Uflex Ltd Management Discussions.

FORWARD-LOOKING STATEMENTS

Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Companys actual results, performance or achievements could thus differ materially from those projected in any such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.

1. global Economy

One year ago economic activity was accelerating in almost all regions of the world and the global economy was projected to grow at 3.9 percent in 2018 and 2019. One year later, much has changed: the escalation of US-China trade tensions, macroeconomic stress in Argentina and Turkey, disruptions to the auto sector in Germany, tighter credit policies in China, and financial tightening alongside the normalization of monetary policy in the larger advanced economies have all contributed to a significantly weakened global expansion, especially in the second half of 2018.

Chinas growth declined from 6.8 percent in the first half of 2018 to 6.0 percent in the second half of the year. The resulting weakening in import demand appeared to have impacts on trading partner exports in Asia and Europe. (Source: IMF World Economic Outlook)

Economic growth accelerated in more than half the worlds economies in both 2017 and 2018. Developed economies expanded at a steady pace of 2.2 per cent in both years, and growth rates in many countries have risen close to their potential, while unemployment rates in several developed economies have dropped. Among the developing economies, the regions of East and South Asia remain on a relatively strong growth trajectory, expanding by 5.8 per cent and 5.6 per cent, respectively in 2018. Many commodity exporting countries, notably fuel exporters, are continuing a gradual recovery, although they remain exposed to volatile prices.

According to the World Economic outlook by the International Monetary fund (IMF), global growth is now projected to slow from 3.6 percent in 2018 to 3.3 percent in 2019, before returning to 3.6 percent in 2020.

The current forecast envisages that global growth will level off in the first half of 2019 and firm up

after that. The projected pickup in the second half of 2019 is predicated on an ongoing buildup of policy stimulus in China, recent improvements in global financial market sentiment, the waning of some temporary drags on growth in the euro area, and a gradual stabilization of conditions in stressed emerging market economies, including Argentina and Turkey.

Improved momentum for emerging market and developing economies is projected to continue into 2020, primarily reflecting developments in economies currently experiencing macroeconomic distress—a forecast subject to notable uncertainty.

Growth in emerging and developing Asia is expected to dip to 6.3 percent in 2019 and 2020.

On the other hand, growth in Japan has been revised upwards on account of the additional fiscal support provided to the economy this year, including measures to mitigate the effects of the planned consumption tax rate increase.

2. Indian Economy

The GDP growth rate trend of Indian economy has changed in the last five years, that is from 2014-15 to 2018-19, the average growth rate of GDP has been at 7.7%. This has made India the fastest moving emerging economy in the world economic system. The macro-economic environment has improved significantly during the last few years. Inflation is contained, fiscal consolidation is on the right path and foreign investment flows are growing year after year

Indias GDP is estimated to have increased 7.2 per cent in 2017-18 and 7 per cent in 2018-19 as per the Second Advance Estimates of Gross Domestic Product (GDP) released by the Central Statistics Office (CSO). During the first half of 2018-19, GDP (at constant 2011-12 prices) grew by 7.6 per cent.

The macro fundamentals of the economy are sound. Fiscal deficit has been brought down to 3.4% in the revised Governments estimate of 2018-19.

The Current Account Deficit (CAD), against a high of 5.6% six years ago, is about 2.5% of GDP in 2018-19. Indias exports are projected to touch an all-time high of $330 Billion in the current fiscal.

India has retained its position as the third largest startup base in the world with over 4,750 technology startups, with about 1,400 new start-ups being founded in 2016, according to a report by NASSCOM.

India is emerging as an important player in the world economy as reflected in World Banks Ease of Doing

Business 2019 Report, which improves in ranking by 23 positions to 77th rank in 2018.

In India, continued implementation of structural and financial sector reforms with efforts to reduce public debt remain essential to secure the economys growth prospects. In the near term, continued fiscal consolidation is needed to bring down Indias elevated public debt. This should be supported by strengthening goods and services tax compliance and further reducing subsidies. Important steps have been taken to strengthen financial sector balance sheets, including through accelerated resolution of nonperforming assets under a simplified bankruptcy framework. These efforts should be reinforced by enhancing governance of public sector banks. Reforms to hiring and dismissal regulations would help incentivize job creation and absorb the countrys large demographic dividend; efforts should also be enhanced on land reform to facilitate and expedite infrastructure development.

India is projected to grow at 7.3 per cent in 2019 and 7.5 per cent in 2020, supported by the continued recovery of investment and robust consumption, thus remaining the fastest growing major economy of the world, according to the IMF.

3. Industry Structure & Developments

As one of the fastest growing segments of the packaging industry, flexible packaging combines the best qualities of Plastic, Film, Paper and Aluminum Foil to deliver a broad range of protective properties while employing a minimum of material. Technological innovation, sustainability concerns and attractive economics are among the reasons for the phenomenal growth of flexible packaging globally in the last two decades. The flexible packaging sector has traditionally had an extremely diverse and fragmented structure, consisting of a few large global operations and many small to medium-sized national and regional companies. Technical advances have allowed flexible packaging to become the format choice for a wide variety of consumer products. It has emerged as an alternative to traditional rigid packaging. Many products which were traditionally packed in cans and jars are now available in pouches and bags and have many advantages over rigid packaging. It requires less packing material and the packaging is lighter than the traditional packaging. Moreover, the reduction in weight of the packaging makes it more cost effective by lowering the warehousing and the shipping cost.

The increasing demand for convenience foods and fast food is giving rise to demand for lightweight packaging. Also, changing consumer behavior and growing processed-food industry is triggering the demand for easy and flexible packaging material.

Flexible packaging provides convenience to the consumer while ensuring product safety. Innovative packaging solutions are developed by manufacturers to cater to the consumers demand for convenient, easy-to-use, and lightweight packaging. Changing consumer behavior and growing processed-food industry is triggering the demand for easy and flexible packaging material. Flexible packaging has, as a result, become substantially more sophisticated with high-end graphics, high oxygen and moisture barriers, and new functionalist

The global flexible packaging market is expected to witness a CAGR of 5.1%, and is projected to reach USD 313.1 billion by 2024. Geographically, the flexible packaging industry will witness strong growth over the years to come in all major regions, especially the Asia-Pacific (APAC). The flexible packaging industry in APAC has been growing steadily over the last five years, registering a CAGR of approximately 5% between 2015-2019, led by China and India. This strong growth will continue through 2022 with the size of the flexible packaging industry in India expected to increase USD 6.8 billion, while an increase of USD 5.05 billion is expected for the flexible packaging industry in China. (Source: https://www.technavio.com/research/

flexible-packaging-industrv-analvsis). The growth is attributed to the increasing disposable income and growing consumer preference towards packaged goods. Moreover, low production cost coupled with expanding applications of flexible packaging such as improving moisture barrier properties, appropriate sealing and heat insulation is also expected to drive the market. New innovations in flexible packaging are further expected to propel the market growth during the forecast period. (Source : https://www . globenewswire.com).

The life cycle attributes of flexible packaging demonstrate many sustainable advantages. It starts with less waste in the first place, greatly reducing landfill discards. Innovation and technology have enabled flexible packaging manufacturers to use fewer natural resources in the creation of their packaging, and improvements in production processes have reduced water and energy consumption, greenhouse gas emissions and volatile organic compounds. Even more, lighter-weight flexible packaging results in less transportation- related energy and fossil fuel consumption, and environmental pollution. With its versatility, custom qualities, efficiency in conserving resources, and sustainability, flexible packaging is considered most advantageous.

