Director's Report
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UPL LtdIndustry : Pesticides / Agrochemicals - Indian
BSE Code:512070
ISIN Demat:INE628A01036
Book Value(Rs):156.74
NSE Symbol:UPL
Div & Yield %:1.24
Market Cap (Rs Cr.):32938.6
P/E(TTM):54.35
EPS(TTM):11.92
Face Value(Rs):2
  Change Company 

To,

The members of

UPL Limited

Your Directors have pleasure in presenting their report and audited accounts for the year ended on 31st March, 2018.

FINANCIAL RESULTS

(H In crores)

Consolidated

Standalone

Current Year Previous Year Current Year Previous Year
Total Revenue 17920 17124 7809 7602
Earnings before interest, tax, depreciation, amortisation, 3919 3429 1384 1268
exceptionals, prior period adjustments and minority interest
Depreciation/amortisation 675 672 666 655
Finance Cost 783 735 135 149
Exceptional items 63 81 7 46
Loss from Associates 93 19 - -
Profit before tax 2305 1922 576 418
Provision for taxation
Current tax 311 293 180 89
Adjustments of tax relating to earlier years (79) 5 (83) -
Deferred tax 43 (109) (69) 84
Profit after tax 2030 1733 548 245
Minority interest 8 6 - -
Net profit for the year 2022 1727 548 245

OPERATIONAL PERFORMANCE

The Company had another year recording satisfactory results. While most of the peers in the industry had a negative growth, the Company recorded a decent growth of about 7%.

Some of the highlights of the Company's global performance are as under: A. Revenue from operations increased by 5% to H 17,506 crores. B. EBIDTA improved by 14% to H 3,919 crores.

C. Profit before taxes have gone up by 20% to H 2,305 crores. D. Profit after taxes have gone up by 17% to H 2,029 crores.

Region wise performance highlights are as under:

In India, the market for agrochemicals was fairly flat and grew by just 7%. During the year, the country recorded below normal rainfall of about 95% of long period average. In the months of June and July, there were exceptionally good spells of rain in most parts of country. But subsequently, prolonged dry spells across the country were seen. This resulted in decline in sale of fungicides. The southern states suffered from deficit rains and received good rains only at the end of the season. Worst floods were witnessed in Gujarat, Rajasthan and Mumbai. There were heavy floods in Assam, Bihar, Uttar Pradesh and Odisha. The rabi season was not very encouraging for agrochemicals, due to low temperatures and higher humidity, making the crops resistant to pest attacks. At the beginning of the year, the introduction of GST and confusion in the market prevailing due to this had significantly adverse effect on Company's sales. The channel stopped fresh purchases and old inventory was returned. Subsequently, the market has adjusted to this new tax regime and it is expected that in coming years, higher sales can be expected.

During the year, some of the key brands of the Company did good business. Significant growth was noticed in business of new fungicides launched in the earlier year. The Company launched new speciality/ biological products successfully. Some of the initiatives like Adarsh Kisan centres taken by the Company in earlier years were well appreciated by farming community and this helped the Company to improve its sales.

In North America, some of the herbicides of the Company recorded very good growth. The western states came out of spells of dry weather and had bountiful rains. The sale of fungicides for potato and vegetable market grew. Sale of insecticides also went up as the cotton planted area increased. However, the commodity prices remained subdued. The situation is likely to improve in future.

In Latin America, including Brazil, the new insecticide launched got a very encouraging response. The fungicide business continued to grow and more areas were treated with Company's fungicides. At the beginning of the year, there were delayed rains in north Brazil and dry season in south Cone and Argentina.

The European market has started improving. Summer heatwaves prevailed across Southern Europe. Though overall market scenario was not so favorable, the Company's performance showed lot of improvement. It is expected that in coming years, the Company's business will continue to grow in Europe. During the year, herbicides sales grew in sugar beet farming. The Company introduced new herbicides and fungicides in the market. Business in Germany rebounded with higher growth. However, due to low disease pressure in dry weather of Italy and Spain, usage of fungicides reduced there.

As regards rest of the world, double digit growth was recorded in Africa and some of the South East Asian countries. In turkey, new herbicides were successfully launched. The Company continues to introduce new products in different countries. Business has improved in China. In Australia, severe summer heat and drought conditions continue to prevail resulting in low usage of agrochemicals.

FUTURE OUTLOOK

This year, normal monsoons are predicted in India. Onset of timely monsoon will result in on time sowing thereby ensuring increase in overall planting acreages in Kharif crops like Rice, Cotton, Soybean and Corn. This will fuel economic growth by enhancing the farm productivity. The growth in farm sector income will affirmatively trigger the usage of Agrochemicals.

The special focus of Union Budget on Indian Agriculture is further expected to accelerate the growth in the farming sector. The announcements of various favorable policies like linking MSP to production costs, e-NAM (Online Market Place), 100% Tax deduction on profits to Farmers Producers Organizations (FPO) with a turnover below INR 100 crores and increase in the Agricultural Credit target by 10 % to INR 11 Lakh Crores will spur the economic growth of farmers. Focused impetus for Crop Insurance, Micro-irrigation, Food Processing and Agricultural exports will further lead to progress in the sector with a vision towards achieving the Government mandate of doubling farm Income by 2022. These policies will result in increasing the purchasing power of growers to go for higher investments anticipating better yields.

