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Uflex Ltd.

BSE: 500148 Sector: Industrials
NSE: UFLEX ISIN Code: INE516A01017
BSE 00:00 | 08 Aug 631.25 3.25
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OPEN 628.00
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VOLUME 21757
52-Week high 719.00
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P/E 20.50
Mkt Cap.(Rs cr) 4,558
Buy Price 0.00
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Sell Price 0.00
Sell Qty 0.00
OPEN 628.00
CLOSE 628.00
VOLUME 21757
52-Week high 719.00
52-Week low 427.05
P/E 20.50
Mkt Cap.(Rs cr) 4,558
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Uflex Ltd. (UFLEX) - Director Report

Company director report

To the Members

Your Directors have the pleasure of presenting 32nd Annual Report togetherwith the Standalone & Consolidated Audited Financial Statements of the Company for theFinancial Year ended 31st March 2021.

FINANCIAL RESULTS

The summarized financial results for the year ended 31st March 2021 and forthe previous year ended 31st March 2020 are as follows:

[Rs. in Crores]

Consolidated Year Ended

Standalone Year Ended

2021 2020 2021 2020
Revenue from Operations 8890.76 7404.84 4635.07 4069.71
Other Income 22.80 28.46 20.34 82.65
Share in Profit of Associates for the Year 5.66 3.20 -- --
Share in (Loss) of Joint Venture for the Year (4.35) (4.88) -- --
Total Income 8914.87 7431.62 4655.41 4152.36
Profit before Finance Cost Depreciation & Tax 1826.99 1108.84 766.02 616.42
Finance Cost 229.07 224.79 152.28 172.89
Depreciation 455.73 403.19 259.65 261.36
Profit before Tax 1142.19 480.85 354.09 182.17
Less: Tax Expenses 298.51 109.98 123.65 38.90
Profit for the year before Minority Interest 843.68 370.87 230.44 143.27
Non Controlling Interest (0.78) (1.06) -- --
Profit for the year 842.90 369.82 230.44 143.27
Total Other Comprehensive Income for the Year 30.28 38.53 0.76 (12.07)
Total Comprehensive Income for the Year 873.18 408.35 231.20 131.20

During the year under review your Company has achieved consolidated total income andnet profit of Rs. 8914.87 crore and Rs. 842.90 crore respectively as against total incomeand net profit of Rs. 7431.62 crore and Rs. 369.82 crore respectively during the previousfinancial year ended 31stMarch 2020.

Further your Company has achieved standalone total income of Rs. 4655.41 and netprofit of Rs 230.44 crore as against total income of Rs. 4152.36 crore and net profit ofRs. 143.27 crore during the previous financial year ended 31stMarch 2020.

The Details of financial performance of all subsidiaries and associates are containedin Note No.46 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 efforts were made by all countries to ensurethe adequate supply of food and medicines to the public which was made possible only dueto seamless continued operations of packaging industry. While Uflex did face initialadministrative and supply chain challenges in some countries during initial lockdownperiod but there was no impact on its overall production and sales volumes during theperiod. Though the business is not likely to be impacted yet uncertainties in the futuredue to underlying developments w.r.t COVID -19 are difficult to predict.

TRANSFER OF UNCLAIMED DIVIDEND TO AUTHORITY

An amount of Rs.1585605.60/- (Rupees Fifteen Lac Eighty Five Thousand Six HundredFive and Paise Sixty Only) was transferred to Investor Education and Protection Fund(IEPF) during the year under review.

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 24982 (Twenty FourThousand Nine Hundred Eighty Two only) Equity Shares on which Dividend was notpaid/claimed for more than seven years to the Investor Education and Protection Fund(IEPF) during the year under review.

DIVIDEND

Your Directors are pleased to recommend a dividend @ Rs. 2.50 per share for thefinancial year ended 31st March 2021 after considering future needs of the company forgrowth.

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 September2021. In respect of shares held in dematerialized form it will be paid to those Memberswhose names 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.

SHARE CAPITAL

The paid-up equity share capital outstanding as on 31st March 2021 was Rs.72.21 Crore. 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 2021 none of the Directors of the Company held any EquityShares except Shri Ashok Chaturvedi Chairman & Managing Director who held 502533Equity Shares of the Company.

FIXED DEPOSITS

The company neither had any fixed deposits outstanding as on 31st March 2021nor fresh/renewal of deposits were accepted during the financial year 2020-2021. Therewere no unclaimed deposits as on 31st March 2021.

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.

During the year Shri Amitava Ray (DIN: 00184143) ceased to be the Whole-time Directorof the Company w.e.f. close of business hours of 1st February 2021 The Boardof Directors placed on record their appreciations for the valuable contribution made byShri Amitava Ray (DIN: 00184143) as the Whole-time-Director of the

Company and Shri Jagmohan Mongia (DIN: 09051022) has been appointed as an Additional& Whole-time Director on the Board of the Company w.e.f. 11th February2021. Your Directors welcome Shri Jagmohan Mongia (DIN: 09051022) on the Board of theCompany.

