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Management Discussion  
UPL Ltd.
 
BSE Code 512070
ISIN Demat INE628A01036
Book Value(Rs.) 106.67
NSE Code UPL
Dividend Yield % 0.93
Market Cap(Rs. in millions) 437891.92
P/E 87.40
EPS 6.56
Face Value(Rs.) 2  
Year End: March 2016
 

MANAGEMENT DISCUSSION AND ANALYSIS

Global economic overview

The deceleration of economic activity in emerging and developing economies had a significant effect on the global economy. While major high-income countries made a modest recovery the slowdown in emerging economies overshadowed this growth. Global growth stood at 2.4% in 2015, slowing from 2014 when it was at 2.6%. Developed economies made some progress, driven by domestic demand as their labour markets and credit conditions healed. Most developing economies, however, stagnated due to a decline in commodity prices. China underwent an economic rebalancing, and reported slowing growth. Brazil and Russia faced domestic and external hurdles, and are yet to recover. South Asia was a notable exception, maintaining robust growth, even though it slowed from 6.1% to 5.1% in 2015. Large infrastructure investments, ongoing mine developments and increased consumer spending helped these economies remain stable through these unfavourable global conditions. Falling oil prices affected the growth of commodities-dependent regions like Brazil and Russia. Estimates for global growth are pegged at 3.2% for 2016 and 3.5% for 2017, with emerging markets accounting for a major share of global growth.

Indian economic overview

The Indian economy estimated to report a growth of 7.6% in FY 2016, which was higher than the brvious year's 7.2%. The country faced weak monsoons, yet agriculture grew by 1.1% spurred by livestock and food grain growth. Industry growth accelerated to 7.3% in 2015-16 from 5.9% in the brvious year Manufacturing saw a major boost too, aided by lower input costs. Industrial production remained weak, as did growth in sub-sectors like mining, construction and utilities. Growth in the services industry remained moderate, due to declining growth in public administration, defense and other services. Financial services, real estate and professional services grew by 10.3%, aided by an increase in bank deposit and credit growth. Private consumption is estimated at 7.6%, up from 6.2% a year earlier India's economy is expected to grow at 7.9% in 2016-17 and 8% in 2017-18 as per World Bank estimates. (Source: Asian Development Bank, World Bank, Business Standard].

Agricultural sector in India

Agriculture is a major industry in India, employing over 58% of the country's population. The sector clocked a growth of 8.3% in FY 2015, with the GDP of agriculture and its allied sectors valued at USD259.23 billion. Annual food grains production in India reached an all-time high of 252.68 million tonnes. India has the second-largest land by size dedicated for agriculture at 157.35 million hectares. India is also among the major exporters of agricultural products in the world. Exports grew at a CAGR of 27.9% during FY 2010-15, and are valued at USD 38.7 billion in FY 2015. India exported rice worth USD 3.17 billion in 2015-16, accounting for nearly 39.33% of the net agricultural exports. Livestock products and fruits and vegetables were the second-highest exports, accounting for 26.8% and 6.8%, respectively. The sector is expected to continue growing, with the estimated consumption expenditure reaching USD 3.6 trillion by 2020, up from USD 0.2 trillion in 2015. Rising per capita income is likely to drive demand for agriculture and its allied sectors. (Source: IBEF, Economic Times]

Global crop protection chemicals industry

Crop protection chemicals sales in almost all regions declined in 2015, with the sharpest falls occurring in Europe and Latin America. Weakening herbicide prices, varying weather patterns including the El Nino phenomenon and weak monsoons, caused a slump in sales. Despite a dip in sales, Latin America remained a major market with sales of USD 14,052 million. El Nino rains delayed planting in Argentina and Brazil, with both countries suffering economic brssures and high costs of borrowing. The biggest decline happened in Europe, with sales dipping by almost 16% to USD 11,604 million. The market gradually got better owing to a mild winter and an early spring. Trading improved in Ukraine, but Russia was affected by economic weakness. The NAFTA region reported a 4.6% drop in sales, registering USD 9,356 million. The US market was also affected by a delayed start to the rains. In Canada, high crop stocks and low prices didn't bode well for the industry. Mexico had slightly more favourable conditions and grew marginally. Meanwhile in Asia, sales fell by 4.1% to USD 14,040 million while sales across the remaining countries increased marginally by 0.5% to USD 2,158 million. [Source: Phillip McDougal]