Flexible packaging is the most economical method to package, preserve and distribute food, beverages, consumables, pharmaceuticals and other products

that need extended shelf life. It can be designed with barrier properties tailored to fit the products being packaged keeping in mind the end-use, whereas other packaging formats generally provide a one-size-fits-all approach. Flexible packaging can now be made in a wide variety of innovative shapes, sizes and appearances, and can include components such as handles and opening and reclosing features such as zips and spouts to name a few. Changing consumer lifestyle, growth of DINK (Double Income No Kids) population, propensity to spend more on the back of increasing disposable income has enhanced dependence on processed, pre-cooked and packed foods, which has augured well for the overall growth of the flexible packaging industry. The industry has witnessed introduction of new and efficient films used in manufacturing flexible packaging materials. Smaller unit packs/ sachets dispensing measured and controlled potions are a rage in FMCG and pharmaceutical sector. Modified Atmosphere Packaging (MAP), vacuum skin packaging are some of the current trend setting packaging solutions that have been developed to meet ever-evolving demands of the end-users. Spout valves are being provided in the flexible packs to enable nitrogen flushing of packed food items for enhancing shelf life. IoT (internet of things) is being integrated to enhance the overall functionality and intelligence quotient of flexible packaging.

Other developments in the flexible packaging industry of late have been multilayer co-extruded polymeric structures that provide more flexibility in terms of desired functionality, thickness, and cost- effectiveness without over-engineering/over dressing. Growing adoption of track-and-trace technologies, such as RFID and barcodes in premium product segments including wines and spirits are gaining prominence by the days. Special Inks are being used in process of converting that can be deciphered and detected only in UV ambience. Flexible packaging technology has advanced dramatically over the past 10 years and is now a consumer household mainstay, steadily moving into new markets across applications. Flexible Packaging materials have progressed from simple monolayer bags and wrappings to coextruded or laminated engineered multilayer and coated constructions, comprising multiple materials such as polymers, paper, metal foils, coatings, sealant layers and other additives. These developments provide properties such as high barrier to atmospheric gases, extended shelf life and convenience all of which are increasingly demanded in packaging for food, consumables and pharmaceuticals. The properties of flexible packaging can be tailored and customized to provide specific combinations required by different products.

The global flexible packaging market is categorized on the basis of product type, material type, and application. With regard to material type, the global flexible packaging market is segmented into Cellulosic, Aluminum, Paper, and Polymer. Further classification of polymer includes Poly Styrene, Ethylene Vinyl Alcohol (EVOH), Poly Vinyl Chloride (PVC), Polyamide (PA), Biaxially-oriented polyethylene terephthalate (BOPET), Cast Polypropylene (CPP), Biaxially-Oriented Polypropylene (BOPP), Polypropylene (PP), and Polyethylene (PE). Subsegmentation of Polyethylene (PE) includes LLDPE, HDPE, and LDPE. Based on segmentation by product type, the global flexible packaging market is divided into Retort Pouches, Squeezable Bottles, Converted Roll Stock, Laminated Tubes, Vacuum Pouches, Wicketed Bags, Gusseted Bags, and Stand-up Pouches. Out of these, the market seems to be drawing more revenue shares from the stand- up pouch segment. With respect to application, the global market for flexible packaging is categorized into Industrial and Institutional, and Consumer. Further classification of Consumer group includes tobacco, pharmaceutical, personal care, and food and beverages. Among these, the market is seen to be dominated by the food and beverage group since it is more convenient for end users to carry their food around with sealed and proper packaging.

The already intensified Sustainability Narrative for Flexible Packaging world over is seeing both the advantages and disadvantages being highlighted based on ideological affinities. Currently, both Circular Economy (CE) and Sustainable Materials Management (SMM) frameworks are being used and recommended for policy by different groups, encompassing private/ public companies, nongovernmental organizations (NGOs), as well as public policy makers. While detractors say that it is almost impossible for the multilayered flexible packaging to be segregated layer-wise and recycled, the proponents say that the biggest challenge lies with the collection and sortation of post-consumer waste for which Governments, Corporate Houses, Civil Society and most importantly Public at large should make collaborative efforts. It has been proven beyond reasonable doubt that Flexible Packaging is re-processable and for end-of-life use can be converted from Waste to Energy and in some cases even from Waste to Fuel through a variety of processes including combustion, gasification, pyrolisation, anaerobic digestion and land fill gas recovery.

Plastic Waste Management (Amendment) Rules, 2018 notified by Ministry of Environment, Forest and Climate Change, Government of India on 27 March 2018 acknowledges the agility of multilayered

flexible packaging particularly for effective end of life use. This makes a great case for other countries to follow suit in acknowledgment of the brilliant and resource efficient technology that flexible packaging is.

Asia Pacific flexible packaging market is projected to grow at a CAGR of 6.01% over the forecast period to reach a market size of US$49.928 billion by 2023 from US$35.170 billion in 2017. Emerging economies like China and India are expected to witness the substantial growth of flexible packaging market. China is expected to be the largest market for flexible packaging solutions due to its shift from production-based to a consumption-based economic structure. Rising number of supermarkets in the Asia Pacific region will boost the demand for flexible packaging solutions.

A number of significant trends are driving rapid change across the industry such as the increased presence of global multinational companies, consumer brand awareness and products with clean- label messaging that enhance brand transparency and builds purchasing confidence. The demand for smaller and flexible packaging is also increasing due to increase in per capita income, urbanization and growing numbers of working women. Furthermore, the e-commerce industry in India has substantially expanded and is changing the packaging needs, driving requirements for versatile and visually appealing packaging solutions.

4. Business Review

(i) Films Business

The main products of this business are BOPP Films, CPP Films, Polyester (BOPET) Films, and Metalized and other Specialty films.

The Companys OPP (Orientated Polypropylene) films comprising BOPP (Biaxially Oriented Polypropylene) and CPP (Cast Polypropylene) films are highly cost effective, functionally efficient and therefore have rapidly penetrated into high barrier sensitive packaging segment across the world. These films are primarily being used for applications like packaging & conversion; industrial coatings; printing & lamination; encapsulation; overwraps (for CDs, cigarettes, cartons), confectionery packaging; anti-fog (for food products), textile bags; biscuit and sandwich overwrap amongst several others products. BOPP Films are known for low moisture transmission rates thus finding extensive use in manufacturing packaging material for snack food. High tensile strength, low elongation and thermal shrinkage further render it suitable for processing on high-speed printing, coating/ laminating and other converting machines. BOPP Film is known to have a combination of excellent slip and optical properties. The high gloss and excellent clarity provides good aesthetic appeal whereas controlled slop properties make it suitable to perform well on various form fill seal (FFS), overwrapping and converting machines in order to improve or maintain high productivity.

Even the CPP film is extremely dynamic and versatile with high gloss, transparency, good heat seal-ability, good twisting property, superior tear and puncture resistance. These factors pave way for its application in food wraps, packing bakery products, anti-wraps, anti-fog packaging, garment bags, retort packaging, deep freeze applications, etc.

The Companys OPP film manufactured at its Indian plant caters largely to the captive & domestic market while the Egypt plant caters to the international market. The plant capacity for OPP Film (including CPP) is 34,000 TPA at Noida and stands at 43,400 TPA for Egypt plant.

