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UPL Ltd.

BSE: 512070 Sector: Agri and agri inputs
NSE: UPL ISIN Code: INE628A01036
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OPEN 807.00
PREVIOUS CLOSE 802.55
VOLUME 290574
52-Week high 864.75
52-Week low 399.00
P/E 269.77
Mkt Cap.(Rs cr) 61,422
Buy Price 0.00
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Sell Price 0.00
Sell Qty 0.00
OPEN 807.00
CLOSE 802.55
VOLUME 290574
52-Week high 864.75
52-Week low 399.00
P/E 269.77
Mkt Cap.(Rs cr) 61,422
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

UPL Ltd. (UPL) - Auditors Report

Company auditors report

To the Members of UPL Limited

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

OPINION

We have audited the standalone financial statements of UPL Limited ("theCompany") which comprise the standalone balance sheet as at March 31 2020 and thestandalone statement of profit and loss (including other comprehensive income) standalonestatement of changes in equity and standalone statement of cash flows standalone financialstatements including a summary of the significant accounting policies and otherexplanatory information (hereinafter referred to as "the standalone financialstatements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone required by the Companies Act 2013("Act") in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2020 and profit and other comprehensive income changes in equityand its cash flows for the year ended on that date.

BASIS FOR OPINION

We conducted our audit in accordance with the Standards on Auditing (SAs) Act. Ourresponsibilities under those SAs are further described in the Auditor's Responsibilitiesfor the Audit of the Standalone Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India together with the ethical requirements that are relevantto our audit of the standalone financial statements under the provisions of the Act andthe Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our opinionon the standalone financial statements.

EMPHASIS OF MATTER

We draw attention to note 45 of the standalone financial statements regarding theamalgamation of Advanta Limited into the Company accounted for in the financial year 16-17with effect from1 April 2015. In accordance with the Scheme approved by the Hon'ble HighCourt of Gujarat (‘the Scheme') the amalgamation had been accounted for as perAccounting Standard 14 ‘Accounting for Amalgamations'. Accordingly all assets andliabilities of Advanta Limited had been recorded at their respective for the year thenended and notes to existing book values. The difference between the book values of thenet assets so recorded and the consideration (being fair value of equity shares and issueprice of preference shares issued by the Company to the shareholders of Advanta Limited)aggregating Rs 3697 crore had been debited as goodwill. This goodwill is being amortisedas per terms of the Scheme and is also tested for impairment every year. Such accountingtreatment of statements give the information this transaction is different from thatprescribed under Ind AS 103 ‘Business Combinations' which requires assetsliabilities and consideration to be measured at fair value and goodwill to be tested onlyfor impairment. Had the accounting treatment prescribed under Ind AS 103 been followedprofit after tax reported for the year ended March 31 2020 would have been higher by Rs370 crore and goodwill and equity as at March 31 2020 would have been higher by Rs 1842crore respectively. under section 143(10) of the Our opinion is not modified in respect ofthis matter.

KEY AUDIT MATTERS

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

DESCRIPTION OF KEY AUDIT MATTER

Revenue recognition rebates and sales returns

Refer note 2.1 and 2.2 (b) to accounting policies and note 21 to the standalonefinancial statements

The key audit matter How the matter was addressed in our audit
Revenue recognition Our procedures included the following:
• The timing of revenue recognition is relevant to the reported performance of the Company. • We assessed the compliance of the revenue recognition accounting policies against the requirements of Indian Accounting Standards ("Ind AS").
• We identified revenue recognition as a key audit matter because of quantum of revenue and the time and audit effort involved in auditing the terms of the customers contract and the revenue recognised. • We evaluated the design and operating effectiveness of the relevant key financial controls with respect to revenue recognition on selected transactions.

Revenue recognition rebates and sales returns

Refer note 2.1 and 2.2 (b) to accounting policies and note 21 to the standalonefinancial statements

