Switzerland Limited:

United Phosphorus Switzerland is providing management services and holding investments and registrations for the Company's products.

Decco Worldwide Post-Harvest Holdings Cooperatief U.A.:

Decca Worldwide Post-harvest Holdings Coperatief UA is the holding company for Decco Worldwide Post-Harvest Holdings BV.

United Phosphorus Holding, Brazil B.V. (Formerly known as Regentstreet B.V.):

United Phosphorus Holdings Brazil B.V. is the holding company of Brazil entity.

UPL Italia S.R.L.(Formerly Known as Cerexagri Italia S.R.L.):

UPL Italia S.R.L is engaged in the distribution of formulated products in Italy. The Turnover is Rs. 283 Crand the Profit before tax for the year ended 31st March 2017 is Rs. 13 Cr.

UPL IBERIA, SOCIEDAD ANONIMA (formerly known as Compania Espanola Industrial Quimica de Productos Agricolas Y Domesticos, S.A.U.,Spain):

UPL Iberia is engaged in the distribution of formulated products in Spain & Portugal. The Turnover is Rs. 163 Cr and the Profit before tax is Rs. 14 Cr.

Decco Worldwide Post-Harvest Holdings B.V.:

This is the holding company for other Decco entities, and holds registrations for these entities.

Transterra Invest, S. L. U. Spain:

Transterra Invest, S L is the holding company for group entities in Spain and Latin America.

Cerexagri S.A.S.:

Cerexagri SAS is a supply chain company for the group with 3 key production facilities in France involved in the production of Copper & Sulphur based fungicides. It has a formulation facility at Bassens to formulate herbicides and insecticides. The Sales Turnover for the year ended 31st March 2017 is Rs. 372 Cr and the Profit before tax is Rs. 21 Cr.

Neo-Fog S.A.:

Neo-Fog S.A is engaged in the distribution of Anti-sprouting herbicides in the French domestic market. The Turnover for the year ended 31st March 2017 is Rs. 25 Cr and the Profit before tax is Rs. 4 Cr.

UPL France (formerly Known as AS pen SAS):

UPL France SAS is engaged in the distribution of formulated products in France. Products are sourced from UPL's manufacturing facilities in Europe and India, as well as locally formulated in toll manufacturing facilities. The Turnover is Rs. 351 Cr and the Profit before tax is Rs. 45 Cr.

UPL Corporation Limited, Mauritius (formerly known as Biowin Corporation Ltd.):

UPL Corporation does trading business and also holds investments for the group. The Turnover is Rs. 2411Cr and the Profit before tax is Rs. 328 Cr. The Company made its maiden USD 500 mn bond issue.

Decco Iberica Postcosecha, S.A.U., Spain (formerly Cerexagri Iberica):

Decco Iberica is involved in fabrication & commercialization of chemical products, waxes & fungicides, as well as the machinery used for their application. The Turnover is Rs. 103 Cr and the Profit before tax is Rs. 15 Cr.

Limited Liability Company UPL (formerly known as JSC United Phosphorus Limited):

Limited Liability Company UPL is engaged in the distribution of technical and formulated products in Russia and other CIS countries. The Turnover for the year ended 31st March 2017 is Rs. 31 Cr and the Profit before tax is Rs. 5 Cr.

United Phosphorus Inc., U.S.A. (Consolidated along with Group entities UPI Finance LLC, Cerexagri Inc (PA), USA, Cerexagri Delaware Inc, USA, Canegrass LLC, USA, RiceCo LLC, USA, United Phosphorus Inc is engaged in the distribution of AI's as well as formulated products in the United States and Canada. UPI also provides technologies for pest management, aquatics, Turf & Ornamental as well as fumigants for grain storage. The Turnover is Rs. 2,452 Cr and the Profit before tax is Rs. 82 Cr.

Canegrass is Company for the distribution of Asulam (Sugarcane Herbicide) in the USA. RiceCo LLC is dedicated to meet specific technology needs of rice farmers in the USA. Its turnover during the year is Rs. 392 Cr and Profit before tax is Rs. 12 Cr.

Decco US Post Harvest Inc, USA:

Decco US Post Harvest Inc is engaged in the production and selling of post harvest products and fumigants for use in the treatment of fresh agricultural produce. It has manufacturing facilities in Monrovia, CA and Yakima WA. Turnover for the year is Rs. 231 Cr and Profit Before Tax is H-2 Cr.

