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Directors Report of UPL Ltd.

Mar 31, 2017

To,

The members of UPL Limited

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

Financial Results (Rs,incrores)

Consolidated

Standalone

1 Current Year

Previous Year

Current Year

Previous Year

Total Revenue

17124

14660

7602

6758

Earnings before interest, tax, depreciation, amortization, exceptional, prior period adjustments and minority interest

3429

2711

1268

1319

Depreciation/amortization

672

676

655

619

Finance Cost

735

704

149

192

Exceptional items

81

129

46

-

Prior period adjustments

-

-

-

-

Loss from Associates

19

85

-

-

Profit before tax

1922

1117

418

508

Provision for taxation

-

-

-

-

Current tax

298

342

89

107

MAT credit entitlements

-

-

-

-

Deferred tax

(109)

(177)

84

16

Tax effect of earlier year

-

-

-

-

Profit after tax

1733

952

245

385

Minority Interest

6

12

-

-

Net profit for the year

1727

940

245

385

OPERATIONAL PERFORMANCE

The Company has delivered another year of good results.

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

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

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

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

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

Region wise performance highlights are as under.

In India, the market for agrochemicals grew by about 9%. While cotton acreage reduced, mainly in the North, there was significant increase in pulses and oilseed planted area. In some parts of the country like Karnataka, Tamil Nadu, Andhra

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

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

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

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

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

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

FUTURE OUTLOOK

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

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

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

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

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

DIVIDEND

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

DIVIDEND DISTRIBUTION POLICY

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

FINANCE

(a) Fixed Deposits

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

(b) Particulars of Loans, Guarantees or Investments

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

(c) Changes in Paid-up Share Capital

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

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

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

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

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

AMALGAMATION

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

CREDIT RATING

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

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

ESOP

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

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

SAFETY AND ENVIRONMENT

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

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

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

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

Major Award Details:

Award

Category

No. of Awards

Awarded by

Business

3

National Business Success Award Institute, Exame Magazine, Icontec

Energy

Conservation

3

FICCI, BEE Ministry of Power

Environment

4

Vietnam Association of Environmental Economics, International Research Institute for Manufacturing (1 RIM)

Manufacturing

10

IMEA, International Research Institute for Manufacturing, Frost & Sullivan, QCFI [Quality Circle Forum of India] agency

People

1

Epoca Magazine

Safety

8

Institute of Directors, Department of industrial safety and fire protection police-vietnam, OSHAI, international foundation ORP, Occupational Risk insurance COLMENA, NSCI, EKDKN

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

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

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

a. Safety Induction and orientation of new employees :

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

b. Employee Education process:

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

c. Hazard and operability study (HAZOP):

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

d. Emergency Response Team (ERT) program:

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

e. Safety Self Recognition Program (SSRP):

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

f. Near Miss Reporting:

One of the essential ingredients of reducing major safety incidents is to continuously monitor and oversee smaller and less significant incidents. It helps the teams address potential risks through detection of a combination of unsafe acts and conditions.

A total of Rs,14 crores has been invested specifically to enhance the operating safety standards at the factories in addition to the above mentioned initiatives.

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

The following major steps have been initiated at our factories:

a. Reduction of effluent discharge at Jhagadia by way of segregation and better recycling of different effluent streams. This is expected to result in better effluent management especially during the monsoon seasons.

b. Operation of formulation and few active ingredients manufacturing units in a "Zero Liquid Discharge” (ZLD) mode.

c. Dedicated technology groups work to enhance the environmental compliance and management standards thereby resulting in reduction of the utility and effluent footprint.

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

Environment and Sustainability

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

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

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

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

Reducing Environmental Impact

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

Water Consumption Performance

Carbon Emissions Performance

Waste Disposal Performance

Wastewater Discharge Performance

In 2016-17, water consumption per tonne of production in UPL manufacturing plants reduced by 19% compared to 2015-16.

In 2016-17, C02 emissions per tonne of production in UPL manufacturing plants reduced by 22% compared to 2015-16.

In 2016-17, waste disposal per tonne of production in UPL manufacturing plants reduced by 6% compared to 2015-16.

In 2016-17, wastewater discharge per tonne of production in UPL manufacturing plants reduced by 27% compared to 2015-16.

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

Specific Water Reduction Initiatives

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

- Reduced 19% specific water consumption by operational Excellency.

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

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

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

Specific Carbon Emissions Reduction Initiatives

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

- Reduced 13 % specific energy consumption by operational Excellency.

- Reduced 22 % C02 emissions by changing energy mix and by reducing specific energy consumption.

Specific Waste Reduction Initiatives

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

- Reduced 6 % specific waste disposal from our operating plants by operational Excellency.

- Reduced waste from packaging process by improvement in packing material

- Implemented waste segregation practices for efficient waste management

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

- Recovered value added products from waste.

Specific Wastewater Reduction Initiatives

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

- Reduced 27% specific wastewater discharge by operational Excellency.

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

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

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

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

RESEARCH AND DEVELOPMENT

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

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

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

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

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

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

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

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

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

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

CORPORATE SOCIAL RESPONSIBILITY

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

- Agriculture Development

- Employability & Entrepreneurship

- Education & Empowerment

- Environment & Nature Conservation

- Health & Sanitation

- National & Local Area needs

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

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

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

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

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

VIGIL MECHANISM / WHISTLEBLOWER POLICY

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

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

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

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

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

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

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

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

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

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

Internal Controls over Financial Reporting:

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

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

INDIAN ACCOUNTING STANDARD (IND AS)

Pursuant to the Notification issued by the Ministry of Corporate Affairs dated February 16, 2015, relating to the

Companies (Indian Accounting Standard) Rules 2015, the Company, its subsidiaries, associates and Joint Venture Companies have adopted "IND AS” with effect from 1st April,

2015 with comparatives for the previous year ending 51st March 2016. This transition has happened very smoothly. The impact of the change on adoption of IND AS is given in the notes to the financial statements.

RISK MANAGEMENT FRAMEWORK

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

Some of the key business risks and their mitigation plans are as under:

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

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

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

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

SUBSIDIARY COMPANIES / ASSOCIATE COMPANIES

Shroffs United Chemicals Limited:

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

SWAL Corporation Limited:

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

Optima Farm Solutions Ltd:

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

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

UPL Europe is engaged in the production and distribution of Agrochemicals in UK & Europe. The company has a formulation production site at Sandbach, UK and a sales office at Warrington, UK. The Turnover for the year ended 51st March 2017 is Rs,778 Cr and the Profit before tax is Rs,89 Cr.

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

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

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

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

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

B.V.):

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

Cerexagri B.V. - Netherlands:

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

Blue star BV:

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

United Phosphorus Holdings Cooperatief U.A.:

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

United Phosphorus Holdings B.V, Netherlands:

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

United Phosphorus Switzerland Limited:

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

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

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

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

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

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

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

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

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

Decco Worldwide Post-Harvest Holdings B.V:

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

Transterra Invest, S. L. U. Spain:

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

Cerexagri S.A.S.:

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

Neo-Fog S.A.:

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

UPL France (formerly Known as AS pen SAS):

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

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

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

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

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

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

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

United Phosphorus Inc., U.S.A. (Consolidated along with Group entities UPI Finance LLC, Cerexagri Inc (PA), USA, Cerexagri Delaware Inc, USA, Canegrass LLC, USA, RiceCo LLC, USA,

United Phosphorus Inc is engaged in the distribution of Al''s as well as formulated products in the United States and Canada. UPI also provides technologies for pest management, aquatics, Turf & Ornamental as well as fumigants for grain storage. The Turnover is Rs,2,452 Cr and the Profit before tax is Rs,82 Cr.

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

RiceCo LLC is dedicated to meet specific technology needs of rice farmers in the USA. Its turnover during the year is Rs,392 Cr and Profit before tax is Rs,12 Cr.