While there is some optimism for conditions to improve, aided by a growth in wheat, maize and rice production, which had been hampered by high stocks and poor weather conditions, the problems faced in 2015 might persist through 2016, with industry watchers advising caution. Long-term projections indicate the agrochemical industry will grow at a CAGR of 3.2% from 2015-20. (Source: CCPIA]

Global crop protection chemicals market

The crop protection chemicals market was valued at USD 51.2 billion in 2015 and is estimated to reach USD 77.50 billion by 2020 at a CAGR of 8.6%. Latin America leads the crop protection chemicals market, especially Brazil, which was the biggest single country market in 2015. Besides Brazil, Argentina was estimated to have a market share of around USD 2.5 billion. Asia Pacific was the second largest market followed by Europe. Asia Pacific is expected to be the fastest-growing market during the forecasted period.

Insecticides, fungicides, herbicides, and seed treatment are the major segments in the crop protection chemicals market. The herbicides market is expected to be the fastest growing segment for the period 2015-2020. Seed treatment products are expected to have an impact on the market as well. Microbial seed treatment on field crops is driving the bio-pesticides market.

Factors like increasing population, decreasing arable land, focus on productivity and increasing purchasing power are driving the global crop protection market.

Indian crop protection chemical industry

In 2015, the chemical industry was worth USD 144 billion, of which the crop protection chemicals market was valued at USD 2.5 billion. The growth is pegged at a CAGR of 12%, to reach USD 7.5 billion by 2019. Insecticides were the largest sub-segment of agrochemicals with a 60% market share and herbicides having 16% market share. These were the fastest growing segments in India. As of 2015, 50% of the crop protection industry's produce was exported. By 2019, exports are estimated to go up to

60% and amount to USD 4.2 billion. The domestic market share is also set to rise to USD 3.3 million at a CAGR of 8%. India is currently the fourth-largest producer of agrochemicals, after United States, Japan and China. (Source: FICCI)

Crop protection chemical growth drivers

The Indian crop protection chemicals market is supported by strong growth drivers. A low consumption of crop protection chemical products in India, 0.6 kilograms per hectare compared to the world average of 3 kilograms per hectare, offers potential for growth. Availability of cheap labour and low processing costs offer opportunities for MNCs to set up manufacturing hubs in India for their export markets. The sector is also driven by a huge opportunity for contract manufacturing and research for Indian players due to a large availability of technically skilled labour

Crop protection chemical industry challenges

Despite strong growth drivers, the Indian crop protection chemical industry faces challenges in terms of low awareness among farmers (only 25-30% of the farmers are aware of agrochemical products and their usage). With large number of end users sbrad across the country, managing inventory and distribution costs is a challenge for industry players. Rising sale of spurious pesticides and spiked bio-pesticides also pose major threats to industry growth.

Effective supply chain management practices are another area of concern for the industry. Companies face challenges due to seasonal demand, unbrdictability of pest attacks and high dependence on monsoons. Month-end skews and high inventory across the channel remain perennial problems.

Lack of farmer education has been a  fundamental hurdle faced by the crop protection industry as the awareness and knowledge of usage is limited to just 25-30% of the total strength. Poor communication on the part of retailers increases farmer reluctance leading to a risk of crop failure. Inefficient distribution systems lead to postharvest losses, estimated at Rs.4,500 crore per year The product development life-cycle also poses a challenge, as the average development time frame is 10 years. Even after that, it takes the regulatory bodies three to five years to register a generic product, owing to inadequate resources, infrastructure and protocol, leading to complexities.