BOPET (Bi-axially Oriented Polyethylene Terephthalate) Film is a polyester film using high quality resins produced at the Companys state- of-the-art film manufacturing plants at India, Dubai, Egypt, Poland, Mexico and United States of America with a cumulative production capacity in excess of 2,56,000 TPA. Indian plants meet captive & Indian market requirements whereas overseas plants serve overseas markets across the globe. BOPET Films exhibit superior mechanical properties; improved resistance to chemicals; good barrier to oxygen; excellent receptivity to surface treatment & coatings and high resistance to abrasion.

BOPET Films have excellent dielectric properties, good flatness and coefficient of friction (COF), tear resistance and puncture resistance, excellent dimensional stability over a wide range of temperature, good resistance to common solvents, moistures, oil and grease and poses excellent barrier against a wide range of atmospheric gases among other benefits. This variant therefore finds extensive use in metallizing; thermal lamination; lidding functions; holographic applications; pressure sensitive tapes; cable wrapping among several others. With Uflexs focus on developing sustainable innovations and solutions for Brand Owners and Flexible Packaging Industry, the Packaging Films business has taken its green thumb to greater heights with the addition of a range of eco

friendly films to its robust product portfolio. Its plant in Mexico and USA began manufacturing Specialized PET films under the brand Asclepius™ that are a family of plain, treated, coated, high barrier, high bond and heat- sealable BOPET films based on 90% PCR polymer content.

The Company also manufactures high barrier metallized films that are considered as ultimate solution for packaging a wide array of products requiring extended shelf life apart from a host of applications in the textile and capacitor industries. AlOx coated transparent ultra-high barrier films manufactured by the Company are finding extensive use in stand-up pouches that offer see through features to consumers at the point-of-sale (POS).

Metallized films are manufactured at all film manufacturing plants of the Company, i.e. India, Dubai, Poland, Egypt, Mexico and USA with cumulative production capacity of over 78,600 TPA. This fiscal, an additional Metallizer with a capacity of 7200 TPA was installed at the Packaging Film Plant in Noida; whereas a superior high barrier metallizer with unique surface enhancing properties that boosts shelf life of products and capable of producing 7200 TPA, became operational in July 2018 in the Packaging Film Plant of Egypt. With this, the Company now has one avant-garde high barrier metallizer and fourteen state-of-the-art metallizers with plasma treatment facilities for ensuring better metal deposition.

Supplementing the existing brick-and-mortar business model of its global Packaging Films business, the company also forayed into online space with its e-commerce website FLEx- BuzzR that makes available the complete range of film offerings from its Poland plant to its European Union customers.

(ii) Flexible Packaging Business

The main products of this business are laminates made of various combinations of Polyester, BOPP, Poly, Metalized & Holographic films and others in roll form or various preformed pouches & bags of several sizes and profiles; and laminated flexi-tubes. Also aligned with the core business of Flexible Packaging are allied activities involving manufacturing of packaging and converting machines; rotogravure cylinders, flexo-printing press; flexo-polymer plates, elastomers & sleeves; inks & adhesives and holographic materials.

The Cylinder Business of Uflex, with a capacity to manufacture 1,08,000 cylinders per year,

expanded its business with the installation of a fully automatic Laser CNC Die Cutting Line at its Noida facility. This Line produces flat Metallic Die plates & Rotary Dies used for stamping application; and male-female dies used for hot foil & embossing applications in the Packaging Industry.

The Company has the technical ability, and innovative skills to engineer flexible packaging solutions with optimized barrier properties, superior aesthetics, enhanced functionalities; high eco-friendliness and infallible brand protection features. The Company is one of the global leaders producing bespoke world class flexible packaging solutions. The guiding vectors of the Companys Business Strategy are:

• Innovation to create value added differentiation;

• Proximity to customers;

• Speed to market reach for reaping the first mover advantage;

• Ability to offer end-to-end solutions across the entire flexible packaging spectrum;

• Ability to execute any quanta of order and ensuring just-in-time deliveries anywhere across the globe.

The company currently offers flexible packaging solutions for the entire spectrum of product types which includes solids, semisolids, powders, granular materials, viscous fluids, pastes and gels. With the commencement of Aseptic Packaging Material manufacturing plant in year 2017 at Sanand in Gujarat, offering packaging solutions for non-aerated liquid products and capacity to manufacture 7 billion packs per annum, the Company has completed the entire bouquet of product offering.

On the road to Industry 4.0, Engineering Business of Uflex launched Industrial Internet of Things (llOT) enabled Converting Machines - top of the line Extrusion Coating & Lamination machine ‘Ex Lam 400 designed with high line speed of 400 meters per minute (mpm) to handle thin and thick laminate; Solventless Laminator Machine ‘Super S-1300; and Gearless CI Flexo Printing Press ‘Elisa with high automation level in the form of sleeves, anilox removal system and efficient ink washing system, making Uflex the first ever Indian company to offer it.

A whole new range of machines were also developed for Aseptic Liquid Packaging, namely Aseptic Brick Type Packing Machine and

Aseptic ESL Flexi-Pouch Machine; besides the New Generation Collar Type Servo Driven Machine ‘Uflex FFS-CTSD and Linear Pick Fill & Seal Machine.

At Chemical Business of Uflex, the cumulative capacity of ink and adhesive manufacturing plant at the end of FY18-19 was 58920 TPA. This was due to an addition of 480 TPA in its Noida Ink plant alongwith de-bottlenecking and process improvements.

Production began in full scale, this fiscal, in the latest plant added to Uflex Holography business in Jammu. In FY18-19, it further expanded with the set-up of its new Label Flexography Line in Noida with a capacity to produce 40,00,000-45,00,000 sqm annually. Equipped with advanced Gallus and Edale presses, production in this line too started by the end of March 2019. In its bid to develop brand protection solutions against counterfeits, a new substrate Holography PVC/ PVDC coated film was commercially launched for Pharma industry as an anti-counterfeiting solution and supplied to leading drug-makers Sanofi and Alkem. With a client list ranging from Samsung India Electronics, Tata Steel, Volvo, Eicher, ITC, Indian Oil and Jawaharlal Nehru University, Uflex Holography business supplied to 770 customers in FY18-19.

Reaffirming its commitment towards a greener future and making its packaging division a zero discharge unit, Uflex installed latest recycling machine with advanced technology to convert Multi-layered Plastic (MLP) into Granules, at its Noida plant. The company also commissioned its new Pyrolysis Plant at its Noida facility; earning it the distinction of first such plant in North India. Pyrolysis is a process converting Waste to Fuel by chemically decomposing organic materials at elevated temperatures in the absence of oxygen. The pyrolysis plants two reactors at Uflex Noida unit can convert 6 tonnes of discarded waste material thats generated every day from printing, unused trim, laminates, tubes and other unprocessed material into liquid fuel, hydrocarbon gas and carbon black. Thus at the end of the process, the entire waste is converted into three forms of fuel, which is further utilized in manufacturing processes.

(iii) Aseptic Liquid Packaging Business

Asepto, the Liquid Packaging Brand from Uflex, within a short span of its launch in 2017 has created a radical shift in the aseptic beverage packaging market. The shift is not only

packaging process oriented, but also a complete change in thoughts that is likely to pave the way for packaging in the subsequent years. Asepto has developed a strong customer base spanning across all three promising segments domestically including- Dairy & Dairy Products, Juices, and Alcoholic Beverages. Asepto has given a novel dimension to aseptic liquid packaging market that helps companies create brands by mere differentiation in packaging, an unprecedented move to say the least.

