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NOTES TO ACCOUNTS

UPL Ltd.

You can view the entire text of Notes to accounts of the company for the latest year
Market Cap. (₹) 41356.56 Cr. P/BV 2.82 Book Value (₹) 191.68
52 Week High/Low (₹) 709/478 FV/ML 2/1 P/E(X) 28.58
Bookclosure 03/07/2019 EPS (₹) 18.94 Div Yield (%) 1.48
Year End :2019-03 

Notes to Standalone Financial Statements for the year ended March 31, 2019

41. Financial risk management objectives and policies

The movement in the pre-tax effect is a result of a change in the fair value of monetary assets and liabilities denominated in US dollars, where the functional currency of the entity is a currency other than US dollars. Although the derivatives have not been designated in a hedge relationship, they act as an economic hedge and will offset the underlying transactions when they occur.

Equity price risk

The Company's listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The investment in listed and unlisted equity securities are not significant.

Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company's treasury department. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty's potential failure to make payments.

The Company's maximum exposure to credit risk for the components of the balance sheet at March 31, 2019, 31 March 2018 is the carrying amounts as illustrated in Note 10 except for financial guarantees and derivative financial instruments.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.

The Company manages liquidity risk by maintaining adequate reserves, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of the financial assets and liabilities.

The table below summarises the maturity profile of the Company's financial liabilities based on contractual undiscounted payments.

March 31, 2019

Less than 1 year

1 to 5 years

> 5 years

Total

Borrowings (other than convertible preference shares) (refer note 14)

507

209

249

965

Convertible preference shares (refer note 15)

-

-

-

-

Other financial liabilities (refer note 15)

429

4

-

433

Trade and other payables (refer note 17 and 18)

2,817

-

-

2,817

Derivative contracts (refer note 15)

-

-

-

-

3,753

213

249

4,215

In Crores

March 31, 2019

Less than 1 year

1 to 5 years

> 5 years

Total

Borrowings (other than convertible preference shares)

313

413

269

995

(refer note 14)

Convertible preference shares (refer note 15)

-

-

-

-

Other financial liabilities (refer note 15)

341

4

-

345

Trade and other payables (refer note 17 and 18)

2,353

-

-

2,353

Derivative contracts (refer note 15)

36

135

-

171

3,043

552

269

3,864

Rs In Crores

42. Capital management

Capital includes equity attributable to the equity holders to ensure that it maintains an efficient capital structure and healthy capital ratios in order to support its business and maximise shareholder value. The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions or its business requirements. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the year ended March 31, 2019 and March 31, 2018.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. Net debt is calculated as loans and borrowings less cash and cash equivalents.

March 31, 2019

March 31, 2018

Borrowings other than convertible preference shares (Note 14 and 15)

1,238

1,122

Less: cash and cash equivalents (Note 11)

(77)

(93)

Net debt

1,161

1,029

Optionally Convertible preference shares (Note 14)

-

-

Equity (Note 12 and 13)

7,972

7,969

Total capital

7,972

7,969

Capital and net debt

9,133

8,998

Gearing ratio

13%

11%

In order to achieve this overall objective, the Company's capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowings in the current period.

43. Exceptional items

Rs In Crores

March 31, 2019

March 31, 2018

Amount payable as per final order of The Competition Commission of India

-

7

Amount payable for proceeding before Patent Trial & Appeal Board

4

-

4

7

44. Foreign Exchange Management Act

In January 2013, the Company had received a show cause notice from the Directorate of Enforcement, alleging that the Company had contravened certain provisions of Foreign Exchange Management Act, 1999 with regard to foreign direct investment made and utilisation of proceeds of FCCB / ECB. The Company had replied to the show cause notice and had personal hearings to represent their matter and filed written submissions on the basis of which Directorate of Enforcement vide order dated 28th February, 2018 has dropped all the charges levied against the Company.

45. Amalgamation with Advanta Limited

The Hon'ble High Court of Gujarat vide its order dated June 23, 2016 had sanctioned the Scheme of Amalgamation of Advanta Limited with the Company with an appointed date of April 01, 2015. In accordance with the provisions of the scheme and as approved by the High Court, the amalgamation was accounted for under the purchase method specified in Accounting Standard 14 - Accounting for Amalgamations' which is different from Ind AS 103 'Business Combinations'. As per the Court approval the goodwill arising on amalgamation is being amortised over a period of ten years from the appointed date, which is not amortised under Ind AS 103 but only tested for impairment.

If the Company had accounted for amalgamation as per Ind AS 103, profit for the for the years ended March 31, 2019 and March 31, 2018 would have been higher by Rs 370 crs each.