RiceCo International, Inc. Bahamas:

RiceCo International is a rice focused company operating mainly in Asia and Latin America. The Turnover for the year is Rs. 439 Cr and the Profit before tax is Rs. 24 Cr.

UPL Limited, MAURITIUS (Formerly known as Uniphos Limited, Mauritius):

UPL Mauritius does Trading business. The Turnover for the year is Rs. 2798 Cr and the Profit before tax is Rs. 514 Cr.

UPL LIMITED, Gibraltar (Formerly Known as Uniphos Limited, Gibraltar):

UPL Limited Gibraltar does Trading operations. The Turnover for the year is Rs. 3248 Cr and the Profit before tax is Rs. 595 Cr.

United Phosphorus Cayman Limited:

United Phosphorus Cayman Ltd, is a Company having branch in Colombia. The Turnover for the year is Rs. 223 Cr and the Profit before tax is H- 6 C.

UPL Agro SA DE CV (Formerly Known as United Phosphorus de Mexico, S.A. de C.V:

UPL Agro SA DE CV is engaged in sales and marketing of branded formulations in Mexico. This entity received the ESR award on parameters of business ethics, environment and community engagement. The Turnover for the year is Rs. 404 Cr and the Profit before tax for the year is H– 23 Cr.

Decco Jifkins Mexico Sapi:

Decco Jifkins Mexico, SAPI De CV is primarily engaged in purchase, sale, distribution and import of goods and service in post harvest for fruits and vegetables in Mexico. The Turnover for the year is Rs. 9 Cr. and the Profit before tax for the year is H-2 Cr.

Uniphos Industria e Comercio de Produtos Quimicos Ltda:

This is a holding company.

UPL Do Brasil - Industria e Comrcio de Insumos Agropecurios S.A.:

United Phosphorus do Brazil Ltda has a strong distribution network in Brazil for its AI's as well as formulated sales. It is located in Campinas and also has a manufacturing facility in Ituverava. The Sales Turnover for the year is Rs. 3,450 Cr and the Profit before tax for the year is Rs. 124 Cr.

UPL Costa Rica S.A.(Formerly known as Cerexagri Costa Rica, S.A.):

UPL Costa Rica SA is engaged in marketing and distribution of Agro chemicals in Costa Rica. It also provides value added services such as contract spraying. The Turnover for the year is Rs. 261 Cr and the Profit before tax for the year is H-1 Cr.

UPL Bolivia S.R.L (Formerly Known as UP Bolivia S.A.):

UPL Bolivia is engaged in the sales and marketing of agro chemicals in Bolivia. The Turnover for the year is Rs. 27 Cr and the Profit before tax for the year is H– 3 Cr.

Icona Sanluis S A – Argentina:

Icona Sanluis SA is a manufacturing and marketing company for selling formulated products in Argentina. It has a manufacturing plant in San Luis, Argentina. The Turnover for the year is Rs. 17 Cr and the Profit before tax for the year is H-4 Cr.

DVA Technology Argentina S.A. :

DVA Technology Argentina holds registrations in Argentina.

UPL Argentina S A (formerly known as Icona S A - Argentina):

The company is a manufacturing and marketing company for selling formulated products in Argentina. It has a manufacturing facility in Abott, Argentina. The Turnover for the year is Rs. 376 Cr and the Profit before tax for the year is H-28 Cr.

Decco Chile SpA:

Decco Chile SpA provides post harvest solutions to maintain the quality of fresh fruits and vegetables. The Turnover for the year is Rs. 29 Cr and the Profit before tax for the year is Rs. 4 Cr.

UPL Colombia SAS (Formerly Known as Evofarms Colombia SA):

UPL Colombia is engaged in sales and marketing of agro chemicals for the Andean markets - Venezuela, Ecuador, Peru and Colombia. The Turnover for the year is Rs. 135 Cr and the Profit before tax for the year is Rs. 1 Cr.

UP Aviation Limited, Cayman Island:

UP Aviation Ltd owns the aircraft for Business purposes.

UPL Management DMCC:

UPL Management DMCC provides management services. The Turnover for the year is Rs. 117Cr and the Profit before tax for the year is Rs. 15 Cr.

UPL Australia Limited (Formerly known as United Phosphorus Limited, Australia):

UPL Australia is engaged in sales and marketing of branded agro chemicals in Australia. It holds the registrations as well as inventory for prompt supply of material to service local demand. The Turnover for the year is Rs. 214 Cr and the Profit before tax for the year is Rs. 16 Cr.

