uflex ltd Directors report


To the Members,

Your Directors have the pleasure of presenting 34th Annual Report together with the Standalone & Consolidated Audited Financial Statements of the Company for the Financial Year ended 31st March, 2023.

Financial Results

The summarized financial results for the year ended 31st March, 2023 and for the previous year ended 31st March, 2022 are as follows:

[Rs. in Crores]

Consolidated Year Ended

Standalone Year Ended

2023 2022 2023 2022
Revenue from Operations 14662.51 13127.13 6778.89 5673.78
Other Income 129.42 108.98 38.12 46.81
Share in Profit / (Loss) of Associate for the Year -4.99 4.30 -- --
Share in (Loss) of Joint Venture for the Year -2.46 -3.62 -- --
Total Income 14784.48 13236.79 6817.01 5720.59
Profit before Finance 1878.50 2279.98 761.75 679.66
Cost, Depreciation & Tax
Finance Cost 473.43 322.46 182.57 155.03
Depreciation 599.03 537.12 262.06 253.21
Profit before Exceptional Items and Tax 806.04 1420.40 317.12 271.42
Exceptional Items -149.99 -38.10 -- --
Profit before Tax and after Exceptional Items 656.05 1382.30 317.12 271.42
Less: Tax Expenses 175.29 282.88 73.40 49.09
Profit for the year before Non-controlling Interest 480.76 1099.42 243.72 222.33
Non-Controlling Interest -0.07 -1.17 -- --
Profit for the year 480.69 1098.26 243.72 222.33
Total Other Comprehensive Income for the Year 350.57 57.85 -1.08 1.53
Total Comprehensive Income for the Year 831.26 1156.11 242.64 223.86

During the year under review, your Company has achieved consolidated total income and net profit of Rs. 14784.48 crore and Rs. 480.69 crore respectively as against total income and net profit of Rs. 13236.79 crore and Rs. 1098.26 crore respectively during the previous financial year ended 31st March, 2022.

Further, your Company has achieved standalone total income of Rs. 6817.01 crore and net profit of Rs. 243.72 crore as against total income of Rs. 5720.59 crore and net profit of Rs. 222.33 crore during the previous financial year ended 31st March, 2022.

The Details of financial performance of all subsidiaries and associates are contained in Note No.53 of the Notes to Accounts to the Consolidated Financial Statements.

Transfer of Unclaimed Dividend to Authority

An amount of Rs 17,33,009/- (Rupees Seventeen Lac Thirty Three Thousand Nine 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 Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended from time to time, the Company has transferred 21,407 (Twenty One Thousand Four Hundred Seven Only) Equity Shares on which Dividend was not paid/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. 3.00 per share for the financial year ended 31st March 2023 after considering future needs of the company for growth. The dividend, if approved at the forthcoming Annual General Meeting will be paid to the Members whose names appear in the Register of Members as on Friday, 4th August, 2023. In respect of shares held in dematerialized form, it will be paid to those Members whose names are furnished by National Securities Depository Limited and Central Depository Services (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, 2023 was Rs. 72.21 Crore. During the year under review, the Company has neither issued Shares with Di3 erential Voting Rights nor granted Stock Options nor Sweat Equity.

As on 31st March, 2023 none of the Directors of the Company held any Equity Shares except Shri Ashok Chaturvedi, Chairman & Managing Director and Shri Jagmohan Mongia, Whole-time Director, who held 5,02,533 (Five Lac Two Thousand Five Hundred Thirty Three) & 1 (one) Equity Shares respectively of the Company.

Fixed Deposits

The company neither had any fixed deposits outstanding as on 31st March 2023 nor fresh/renewal of deposits were accepted during the financial year 2022-2023. There were no unclaimed deposits as on 31st March, 2023.

Directors and Key Managerial Personnel

None of the directors of the company are disqualified under the provisions of the Companies Act, 2013 (‘Act) or under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

During the year, the Nomination of Shri Alok Sabharwal (DIN : 02144568) as Nominee-Director of the Company was withdrawn by IFCI Limited w.e.f. 31st October, 2022. Further, Shri Tara Sankar Bhattacharya (DIN : 00157305) ceased to be Director of the Company w.e.f. closing business hours of 13th February, 2023 on account of completion of his second term as Independent Director(s) of the company. The Board of Directors placed on record their appreciations for the valuable contribution made by Shri Alok Sabharwal (DIN : 02144568) and Shri Tara Sankar Bhattacharya (DIN : 00157305), during their respective terms as the Director of the Company. Further, Shri Sujit Kumar Varma (DIN: 09075212) was appointed as an Additional Director (Independent) of the Company w.e.f. 14th February, 2023 for a term of 3 consecutive years ending on 13th February, 2026. His appointment(s) was approved by the Members of the Company through Postal Ballot on 17th April, 2023. Further, the Shareholders of the company also by way of Special Resolution passed through Postal Ballot on 17th April, 2023 appointed Shri Ghyanendra Nath Bajpai (DIN: 00946138) as an Independent Director of the Company for a term of 3 consecutive years ending on 16th April, 2026. Your Directors welcome Shri Sujit Kumar Varma (DIN: 09075212) & Shri Ghyanendra Nath Bajpai (DIN: 00946138) on the Board of the Company.

