To the Members
Your Directors have the pleasure of presenting this Thirty First Annual Report togetherwith the Standalone & Consolidated Audited Financial Statements of the Company for theFinancial Year ended 31st March 2020.
The summarized financial results for the year ended 31st March 2020 and for theprevious year ended 31st March 2019 are as follows:
[Rs. in Crores]
| ||Consolidated Year Ended ||Standalone Year Ended |
| ||2020 ||2019 ||2020 ||2019 |
|Revenue from Operations ||7404.84 ||7957.22 ||4069.71 ||4220.97 |
|Other Income ||28.46 ||20.71 ||82.65 ||21.55 |
|Share in Profit of Associates for the Year ||3.2 ||5.2 ||-- ||-- |
|Share in (Loss) of Joint Venture for the Year ||(4.88) ||(8.33) ||-- ||-- |
|Total Income ||7431.62 ||7974.8 ||4152.36 ||4242.52 |
|Profit before Finance Cost Depreciation & Tax ||1108.84 ||1007.53 ||616.42 ||480.57 |
|Finance Cost ||224.79 ||217.93 ||172.89 ||167.94 |
|Depreciation ||403.19 ||380.85 ||261.36 ||239.93 |
|Profit before Tax ||480.85 ||408.75 ||182.17 ||72.70 |
|Less: Tax Expenses ||109.98 ||93.54 ||38.90 ||21.04 |
|Profit for the year before Minority Interest ||370.87 ||315.21 ||143.27 ||51.66 |
|Non Controlling Interest ||(1.06) ||(1.38) ||-- ||-- |
|Profit for the year ||369.82 ||313.84 ||143.27 ||51.66 |
|Total Other Comprehensive Income for the Year ||38.53 ||26.91 ||(12.07) ||-7.25 |
|Total Comprehensive Income for the Year ||408.35 ||340.75 ||131.20 ||44.41 |
During the year under review your Company has achieved consolidated total income andnet profit of Rs. 7431.62 crore and Rs. 369.82 crore respectively as against total incomeand net profit of Rs. 7974.80 crore and Rs. 313.84 crore respectively during the previousfinancial year ended 31st March 2019.
Further your Company has achieved standalone total income of Rs. 4152.36 and netprofit of Rs 143.27 crore as against total income of Rs. 4242.52 crore and net profit ofRs. 51.66 crore during the previous financial year ended 31st March 2019.
The Details of financial performance of all subsidiaries and associates are containedin Note No. 45 of the Notes to Accounts to the Consolidated Financial Statements.
The outbreak of coronavirus disease 2019 (COVID-19) has created an unprecedented globalhealth crisis that has a deep impact on the businesses and economy. Uflex operates inmultiple countries across the globe - both in terms of its manufacturing operations andthe markets for its products and all these countries had imposed lockdowns of varyingtypes aimed at containing the spread of the virus. Given that Uflex business ismanufacturing of Flexible Packaging Films and Flexible Packaging which is predominantlyused in food and Pharma packaging all out efl'orts were being made by all countries toensure the adequate supply of food and medicines to the public which was made possibleonly due to seamless continued operations of packaging industry. While Uflex did faceinitial administrative and supply chain challenges in some countries during initiallockdown period but there was no impact on its overall production and sales volumes duringthe quarter which grew in Quarter 4 over the sequential quarter. While Uflex believesthat its business will continue to remain unscathed by the pandemic as it continues towitness higher demand for its products globally so far in FY 2021 there could beuncertainties in the future due to underlying developments w.r.t COVID 19 which aredifficult to predict.
TRANSFER OF UNCLAIMED DIVIDEND TO
An amount of Rs. 1340414/- (Thirteen Lac Forty Thousand Four Hundred Fourteen Only)was transferred to Investor Education and Protection Fund (lEPF) during the year underreview.
TRANSFER OF UNCLAIMED SHARES TO AUTHORITY
As per the Provision of Section 124(6) of the Companies Act 2013 read with InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016 as amended from time to time the Company has transferred 670207 (Six Lac SeventyThousand Two Hundred Seven Only) Equity Shares on which Dividend was not paid/claimed formore than seven years to the Investor Education and Protection Fund (lEPF) during theyear under review.
Your Directors are pleased to recommend a dividend @ Rs. 2.00 (Rupees Two only) pershare for the financial year ended 31st March 2020 after considering future needs of thecompany for growth.
The dividend if approved at the forthcoming Annual General Meeting will be paid toMembers whose names appear in the Register of Members as on 10th September 2020. Inrespect of shares held in dematerialized form it will be paid to those Members whosenames are furnished by National Securities Depository Limited and Central DepositoryServices (India) Limited as beneficial owner.