Crop protection chemical growth imperatives

Going forward, the industry needs simplified registration norms for pesticide exports and a reformulation of regulations to bring under its fold all types of pesticides (including bio-pesticides). Subsequently, government and industry players need to work together to sustain momentum. Regulators need to increase their inspection staff to ensure regular checks to address spurious products.

There is also a need to encourage top-of-the-line R&D practices and facilitate registration processes for the development of new molecules. Large MNCs can thereafter look to forge strategic alliances with Indian counterparts to increase their marketing and distribution reach or expand into newer product categories. Smaller Indian companies can look at tie-ups with MNCs to explore opportunities in contract research and manufacturing.

CROP PROTECTION CHEMICAL BUSINESS DRIVERS

• Export opportunities are increasing, driven by low-cost manufacturing,  seasonal domestic demand, overcapacity, better global price realisations and a strong brsence in generic pesticide manufacturing.

• Crop protection chemicals worth USD 6.3 billion are supposed to be taken off the patent list by 2020. This brsents

a major export opportunity for Indian companies as they enjoy an expertise in the generic agrochemicals segment. The top-six importing nations constitute only 44% of India's total exports, leaving a wide margin for exports to other nations. [Source: <http://ficci.in/>]

Growth in herbicides is being driven by GM crops, shortage of labour and rising labour costs. Projected CAGR for herbicides is 15% by 2019. Fungicide growth was also up by a CAGR of 7.5% over the last five years and is set to rise further.

• India consumes the lowest amount of crop protection chemicals in the world, at just 0.6 kilos per hectare, compared to 5-7 kilos per hectare in the UK, and around 13 kilos per hectare in China. To increase yield and ensure food security, crop protection chemical penetration  in India is bound to increase. (Source: TSMG, Economic Times, Business Standard)

North America accounts for 19% of the Company's consolidated revenues. The business comprises crop protection chemicals, speciality products (T&O), aquatics and technical sales.

Industry sales in the large and mature USD 9.4 billion North American market de-grew 4.6% during the year under review on account of climatic vagaries, sluggish mature segments, lower purchasing power following weaker commodity prices and a distribution system consolidation that reduced market players. The market was marked by strong programs offered by the Big Six producers; the five largest distributors accounted for more than  70% of the market.

UPL outperformed the North American market with 10% revenue growth, strengthened market share from 2.6% to 3%, perhaps the only instance of any company in this market to have increased its share in a weak year The company reported robust outperformance for the following reasons:

• Balanced product portfolio of formulations and brmixes addressing the broad needs of farmers in the areas of weed and disease resistance

• Ability to periodically introduce  differentiated products comprising formulations and innovative brmixes that address grower problems (resistant weeds and disease management].

Competitive manufacturing support, leveraging an extensive backward integration

• Prudent investment in a field force in under-penetrated regions and product segments

• Competence in the delivery of crop protection solutions for farmers

UPL is attractively placed. It possesses more than 100 registrations across four business units. The company is well-established in the North American 'horse shoe' segment (fruit and vegetables) with a balanced portfolio comprising strong brands (Manzate, Surflan, Lifeline, Assail, Penncozeb and Microthiol], among others. UPL leads in the North American aquatics segment.

UPL is investing to grow its brsence in the American Midwest, a region where row crops (soybean, corn and wheat) are brdominant and where the Company has a relatively sub-scale brsence. It is positioning itself to capture opportunities in the resistance management space with a portfolio of herbicides and fungicides.

Prominent products

Aquathol: Unique herbicide that addresses weeds in lakes and power plant reservoirs.

Tricor, Ultrablezer and Interline: Our herbicides address weed resistance management

Manzate: Best fungicide for disease management

ALP: Fumigant to protect crops following harvest

Latin America

The USD 14.49 billion Latin American market is one of the fastest growing markets the world over. The market grew 3% by volume and de-grew 12% by value in 2015-16 following a currency devaluation impact. The market was marked by sluggishness in a number of segments; the attractive segments comprised disease management, bananas, weed resistance and rice.