The global acceptability and demand of Company's products is increasing at a fair pace due to the growing need and innovation driven products providing solutions in crop protection. Overall Agrochemical markets in Europe seems to be stable for this year without any drastic fluctuation. Markets in US and North America are showing signs of growth in terms of better value realization. With reduction in surfeit of inventory and rising commodity prices, Latin America could potentially see growth in 2018. Inroads of the Company portfolio into smaller markets of Africa and South East Asia with the help of stronger distribution will support further growth in these untapped markets. Company is building portfolio and investing in manufacturing to insulate itself from the growing crisis of crunch in supply and production in China because of policy changes. With the Company growing faster than the market, it augurs possibility of an overall promising year ahead.

DIVIDEND

Your Directors have recommended dividend of 400% i.e. H 8 per Equity Share of H 2 each for the financial year ended 31st March, 2018, 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 23rd August, 2018 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

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR") the Company has formulated its Distribution Policy and the same has been uploaded on the website of the Company which can be accessed at https://www.uplonline.com/policies-compliances-announcements.

FINANCE

(a) Fixed Deposits

The Company has not accepted fixed deposits during the year. There are no fixed deposits outstanding as at 31st March, 2018.

(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) 22,24,287 equity shares of H 2 each on conversion of

Convertible Preference Shares and

(ii) 91,676 equity shares of H 2 each to Employees under

Employee Stock Option Plan of the Company.

CREDIT RATING

The Company enjoys a good reputation for its sound financial management and ability to meet its financial commitments. Company's bank facilities have been rated by CARE as CARE AA+ (Stable) for long term facilities and CARE A1+ for short term facilities and by CRISIL as CRISIL AA+ (Stable) for long term facilities and CRISIL A1+ for short term facilities. Company's Commercial papers are rated by CARE as CARE A1+ and by CRISIL as CRISIL A1+. Company's Non-Convertible Debentures are rated by CARE as CARE AA+ (Stable) and by Brickwork Ratings as BWR AA+ (Stable).

UPL Corporation Ltd., a wholly owned subsidiary of the Company, has been rated by S&P as BBB- (Positive), Moody's Baa3 (Positive) & Fitch BBB- (Stable). It has issued 5 year USD 500 mn USD Denominated Senior Notes under 144A / Reg S in October 2016 and issued a 10 year USD 300 mn USD Denominated Senior Notes under Reg S in February / March 18.

ESOP

The details as required to be disclosed under the SEBI (Share Based Employee Benefits) Regulation, 2014 has been uploaded on the Company's website at the link https://www.uplonline.com/policies-compliances-announcements

SAFETY AND ENVIRONMENT

Health and Safety

Health and safety remains to be a core area of importance for the Company with a motto of each person working for and on behalf of the Company "Alive and Well at the end of the Day". Your Company has improved its safety performance in terms of the TRFR reduction by 42%, Lost Time Injuries by 42%, Process Safety Incidents by 60%, and Severity Index by 40%. However, this is not the end and The Company continues to work in pursuit of Achieving UPL Safety Vision – "To become one of the Best and Safest Chemical Manufacturing Companies in the world and achieve best in class in Safety by making Safety a way of Life". It will be heartening to note eleven units of the Company were incident free for the year 2017-18. Your Company has heavily invested in the infrastructure investment in its old plants to ensure the structural safety of the plants. Company has achieved marked improvements in its green field and brown field projects through various new initiatives under Construction and Contractor Safety Management System. While New initiatives like Zero Leak Programme, Mistake proofing through Poka-yoke, Safety Abnormality reporting, 5S relaunch have helped safety performance improvement immensely, the Process Safety Management, Capacity Building through level 0,

1 & 2 training and several employee engagement initiatives are continuously being strengthened. Level 0, 1 & 2 trainings are training for safety and functional capacity building, an employee can take charge only after he/she has successfully passed the assessment. Your Company has a system of Internal & external safety audit and average compliances on 2nd and 3rd party audit have been a significant 94+%. The testimony of performance reflects through several awards in EHS performance from reputed institutions like OSHAI, Frost & Sullivan, CII Green Business Centre, IGMC, FICCI, Golden Peacock to name a few. All the Indian units have been accredited with ISO 14001-2015 standard.

Transport Safety Management System: Since the Company receives and dispatches large number of Chemical Consignments either in Tankers or Trucks, the Company is pursuing to undertake risk assessment in this area. Company is working at a very advance stages with a third party expert to design the entire scheme for handling hazardous chemicals transport management system for the Company. 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. The Company is constantly working to reduce environmental footprint and find innovative product solutions that benefit the environment. The Company's environmental standards apply worldwide.

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

This year Company has released Sustainability Report as per GRI guidelines. UPL Sustainable Development Plan is fully aligned with UN Sustainable Development Goals.

Reducing Environmental Impact

The target is to reduce 30% environmental footprint in our manufacturing plants by 2020 compared to 2015-16.

Water Consumption Carbon Emissions Waste Disposal Wastewater Discharge
Target Target Target Target
30% reduction in specific water consumption in our manufacturing plants by 2020. 30% reduction in specific plants by 2020. CO2 30% reduction in specific waste 30% reduction in specific emissions in our manufacturing disposal in our manufacturing wastewater discharge in our
plants by 2020. manufacturing plants by 2020.
Performance Performance Performance Performance
In 2017-18, water consumption In 2017-18, CO2 emissions per In 2017-18, waste disposal per In 2017-18, wastewater discharge
per tonne of production in the Company's manufacturing plants tonne of production in Company's manufacturing plants the tonne of production in Company's manufacturing plants the per tonne of production in the Company's manufacturing plants
reduced by 20% compared to reduced by 30% compared to reduced by 25% compared to reduced by 38% compared to
2015-16. 2015-16. 2015-16. 2015-16.

