Mar 31, 2018
1 COMPANY OVERVIEW AND SIGNIFICANT ACCOUNTING POLICIES
I. COMPANY OVERVIEW
The Company is a public limited company, domiciled in India and registered with the ROC, Delhi & Haryana under the Registration number 55-32166 dated 21st June 1988. Old Registration number has been converted into new Corporate Identification Number (CIN) L74899DL1988PLC032166.
Registered office of the Company is situated at 305, 3rd Floor, Bhanot Corner, Pamposh Enclave, Greater Kailash-I, New Delhi- 110 048 and Corporate Office at A-108-109, Sector-4, Noida, Uttar Pradesh-201301.
The Company is a leading Indian Multinational, engaged in the manufacture and sale of flexible packaging products & offers a complete flexible packaging solution to its customers across the globe.
2. EQUITY SHARE CAPITAL A AUTHORISED
The Companyâs authorised Capital is of Rs.34000.00 Lacs (Previous Year Same) distributed into 1,90,00,000 (Previous Year Same) Preference Shares of Rs.100/- each and 15,00,00,000 (Previous Year Same) Equity Shares of Rs. 10/- Each.
A Issued, Subscribed & Paid-Up
The Issued and Subscribed Capital of the Company as at 31st March 2018 is of Rs. 7228.42 Lacs, represented by 72284187 Equity Shares (Including 72701 Equity Shares forfeited) of Rs. 10/- each and the paid-up Capital as at 31st March 2018 is of Rs.7221.15 Lacs, represented by 7,22,11,486 Equity Shares of Rs. 10/- each as at 31st March 2018. The reconciliation of the Equity Share Capital of the Company is given as under:
b) RESTRICTION ON VOTING RIGHTS
The company has only one class of issued equity share capital as on the date of the balance sheet and each holder of equity share is entitled for one vote per share and right to receive the dividend, if any, declared on the equity shares.
c) DIVIDEND
The Board of Directors of the company has recommended a final dividend of Rs. 2.00 (Previous Year Rs.3.50) per share share aggregating to Rs.1741.10 lacs (Previous Year Rs. 3041.92 Lacs) (Including the dividend distribution tax of Rs.296.87 lacs (Previous Year Rs. 514.52 Lacs)) for the financial year ended 31st March 2018 subject to the approval of the shareholder in their ensuing annual general meeting.
1 Working capital facilities from banks are secured a) on first pari passu basis, by way of hypothecation of stock of raw materials, semi-finished goods, finished goods and book debts of the Company, both present and future, b) by way of second pari passu charge on specific fixed assets of the Company, situated at Malanpur (M.P.), Jammu (J & K), NOIDA (U.P.) and Sanand (Gujarat), and c) by guarantee of Chairman & Managing Director of the Company. However, second pari passu equitable mortgage on enhanced working capital facilities is yet to be created.
2 Loan from Body Corporate is secured by way of pledge of listed Equity Shares held as an Investment by the Company. (Refer Note No 3B)
# Includes Rs.4531.66 Lacs (Previous Year 2568.20 Lacs) in respect of deferred letters of credits for capital goods secured by way of hypothecation of specific machines under the letters of credits and pledge of fixed deposits of Rs. 590.65 Lacs (Previous Year Rs.312.88 Lacs).
3. DISCLOSURES FOR ASSETS UNDER OPERATING LEASES
The Company has taken certain vehicles on operating Lease. The required disclosures are as under: Minimum future Lease Rentals on assets under Operating Leases taken:
4. DEFINED BENEFIT PLAN
a) Gratuity
The employeesâ Group Gratuity Scheme is managed by ICICI Prudential Life Insurance Company Limited. The present value of obligation is determined based on actuarial valuation using the Projected Unit credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The additional disclosure in terms of Ind AS 19 on âEmployee Benefitsâ, is as under:
The expected benefits increases are based on the same assumptions as are used to measure the Companyâs defined benefit plan obligations as at 31st March 2018. The company is expected to contribute Rs. 279.48 lacs to defined benefits plan obligations fund for the year ending 31st March 2019.
The significant accounting assumptions are the discount rate and expected salary increase. The sensitivity analysis below have been determined based on reasonable possible changes of the respective assumptions occurring at the end of the reporting period while other assumptions constant.