Decco US Post Harvest Inc, USA:

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

RiceCo International, Inc. Bahamas:

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

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

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

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

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

United Phosphorus Cayman Limited:

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

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

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

Decco Jifkins Mexico Sapi:

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

Uniphos Industria e Comercio de Produtos Quimicos Ltda:

This is a holding company.

UPL Do Brasil - Industria e Comercio de Insumos Agropecuarios S.A.:

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

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

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

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

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

Icona Sanluis S A - Argentina:

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

DVA Technology Argentina S.A. :

DVA Technology Argentina holds registrations in Argentina.

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

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

Decco Chile SpA:

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

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

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

UP Aviation Limited, Cayman Island:

UP Aviation Ltd owns the aircraft for Business purposes.

UPL Management DMCC:

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

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

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

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

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

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

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

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

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

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

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

PT Catur Agrodaya Mandiri, Indonesia:

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

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

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

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

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

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

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

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

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

Anning Decco Fine Chemical Co. Limited, China:

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

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

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

UPL Agromed Tohumculuk Sa,Turkey:

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

Safepack Products Limited, Israel:

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

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

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

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

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

Decco Italia SRL, Italy:

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

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

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

UPL Africa SARL:

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

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

a) New subsidiaries:

1. Essentiv LCC

2. Advanta Seeds Ukraine LLC

b) New associate:

1. Weather Risk Management Services Private Limited

c) Cessation of subsidiaries:

1. United Phosphorus do Brasil Ltda

2. United Phosphorus Limited, Gibraltar

3. Advanta (BVI) Ltd.

Details of companies which have become its subsidiaries

during the year pursuant to amalgamation of erstwhile

Advanta Ltd.:

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

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

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

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

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

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

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

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

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

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

11) Advanta US Inc. is engaged in distribution and marketing of Hybrids of Corn, forage sorghum,Grain sorghum seeds in the US and Mexico. The Sales Turnover for the year is Rs,106 Cr and the Profit before tax is Rs,-126 Cr

12) Advanta Seeds Ukraine LLC has just started operation in Ukraine. The Profit before tax is Rs,-10 Cr.

MATERIAL SUBSIDIARY

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

RELATED PARTY TRANSACTIONS

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

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

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

INSURANCE

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

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

Appeal before the Supreme Court:

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

AUDITORS

a) Statutory Auditors

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

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

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

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

b) Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost account records maintained by the Company are required to be audited. Your Directors had, on the recommendation of the Audit Committee, appointed Messrs RA & Co., Cost Accountants to audit the cost accounts of the Company for the financial year 2017-18 on a remuneration of Rs,7.00 lakhs. The Cost Auditors have submitted a certificate of their eligibility for such appointment. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Member''s ratification for the remuneration payable to Messrs RA & Co., Cost Auditors is included at Item No. 6 of the Notice convening the Annual General Meeting.

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

2015-16 was filed on 27th August, 2016.

c) Secretarial Audit

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

REPORTING OF FRAUD

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

DEPOSITORY SYSTEM

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

DIRECTORS

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

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

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

EVALUATION OF THE BOARD''S PERFORMANCE

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

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

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

REMUNERATION POLICY

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

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

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

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

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

FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

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

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

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

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

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

PERSONNEL

As on 31st March, 2017, The Company has 3489 employees in India, and 5714 employees globally which includes 676 employees of Advanta who moved to the Company.

The Company has always believed that its people are its biggest asset. The year 2016-17 saw several key initiatives to nurture on our core values.

1. SUPPLY CHAIN ACADEMY

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

During the year, 27 programs have been delivered under SCA, benefiting 614 employees.

2. GLOBAL SALES EXCELLENCE AWARDS

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

3. THE COMPANY CERTIFIED AS A GREAT PLACE TO WORK

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

We are very pleased to inform you that we won the GPTW certification in both the countries in our maiden attempt.

PARTICULARS OF EMPLOYEES

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

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under sections 134(3)(m) of the

Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are provided in Annexure 6 to this Report.

DIRECTORS RESPONSIBILITY STATEMENT

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

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

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

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

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

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

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

CORPORATE GOVERNANCE

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

Dealing with securities which have remained unclaimed

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

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

BUSINESS RESPONSIBILITY REPORTING

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

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial statements are prepared for the year 2016-2017 in compliance with the provisions of the Companies Act, applicable Accounting Standards and as prescribed under the SEBI regulations. The consolidated statements are prepared on the basis of audited financial statements of the Company, its subsidiaries, associates and joint ventures. These consolidated financial statements 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 www.uplonline.com.

EXTRACT OF ANNUAL RETURN

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

REGISTRAR AND SHARE TRANSFER AGENT

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

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

LISTING OF THE COMPANY''S EQUITY SHARES

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

ACKNOWLEDGEMENT

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

CAUTIONARY STATEMENT

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

On behalf of the Board of Directors

Mumbai Rajnikant Devidas Shroff

24th May, 2017 Chairman & Managing Director

(DIN: 00180810)

Registered Office:

3-11, G.I.D.C., Vapi Dist. Valsad, Gujarat Pin: 396195.


Mar 31, 2013

The Directors have the pleasure of presenting their report and audited accounts for the year ended on 31st March, 2013.

Financial Results:

(Rs. In lakhs)

Consolidated Standalone

Current Year Previous Year Current Year Previous Year

Total Revenue 929,447 776,365 407,376 345,949

Earnings before interest, tax, depreciation, amortisation, 176,178 147,634 56,097 61,482 exceptionals, prior period adjustments and minority interest

Depreciation/amortisation 35,372 29,238 15,776 14,349

Finance cost 42,896 41,464 10,599 16,437

Exceptional items 1,504 1,845 - -

Prior period adjustments 2,018 2,217 - -

Minority interest -156 535 - -

Profit before tax 94,544 72,335 29,722 30,696

Provision for taxation

Current tax 22,134 11,679 7,930 6,199

MAT credit entitlements - -192 - -192

Deferred tax -84 937 940 2,046

Tax effect of earlier year -1,733 377 39 -61

20,317 12,801 8,909 7,992

Profit after tax 74,227 59,534 20,813 22,704

Profit / (Loss) from associates 3,233 -3,979 - -

Net profit for the year 77,460 55,555 20,813 22,704

Operational performance:

During the year, rainfall in India was erratic. There was delay in the arrival of the monsoon, adversely affecting the kharif crops. Although in the later part, the monsoon picked up which turned out to be favourable for the rabi crops. However, in most parts of the country, there was drought-like situation. Due to water shortage, cotton and rice acreage in the country decreased. Herbicide application in rice and soya bean came down. During the year, it was heartening to note that apart from the Northern states of the country, the Eastern states are also being classified as food baskets for the country with improved production of many food and vegetable crops.

This is a good sign for the country which can take credit for being one of the leading producers of the world for soya bean, cotton, sugarcane, rice and certain cereals.

On the global front, Latin American countries like Brazil, Argentina, Colombia, among others, witnessed higher demand for Company''s agrochemicals. In the US, initial planting of corn started on a good note. However, due to droughts in later part of the season, farmers shifted the production to other crops. This had an adverse impact on sales.

The prices of most of the inputs were stable during the year. The commodity prices, except cotton, sustained or rose slightly.

During the year, the US dollar became stronger against most major currencies. In India, a very tight monetary policy with high interest rates was followed to bring down inflation but this impacted the overall economic growth very badly. However, of late, there have been signs of inflation easing out which gives hopes for reduction in rates of interest in the near future.

The economic scenario is changing. The world seems to be coming out of recession witnessed in last five years. The US economy is showing definite signs of revival. In Europe, some of the countries are still suffering and it will take more time for these countries to revive their economies.

It is heartening to note that Company''s sales are going up in all parts of the world, be it the US, Europe, Africa, Asia and Australia. Latin American markets, especially Brazil, have emerged as very prospective markets and in the years to come, there is a very high potential to improve the sales in these markets.