The Company has taken following initiatives this year to make our operating plant sustainable:

Speci_c 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 the Company's commitment to sustainable development. Aiming to decrease abstracted water demand in our operating plants, following initiatives has been taken this year:

Reduced the water consumption in ALP Red Phosphorus production in Vapi Unit 0.

Reduced the water consumption in Clomazone, Devrinol production in Ankleshwar Unit 2.

Utilized the hot water bath water in drum detoxification in

Ankleshwar Unit 3.

Enhanced the RO water utilization by 57% in last two years at

Jhagadia Unit 5.

Implemented water efficient equipment in manufacturing processes.

Implemented metering, monitoring & targeting (MMT) to ensure the efficient performance of system.

Dedicated technology group worked to reduce water demand.

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 business. Aiming to decrease carbon emissions in the Company's operating plants, following initiatives has been taken this year:

Reduced 30 % CO2 emissions by changing energy mix and by reducing specific energy consumption as compared to baseline 2015-16.

Implemented energy efficient equipment in manufacturing processes.

Implemented metering, monitoring & targeting (MMT) to ensure the efficient performance of system.

Dedicated technology group worked to reduce energy consumption as well as CO2 emissions.

Speci_c Waste Reduction Initiatives

The Company has taken special care to reduce, recycle and eliminate hazardous as well as non-hazardous solid waste. Aiming to decrease waste disposal from the Company's operating plants, following initiatives has been taken this year:

Reduced 25 % specific waste disposal as compared to baseline

2015-16 from the Company's operating plants by operational excellency.

Converted the process waste of Pendimethalin and Glufocinate plant into sellable by-products in Jhagadia Unit 5.

Reduced specific waste disposal by increasing the yield of PMP and UPH production in Vapi Unit 0.

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 has been taken this year:

Reduced 38% specific wastewater discharge from 2015-16 baseline by operational excellency.

Reduction of effluent discharge in 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 just reduces the footprint and consequent capex spends of the plant but also results in significant reduction in the quantity of effluent generated.

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

Implemented metering, monitoring & targeting (MMT) to ensure the efficient performance of system.

Dedicated technology group worked to enhance the environmental compliances and management standards thereby resulting in reduction of the utility and environmental footprint.

RESEARCH AND DEVELOPMENT

In order to fulfil the vision and the mission, Company has created multiple Research and Development Centres which are located in different countries spread across the Globe to provide services to the farmers at a pace which is required to overcome the problems faced by them. These Research and Development Centres are very effective in providing solutions to the regional as well as Global pest management issues.

The Research and Development Centres are equipped with state-of art facilities and highly qualified scientists. Company is engaged in developing technical products in a highly cost effective way and in providing pre-mix formulations which are more effective and economical to the farmer, safe to handle and environment friendly.

Every year Company introduces many new products in the market which are the result of the tireless work by the skilled scientists who develop these products. The products are designed following Green Chemistry Principles and desired safety considerations.

Company is very innovative in introducing pre-mix combinations of two or more active ingredients as effective pest-management and resistance management solutions. Scientists working on the projects develop these products at a fast pace to make the projects successful and quick market introduction of the products.

The formulations are tested extensively for bio-efficacy at the development stage before going to the market launch. Care is taken to develop safe, easy to handle and environmentally friendly formulations keeping in the mind "The Farmer First" motto of Company.

The Research and Development Centres also work on the existing products and processes been commercialized to make them more cost-effective or to improve the quality.

Company respects Intellectual Property of others and creates its own Intellectual property for the products and processes developed by the Research and Development Centres. Patents are obtained in the countries of interest and appropriate measures are taken to safeguard the IP.

Technical and formulation registration requires data generation like chemical composition, physico-chemical properties, toxicity and impurity profile, bio-efficacy, residue and packaging and so on. The required data is generated at Research and Development Centres and then gets the products tested at GLP laboratory to generate the data for submission to the regulatory authority in various countries.

Company is also giving importance to for Speciality and Industrial Chemicals for which the industrial processes are developed in the Research and Development Centres. R&D scientists are able to provide safe and economical processes which are successfully implemented for commercial production.

CORPORATE SOCIAL RESPONSIBILITY

‘Doing Things Better' is core to the Company's DNA. Three simple words, which lie at the heart of the Company's philosophy have been the guiding force in all community interventions. All of the Company's CSR programs are driven by the belief that humankind is one community, where each member is responsible for the wellbeing of the other. Hence the Company's interventions are not restricted to the development of the neighboring communities alone, but the Company works on programs that cater to the wider national interest too! Though the Company's CSR efforts are focused in Gujarat, they have also touched lives in many other states including but not restricted to Maharashtra, West Bengal, Kashmir, Tamil Nadu and Himachal Pradesh.

In neighborhoods the Company's focus is to work on the needs, strengths and growth priorities of the community. Hence in Dang district which is primarily an agricultural economy, the main focus is on providing sustainable livelihood from improved agricultural practices. Multiple interventions have been designed and implemented with the support of farmers groups at the village level. UPL Centre for Agricultural Excellence provides the much needed training support to the farmers. AKRSP SRI, Dang Paddy Development Program, BoriBagicha, use of mini drip irrigation, animal husbandry, providing water harvesting structure like dams and wells etc. have improved the productivity of the land thereby making agriculture more sustainable and profitable for more than 15,000 farmers.