UPL outperformed this market by reporting 25% revenue growth. The company was brsent in 27 countries, growing its brsence in most for the following reasons:

• Focusing on new product introductions (15 in 2015-16, among the highest across all competitors in that market]

• Concentration on products addressing disease resistance (especially in banana]

• Strengthened service through timely product availability and providing technical assistance

Going ahead, the Company intends to ride a projected rebound in the Latin American market through a stronger leverage of its sustained product development and enhanced customer-centricity.

Brazil

The USD 10 billion Brazil market is nearly 2.5x India and the largest crop protection market in the world.

Brazil is an agricultural powerhouse; Agriculture accounted for nearly 5.8% of its GDP (in 2014). Brazil is the world's biggest producer and exporter of coffee, sugar and orange juice, the biggest meat exporter and the second-biggest producer and exporter of soy products, as well as a major corn grower.

Soybean exports stood at 49.1% of all the exports. Despite a dip in the country's GDP, the agricultural sector posted a growth by 1.8% over 2014.

However; this sizable market contracted from USD 12.2 billion in 2014 owing to exchange rate fluctuations, decline in crop realisations and inventory accumulation. There was also a decline in the insecticides market owing to reduced insect infestation frequency and knockoff products making their way illegally from Paraguay. Despite a market contraction by 18%, UPL's revenues grew significantly, the only crop protection chemical company where this transpired during this challenging fiscal.

The Company deployed dedicated customer relationship management protocols to analyse customer feedback.

The Company provided technical assistance to help farmers understand its products and use them responsibly. The Company developed seed treatment strategies to grow its brsence. The Company received 14 registrations in the crop protection space; Over the last three years, the Company was the most successful in getting most products registered, in a country where product registration usually takes three to five years.

The Company invested in a formulations lab and engaged researchers and consultants from local universities.

Rest of the world

The RoW business of the Company comprised about 14% of the Company's overall revenues. The business comprises most countries in Africa, Turkey and adjoining nations, the Middle East extending into Asia (excluding India).

The market (otherwise growing annually at 5 to 6%) was largely stagnant in 2015-16. UPL outperformed the market with 2% revenue growth. This outperformance was the result of a prudent selection of markets based on potential and payment security, the aggregation of half a dozen countries into a market cluster for marketing convenience and a combrhensive portfolio to address growing farmer needs. Besides, the Company focused on opportunities in addressing corn, wheat and horticulture products. It leveraged the availability of Mancozeb and Mancozeb mixtures.

The Asian region comprises the entire geographical sweep extending from Myanmar to New Zealand (including Japan). This is one of UPL's most diverse markets comprising a matured geography like Japan, under-developed  markets like Myanmar and Cambodia and emerging markets like Vietnam and Indonesia.

The year under review was marked by a convergence of a number of challenges. Most countries experienced low or no rain and agriculture commodity prices were low, which means that farmers could not earn adequately to reinvest into crop protection chemicals. Besides, the impact of currency devaluation affected the Company's earnings.

The company outperformed the regional growth average through a focus on the fruit and vegetable segment. Besides, the Company adopted a focused returns-driven approach that protected its viability. Companies that were dependent on cereal-driven crop protection chemicals were affected as some countries discouraged rice growth with the objective to conserve water.

As chickpea realisations and acreage increased in Australia, UPL was one of the first to address the trend through enhanced Mancozeb DF sales.

UPL has more than 500 registrations in this region. It has a leadership position  in its core manufactured molecule and rapidly growing in another molecule. Some unique mixture products could emerge prominent contributors. Countries like Vietnam are taking leadership a position in coffee, dragon fruit, pepper and cashew with farmers spending more on crop protection chemicals. The Indonesian government is supporting farmers through training and technology support. The product registration regime is tightening in Thailand, Vietnam and Indonesia. UPL expects to capitalise following local brsence in each market coupled with adequate distribution channels and a crop-based portfolio.