CHANGE IN NATURE OF BUSINESS
There is no change in the nature of business of the Company.
The paid-up equity share capital outstanding as on 31st March 2020 was Rs. 72.21Crore. During the year under review the Company has neither issued Shares withDifferential Voting Rights nor granted Stock Options nor Sweat Equity.
As on 31st March 2020 none of the Directors of the Company except the following heldshares or convertible instruments of the Company:
Shri Ashok Chaturvedi Chairman & 502533 Equity Shares Managing Director
The company neither had any fixed deposits outstanding as on 31st March 2020 norfresh/renewal of deposits were accepted during the financial year 2019-2020. There were nounclaimed deposits as on 31st March 2020.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
None of the directors of the company are disqualified under the provisions of theCompanies Act 2013 ('Act') or under the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
There is no change in composition of the Board of Directors of the Company. However inaccordance with the provisions of the Companies Act 2013 and the Articles of Associationof the Company Shri Ashok Chaturvedi Chairman and Managing Director (DIN: 0023452) ofthe Company retires by rotation and being eligible officers himself for re-appointment.
All Independent Directors of your Company have given declarations confirming that theymeet the criteria of Independence as prescribed both under the Act and Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015.
RELATIONSHIP BETWEEN DIRECTORS INTER-SE
None of the Directors are related to each other within the meaning of the term"relative" as per Section 2(77) of the Companies Act 2013.
DIRECTORS' RESPONSIBILITY STATEMENT
On the basis of representations received from the Executives of the Company subject todisclosures in the Annual Accounts and also on the basis of the discussion with theStatutory Auditors/Internal Auditors of the Company from time to time your Directors makethe following statements in terms of Section 134(3)(c) of the Companies Act 2013:
a. that in the preparation of the annual accounts for the year ended 31s'March 2020 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b. that the Company has selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2020 and of the Profitof the Company for the year ended on that date;
c. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d. that the annual accounts have been prepared on a going concern basis;
e. that proper Internal Financial Controls were in place and that the financialcontrols were adequate and were operating effectively.
f. that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
The Company's Internal Auditors conducted periodic audits to provide reasonableassurance that the Company's established policies and procedures are followed. The AuditCommittee constituted by the Board reviewed the internal controls and financial reportingissues with Internal Auditors and Statutory Auditors.
STATUTORY AUDIT & AUDITORS
There is no change in Statutory Auditors. M/s. KAAP & Associates CharteredAccountants (Firm Registration No. 019416N) will continue as the Statutory Auditors ofthe Company as appointed for a term of five consecutive years from the conclusion of 28thAnnual General Meeting till the conclusion of 33rd Annual General Meeting of the Companypursuant to Section 139 of the Companies Act 2013.
The Report given by M/s. KAAP & Associates Chartered Accountants (FirmRegistration No. 019416N) Statutory Auditors on the financial statement of the Companyfor the year 2019-20 is part of the Annual Report. There has been no qualificationreservation or adverse remark or disclaimer in their Report.
During the year under review the Auditors has not reported any matter under section143 (12) of the Act therefore no details is required to be disclosed in the BoardsReport.
The Report of the Auditors on the financial statements including relevant notes on theaccounts for the Financial
Year ended 31st March 2020 are self-explanatory and therefore do not callfor any further comments.
As per the requirements of the Section 148 of the Act read with the Companies (CostRecords and Audit) Rules 2014 as amended from time to time your Company is required tomaintain cost records and accordingly such accounts are made and records have beenmaintained every year.
The Board of Directors of your Company has re-appointed M/s. Jitender Navneet &Co. Delhi Cost Accountants (Firm Registration No.00119) as Cost Auditors of the Companyfor the financial year 2020-2021.
The Board has re-appointed M/s Mahesh Gupta & Co. Practicing Company SecretariesDelhi as Secretarial Auditor pursuant to the provisions of Section 204 of the CompaniesAct 2013. The Report of the Secretarial Auditor is annexed to the Report as per Annexure- A'.
Flex Middle East FZE UAE UFlex Europe Limited UK UFlex Packaging Inc. USA UPETHoldings Limited Mauritius LLC Flex Chemicals Private Limited Russia and USC HologramsPvt. Ltd. India are Subsidiary Companies u/s 2(87) of the Companies Act 2013. UTechDevelopers Limited alongwith it's subsidiary SD Buildwell Private Limited ceased to besubsidiary of the Company w.e.f. 3rd October 2019.
Further Flex Americas S.A. De C.V. Mexico Flex P. Films (Egypt) S.A.E ArabRepublic of Egypt Flex Films (USA) Inc. USA Flex Films Europa Sp. Zo.o. Poland UPET(Singapore) Pte. Limited Singapore Flex Films Africa Private Limited Nigeria FlexFilms Rus LLC Russia and Flex Films Europa Korlatolt Feleossegu Tarsasag Hungary arestep-down subsidiaries of the Company. Digicyl Pte. Limited Singapore and DigicylLimited Israel are JV of the Company.