The holographic aseptic packaging developed by Asepto overwhelmed the market with its spark of holographic innovation. Fresca Foods Pvt. Ltd., Indias leading juice manufacturer became the first juice brand to launch its 200ml Tropical Premium mix in holographic packaging in India, by joining forces with Asepto. The packs hit the retail shelves in August 2018. On the first day of its market launch, the brand was able to bag a massive order for the upcoming season. This truly brought forward the power of Aseptos aesthetics.

In the following months, juceika from sms International Beverages Pvt. Ltd launched all their juice variants in Asepto Spark holographic packs. The wave of holography shaped the domestic market and brands started looking at opting for holographic options with a motto to stand out.

Recognizing our commitment to innovation in aseptic packaging, Asepto Spark by Uflex received ‘The Economic Times Polymers Awards, 2019, Excellence in Packaging -Beverage, Large Enterprise for Fresca Packs, showcasing Asepto Sparks brilliance to spearhead a products packaging based on holographic effects.

Some of the updates of product innovation and launches of company and its subsidiaries :

I. Uflex developed Satellite Thermal Radiation Insulation Film for Indian Space Research Organization: FlexFilms, the global film manufacturing arm of Uflex, has developed a specialized film for passive thermal control of spacecraft components for Indian Space Research Organization (ISRO). The film was as per ISROs specifications that covered electro-optical and physical terms like solar transmittance, infrared emittance and thickness of coating in nanometers on both sides of the substrate and a wide- spectrum working temperature of -150 to

+ 120 degrees. The new film was subjected to space environmental tests and it passed all parameters and tests to qualify for space application.

II. Uflex became Indian Banks Association Certified Security Printer: Uflex was certified by the Indian Banks Association (IBA) as a security printer for printing MICR instruments for its member banks. Since Uflex possesses all required systems, technology and infrastructure that MICR (Magnetic Ink Character Recognition) requires the Indian Banks Association conferred this certification to Uflex. With this, a huge window of opportunity for security printing of MICR instruments both in India and overseas have opened up for Uflex.

III. FlexFilms Forayed into Online Space with the Launch of E-Commerce Website FLEX-BuzzR: With the launch of Flex- BuzzR, the first of its kind e-commerce website by FlexFilms, the company has added yet another feather in its cap! Flex- BuzzR offers the complete range of film product portfolio from its Poland plant, available to customers in European Region, at a click of a button. This B2B platform www.flexbuzzhour.com has been launched with the intent to supplement Flex Films existing brick-and-mortar business model. Besides offering its portfolio of films, the website also allows customers to browse product catalogue with its description and applications. Eventually customers have the option to create their cart for which a formal order gets generated. It offers unique opportunity for European customers to not just pick up readily available rolls, but also order as per their customized need at the same time. Active production site in Poland offers unique opportunity for European customers to not just pick up readily available rolls (Quick Pick Order) of what they like, but also order as per their customized need at the same time (Made to Order).

IV. Asepto Marked its Entry into Retail Shelves with Fresca Juice Holographic Packs: Asepto Spark, the aseptic liquid packaging brand by Uflex with unique and striking effects created through holography, was commercialized and hit the retail stores in India for the first time. It was used to launch new Fresca and Guava. The sparkling holographic packs of Fresca manufactured

by Asepto served as marketing differentiator for the brand and it helped Fresca bag several orders for the festive season. Since its launch, Asepto Spark has received tremendous response from international markets like the Middle East, Europe, Asia, Africa, and China.

V. New Optika Transparent Flexi-tubes, a Boon for Global Cosmetic Brands: This Flexi-Tube portfolio has all the advantages of multi-layered flexible laminates to perfection. Uflex Flexi-Tubes offers plethora of aesthetical benefits to brands like 360 degree printing, utilization of the entire tube torso for branding from shoulder to crimp, high definition graphics, imparting metallic effects using advanced registered printing, registered lamination, superior surface finish using matte & gloss effects and electron beam (EBM) coating for ultrahigh gloss among several others.

VI. US Patent Grant to FlexFilms for Breakthrough BOPET Film Used for Alu Alu Blister Pack: FlexFilms (USA) Inc has been granted United States Patent 10131122 covering entire categories of Formable Films that includes one or more BOPET layers used in Alu Alu blister packaging. With the patent issuance, the company has got exclusive right of manufacturing and sale of this special BOPET film in USA for the next 20 years. The patent is also filed in Europe and India which gives us the right to its sale in Europe and India. This patent has a uniqueness of forming characteristic of BOPET film in Z direction during packaging application. With this innovation in pharma packaging and particularly for Alu-Alu blister laminate structure, our 100% environment friendly BOPET film has completely replaced the carcinogenic PVC which when recycled, reprocessed or comes into direct contact with sunlight; releases poisonous gases that are hazardous for human health.

VII. Swiss Ordinance Compliant Inks Developed as a New Solution for the Pharma Industry: In a constant bid to develop new products to serve its customers, Uflex Chemical business launched a new PU based NTNK ink series Flexglide 1817 which is complaint with Swiss Ordinance. Flexglide 1817 caters to the special needs of blister packing for Pharma Industry as it meets the unique properties desired from inks. Alu Alu is an

excellent multi-layered structure designed for packaging of extremely sensitive range of pharmaceutical and generic medicines, which are highly hygroscopic and light sensitive in nature. Alu Alu packaging protects packaged product against humidity and contamination especially those which tend to absorb moisture from the air. It also offers excellent adhesion on variety of substrates - PET, BOPP or Nylon- besides excellent solvent release, thereby ensuring medicine efficacy.

VIII. New Products in Pharma Packaging for the Indian Market: Uflex steered the path of innovation with its fresh range of packaging products designed especially for the Indian Pharmaceutical Market-

a. Development of a revolutionary PET based Alu-Alu Packaging making it an indigenous product since in conventional Cold Form Laminate, the PVC and BON have to be imported into India. Alu-Alu packaging provides sustainability and cost optimization over conventional Cold Form Laminate.

b. Development of 20-micron pinhole free soft tempered Fast Tear Strip Foil which contributes in providing higher yield gain of 36% leading to tremendous cost savings for pharma companies.

c. Child Resistant & Senior Friendly (CRSF) Foil, protects unintentional damage to the foil which is common with conventional blister foils that get easily tampered during handling, affecting the formulation. CRSF Foil will help Uflex bridge the current existing gap.

Ix. FlexFilms Launched FLExMET- PROTECT™ F-HBP-M and FLExPET™ F-HPF Films with Superior Properties:

The approach to serve the ever changing needs of customers alongwith the assurance of providing superior quality, enabled FlexFilms to launch new state-of-the-art BOPET Films i.e., FLEXMETPROTECT™ F-HBP-M and FLEXPET™ F-HPF.

a. FLEXMETPROTECTTM F-HBP-M is a

metalized biaxially oriented polyester (BOPET) film with a superior gas barrier that offers high moisture and oxygen barrier for virtually all applications, including aluminium foil replacement. High barrier comes from BOPET film

technology, with high optical density specifically suitable for most flexible packaging product offerings. This film is 100 percent web inspected using advanced web metalized surface inspection system. The film is of great use in shipping moisture sensitive items in multi-layered pouch.