UPL New Zealand Limited (Formerly known as United Phosphorus Limited, New Zealand):

UPL New Zealand is engaged in distribution of Agro Chemicals in New Zealand. It holds the registrations as well as inventory for prompt supply of material to service local demand. The Turnover for the year is Rs. 16 Cr and the Profit before tax for the year is Rs. 2 C.

UPL Shanghai Ltd (Formerly known as United Phosphorus (Shanghai) Company Limited):

UPL Shanghai is engaged in distribution of Company's products in China. It has procured Office in Shanghai and is engaged in purchase of actives and intermediates required by manufacturing facilities globally.

UPL Limited Korea (Formerly known as United Phosphorus (Korea) Limited):

UPL Korea was formed to grow UPL's agro chemical and fumigation business in Korea. The Turnover for the year is Rs. 2 Cr and the Profit before tax for the year is Rs. 1 Cr.

PT.UPL Indonesia (Formerly Known as PT. United Phosphorus Indonesia):

UPL Indonesia is doing business in Indonesia. It mainly caters to the requirements of strategic partners like Nufarm, FMC and other top local companies as well as semi-government organization. The Turnover for the year is Rs. 43 Cr and the Profit before tax for the year is Rs. 3 Cr.

PT Catur Agrodaya Mandiri, Indonesia:

The major business is branding and distribution of formulated products through a network of distributors in Indonesia. The company holds 50 plus registrations and has successfully commercialized most of these. The Turnover for the year is Rs. 55 Cr and the Profit before tax for the year is Rs. 3 Cr.

UPL Limited, Hong Kong (Formerly Known as United Phosphorus Limited, Hong Kong):

UPL Hong Kong is engaged in the sales and marketing of agro chemicals in Hong Kong. It also acts as a supply source of raw material purchases of the manufacturing facilities. The Turnover 31st March 2017 is Rs. 574 Cr and the Profit before tax is Rs. 44 Cr.

UPL Philippines Inc. (Formerly Known as United Phosphorus Corp. Philippines):

UPL Philippines is engaged in the distribution of agro chemicals in Philippines. It holds registrations and inventory for servicing domestic demand. It also provides value added services to plantation business in Philippines. The Turnover is Rs. 54 Cr and the Profit before tax is 0.47 Cr.

UPL Vietnam Co. Ltd. (Formerly Known as United Phosphorus Vietnam Co., Limited):

UPL Vietnam is engaged in the manufacturing and marketing of branded agro chemical formulations in Vietnam. It also exports its production to Australia, South East Asia and few African countries as well, other than catering to local demand. The Turnover is Rs. 142 Cr and the Profit before tax is Rs. 27 Cr.

UPL Limited, Japan (Formerly Known as United Phosphorus Limited, Japan):

This entity is for registering and selling UPL products in Japan. The local presence in Japan has boosted access to Japanese technology and expertise, and built relations with other Japanese companies. UPL Japan sells both AI's as well as branded products which are formulated and repacked locally. It has a JV with Hodogaya Chemical Co Ltd with headquarters in Tokyo. The Turnover is Rs. 165 Cr and the Profit before tax is H-57 Cr.

Anning Decco Fine Chemical Co. Limited, China:

Anning Decco is a joint venture in China. The company is engaged in the production and distribution of Shellac. The Turnover for the year is Rs. 23 Cr and the Profit before tax is Rs. 4 C.

UPL Ziraat Ve Kimya Sanayi Ve Ticaret Limited Sirketi (Formerly Known as Cerexagri Ziraat Ve Kimya Sanayi Ve Ticaret Limited Sirketi, Turkey):

The Company has a strong distribution network as well as brand presence in Turkey (mainly western region). The Turnover is Rs. 112 Cr and the Profit before tax is H-11 Cr.

UPL Agromed Tohumculuk Sa,Turkey:

UPL Agromed has a strong marketing presence in the eastern part of Turkey. It also has a manufacturing and repacking facility in Turkey. The Turnover is Rs. 75 Cr and the Profit before tax is H-5 Cr.

Safepack Products Limited, Israel:

Safepack is engaged in the production and distribution of Post-Harvest Products in Israel and export to neighboring countries. The Turnover is Rs. 41 Cr and the Profit before tax is Rs. 2 Cr.