If the discount rate increases /(decreases by 0.5%), the defined benefit plan obligations would decrease by Rs.139.25 Lacs (increase by Rs.150.25 Lacs) as at 31st March 2018.
If the expected salary growth increases /(decreases by 0.5%), the defined benefit plan obligations would increase by Rs.149.85 Lacs (decrease by Rs.139.75 Lacs) as at 31st March 2018.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Further in presenting the above sensitivity analysis, the present value of the defined benefit obligations has been calculated using the Projected Unit Credit Method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the Balance Sheet.
b) Leave Encashment
The Company has provided for its Liability towards Leave encashment, based on the actuarial valuation, disclosure whereof in terms of Indian Accounting Standard (Ind AS)- 19, âEmployee Benefitsâ is as under:
5. Balances of some of the parties are subject to reconciliation & confirmations.
6. Previous Year figures have been recasted / regrouped/ reclassified, wherever considered necessary.
7. Impact of Implementation of Goods and Services Tax (GST) on the financial statements
In accordance with Ind AS 18 on âRevenueâ and Schedule III of the Companies Act, 2013, Revenue from Sales of Goods and Services for the previous year ended 31st March 2017 and for the period from 1st April 2017 to 30th June 2017 were reported gross of Excise Duty and Net of Value Added Tax (VAT) / Sales Tax. Excise Duty was reported as separate expense item in Note No â32(A)â as Duties paid on Revenues. Consequent to introduction of Goods and Service Tax (GST) with effect from 1st July 2017, VAT/Sales Tax, Excise Duty etc. have been subsumed into GST. GST has not been recognized as part of Revenue from Sales of Goods and Services as per the requirement of Ind AS 18. This has resulted into lower reported sales in the current year in comparison to the sales reported under the pre-GST structure of indirect taxes. With the change in the structure expenses are also reported net of taxes (where credit is available). Accordingly, financial statements for the year ended 31st March 2018 and in particular, sales, absolute expenses, Inventory and ratios in percentage to Revenues are not comparable with the figures of previous year.
8. SEGMENT DISCLOSURE :
Segment disclosure in accordance with the Ind AS 108 on â Operating Segmentsâ are as under:
Accounting Principles and policies, as reported in Significant Accounting polices, used in the preparation of financial statements are consistently applied to record revenue, expenditure, assets and liabilities, in each segment.
9. RELATED PARTY DISCLOSURES
(a) List of Related Parties (as per IND AS-24):
i) Subsidiaries : Flex Middle East FZE , Uflex Europe Ltd., Uflex Packaging Inc., Upet Holdings Ltd., U Tech Developers Ltd., Digicyl Pte. Ltd. and USC Hologram (P) Ltd.
ii) Fellow Subsidiaries : Flex Films Europa Sp. z.o.o,Flex P Films (Egypt) S.A.E., UPET (Singapore) PTE. Ltd., Flex Americas S.A. de C.V.,SD Buildwell Pvt.Ltd., Flex Films (USA) Inc., Refex Energy (Rajasthan) (P) Ltd. (upto 30/05/2017) and Bundelkhand Projects Pvt. Ltd. (upto 30/05/2017)
iii) Associates : Flex Foods Limited
iv) Key Management Personnel & their relatives/ HUF (also exercising significant influence over the Company) : Mr. Ashok Chaturvedi, Chairman & Managing Director (relatives, Mrs. Rashmi Chaturvedi, Mr.Anant Shree Chaturvedi, Mr. Apoorva Shree Chaturvedi & Ms. Anshika Chaturvedi), Ashok Chaturvedi (HUF) and Mr. Amitava Ray, Wholetime Director
v) Enterprises in which the persons referred in (iv) along with their relatives exercise significant influence : AKC Retailers Pvt. Ltd., Anshika Investments Pvt. Ltd., Anant Overseas Pvt. Ltd., Apoorva Extrusion Pvt. Ltd., Anshika Consultants Pvt. Ltd., A.R. Leasing Pvt. Ltd., A.R.Infrastructures & Projects Pvt. Ltd., AC Infrastructures Pvt. Ltd., Cinflex Infotech Pvt. Ltd.,Flex International Pvt. Ltd., Ultimate Infratech Pvt. Ltd., Ultimate Flexipack Ltd., Ultimate Prepress LLP, Naveli Collections Pvt. Ltd., Modern Info Technology Pvt. Ltd., Flex Industries Pvt. Ltd., Club One Airways Pvt. Ltd., Niksar Finvest Pvt. Ltd., Ganadhipati Infraproject Pvt. Ltd., Nirman Overseas Pvt. Ltd., Kaya Kalpa Medical Services Pvt. Ltd., Sungrace Products (India) Pvt. Ltd., Virgin Infrastructures Pvt. Ltd., Liberal Advisory Services Pvt. Ltd.