b. FLEXPETTM F-HPF, is a first-of-its kind biaxially oriented nylon replacement (BON) film, made with a newly developed patent pending technology that offers important features of thermoforming performance, high puncture resistance and flexural fatigue strength. This technology is suitable for many applications, thereby providing a replacement for biaxially oriented nylon (BON) in many applications. F-HPF is far more superior to nylon (BON) with fewer pin holes, in terms of thermoform-ability whereas its puncture and flex crack resistance is at par with BON. Value propositions like better water resistance availability and compatibility with wide range of inks and adhesives makes it cost effective with greater yield per unit area, as compared to BON. The property of thermoformability allows it to mould itself into the shape of item and is of great use in e-commerce packing of 3D objects.

x. FlexFilms India launched a host of films with cutting edge technology and properties, embedded in each.

a. F—PRP, a 12 Micron BOPET film is designed to meet the critical needs of bulk packaging. It is ideal to use for low density, high volume packaging like large bags of atta, sugar or rice packaging.

b. F-TFP a thermofoming film with 15 micron, 23 micron and 36 micron has been developed for semi-rigid packaging, especially suitable for ready-to-eat food packaging, take away food items. This film can replace OPA film where OTR barrier is not important and modified version of F— TFP is available with improved OTR barrier property.

c. F-FTC, the Fast to Tear film, overcomes the challenge of tear- ability in multi-layer packaging which makes the films easily tearable in

both directions, enabling consumer ease of accessing the product. This film is applicable for sachets and onetime use food packaging like ketchup, confectionaries and snack.

d. PETG Resin, an amorphous polymer that does not crystallize making it an excellent replacement for transparent polymer was launched for Indian markets, this fiscal. PETG Resin offers high performance properties including transparency, clarity, gloss, glaze and printability in applications. PETG acts as a replacement for transparent polymers in applications like personal care, signage, sheet extrusion, LED profile, medical devises, home appliances, consumer goods and 3D print technology.

e. A range of Ultra High Barrier BOPP films were launched to suit brand owners needs. These include UltraHigh Oxygen Barrier Metallized BOPP film B-TUO-M that has been developed has outstanding barriers with less than 10 oxygen transmitting rate (OTR) and sealing functionalities with excellent metal bond strength & metal cracking resistance; and superlative substrate for extrusion lamination; whereas Ultra High Barrier & High Seal Strength Metallized BOPP film B-TUH-M has outstanding barriers with less than 15 OTR and high seal strength with excellent hermetic seal; better metal bond strength & nitrogen flushing capabilities.

f. The challenge of sustainable extrusion bond, barrier & seal performance faced by the flexible packaging industry is addressed by Ultra-High Barrier with robust seal performance & high metal bond metallized CPP film ‘C-CLM; as it replaces three layers with two, thereby enabling advantages of lesser carbon foot print.

xI. Specialized Formulation that Renders Barrier Packaging for Edible Oil Re- processable: Uflex has developed a customized formulation that renders barrier packaging for edible-oil re-processable despite the presence of Nylon and/or EVOH. Edible oil forms over 30 per cent of the INR 4.34 trillion packaged food market in India, thus offering a huge market to tap into, for flexible packaging requirements of all edible-oil players worldwide.

XII. Uflex Transforms the Packaging for Rasna Fruit Powder Concentrate: Uflex created a four-tier profiled packaging structure for Rasna Fruit Powder concentrate comprising Polyester/ Aluminium Foil / Polyester / Polyethylene. While the foil imparted perfect barrier to water vapour and oxygen, two layers of polyester in the structure was incorporated to lend sturdiness to the pouch carrying 750 grams of powder concentrate ensuring that the side handle does not snap while holding the pack. A dispensing spout fused with the laminate makes it enormously convenient for the consumers to pour out just the required quantity of fruit powder concentrate.

xIII. A 100% Bio-degradable Premium Lens Transfer Paper Developed Using Fresnel Lens: The Holography business of Uflex has developed premium Lens Transfer Paper / Paperboard for carton packaging, with the novel use of different technologies of Fresnel Lens. The dominance of registered printing on the exclusive lens carton provides a premium 3D effect and has transformed the appearance of the product, both in terms of aesthetic value and brand protection. The product boasts of not only being environmentally friendly but is also 100% biodegradable and decomposes in soil along with the main substrate of paper/board.

xIV. New Solvent-less White Adhesive for Convertors, a reason to cheer: Chemical Business of Uflex launched a general- to-medium performance 2K solvent-less PU adhesive FLEXBON 901A/901W that enables laminators and brand owners to reduce their application cost and substantially enhance their performance by partially replacing white inks and meet consumer demands. Other key features include good adhesion; suitability for low temperature applications (35-45 degree celsius); and the ability to provide fast decay of primary aromatic amine.

xV. UV LED Sheetfed Inks FlexGreen that Assures Energy Efficiency: Uflex Chemicals business launched FlexGreen, a series of UV-LED process colors for sheetfed offset printing on coated paper, paperboard and Met-Pet Board. It exhibits unique properties such as high color strength and gloss besides quick curing. It also offers excellent ink-water balance and

press stability besides excellent print quality with low odour. Due to its high strength, the desired ink densities are achieved with lesser ink release, thus providing superior mileage. Flexgreen brings substantial savings to printers by way of lower energy costs and reduced carbon footprint.

XVI. Cylinder Business of Uflex Launched Metallic Dies for Hot Foil Stamping & Embossing on Printed Labels & Packs:

Cylinder Business launched new Metallic Dies, produced at it latest and fully automatic CNC Die manufacturing line, in the form of metallic plates & rollers with embossed 3D image engraved on it. The Die Plates can be produced on flat bed system and can also make Rotary Dies. The image gets superimposed due to combined effect of mechanical pressure or temperature on the printed substrate leading to an embossed image derived on printed labels & packs. The most common use of metallic dies will be for the label industry.

xVII.Engineering Business Strengthens its Product Portfolio: New machines were developed and existing ones modified by the Engineering Business of Uflex, to suit the needs of the customers.

a. Extrusion Coating & Lamination machine Ex Lam 400 has been designed with line speed of 400 meters per minute (mpm).

b. A design copyright was received for creating first time globally Rotogravure Printing Machines for

curing of special purpose UV coatings with LED lights having over 60 to 70 microns of enhanced build-up of material on defined areas, to give an embossed feeling on plastic or paper substrate.

c. Rotary FFS Machine which was being used for mouth fresheners etc. was modified and upgraded to be used for spices, coffee and other powdered products, at much higher speeds.

d. A new version of Slitter machine with Turret on re-wind for better productivity was developed and launched.

e. A five hood 1650mm wide web Coating Machine was developed.

xVIII. Chemicals Business of Ulfex Launched New Adhesive for High Speed Lamination Machines: Solvent-free

Adhesive 777 A/C, a unique and universal product that offers excellent performance on various substrates including plastics, was launched by the Chemical Business of Uflex.

5. Certification & Accreditation

Certifications were awarded to manufacturing facilities across various businesses of Uflex and its subsidiaries in FY 2018-2019, reiterating the companys commitment to continuously improve operational efficiency and deliver its overall business objective to stakeholders.

Packaging Business

• BRC Certificate of Conformity B00493 to Noida packaging plant for Global Standard for Packaging and Packaging Materials.

• SGS System Certificate ISO 22000:2005 to Jammu packaging plant for Manufacturing and Supply of printed and flexible laminated rolls and pouches.

• SGS System Certificate ISO 9001:2015 to Jammu packaging plant for Manufacturing and Supply of printed and flexible laminated rolls and pouches.

• DNV-GL Management System Certificate

FSSC 22000 to Jammu packaging plant for manufacturing of printed films, printed/unprinted laminated rolls & pouches for food applications.