During the year, despite sluggish conditions in most of the markets, the Company has performed very well. Some of the highlights of global performances are as under:

(a) Revenue from operations has increased by 20% to Rs.9,294 crores.

(b) EBIDTA has gone up by 19%.

(c) Profit before taxes have gone up by 30% to Rs.945 crores.

(d) Profit for the year has gone up by 39% to Rs.775 crores.

Future outlook:

For the coming year, with a normal monsoon predicted for India the Company''s performance in India is likely to improve. On the global front, the potential of Latin American market looks robust, especially Brazil. With commodity prices expected to be stable or slightly rising, offtake of agrochemicals will improve. The Company has taken many initiatives in terms of supply chain management which will reduce the overall cost of production for the Company. The Company is also entering new potential markets, such as South Africa, Phillipines, among others. Over the next five years, the Company is poised to register high growth.

Dividend:

Your Directors have recommended dividend of 125% i.e. Rs.2.50 per Equity Share of Rs.2 each for the financial year ended 31st March, 2013, 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 19th July, 2013 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.

Finance:

During the year, the Company raised funds of Rs.300 crores by issuing Unsecured Listed Redeemable Non-convertible Debentures.

Buy back:

During the year, the Company completed successfully the buy back programme on 17th December, 2012 by buying back 1,92,00,000 equity shares of Rs.2 each at an average rate of Rs.116.40 per equity share aggregating to Rs.223.49 crores.

Fixed deposits:

The Company has not accepted fixed deposits during the year. There are no fixed deposits outstanding as at 31st March, 2013.

Recent acquisitions:

During the year, the Company, through its overseas subsidiary, has entered into an agreement with Punjab Chemicals to acquire a 100% stake in the Dutch company, SD Agrichem Europe, a subsidiary of Punjab Chemicals and Crop Protection Limited, along with all tangible and intangible assets, IPR, product registrations, brands, distribution network and manufacturing facilities.

Agrichem based out of Oosterhaut, the Netherlands is engaged in the production, marketing and selling of crop protection products in the European agrochemicals market. Agrichem''s product range includes herbicides, insecticides and fungicides registered in several European countries like the Netherlands, Belgium, the UK, France, Germany, Ireland, Denmark, Italy, Slovakia, Czech Republic, Belarus and Switzerland. It has a well-staffed crop protection registration department, in-house R&D and quality control facilities and its own formulation facilities in the Netherlands.

Agrichem will give your Company new and enhanced market access in European countries. Agrichem has an exciting registrations portfolio with products that will complement the Company''s existing portfolio in Europe.

Research and development:

R&D has played an important role for the growth of the Company. To further improve the capabilities of R&D, many new equipment and instruments have been added to the R&D laboratories at Ankleshwar, Thane and Vapi.

The R&D efforts have been focused on developing manufacturing processes of off-patent agrochemical molecules and specialty chemicals. The emphasis has been to develop innovative, cost-effective and patent non-infringing processes. These efforts have resulted in the manufacturing processes of several molecules for introduction in the future. The efforts have also been mediated towards improving the processes for the manufacture of existing products in terms of quality enhancement, raw materials cost reduction and batch cycle time reduction. Environment, Health and Safety (EHS) have been given prime importance during these process development /improvement activities.

Keeping in mind the global trends, R&D has focused its efforts to develop new safer and eco-friendly formulations. Several such formulations have been developed during the year. Many new combination formulations have been also developed to control a variety of pests.

International regulatory data requirements for product registrations are becoming stricter day by day. The capabilities have been built within R&D laboratories to fulfill these requirements. Further, to meet the growing needs for new product introductions, regulatory data generation has been aggressively pursued for both domestic and international registrations.

Subsidiary companies / associate companies:

In pursuance of Circular no. 2/2011 dated 8th January, 2011 issued by the Ministry of Corporate Affairs, the Company attached its consolidated financial statements and that of its subsidiaries. The same is prepared in compliance with the Accounting Standard-21.

The annual accounts of the subsidiary companies and related detailed information shall be made available to the shareholders of the Company and its subsidiaries on request. They are also available for inspection by the members at the Company''s registered office and administrative office.

During the year, the subsidiary companies in the UK, the US, Brazil and Turkey have performed very well. Businesses of other subsidiaries like Cerexagri, Agrichem and Riceco have also been very profitable.

Apart from these subsidiaries, Advanta Limited, where the Company holds 49% of the shares, has also shown a remarkable performance. It is expected that in future also, this Company will come out with very good results.

Insurance:

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

Auditors and Auditors report:

M/s S. V. Ghatalia & Associates LLP, Chartered Accountants, the Statutory Auditors are retiring at the ensuing Annual General Meeting and being eligible for reappointment have expressed their willingness to continue, if reappointed. Your Directors recommend their appointment as the Statutory Auditors and fix their remuneration for the year 2013-14.

Cost audit:

The Board of Directors appointed M/s. RA & Co, Cost Accountants, Mumbai as Cost Auditors of the Company for conducting audit of the cost accounts maintained by the Company for FY 2013-14. They have submitted a certificate of eligibility for the appointment. For the year 2012-13, the due date for filing the Cost Audit Report is 30th September, 2013 and the same will be filed in due course. The Cost Audit Report for the year 2011-12 was filed on 8th January, 2013.

Depository system:

98.09% of the total paid-up Equity Shares of the Company were dematerialised as on 31st March, 2013.

Directors:

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Kalyan Banerjee, Dr. Reena Ramachandran, Mr. Pradip Madhavji and Mr. R. D. Shroff, Directors of the Company, retire by rotation at the ensuing Annual General Meeting of the Company, and being eligible offer themselves for reappointment.

During the year, the Board of Directors has appointed Mr. Suresh P. Prabhu as an Additional Director on the Board of the Company with effect from 30th January, 2013. Mr. Prabhu is an eminent chartered accountant. He has been a Member of Parliament in the 11th, 12th, 13th and 14th Lok Sabha (from 1996-2009) and was a Cabinet Minister of Industry, Energy, Environment and Forests, Chemicals and Fertilisers, Heavy Industry & Public Enterprises at various points of time. Mr. Prabhu has many years of experience in the field of sustainable development, banking and finance and international business. He has participated and also addressed at forums in India and abroad. He is a part of many reputed associations involved in business, sports, educational and social initiatives. Mr. Prabhu has a rich and varied experience and your Company is proud to avail of his knowledge and guidance. As per Section 260 of the Companies Act, 1956, he holds the office of Director up to the date of the ensuing Annual General Meeting. Notices in writing as required under Section 257 of the Companies Act, 1956 have been received from members proposing his appointment as Director of the Company at the ensuing Annual General Meeting. Your Directors recommend his appointment.

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the brief resume of Mr. Kalyan Banerjee, Dr. Reena Ramachandran, Mr. Pradip Madhavji, Mr. R. D. Shroff and Mr. Suresh P. Prabhu, Directors of the Company are provided in the notice convening the Annual General Meeting of the Company.

During the year Mr. Chirayu Amin has resigned from the Board of Directors of the Company with effect from 23rd October, 2012.

The Board takes this opportunity to place on record its deep sense of appreciation for the support and invaluable contribution made by Mr. Chirayu Amin during his tenure as Director of the Company.

Personnel:

The relationship with all employees and workers at all sites of the Company remained very cordial throughout the year. Your Directors would like to place their appreciation for the contribution made by all the employees of the Company.

Particulars of employees:

In terms of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of the employees are set out in the Annexure to the Directors'' Report. Having regard to the provisions of Section 219(1) (b) (iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

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 Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are provided in the Annexure to this Report.