The key audit matter How the matter was addressed in our audit
• Using statistical sampling we tested the terms of the revenue contracts against the recognition of revenue based on the underlying documentation and records.
• We tested the accuracy of revenue recognised around year end. On a sample basis we evaluated the revenue being recognised in the correct accounting period.
• We assessed the adequacy of disclosures in the standalone financial statements against the requirements of Ind AS 115 Revenue from contracts with customers.
Rebates and sales returns Our procedures included the following:
The Company provides rebates to various customers in terms of formal agreements. The recognition and measurement of rebates including establishing an accrual at year end involves significant judgement and estimates particularly the expected level of rebates of each of the customers. • Understanding the process followed by the Company for identifying and determining the value of rebates and sales returns.
As disclosed in Note 2.1 to the standalone financial statements revenue is recognised net of sales returns. Estimation of sales returns involves significant judgement and estimates. • We evaluated the design and tested the operating effectiveness of the relevant key financial controls with respect to recognition and accrual of the rebate expense and sales returns.
The value of rebates and sales returns together with the level of judgement involved resulted in rebates and sales returns being a key audit matter. • We tested the data used by the Company in assessing the provision for rebates and sales returns for completeness and accuracy by agreeing the invoices for the rebate and sales returns to the formal agreements;
• On a sample basis we evaluated the basis of rebate and sales return provision by agreeing amounts recognised to the terms of agreements and approvals.
• We assessed the assumptions and judgements used in the sales return provision by comparing against historical trends returns and subsequent actual sales returns.
• We compared year end customer rebate accruals and rebate costs in the year to prior year actual rebate payments to assess the accuracy of the accrual against actual rebates paid.

Existence and valuation of inventory

Refer notes 2.1 2.2 (i) to the accounting policies and note 9 to the standalonefinancial statements

The key audit matter How the matter was addressed in our audit
The Company has operations spread across the country and holds inventory at various locations. The Company has a plan wherein inventory is verified on a periodic basis to ascertain the existence of inventory. Our procedures included the following:
• We assessed the inventories accounting policies and evaluated compliance with the requirements of Ind AS.
Inventory valuation involves significant assumptions and estimations made by the Company which include identifying obsolete inventory slow moving inventory and inventory not suitable for use. • We evaluated the design and the operating effectiveness of the relevant key financial controls with respect to physical verification of inventory valuation of inventory including the provision for obsolete and slow-moving inventory.
The Company also makes an estimate for slow moving inventory based on the age of the inventory. • For locations selected using statistical sampling we observed physical verification of inventory conducted by the Company as at the year end. Furthermore for inventory held by third parties we verified the quantity of inventory on hand against independent inventory statements.
We have identified inventory as a key audit matter because of the number of locations at which inventory is stored and the judgement applied in the valuation of inventory.
• We obtained the system generated inventory ageing report and analyzed the ageing profile of inventories to identify slow and obsolete inventory. Using the aged system report we assessed the adequacy of the allowance for obsolete and slow-moving inventory items.

Impairment of trade receivables

Refer notes 2.1 & 2.3 (m) to the accounting policies and note 10 and 41 to thestandalone financial statements

The key audit matter How the matter was addressed in our audit
Trade receivables amount to approximately 3161 crore and the expected credit loss amounts to approximately 120 crore as at March 31 2020. Our procedures included the following:
The Company has applied a simplified ECL model to determine the impairment against trade receivables at the reporting date. • We assessed the design and implementation and tested the operating effectiveness of the Company's relevant key financial controls around the ECL allowance.
The expected credit loss (ECL) model involves the use of various assumptions and study of historical observed default rates over the expected life of the trade receivables. • We critically assessed the ECL model developed by the Company and verified with the requirement of Ind AS 109.
The significant judgements include the assessment for the forward-looking estimates. • Tested key assumptions and judgements such as those used to assess the likelihood of default and loss on default by comparing to historical data.
Due to the significance of trade receivables and the significant judgement involved in determining the ECL the impairment of trade receivables was considered to be a key audit matter. • We involved our IT specialists to check the system generated ageing report used in assessing the ECL allowance the system controls around the processing of data used for ECL and verifying the output generated thereof.
• We considered the adequacy of the disclosures in the standalone financial statements against the requirements of Ind AS 109 Financial Instruments and Ind AS 107 Financial Instruments Disclosures.

Valuation of goodwill

Refer to accounting policy notes 2.1 2.2 (d) 4 and 49 to the standalone financialstatements