Further, the Board of Directors vide its Circular Resolution dated 25th May, 2023 has approved the appointment of Smt. Rashmi Verma (DIN: 01993918) as an Additional Director (Independent, Non-Executive, Woman Director) w.e.f. 26th May, 2023 on the Board of the Company for a term of 3 consecutive years ending on 25th May, 2026. Further, Smt. Indu Liberhan (DIN:03341420) & Shri Pradeep Narendra Poddar (DIN:00025199) ceased to be Director of the Company respectively w.e.f. closing business hours of 27th May, 2023 and 29th May, 2023 on account of completion of their respective second term(s) as an Independent Director of the Company. The Board of Directors placed on record their appreciations for the valuable contribution made by Smt. Indu Liberhan (DIN:03341420) & Shri Pradeep Narendra Poddar (DIN:00025199) during their respective terms as the Director of the Company.

All Independent Directors of your Company have given declarations confirming that they meet the criteria of Independence as prescribed both under the Act and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

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 to disclosures in the Annual Accounts and also on the basis of the discussion with the Statutory Auditors/Internal Auditors of the Company from time to time, your Directors make 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 31st March, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. that the Company has selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2023 and of the Profit of the Company for the year ended on that date;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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 financial controls were adequate and were operating effectively.

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

The Companys Internal Auditors conducted periodic audits to provide reasonable assurance that the Companys established policies and procedures are followed. The Audit Committee constituted by the Board reviewed the internal controls and financial reporting issues with Internal Auditors and Statutory Auditors.

Statutory Audit & Auditors

During the year, M/s. Vijay Sehgal & Co., Chartered Accountants, Delhi (Firm Registration No.000374N) was appointed as Joint Statutory Auditors of the Company, to holdprofitice from the conclusion of the 33rd Annual General Meeting until the conclusion of the 38th Annual General Meeting of the Company to be held in year 2027. The Report given by M/s. M S K A & Associates, Chartered Accountants (Firm Registration Number – 105047W) & M/s. Vijay Sehgal & Co., Chartered Accountants, Delhi (Firm Registration No.000374N), Statutory Auditor(s) on the financial statement of the Company for the year 2022-23 is part of the Annual Report. There is no qualification, reservation or adverse remark or disclaimer in their Report. During the year under review, the Auditors had not reported any matter under section 143(12) of the Act, therefore, no details are required to be disclosed in the Board Report.

The Report of the Auditors on the financial statements including relevant notes on the accounts for the Financial Year ended 31st March, 2023 are self-explanatory and therefore, do not call for any further comments.

Cost Auditors

As per the requirements of the Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company is required to maintain cost records and accordingly, such accounts are made and records maintained 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 Company for the financial year 2023-2024.

Secretarial Auditors

The Board has re-appointed M/s Mahesh Gupta & Co., Practicing Company Secretaries, Delhi as Secretarial Auditor for Financial Year 2023-24 pursuant to the provisions of Section 204 of the Companies Act, 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, UPET Holdings Limited, Mauritius, LLC Flex Chemicals Private Limited, Russia, and USC Holograms Pvt. 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, Arab Republic 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, Flex Films Rus, LLC, Russia, Flex Specialty Chemicals (Egypt) S.A.E., Egypt, Flex Foils Bangladesh Private Limited, Bangladesh, Flex Films Europa Korlatolt Feleossegu Tarsasag, Hungary, Flex Pet (Egypt) S.A.E., Egypt (w.e.f. 21st November, 2022), and Plasticfix Europa Spolka Z Organiczona Odpowiedzialnoscia, Poland (w.e.f. 14th October, 2022) are step-down subsidiaries of the Company. Digicyl Pte. Limited, Singapore and Digicyl Limited, Israel are JV of the Company. Further, Flex Americas Brasil Ltda, Brazil (w.e.f. 4th April, 2023) and Uflex Woven Bags, S.A. DE C.V., Mexico (w.e.f. 26th April, 2023) has been incorporated as step-down subsidiaries.

