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UPL Ltd.

BSE: 512070 Sector: Agri and agri inputs
NSE: UPL ISIN Code: INE628A01036
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OPEN 844.00
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VOLUME 381210
52-Week high 864.75
52-Week low 398.05
P/E 281.34
Mkt Cap.(Rs cr) 64,058
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Sell Price 0.00
Sell Qty 0.00
OPEN 844.00
CLOSE 842.00
VOLUME 381210
52-Week high 864.75
52-Week low 398.05
P/E 281.34
Mkt Cap.(Rs cr) 64,058
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

UPL Ltd. (UPL) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting their report and audited financialstatements (consolidated and standalone) for the year ended March 31 2020.

FINANCIAL RESULTS

Rs in crore

Particulars Consolidated Standalone
2019-20 2018-19 2019-20 2108-19
Total Income 35860 22077 10147 9220
Earnings before interest tax depreciation amortisation exceptional prior period adjustments and minority interest 6877 4053 1711 1399
Depreciation/amortisation 2012 880 891 724
Finance Cost 1481 963 272 185
Exceptional items 623 451 10 4
Profit/(Loss) from Associates 3 14 - -
Profit before tax 2764 1773 538 486
Provision for taxation
Current tax 759 442 55 83
Adjustments of tax relating to earlier years 8 (4) - (3)
Deferred tax (181) (240) 22 1
Profit after tax 2178 1575 461 405
Minority interest 402 84 - -
Net profit for the year 1776 1491 461 405

DIVIDEND

Your Directors have recommended dividend of 300% i.e. Rs 6/- per equity share ofRs 2/- each for the financial year ended March 31 2020 which if approved at theforthcoming Annual General Meeting ("AGM") will be paid to all those equityshareholders of the Company whose name appear in the Register of Members and whose nameappear as beneficial owners as per the beneficiary list furnished for the purpose byNational Securities Depository Limited and Central Depository Services (India) Limited.The total dividend pay-out will amount to approx. Rs 458 crore resulting in pay-out of99.41% on standalone profit after tax of the Company and 25.79% on consolidated profitafter tax of the Company.

The dividend recommended is in line with the dividend distribution policy of theCompany. The policy is available on the website of the Company under Investors section athttps://www.upl-ltd.com/investors.

OPERATIONAL PERFORMANCE

FY2020 was a significant year for the Group as it was celebrating its 50thanniversary year and also completed integration for the landmark Arysta acquisition.

The Company reported strong financial and operating performance for FY2020. During theyear consolidated revenue from operations grew by 13% to Rs 35756 crore from Rs 31616crore and EBITDA increased by 18% to Rs 7452 crore from Rs 6312 crore in FY2019. TheEBITDA margin stood at 21% in FY2020 (20% in FY2019). For details of financial performanceplease refer to Management Discussion and Analysis Report. The region-wise highlights ofFY2020 were as under:

• The Company witnessed 24% growth in terms of revenue in Latin America. TheCompany achieved 4th position in Brazil and first position in Mexico andColumbia. The customers are awarding UPL higher shares of wallet after integration. TheCompany has a complete portfolio in this region in soy corn sugarcane and cotton whichare driving sales.

• The Company witnessed 13% growth in terms of revenue in North Americadespite floods driving market decline. The Company shared growth in major product linesand a strong growth in Canada thanks to synergies in combined portfolio. The China-USAtariff war was a tailwind to UPL by helping customers hedge risk.

• In Europe dry conditions and forex impacted revenue by 7% year-on-year. Thedry-hot weather conditions impacted crop yields in western and eastern Europe.

• In India the revenue on a consolidated basis grew by 11% in FY2020 overFY2019. There was a growth in Herbicide volumes driven by Glufosinate. Also ProNutivapackage solution and service offering helped to create better value for farmers.

• As regards rest of the world revenue grew by 12% with gains in South East Asiaand Japan. There were synergies in Japan thanks to broader customer base and partnerships.There was strong business growth in South East Asia thanks to return of rains andsynergies. The gain was slightly offset by adverse impact from forex in Africa anddrought/wild fire in Australia.

COMPLETION OF INTEGRATION OF ARYSTA

In FY18-19 the Company through its subsidiary UPL Corporation Limited in Mauritius hadacquired Arysta LifeScience for USD 4.2 billion. Integration of Arysta was achieved aheadof the target. The integration will go a long way in achieving the synergy in the form of

(i) Optimising manufacturing footprint;

(ii) Increasing procurement efficiency;

(iii) Insourcing R&D activities to boost efficiency and expanded bandwidth toaccess new technology;

(iv) Consolidation into one shared IT platform and reduction of IT infrastructure costand

(v) Consolidation of support functions.

In terms of revenue the major levers were (i) Complementary portfolios (solutionselling) which enabled meeting grower/channel needs through complimentary AI portfolio andaccess to new crops with a broader base of generic and proprietary products; and (ii)Cross sell through expanded geographic reach which held both companies to expand sales byleveraging each other's complementary geographic presence

Further detailed analysis of the performance and operations of the Company in FY19-20and future outlook have been covered in the Management Discussion and

Analysis Report and other sections of the Annual Report.