(up to 15/02/2018), Minor Hotel Pvt. Ltd.(upto 15/02/2018),East Coast Star Hotel Pvt. Ltd..(upto 15/02/2018), Saga Realtors Pvt. Ltd., Ganadhipati Infrastructure & Projects Pvt. Ltd., Gangotri Management Pvt. Ltd., Manpasand Marketing Pvt. Ltd., Magic Consultants Pvt. Ltd., A.L.Consultants Pvt. Ltd., First Flexipack Corporation, Ultra America Inc., AR Airways Pvt. Ltd., A-one Catering LLP, Refex Energy (Rajasthan) Pvt. Ltd.(w.e.f. 31/05/2017), Bundelkhand Projects Pvt. Ltd.(w.e.f. 31/05/2017), Affatus Gravures Pvt. Ltd.(w.e.f. 30/06/2017), Affatus Graphics Pvt. Ltd.(w.e.f. 30/06/2017), RCMT Clothings Pvt. Ltd.(w.e.f. 05/09/2017) and Manushree Creations Pvt. Ltd.(w.e.f. 24/02/2018)
(b) The Company has entered into transactions with certain parties listed above during the year under consideration. Details of these transactions are as follows :
The company has extended corporate guarantees to the lenders of its subsidiary(ies) / Fellow Subsidiary(ies). The outstanding amount of corporate guarantees extended by the company as on the balance sheet date has been disclosed in Note No 34(B).
10. FINANCIAL RISKS MANAGEMENT
In the course of business, amongst others, the Company is exposed to several financial risks such as Credit Risk, Liquidity Risk, Interest Rate Risk, Exchange Risk and Commodity Price Risk. These risks may be caused by the internal and external factors resulting into impairment of the assets of the Company causing adverse influence on the achievement of Companyâs strategies, operational and financial objectives, earning capacity and financial position.
The Company has formulated an appropriate policy and established a risk management framework which encompass the following process.
- identify the major financial risks which may cause financial losses to the company
- assess the probability of occurrence and severity of financial losses
- mitigate and control them by formulation of appropriate policies, strategies, structures, systems and procedures
- Monitor and review periodically the adherence, adequacy and efficacy of the financial risk management system.
The Company enterprise risk management system is monitored and reviewed at all levels of management, Internal Auditors, Audit Committee and the Board of Directors from time to time.
Credit Risk
Credit Risk refers to the risks that arise on default by the counterparty on its contractual obligation resulting into financial loss to the company. The company may carry this Risk on Trade and other receivables, liquid assets and some of the non current financial assets.
In case of Trade receivables, the company has framed appropriate policy for extending credits period & limit to each customer based on their profile, financial position and their external rating etc. The collections of trade dues are strictly monitored . In case of Export customers, even credit guarantee insurance is also obtained wherever required.
Companyâs exposure to Credit Risk is also influenced by the concentration of risk from top five customers. The details in respect of the% of sales generated from the top customer and top five customers are given hereunder.
The credit risk on cash & cash equivalent, investment in fixed deposits, liquid funds and deposits are insignificant as counterparties are banks or mutual funds with high credit ratings assigned by the rating agencies of international repute.
Liquidity Risk
Liquidity Risk arises when the company is unable to meet its short term financial obligations as and when they fall due.
The company maintains adequate liquidity in the system so as to meet its all financial liabilities timely. In addition to this, the companyâs overall financial position is very strong so as to meet any eventuality of liquidity tightness.
Contractual maturities of financial liabilities are given as under:
Interest Rate Risk
Generally market linked financial instruments are subject to interest rate risk. The company does not have any market linked financial instruments both on the asset side as well liability side. Hence there no interest rate risk linked to market rates.