There is optimism around the Company's brsence in these markets. Most of the regions are under-penetrated in the consumption of crop protection chemicals; the governments in the countries need to grow more food to feed their increasing populations. Besides, a growing awareness of crop protection products, brference for branded products and growing need for diverse products are driving the growth in these geographies. The company intends to address market gaps through a wider portfolio and continuing to focus on relatively under-rebrsented market spaces.

RiceCo

This 100% subsidiary of UPL was acquired in 2010 to provide a complement of herbicides, fungicides, insecticides and adjacent technologies addressing a single crop (rice].

In contrast to the rest of the organisation structured around geographic lines, RiceCo developed a crop-centric competence across geographies. This  is a relevant specialisation; the crop accounts for more than 330 million acres; there is extensive under-penetration in crop protection for rice. RiceCo operates in over 30 countries and intends to carve out a brsence in all major rice-producing countries. The focus of RiceCo is to encourage the use of rice protection chemicals and provide technical support in enhancing yields and farmer returns.

RiceCo is the only company of its kind offering this rice-centric solution in the US market. Over the years, the Company developed a basket of popular products -it developed Stam 80 DF, a water soluble herbicide bag, and launched herbicide Eros Gold in Indonesia. The other popular products comprised Propanil 80 DF and Holdown. Besides, the Company widened its coverage to three more countries and intends to reach another four during the current year.

Europe

UPL's revenue from Europe accounted for 15% of its consolidated revenues in 2015-16. The European crop protection chemicals market was valued at USD 11.6 billion, of which UPL accounted for a 2.6% share. The mature European market is marked by stringent regulations warranting extensive compliance competence.

During the year, the markets remained flat as agro commodity prices declined, making the farmers more careful about the quality of inputs being used. In addition, crop areas for sugar beet declined 15% during the year owing to a reduction in subsidies. The European summer remained disease-free, reducing the demand for fungicides among potato farmers. A severe drought in Spain and other South Eastern European countries affected business in general.

Despite these developments, UPL held onto its 2.6% market share. During this challenging year, the Company embarked on a number of initiatives:

• Invested in new products, which protected its market position for sugar beet, potatoes, fruit and vegetables. The Company invested to enhance its brsence in the cereals segment, which will progressively benefit.

• Fortified its distribution in Italy and reported improvement.

• Grew its business and appointed a country manager in Hungary.

The Company demonstrated its capability in the manufacture of qualitatively consistent products conforming to relevant norms from proprietary formulations and limit its dependence on imported variants.

The Company's Aluminum Phosphide product was registered in Germany helping grow its business in that key market.

Going ahead, the Company expects to widen its footprint and sustain growth.

Star products

• Metaphil; sugar beet herbicide

• Penncozeb; contact fungicide

• Bordeaux Bordelaise; fungicide used in vineyards

India • •

UPL's India business accounted for Rs.2,713 crore in revenues. The Indian market contracted 6-8% on the back of an under-par monsoon, which affected farm output, commodity prices (except pulses), the financial health of farmers and the corresponding demand for crop protection chemicals. Besides, the North Indian cotton crop suffered a devastating white fly attack; Gujarat suffered from the pink bollworm.

UPL grew its India business 3% at a time when the crop protection chemicals industry contracted.

The Company re-launched a soybean herbicide (brand name Iris) and achieved 100% volume growth. The Company introduced soil health products for rice (Safilizer) and reported a volume of 262 tonnes in the first year

The Company launched eight products in  the lucrative biologicals segment.

Going ahead, the Company plans to launch variants for cereals, cotton, corn, fruit and vegetables. The Company is brparing to launch UPDT, a drought-mitigating agent, whose prospects appear bright.

The Company started Adarsh Kisan Centres to provide advisory yield-enhancing services. Besides, this program assists farmers in efficient farming practices and economical crop protection chemical use.

The Company is reducing its dependence on insecticides and focusing on fungicides and herbicides instead. Fungicides rebrsent a growing opportunity owing to an enhanced focus on quality; the herbicide market is growing on account of rising labour costs.