Directors responsibility:

Your Directors confirm the following Directors Responsibility statements pursuant to provisions of Section 217 (2AA) of the Companies Act, 1956:

1. In the preparation of Annual Accounts for the year ended 31st March, 2013, the Company has followed the applicable accounting standards with proper explanations relating to material departures;

2. Appropriate accounting policies have been selected and applied consistently and judgments and estimates are made prudently and reasonably so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the profit of the Company for that year;

3. Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with applicable provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The annual accounts have been prepared on a ''going concern'' basis.

Corporate governance:

The Company and its Board has been complying with the Corporate Governance parameters to the extent set out in this respect as a separate report, in pursuance of requirement of Clause 49 of the Listing Agreement. The Management Discussion and Analysis Report forms part of this Report. Auditor''s certificate regarding compliance of the conditions of the Corporate Governance as stipulated under the said Clause is also attached to this Report.

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 have been no defaults in paying the annual listing fees.

Acknowledgement:

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

Mumbai On behalf of the Board of Directors

25th April, 2013

Registered Office:

3-11, G.I.D.C., Vapi

Dist. Valsad, Gujarat R. D. Shroff

Pin: 396195. Chairman & Managing Director


Mar 31, 2012

The Directors have pleasure in presenting their report and audited accounts for the year ended on 31 March 2012.

Financial results

(Rs. in Lacs)

Particulars Consolidated Standalone

Current year Previous Year Current year Previous Year Total Revenue 776365 589817 345949 306468

Earnings before interest, tax, depreciation, 147634 120736 61482 61855 amortization, exceptional, prior period adjustments and minority interest

Depreciation/ amortization 29238 21380 14349 11468

Interest 41464 31200 16437 29364

Exceptional items 1845 1400 - -

Prior period adjustments 2217 312 - -

Minority interest 535 1036 - - Profit before tax 72335 65408 30696 21023 Provision for taxation

Current tax 11679 9597 6199 5880

MAT credit entitlements -192 - -192 -

Deferred tax 937 -1496 2046 -631

Tax effect of earlier year 377 -793 -61 24

12801 7308 7992 5273

Profit after tax 59534 58100 22704 15750

Loss from associates 3979 2338 - - Net profit for the year 55555 55762 22704 15750

Merger

The Honorable High Court of Gujarat, vide its order dated 20 December 2011 and 13 January 2012 has sanctioned Scheme of Amalgamation of Company's overseas subsidiary United Phosphorus Limited (Mauritius) with the Company with effect from 1 July 2011. Pursuant to this, all the assets and liabilities of United Phosphorus Limited (Mauritius) have been vested in the Company.

operational Performance

During the year, India received good rainfall. Except for parts of Andhra Pradesh, good rainfall was recorded all over India. Production for almost all the crops increased.

In various countries worldwide, good rainfall were recorded.

The prices of most inputs were fairly stable. However, crude prices started moving up steeply in recent months. Further, during the year, the volatility of various currencies continued. After a brief period of stability, the currencies, mainly the US dollar started rising again. On account of an increase in crude prices and a higher import bill, the Indian economy posted negligible growth. Inflation has been rising. Interest rates remained quite high throughout the year, affecting all sectors in the economy adversely.

The US economy has started, albeit slowly, showing signs of revival. However, economies of the European nations have worsened during the year. The fears of euro zone debt crisis are looming large. This may lead to lower economic growth in the coming years. In Asia, the tsunami destroyed Japan's crop production. There was civil unrest in Libya.

In spite of these adverse circumstances, the Company performed very well. Some of the highlights of its performance are as under:

a) Revenue from operations - increased by 14% to Rs. 330,800 lakhs.

b) Exports - increased by 16% to Rs. 167479 lakhs (FOB value).

c) EBITDA - decreased by 0.6% to Rs. 61482 lakhs.

d) Profit before tax - increased by 46% to Rs. 30696 lakhs.

e) Profit for the year - increased by 44% to Rs. 22704 lakhs.

Future Outlook

For the coming year, normal to above average monsoons are predicted in India. This will result in another year of improved performance in the Indian market. The domestic sales in India are expected to improve, resulting in higher profitability. On the export front, the Company sees good opportunities in Latin American, European and Asian markets. A strong farm economy in Brazil will help the Company penetrate these markets effectively and in a short time. With an increase in the global population and increasing demand for higher quality foods, the Company is poised for higher sales and improved profitability in the future.

Dividend

Interim dividend of 100% on equity shares was paid to the members for the financial year 2011-12 in April, 2012.

Your Directors have recommended final dividend of 25% i.e. Rs.0.50 per Equity Share of Rs. 2 each for the financial year ended 31 March 2012, 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 27 July 2012 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.

Finance

During the year, the Company raised funds of Rs. 250 crores by issuing unsecured Redeemable Non-convertible Debentures.

Fixed Deposits

The Company has not accepted fixed deposits during the year. There are no fixed deposits outstanding as at 31 March 2012.

Recent Acquisitions

During the year, the Company acquired a 51% stake in DVA Agro Do Brasil (DVA Agro Brazil), a Brazilian company, from DVA Group, Germany and other shareholders.

DVA Agro Brazil is engaged in producing, marketing, selling and distributing crop protection products and specialties in the Brazilian agrochemicals market. It has a formulation plant in Brazil with expansion plans currently under execution to build capabilities in different crop protection product categories. This acquisition will result in blending German and Indian expertise in business, technology and manufacturing in agribusiness in Brazil. This will help develop crop protection solutions, to provide higher value- added products to customers and also considerably broaden the Company's existing portfolio.

Research and Development Research and Development efforts have been focused on developing process technologies of off-patent molecules for future introductions. Process improvements of existing products have been undertaken to improve product quality, cost reduction and productivity improvement Environment, Health and Safety (EHS) considerations have been given special emphasis in the process improvement activities.

R&D efforts have also been focused on developing new, safer, and eco-friendly formulations for better efficacy and improved value to farmers. Many new combination products have been developed and are under bio efficacy studies to control a broad spectrum of pests.

A new pilot plant has been set up at Ankles war during the year to scale up new formulation compositions and processes and for making larger quantities of formulations for field trials.

Regulatory data generation and chemistry dossier preparation for domestic and international registrations were continued during the year.

Subsidiary Companies

In pursuance of Circular no. 2/2011 dated 8 January 2011 issued by Ministry of Corporate Affairs, the Company attached its consolidated financial statements and that of its subsidiaries. The same is prepared in compliance with the Accounting Standard-21.

The annual accounts of the subsidiary companies and related detailed information shall be made available to the shareholders of the Company and its subsidiaries on request. They are also available for inspection by the members at the Company's registered office and administrative office.

During the year, the subsidiary companies in the UK, the US, China, Vietnam and South Africa have performed well. Cerexagri group of companies also improved the sales and profitability in European markets.

Insurance

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

Auditors and Auditors Report M/s S. V. Ghatalia & Associates, Chartered Accountants, the statutory auditors are retiring at the ensuing Annual General Meeting and being eligible for reappointment have expressed their willingness to continue, if re- appointed. Your Directors recommend their appointment as the Statutory Auditors and fix their remuneration for the year 2012-13.

In respect of consolidated accounts, the auditors have qualified their report for non-inclusion of accounts of certain subsidiaries, joint ventures and associated companies, and non-disclosure of segment reporting. In this regard, your attention is invited to Notes 2(b) and 31 of the consolidated accounts which are self-explanatory.

Cost Audit

During the year, M/s. M.B. Ashtamkar, Cost Auditors, submitted their resignation. In their place, the Board of Directors appointed M/s. RA Ef Co, Cost Accountants, Mumbai as Cost Auditor of the Company for conducting audit of the cost accounts maintained by the Company in respect of the insecticides for the years 2011-12 and 2012-13. They have submitted a certificate of their eligibility for such appointment. For the year 2011-12, the due date for filing the Cost Audit Report is 30 September 2012 and the same will be filed in due course. The Cost Audit Report for the year 2010-11 was filed on 20 September 2011.