However the interest rate in respect of major portion of borrowings by the Company from the banks and others are linked with the Benchmark / Base Prime lending rate of the respective lender and in case of foreign currency borrowings by way of ECB, the same is linked with the LIBOR. Any fluctuation in the same either on higher side or lower side will result into financial loss or gain to the company.
The amount with is subjected to the change in the interest rate is of Rs. 126384.09 lacs out of the total debt of Rs. 141838.53 Lacs.
Based on the Structure of the debt as at year end, a one percentage point increase in the interest rate would cause an additional expense in the net financing cost of Rs. 1263.84 Lacs.
Foreign Currency Risk
The company is exposed to the foreign currency risk from transactions & translation. Transactional exposures are arising from the transactions entered into foreign currency. Management keeps a close watch of the maturity of the financial assets in foreign currency and payment obligations of the financial liabilities.
Based on five percentage point variations in the exchange rate, the profit before tax for the year based on the foreign currency transaction entered during the period will be effected by Rs. 815.58 Lacs
Commodity Price Risk
The main raw materials which company procures are global commodities and their prices are to a great extent linked to the movement of crude prices directly or indirectly.
The pricing policy of the Companyâs final product is structured in such a way that any change in price of raw materials is passed on to the customers in the final product however, with a time lag which mitigates the raw material price risk.
With regard to the finished products, the Company has been operating in a global competitive environment which continues to keep downward pressure on the prices and the volumes of the products.
In order to combat this situation, the Company formulated manifold plans and strategies to develop new customers & focus on new innovative products. In addition, it has also been focusing on improvement in product quality and productivity. With these measures, Company counters the competition and consequently commodity price risk.
Mar 31, 2017
1. In accordance with the Ind AS 40- âInvestment Propertyâ, the company has reclassified the items of property, plant and Equipment to be designated as Investment property. Accordingly assets having carrying value of Rs. 3668.24 lacs and Rs. 3551.04 Lacs as at 1st April 2015 and 31st March 2016 respectively has been classified as Investment Property instead of Property, Plant & Equipment.
2. In accordance with the Ind AS 109 on âFinancial Instrumentsâ, the company has opted for an irrevocable election to presents the subsequent changes in fair value of the equity instruments through the other comprehensive income. Accordingly cumulative net loss of Rs. 2819.67 Lacs and Rs. 2215.21 lacs as at 1st April 2015 and 31st March 2016 respectively on the value of investment has been adjusted to the Other Comprehensive Income on that date. Further, Equity Instruments pledged against the borrowings have been disclosed separately in the Balance Sheet.
3. In accordance with the Ind AS 109 on âFinancial Instrumentsâ Long Term Loans given are measured at amortized cost using the effective rate of interest method. Accordingly the upfront charges received, which were credited to Statement of Profit & Loss , are now amortized over the loan period. As a result Rs. 26.24 lacs (Net of deferred tax of Rs. 13.88 Lacs ) has been transferred from surplus in Profit & Loss Account to Transaction Cost (pending Amortization) as at 31st March 2016.
4. In accordance with the Ind AS 109 on âFinancial Instrumentsâ Long Term Loans and borrowings are measured at amortized cost using the effective rate of interest method. Accordingly the upfront charges including loan processing fees and transaction cost , which were charged to Statement of Profit & Loss, are now amortized over the loan period. As a result amount of Rs.176.30 Lacs and Rs. 250.70 Lacs (Net of Deferred Tax of Rs. 93.30 Lacs and Rs 132.68 Lacs respectively) has been transferred from surplus in Profit & Loss to Transaction Cost (Pending Amortization) as at 1st April 2015 and 31st March 2016 respectively and balance amount of Rs. 51.53 lacs as at 31st March 2016 has been transferred from Capital Work in progress to Transaction Cost (pending Amortization).
5. The cumulative tax impact of the items stated in (iii) and (iv) above has been adjusted in the deferred tax asset/liability.