COVID-19 PANDEMIC RESPONSE

We as an entity do not operate in isolation rather we are inextricably linked to thesociety we live in. Our success is also dependent on how well we respond to needs ofsociety in times of crisis. The COVID-19 crisis is one of the toughest challenges theworld has ever faced.

As a responsible organisation we are doing our bit for India's COVID-19 pandemicresponse. The Company contributed Rs 75 crore to PM-CARES Fund Rs 1 crore to MumbaiPolice Foundation assisting the Government to fight against COVID-19. The Company is alsocontinuously providing large numbers of masks personal protection equipment (PPE) unitsto help with the safety of India's frontline heroes in healthcare and sanitisation who arerelentlessly fighting the battle against novel corona virus.

The Company has provided more than 9000 litres of hand sanitiser free of cost to theagencies across cities involved in fight against India's COVID-19 pandemic response.

The Company also provided approx. 54 lac litres of Sodium Hypochlorite (1% solution) tosanitise various municipalities government offices villages etc. The Company alsosanitised streets hospitals police stations through UPL's Falcon sprayers coveringvarious states.

Similar social initiatives were also undertaken at our international operations bothdirectly and also in collaboration with local associations covering various regions -Brazil Mexico Cuba Colombia Europe North America Canada Vietnam Cambodia IvoryCoast and Costa Rica. Examples of some initiatives included distribution of medicalsupplies food packets sanitisers masks and PPE's 24 hours helplines conductingawareness and educational programs etc.

FINANCE

(a) Deposits

During FY2020 the Company did not accept any deposit within the meaning of Chapter Vof the Companies Act 2013.

(b) Particulars of Loans Guarantees or Investments

The details of Loans Guarantees or Investments are given in the notes no. 56 and 36to the standalone financial statement.

(c) Changes in Paid-up Share Capital

During the year the Company issued and allotted shares in the following manner:

(i) 254671335 fully paid up equity shares of Rs 2 each were issued as Bonus shares.

(ii) 31451 equity shares of Rs 2 each were issued to Employees under Employee StockOption Plan of the Company.

The equity shares issued during the year rank pari-passu with the existingequity shares of the Company.

The paid-up share capital of the Company as at March 31 2020 was 764045456 equityshares of face value Rs 2/- each.

(d) The Company do not propose to transfer any amount to the reserves as provisionfor proposed dividend.

EMPLOYEE STOCK OPTION PLANS

The Company has two active Employee Stock Option Plans ("Advanta ESOP Plans")as at March 31 2020 viz. Advanta India Limited Employees Stock Option and Shares Plan2006 and Advanta Employee Stock Option Plan 2013. During the year the Company closed theUPL Limited Employee Stock Option Plan 2017 ("ESOP 2017") as there was no planto make any further grants under ESOP 2017 and the option grantees communicated theirintention not to participate in ESOP 2017 in future. All the plans are administered by theNomination and Remuneration Committee of the Board.

There were no changes in the ESOP Plans during the financial year under review. TheESOP Plans are in compliance with the Securities and Exchange Board of India (Share BasedEmployee Benefits) Regulations 2014 [SEBI (SBEB) Regulations 2014]. In compliance withthe same a certificate from auditor confirming implementation of ESOP Plans inaccordance with the said regulations and shareholder's resolution will be placed at theensuing AGM of the Company.

The requisite disclosures under the SEBI (SBEB) Regulations 2014 as on March 31 2020are uploaded on the Company's website under Investors section. Details of the ESOP Planshave also been provided in the notes to the standalone financial statement.

SAFETY AND ENVIRONMENT

"Doing things Safer is Doing things Better" is the mantra as part of ouroperating philosophy and business continuity. Safety and well-being of everyone workingfor and on behalf of the Company continues to be of top priority for the Company.Following significant success of the "Safety First" initiative last yearwhich was largely shop floor engagement driven your extended the same with inclusion ofprocess safety focusing on the design aspects of the processes activity-based riskassessments of all manual operations in order to enhance its overall safety performanceand take it to the next level and to meet UPL vision of "Being Best in Class"by making "Safety a way of Life".

We also believe that the dynamic natural environment presents both opportunities andchallenges to our business. We have developed strategies to ensure the resilience of ouroperations to current and upcoming environmental risks. While effective management isimperative we strongly believe that the global transition to a more sustainable futureprovides immense opportunities to our business. Aligned to our legacy we are constantlyworking to reduce our environmental footprint and find innovative product solutions thatbenefit the society. Given our innovation driven growth strategy we envision to deliverinventive and novel products for the global food system in a manner that is sensitive tothe current global environmental landscape and the needs of the future generations.

This year your Company has released its third Sustainability

Report as per GRI standards. Some of major achievement in this year are summarisedbelow:

• 61% Dow Jones Sustainability Index (DJSI) score improved in FY2020compared to FY2019.

• Scored higher international sustainability rating (DJSI & FTSE) inall three dimension (environment social & governance) from industry average.

• Achieved Zero Liquid Discharge in 60% of our operating plants globally.

• Harvested and recycled approximately 440 tankers rain water in ouroperating plants Unit 0 1 2 & 4.

• Obtained environmental clearances (ECs) from MoEF&CC to enhanceproduction capacity 4 times for our operating plants Unit 0 1 2 & 10.