In accordance with the General Circular issued by the Ministry of Corporate Afl'airsGovernment of India the Balance Sheet Profit and Loss Account and other documents of thesubsidiary companies are not being attached with the Balance Sheet of the Company. TheCompany will make available the Annual Accounts of the subsidiary companies and therelated detailed information to any member of the Company who may be interested inobtaining the same. The annual accounts of the subsidiary companies will also be kept openfor inspection at the Registered Office of the Company. The Consolidated FinancialStatements presented by the Company include the financial results of its SubsidiaryCompanies & Associate Companies.
Financial position of each of the Subsidiaries is provided in a separate statementattached to the Financial Statement pursuant to first proviso to Section 129(3) of theCompanies Act 2013.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company are prepared in accordance withrelevant Indian Accounting Standards issued by the Institute of Chartered Accountants ofIndia and forms an integral part of this Report.
Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies(Accounts) Rules 2014 a statement containing salient features of the financialstatements of Subsidiaries/Associate Companies/Joint Ventures is given at note No. 46 ofthe Consolidated Financial Statements in Form AOC-1 and thus forms an integral part ofthis Report.
CORPORATE SOCIAL RESPONSIBILITY
In accordance with the requirements of Section 135 of Companies Act 2013 your Companyhas a Corporate Social Responsibility (CSR) Committee which comprises Smt. Indu LiberhanChairperson; Shri Achintya Karati Member and Shri Amitava Ray Member. The terms ofreference of the Corporate Social Responsibility (CSR) Committee is provided in theCorporate Governance Report. Your Company has also formulated a Corporate SocialResponsibility Policy (CSR Policy) which is available on the website of the Company athttp://www. uflexltd.com/pdf/Policies/UFLEX-CSR-Policy.PDF
Annual report on CSR activities and initiatives taken as required under the Companies(Corporate Social Responsibility Policy) Rules 2014 has been appended as ANNEXURE-B' and forms integral part of this Report.
Company considers social responsibility as an integral part of its business activitiesand endeavors to utilize allocable CSR budget for the benefit of the society andenvironment. During the Financial Year 2019-2020 the Company was to undertake CSRActivities of an amount of Rs.279.91 Lacs based on the average profits of the threepreceding financial years. However the Company has spent only Rs. 68.90 Lacs upto 31stMarch 2020. The balance amount of Rs.211.01 Lacs could not be spent as the Company wasnot able to identify meaningful CSR interventions.
Your Company has taken adequate steps to ensure compliance with the provisions ofCorporate Governance as prescribed under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 with the Stock Exchanges.
A separate Report on Corporate Governance along with Report on Management Discussionand Analysis is enclosed as part of this Report as ANNEXURE - C' & D' andforms an Integral Part of this Report
DISCLOSURE UNDER COMPANIES ACT 2013
(i) Extracts of Annual Return
The details forming Part of the Extracts of Annual Return in Form MGT-9 is annexed asper ANNEXURE - E' which forms an integral part of this Report and is alsoavailable on the Company's website www.uflexltd.com.
During the year Four Board Meetings and Four Audit Committee Meetings were convenedand held. The details of which are given in Corporate Governance Report appended hereto.
(iii) Composition of Audit Committee
The Board has constituted an Audit Committee which comprises Smt. Indu Liberhan as theChairperson and Shri Achintya Karati; Shri T. S. Bhattacharya; Shri Pradeep Poddar andShri Amitava Ray as the Members. More details about the Committee are given in theCorporate Governance Report appended hereto.
(iv) Related Party Transactions
All related party transactions are negotiated on an arm's-length basis and are inordinary course of business. Therefore the Provisions of Section 188(1) of the CompaniesAct 2013 are not applicable. However suitable disclosure has been made in the notes tothe Financial Statements.
The Related Party Transactions Policy as approved by the Board is uploaded on theCompany's website: www.uflexltd.com at the web-link http://www.uflexltd.com/pdf/Policies/UFLEX-RELATED-PARTY- TRANSACTIONS-POLICY.pdf
(v) Particulars of Loans Guarantees and Investments
Details of Loans Guarantees and Investments are given in the accompanying FinancialStatements.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by any Regulator or Court whichwould impact the going concern status of the Company and its future operations.
INTERNAL FINANCIAL CONTROLS
A detailed note has been provided under Management Discussion and Analysis Reportappended hereto.