6. In accordance with Ind AS 10 on âEvents after Reporting periodâ, liability in respect of dividends will be recognized only in the year in which the dividends are declared. Accordingly amount provided for the proposed dividend of Rs. 2346.63 Lacs and Rs.2781.19 Lacs (Including Dividend Distribution Tax of Rs.396.92 Lacs and Rs.470.42 Lacs respectively) as at 1st April 2015 and 31st March 2016 respectively has been transferred from Proposed Dividend to Surplus in Profit & Loss.
7. The resulting difference arising from all the above referred Ind AS transition adjustments are recognized directly in retained earnings and other comprehensive income.
8. In accordance with Ind AS18 on âRevenueâ, Net sale & Job work are adjusted for the amount of rebate and discount given to the customers (including the amount of cash discounts) and commission paid on sales. Accordingly Rs. 1468.92 Lacs in respect of discount given to customers and commission paid have been reduced from revenue and also the same amount has been reduced from other expenses. Further, these are adjusted for the amount of excise duty and other tax recoveries from customers, for which economic benefits flows to the entities. Accordingly the revenue has been increased by Rs. 32859.86 lacs and the same amount has been added to the other expenses.
9. Represents net amount of treatment given in accordance Ind AS 109 on âFinancial Instrumentsâ, for recognition of interest income/expense, based on effective interest rate method.
10. Represents the amount relating to re-measurement of the net defined benefit liability / asset in accordance with the Ind AS-19 on âEmployee Benefitsâ.
11. Gross Block & Capital Work- in- Progress includes Pre-operative expenses, basis of which is certified by the Management.
12. Capital Work in Progress includes Rs 341.89 lacs (Previous year Rs. 1831.33 lacs) in respect of Machinery in Transit.
13. Restriction On Voting Rights
The company has only one class of issued equity share capital as on the date of the balance sheet and each holder of equity share is entitled for one vote per share and right to receive the dividend, if any, declared on the equity shares.
14. Dividend
The Board of Directors of the company has recommended a final dividend of Rs.3.50 (Previous Year Rs.3.20) per share share aggregating to Rs.3041.92 lacs (previous Year Rs. 2781.19 Lacs) (Including the dividend distribution tax of Rs. 514.52 lacs (previous Year Rs. 470.42 Lacs)) for the financial year ended 31st March 2017 subject to the approval of the shareholder in their ensuing annual general meeting.
Previous Year figures have been given in brackets.
* These are secured a) on pari passu basis by way of hypothecation of specific movable properties of the Company (save and except book debts), both present & future, subject to prior charges created and / or to be created in favour of Companyâs bankers for working capital facilities, b) by first pari passu equitable mortgage of specific immovable properties of the Company situated at Malanpur (M.P.), Jammu (J & K), NOIDA (U.p.) and Sanand (Gujarat)and c) by guarantee of Chairman & Managing Director of the Company. However charges in respect of specific immovable properties situated at Sanand (Gujarat) is yet to be created. Further, in respect of loan from South Indian Bank first pari-passu equitable mortgage on specific aforesaid immovable properties of the companies is yet to be created.
@ These are secured a) on pari passu basis by way of hypothecation of specific movable properties of the Company (save and except book debts), both present & future, subject to prior charges created and / or to be created in favour of Companyâs bankers for working capital facilities, b) by first pari passu equitable mortgage of specific immovable properties of the Company situated at Malanpur (M.P.), Jammu (J & K), NOIDA (U.p.) and Sanand (Gujarat) and c) by guarantee of Chairman & Managing Director of the Company.
$ These are further secured by way of second pari passu charge on the current assets of the Company.
# These are secured by way of hypothecation of Vehicles of the Company.
~ This is secured by a) exclusive first charge by way of hypothecation of Specific aircrafts owned by M/s A.R. Airways pvt. Ltd.(related party), b) corporate guarantee of A.R. Airways pvt. Ltd. and c) guarantee of Chairman & Managing Director of the Company.
15. Working capital facilities from banks are secured a) on first pari passu basis, by way of hypothecation of stock of raw materials, semi-finished goods, finished goods and book debts of the Company, both present and future, b) by way of second pari passu charge on specific fixed assets of the Company, situated at Malanpur (M.P.), Jammu (J & K), NOIDA (U.P.) and Sanand (Gujarat), and c) by guarantee of Chairman & Managing Director of the Company.