In accordance with the General Circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company, who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered O3 ice of the Company. The Consolidated Financial Statements presented by the Company include the financial results of its Subsidiary Companies & Associate Companies.

Financial position of each of the Subsidiaries is provided in a separate statement attached to the Financial Statement pursuant to first proviso to Section 129(3) of the Companies Act, 2013.

Consolidated Financial Statements

The Consolidated Financial Statements of the Company are prepared in accordance with relevant Indian Accounting Standards issued by the Institute of Chartered Accountants of India 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 financial statements of Subsidiaries/Associate Companies/Joint Ventures is given at note No. 53 of the Consolidated Financial Statements in Form AOC-1 and thus forms an integral part of this Report.

Corporate Social Responsibility

In accordance with the requirements of Section 135 of Companies Act, 2013, your Company has a Corporate Social Responsibility (CSR) Committee during the year, which comprised Smt. Indu Liberhan (DIN: 03341420), Chairperson, Shri Jagmohan Mongia (DIN: 09051022) and Shri Paresh Nath Sharma (DIN : 00023625), Member. Consequent upon cessation of Smt. Indu Liberhan (DIN: 03341420) from the Directorship of the Company upon completion of her second term as Independent Director, she ceased to be the Chairperson of the Corporate Social Responsibility (CSR) Committee. Accordingly, the Committee has been reconstituted which now comprises of Shri Jagmohan Mongia (DIN: 09051022), Chairman, Shri Paresh Nath Sharma (DIN : 00023625) and Smt. Rashmi Verma (DIN: 01993918), Member. The terms of reference of the Corporate Social Responsibility (CSR) Committee is provided in the Corporate Governance Report. Your Company has also formulated a Corporate Social Responsibility Policy (CSR Policy) which is available on the website of the Company at https://www. uflexltd.com/pdf/Policies/Uflex-CSR-Policy.pdf. The 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. The Company considers social responsibility as an integral part of its business activities and endeavors to utilize allocable CSR budget for the benefit of the society and environment. During the Financial Year 2022-2023, the Company was to undertake CSR Activities of an amount of Rs 525.37 Lacs. However, the Company spent an amount of Rs. 334.41 Lacs during the year and an amount of Rs. 228.00 Lacs was transferred to CSR unspent account with Schedule Bank within 30 days from the closure of financial year as per provisions of section 135(6) of the Companies Act, 2013 for meeting CSR activities for ongoing projects. As the Company has transferred Rs.37.04 Lacs in excess against the qualifying amount of Rs.190.96 Lacs, which was to be transferred to unspent CSR Account. The said Rs. 37.04 Lacs shall be available for set-off in subsequent years.

Corporate Governance

Your Company has taken adequate steps to ensure compliance with the provisions of Corporate Governance as prescribed under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges.

A separate Report on Corporate Governance along with Report on Management Discussion and Analysis is enclosed as part of this Report as ANNEXURE - ‘C & ‘D and forms an Integral Part of this Report.

Disclosure under Companies Act, 2013

(i) Annual Return

The Dra3 Annual Return of the Company as on 31st March, 2023 is available on the Companys website and can be accessed at https://www.uflexltd. com/pdf/Extract-Annual-Return/UFLEX-Annual-Return-2022-2023.pdf.

(ii) Meetings

During the year, Four Board Meetings and Four Audit Committee Meetings were convened and held. The details of meetings held are given in Corporate Governance Report appended hereto.

(iii) Composition of Audit Committee

The Board has constituted an Audit Committee, which comprised Smt. Indu Liberhan (DIN:03341420) as the Chairperson, Shri Jagmohan Mongia (DIN: 09051022), Shri Pradeep Narendra Poddar (DIN: 00025199) and Shri Paresh Nath Sharma (DIN : 00023625) as the Members as on 31.03.2023. Shri Tara Sankar Bhattacharya (DIN : 00157305) ceased to be Director of the Company w.e.f. closing business hours of 13th February, 2023. Consequent upon cessation of Directorship of Smt. Indu Liberhan (DIN: 03341420), upon completion of her second term as Independent Director, she ceased to be the Chairperson of the Audit Committee. Accordingly, the Committee has been reconstituted and now comprises of Shri Paresh Nath Sharma (DIN : 00023625) Chairman, Shri Jagmohan Mongia (DIN: 09051022), Shri Sujit Kumar Varma (DIN: 09075212) and Smt. Rashmi Verma (DIN: 01993918), Member. More details about the Committee are given in the Corporate Governance Report appended hereto.

(iv) Related Party Transactions

All related party transactions are negotiated on an arms-length basis and are in ordinary course of business. Therefore, the Provisions of Section 188(1) of the Companies Act, 2013 are not applicable.

