To the Members
Your Directors have the pleasure of presenting this Thirtieth Annual Report togetherwith the Standalone & Consolidated Audited Financial Statements of the Company for theFinancial Year ended 31st March 2019.
The summarized financial results for the year ended 31st March 2019 and forthe previous year ended 31st March 2018 are as follows:
[Rs. in Crores]
| || |
Consolidated Year Ended
Standalone Year Ended
| ||2019 ||2018 ||2019 ||2018 |
|Revenue from Operations ||7957.22 ||6779.71 ||4220.97 ||3878.21 |
|Other Income ||20.71 ||19.98 ||21.55 ||16.35 |
|Share in Profit of Associates for the Year ||5.20 ||3.21 ||-- ||- |
|Share in (Loss) of Joint Venture for the Year ||(8.33) ||-- ||-- ||-- |
|Total Income ||7974.80 ||6822.91 ||4242.52 ||3894.56 |
|Profit before Finance Cost Depreciation & Tax ||1007.53 ||902.58 ||480.57 ||476.15 |
|Finance Cost ||217.93 ||197.09 ||167.94 ||144.22 |
|Depreciation ||380.85 ||351.59 ||239.93 ||221.28 |
|Profit before Tax ||408.75 ||353.90 ||72.70 ||110.65 |
|Less: Tax Expenses ||93.54 ||41.70 ||21.04 ||9.73 |
|Profit for the year before Minority Interest ||315.21 ||312.20 ||51.66 ||100.92 |
|Non Controlling Interest ||(1.38) ||(172) ||-- ||-- |
|Profit for the year ||313.84 ||310.48 ||51.66 ||100.92 |
|Total Other |
Comprehensive Income for the Year
|26.91 ||65.82 ||(7.25) ||5.73 |
|Total Comprehensive Income for the Year ||340.75 ||376.30 ||44.41 ||106.65 |
During the year under review your Company achieved consolidated total income and netprofit of Rs. 7974.80 crore and Rs. 313.84 crore respectively as against total income andnet profit of 6822.91 crore and Rs. 310.48 crore respectively during the previousfinancial year ended 31st March 2018.
Further your Company has achieved standalone total income of Rs. 4242.52 crore and netprofit of Rs. 51.66 crore as against total income of Rs. 3894.56 crore and net profit ofRs. 100.92 crore during the previous financial year ended 31st March 2018.
The comprehensive details of the performance of the Company have been given in theManagement Discussion and Analysis Report appended hereto.
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.
TRANSFER OF Unclaimed DIVIDEND TO AUTHORITY
An amount of Rs. 4580280/- (Rupees Forty Five Lac Eighty Thousand Two Hundred EightyOnly) was transferred to Investor Education and Protection Fund (IEPF) during the yearunder 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 55945 (Fifty Five ThousandNine Hundred Forty Five Only) Equity Shares on which Dividend was not paid/claimed formore than seven years to the Investor Education and Protection Fund (IEPF) during theyear under review.
Your Directors are pleased to recommend a dividend @ Rs 2/- per share for the financialyear ended 31st March 2019 after considering future needs of the company 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 25th July 2019 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 2019 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 2019 none of the Directors of the Company except thefollowing held shares or convertible instruments of the Company:
|Mr. Ashok Chaturvedi Chairman & Managing Director ||502533 Equity Shares |
The company neither had any fixed deposits outstanding as on 31st March 2019nor fresh/renewal of deposits were accepted during the financial year 2018-2019. Therewere no unclaimed deposits as on 31st March 2019.
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.
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.
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Shri Amitava Ray Whole-Time Director of the Company due forretirement by rotation and being eligible offers himself for reappointment.
Shri Ashok Chaturvedi has been re-appointed as a Chairman & Managing Director ofthe Company w.e.f 1st February 2019 for a period of five (5) years on the termsand conditions as recommended by the Nomination and Remuneration Committee and approved bythe Board of Directors of the Company in their meeting held on 3rd November2018 subject to the approval of shareholders.