The need assessment survey of the Company had brought out the fact that the per capita availability of land was small which led to disguised unemployment. Many youth and women in the region were not productively employed. The Company's employment and entrepreneurship initiatives are focused on providing this segment with knowledge, skills and the motivation to take up entrepreneurship as an income generating opportunity. Skill based entrepreneurship development program provides training to start both farm and non-farm based enterprises. Four UPL Niyojaniy Kendra's are providing training to youth in the region on industrial skills like welding, fitting, electrical etc. Once trained these youth get gainfully employed in the neighboring industries. UPL Udyamita with more than 1300 women members is another intervention that focuses on making women financially independent through self- help groups.

Another focus area for the Company is the conservation and preservation of flora and fauna. UPL Social Forestry aims at afforestation and rehabilitating the degraded forest and common lands with active support from the community. Under UPL Social Forestry a total 71,351 plants were planted and is being properly maintained at different community sites which covers 163.73 acres of community land. The Company has also planted 1,20,000 Mangrove plants spread across 60 acres of land in the coastal belt in Vagra block, DAHEJ. Innovatively, the Company adopted different participatory approach to execute the UPL Social Forestry that has led to sustain the plantation and project. Sarus Conservation project has made some impressive progress since inception 3 years back. Sarus protection groups are actively working towards protection of nests, eggs and juvenile Sarus. Around 80 Eco Clubs have made thousands of children aware about the importance of nature preservation.

The Company has built 36 toilet blocks in community school/public places under UPL School Sanitation Project and are driving hygenic behavior through toilet blocks. Girls safety, Home safety, Industrial safety and Road safety programs make the target population (more than 10,000 till date) aware of the safety measures to avoid untoward incidents.

UPL Unnati program has been taken up to help community based organizations of Mumbai to improve their capabilities and thereby work with the community in a better way. The Company is supporting Global Parli project (Maharashtra) which is working to make Parli tehsil a model for others to follow. Vandri cluster development program is another initiative that is working towards improving the quality of life of villagers in Vandri which is a very remote village in Gujarat not equipped with basic facilities.

The Company also support the relief efforts of the government in times of natural disasters. Last year the Company provided food packets to the flood affected people in Banaskantha district of Gujarat. Similarly the Company donated INR 25 lacs for rehabilitation of flood victims in Assam.

The Company's international subsidiaries and sister concerns share development ethos. UPL Brazil works on a complimentary education program empowering the local youth to lead meaningful lives. UPL

Colombia is responding to surrounding communities "whole life cycle" need by promoting the social and economic development through education, entrepreneurship and the conservation of the environment. UPL Argentina has establishing Social Security office at plant for every neighbour community (in the past they need to travel 46 km to have access to social security office). UPL Mexico has been collecting and distributing winter clothing to the poorest of the poor since 2015. UPL Tanzania has been supporting small farmers who are totally dependent on Sunflower farming for their existence.

The Annual Report on CSR activities is annexed to this report as "Annexure 1".

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 https:// www.uplonline.com/policies-compliances-announcements.

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.

In earlier year, the Company made all efforts to create awareness among the employees about the Policy. The Company also made all efforts to create awareness about the policy among the employees, who have joined during the year. 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.

During the year, the workshops were arranged, conducted by an esteemed agency, to educate the employees, who have joined during the year, 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, subcommittees 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 robust systems for internal audit, risk assessment and mitigation and has an independent Internal Audit Department with well-established internal control and risk management processes both at the business and corporate levels.

Internal Audit function plays a key role in providing to both the operating management and to the Audit Committee of the Board, an objective view and re-assurance of the overall internal control systems and effectiveness of the Risk Management processes and the status of compliances with operating systems, internal policies and regulatory requirements across the company including its subsidiaries. Internal Audit also assesses opportunities for improvement in business processes, systems and controls and provides recommendations designed to add value to the operations.

The scope and authority of the Internal Audit Department is derived from the Annual Audit Plan approved by the Audit Committee at the beginning of the year. Internal Audits are performed by an in-house team of qualified professionals on the basis of comprehensive risk-based audit plan. Every quarter, the Audit Committee is presented with key internal controls issues/audit observations and action taken update on the internal controls issues/audit observations highlighted in the previous Audit Committee presentations.

Internal Controls over Financial Reporting:

Exercise for evaluating the adequacy of Internal Financial Controls and their Operating Effectiveness is carried out every year. This activity includes understanding and testing of Internal Financial Controls and evaluating their operating effectiveness based on the assessed risk factors. During the year, the effectiveness of the controls was validated. No reportable material weaknesses in design and effectiveness was observed.

From time to time, the Company's systems of internal controls covering financial, operational, compliance, IT applications, etc. are reviewed by external experts too. Presentations are made to the Audit Committee on the findings of such reviews.