Citrashine (Pty) Ltd, South Africa (Formerly known as Friedshelf 1114 (Pty) Ltd,South Africa):

Citrashine is engaged in the manufacturing and distribution of chemicals and waxes for the post harvest treatment of fruits and vegetables and operates primarily in South Africa. The Turnover is Rs. 22 Cr and the Profit before tax is H-1Cr.

Decco Portugal Post Harvest, Unipessoal LDA (formerly known as UPL Portugal Unipessoal LDA):

Decco Portugal Unipessoal LDA is a new entity which will start operations shortly.

Decco Italia SRL, Italy:

Decco Italia SRL is engaged in the production and selling of post-harvest products and fumigants for use in the treatment of fresh agricultural produce. The Turnover is Rs. 32 Cr and the Profit before tax is Rs. 3 Cr.

UPL Paraguay S.A. (Formerly Known as United Phosphorus Paraguay S.A.):

UPL Paraguay is engaged in the sales and marketing of agro chemicals in Paraguay. The Turnover is Rs. 14 Cr and the Profit before tax is H-3 Cr.

UPL Africa SARL:

UPL Africa is established for sales in African region. It holds registration for sales in CILSS countries in Africa.

Details of companies which have become or ceased to be its subsidiaries, joint ventures or associate companies during the year:

a) New subsidiaries:

1. Essentiv LCC

2. Advanta Seeds Ukraine LLC

b) New associate:

1. Weather Risk Management Services Private Limited

c) Cessation of subsidiaries:

1. United Phosphorus do Brasil Ltda

2. United Phosphorus Limited, Gibraltar

3. Advanta (BVI) Ltd.

Details of companies which have become its subsidiaries during the year pursuant to amalgamation of erstwhile Advanta Ltd.:

1) Advanta Seeds International – Mauritius; is engaged in distribution and marketing of seeds in the various countries . The Sales Turnover for the year is Rs. 180 Cr and the Profit before tax is Rs. 30 Cr.

2) Advanta Seeds DMCC (formerly known as Advanta Seeds JLT) is engaged in distribution and marketing of seeds in the UAE. The Sales Turnover for the year is Rs. 211 Cr and the Profit before tax is Rs. 87 Cr.

3) PT Advanta Seeds Indonesia is engaged in distribution and marketing of field Corn and Sweet Corn seeds in Indonesia. The Sales Turnover for the year is Rs. 34 Cr and the Profit before tax is Rs. 11 Cr.

4) Advanta Holdings B.V. – Netherlands; is engaged in distribution and marketing of seeds in Europe. The Sales Turnover for the year is Rs. 126 Cr and the Profit before tax is H-23 Cr.

5) Advanta Semillas SAIC is engaged in distribution and marketing of Sorghum corn sunflower seeds in Argentina. The Sales Turnover for the year is Rs. 223 Cr and the Profit before tax is H-4 Cr

6) Advanta Netherlands Holding B.V. is engaged in distribution and marketing of and research and technical solutions to farmers & breeders into seeds in the Netherlands and Europe. The Sales Turnover for the year is Rs. 5 Cr and the Profit before tax is Rs. 3 Cr,

7) Pacific Seeds Holdings (Thailand) Limited is holding Company. The Profit before tax is Rs. 108 Cr, largely contributed by other income.

8) Pacific Seeds (Thai) Limited is engaged in distribution and marketing of seeds in Thailand. The Sales Turnover for the year is Rs. 316 Cr and the Profit before tax is Rs. 97 Cr

9) Advanta Comercio De Sementas Ltda. is engaged in distribution and marketing of Sorghum Soyabean Canola Corn seeds in Brazil. The Sales Turnover for the year is Rs. 152 Cr and the Profit before tax is H-6 Cr.

10) Advanta Seeds Pty Ltd (Formerly, Pacific Seeds Pty Ltd) is engaged in distribution and marketing of Sorghum, Corn and Canola seeds in Australia. The Sales Turnover for the year is Rs. 202 Cr and the Profit before tax is H-23 Cr.

11) Advanta US Inc. is engaged in distribution and marketing of Hybrids of Corn, forage sorghum,Grain sorghum seeds in the US and Mexico. The Sales Turnover for the year is Rs. 106 Cr and the Profit before tax is H-126 Cr 12) Advanta Seeds Ukraine LLC has just started operation in Ukraine. The Profit before tax is H-10 Cr.

MATERIAL SUBSIDIARY

The Company does not have any material subsidiary as per the parameters laid down by the Companies Act, 2013.