• DNV-GL Management System Certificate

ISO 9001:2015 to Jammu packaging plant Manufacturing of packaging films, laminated rolls & pouches in unprinted/ printed forms.

Packaging Film Business

• BRC Global Standard for Packaging and Packaging Materials Certificate for Packaging Films Business in India.

• Eagle Registrations Inc ISO 9001:2015 Certificate for Flex Films (USA) Inc.

• Eagle Registrations Inc Green Kingfisher Certification for Flex Films (USA) Inc.

• American Institute of Banking Consolidated Standards for Non-food Contact Packaging Manufacturing Facilities for Flex Films (USA) Inc.

• Bureau Veritas ISO 9001:2015 Certificate for FLEX AMERICAS S.A. de C.V., Mexico.

• Bureau Veritas ISO 14001:2015 Certificate for FLEX AMERICAS S.A. de C.V., Mexico.

• BRC Global Standard for Packaging and Packaging Materials Certificate for FLEX P FILMS (EGYPT) S.A.E., Egypt.

• Intertek ISO 22000:2005 Certificate for FlexFilms EUROPA Sp. Z.o.o., Poland.

• Intertek ISO 140001:2015 Certificate for FlexFilms EUROPA Sp. Z.o.o., Poland.

• Intertek ISO 9001:2015 Certificate for FlexFilms EUROPA Sp. Z.o.o., Poland.

• Intertek OHSAS 180001:2007 Certificate for FlexFilms EUROPA Sp. Z.o.o., Poland.

• Intertek OHSAS 180001:2007 Certificate for FlexFilms EUROPA Sp. Z.o.o., Poland.

Aseptic Liquid Packaging Business

• Forest Stewardship Council Certificate

• HALAL India Certificate

Chemical Business

• DNV-GL Risk Management System Certificate ISO 31000:2018.

• ISO 45001:2018- A new international standard that provides a framework for an organization to manage risks and opportunities to help prevent work related injury and ill health to workers.

• ISO 14001:2015 for conforming to the Environmental Management System Standard.

• ISO 9001:2015 for conforming to the Quality Management System Standard.

Cylinder Business

• DNV-GL Management System Certificate ISO 9001:2015.

Holography Business

• TUV Rheinland Certificate of Compliance Uflex/2015/002 - Hologram Security & Safety Management Standard

• DNV-GL ISO 14001:2015 Certificate for design and manufacture of security hologram, paper labels including holographic film and hologram laminated product

• OEKO TEX Certificate 2018-19 for Polyester Films used for sequins, hot melt films, fancy yarns, stamping foils & glitter powder in lacquered coated colours

• Authentication Solution Provider Association Certification of Membership 2018-19

6. Hall of Fame

Some of Awards and Accolades that were conferred upon Uflex and leadership during the financial year

2018-19 are:

• AIMCAL 2019 Product Excellence Award to BOPET film F-TBF-M-08.

• The Economic Times Polymers Awards 2019 for Excellence in Packaging Beverages - Large Enterprises to Asepto Spark Fresca.

• Asias Most Trusted Company 2018 by International Brand Consulting Corporation, USA.

• Best Food Processing and Packaging 20182019 Brand to Uflex by The Economic Times.

• Six titles at IFCA Star Awards 2018 for Packaging Excellence.

• Seven wins at SIES SOP Star Awards 2018 for Packaging Innovation & Product Development.

• Golden Cylinder Award 2018 by Gravure Association of The Americas for Haldirams Classic Salted Pack.

• Uflex authorized as Economic Operator Tier 2 (Importer & Exporter) by Central Board of Indirect Taxes and Customs.

• Flex Films Noida struck GOLD at the National Award for Manufacturing Competitiveness 2018-2019 hosted by International Research Institute of Manufacturing.

• Special Jury Award at 2nd CII National Competition on SPC towards Zero Defect to Chemical Business.

• Chemical Business of Uflex won the 1st International Recognition from Royal Society for Prevention of Accidents, UK.

• Growcare Excellence Gold Award for Innovative Idea / Project Manufacturing Award to Chemical Business.

• Apex Excellence Gold Award to Chemical Business.

• Exceed Gold Award to Chemical Business by Ek Kaam Desh Ke Naam.

• Exceed Platinum Award to Chemical Business by Ek Kaam Desh Ke Naam.

• FAME Rashtra Vibhushan Platinum Award to Chemical Business.

• Frost and Sullivan Award 2018 for Sustainability to Chemical Business.

• Frost and Sullivan Award 2018 for Safety to Chemical Business.

• National CSR Leadership Congress & Awards for Best Practices in Water Management.

• Chemical Business recognized with Behavioral Based Safety Implementation in Indian Industry Award by The Forum of Behavioral Safety.

• Uflex HR won awards for Innovative L&D Practices and Organization with Best ER

• Awarded Excellence in HR Practices and Reward and Recognition titles at People & Culture Summit 2018.

The key to successful leadership today is influence, not authority." - Ken Blanchard

The leadership team of Uflex was honored for their outstanding contribution to Packaging

Industry in FY2018-2019:

• Uflex Chairman & Managing Director Mr. Ashok Chaturvedi conferred with Father of Flexible Packaging at 1st Global Conference on Plastic & Packaging 2019.

• Mr. Ajay Tandon, President- Engineering & New Product Development at Uflex adjudged as Business Leader of the Year Award by BTVI, endorsed by CMO Asia.

• Mr. Jagmohan Mongia, President - Flex Films India awarded with CEO of the Year title at 13th Employer Branding Awards.

• Mr. Dilip Kumar Dosi, Joint President - Production & Operational Excellence, Flex Films India presented with Manufacturing Leadership Award by BTVI, endorsed by CMO Asia.

7. Financial and Operational Performance -

Overview

The summarized financial results are given hereunder:

Summary of results:

(Rs. in Crores)

2018-19

2017-18

Consoli-dated Stand-alone Consoli-dated Stand-alone
Total Income 7974.80 4242.52 6822.91 3894.56
Profit before Finance Cost, Depreciation & Tax 1007.53 480.57 902.58 476.15
Profit before Tax 408.75 72.70 353.90 110.65
Profit for the year 313.84 51.66 310.48 100.92

8. Opportunities; Key Trends & Threats Opportunities

Flexible packaging is one of the rapidly growing segments of the packaging industry, combining the highest qualities of film, paper, and aluminum foil to provide a wide range of protective characteristics. These flexible packages can acquire the shape of

a pouch, liner, bag or overwrap and it can resonate with any type of packaging and offers numerous advantages over rigid packaging. It helps in extending the shelf life of various products, particularly food, and has a positive sustainability profile. Flexible packaging also requires lower energy to produce and to transport, and generates lower quantities of greenhouse gases. Additionally, it also offers convenience to consumers as it is light-weight, easy to open, carry, store, and reseal. All the major traditional benefits of rigid packaging can be realized from flexible packaging with the added advantages of lower cost and greater flexibility. Rising demand for cost-effective packaging solution which provides the ease of preserving and easy distribution of food, beverages, pharmaceuticals and other products which require extended shelf life is accelerating the demand for flexible packaging.

One of the important factors driving the growth of flexible packaging market is the growing inclination of consumers towards convenience products. The changing consumer preferences due to busy lifestyles and smaller household units demand products that are easy to open, store, use, carry, and dispose, and that cater to their on-the-go lifestyles. This in turn is favoring product packaging that complements the modern lifestyle. With convenient packaging, on the go options can be utilized for wide range of products. Convenient packaging is not just limited to food and beverages, but finds growing applications ranging from healthy products complementing fit lifestyle choices to prescription and personal care items. Packaging convenience is a key purchasing motivator for consumers. It affects their preference towards a particular type or design of packaging and influences their behavior.