• Implemented FO Technology as first among chemical companies in the worldto treat high TDS & high COD wastewater in Unit 1 Ankleshwar.

• Implemented Stream Identification & Segregation for better wastewatermanagement & treatment.

• Reduced 7.64% specific water consumption reduced 7.32% specific carbonemissions and reduced 2.7% specific wastewater generation as compared to last year.

• 17% energy comes from renewable sources in our largest two manufacturing plants.

At UPL Sustainability is driven by smarter innovation and profitable growth. Webelieve that a business can be profitable by adopting sustainable practices ensuringharmony with the society and environment.

Our major future sustainability initiatives by 2025 are summarised below:

1. Reduce 30% environmental footprint from baseline 2019-20. has

2. Source 80% raw material from sustainable sources.

3. Zero dependency on tanker & ground water.

4. Enhancing world food security.

RESEARCH AND DEVELOPMENT

The Company has multiple Research and Development Centres which are in almost all thecontinents. These centres play a very crucial role in accomplishing the Company's missionof manufacturing and supplying crop risk protection and specialty chemicals to theend users worldwide.

Qualified and talented scientific personnel and state-of-the-art facilities at theResearch and Development Centres are the biggest assets for the Company. The centres arededicated to the development of products and processes that are cost-effective andenvironmentally friendly keeping in mind the affordability and safety of the end user.

The products and processes developed by the Research and Development Centres are basedon the principles of Green Chemistry and Atom Economy amongst others.

The products and the processes are rigorously evaluated for hazard and safety at allthe stages of development.

To combat the pest in the world and for effective pest management Research andDevelopment Centres develop innovative combination products. The developed products aretested for chemical properties toxicity impurity profile bio-efficacy residue andpackaging and so on. The required data is generated at Research and Development Centresand then get the products tested at GLP laboratory to generate the data for submission tothe regulatory authority of the country.

Specialty Chemicals and Industrial Chemicals are areas in which the Company has plannedto come up in a big way. For this Research and Development Centres are developing theprocesses which are industrially viable and safe at the large-scale production.

The Company is committed to creation of Intellectual Property (IP) for the innovativeproducts and processes developed by the Research and Development Centres. Patents areobtained in the countries of interest and appropriate measures are taken to safeguard theIP. At the same time IP of others is respected.

CORPORATE SOCIAL RESPONSIBILITY

At UPL we believe in all-inclusive and sustainable growth of society. This philosophyhas always been the guiding force in all our community interventions. Not only all our CSRinitiatives are determined with the trust that humankind is one community where eachmember is responsible for the wellbeing of the other but also our core businesses are allabout connecting with people in a human way showing respect demonstrating trustcelebrating diversity favoring warmth over cool. We see the value in human connectivityand how it creates new opportunities for everyone.

At present two core UPL values "Always Human" and "OpenHearts" are guiding force of our CSR initiatives. Hence our interventions are notrestricted to the development of our neighboring communities only as we work oninitiatives that cater to the wider national interest.

Our commitment and interventions cater all the segment of the society and have beenclassified in 4 focus areas viz. (a) Institution of excellence; (b) SustainableLivelihood; (c) Nature Conservation and (d) Local and National Need.

UPL's CSR initiatives are being undertaken in 11 countries (including India) andimplementing and supporting more than 80 development interventions benefiting more than 70communities across continents.

• UPL Brazil works on a complimentary education program empowering the local youthto lead meaningful lives.

• UPL Colombia is responding to surrounding communities "whole lifecycle" need by promoting the social and economic development through educationentrepreneurship and the conservation of the environment.

UPL Colombia continued to give its important contribution in the program"Education for Competitiveness" in alliance with the National Federation ofCoffee Growers acting through the Committee of Coffee Growers of the Department of Caldasin Colombia.

• UPL Argentina has established Social Security office at plant for every neighborcommunity (in the past they need to travel 46 km to have access to social securityoffice).

• UPL Mexico has been collecting and distributing winter clothing to the poorestof the poor since 2015.

• UPL Kenya is working with Mr. Patric Kilonzo Mwalua Wildlife Trust forConservation of wildlife at Tsavo West National Park by minimising man-animal conflictthrough promotion of Sunflower Farming in a sustainable ecologically responsible way

• UPL Belgium works with charities in the Liege region. Also works withneighborhood children's association for the St Nicolas party.

• UPL UK had the Sandbach anniversary at the local cricket club they had theinflatable assault course and zorbs on site.

• UPL Cote d'Ivoire started project on improving cardiovascular health outcomes inrural Cote d'Ivoire" (Ivory coast) with Dr. David Lulu/The Heart Fund and Kenya.

• UPL has signed a MOU with Oxford India Centre for Sustainable Development(OICSD) at Somerville College University of Oxford to UPL Sustainability Fund

For separate report on Corporate Social Responsibility please refer to the section‘Social Initiatives' in the annual report.

VIGIL MECHANISM/WHISTLE-BLOWER POLICY

The Company has always strived to conduct its business fairly ethically and withintegrity. In line with this belief the Company has in place a robust whistle-blowerpolicy to deal with any fraud irregularity or mismanagement in the Company. This Policyis in addition to the Company's Global Code of Conduct which also empowers itsstakeholders to make protected disclosures through the reporting channels consisting ofdesignated e-mail address hotline and customised web-portal details of which areprescribed under the Policy and the Code.