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 viz., Industry Risks, R&D Risk, Currency Fluctuation Risk and their mitigation plans were included in the Directors' Report of 2016-17. Some of the additional key business risks identified during the year and their mitigation plans are as under:

Liquidity Risks: The Company requires very sound base of working capital. During the off-season the Company cannot afford to have huge inventory and receivables as this will result into delayed payment to the creditors. It is very important that the Company enjoys a fair amount of liquidity of funds. Liquidity risks could impact the debt repayment capabilities of the Company and thereby the Company's name in the market will be affected. To mitigate this risk, the Company's business enjoys adequate liquidity. It has a very comfortable debt equity position. The Company is earning cash profit of more than H 2500 crores. The working capital management is also very sound and at present the Company's net working capital stands at 90 days of turnover. Considering all this, the Company does not expect liquidity to be a major concern.

HR Risks: The Company has a huge workforce. Globally it employs around 5000 people who are from diverse nationalities, geographies and varied culture. The function of HR therefore becomes very important. A poor HR policy could impact productivity and profitability of the Company. To mitigate this risk, the present HR strategy has fostered cross functional coordination across all countries. Even though large number of workforce is employed in different countries they all follow the same corporate culture of the Company. The senior management team is visiting various plants and offices of the Company regularly and relations at all these places is very cordial and tension free. In fact, the Company is certified as a "Great Place to Work" in India as well as in Brazil. The Company will continue to put in more efforts and see that HR functions are carried out properly and professionally.

Cyber Security Risks: In the hyper connected world the Company has provided its employees mobiles, laptops and tablets to enable them to perform their functions effectively. However there are lots of security threats to the data of the Company and the confidential data may go to unauthorized persons by way of hacking of mobile, laptops and tablets. It is pointed out there is no such thing as perfect protection. The bigger the organization and more complex in nature, it becomes a target for data security risks. It is necessary to provide for preventive measures to ensure lower risks, early detection of risks and cost effective data security systems. The goal is to build a sustainable cyber security program that governs protection and ensures enablement to employees and others in right proportion. To mitigate this risk, the control measures taken by the Company include continuous monitoring of data security systems, providing access only to required staff, security incidents and event monitoring and prevention of loss of data. Continuous risk assessment and monitoring is necessary. The various layered security controls have been established.

Recently there have been cyber threats all over the world. Ransomware had affected some of the global organizations, however there was no impact on the Company. This was because of the mitigating steps taken by the Company such as blocking vulnerable ports and services, communicating throughout the organization by sending awareness mailers etc.

Reputation Risks: Due to a large organization set up and employing many people across the globe as also non-observance of the policies and pre-determined procedures and SOPs can result at times into risk of damage to the reputation of the Company. The Company deals with various stakeholders and if they are not attended properly and are not provided with quality products and services, Company's image will get spoilt. If suppliers are not paid in time or the employees who are leaving the organization do not get their dues in time the Company suffers the risk of reputation. To mitigate this risk, the finance department and the HR department take care to see that the suppliers are paid in time and all government dues are cleared on time. The collection are made in time and there is no overtrading. All the employees of the Company are required to sign integrity policy when they join. This ensures that there are no chances of corruption or favoritism against any employee. The Company follows this policy diligently. The Company's share department along with Registrar and Transfer Agents ensure that quality services are provided to the shareholders and all their genuine complaints are attended properly.

The Company carries out lots of social activities, contributes to various NGO's and educates the farmers continuously. The Company is conscious of the fact about the negative image of the Agro Chemical industry in the society and to safeguard the interest of the Company the Company takes various awareness measures and makes timely representations to various authorities. The Company ensures that all its products are of the right quality. The Company ensures that at all plants there is no pollution and environment protection assurance is the top most priority. If required, the Company legally fights against some motivated NGO's to see that there are no false allegations against the Company and its reputation does not get damaged.

SUBSIDIARY COMPANIES / ASSOCIATE COMPANIES Shro_s 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 H 666 Cr and the Profit before tax is H 44 Cr.

Optima Farm Solutions Ltd:

Optima farm solutions ltd is engaged in the manufacture of agrochemicals in Jammu. The Company has made sales of H 174 Cr in the current year.

UPL Europe Ltd.:

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 2018 is H 866 Cr and the Profit before tax is H 67 Cr.

UPL Deutschland GmbH:

UPL Deutschland GmbH is engaged in the distribution of formulated products in Germany & Austria. The Turnover for the year is H 331 Cr and the Profit before tax is H 10 Cr.

UPL Polska Sp z o o:

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.:

UPL Benelux BV is engaged in the distribution of formulated products in Benelux and Switzerland. The Turnover for the year is H 336 Cr and the Profit before tax is H 23 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 2018 is H 975 Cr and the Profit before tax is H 27 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 Cooperatief U.A. is the holding company in Brazil.

UPL Italia S.R.L.:

UPL Italia S.R.L is engaged in the distribution of formulated products in Italy. The Turnover is H 329 Cr and the Profit before tax for the year ended 31st March 2018 is H 14 Cr.

UPL IBERIA, SOCIEDAD ANONIMA:

UPL Iberia is engaged in the distribution of formulated products in Spain & Portugal. The Turnover is H 145 Cr and the Profit before tax is H 7 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 2018 is H 451 Cr and the Profit before tax is H 27 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 2018 is H 38 Cr and the Profit before tax is H 6 Cr.

UPL France:

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 H 403 Cr and the Profit before tax is H 32 Cr.

UPL Corporation Limited, Mauritius:

UPL Corporation does trading business and also holds investments for the group. The Turnover is H 2386 Cr and the Profit before tax is H 197 Cr.

Decco Iberica Postcosecha, S.A.U., Spain:

Decco Iberica is involved in fabrication & commercialization of chemical products, waxes & fungicides, as well as the machinery used for their application. The Turnover is H 117 Cr and the Profit before tax is H 15 Cr.