The flexible packaging products such as boil-in- the-bag, bake-in-the-carton, mix-in-the-pouch, and serve-from-the-tray are the major examples of flexible packaging products offered from consumers point of view and avail the kind of convenience consumer require. Consumer packaged goods companies are responding to this demand by creating more snacking options that are smaller sized. Thus, the changing consumer lifestyle and consumption habit will drive the adoption of flexible packaging in several end user sectors such as food and beverages, pharmaceuticals, and home and personal care.

Key Trends for the flexible packaging industry in FY 2019-20 are:

Sustainability: Shifting demographics and

consumer preferences are driving the demand for more sustainable solutions, in flexible packaging and far beyond. Negative publicity around ocean

gyres and plastic-filled beaches only add to the urgency to increase recyclability, curbside collection, sorting capabilities and finally innovation to increase demand for recyclable materials. Rigid-to-flexible conversion, with its huge sustainability benefits, has been a trend for some time now. Add to all of these the opportunities resulting from more cost-effective and technologically feasible recyclable packaging solutions available today, and sustainability is at the top of everyones list.

The Quest for Cost-Cutting Alternatives: Flexible packaging is used in a wide variety of industries — most notably the food and beverage and pharmaceutical sectors, as well as any other field dealing with consumable or perishable items that have specific or unique needs. Its not hard to see why — just about every actor in these industries is on a constant quest to reduce overhead and cut down on ongoing expenses. Product packaging is an obvious place to begin.

Aside from providing more advanced features and greater utility, not to mention enhanced reusability, flexible product packages are also less resourceintensive to manufacture, which means concerned parties can easily reduce energy expenses. This is also a win for shipping and freight costs, since more flexible packages take up less space in vehicles than more rigid options.

In some cases, the fabrication process for flexible packaging can even be performed on-site, rather than trucking in more traditional packaging materials.

Higher Performance Needs for Premium Products:

Part of the reason flexible packaging is catching on is that the material science world is always finding new ways to shrink the "gauge" of plastic films and other items relative to their strength. The idea is to pursue ever-thinner and ever-more economical materials that dont sacrifice tensile strength. But performance is of equal or even greater concern for certain types of premium or volatile products. Flexible packaging shines here as well.

Consider the rising popularity of "premium" organic food items and beverages, cosmetics, and baked goods that have fewer preservatives, synthetic chemicals, conflict materials, and other questionable additives. These products still must travel significant distances between the manufacturing facility and the end user, and that means companies must address the items increased susceptibility to surrounding environments — which is unnecessary with more preservative-laden products — through clever packaging innovations.

To that end, flexible packaging pioneers are applying their materials and techniques to modified

atmosphere packaging (MAP). This type of packaging helps account for the higher rate of spoilage among organic and more natural products, increasing their shelf life and allowing them to survive transit in good condition. In the past, when a product required packaging with more robust barrier properties, glass and aluminum were the go-to packaging materials. Such materials are now being supplanted by advanced, reusable plastics and high-performance, bio-based films.

Consumer Time Sensitivity and Convenience:

Theres perhaps no force in industry more influential than consumer demand. And for decades now, people throughout the world have indicated their preference for more sustainable and convenient packaging. The higher demand for frozen, ready-to- cook meals is just one example of this. And the trend toward busier, more mobile lifestyles has brought about high demand for food products that are easy to carry, simple to open, and require little prep time. Demand for packaged produce is quickly outpacing demand for unpackaged produce. Pre-sliced and pre-prepared foods are driving demand for more cost-effective modified atmosphere packaging, which is further fueling demand for more flexible, advanced materials.

E-commerce: E-commerce is driving practically all retail growth and, in turn, its impact on flexible packaging. According a research conducted by Food Marketing Institute (FMI), ( https://www.fmi.org ). the online grocery market alone is expected to reach $100 billion by 2022. These numbers translate to major opportunities for brands to secure market share through online sales, but it also means their packaging solutions must meet higher standards for product protection, durability and other performance factors.

E-commerce is vastly different from traditional, in-store retail sales, and so are the packaging requirements for each. Many flexible packaging solutions are designed to control important elements like moisture, air, temperature and light. Food pouches, for example, feature high-performance materials that safeguard and preserve perishables, resist the threat of tears and punctures, and offer tamper-proof options. There are also multiple options for shipping protection, including stretch wrap, poly mailer bags and protective air pillows.

Threats

The presence of large number of players in the market and entry of new entrants in the global flexible packaging market is projected to intensify the market competition. The market competition is seen on the basis of price, quality, services, and innovation. The leading players in the market putting efforts

by introducing innovative and bio-based packaging materials.

Conversely, some restraining factors that are projected to obstruct the growth of the flexible packaging market. One of the key factor is the use of multiple layer of various types of material are used that makes recycling difficult and is complicated procedure to deal with. In some of the cases plastic and metal are used together for flexible packaging which makes the recycling difficult, as plastic can be recycled is a much easy manner than metal. Moreover, the environmental norms and regulations are getting restrict day by day, which is also hindering the growth of flexible packaging market at the global level. To prevent themselves from being flagged by various stakeholders, flexible packaging companies have to account for designs that address environmental issues, end-of-life disposal, and reduction of greenhouse gas and water footprints. This could prove to be a costly process.

Flexible packaging companies not only have the pressure to innovate in their offerings but at the same time must also ensure that their products are designed to protect the packaged contents from the external environment. Choosing a packaging material that can survive factors such as sunlight, UV rays, high and low temperature, humidity, moisture, and rain is a herculean task. Also, the environmental conditions vary from region to region. Hence, to design and implement a packaging material that meets all these parameters is most likely to put flexible packaging companies in a big dilemma.

Further, Anti-plastics sentiment continues to rise, both in absolute numbers and relative to perceptions of alternative materials. Consumers are being exposed to media and publications showcasing the negative aspects of one-time-use plastics. Stringent government regulations regarding polymer and recyclability of packaging material may hinder the flexible packaging market growth

9. Future Outlook

Globally, the demand for flexible packaging has increased at a rapid rate, as it can be used for various purposes. Moreover, with advancements in packaging material and packaging technologies the demand in the flexible packaging has also grown at a significant rate. The demand for flexible packaging is also seen in various industries such as food and beverages, consumer goods, pharmaceuticals, and many others. Thus, the growing use of flexible packaging in different industries is projected to boost the demand for flexible packaging and expand the flexible packaging market.

According to "Global Flexible Packaging Market Forecast 2019-2027", the flexible packaging market

in terms of revenue is estimated to grow to $325,391 million by 2027 at a CAGR of 4.48% between 2019 and 2027. Also, the flexible packaging market in terms of volume is estimated to grow to 29,856 kilotons by 2027 at a CAGR of 3.87% during the same period.. The key factors that are responsible for the market advancement are:

• Cost-effectiveness & increased shelf-life of the product

• Downsizing of packaging

• Rising demand from end-users

However, the growing e-commerce sales are subsequently creating the demand for safe packaging for the entire supply chain duration. Also, increasing demand from end users like food & beverages, healthcare, cosmetics & toiletries, e-commerce and others for products packaging is driving flexible packaging market growth. However, strict regulatory measures are some factors hindering the growth of the market. Replacement of conventional packaging by modern flexible packaging is providing ample growth opportunities in the coming future. (Source : https://www.inkwoodresearch.com ).