RELATED PARTY TRANSACTIONS

All Related Party Transactions entered into during the year were on arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are approved by the Audit Committee. Prior omnibus approval is obtained from the Audit Committee in respect of the transactions which are repetitive in nature. The transactions entered into pursuant to the omnibus approval so granted are reviewed on a quarterly basis by the audit committee.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website. The same can be accessed on www.uplonline.com/investors/policies/ related party transactions.

INSURANCE

All the properties and operations of the Company have been adequately insured.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

Appeal before the Supreme Court:

The Competition Commission of India (CCI) has levied a penalty of Rs. 25,244 lakhs on the Company vide its order in April, 2012 for alleged violations of Cartel under the provisions of section 3(3)(b) and 3(3)(d) of the Competition Act, 2002. The order of CCI was challenged before the Competition Appellate Tribunal (COMPAT), which by its order dated 29th October 2013 has reduced the penalty to Rs. 694 lakhs. The Company and CCI have challenged the order of the COMPAT before the Hon'ble Supreme Court. The Hon'ble Supreme Court vide its order dated 8th May, 2017 has upheld the decision of COMPAT and confirmed penalty of Rs. 694 lakhs. It has dismissed the appeal filed by CCI.

AUDITORS

a) Statutory Auditors

As per the provisions of Section 139 of the Companies Act 2013, the term of the Office of M/s S R B C & CO LLP, as Statutory Auditors of the Company will conclude from the close of the forthcoming Annual General Meeting of the Company.

The Board of Directors places on record its appreciation for the services rendered by M/s S R B C & CO LLP as the Statutory Auditors of the Company.

Subject to the approval of the Members, the Board of Directors of the Company has recommended the appointment of B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration Number 101248W/W-100022) as the Statutory Auditors of the Company pursuant to Section 139 of the Companies Act, 2013.

Members' attention is drawn to a Resolution proposing the appointment of B S R & Co. LLP, Chartered Accountants as Statutory Auditors of the Company which is included at item No. 5 of the Notice convening the Annual General Meeting.

b) Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost account records maintained by the Company are required to be audited. Your Directors had, on the recommendation of the Audit Committee, appointed Messrs RA & Co., Cost Accountants to audit the cost accounts of the Company for the financial year 2017-18 on a remuneration of Rs. 7.00 lakhs. The Cost Auditors have submitted a certificate of their eligibility for such appointment. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification.

Accordingly, a Resolution seeking Member's ratification for the remuneration payable to Messrs RA & Co., Cost Auditors is included at Item No. 6 of the Notice convening the Annual General Meeting.

For the year 2016-17, the due date for filing the Cost Audit Report is 27th September, 2017 and the same will be filed in due course. The Cost Audit Report for the year 2015-16 was filed on 27th August, 2016.

c) Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Messrs N.L. Bhatia & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as "Annexure 3".

REPORTING OF FRAUD

The Auditors of the Company have not reported any fraud as specified under section 143 (12) of the Companies Act, 2013.

DEPOSITORY SYSTEM

98.70% of the total paid-up equity shares of the Company are dematerialised as on 31st March, 2017.

DIRECTORS

In accordance with the provisions of section 152 of the Companies Act, 2013, and Articles of Association of the Company, Mr. Jaidev Rajnikant Shroff (DIN: 00191050) and Mrs. Sandra Rajnikant Shroff (DIN: 00189012), Directors of the Company, retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offer themselves for re-appointment.

The information of Directors seeking appointment/ reappointment as required pursuant to Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is provided in the notice covering the Annual General Meeting of the Company.

All the independent directors have given declaration that they meet the criteria of independence laid down under section 149 (6) of the Companies Act, 2013 and Regulation 16(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

EVALUATION OF THE BOARD'S PERFORMANCE

Pursuant to the provisions of the Companies Act, 2013 and Regulations 17 (10) and 25(4)(a) of the Listing Regulations, the evaluation process for performance of the Board, various committees and directors was carried out. Each director was provided a questionnaire to be filled up, providing feedback on the overall functioning of the Board and the committees. The questionnaire covered various parameters such as composition, execution of specific duties, quality and timeliness of flow of information, discussions and deliberations of different items of agenda, independence of judgments, etc. The directors were also asked to provide their suggestions for areas of improvement to ensure higher degree of engagement with the management.

Evaluation of individual director was also carried out and parameters such as contribution, attendance, expertise, decision making and other related factors were considered in this exercise.