16. Loan from a Body Corporate is secured by way of pledge of listed Equity Shares held as an Investment by the Company. (Refer Note No 4A)
# Represents deferred letters of credits for capital goods secured by way of hypothecation of specific machines under the letters of credits and pledge of fixed deposits of Rs. 312.88 Lacs (Previous Year Rs.214.75 lacs).
17. DEFINED BENEFIT PLAN
18. Gratuity
The employeesâ Group Gratuity Scheme is managed by ICICI prudential Life Insurance Company Limited. The present value of obligation is determined based on actuarial valuation using the projected Unit credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The additional disclosure in terms of Ind AS 19 on âEmployee Benefitsâ, is as under:
The expected benefits increases are based on the same assumptions as are used to measure the Companyâs defined benefit plan obligations as at 31st March 2017. The company is expected to contribute Rs. 201.23 lacs to defined benefits plan obligations fund for the year ending 31st March 2018.
The significant accounting assumptions are the discount rate and expected salary increase. The sensitivity analysis below have been determined based on reasonable possible changes of the respective assumptions occurring at the end of the reporting period while other assumptions constant.
If the discount rate increases /(decreases by 0.5%), the defined benefit plan obligations would decrease by Rs.127.45 Lacs (increase by Rs.137.74 Lacs) as at 31st March 2017.
If the expected salary growth increases /(decreases by 0.5%), the defined benefit plan obligations would increase by Rs.132.65 Lacs (decrease by Rs.124.06 Lacs) as at 31st March 2017.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Further in presenting the above sensitivity analysis, the present value of the defined benefit obligations has been calculated using the projected Unit Credit Method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognized in the Balance Sheet.
19. Balances of some of the parties are subject to reconciliation & confirmations.
20. Previous Year figures have been recasted / regrouped/ reclassified, wherever considered necessary.
21. RELATED PARTY DISCLOSURES (a) List of Related Parties:
22. Subsidiaries : Flex Middle East FZE , Uflex Europe Ltd., Uflex Packaging Inc., Upet Holdings Ltd., U Tech Developers Ltd., Flex p Films (Brasil) Comercio De Films plasticos Ltda. (upto 28/03/17) and USC Hologram (p) Ltd.
23. Fellow Subsidiaries : Flex Films Europa Sp. z.o.o,Flex p Films (Egypt) S.A.E., UpET (Singapore) pTE. Ltd., Flex Americas S.A. de C.V.,SD Buildwell pvt.Ltd., Flex Films (USA) Inc., Refex Energy (p) Ltd. (w.e.f.07/07/2016), Bundelkhand projects pvt. Ltd. (w.e.f.07/07/2016).
24. Associates : Flex Foods Limited and Refex Energy (Rajasthan) (p) Ltd.(upto 06/07/2016).
25. Key Management Personnel & their relatives/ HUF (also exercising significant influence over the Company) : Mr. Ashok Chaturvedi, Chairman & Managing Director (relative Mrs. Rashmi Chaturvedi), Mr. Ashok Chaturvedi (HUF) and Mr. Amitava Ray, Whole-time Director.
26. Enterprises in which the persons referred in (iv) along with their relatives exercise significant influence : AKC Retailers pvt. Ltd., Anshika Investments pvt. Ltd., Anant Overseas pvt. Ltd., Apoorva Extrusion pvt. Ltd., Anshika Consultants pvt. Ltd., A.R. Leasing pvt. Ltd., A.R.Infrastructures & Projects Pvt. Ltd., AC Infrastructures Pvt. Ltd., Cinflex Infotech Pvt. Ltd.,Flex International pvt. Ltd., Ultimate Infratech pvt. Ltd., Ultimate Flexipack Ltd., Ultimate prepress LLp, Naveli Collections pvt. Ltd., Modern Info Technology pvt. Ltd., Flex Industries pvt. Ltd., Club One Airways pvt. Ltd., Niksar Finvest pvt. Ltd., Ganadhipati Infraproject pvt. Ltd., Nirman Overseas pvt. Ltd., Kaya Kalpa Medical Services pvt. Ltd., Sungrace products (India) pvt. Ltd., Virgin Infrastructures pvt. Ltd., Liberal Advisory Services pvt. Ltd., Minor Hotel pvt. Ltd.,East Coast Star Hotel pvt. Ltd., Saga Realtors pvt. Ltd., Gangotri Management pvt. Ltd., Manpasand Marketing pvt. Ltd., Magic Consultants pvt. Ltd., First Flexipack Corporation, Ultra America Inc., AR Airways pvt. Ltd., A-one Catering LLp (w.e.f. 05.07.2016), Bundelkhand projects pvt. Ltd.(up to 06.07.2016)
27. FINANCIAL RISKS MANAGEMENT
In the course of business, amongst others, the Company is exposed to several financial risks such as Credit Risk, Liquidity Risk, Interest Rate Risk, Exchange Risk and Commodity price Risk. These risks may be caused by the internal and external factors resulting into impairment of the assets of the Company causing adverse influence on the achievement of Companyâs strategies, operational and financial objectives, earning capacity and financial position.