Limited Liability Company UPL:

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 2018 is H 28 Cr and the Profit before tax is H 2 Cr.

United Phosphorus Inc., U.S.A.:

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 H 2,883 Cr and the Profit before tax is H 55 Cr.

Canegrass:

Canegrass is Company for the distribution of Asulam (Sugarcane Herbicide) in the USA.

RiceCo LLC:

RiceCo LLC is dedicated to meet specific technology needs of rice farmers in the USA. Its turnover during the year is H 242 Cr and Profit before tax is H 11 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 H 247 Cr and Profit Before Tax is H 8 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 H 249 Cr and the Profit before tax is H 29 Cr.

UPL Limited, MAURITIUS:

UPL Mauritius does Trading business. The Turnover for the year is H 960 Cr and the Profit before tax is H 306 Cr.

UPL LIMITED, Gibraltar:

UPL Limited Gibraltar does Trading operations. The Turnover for the year is H 2969 Cr and the Profit before tax is H 299 Cr.

United Phosphorus Cayman Limited:

United Phosphorus Cayman Ltd, is a holding Company. The Turnover for the year is H 300 Cr and the Profit before tax is H 8 Cr.

UPL Agro SA DE CV:

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 H 436 Cr and the Profit before tax for the year is H – 3 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 H 9 Cr. and the Profit before tax for the year is H – 2.

Uniphos Industria e Comercio de Produtos Quimicos Ltda:

This is a holding company of UPL Do Brasil-Industria e Comercio de Insumos Agropecuarios S.A..

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 H 3,594 Cr and the Profit before tax for the year is H 52 Cr.

UPL 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 H 330 Cr and the Profit before tax for the year is H -10 Cr.

UPL Bolivia S.R.L:

UPL Bolivia is engaged in the sales and marketing of agro chemicals in Bolivia. The Turnover for the year is H 37 Cr and the Profit before tax for the year is H 5 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 H Nil 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:

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 H 393 Cr and the Profit before tax for the year is H -90 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 H 44 Cr and the Profit before tax for the year is H 8 Cr.

UPL Colombia SAS:

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 H 143 Cr and the Profit before tax for the year is H -10 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 H 96 Cr and the Profit before tax for the year is H 26 Cr.

UPL Australia Limited:

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 H 143 Cr and the Profit before tax for the year is H 10 Cr.

UPL New Zealand Limited:

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 H 7 Cr and the Profit before tax for the year is H 1 Cr.

UPL Shanghai Ltd:

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

UPL Limited Korea:

UPL Korea was formed to grow UPL's agro chemical and fumigation business in Korea. The Turnover for the year is H 3 Cr and the Profit before tax for the year is H 1 Cr.

PT.UPL Indonesia:

UPL Indonesia is doing business in Indonesia. It mainly caters to the requirements of strategic partners like Nufarm, FMC ad other top local companies as well as semi-government organization. The Turnover for the year is H 87 Cr and the Profit before tax for the year is H 6 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 H 49 Cr and the Profit before tax for the year is H -2 Cr.

UPL 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 2018 is H 555 Cr and the Profit before tax is H 21 Cr.

UPL Philippines Inc.:

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 H 93 Cr and the Profit before tax is H 1 Cr.

UPL Vietnam Co. Ltd.:

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 H 185 Cr and the Profit before tax is H 27 Cr.

UPL 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 and research laboratory center at Tsukuba. The Turnover is H 196 Cr and the Profit before tax is H 3 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 H 23 Cr and the Profit before tax is H Nil.

UPL Ziraat Ve Kimya Sanayi Ve Ticaret Limited Sirketi:

The Company has a strong distribution network as well as brand presence in Turkey (mainly western region). The Turnover is H 157 Cr and the Profit before tax is H -20 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 H 110 Cr and the Profit before tax is H -4 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 H 36 Cr and the Profit before tax is H -4 Cr.

Citrashine (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 H 32 Cr and the Profit before tax is H -1 Cr.

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 H 43 Cr and the Profit before tax is H 5 Cr.

UPL Paraguay S.A.:

UPL Paraguay is engaged in the sales and marketing of agro chemicals in Paraguay. The Turnover is H 29 Cr and the Profit before tax is H -5 Cr.

UPL Africa SARL:

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

Advanta Seeds International, Mauritius:

Advanta Seeds International is engaged in distribution and marketing of seeds in the various countries. The Sales Turnover for the year is H 697 Cr and the Profit before tax is H 75 Cr.

Advanta Seeds DMCC (formerly known as Advanta Seeds JLT):

Advanta Seeds DMCC is engaged in distribution and marketing of seeds in the UAE. The Sales Turnover for the year is H 34 Cr and the Profit before tax is H -9 Cr.

PT Advanta Seeds, Indonesia:

PT Advanta Seeds is engaged in distribution and marketing of field Corn and Sweet Corn seeds in Indonesia. The Sales Turnover for the year is H 70 Cr and the Profit before tax is H 16 Cr.

Advanta Holdings B.V., Netherlands:

Advanta Holdings B.V. is engaged in distribution and marketing of seeds in Europe. The Sales Turnover for the year is H Nil and the Profit before tax is H -17 Cr.