The Chairman of the Audit Committee oversees the whistle-blower policy. The AuditCommittee on a quarterly basis is presented an update on the whistle-blower policy. As perthe policy any employee or director can directly communicate with the Chairman of theAudit Committee to report any actual/suspected fraud or non-compliance at the designatede-mail address - whistleblower@upl-ltd.com.

On a regular basis the Company undertakes all efforts to create awareness among theemployees about the Policy including the new joinees during the year. The Policy ensurescomplete protection to the whistle-blower and follows a zero tolerance approach toretaliation or unfair treatment against the whistle-blower and all others who report anyconcern under this Policy. Total confidentiality of the proceedings of the policy is alsomaintained.

The policy is available on the website of the Company under Investors section athttps://www.upl-ltd.com/investors. The Policy was revamped during the year and made morerobust to include the best practices around the globe.

PREVENTION OF SEXUAL HARASSMENT (POSH) OF WOMEN AT THE WORKPLACE

The Company is committed in creating and maintaining a secure and safe work environmentthat enables its employees agents vendors and partners to work free from unwelcomeoffensive and discriminatory sexual behavior and without fear of prejudice gender biasand sexual harassment. In order to deal with sexual harassment at workplace the Companyhas implemented a gender-neutral policy Prevention and Redress of Sexual Harassment Policy("Policy").

The Policy applies to all those employed and associated with UPL and its subsidiariesirrespective of whether they are regular temporary ad hoc or daily wage basis employees.The Policy also covers all contract workers consultants retainers probationerstrainees and apprentices or called by any other such name engaged by us whether the termsof their employment are expressed or implied.

A knowledgeable and experienced Internal Compliant Committee comprising mainly of womenand an unbiased third party is currently functional to attend and redress complaints thatarise under this Policy. Further there are sub committees at unit locations to ensurestrict adherence of this policy and make a workplace free from biases and prejudices. TheCommittee has not received any formal complaint during FY2020.

All employees are mandated to attend a classroom training and confirm their adherenceto the rules. During FY2020 a total of 532 employees were trained on POSH workshopconducted by Company's external partners and 4547 employees acknowledged to comply withthe POSH policy.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an adequate system of internal controls. The Company has adoptedpolicies and procedures covering all financial and operating functions. These controlshave been designed to provide a reasonable assurance over:

• Accuracy and completeness of the accounting records

• Compliance with applicable laws and regulations

• Effectiveness and efficiency of operations

• Prevention and detection of frauds and errors

• Safeguarding of assets from unauthorised use or losses

The Company has an in-house Internal Audit department with a team of qualifiedprofessionals. The internal audit department prepares an annual audit plan based on riskassessment and conducts extensive reviews covering financial operational and compliancecontrols. Improvements in processes are identified during reviews and communicated to themanagement on an ongoing basis. The Audit Committee of the Board monitors the performanceof the internal audit team on a periodic basis through review of audit plans auditfindings and issue resolution through follow-ups. Each year there are at least fourmeetings in which the Audit Committee reviews internal audit findings.

Internal Audit function plays a key role in providing to both the management and to theAudit Committee an objective view and re-assurance of the overall internal controlsystems and effectiveness of the risk management processes and the status of complianceswith operating systems internal policies and regulatory requirements across the Companyincluding its subsidiaries.

INTERNAL CONTROLS OVER FINANCIAL REPORTING

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteria.Essential components of internal controls are followed as stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

The Company has developed and implemented a Risk & Control Framework to ensureinternal controls over financial reporting. This framework includes testing and monitoringover entity level controls process level controls and IT general controls. The entitylevel controls include testing and monitoring of compliance to business policies. Theprocess level controls include a risk control matrix for monitoring key businessprocesses. The IT general controls include monitoring of the overall IT environmentcomputer operations and access to programs and data.

On a periodic basis testing of entity level controls process level controls and ITgeneral controls is carried out and status of testing of controls is presented to theAudit Committee. During the year controls were tested and no reportable materialweaknesses in design and effectiveness were observed.

RISK MANAGEMENT FRAMEWORK

The Company has instituted strong risk management processes as part of its riskmanagement framework. This involves a detailed exercise in terms of identifying thecritical risks assessing them on the basis of probability of occurrence and severity ofimpact. This is followed by formulating appropriate plans to mitigate these risks. Thisalso enables the management to identify if any such risks can be translated into businessopportunities.

Pursuant to Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 a Risk Management Committee is constituted consisting of threedirectors of the Company. The Committee reviews findings of the risk management exerciseand effectiveness of mitigation plans put in place. It also seeks feedback from seniorexecutives across different functions and business regions which aids it in identifyingmonitoring and managing the critical risks. There is continuous monitoring by theCommittee to ensure that mitigation plans are effective in addressing such risks as andwhen they arise.

Some of the key risks identified in the past are adverse weather competition currencyfluctuation liquidity supply chain business continuity cybersecurity R&D HR andRegulatory.

For more details on the risks and their mitigation plan please refer to ManagementDiscussion and Analysis report in this annual report.