Depository System

98.09% of the total paid up equity shares of the Company are dematerialized as on 31st March 2012.

Directors

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Chirayu Amin, Mr. V. R. Shroff, Mr. Vinod Sethi and Mr. A. C. Ashar, Directors of the Company, retire by rotation at the ensuing Annual General Meeting of the Company, and being eligible offer themselves for reappointment.

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the brief resume of Mr. Chirayu Amin, Mr. V. R. Shroff, Mr. Vinod Sethi and Mr. A. C. Ashar, Directors of the Company are provided in the notice convening the Annual General Meeting of the Company.

Personnel

The relationship with all employees and workers at all sites of the Company remained very cordial throughout the year. Your Directors would like to place their appreciation for the contribution made by all the employees of the Company.

Particulars of Employees

In terms of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of the employees are set out in the annexure to the Directors' Report. Having regard to the provisions of Section 219(l)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

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 section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are provided in the Annexure to this Report.

Directors Responsibility Your Directors confirm the following Directors Responsibility statements pursuant to provisions of Section 217 (2AA) of the Companies Act, 1956:

1. In the preparation of Annual Accounts for the year ended 31 March 2012, the Company has followed the applicable accounting standards with proper explanations relating to material departures;

2. Appropriate accounting policies have been selected and applied consistently and judgments and estimates are made prudently and reasonably so as to give a true and fair view of the state of affairs of the Company as at 31 March 2012 and of the profit of the Company for that year;

3. Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with applicable provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

k. The annual accounts have been prepared on a going concern basis.

Corporate Governance

Your Company and its Board has been complying with Corporate Governance to the extent set out in this respect as a separate report, in pursuance of requirement of Clause 49 of the Listing Agreement. The Management Discussions and Analysis Report forms part of this Report. Auditor's certificate regarding compliance of the conditions of the Corporate Governance as stipulated under the said clause is also attached to this Report. 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.

Mumbai: 30 April 2012 On behalf of the Board of Directors

Registered Office:

3-11, G.I.D.C., Vapi

Dist. Valsad, Gujarat R. D . Shroff

Pin: 396195. Chairman & Managing Director


Mar 31, 2011

The Directors have pleasure in presenting their report and audited accounts for the year ended on 31st March, 2011.

FINANCIAL RESULTS: (Rs. in lacs)

Consolidated Current Previous Year Year

Sale of Products (net of excise and rebate and discounts) and other income from operations. 589817 549279

Profit before depreciation, interest and amortization of Deferred revenue expenses and Minority Interest 120424 103389

Depreciation / Amortisation 21380 21470

Interest 31200 19379

Exceptional Items 1400 2670

Minority Interest 1036 593

Profit Before Tax 65408 59277

Provisions for Taxation:

Current Tax 9597 3720

MAT Credit Entitlement - -

Deferred Tax (1496) 4415

Tax effect of earlier years (793) 401

7308 8536

Profit After Tax 58100 50741

Share of Profit in Associates (1417) 1875

56683 52616

Prior Period Adjustments (Net) 921

Debenture Redemption Reserve (Net of write back) (23843) 3601

(22922) 3601 79605 49015

Balance Brought Forward 123693 86929

Amount available for Appropriations 203298 135944

APPROPRIATIONS:

Debenture Redemption Reserve written back

Final Equity Dividend 9261 8791

Tax on Distributed Profits 1502 1460

Debenture Redemption Reserve (Net of write back) Transfer to General Reserve 27500 2000

38263 12251

Balance Carried Forward 165035 123693



Stand Alone Current Previous Year Year

Sale of Products (net of excise and rebate and discounts) and other income from operations. 306468 262734

Profit before depreciation, interest and amortization of Deferred revenue expenses and Minority Interest 61855 44895

Depreciation / Amortisation 11468 10791

Interest 29364 9264

Exceptional Items - -

Minority Interest - -

Profit Before Tax 21023 24840

Provisions for Taxation: Current Tax 5880 4420

MAT Credit Entitlement - (2277)

Deferred Tax (631.00) 4568

Tax effect of earlier years 24 -

5273 6711

Profit After Tax 15750 18129

Share of Profit in Associates -

15750 18129

Debenture Redemption Reserve (Net of write back) -

0 0

15750 18129

Balance Brought Forward 2340 63

Amount available for Appropriations 18090 18192

APPROPRIATIONS:

Debenture Redemption Reserve written back 30448 4402

Final Equity Dividend 9261 8791

Tax on Distributed Profits 1502 1460

Debenture Redemption Reserve (Net of write back) 6605 8003

Transfer to General Reserve 27500 2000

44868 20254

Balance Carried Forward 3670 2340



OPERATIONAL PERFORMANCE:

During the year, India received very good monsoon. The La Nina effect leading to high precipitation resulted in bountiful rains throughout the country. Many crops recorded higher production this year. There was bumper harvest in both kharif and rabi seasons. Prices of most of the inputs also stabilized during the year. All these factors led to overall improvement in the economy of the country. The GDP growth was also higher.

Barring a few countries like Argentina, the rains were good and fairly widespread in most of the countries around the world. However, there were political upheavals and public uprising which saw end of dynasty rule in countries like Tunisia, Egypt, Libya, etc. Japan suffered national calamities like earthquake, tsunami and nuclear leaks. It led to high crude oil prices which affected the economies of all countries. Fears of inflation are looming large. Economies of some of the European nations continued to remain sluggish.

On the back of good monsoon, the sale of agrochemicals in India in the first half of the year were higher. However, contrary to the expectations, the sales in second half were not so encouraging. On international front, the company did very good business in Latin American market. The sales of companys agrochemicals in these parts were high and in future also, the sales of agrochemicals in the Latin American countries will go up.

Total net sales for the year were higher at Rs. 2809.14 crores as against Rs. 2453.39 crores. Profit before Taxes were at Rs. 210.23 crores as against Rs. 248.40 crores last year.

FUTURE OUTLOOK:

For the year 2011-12, normal monsoons are predicted in India. This should result in higher sales and improved profitability. Further, economic situation in USA and many countries in Europe are showing distinct signs of recovery. This will positively affect the performance of agrochemical industry. With the population in India going up, food production has to go up which can be possible only by increased and regulated usage of agrochemicals. In the recent Union Budget, greater thrust is provided on agriculture, infrastructure and education. This will also help the Company to have better performance in the coming years.

DIVIDEND:

Your Directors have recommended dividend of Rs. 2/- per Equity Share of Rs. 2/- each for the financial year ended 31st March, 2011, 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 26th July, 2011 and whose names appear as beneficial owners as per beneficiary list furnished for the purpose by National Securities Depository Limited and Central Depository Services (India) Limited.

FINANCE:

During the year, the Company has raised funds of Rs. 600 crores by issue of unsecured Redeemable Non-convertible Debentures.

FIXED DEPOSITS:

The Company has not accepted fixed deposits during the year. There are no fixed deposits outstanding as at 31st March, 2011.

RECENT ACQUISITIONS:

During the year, the Company made following acquisitions:

a) Global non-mixture Mancozeb fungicide business and related assets from DuPont, including existing inventory, manufacturing and formulation production facilities in Barranquilla, Colombia. This includes rights to registered brands for non-mixture mancozeb products, trademarks, as well as registrations and supporting regulatory data for those products, which include Manzate® brand fungicides. Mancozeb is a leading fungicide and this acquisition will also help the Company in strengthening its position in the high growth emerging markets including South and Central America.This purchase will enhance the Companys position in the EBDC (Ethylene Bis Dithio Carbamates) segment.

b) RiceCo LLC, USA along with its subsidiaries and certain assets of the international business of its Affiliate Company. RiceCo does business in more than 20 countries with major markets in the US and other countries like Mexico, Thailand, Nigeria and Sri Lanka. RiceCo mainly caters to the rice market and has a wide range of product offerings based on the herbicide Propanil for this segment. Propanil is a herbicide used for the control of many important annual grasses, broadleaf and sedge weeds in rice. RiceCo will add strong brands for the rice segment to the Companys branded product portfolio.