The key audit matter How the matter was addressed in our audit
• As at March 31 2020 the Company had 1855 crore of goodwill as a result of acquisition of Advanta Limited. Our procedures included the following:
• The Company makes significant judgement in estimating future cash flows which are used for annual goodwill impairment testing. The Company compares the carrying value of the assets with their recoverable amount • We assessed the Company's methodology applied in determining the CGUs to which these assets are allocated.
• We assessed the assumptions around the key drivers of the cash flow forecasts including discount rates expected growth rates and terminal growth rates used;
• The inputs to the impairment testing model which have most significant impact on the model includes: • We compared the cash flow forecasts to approved budgets and other relevant market and economic information as well as testing the underlying workings.
a) Future cash flows and growth rate; and
b) Discount rate applied to the projected cash flows • We assessed Company's sensitivity analysis over the key assumptions to determine any possible change in these assumptions which would result in an impairment.
• The impairment test model includes sensitivity testing of key assumptions.
• The annual impairment testing is considered a significant accounting judgement and estimate and a key audit matter because: • We involved our valuation expert to assess the assumption and methodology used by the Company to determine the recoverable amount.
a) the assumptions on which the tests are based are highly judgmental and are affected by future market and economic conditions which are inherently uncertain; and • Assessing the adequacy of the Company's disclosures related to the impairment tests and their compliance with Ind AS.
b) the significance of the balance to the standalone financial statements.

OTHER INFORMATION

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the standalone financial statements and our auditors'report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

MANAGEMENT'S AND BOARD OF DIRECTORS' RESPONSIBILITY FOR THE STANDALONE FINANCIALSTATEMENTS

The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the standalone financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the Management and Board of Directorsare responsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to standalone financial statements inplace and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the standalone financial statementsmade by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion.

Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report.

However future events or conditions may cause the Company to cease to continue as agoing concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

2. (A) As required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books

c) The standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31March 2020 taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2020 from being appointed as a director in terms of Section164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference tostandalone financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at March 31 2020 onits financial position in its standalone financial statements - Refer Note 35(b) to thestandalone financial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from November 8 2016 to December30 2016 have not been made in the standalone financial statements since they do notpertain to the financial year ended March 31 2020.

(C) With respect to the matter to be included in the Auditors' Report under section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No.: 101248W/W-100022
Bhavesh Dhupelia
Partner
Mumbai Membership No.: 042070
May 22 2020 UDIN: 20042070AAAABJ7351

Annexure A to the Independent Auditors' Report on standalone financial statements

(Referred to in our report of even date)

i. a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets (property plant and equipment).

b) The Company has a regular programme of physical verification of its fixed assets(property plant and equipment) by which all fixed assets (property plant and equipment)are verified in a phased manner over a period of three years. In our opinion thisperiodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets.

Pursuant to the programme certain fixed assets (property plant and equipment) werephysically verified by the management during the year. In our opinion and according tothe information and explanations given to us no material discrepancies were noticed onsuch verification.

c) In our opinion and according to the information and explanations given to us by themanagement and on the basis of an examination of the records of the Company the titledeeds of the immovable properties as disclosed in Note 3 of the standalone financialstatements are held in the name of the Company except in the case of leasehold landfreehold land and buildings with a carrying value of Rs 11 crore Rs 2 crore and Rs 47lakh (Gross block of Rs 11 crore Rs 2 crore and Rs 1 crore) as at March 31 2020respectively wherein as explained to us the Company is not able to reconcile with fixedassets register with the title deeds and hence we are unable to comment on the same.

ii. The inventory except goods in transit and stocks lying with third parties hasbeen physically verified by the management at reasonable intervals during the year. In ouropinion the frequency of such verification is reasonable. For stocks lying with thirdparties at the year- end written confirmations have been obtained by management and inrespect of goods-in- transit subsequent goods receipts have been verified orconfirmations have been obtained from the parties. The discrepancies noticed onverification between the physical stocks and the book records were not material and havebeen dealt with in the books of account.

iii. The Company has granted unsecured loan to one company covered in the registermaintained under

Section 189 of the Act.

a) In respect of the aforesaid loan the terms and conditions under which such loan wasgranted are not prejudicial to the Company's interest.

b) In respect of aforesaid loan which is repayable on demand we are informed that theamount of interest and principal demanded by the company has been fully paid during theyear and thus there has been no default on the part of parties to whom the money has beenlent.

c) There are no amounts overdue for more than ninety days at the balance sheet date inrespect of the aforesaid loan.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act with respectto the loans granted investments made guarantees given and security provided asapplicable.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public during the year in terms of theprovisions of Sections 73 to 76 or any other relevant provisions of the Act and the rulesframed there under. Accordingly paragraph 3(v) of the Order is not applicable to theCompany.

vi. We have broadly reviewed the books of account maintained by the Company asspecified under Section 148(1) of the Act for maintenance of cost records in respect ofthe products manufactured by the Company and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not made adetailed examination of cost records with a view to determine whether they are accurate orcomplete.

vii. a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Employees' StateInsurance Income-tax Goods and services tax Duty of Customs and other materialstatutory dues have been regularly deposited during the year by the Company with theappropriate authorities.