Advanta Semillas SAIC:

Advanta Semillas is engaged in distribution and marketing of Sorghum corn sunflower seeds in Argentina. The Sales Turnover for the year is H 193 Cr and the Profit before tax is H -37 Cr

Advanta Netherlands Holding B.V.:

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 H 32 Cr and the Profit before tax is H -6 Cr,

Paci_c Seeds Holdings (Thailand) Limited:

Pacific Seeds Holdings is holding Company. The Profit before tax is H Nil, largely contributed by other income.

Paci_c Seeds (Thai) Limited:

Pacific Seeds (Thai) is engaged in distribution and marketing of seeds in Thailand. The Sales Turnover for the year is H 360 Cr and the Profit before tax is H 110 Cr

Advanta Comercio De Sementas Ltda.:

Advanta Comercio is engaged in distribution and marketing of Sorghum Soyabean Canola Corn seeds in Brazil. The Sales Turnover for the year is H 89 Cr and the Profit before tax is H-92 Cr.

Advanta Seeds Pty Ltd (Formerly, Paci_c Seeds Pty Ltd):

Advanta Seeds Pty Ltd is engaged in distribution and marketing of Sorghum, Corn and Canola seeds in Australia. The Sales Turnover for the year is H 253 Cr and the Profit before tax is H 23 Cr.

Advanta US LLC (formerly known as Advanta US Inc):

Advanta US LLC 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 H 137 Cr and the Profit before tax is H -57 Cr.

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

a) New subsidiaries:

1. UPL Jiangsu Limited

2. UPL Agro Limited Mauritius

3. Riceco International Bangladesh Ltd

4. Uniphos Malaysia Sdn Bhd

b) New associate:

1. Serra Bonita Sementes S.A.

c) Cessation of subsidiaries:

1. UPL Africa SARL

2. UPL Limited Mauritius

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 https://www.uplonline.com/ policies-compliances-announcements.

INSURANCE

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

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material order passed by the Regulators or Courts.

AUDITORS

a) Statutory Auditors

At the 33rd Annual General Meeting of the Company held on 8th July, 2017, the Members of the Company have approved 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 for a term of 5 (five) years from the Company's financial year 2017-18, to hold office from the conclusion of 33rd Annual General Meeting of the Company (subject to ratification of their appointment at every Annual General Meeting, if required under the Act).

However, pursuant to the Companies Amendment Act, 2017 which was notified on May 7, 2018, the provision related to ratification of appointment of auditors by Members at every Annual General Meeting has been done away with.

The report of the Statutory Auditors along with the Notes to Schedules forms part of the Annual Report and contains an Unmodified Opinion without any qualification, reservation or adverse remark.

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 2018-19 on a remuneration of H 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. 5 of the Notice convening the Annual General Meeting.

For the year 2017-18, the due date for filing the Cost Audit Report is 27th September, 2018 and the same will be filed in due course. The Cost Audit Report for the year 2016-17 was filed on 28th August, 2017.

c) Secretarial Auditors

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 Secretarial Audit Report is annexed herewith as "Annexure 2".

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

98.91% of the total paid-up equity shares of the Company are dematerialised as on 31st March, 2018.

DIRECTORS

In accordance with the provisions of section 152 of the Companies Act, 2013, and Articles of Association of the Company, Mr. Vikram Rajnikant Shroff (DIN: 00191472) and Mr. Arun Chandrasen Ashar (DIN: 00192088), 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 earlier appointments of Mr. Rajnikant Devidas Shroff (DIN: 00180810) as Chairman and Managing Director of the Company and Mr. Arun Chandrasen Ashar (DIN: 00192088) as Whole-time Director designated as Director-Finance expire on 30th September, 2018. The Board of Directors has re-appointed Mr. Rajnikant Devidas Shroff (DIN: 00180810) as Managing Director and Mr. Arun Chandrasen Ashar (DIN: 00192088) as Whole-time Director designated as Director-Finance for further period of 5 (five) years, with effect from 1st October, 2018 and subject to the approval of the Members and upon the terms and conditions as set out in the notice convening the 34th Annual General Meeting of the Company.

The special resolutions seeking approval of the Members of the Company for the re-appointment of Mr. Rajnikant Devidas Shroff and Mr. Arun Chandrasen Ashar have been incorporated in the notice of the 34th Annual General Meeting of the Company along with brief details about them.

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

During the year, Mr. Pradip Madhavji (DIN: 00549826), Independent Director has resigned from the Board of Directors of the Company with effect from 27th April, 2018 for personal reasons. During his tenure, he was Lead Independent Director and was Chairman of Audit Committee and Stakeholders Relationship Committee. The Board wishes to place on record its appreciation for his valuable advice and efficient discharge of his duties during the period of almost last fifteen years. The Company acknowledges his pragmatic approach and immense contribution in handling various issues diligently.

All the independent directors have given declaration that they meet the criteria of independence laid down under the Companies Act, 2013 and 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 25th January, 2018 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 https:// www.uplonline.com/ policies-compliances-announcements.

PERSONNEL

As on 31st March, 2018, the Company has 3865 employees in India, and 4784 employees globally.

The Company has always believed that its people are its biggest asset. The year 2017-18 saw several key initiatives to nurture on our core values.

The initiatives taken during the year

1. SUPPLY CHAIN ACADEMY

The Supply Chain Academy launched in the year 2016 saw a tremendous response. Total 1263 employees were covered under this training initiative where the employees were given training in Safety, Skill Upgradation and other behaviour aspects.