(c) One-half of stake in Sipcam Isagro Brasil (SIB) , a company in Brazil. This company is a niche local producer and distributor in the Brazilian agrochemicals market. It has a formulation plant in Brazil. This acquisition will help the Company to enter direct distribution business in Brazilian market for its products and help to target untapped markets.

RESEARCH AND DEVELOPMENT:

Research and Development has been given the highest priority in companys business plan. Companys research laboratories at Ankleshwar, Thane and Vapi have been upgraded by adding new equipment and instruments.

In pursuit of introducing new products in the market, R&D has focused on the development of process technologies for the fungicides, herbicides and insecticides. Efforts have also been focused on developing new safer and eco-friendly formulations for better efficacy and improved value for the farmers.

R&D has worked relentlessly in the quality improvement, cost reduction, batch cycle time and waste reduction of our existing products.

Various regulatory data generation and submission of registration dossiers have been also done by R&D during the year.

CORPORATE SOCIAL RESPONSIBILITY:

As a responsible corporate citizen, the Company is carrying out many social activities in diverse fields. In respect of education, it has set up schools and colleges in Vapi, Ankleshwar, Sivakasi, etc. It is also providing monetary help to other schools and colleges situated near the factories of the Company. The Company has also set up post graduation higher study education institutions at Vapi and Ankleshwar. At Vapi, management and nursing colloges are set up. At Ankleshwar, new chemical engineering college is coming up.

In the fields of health and medicine, the Company along with Rotary club has started state of art hospital at Vapi with the latest modern equipments. At Ankleshwar, the Company is helping the nursing homes and hospitals.

Environment and pollution control is a priority issue for the Company. The Companys factories are located in chemical zones at Vapi and Ankleshwar. Senior management of the Company including the Chairman and Vice-Chairman are actively involved in effluent treatment companies in Vapi and Ankleshwar. With significant efforts of these officials in the areas of pollution control, Vapi has been removed from the list of critically polluted areas.

The Company is spending lot of money to help the small and medium scale units in managing their effluents by developing sophisticated COD measuring instruments. At Ankleshwar, the Company has helped in setting up a state of art solid waste landfill site which is considered to be the best in the country. For outstanding research and development work on pollution control and environment protection, the Chairman has been awarded by the Department of Science and Research (DSIR).

Various other initiatives which will help people and improve their life-style are supported and encouraged by the Company. This includes building gardens, parks and temples, providing rural electrification and tubewells, etc.

SUBSIDIARY COMPANIES:

In pursuance of Circular no. 2/2011 dated 8th January, 2011 issued by Ministry of Corporate Affairs, the Company has attached the consolidated financial statements of the Company and its subsidiaries. The same are prepared in compliance with the Accounting Standard-21.

The annual accounts of the subsidiary companies and related detailed information shall be made available to the shareholders of the Company and its subsidiaries on request. They are also available for inspection by the members at the Companys registered office and administrative office.

In spite of the economies of many countries were under pressure, all the subsidiary companies of your Company have performed reasonably well. Subsidiaries in U. S. A., U.K., Cerexagri group of companies, Argentina, Australia and Japan have done good business.

INSURANCE:

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

AUDITORS AND AUDITORS REPORT:

M/s S. V. Ghatalia & Associates, Chartered Accountants, the statutory auditors are retiring at the ensuing Annual General Meeting and being eligible for re-appointment have expressed their willingness to continue, if re-appointed. Your Directors recommend their appointment as the Statutory Auditors and fix their remuneration for the year 2011-12.

The auditors, without qualifying their Report have drawn attention of members that as per the Court order and the legal advice obtained by the company, the company has not adjusted tax benefit in respect of the amortization of the Product Registrations and Product acquisition to the reserves. In this regard, your attention is invited to Note No.14 in schedule T which is self- explanatory. The other notes to the accounts referred to in the Auditors Report are self-explanatory and do not call for any further comments.

In respect of consolidated accounts, the auditors have qualified their report for non-inclusion of accounts of certain subsidiaries, joint ventures and associated companies, and non disclosure of segment reporting. In this regard, your attention is invited to Notes 1(b) and 18 of schedule S of the consolidated accounts which are self-explanatory.

COST AUDIT:

The Board of Directors appointed M/s. M.B. Ashtamkar, Cost Accountant, Mumbai as Cost Auditor of the Company for conducting audit of the cost accounts maintained by the Company in respect of the insecticides for the year 2011-12. They have submitted a certificate of their eligibility for such appointment. For the year 2009-10, they have filed their Cost Audit Report on 25th September, 2010. The due date for filing the same was 30th September, 2010.

DEPOSITORY SYSTEM:

97.98% of the total paid up equity shares of the Company are dematerialized as on 31st March, 2011.

DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. J. R. Shroff, Dr. P. V. Krishna, Mr. Pradeep Goyal and Mrs. S. R. Shroff, Directors of the Company, retire by rotation at the ensuing Annual General Meeting of the Company, and being eligible offer themselves for re-appointment.

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the brief resume of Mr. J. R. Shroff, Dr. P. V. Krishna, Mr. Pradeep Goyal and Mrs. S. R. Shroff, Directors of the Company are provided in the notice convening the Annual General Meeting of the Company.

PERSONNEL:

The relationship with all employees and workers at all sites of the Company remained very cordial throughout the year. Your Directors would like to place their appreciation for the contribution made by all the employees of the Company.

SAFETY, HEALTH PERFORMANCE AND ENVIRONMENT:

The Company ensures that compliance to statutory safety regulations is fully met with the management support to manufacturing units. The Company has implemented various codes of practices under Responsible Care program, an initiative of Indian Chemical Council, which addresses broadly various aspects related to Safety, Health and Environment. The Company not only addresses its own issues related to SHE aspects, but also takes care of various related problems faced by other industries in the region where the Units are located. All manufacturing units are operating with QMS ISO 9001, EMS ISO 14001 and OHSAS 18001 certification. Various certificates are getting renewed from time to time after audits by respective accreditation agency.

The Company have all the material Consents & Authorization valid under different environmental acts and rules. Various manufacturing activities are performed at the units as per Consents obtained from respective State Pollution Control Boards. Moreover, all Units are complying to provisions of Factories Act and Company have taken steps to ensure safe working place for all employees, and protecting their health.

During the last year, the Company has augmented Effluent Treatment Plants and air pollution control systems at the Units to meet stringent discharge norms being prescribed for discharge of treated wastewater / stack emissions. The Company is already having on-line monitoring system for TOC / TKN at two units i.e. Unit No. 00 at Vapi and Unit No. 01 at Ankleshwar. For treating effluent with refractory COD, Company has set up separate treatment system at Vapi and Ankleshwar. To take care of Ammonical Nitrogen problem, Company has incorporated additional treatment system which ensures that this parameter is well within the prescribed limit. Treated effluent from the Units is discharged to Common Treatment Facilities at Vapi, Ankleshwar and Jhagadia; and effluent discharge meets inlet norms of Common Treatment Facilities.

Measures taken by the Company for water conservation and recycling have paid good results. With operation of RO System at Unit No. 05 (Jhagadia), approximately 200 KL / Day water has been recycled which has helped in reduction of water consumption.

Solid and Hazardous Wastes generated by the units are treated and disposed off at Common Hazardous Waste Treatment & Disposal Facility. During the year, Company has constructed Hazardous Waste Storages at units as per the new guidelines.

The Company has set up Emergency Risk Teams at all its units. In case of any emergency like flood, fire, accident, explosion or any other calamity, these teams swing into action immediately and bring the situation under control. Their work is greatly appreciated by the government departments, fire brigade and the industries in these areas.