The policy is available on the website of the Company under Investors section athttps://www.upl-ltd.com/investors.

SUBSIDIARY COMPANIES/ASSOCIATE

COMPANIES

The Company has a number of subsidiary companies and associates spread across theglobe. Crop protection product companies need local registrations to enable them to selltheir products in different countries in the world. These registrations are granted bylocal government body of each country to a local entity established in that country.

As on March 31 2020 the Company had 225 subsidiaries across the globe. Most of theseoverseas subsidiaries and associate companies are marketing arms and their main activityis confined to marketing by servicing their local market with greater efficiency andensuring timely availability of different products of the Company.

Some other entities are holding companies which hold investments in other groupentities.

The details of essential parameters of each subsidiary/ associate company like sharecapital assets liabilities turnover profits before and after tax are given separatelyunder the Statement of AOC-1 Form forming part of the Annual Report.

The companies which were newly added or ceased to be subsidiaries/jointventures/associates during the year are as follows:

Industrias Bioquim Centroamericana Sociedad Anonima Costa Rica
Procultivos Sociedad Anonim Costa Rica
Inversiones Lapislazuli Marino Sociedad Anonima Costa Rica
Bioquim Sociedad Anonima Costa Rica
Bioquim Panama Sociedad Anonima Panama
Bionic Nicaragua Sociedad Anonima Nicaragua
Biochemisch Dominicana Sociedad De Responsabilidad Limitada Dominican Republic
Nutriquim De Guatemala Sociedad Anonima Guatemala
UPL Agro Ltd Hong Kong
UPL Portugal Unipessoal Ltda. Portugal
UPL Services LLC USA
United Phosphorus Holdings Uk Ltd U.K.
AFS Agtech Pvt. Limited India
Natural Plant Protection Limited India
Cessations during the year
UPL Deutschland GmbH(Formerly Known as United Phosphorus GMBH - Germany) Germany
Arysta LifeScience France SAS France
Arysta Lifescience Italia SrL Italy
Arysta LifeScience do Brasil Industria Quimica e Agropecuaria SA Brazil
Arysta LifeScience Europe Sarl France
Goemar Developpement SAS France
Netherlands Agricultural Technologies CV Netherlands
Dutch Agricultural Formations CV Netherlands
Agriphar de Costa Rica SA Costa Rica
Agriphar de Colombia SAS Colombia
Kempton Chemicals (Pty) Ltd South Africa
Arysta LifeScience Ecuador S.A. Ecuador
Volcano Agrociencia Industria e Comercio de Defensivos Agricolas Ltda Brazil

MATERIAL SUBSIDIARY

As on March 31 2020 the Company has 7 (seven) unlisted material subsidiaries as perthe parameters laid down under SEBI Listing Regulations which include Anesa S.A. ArystaLifescience U.K. Brl Limited Arysta Lifescience Global Limited UPL Corporation LimitedUPL Limited Gibraltar UPL Do Brasil - Industria E Comercio De Insumos Agropecuarios S.A.and UPL NA Inc. None of these subsidiaries have sold disposed offor leased assets of morethan 20% of its assets during the current year.

DEALING WITH SECURITIES WHICH HAVE REMAINED UNCLAIMED

As per Regulation 39(4) read with Schedule VI of the SEBI Regulations the Company isin the process of sending reminders to those Members whose share certificates haveremained unclaimed to contact the Company immediately in the matter. The Registrar andTransfer Agent M/s Link Intime India Pvt. Ltd. is in the process of compiling the data forunclaimed shares. The Company after following the prescribed procedure will dematerialiseunclaimed shares which are retained with the Company. These shares would be held by theCompany on behalf of the holders of such shares in an "Unclaimed SuspenseAccount" to be opened with a depository. All the shares with respect to whichdividend remains unclaimed for seven consecutive years such shares and dividend thereonon those shares shall be transferred to the IEPF Authority as prescribed by the Ministryof Corporate Affairs.

RELATED PARTY TRANSACTIONS

All related party transactions entered into during the year were on arm's length basisand were in the ordinary course of business. There are no materially significant relatedparty transactions made by the Company with promoters directors key managerial personnelor other designated persons which may have a potential conflict with the interest of theCompany at large. Accordingly the disclosure of related party transactions in Form AOC-2is not applicable.

Prior omnibus approval of the Audit Committee is obtained for related partytransactions which are repetitive in nature and in case such transactions exceed thelimits approved through the omnibus approval the transactions are subsequently ratified.The transactions entered into pursuant to the omnibus approval so granted are reviewed ona quarterly basis by the Audit Committee.

Detailed disclosure on related party transactions as per Ind AS-24 containing name ofthe related party and details of the transactions entered with such related party havebeen provided under Notes to financial statements

Disclosure on related party transactions on half year basis is also submitted to thestock exchanges.

The policy on related party transactions as approved by the Board is available on thewebsite of the Company under Investors section at https://www.upl-ltd.com/investors.

INSURANCE

All the properties and operations of the Company to its best judgement have beenadequately insured.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There is no significant and material order passed by the Regulators or Courts whichimpacts the Company's ability to continue as a going concern.