The global Flexible packaging market by region has been segmented into North America, Europe, Asia-Pacific and Rest of the world. This market has seen a substantial growth over the past few years. Asia-Pacific has accounted the largest market for Flexible packaging market followed by Europe and North America. Asia-Pacific region is comprised of countries such as China, India, and Japan, which are the leading exporters of goods to various parts of the world. The increasing exports from these countries is leading to the growth of the flexible packaging market. The booming e-commerce market in the region is also contributing to the growth of the flexible packaging market. The e-commerce market is boosted by the increasing internet penetration.

Uflex Limited being a fully integrated end-to-end flexible packaging materials and solution company, the window of opportunity is promisingly big. Innovation to create value added differentiation; ability to execute any quantum of order; ensuring just in time delivery anywhere in the globe and an enviable speed to market reach to reap the first mover advantage puts the company in a good stead to further widen and embolden its business prospects in the coming years.

10. Internal Control System, their Adequacy and Operative Effectiveness

The Company has laid down internal financial controls. The policies and procedures adopted by the Company ensure orderly and efficient conduct of its business, safe- guarding of its assets, prevention

and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable information.

The Company has also laid down an adequate system for legal compliances. It has created appropriate structures with proper delegation of duties and responsibilities for employees at each level on enterprise basis which ensures proper adherence and compliance of such systems.

Both the Internal Financial Control and Enterprise Legal Compliance Systems are subject to review by the Management in respect of their adequacy and operational effectiveness. These systems in turn are also reviewed by the Internal Auditors, Statutory Auditors and the Audit Committee. Finally, the Board of Directors of the Company also reviews and takes note of them.

11. Risk Management

Risk is an integral part of business. Risk can be broadly categorized into two categories: (a) Risk Associated at Transactions Level; (b) Risk Associated at Decision Making Level.

Risks Associated at Transactions Level

The Company has formalized & documented a detailed Manual on Internal Financial Control covering each activity involving Financial and Operational transactions, the probable risk underlying those activities and the control tools to prevent such risks either through manual or automated process.

Similarly, the Company has also formalized & documented a detailed Manual on Legal Compliance System listing all applicable laws, defining of responsibility centres for necessary compliances thereof and the compliance tasks to be performed under each applicable laws.

As Management is primarily responsible for the designing, implementation, maintenance, adequacy, monitoring & control mechanism and the operating effectiveness of the Internal Financial Control & Legal Compliance Systems, the Company has created appropriate structures with proper delegation of duties and responsibilities of employees at each level on enterprise basis for the compliances thereof. They also review periodically the adequacy of the enterprise level Internal Financial Control and Legal Compliance System in view of changes in business environment, technological changes & regulatory & legal changes and also based on the suggestion by the Internal Auditor, Statutory Auditors & Audit Committee.

Both the Internal Financial Control and Legal Compliance System are subject to review by the

Internal Auditor on quarterly basis. They review the adherence, adequacy and effectiveness of the Internal Financial Control operating in the Company and Legal Compliances by the Company of the applicable laws. Based on their review they submit detailed reports covering their suggestions, recommendations & observations to the management and the Audit Committee.

The detailed Audit Reports of the Internal Auditors are reviewed by the Audit Committee comprehensively with the Management and the Internal Auditors. Based on their review, they make necessary directions if any to the Management and / or to the Internal Auditors for the actions / steps to be taken by them. The brief of the report is also given to the Board by the Chairman of the Audit Committee.

Risks Associated at Decision Making Level

All the Financial, Operational and Legal risks associated at transactions and operational levels are taken care through the above systems. In addition to these, there are other risks which arise during the course of decision making on strategic and corporate financial matters of the Company.

The Company has identified following nature of risks which may be associated with the decisions on Strategic & Corporate Financial matters of the Company.

• Political, Social and Economic Risks

• Market Risk

• Technology Selection Risk

• Capital Structuring Risk

• Exchange & Interest Rate Risk

The management of the Company evaluates the above risks before taking any decision on strategic & corporate financial matters. A detailed report is submitted by the management on these matters to the Audit Committee and the Board for their review.

On the basis of the aforesaid Risk Management Process followed by the Company the Risk Management Committee & Audit Committee review & evaluate in detail the establishment and adherence of the Companys Enterprise Risk Management System and also review & evaluate the adequacy and efficacy of the same.

The Board reviews the recommendation of the Audit Committee on the establishment, adherence, adequacy and efficacy of the Companys Enterprise Risk Management framework.

12. Companys Standalone and Consolidated Financial Performance & Analysis Results of Operations

(Rs. in Crore)

Particulars

STANDALONE

CONSOLIDATED

Year ended 314mar-19 year ended 314mar-18 year ended 314mar-19 year ended 314mar-18
Amount Amount Amount Amount
INCOME
Revenue from Operations 4220.97 3878.21 7957.22 6779.71
Other Income 21.55 16.35 20.71 19.98
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 4242.52 3894.56 7974.80 6822.91
expenditure
Cost of Materials consumed 2700.53 2370.70 4897.68 4033.05
Purchase of Stock-in-Trade 13.30 18.22 13.30 48.16
Changes in Inventories of finished goods, work-in-progress and Stock-in-Trade 0.63 (15.87) (32.99) (21.52)
Employee benefits expense 424.50 390.43 670.52 599.02
Other expenses 653.95 694.33 1449.73 1303.03
Expenses Allocated to Self Constructed Assets (30.96) (39.39) (30.97) (41.43)
Total Operating Expenses 3767.63 3418.42 6967.27 5921.31
EBIDT 480.57 476.15 1007.53 902.58

13. Significant Changes in Financial Ratios

During the year, on a consolidated basis there was no significant change in the financial ratios compared to the previous year. However, on a standalone basis, the significant changes in the financial ratios of the Company, which are more than 25% as compared to the previous year are summarized below:

Financial

Ratio

Standalone

Change

(%)

Reason for change

FY 2018-19 FY 2017-18
Net Profit Margin 1.2% 2.7% -54% Due to

increased

employee

benefits

expenses,

finance

cost and

depreciation

of new

projects

Return on Networth 2.4% 4.9% -50% Decrease in net profit due to low profitability

14. Human Resource Development/Industrial Relations

The Companys Human Resources (HR) philosophy has always been directed towards establishing and building a strong performance and competency driven culture with greater sense of accountability and responsibility. The Company has taken several

pragmatic steps for strengthening organizational competency through engagement and development of employees as well as installing effective systems for improving the productivity, quality and accountability at functional levels.

With the ever-changing and turbulent business scenario, the Companys basic focus is to upgrade the skillset and knowledge levels of the existing human assets by providing appropriate learning, training and development at all levels, motivating them to face the vagaries of business ecosystem in a VUCA world, inculcating the attitude for prompt and deft action and shouldering multifarious responsibilities demanded by the job.

The effort to rationalize and streamline the work force is a continuous process. The Company had 6664 permanent employees in Indian operations as on 31st March, 2019. The industrial relations scenario remained harmonious and conducive throughout FY 2018-19.

15. Environment, Occupational Health & Safety

Your Company is committed to conducting its operations with utmost concern towards the environment and ensuring a safe and healthy workplace for all employees. The collective endeavor of the Companys employees at all levels is directed towards sustaining and continuously improving standards of environment management, and occupational health & safety in an endeavor to meet and exceed international benchmarks.