First term as being Independent Director of Shri Tara Sankar Bhattacharya Smt InduLiberhan and Shri Pradeep Narendra Poddar is expiring on 13th February 202027th May 2020 and 29th May 2020 respectively. On therecommendations of Nomination and Remuneration Committee the Board has proposed there-appointment of all the above directors for the approval of Shareholders through SpecialResolution for a second term of three years each.
The brief resume and other details as required under Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 are provided inthe Notice of Annual General Meeting of the Company.
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 compliance certificates received from the Executives of the Companysubject to disclosures in the Annual Accounts and also on the basis of the discussion withthe Statutory Auditors/Internal Auditors of the Company from time to time your Directorsmake the 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 31stMarch 2019 the applicable
accounting standards have been followed along with proper explanation relating tomaterial 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 2019 and ofthe Profit of 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 2018-19 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 2019 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 2019-2020.
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 AnnexureA'.
Flex Middle East FZE United Arab Emirates UFlex Europe Limited UK UFlex PackagingInc. USA UPET Holdings Limited Mauritius Digicyl Pte Limited Singapore(upto 27thJune 2018); UTech Developers Limited India and USC Holograms Pvt. Ltd. India areSubsidiary Companies u/s 2(87) of the Companies Act 2013. Flex Chemicals Private LimitedRussia (w.e.f. - 9th August 2018) has been incorporated / acquired as Wholly OwnedSubsidiary of the Company and Status of Digicyl Pte Limited Singapore has been changed toJoint Venture Company from Wholly Owned Subsidiary Company (w.e.f. 28th June2018) during the year under review.
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 and S.D. Buildwell Pvt. Ltd. India are step-downsubsidiaries of the Company. Flex Films Africa Private Limited Nigeria (w.e.f. 11th May2018) Flex Films Rus LLC Russia (w.e.f. 23rd November 2018) Flex Films EuropaKorlatolt Feleossegu Tarsasag Hungary (w.e.f. 2nd August 2018) have been incorporated asstep-down subsidiaries of the Company & Digicyl Limited Israel (w.e.f. 18th July2018) as the JV Company during the year under review.
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 Mrs. Indu LiberhanChairperson; Mr. Achintya Karati Member and Mr. 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 socialresponsibility as an integral part of its business activities and endeavors to utilizeallocable CSR budget for the benefit of the society and environment.
Accordingly the Company was supposed to undertake CSR Activities utilizing Rs. 363.85Lacs based on the average profits of the three preceding financial years. However theCompany spent Rs. 36.25 Lac upto 31st March 2019. The balance amount of Rs. 327.60 Laccould not be spent as the Company was not 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 also availableon 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 Mrs. Indu Liberhan as theChairperson and Mr. A. Karati; Mr. T S. Bhattacharya; Mr. Pradeep Poddar and Mr. AmitavaRay as the Members. More details about the Committee are given in the Corporate GovernanceReport 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 .
(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 2018-2019 and hence no complaint is outstanding as on 31stMarch 2019 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 2019 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 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 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-Policv.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 till 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'.
During the year under review your Company & its subsidiaries received 27 Awardsand Accolades conferred by reputable organizations/ bodies based out of India and Overseasfor excellence Some of these awards & accolades includes:.
Uflex Chairman & Managing Director Mr. Ashok Chaturvedi conferred withFather of Flexible Packaging' at 1st Global Conference on Plastic & Packaging2019
Dow 2018 30th Awards for Packaging Innovation adjudged biodegradable WaterlessInternet Flower Packaging by Uflex as the Diamond Finalist Winner.
'Best Sustainable Packaging Innovation' & 'Resource Efficiency' Title atSustainability Awards 2018 for Waterless Internet Flower Packaging by Uflex.
The Economic Times Polymers Awards 2019 for 'Excellence in Packaging Beverages -Large Enterprises' to Asepto Spark Fresca.
Asia's Most Trusted Company 2018 by International Brand Consulting CorporationUSA.
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
Place : NOIDA Chairman & Managing Director
Dated : 27th May 2019 (DIN 00023452)