AUDITORS

a) Statutory Auditor

At the 33rd Annual General Meeting of the Company held on July 8 2017 the Members ofthe Company appointed B S R & Co. LLP Chartered Accountants (ICAI Firm RegistrationNumber 101248W/W-100022) as the Statutory Auditor of the Company pursuant to section 139of the Companies Act 2013 for a term of 5 (five) years from the Company's financial year2017-18. They will hold office till the conclusion of 38th Annual GeneralMeeting ("AGM") of the Company. The statutory auditor has confirmed that theyare not disqualified from continuing as auditor of the Company.

There are no instances of any fraud reported by the statutory auditor to the AuditCommittee or the Board pursuant to section 143(12) of the Act. The Auditor's Report onstandalone and consolidated financial statements forms part of the Annual Report andcontains an Unmodified Opinion without qualification reservation or adverse remark.

b) Cost Auditor

Pursuant to section 148 of the Companies Act 2013 read with The Companies (CostRecords and Audit) Amendment Rules 2014 the cost account records maintained by theCompany are required to be audited. The Board on the recommendation of the AuditCommittee has appointed M/s. RA & Co. Cost Accountants to audit the cost accounts ofthe Company for the financial year 2020-21 on remuneration of Rs 8.5 lakh. TheCompany has received a certificate of eligibility from the cost auditor for theappointment. As required under the Companies Act 2013 the remuneration payable to thecost auditor is required to be placed before the Members in a general meeting forratification.

Accordingly a resolution seeking Member's ratification for the remuneration payable toM/s. RA & Co. Cost Auditor is included in the Notice convening the AGM.

The Cost Audit Report for the financial year 2018-19 was filed with the Ministry ofCorporate Affairs on August 27 2019. The Cost Audit Report for the financial year 2019-20will be filed before the due date.

c) Secretarial Auditor

Pursuant to section 204 of the Companies Act 2013 and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board had appointed M/s. N. L.Bhatia & Associates a firm of Company Secretaries in Practice to conduct secretarialaudit for the financial year 2019-20. The Report of the Secretarial Auditor is annexed tothis report. The report of the Secretarial Auditor for the financial year 2019-20 isunmodified and does not contain any qualification reservation or adverse remark.

The Board has re-appointed M/s. N. L. Bhatia & Associates to conduct thesecretarial audit for the financial year 2020-21. They have confirmed their eligibilityfor the appointment.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of section 152 of the Companies Act 2013 ("theAct") and Articles of Association of the Company Mrs. Sandra Shroff (DIN: 00189012)Director of the Company retires by rotation at the forthcoming AGM of the Company andbeing eligible has offered herself for re-appointment. In terms of provisions ofRegulation 17(1)(A) of SEBI Listing Regulations special resolution has been proposed forapproval of members.

During the year the Board of Directors appointed Ms. Usha Rao Monari (DIN:0008652684) as an Additional Director (Non-Executive & Independent) on therecommendation of the Nomination and Remuneration Committee effective December 27 2019 tohold office till the conclusion of the ensuing 36th AGM and as an IndependentDirector for a term of 5 (five) consecutive years effective December 27 2019 subject toapproval of the members at the ensuing AGM.

The first term of 5 (five) years of Mr. Hardeep Singh (DIN: 00088096) as an IndependentDirector of the Company concluded on February 1 2020. The Board of Directors on therecommendation of the Nomination and Remuneration Committee and based on the performanceevaluation appointed Mr. Hardeep Singh as an Additional Director (Non-Executive &Independent) effective February 2 2020 for the second term of 5 (five) aconsecutive yearseffective February 2 2020 subject to approval of the members in the ensuing AGM.

Further the Board of Directors also seeks re-appointment of Dr. Vasant Gandhi (DIN:00008370) whose first term of 5 (five) years as Independent Director expires on November22 2020. Based on the recommendation of the Nomination and Remuneration Committee and theperformance evaluation the Board proposes reappointment for further period of 5 (five)consecutive years effective November 23 2020 subject to approval of the members at theensuing AGM.

The information of Directors seeking appointment/ re-appointment as required pursuantto Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 ("SEBI Listing Regulations") and the Secretarial Standard on GeneralMeetings issued by The Institute of Company Secretaries of India is provided in thenotice convening the 36th AGM of the Company.

All the independent directors of the Company as on March 31 2020 have givenrequisite declaration stating that they meet the criteria of independence laid down undersection 149(6) of the Companies Act 2013 and Regulation 16(b) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. In the opinion of the Boardthere has been no change in the circumstances which may affect their status as independentdirectors of the Company and the Board is satisfied of the integrity expertise andexperience (including proficiency terms of Section 150(1) of the Act and applicable rulesthereunder) of all Independent Directors on the Board. In terms of Section 150 read withRule 6 of the Companies (Appointment and Qualification of Directors) Rules 2014Independent Directors of the Company have undertaken requisite steps towards the inclusionof their names in the data bank of Independent Directors maintained with the IndianInstitute of Corporate Affairs.

During the year Mr. Mukul B. Trivedi superannuated from his position of CompanySecretary & Compliance Officer with effect from November 7 2019. Mr. Sandeep Deshmukhwas appointed as Company Secretary & Compliance Officer of the Company with effectfrom November 8 2019.