According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Profession tax have notgenerally been regularly deposited during the year with the appropriate authorities thoughthe delays in deposit have not been serious.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income-tax Goods andServices Tax Duty of customs and other material statutory dues were in arrears as atMarch 31 2020 for a period of more than six months from the date they became payableexcept for profession tax as given below.

Name of the Statute Nature of the Dues Amount (in crore) Period to which amount relates Due date Date of payment
Profession tax Tax 0.04 April 2018 to September 2019 Various Unpaid

b) According to the information and explanations given to us and based on ourexamination of the records of the Company there are no dues of Income-tax Sales TaxService tax Duty of customs Goods and services tax duty of excise and value added taxas at March 31 2020 which have not been deposited with the appropriate authorities onaccount of any dispute except as stated below:

Name of the Statute Nature of the Dues Amount Amount paid under protest Period to which amount relates Forum where dispute is pending
(in crore) (in crore) (Assessment Year)
Income tax Act 1961 Income tax demands 10 - AY*1995-96 to AY 1997- 98 AY 2008-09 to AY 2010-11 and AY 2015-16 Supreme Court High Court Commissioner Income-tax and Income-tax Appellate Tribunal
Sales tax Act Sales tax demands 20 3 FY 1985-86 1995-96 2005-06 to 2007-08 2011-12 to 2014-15 Supreme Court Jt Commissioner of Sales tax Sales tax Tribunal
Central Excise/ Finance Act Excise duty/ Service tax demands 88 0 FY 1989-90 1994-2004 and 2007-2015 Commissioner (Appeals) Central Excise and Service tax Appellate Tribunal
Custom duty Custom duty demands 22 - FY 1992 to 1997 2000 2001 and 2004 Commissioner (Appeals) Central Excise and Service tax Appellate Tribunal
Foreign Trade (Development and regulation) Act Fiscal Penalty 33 - FY 1992 to 1997 Bombay High Court
Goods and Services Tax Goods and Service Tax demands 2 2 FY 2019-20 Goods and Service Tax Appellate Tribunal

* AY Assessment year FY Financial year

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of loans or borrowings from financial institutionbank or dues to debenture holders during the year. The Company did not have any loans orborrowings from the government during the year.

ix. According to the information and explanations given to us the Company did notraise money by way of initial public offer or further public offer (including debtinstruments) and term loans during the year.

Accordingly para 3(ix) of the Order is not applicable to the Company.

x. According to the information and explanations given to us no material fraud by theCompany or fraud on the Company by its officers or employees has been noticed or reportedduring the year nor have we been informed of such case by the management.

xi. According to the information and explanations given to us and based on ourexamination of the records of the Company the managerial remuneration has been paid/provided in accordance with the requisite approvals mandated by the provisions of Section197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company as prescribed under Section 406 of the Act. Accordinglypara 3(xii) of the Order is not applicable to the Company.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company no preferential allotment or private placementof shares or fully or partly convertible debentures was made during the year.

Accordingly para 3(xiv) of the Order is not applicable to the Company.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any noncashtransactions with directors or persons connected with them. Accordingly para 3(xv) of theOrder is not applicable to the Company.

xvi. According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.Accordingly reporting under the clause 3(xvi) of the Order is not applicable to theCompany.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No.: 101248W/W-100022
Bhavesh Dhupelia
Partner
Mumbai Membership No.: 042070
May 22 2020 UDIN: 20042070AAAABJ7351

Annexure B to the Independent Auditors' Report on the Standalone financial statementsof UPL Limited March 31 2020

Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013

(Referred to in paragraph (2(A)f)) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

OPINION

We have audited the internal financial controls with reference to standalone financialstatements of UPL Limited ("the Company") as at March 31 2020 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to standalone financial statements and such internal financialcontrols were operating effectively as March 31 2020 based on the internal financialcontrols with reference to standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India (the "Guidance Note").

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to standalone financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 (hereinafterreferred to as "the Act").

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to standalone financial statements. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to standalone financial statements were established andmaintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to standalone financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tostandalone financial statements included obtaining an understanding of such internalfinancial controls assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the standalone financial statementswhether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls withreference to standalone financial statements.

MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONE FINANCIALSTATEMENTS

A company's internal financial controls with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to standalone financial statements include thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONEFINANCIAL STATEMENTS

Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial controls with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No.: 101248W/W-100022
Bhavesh Dhupelia
Partner
Mumbai Membership No.: 042070
May 22 2020 UDIN: 20042070AAAABJ7351