PARTICULARS OF EMPLOYEES:

In terms of section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of the employees are set out in the annexure to the Directors Report. Having regard to the provisions of section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

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 section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are provided in the Annexure to this Report.

DIRECTORS RESPONSIBILITY:

Your Directors confirm the following Directors Responsibility statements pursuant to provisions of Section 217 (2AA) of the Companies Act, 1956:

1. in the preparation of Annual Accounts for the year ended 31st March, 2011, the Company has followed the applicable accounting standards with proper explanations relating to material departures;

2. appropriate accounting policies have been selected and applied consistently and judgements and estimates are made prudently and reasonably so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2011 and of the profit of the Company for that year;

3. proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with applicable provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

4. the annual accounts have been prepared on a going concern basis.

GROUP FOR INTERSE TRANSFER OF SHARES:

As required under Clause 3(1)(e) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 persons constituting "Group" (within the meaning as defined in the Monopolies and Restrictive Trade Practices Act, 1969) for the purpose of availing exemption from applicability of the provisions of Regulation 10 to 12 of the aforesaid Regulations, are given in the Annexure attached herewith and forms part of this Annual Report.

CORPORATE GOVERNANCE:

Your Company and its Board has been complying with Corporate Governance to the extent set out in this respect as a separate report, in pursuance of requirement of Clause 49 of the Listing Agreement. The Management Discussions and Analysis Report forms part of this Report. Auditors certificate regarding compliance of the conditions of the corporate Governance as stipulated under the said clause is also attached to this Report.

LISTING OF THE COMPANYS EQUITY SHARES:

The equity shares of your Company are listed on the Bombay Stock Exchange 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.



On behalf of the Board of Directors

R. D . Shroff Chairman & Managing Director

Mumbai 29th April, 2011

Registered Office: 3-11, G.I.D.C., Vapi Dist. Valsad, Gujarat Pin: 396195.


Mar 31, 2010

The Directors have pleasure in presenting their report and audited accounts for the year ended on 31st March, 2010.

FINANCIAL RESULTS:

(Rs. in lacs)

Consolidated Stand Alone

Current Previous Current Previous

Year Year Year Year

Sale of Products (net of excise and rebate and discounts)

and other income from operations. 549457 497350 262734 258065

Profit before depreciation, interest and amortization of

Deferred revenue expenses and Minority Interest 103336 98670 45060 48397

Depreciation / Amortisation 21470 19268 10791 8889

Interest 19379 29189 9264 23014

Exceptional Items 2670 1007 - 50

Minority Interest 593 247 - -

Profit Before Tax 59224 48959 25005 1 6444

Provisions for Taxation:

Current Tax 5997 4512 4420 1871

MAT Credit Entitlement (2277) (1935) (2277) (1861)

Deferred Tax 4415 (193) 4568 534

Fringe Benefits Tax - 308 - 290

8135 2692 6711 834

Profit After Tax 51089 46267 18294 15610

Share of Profit in Associates 1875 1995 - -

52964 48262 18294 15610

Debebture Redemption/ General Reserve written back 5000

Prior Period Adjustments (Net) 348 2675 165 836

Debenture Redemption Reserve (Net of write back) : 3601 11664 - -

3949 14339 165 836

49015 38923 18129 14774

Balance Brought Forward 86929 57223 63 1170

Amount available for Appropriations 135944 96146 18192 15944

APPROPRIATIONS:

Debenture Redemption Reserve written back - 4402 -

Transfer from General Reserve - 5000

Final Equity Dividend 8791 6596 8791 6596

Tax on Distributed Profits 1460 1121 1460 1121

Debenture Redemption Reserve (Net of write back) 8003 11664

Transfer to General Reserve 2000 1500 2000 1500

12251 9217 20254 20881

Balance Carried Forward 123693 86929 2340 63

OPERATIONAL PERFORMANCE:

During the year the monsoon in India was scanty and erratic. There was drought in many parts of the country. However, as the companys sales are made in almost all the countries in the world, the companys dependence on rainfalls in India has reduced considerably. In fact, international sales account for 78% of the total sales globally. Hence, the poor rainfall in India did not affect the performance of the Company.

During the first few months of the financial year key input costs were high and so were the selling prices. Subsequently the input costs moderated over the course of the year. The company was able to effectively pass on the impact of the changes in input costs. The company continuously endeavors to bring efficiencies in production processes leading to savings in overhead costs.

The year witnessed varied currency fluctuations wherein the Indian Rupee appreciated notably against the US Dollar and Euro. The company took necessary action to reduce the impact of currency fluctuations.

Total net sales for the year were higher at Rs.2453.39 crores as against Rs.2327.39crores: Profit before Taxes were higher at Rs.250.05 crores as against Rs.164.44 crores last year.

FUTURE OUTLOOK:

India, with its vast population, is a huge market and Indian economy survived the severe onslaught of global slowdown. In fact, Indian economy maintained its growth momentum. All agro-based companies in India have done well in the current year.

For the year 2010-11, near normal rains are forecasted. This should augur well for the Company. The expected revival of economies all over the world will pave way for another good year. U.S. and European economies have concerns in the areas of high unemployment and low spending. Some of the world economies face political crisis and financial imbalances. In comparison, Indian economy has done extremely well. Monetary policies, coupled with a very strict financial discipline, have helped the country face the downturn effectively and some of the sectors have progressed very well last year. Agri-based sector is one such sector. The company is expected to maintain a stable growth rate in the coming year.

DIVIDEND:

Your Directors have recommended dividend of Rs.2/- per Equity Share of Rs. 2/- each for the financial year ended 31st March, 2010, which if approved at the forthcoming Annual General Meeting, will be paid to all those Equity Shareholders of the Company whose names appear in the Register of Members as on 8th September, 2010 and whose names appear as beneficial owners as per beneficiary list furnished for the purpose by National Securities Depository Limited and Central Depository Services (India) Limited.

FINANCE:

During the year, the company has raised funds of Rs.385 crores by issue of unsecured Redeemable Non-convertible Debentures. It has also issued short term commercial papers.

FIXED DEPOSITS:

The Company has not accepted fixed deposits during the year. There are no fixed deposits outstanding as at 31st March, 2010.

RESEARCH AND DEVELOPMENT:

Your company is giving maximum importance to research and development by regular upgradation and modernization of all R&D laboratories and by recruitment of qualified and experienced scientists and engineers.

With the constant endeavor to improve quality, cost reduction and to penetrate new local and global markets, research is carried out continuously at companys R&D laboratories at Ankleshwar, Halol, Jhagadia, Thane and Vapi.

Many new products have been developed by the R&D team which will be commercialized in the coming years. The company is also working on developing and producing molecules which are going off patent in the near future.

The R&D team is continuously working and developing new safe and ecofriendly formulations and combination formulations of various pesticides for which patents are obtained in India and abroad.

Extensive field trials and data generation work for various pesticides is undertaken by R&D team, alongwith agricultural universities, with a view to further improve their quality and safety.

CORPORATE SOCIAL RESPONSIBILITY:

The company has been active in the area of social services for the benefit of communities, in and around, where its factories are located. Right from its inception as a small scale industry way back in 1970, its endeavour for social upliftment has been a continuous process. Over the years, this service is extended to other areas and many diverse fields.

In the field of education, the Company has funded and managed many schools and colleges. It is supporting a new Chemical Engineering col lege with the help of Rotary CIub at Ankleshwar. Arts, Commerce, Science, Pharmacy, Nursing and Management Colleges are set up with the financial and management support from the Company. At Baroda, the Company has promoted various artists and art exhibitions, photo exhibitions, photo-journalism etc.

The Company is always in the forefront of medical care initiatives. It has supported various hospitals, promoted scores of rural health check-up camps, provided medicines, etc.

Various environmental initiatives are taken by the Company. Thousands of saplings are planted every year.