The Independent Directors held a meeting on 24th January, 2017 to review the performance of evaluation of the Non-independent/Non-promoter Directors and the entire Board including the Chairman. The Independent Directors expressed complete satisfaction of the professionally managed overall functioning of the Board, various committees as well as all the directors of the Company. They appreciated the knowledge and expertise of the Chairman and his exemplary leadership qualities which demonstrate positive attributes in following the highest standards of corporate values and culture of the Company.

REMUNERATION POLICY

The Board has on the recommendation of the Nomination and Remuneration Committee framed and adopted the Policy for selection and appointment of directors, senior management and their remuneration. The Board recognizes that the various Committees of the Board have very important role to play to ensure highest standards of corporate governance. The Chairman of the Board and other Executive Directors form broad policies and ensure their implementation in the best interests of the Company.

The Criteria for selection of directors and senior management are mainly qualifications, experience, integrity, independence of the directors, etc.

The remuneration to Non-executive Directors consists of sitting fees for attending Board/Committee meetings, commission and other reimbursements. As per the approval given by the members, the said commission shall not exceed 1% of the net profits of the Company. All the Non-executive, Non-Promoter Directors are paid commission on uniform basis. The Independent directors are not entitled to any stock options under the Stock Option Scheme of the Company.

The remuneration to the Managing Director and other Executive Directors consist of monthly salary, allowances, perquisites, commission and other retirement benefits. The remuneration payable to them is subject to the approval of the members of the Company. The overall managerial remuneration payable to them shall not exceed 10% of the net profits of the Company.

In respect of senior management, the remuneration is based on the performance, company's performance, targets achieved, industry benchmark and compensation trends in the industry. Their remuneration consists of monthly salary, bonus, perquisites, KPI and other retirement benefits.

FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

Pursuant to the SEBI regulations the Company has worked out a Familiarization programme for the Independent Directors, with a view to familiarize them with their role, rights and responsibilities in the Company, nature of Industry in which the Company operates, business model of the Company, etc.

Through the Familiarization programme, the Company apprises the independent directors about the business model, corporate strategy, business plans and operations of the Company. These directors are also informed about the financial performance, annual budgets, internal control system, statutory compliances etc. They are also familiarized with Company's vision, core values, ethics and corporate governance practices.

At the time of appointment of independent director, a formal letter of appointment is given to him, which explains his role, responsibility and rights in the Company.

Subsequently they are appraised of the Company's policies on CSR, nomination and remuneration, plant safety, HR, succession policy for directors and senior management. They are updated with global business scenario, marketing strategies, legislative changes etc. Factory visits are arranged to appraise them of various operational and safety aspects of the plants to get complete understanding of the activities of the Company. Eminent personalities are invited to educate the independent directors about the latest happenings relevant to the duties, rights and responsibilities of the independent directors.

Details of Familiarization programme of Independent Directors with the Company are available on the website of the Company www.uplonline.com.

PERSONNEL

As on 31st March, 2017, The Company has 3489 employees in India, and 5714 employees globally which includes 676 employees of Advanta who moved to the Company. The Company has always believed that its people are its biggest asset. The year 2016-17 saw several key initiatives to nurture on our core values.

1. SUPPLY CHAIN ACADEMY

Supply Chain Academy (SCA) was launched on 3rd November, 2016. The objective of SCA is to enhance employees' capabilities, be it technical Know-How, professional skills or leadership behaviors. The academy has active involvement of senior leaders to guide design of programs and projects focused on practical learnings that can be implemented in the workplace. During the year, 27 programs have been delivered under SCA, benefiting 614 employees.

2. GLOBAL SALES EXCELLENCE AWARDS

The Company attributes its tremendous growth over the past year to its employees who drive the sales of the Company's product offerings. To recognize their talent and motivate them to continue the good work, we recognized high performers during our inaugural Global Sales Excellence Function held in Mumbai on 16th November, 2016. In this prestigious event, high-performing sales (wo)men from 13 countries were felicitated by the Global CEO and the Leadership team. This was a fantastic platform to celebrate success and also help our best performers share knowledge and experiences with each other.