Further the IFCI Limited had withdrawn the nomination of Shri Anish Babu Venugopal(DIN: 02830575) as nominee of IFCI Limited and nominated Shri Alok Sabharwal(DIN:02144568) as new nominee Director w.e.f. 2nd December 2020. The Board ofDirectors placed on record their appreciations for the valuable contribution made by ShriAnish Babu Venugopal (DIN: 02830575). Further your Directors welcome Shri Alok Sabharwal(DIN:02144568) on the Board of the Company.

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/lnternal 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 31st March 2021the applicable accounting standards have been followed along with proper explanationrelating 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 2021 and of the Profitof the Company forthe 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. TheAudit Committee constituted by the Board reviewed the internal controls and financialreporting issues 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 2020-21 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 had not reported any matter under section143(12) of the Act therefore no details are required to be disclosed in the BoardReport.

The Report of the Auditors on the financial statements including relevant notes on theaccounts for the Financial Year ended 31st March 2021 are self-explanatory andtherefore do not call for any further comments.

COST AUDITORS

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 maintained everyyear.

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 2021-2022.

SECRETARIAL AUDITORS

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'.

SUBSIDIARY COMPANIES

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.

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 AffairsGovernment 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 Liberhan(DIN: 03341420) Chairperson; Shri Achintya Karati (DIN: 00024412) Member and ShriJagmohan Mongia (DIN: 09051022) (w.e.f. 11th February 2021) Member. ShriAmitava Ray (DIN: 00184143) ceased to be Member of the Committee w.e.f. close of businesshours of 1st February 2021. The terms of reference of the Corporate SocialResponsibility (CSR) Committee is provided in the Corporate Governance Report. YourCompany has also formulated a Corporate Social Responsibility Policy (CSR Policy) which isavailable on the website of the Company at http://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 2020-2021 the Company was to undertake CSRActivities of an amount of Rs. 212.75 Lacs based on the average profits of the threepreceding financial years. However the Company spent Rs. 217.99 Lacs upto 31stMarch 2021.

CORPORATE GOVERNANCE

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) Annual Return

The Annual Return of the Company as on 31st March 2021 is available on theCompany's website and can be accessed at https://www.uflexltd.com/pdf/Extract-Annual-Return/UFLEX-Annual-Return-2020-2021. pdf

(ii) Meetings

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(DIN:03341420) as the Chairperson and Shri Achintya Karati (DIN: 00024412); Shri TaraSankar Bhattacharya (DIN: 00157305) Shri Pradeep Narendra Poddar (DIN: 00025199) and ShriJagmohan Mongia (DIN: 09051022) as the Members. Shri Amitava Ray (DIN :00184143) ceased tobe Member of Audit Committee w.e.f. closing business hours of 1st February 2021. Moredetails about the Committee are given in the Corporate 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.

(vi) There is no proceeding pending under the Insolvency and Bankruptcy Code 2016 (31of 2016) during the year.

(vii) There was no instance of one time settlement with any Bank or FinancialInstitution.

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 atweb-link http://www.uflexltd.com/pdf/Policies/UFLEX- Whistle-Blower-Policy.pdf

BOARD EVALUATION

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 2020-2021 and hence no complaint is outstanding as on 31stMarch 2021 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 2021 and the date of this reportaffecting financial position of the Company.

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

Risk Management is a very important part of any business. Company’s RiskManagement Policy divides Risk into two broad categories; one Risk Associated at theTransactional Level 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 delegationof duties and responsibilities of employees at each level on enterprise basis forcompliances 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 - ‘E'.

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 - ‘F'.

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 theneeds of the communities and works to make a positive difference and create maximum valuefor the society. It has been conducting business in a way that delivers long-termshareholder value and benefits society. As stipulated under the Listing Regulations theBusiness Responsibility Report describing the initiatives taken by the Company from anenvironmental social and governance perspective is attached in the format prescribed asANNEXURE - ‘G' and forms integral part of the Annual Report.

AWARDS

Details of Awards and Accolades conferred by reputable organizations/ bodies based outof India and Overseas for excellence received by your Company & its subsidiaries arementioned in Management and Discusiion and Analysis section of the Annual Report and someof these awards & accolades includes:

• UFlex won Packaging Gateway Excellence Awards 2020 in the category'Environmental Impact' for driving the circular economy with its pathbreaking technologyto recycle MLP packaging homogeneously.

• AIMCAL 2020 Awards for 'Product Excellence' was presented to FLEXITUBES forClariss Organic Face Wash.

• AIMCAL 2020 Awards for 'Technical Excellence' to UFlex 4D Bags with handle forRoyal Gold & Rice King.

• ASEPTO the Aseptic Liquid Packaging Business of UFlex was awarded with 'TheMost Admired Brand of 2020' title by White Page International. Its President & CEOAshwani Sharma was honoured as one of the 'Inspirational Leaders of India 2020' by them.

Further the details of all Awards and Accolades conferred upon the Company are alsoprovided on the Company's website at http://www.uflexltd.com/awards.php.

PERSONNEL

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.

ACKNOWLEDGEMENT

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 : 29th June 2021 (DIN 00023452)

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