The Chairman of the Company was given an award by the Department of Science & Industrial Research (DSIR) for outstanding research and development on pollution control and environment protection.

The Company is supporting the people in Dangs for improving their lifestyles. In Vapi and Ankleshwar, it is supporting numerous temples, gardens and parks. The Company has also provided rural electrification and tubewells in nearby villages around Vapi and Ankleshwar.

SUBSIDIARY COMPANIES:

Your Directors are pleased to inform you that the DCA has vide its letter dated 9th June, 2010 approved the Companys request and exempted the Company from attaching the Profit and Loss Account, Balance Sheet, Directors Report and Auditors Report of its subsidiaries subject to the condition that the Company will attach the consolidated financial statements of its subsidiaries for the year ended 31st March, 2010.

The Audited Consolidated Financial Statements of your Company as per Accounting Standard - 21 form part of this Report

Annual accounts of subsidiary companies are available for inspection at the Companys Registered office and Administrative office. The same will be made available to the investors of the companies upon request.

All the subsidiary companies have performed well during the year. There has been increase in the business of the major subsidiaries at USA, U. K., Japan and Cerexagri group of companies, though global slowdown and currency fluctuations affected their performance to some extent.

INSURANCE:

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

AUDITORS AND AUDITORS REPORT:

M/s S. V. Ghatalia & Associates, Chartered Accountants, the statutory auditors are retiring at the ensuing Annual General Meeting and being eligible for re-appointment have expressed their willingness to continue, if re-appointed. Your Directors recommend their appointment as the Statutory Auditors and fix their remuneration for the year 2010-11.

The auditors, without qualifying their Report have drawn attention of members that as per the Court order and the legal advice obtained by the company, the company has not adjusted tax benefit in respect of the amortization of the Product Registrations and Product acquisition to the reserves. In this regard, your attention is invited to Note No.14 in schedule T which is self- explanatory. The other notes to the accounts referred to in the Auditors Report are self-explanatory and do not call for any further comments.

In respect of consolidated accounts, the auditors have qualified their report for non-inclusion of accounts of certain subsidiaries, joint ventures and associated companies, non provision for decline in the market value of the investment in the accounts of the subsidiary company in Japan and non disclosure of segment reporting. In this regard, your attention is invited to Notes 1 (b), 6 and 18 of schedule S of the consolidated accounts which are self-explanatory.

COST AUDIT:

The Board of Directors appointed M/s M. B. Ashtamkar, Cost Accountant, Mumbai as Cost Auditor of the Company for conducting audit of the cost accounts maintained by the Company in respect of insecticides for the year 2010-11.

DEPOSITORY SYSTEM:

97.72% of the total paid up equity shares of the Company are dematerialized as on 31st March, 2010.

DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Kalyan Banerjee, Dr. (Mrs.) Reena Ramachandran, Mr. Pradip Madhavji and Mr. R. D. Shroff, Directors of the Company, retire by rotation at the ensuing Annual General Meeting of the Company, and being eligible offer themselves for re-appointment.

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the brief resume of Mr. Kalyan Banerjee, Dr. (Mrs.) Reena Ramachandran, Mr. Pradip Madhavji and Mr. R. D. Shroff, Directors of the Company are provided in the notice convening the Annual General Meeting of the Company.

PERSONNEL:

The relationship with all employees and workers at all sites of the Company remained very cordial throughout the year. Your Directors would like to place their appreciation for the contribution made by all the employees of the Company.

SAFETY, HEALTH PERFORMANCE AND ENVIRONMENT:

The Company has integrated Safety, Health and Environment aspects into manufacturing operations and other areas which facilitated continual improvement in the performance. UPL is Signatory to Responsible Care initiative of Indian Chemical Council and has been allowed to use Responsible Care logo. All manufacturing Units have implemented Quality Management System Standards ISO 9001, Environmental Management System Standards ISO 14001 and Occupational Safety & Health Assessment Standards OHSAS 18001. These certificates are being renewed from time to time after audit by certification agency.

The manufacturing Units are operating with valid Consents and Authorization issued by respective State Authorities. All the Manufacturing Units have Air Pollution Prevention & Control measures and have Effluent Treatment Plants. Company is recovering various valuable resources from waste streams and are being recycled. With concerted efforts in process improvement and waste reduction, there is considerable reduction in consumption of resources like water, electricity, solvents and raw materials in manufacturing of various products. Company has also adopted energy conservation measures and improved energy efficiency at all units.

At its Jhagadia unit, Company has commissioned and is operating a water re-cycling system using Reverse Osmosis Technology with capacity of 380 KL per day. Recovered water is being reused in the plants. The ETP at Jhagadia Unit is set up with Sequential Bio Reactor technology (SBR).

Treated effluents from manufacturing units at Ankleshwar, Jhagadia and Vapi are sent to Common Treatment Facilities for further treatment & disposal. The solid / hazardous wastes generated are sent to Common Hazardous Waste Treatment, Storage & Disposal Facilities for treatment and disposal.

Company has automated filling & packing line of Pesticide Formulation and has avoided spillage & exposure.

For further improvement of Safety performance, the Company has focused approach on leading indicators like recording and correcting near miss incidents, implementation of Behavioural Based Safety Management System & hazard recognition through shop floor employees. Parallelly, safety related infrastructure is also being improved by regular investment in plants. In last financial year, Rupees Nineteen Crores have been invested on infrastructure related improvements.

Company is carrying out regular medical examinations of all employees. Regular safety training programmes are conducted for employees, nearby public, contractors and transporters to create safety awareness amongst them on safety aspects and improve safety performance. All units are having Emergency Rescue Team and members are available in all shifts. ERT members are helping the neighbouring units also in case of any emergency situation. The Company is having system of Plant Safety Representatives in each plant besides safety teams.

Company is carrying out hazop studies and risk assessment for all new plants and for expansion programs. Regular safety audits are conducted by safety teams and through external agencies.

A dedicated team is working for green belt development and tree plantation. Company is having own nursery at all Units which provide required saplings for tree plantation.

INFORMATION REGARDING CONSERVATION OF ENERGY ETC AND PARTICULARS OF EMPLOYEES:

Information required under Section 21 7 (1) (e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and information as per Section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of employees) Rules, 1975, as amended from time to time form part of this report and annexed to this report.

DIRECTORS RESPONSIBILITY:

Your Directors confirm the following Directors Responsibility statements pursuant to provisions of Section 21 7 (2AA) of the Companies Act, 1956:

1. in the preparation of Annual Accounts for the year ended 31st March, 2010, the Company has followed the applicable accounting standards with proper explanations relating to material departures;

2. appropriate accounting policies have been selected and applied consistently and judgements and estimates are made prudently and reasonably so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2010 and of the profit of the Company for that year;

3. proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with applicable provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

4. the annual accounts have been prepared on a going concern basis.

GROUP FOR INTERSE TRANSFER OF SHARES:

As required under Clause 3(1 )(e) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 persons constituting "Group" (within the meaning as defined in the Monopolies and Restrictive Trade Practices Act, 1969) for the purpose of availing exemption from applicability of the provisions of Regulation 10 to 12 of the aforesaid Regulations, are given in the Annexure attached herewith and forms part of this Annual Report.

CORPORATE GOVERNANCE:

Your Company and its Board has been complying with Corporate Governance to the extent set out in this respect as a separate report, in pursuance of requirement of Clause 49 of the Listing Agreement. The Management Discussions and Analysis Report forms part of this Report. Auditors certificate regarding compliance of the conditions of the corporate Governance as stipulated under the said clause is also attached to this Report.

LISTING OF THE COMPANYS EQUITY SHARES:

The equity shares of your Company are listed on the Bombay Stock Exchange 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.



For and on behalf of the Board,

Mumbai R. D. Shroff

2nd August, 2010 Chairman & Managing Director

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