46. CSR expenditure:

Details of CSR expenditure:

Rs In Crores

March 31, 2019

March 31, 2018

Gross amount required to be spent by the company during the year

5

6

5

6

Rs In Crores

March 31, 2019

In cash

Yet to be paid in Cash

Total

Amount spent during the year

Construction/acquisition of any asset

-

-

-

On purposes other than above

17

1

18

17

1

18

Rs In Crores

March 31, 2018

In cash

Yet to be paid in Cash

Total

Amount spent during the year

Construction/acquisition of any asset

-

-

-

On purposes other than above

19

1

20

19

1

20

47.Segment information

1. Information about operating business segments

Rs In Crores

March 31, 2019

March 31, 2018

Agro Activity

Non Agro Activity

Unallocated

Total

Agro Activity

Non Agro Activity

Unallocated

Total

Revenue

External-revenue from contracts with customers

7,898

600

-

8,498 6,618

570

-

7,188

External-revenue from contracts with others

146

7

9

162

169

4

13

186

Inter segment

(285)

285

-

-

(183)

183

-

-

Total revenue

7,759

892

9

8,660

6,604

757

13

7,374

Segment Results

Contribution

512

81

-

593

741

29

-

770

Add: Inter segment profit

(53)

53

-

-

(37)

37

-

-

Total segment results

459

134

-

593

704

66

-

770

Unallocated income net of unallocated expenses

(82)

52

Finance costs

185

135

Exceptional items (refer note 43)

4

7

Profit before taxation

486

576

Provision for:

Current tax

83

180

Adjustments of tax relating to earlier years

(3)

(83)

Deferred tax

1

(69)

Net profit after tax

405

548

Other information

Segment assets

10,752

1,018

2,133

13,903

9,148

738

2,164

12,050

Segment liabilities

3,819

273

1,839

5,931 2,458

176

1,447

4,081

Capital expenditure

806

144

48

998

665

65

13

743

Depreciation

236

37

11

284

187

27

12

226

Amortisation

420

0

20

440

420

0

20

440

Non cash expenses other than depreciation

30

0

0

30

17

0

7

24

2. Information about Geoaranhical Business Seaments

Rs In Crores

March 31, 2019

March 31, 2015

India

Outside India

Total

India

Outside India

Total

Revenue by geographical market

External

3,714

4,946

8,660

3,392

3,982

7,374

Carrying amount of non current operating assets

5,771 280

6,051

5,453

336

5,789

3. Notes

(i) The business of the Company is divided into two business segments. These segments are the basis for management control and hence form the basis for reporting. The business of each segment comprises of:

a) Agro activity - This is the main area of the Company's operation and includes the manufacture and marketing of conventional agrochemical products, seeds and other agricultural related products.

b) Non-agro activity - Non agro activities includes manufacture and marketing of industrial chemical and other non agricultural related products.

(ii) Segment revenue in the above segments includes sales of products net of taxes.

(iii) Inter segment revenue is taken as comparable third party average selling price for the year.

(iv) Segment revenue in the geographical segments considered for disclosure are as follows:

a) Revenue within India includes sales to customers located within India.

b) Revenue outside India includes sales to customers located outside India

(v) Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.

(vi) The Company does not have any customer (other than related parties), with whom revenue from transactions is more than 10% of Company's total revenue.

(vii) Based on the "management approach" defined in Ind AS 108 -Operating Segments, the Chief Operating Decision Maker evaluates the company's performance and allocate resources based on an analysis of various performance indicators by business segments. Accordingly information has been presented along these segments.

48. Acquisition of Arysta Lifesciences Inc. and it's subsidiaries from Element Solutions Inc. (formerly Platform Specialty Products Corporation)

On January 31, 2019, UPL Corporation Limited, Mauritius, a subsidiary of the Company completed the acquisition of Arysta Lifesciences Inc. and it's subsidiaries from Element Solutions Inc. (formerly Platform Specialty Products Corporation). The consideration for the acquisition aggregates US $ 4,426 Million(approximately Rs 31,458 crores) and is subject to certain further adjustments as per the terms of the stock purchase agreement signed between parties on July 20,2018.

49. Details of dues to micro and small enterprises as defined under the MSMED Artf 2006

Rs In Crores

March 31, 2019

March 31, 2018

The principal amount and interest due thereon remaining unpaid to any supplier as at the end of each accounting year: Principal amount due to micro and small enterprises

26

17

Interest due on above, current year Rs. 0 (March 31 , 2018: Rs 0)

0

0

Total

26

17

The amount of interest paid by the buyer in terms of section 16 of the MSMED Act 2006 along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the MSMED Act, 2006. The amount of interest accrued and remaining unpaid at the end of each accounting year, current year Rs. 0 (March 31, 2018: Rs. 0) The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure u/s 23 of MSMED Act, 2006.

-

-

Note: The information has been given in respect of such vendors to the extent they could be identified as Micro, and Small enterprises on the basis of information available with the Company.

As per our report of even date attached.

For B S R & Co. LLP

For and on behalf of the Board of Directors of UPL Limited

Chartered Accountants

CIN N0.-L24219GJ1985PLC025132

Firm registration number: 101248W/W-100022

Bhavesh Dhupelia

R.D. Shroff

A.C. Ashar

Partner

Chairman & Managing Director

Whole-time Director

Membership no.: 042070

Din NO.-00180810

Din No.- 00192088

Place: Mumbai

Place: Mumbai

Place: Mumbai

Date: May 17, 2019

Anand Vora

M.B. Trivedi

Chief Financial Officer

Company Secretary

Membership no.: ACS4250

Place: Mumbai

Place: San Francisco

Date: May 17, 2019

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