However, suitable disclosure has been made in the notes to the Financial Statements.

The Related Party Transactions Policy as approved by the Board is uploaded on the Companys website: www.uflexltd.com at the web-link https://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 Financial Statements.

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

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

Significant and Material Orders passed by the Regulators or Courts

There are no significant and material orders passed by any Regulator or Court, which would 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 Report appended 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 and geographical spread of operations, the company has put even greater emphasis to address this risk.

To meet this objective, a Whistle Blower Policy has been laid down. The same policy as approved by the Board is uploaded on the Companys website www.uflexltd. com at web-link https://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 Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015, the Board has carried out an Annual Performance Evaluation of its own performance and that of its Committees and all the Directors individually. The evaluation of Non-Independent Directors, Chairman and the Board as a whole was done at a separate meeting by the Independent Directors.

Disclosure Under Sexual Harassment of Women at Workplace (Prevention, Prohibition And Redressal) Act, 2013

Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. No complaints were received from any employee during the financial year 2022-2023 and hence no complaint is outstanding as on 31st March, 2023 for redressal.

Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the Financial year of the Company to which the Financial Statements relate and the date of the Report

There has been no material change and commitments occurred, between the end of the financial year of the Company i.e. 31st March, 2023 and the date of this report affecting 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 Company Secretaries of India on Board Meetings and Annual General Meetings.

Risk Management

Risk Management is a very important part of any business. The Board of Directors of the Company has constituted a Risk Management Committee to proper implementation and monitoring the Risk Management Plan of the Company. The Committee is responsible for monitoring and reviewing the Risk Management Plan. Its Composition and Terms of reference are mentioned in the Corporate Governance Report and a detailed note has been provided under the Management Discussion and Analysis Report, which forms integral part of this report.

Policy on Remuneration

The Company has in place Nomination and Remuneration Policy for Directors, Key Management Personnel and Senior Management Personnel. The said Policy is available at www.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 employees of the Company will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the Members at the Registered O3 ice of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. Members interested in obtaining a copy thereof, may write to the Company Secretary in this regard.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided as per ANNEXURE - ‘E.

EnergyConservation,TechnologyAbsorption and Foreign Exchange Earnings and Outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of the Companies (Accounts) Rules, 2014, is annexed as ANNEXURE - ‘F.

Business Responsibility and Sustainability Report

UFLEXs approach to business is Creating Shared Value as used by your Company and it is about the impact of the business and engagement through it. Your Company is mindful of the needs of the communities and works to make a positive difference and create maximum value for the society. It has been conducting business in a way that delivers long-term shareholder value and benefits society. As stipulated under the Listing Regulations, the Business Responsibility and Sustainability Report describing the initiatives taken by the Company from an environmental, social and governance perspective is attached in the format prescribed as ANNEXURE – ‘G and forms integral part of the Annual Report.

Dividend Distribution Policy

The Companys Dividend Distribution Policy, approved by the Board, may be accessed on its corporate website at https://www.uflexltd.com/pdf/Policies/ UFLEX_ Dividend_Distribution_Policy.pdf.

Awards

Details of Awards and Accolades conferred by reputable organizations/ bodies based out of India and Overseas for excellence received by your Company & its subsidiaries are mentioned in Management and Discussion and Analysis section of the Annual Report and some of these awards & accolades includes:

• ‘Outstanding Work in Circularity Award in Large Enterprises at the Indian Circular Economy Forum ACE Award 2022 for its sustainability-driven initiatives that help create a circular economy.

• Best Employer Brand Award in the Global Best Employer Brands 2023 segment at the World HRD Congress 2023, presented by Times Ascent.

• ‘Best Organization in HR Practices at the National Management Summit 2022 organized by Top Rankers Management Club.

• Silver Award - Technical Innovation at the Flexible Packaging Achievement Awards 2023, organized by the FPA, for our F-UHB-M Ultra High Barrier & High Metal Bond Metallized Polyester Film for aluminum foil replacement.

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

Personnel

Personnel relations with all employees remained cordial and harmonious throughout the year. Your Directors wish to place on record their sincere appreciation for the continued, sincere and devoted services rendered by all the employees of the Company.

Acknowledgement

The Directors express their gratitude and thanks to all the Indian and International Financial Institutions & Banks, Government Authorities both in India & overseas where companys operations are carried out, Shareholders, Customers, Suppliers and other Business Associates for their continued co-operation and patronage.

For & On behalf of the Board

Ashok Chaturvedi
Place : NOIDA Chairman & Managing Director
Dated : 30th May, 2023 DIN : 00023452