As on March 31 2020 the Company had the following Key Managerial Personnel as persection 2(51) of the Act:

1. Mr. Rajnikant Shroff Chairman and Managing Director

2. Mr. Arun Ashar Whole-time Director

3. Mr. Anand Vora Global Chief Financial Officer

4. Mr. Sandeep Deshmukh Company Secretary and Compliance Officer

Evaluation of Board's Performance

Pursuant to the provisions of the Companies Act 2013 and the SEBI Listing Regulationsthe evaluation process for performance of the Board its various committees individualdirectors and the Chairman of the Board and respective Committees was carried out duringthe year. Each director was provided a questionnaire to be filled up providing feedback onthe overall functioning of the Board its Committees and contribution of individualdirectors. The questionnaire covered various parameters such as structure of theBoard/Committees board meeting practices overall board effectivenessattendance/participation of directors in the meetings etc. The directors were also askedto provide their suggestions for areas of improvement to ensure higher degree ofengagement with the management.

The Independent Directors during the year completed evaluation ofNon-independent/Non-promoter Directors and the entire Board including the Chairman. TheIndependent Directors expressed complete satisfaction of the professionally managedoverall functioning of the Board various committees as well as all the directors of theCompany. They appreciated the knowledge and expertise of the Chairman and his exemplaryleadership qualities which demonstrate positive attributes in following the higheststandards of corporate values and culture of the Company.

The respective Committees and the Board also discussed the report of performanceevaluation and agreed to take requisite steps to implement the suggestions.

Committees of Board Number of Meetings of the Board and Board Committees

The Board currently has six committees namely Audit Committee Nomination andRemuneration Committee Corporate Social Responsibility Committee StakeholdersRelationship Committee Risk Management Committee and the Finance and OperationsCommittee. All the recommendations made by the Committees of Board including the AuditCommittee were accepted by the Board.

The Board met four times during the year under review. The maximum gap between twoBoard meetings did not exceed 120 days. A detailed update on the Board its Committeesits composition terms of reference of various Board Committees number of board andcommittee meetings held and attendance of the directors at each meeting is provided in theReport on Corporate Governance.

Nomination and Remuneration Policy

The Board has on the recommendation of the Nomination and Remuneration Committee framedand adopted the Nomination and Remuneration Policy for selection appointment and removalof directors senior management key managerial personnel (KMP) including theirremuneration. The Board recognises that various Committees of the Board have veryimportant role to play to ensure highest standards of corporate governance. The Chairmanof the Board and other Directors form broad policies and ensure their implementation inthe best interests of the Company.

The criteria for selection of directors senior management and KMP are mainlyqualifications experience expertise integrity independence of the directors etc.

The remuneration to non-executive directors consists of sitting fees for attendingBoard/Committee meetings commission and other reimbursements. As per the approval givenby 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. TheIndependent directors are not entitled to any stock options under the Stock Option Plansof the Company.

The remuneration to the Managing Director and other Executive Directors consist ofmonthly salary allowances perquisites commission and other retirement benefits

The remuneration payable to them is subject to the approval of the members of theCompany. The overall managerial remuneration payable to them shall not exceed 10% of thenet profits of the Company.

In respect of senior management the remuneration is based on their performanceCompany's performance individual targets achieved industry benchmark and compensationtrends in the industry. Their remuneration consists of monthly salary bonus perquisitesKPI and other retirement benefits.

The Nomination and Remuneration Policy is available on the website of the Company underInvestors section at https://www.upl-ltd.com/investors.

Familiarisation Programme for Independent Directors

Pursuant to the SEBI Listing Regulations the Company has devised a familiarisationprogramme for the Independent Directors with a view to familiarise them with their rolerights and responsibilities in the Company nature of the industry in which the Companyoperates business model of the Company etc.

Through the familiarisation programme the Company apprises the independent directorsabout the business model corporate strategy business plans and operations of theCompany. These directors are also informed about the financial performance annualbudgets internal control system statutory compliances etc. They are also familiarisedwith Company's vision core values ethics and corporate governance practices.

At the time of appointment of independent director a formal letter of appointment isgiven to them which explains their role responsibility and rights in the Company.

Subsequently they are apprised of the Company's policies on CSR nomination andremuneration plant safety HR succession policy for directors and senior management.They are updated with global business scenario marketing strategies legislative changesetc. Factory visits are arranged to apprise them of various operational and safety aspectsof the plants to get complete understanding of the activities of the Company.

Details of familiarisation programme of Independent Directors are available on thewebsite of the Company under Investors section at https://www.upl-ltd.com/investors.

HUMAN RESOURCES

The Company continuously strives to be the best globally in all the domains of itsoperations. The Company believes that the core foundation of this vision is its employees.The HR strategy is committed to creating an engaging workforce and an inspirationalleadership that continuously powers this vision. With Arysta acquisition there was abigger task to merge the culture and drive standard vision across. With OpenAg as the newvision HR made sure that the communication of our new vision reaches with an impact tothe last level.

As on March 31 2020 the Company (including . subsidiaries) had 5922 employees inIndia and 11524 employees globally.

Key initiative on HR front: Launching "my UPL"

The Company has been investing in world class HRIS tool Success Factors. The tool wasimplemented to bring the entire integrated organisation on one HR Platform. The manpowerfor 68 countries was brought on the single platform to provide a standard employeeexperience. This will help in robust process workflows implementation.

