UPL: a story of growth, girth, and complex operations

Fiscal 2020 is a landmark year for UPL Ltd, marking its 50th anniversary, but apparently the leading agrochemical company is now making headlines for all the wrong reasons. Its promoters called an investor / analyst meeting on Thursday night, December 10, to deny it as false accusations of any wrongdoing. This follows media reports citing a whistleblower alleging diversion of funds by promoters. During the day, UPL shares took a major hit, falling 15 percent after opening for the day at 479 rupees and finally closing at 416 rupees, down 10.94 percent.

While the corporate governance issues are serious and although the company may deny it, it is up to the regulatory authorities to investigate any wrongdoing, if any, and if found, take appropriate action. However, it may help our readers to learn a little about the company that seems to have expanded rather quickly. After all, he sees himself as a giant in the crucial area of ​​crop protection solutions.

Consider this: It was only in 1994 that you first embarked on your international takeover and have since made about 40 acquisitions. The one he’s most proud of is the one that Arysta LifeSciences company acquired in fiscal 2019 in a $ 4.2 billion cash deal. With this under its belt, it sees itself emerge as the world’s fifth-largest crop protection solutions company with sales of $ 5 billion in fiscal 2020.

But it’s not just about the 40 acquisitions, the company manages what may seem like a rather complex structure with some 225 subsidiaries. That for a company that started in 1969 in the then-small town of Vapi in Gujarat producing red phosphorus, is a long journey of aggressive growth.

The company has some prominent names on its board of directors and on its important board committees. For example, Pradeep Goyal, an engineer by training (a B.Tech in Metallurgy from IIT Kanpur) and known to some as the brother of Union Minister Piyush Goyal, is a member of the audit committee. Then there’s Arun Aishar, the CFO, is a Chartered Accountant and a Fellow of the Institute of Chartered Accountants of India.

Perhaps crucial as the company talks about a consolidated top line for 2019-20 of Rs 35,860 crore, a pre-tax profit of Rs 2,764 crore and an after-tax profit of Rs 2,178 crore, which means Rs 568 crore in taxes. .

However, the notes to the consolidated financial statements detail the remuneration of the commanding officers. It says as of March 31, 2020 it was Rs 12 crore for Rajnikant D Shroff, the chairman and managing director, Rs 57 crore for Jaidev R Shroff, the group’s global CEO, plus Rs 28 crore for Vikram Shroff, a no – non-independent executive director and Rs 9 crore for Sandra R. Shroff, also a non-independent non-executive director.