3. THE COMPANY CERTIFIED AS A GREAT PLACE TO WORK

The Company aspires to become a Great Place to Work where employees trust who they work for, take pride in what they do and enjoy the company of the people they work with. We strongly believe that an engaged workforce is critical in achieving our business goals and building a sustainable organization. With this objective, UPL India and UPL Brazil partnered with a global research and consulting firm, Great Place to Work Institute, to conduct an employee survey – UPL Ki Zubaan, analyse the results and recommend action areas to build a more engaged workforce. As a part of the diagnostics, the GPTW team also assessed our people practices so that we can work on strengthening it further. We are very pleased to inform you that we won the GPTW certification in both the countries in our maiden attempt.

PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in the Annexures 4 and 5 hereunder and forms part of this Report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under sections 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are provided in Annexure 6 to this Report.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, the directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a) That in the preparation of the annual financial statements for the year ended 31st March, 2017, the applicable accounting standards have been followed alongwith proper explanation relating to material departures, if any.

b) That such accounting policies as mentioned in Note 2.1 of the Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit of the Company for the year ended on that date.

c) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) That the annual financial statements have been prepared on a going concern basis.

e) That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f) That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

CORPORATE GOVERNANCE

Your Company and its Board has been complying with Corporate Governance practices as set out in a separate report, in pursuance of requirement of para C of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Management Discussions and Analysis Report forms part of this Report. Auditor's certificate confirming compliance of the Corporate Governance as stipulated under the said Regulations is also attached to this Report.

Dealing with securities which have remained unclaimed

Members are hereby informed that as per Regulation 39(4) read with Schedule VI of the SEBI Regulations, the Company is in the process of sending reminders to those Members whose share certificates have remained unclaimed, to contact the Company immediately in the matter. Due to change in the Registrar and Transfer Agent of the Company, the process could not be completed. The Company, now after following the prescribed procedure will dematerialize unclaimed shares which are retained with the Company. These shares would be held by the Company on behalf of the holders of such shares in an "Unclaimed Suspense Account" to be opened with a depository. At the end of seven years, hereof, these shares shall be transferred by the Company to the IEPF. Dividends remaining unclaimed in respect of such shares shall also be held in a separate suspense account and would likewise be transferred to IEPF at the end of seven years.

Members may note that the lawful claimant in respect of these shares / dividend will be able to claim such shares dividend from the Company till such time they remain in the unclaimed suspense account as aforesaid.

BUSINESS RESPONSIBILITY REPORTING

A separate section of Business Responsibility forms part of this Annual Report as required under Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial statements are prepared for the year 2016-2017 in compliance with the provisions of the Companies Act, applicable Accounting Standards and as prescribed under the SEBI regulations. The consolidated statements are prepared on the basis of audited financial statements of the Company, its subsidiaries, associates and joint ventures. These consolidated financial statements alongwith the Auditors Report thereon form part of the Company's Annual Report. They are also put up on the website of the Company www.uplonline.com.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure 7".

REGISTRAR AND SHARE TRANSFER AGENT

During the year, SEBI suspected fraud and malpractices in the conduct and operations of Sharepro Services (India) Pvt. Ltd., who were the Company's Registrar and Share Transfer Agent (RTA) for a long time. After investigating the affairs of the said RTA, SEBI vide its order dated 22nd March. 2016 restrained Sharepro from conducting R&T activities and directed all the client Companies to carry out audit of the records and system relating to share transfer, payment of dividend, etc., carried out by Sharepro for the last ten years.

Accordingly, the Company appointed M/s N. L. Bhatia and Associates, practicing Company Secretaries, to carry out such audit. They have certified that no irregularities or violations with respect to transfer of securities or payment of dividend were noticed in records of last ten years. Subsequently, as per the advisory issued by SEBI, the Company appointed M/s Link Intime India Private Limited as the new R&T Agent with effect from 1st June, 2016.

LISTING OF THE COMPANY'S EQUITY SHARES

The equity shares of your Company are listed on the BSE Ltd. and National Stock Exchange of India Ltd. There is no default in paying annual listing fees.

ACKNOWLEDGEMENT

Your Directors are thankful to all the stakeholders and various government agencies and ministries for their continued support.

CAUTIONARY STATEMENT

Statements in the Director's Report and the Management Discussion and Analysis describing the Company's objectives, expectations or predictions, may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's operations include: global and domestic demand and supply conditions, availability of critical materials and their cost, changes in government policies and tax laws, economic development of the country, and other factors which are material to the business operations of the Company.

On behalf of the Board of Directors
Mumbai Rajnikant Devidas Shroff
24th May, 2017 Chairman & Managing Director
(DIN: 00180810)
Registered Office:
3-11, G.I.D.C., Vapi
Dist. Valsad, Gujarat
Pin: 396195.