With the implementation of myUPL platform it helped in focusing on the goals and targetachievements.

Launching of mid-year appraisals and completing the mid-year feedback to achieve thegoals has been helpful in creating a performance-based culture. This resulted incompleting the entire annual appraisals cycle in myUPL followed by the compensation moduleimplementation to achieve performance calibration and budgets online.

Role Based Organisation

The integrated organisation has made newer and bolder commitments to all stakeholders.To fulfill the same UPL launched Global Job Levels across to build a role-basedorganisation. Every employee being mapped based on role being handled keeping in view thesize geography and targets.

Learning

Learning has always been the focus for the organisation to improve performance of theemployees including behavior and new product trainings. HR has been organising bothregional and global trainings to make sure that the employees' competence are up to therequired levels.

Way Forward

a) Role based competencies

Institutionalising role-based system by creating role based competencies and traininginterventions which will help employees in role migrations and providing opportunities forgrowth.

b) Talent Management

Utilisation of the force and energy of the millennials launching of Young LeadersProgram and building talent by providing interventions to succeed in a well definedframework. This would pave way for the young talent to learn implement and grow on anaccelerated basis. Succession Planning process will be further streamlined this year.

c) HR Process Outsourcing

To outsource the non-core areas and concentration on the core diligently will be thekey focus area for the year. This will bring in more standardisation of process and quickturn around time with cost efficiencies.

d) Culture

Culture continues to be the focus area for the year as the vision of the organisationrequires a regular imbibement across different regions geography and people. A goodculture can deliver the required results.

e) New work systems

With Covid 19 pandemic spread the way the business is run has changed. With a bigfocus on the safety of the employees different methods to keep the employees engagedconnected and perform becomes the key to the success of the organisation. Creation andexecution of the framework involves developing new work systems in the new reality.

PARTICULARS OF EMPLOYEES

Details of remuneration as required under section 197(12) of the Act read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is annexed to this Report.

Particulars of employee remuneration as required under section 197(12) of the Act readwith rule 5(2) and rule 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 forms part of this report. In terms of the provisions of section136 of the Act the Annual Report is being sent to members excluding the aforementionedinformation. Any member interested in obtaining such information may write to the CompanySecretary of the Company.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation technology absorption foreignexchange earnings and outgo as required to be disclosed under section 134(3) (m) of theCompanies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 areprovided in Annexure to this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

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

a) That in the preparation of the annual financial statements for the year ended March31 2020 the applicable accounting standards have been followed alongwith properexplanation relating to material departures if any.

b) That such accounting policies as mentioned in the Notes to the financial statementshave been selected and applied consistently and judgement and estimates have been madethat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company as at March 2020 and of the profit of the Company for the year ended onthat date.

c) That proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.

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

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

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

CORPORATE GOVERNANCE MD&A AND BRR

Your Company and its Board has been complying with Corporate Governance practices asset out in a separate report in pursuance of requirement of para C of Schedule V of SEBIListing Regulations. A certificate from B S R & Co. LLP Chartered Accountantsconfirming compliance of conditions of Corporate Governance as stipulated under the SEBIListing Regulations is part of this Annual Report.

The Management Discussions and Analysis Report and Business Responsibility Report formspart of the Annual Report as required under the SEBI Listing Regulations.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Board of Directors affirms that the Company has complied with the applicableSecretarial Standards issued by the Institute of Companies Secretaries of India relatingto the meetings of the Board and General Meetings.

CONSOLIDATED FINANCIAL STATEMENT

Consolidated financial statement are prepared for the year 2019-20 in compliance withthe provisions of the Companies Act applicable accounting standards and as prescribedunder the SEBI Listing Regulations. The consolidated statement are prepared on the basisof audited financial statements of the Company its subsidiaries associates and jointventures. These consolidated financial statements along with the Auditor's Report thereonform part of the Company's Annual Report.

ANNUAL RETURN

Pursuant to section 92(3) of the Companies Act 2013 a copy of Annual Return has beenplaced on the website of the Company and the web link of such Annual Return ishttps://www.upl-ltd.com/investors.

EVENTS AFTER BALANCE SHEET DATE

There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Companyto which the balance sheet relates and the date of this Report.

ACKNOWLEDGEMENT

The Board of Directors wish to place on record its deep sense of appreciation for thecommitted services by all the employees of the Company. The Board of Directors would alsolike to express their sincere appreciation for the assistance and co-operation receivedfrom the financial institutions banks Government of various countries where the Companyhas operations Government authorities customers vendors and members during the yearunder review.

CAUTIONARY STATEMENT

Statements in the Director's Report and the Management Discussion and Analysisdescribing the Company's objectives expectations or predictions may be forward lookingwithin the meaning of applicable securities laws and regulations. Actual results maydiffer materially from those expressed in the statement. Important factors that couldinfluence the Company's operations include: global and domestic demand and supplyconditions availability of critical materials and their cost changes in governmentpolicies and tax laws economic development of the country and other factors which arematerial to the business operations of the Company.

On behalf of the Board of Directors
Rajnikant Shroff
Mumbai Chairman & Managing Director
May 22 2020 (DIN: 00180810)