VIGIL MECHANISM AND WHISTLE BLOWER POLICY
Fraud-free and corruption-free work culture has been at the core of the Company'functioning. In view of the potential risk of fraud and corruption due to rapid growth andgeographical spread of operations the company has put even greater emphasis to addressthis risk.
To meet this objective a Whistle Blower Policy has been laid down. The same policy asapproved by the Board is uploaded on the Company's website www.uflexltd.com at web-linkhttp://www.uflexltd.com/pdf/Policies/UFLEX- Whistle-Blower-Policy.pdf
Pursuant to the Provisions of the Companies Act 2013 and under Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 theBoard has carried out an Annual Performance Evaluation of its own performance and that ofits Committees and all the Directors individually.
The evaluation of Non-Independent Directors Chairman and the Board as a whole was doneat a separate meeting by the Independent Directors.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. No complaints were received from any employee during thefinancial year 2019-2020 and hence no complaint is outstanding as on 31s'March 2020 for redressal.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
There has been no material change and commitments occurred between the end of thefinancial year of the Company i.e. 31st March 2020 and the date of this report afl'ectingfinancial position of the Company. The impact of Global Pandemic Covid-19 have beenalready provided in this report.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board Meetings and Annual General Meetings.
Risk Management is a very important part of any business. Company's Risk ManagementPolicy divides Risk into two broad categories; one Risk Associated at the TransactionalLevel and the other Risk Associated at the Decision Making Level.
In respect of the Risk Associated at Transactional Level the company has appropriatecontrol mechanism and operating effectiveness of the Internal Financial Controls and LegalCompliance System. The company has
created appropriate structures with proper delegation of duties and responsibilities ofemployees at each level on enterprise basis for compliances thereof.
In respect of Risk Associated at Decision Making level like political social &economic market technology capital structure foreign exchange & interest ratethey are evaluated before taking any strategic & financial decisions.
Adequacy and operative effectiveness of the Internal Financial Control and LegalCompliance System are periodically reviewed by the management Internal AuditorsStatutory Auditors and the Audit Committee.
However no risk has been identified which in the opinion of the Board may threaten theexistence of the Company.
POLICY ON REMUNERATION
The Company has in place Nomination and Remuneration Policy for Directors KeyManagement Personnel and Senior Management Personnel. The said Policy is available atwww.uflexltd.com (weblink https://www.uflexltd.com/pdf/Policies/Uflex-Nomination-Remuneration-Policy.pdf).
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the Act theReport and Accounts are being sent to the Members and others entitled thereto excludingthe information on employees' particulars which is available for inspection by the Membersat the Registered Office of the Company during business hours on working days of theCompany up to the date of the ensuing Annual General Meeting. Members interested inobtaining a copy thereof may write to the Company Secretary in this regard.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided as per ANNEXURE - F'.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is annexed as ANNEXURE - G'.
BUSINESS RESPONSIBILITY REPORT
UFLEX's approach to business is Creating Shared Value as used by your Company and it isabout the impact of
the business and engagement through it. Your Company is mindful of the needs of thecommunities and works to make a positive difl'erence and create maximum value for thesociety. It has been conducting business in a way that delivers long-term shareholdervalue and benefits society. As stipulated under the Listing Regulations the BusinessResponsibility Report describing the initiatives taken by the Company from anenvironmental social and governance perspective is attached in the format prescribed as ANNEXURE- H' and forms integral part of the Annual Report.
During the year under review your Company & its subsidiaries received 29 Awardsand Accolades conferred by reputable organizations/ bodies based out of India and Overseasfor excellence Some of these awards & accolades includes:.
UFlex adjudged 'Packaging Company of the Year' at 11th edition of PrintWeekIndia Awards 2019.
UFlex named 'Aon Best Employer Company on Employee Experience' in 2019.
Flexible Packaging Awards 2020 confers two Gold and one Silver award toFlexiTubes for Bio Creative Labs USA in the categories of 'Packaging Excellence''Expanding the Use of Flexible Packaging' & 'Technical Innovation'.
UFlex was ranked 188 in 'Fortune India 500 Largest Corporations' list.
The details of all Awards and Accolades conferred upon the Company are provided on thecompany's website at http://www.uflexltd.com/awards.php.
Personnel relations with all employees remained cordial and harmonious throughout theyear. Your Directors wish to place on record their sincere appreciation for the continuedsincere and devoted services rendered by all the employees of the Company.
The Directors express their gratitude and thanks to all the Indian and InternationalFinancial Institutions & Banks Government Authorities both in India & overseaswhere company's operations are carried out Shareholders Customers Suppliers and otherBusiness Associates for their continued co-operation and patronage.
| ||For & On behalf of the Board |
| ||Ashok Chaturvedi |
|Place : NOIDA ||Chairman & Managing Director |
|Dated : 30'h June 2020 ||(DIN 00023452) |