The Saaf and Saafilizer success story

UPL launched Saaf in 2001 and Saafilizer in 2015, both combining to deliver excellent plant growth and vitality.

Decc

Decco rebrsents UPL's offerings in the post-harvest space (products and services for fruits and vegetable packers) accounting for ~5% of Group sales. Although the post-harvest segment rebrsents less than 1% of the global crop protection chemical market, Decco is the leader in this niche and the only player with a global brsence (other competitors being local or regional).

Decco provides a complete range of products (coatings, fungicides, cleaners, sanitisers, growth regulators, among others), services (packaging assistance, analysing fungicide residues, conducting weight loss studies, resistance management and IPM programmes, among others) and equipment (applicators, brushes and electronic controls, among others).

Decco's flagship products comprise coatings for fruits and vegetables made entirely from food-grade raw materials.

In line with its tagline 'We create smart protection', Decco's products protect fruit from damage, physiological breakdown and pathological decay. These products regulate respiration and transpiration to ensure that fruits and vegetables remain fresher, tastier and aesthetically appealing during their journey from farms to plates.

Decco is steadily venturing into Argentina, Peru and Colombia, where it has a dedicated logistics network, and in Mexico, Costa Rica, Brazil and Chile, where it enjoys full-fledged proprietary platforms. Decco is also trying to make the most of the African opportunity by leveraging the networks of European entities serving North African countries and eventually making inroads into the Southern half of the continent. In addition to strongholds in India and China, the Philippines rebrsents a lucrative opportunity on account of its huge pineapple output.

Financial review • •

Basis of brparation

The financial statements of the Company were brpared in accordance with GAAP (generally accepted accounting principles). The financial statements comply with the accounting standards laid down under the Companies (Accounting Standards] Rules, 2006, as amended, and the relevant provisions of the Companies Act, 2013. The financial statements were brpared under the historical cost convention on an accrual basis. The accounting policies were consistent with those used in the brvious years.

Analysis of profit and loss account

• Revenues: Revenues from operations for the Company improved by 10.02% from Rs.1,209,052 lac in 2014-15 to Rs.1,330,151 lac in 2015-16 on the back of improved realisations, strategic product launches and growth in key markets. Other income (1% of the total income

in 2015-16) increased from a negative of Rs.283 lac in 2014-15 to a positive of Rs.11,173 lac, largely owing to foreign exchange gains derived from a buy back of shares by Bio-win Corporation Limited worth Rs.17,421 lac and by United Phosphorus Inc. worth Rs.6,599 lac and loss due to devaluation of currencies in Latin American countries of Rs.17,040 lac.

• Expenses: Total operating expenses of the Company increased by 8.81% from Rs.972,789 lac in 2014-15 to Rs.1,058,524 lac in 2015-16, largely owing to an increase in the Company's operational scale.

Raw material costs, comprising 47.80% of the total income (49.77% in 2014-15) increased from Rs.601,641 lac in 2014-15 to Rs.641,123 lac in 2015-16.

Power and fuel costs declined by 18.92% from Rs.43,559 lac in 2014-15 to Rs.35,318 lac in 2015-16 as a result of the captive power plant remaining fully operational during the year.

Growing scale required new people to join the organisation and existing employees were given necessary increments during the year under review. Owing to these factors, the employee cost of the Company increased by 17.39% - from Rs.104,280 lac in 2014-15 to Rs.122,410 lac in 2015-16. As a proportion of the total cost, employee costs stood at 11.56% in 2015-16 compared to 10.72 % in 2014-15.

Other expenses of the Company increased by 10.54% from Rs.266,868 lac in 2014-15 to Rs.294,991 lac in 2015-16.

Sources of funds

• Capital employed: Capital employed by the Company increased by 17.26% from Rs.987,1 12 lac as on 31st March 2015 to

Rs. 1,157,440 lac as on 31st March 2016 owing to an increase in net worth by 15.88% as well as 15.38% increase in long-term liabilities.