   

Adani Ports & Special Economic Zone Ltd     381.15   Down   -5.40 (-1.40%)   Asian Paints Ltd     1,159.35   Down   -5.65 (-0.48%)   Axis Bank Ltd     505.70   Down   -7.20 (-1.40%)   Bajaj Auto Ltd     2,852.70   Down   -5.25 (-0.18%)   Bajaj Finance Ltd     1,880.40   Down   -32.90 (-1.72%)   Bajaj Finserv Ltd     5,286.35   Down   -98.85 (-1.84%)   Bharat Petroleum Corporation Ltd     371.40   Down   -5.15 (-1.37%)   Bharti Airtel Ltd     402.00   Up   6.65 (1.68%)   Bharti Infratel Ltd     331.10   Down   -4.85 (-1.44%)   Cipla Ltd     589.05   Up   4.65 (0.80%)   Coal India Ltd     292.05   Up   8.85 (3.13%)   Dr Reddys Laboratories Ltd     2,121.90   Down   -14.40 (-0.67%)   Eicher Motors Ltd     31,148.70   Up   228.55 (0.74%)   GAIL (India) Ltd     330.55   Down   -4.80 (-1.43%)   Grasim Industries Ltd     1,100.80   Down   -3.35 (-0.30%)   HCL Technologies Ltd     1,062.35   Up   43.80 (4.30%)   HDFC Bank Ltd     1,955.90   Up   16.90 (0.87%)   Hero Honda Motors Ltd     3,742.70   Up   19.10 (0.51%)   Hindalco Industries Ltd     262.10   Down   -2.65 (-1.00%)   Hindustan Petroleum Corporation Ltd     299.05   Down   -2.45 (-0.81%)   Hindustan Unilever Ltd     1,467.80   Up   13.60 (0.94%)   Housing Development Finance Corporation Ltd     1,834.15   Down   -24.50 (-1.32%)   ICICI Bank Ltd     282.15   Down   -7.45 (-2.57%)   Indiabulls Housing Finance Ltd     1,356.05   Down   -11.50 (-0.84%)   Indian Oil Corporation Ltd     160.10   Up   2.15 (1.36%)   IndusInd Bank Ltd     1,812.85   Down   -20.10 (-1.10%)   Infosys Technologies Ltd     1,178.45   Up   45.60 (4.03%)   ITC Ltd     276.20   Down   -1.15 (-0.41%)   Kotak Mahindra Bank Ltd     1,152.85   Down   -1.05 (-0.09%)   Larsen & Toubro Ltd     1,365.05   Down   -19.95 (-1.44%)   Lupin Ltd     799.90   Up   9.55 (1.21%)   Mahindra & Mahindra Ltd     799.50   Down   -2.40 (-0.30%)   Maruti Suzuki India Ltd     9,025.00   Down   -52.65 (-0.58%)   NIFTY (S&P CNX)     10,564.05   Down   -1.25 (-0.01%)   NTPC Ltd     174.35   Down   -3.20 (-1.80%)   Oil & Natural Gas Corpn Ltd     182.35   Down   -1.60 (-0.87%)   Power Grid Corporation of India Ltd     207.20   Down   -0.90 (-0.43%)   Reliance Industries Ltd     927.90   Down   -14.40 (-1.53%)   State Bank of India     241.20   Down   -4.95 (-2.01%)   Sun Pharmaceuticals Industries Ltd     505.30   Down   -3.90 (-0.77%)   Tata Consultancy Services Ltd     3,402.45   Up   211.30 (6.62%)   Tata Motors Ltd     336.00   Up   1.75 (0.52%)   Tata Steel Ltd     606.20   Down   -15.75 (-2.53%)   Tech Mahindra Ltd     700.50   Up   35.30 (5.31%)   Titan Company Ltd     956.55   Up   3.80 (0.40%)   UltraTech Cement Ltd     4,080.90   Down   -22.55 (-0.55%)   UPL Ltd     765.75   Down   -3.15 (-0.41%)   Vedanta Ltd     308.60   Down   -3.10 (-0.99%)   Wipro Ltd     298.05   Up   5.60 (1.91%)   Yes Bank Ltd     308.55   Down   -9.95 (-3.12%)   Zee Entertainment Enterprises Ltd     587.70   Down   -5.20 (-0.88%)      NSE Data  -  www.nseindia.com (5 minutes delayed) syndicated by www.cmots.com