2. SAKSHAM PRPJECT

Saksham Project launched for conducting Development Centres for the Sales Workforce. 497 employees. The aim was to impart Functional and Technical Competencies to the Sales Workforce and building capability

3. GLOBAL LEADERSHIP PROGRAM

Global Leadership Program – Winning in the Market Place launched for the Global Leaders who have potential to grow along with the organization. The aim is to enable identified individuals to unlock their full potential and be effective leaders and contribute in building the strategy.

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 3 and 4 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 5 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, 2018, the applicable accounting standards have been followed alongwith proper explanation relating to material departures, if any.

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 2017-18 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 along with the Auditors Report thereon form part of the Company's Annual Report. They are also put up on the website of the Company https:// www.uplonline.com/upl-financial-reports.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure 6".

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.

Mumbai On behalf of the Board of Directors
27th April, 2018
Registered O_ce:
3-11, G.I.D.C., Vapi Rajnikant Devidas Shro_
Dist. Valsad, Gujarat

Chairman & Managing Director

Pin: 396195. (DIN: 00180810)

   

Adani Ports & Special Economic Zone Ltd     345.85   Down   -15.90 (-4.40%)   Asian Paints Ltd     1,271.95   Down   -32.80 (-2.51%)   Axis Bank Ltd     597.35   Down   -1.85 (-0.31%)   Bajaj Auto Ltd     2,759.30   Down   -39.90 (-1.43%)   Bajaj Finance Ltd     2,260.80   Down   -118.60 (-4.98%)   Bajaj Finserv Ltd     6,067.65   Down   -192.05 (-3.07%)   Bharat Petroleum Corporation Ltd     367.40   Down   -9.10 (-2.42%)   Bharti Airtel Ltd     356.20   Down   -14.30 (-3.86%)   Bharti Infratel Ltd     277.85   Down   -3.35 (-1.19%)   Cipla Ltd     645.60   Down   -7.60 (-1.16%)   Coal India Ltd     281.15   Up   5.90 (2.14%)   Dr Reddys Laboratories Ltd     2,553.95   Down   -2.30 (-0.09%)   Eicher Motors Ltd     25,852.80   Down   -2,087.40 (-7.47%)   GAIL (India) Ltd     380.90   Down   -9.25 (-2.37%)   Grasim Industries Ltd     1,019.45   Down   -31.70 (-3.02%)   HCL Technologies Ltd     1,096.30   Up   11.40 (1.05%)   HDFC Bank Ltd     1,925.70   Down   -44.55 (-2.26%)   Hero Honda Motors Ltd     3,110.20   Down   -65.00 (-2.05%)   Hindalco Industries Ltd     239.90   Down   -0.50 (-0.21%)   Hindustan Petroleum Corporation Ltd     248.15   Down   -9.85 (-3.82%)   Hindustan Unilever Ltd     1,590.45   Down   -30.85 (-1.90%)   Housing Development Finance Corporation Ltd     1,718.70   Down   -120.70 (-6.56%)   ICICI Bank Ltd     308.75   Down   -8.35 (-2.63%)   Indiabulls Housing Finance Ltd     981.95   Down   -80.20 (-7.55%)   Indian Oil Corporation Ltd     154.95   Down   -3.20 (-2.02%)   IndusInd Bank Ltd     1,674.20   Down   -88.25 (-5.01%)   Infosys Technologies Ltd     718.25   Up   12.95 (1.84%)   ITC Ltd     297.95   Down   -6.00 (-1.97%)   Kotak Mahindra Bank Ltd     1,148.70   Down   -31.50 (-2.67%)   Larsen & Toubro Ltd     1,318.35   Down   -11.35 (-0.85%)   Lupin Ltd     860.75   Down   -29.50 (-3.31%)   Mahindra & Mahindra Ltd     896.05   Down   -63.85 (-6.65%)   Maruti Suzuki India Ltd     7,793.05   Down   -247.10 (-3.07%)   NIFTY (S&P CNX)     10,967.40   Down   -175.70 (-1.58%)   NTPC Ltd     167.90   Down   -0.35 (-0.21%)   Oil & Natural Gas Corpn Ltd     180.60   Up   0.20 (0.11%)   Power Grid Corporation of India Ltd     197.60   Down   -2.80 (-1.40%)   Reliance Industries Ltd     1,232.05   Up   14.55 (1.20%)   State Bank of India     264.35   Down   -6.25 (-2.31%)   Sun Pharmaceuticals Industries Ltd     624.00   Down   -10.90 (-1.72%)   Tata Consultancy Services Ltd     2,198.45   Up   95.30 (4.53%)   Tata Motors Ltd     240.20   Down   -10.15 (-4.05%)   Tata Steel Ltd     607.70   Down   -17.45 (-2.79%)   Tech Mahindra Ltd     751.45   Up   13.40 (1.82%)   Titan Company Ltd     791.10   Down   -9.50 (-1.19%)   UltraTech Cement Ltd     3,974.90   Down   -94.45 (-2.32%)   UPL Ltd     651.40   Down   -14.40 (-2.16%)   Vedanta Ltd     229.90   Down   -0.55 (-0.24%)   Wipro Ltd     332.70   Down   -2.50 (-0.75%)   Yes Bank Ltd     226.40   Down   -0.10 (-0.04%)   Zee Entertainment Enterprises Ltd     448.05   Down   -2.80 (-0.62%)      NSE Data  -  www.nseindia.com (5 minutes delayed) syndicated by www.cmots.com