• Net worth: The net worth of the Company stood at Rs.679,074 lac as on 31st March 2016 compared to Rs.586,033 lac as on 31st March 2015. The growth was mainly on account of a 16.11% increase in reserves. The equity share capital of the Company (comprising 42,86,04,274 equity shares with a face value of Rs.2 each) remained unchanged during the year under review.

Borrowed funds

• Long-term debts: Long-term debts of the Company increased by ~29% -owing to business expansion initiatives undertaken during the fiscal gone by

- from Rs.169,408 lac as on 31st March 2015 to Rs.218,635 lac as on 31st March 2016. Part of the increase was attributed to an exchange loss on account of a revaluation of foreign currency debt. The Company's net debt-equity ratio stood at 0.47 in 2015-16 compared to 0.39 in  2014-15.

• Finance cost: Finance costs increased by 20.36% - from Rs.51,704 lac in 2014-15 to Rs.62,229 lac in 2015-16, owing to an increase in the Company's borrowed funds. The Company's interest cover stood at a comfortable 7.2x in 2015-16 compared to 7.8x in 2014-15.

Application of funds

Net block (tangible assets) of the Company increased by ~26% from  Rs.175,922 lac as on 31st March 2015 to Rs.221,588 lac as on 31st March 2016 owing expansion in capacities of certain key molecules. Debrciation on tangible assets for the year stood at Rs.25,015 lac compared to Rs.19,557 lac owing to an increase in the Company's asset base.

Investments

Non-current investments of the Company increased by ~40% from Rs.76,363 lac as on 31st March 2015 to Rs.106,639 lac as on 31st March 2016. The growth was owing to increased investments of the Company in its associate companies.

Working capital management

• Current assets of the Company increased by 18.62% from Rs.848,854 lac as on 31st March 2015 to Rs.1,006,921 lac as on 31st March 2016. Current ratio of the Company stood at 1.80 in 2015-16 compared to 1.73 in 2014-15.

• Inventories (including raw materials, finished goods, and work-in-progress, among others) increased by 9.83% from Rs.293,760 lac as on 31st March 2015 to Rs.322,625 lac as on 31st March 2016. Inventory turnover was stable at 90 days of turnover in 2015-16 owing to the Company's continued focus on inventory management

• Trade receivables increased by 26.82% from Rs.379,304 lac as on 31st March  2015 to Rs. 481,017 lac as on 31st March  2016 owing to increased offtake. The Company's trade receivables were 125 days of turnover in 2015-16 compared to 112 days in 2014-15. The increase was on account of higher sales in Latin America, where the payment terms were longer.

• Short-term loans and advances of the Company increased by 43.37% - from Rs.58,571 lac as on 31st March 2015 to Rs.83,975 lac as on 31st March 2016 owing to an increase in loans and advances to related parties, sundry deposits, sundry loans and other unsecured loans and advances.

• Other current assets of the Company declined by ~23% from Rs.16,238 lac as on 31st March 2015 to Rs.12,519 lac as on 31st March 2016 owing to a lower unamortised brmium on forward contracts.

• Current liabilities of the Company increased by 21.25% - from Rs.599,347 lac as on 31st March 2015 to Rs.726,685 lac as on 31st March 2016. Short-term borrowings of the Company increased by ~54%, trade payables increased  by 19.35%, other current liabilities increased by 5.04% and short-term provisions declined by 0.25% in 2015-16 compared to 2014-15.

Cash and bank balance

Cash and bank balances increased by 5.75% - from Rs.100,981 lac as on 31st March 2015 to Rs.106,785 lac as on 31st March 2016.

Segment-wise revenue

Agro activity: Income from agro activity comprised 94.51% of the Company's revenue in 2015-16. The Company continued to introduce strong agro products, which helped strengthen its position.

Non-agro activity: Non-agro based income accounted for only 5.41% of the Company's revenue in 2015-16.

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