The Company has formulated an appropriate policy and established a risk management framework which encompass the following process.
- identify the major financial risks which may cause financial losses to the company
- assess the probability of occurrence and severity of financial losses
- mitigate and control them by formulation of appropriate policies, strategies, structures, systems and procedures
- Monitor and review periodically the adherence, adequacy and efficacy of the financial risk management system.
The Company enterprise risk management system is monitored and reviewed at all levels of management, Internal Auditors, Audit Committee and the Board of Directors from time to time.
Credit Risk
Credit Risk refers to the risks that arise on default by the counterparty on its contractual obligation resulting into financial loss to the company. The company may carry this Risk on Trade and other receivables, liquid assets and some of the non current financial assets.
In case of Trade receivables, the company has framed appropriate policy for extending credits period & limit to each customer based on their profile, financial position and their external rating etc. The collections of trade dues are strictly monitored . In case of Export customers, even credit guarantee insurance is also obtained wherever required.
Companyâs exposure to Credit Risk is also influenced by the concentration of risk from top five customers. The details in respect of the% of sales generated from the top customer and top five customers are given hereunder.
The credit risk on cash & cash equivalent, investment in fixed deposits, liquid funds and deposits are insignificant as counterparties are banks or mutual funds with high credit ratings assigned by the rating agencies of international repute.
Liquidity Risk
Liquidity Risk arises when the company is unable to meet its short term financial obligations as and when they fall due.
The company maintains adequate liquidity in the system so as to meet its all financial liabilities timely. In addition to this, the companyâs overall financial position is very strong so as to meet any eventuality of liquidity tightness.
Interest Rate Risk
Generally market linked financial instruments are subject to interest rate risk. The company does not have any marked linked financial instrument both on the asset or liability side. Hence no interest rate risk.
In case of the borrowings by the company, the company is subject to interest rate risk on account of any fluctuation in the base prime lending rate (BPLR) fixed by the banks. Every fluctuation in the BPLR of the bank either on the higher or lower side will result into financial loss or gain to the company.
The major portion of the companyâs debt are linked with the BPLR of the Indian Banks. The total proportions of these debts are Rs. 102375.49 Lacs out of the total debt of Rs. 123811.86 Lacs.
Based on the structure of net debt as at year end, a one percentage point increase in the debt would cause an additional expense in the net financing cost of Rs. 1023.75 Lacs.
Foreign Currency Risk
The company is exposed to the foreign currency risk from transactions & translation. Transactional exposures are arising from the transactions entered into foreign currency. Management keeps a close watch of the maturity of the financial assets in foreign currency and payment obligations of the financial liabilities.
Based on one percentage point variations in the exchange rate, the profit for the year based on the foreign currency transaction entered during the period will be effected by 4.71%.
Commodity Price Risk
The main raw materials which company procures are global commodities and their prices are to a great extent linked to the movement of crude prices directly or indirectly.
The pricing policy of the Company final product is structured in such a way that any change in price of raw materials is passed on to the customers in the final product however, with a time lag which mitigates the raw material price risk.
With regard to the finished products, the Company has been operating in a global competitive environment which continues to keep downward pressure on the prices and the volumes of the products.
In order to combat this situation, the Company formulated manifold plans and strategies to develop new customers & focus on new innovative products. In addition, it has also been focusing on improvement in product quality and productivity. With these measures, Company counters the competition and consequently commodity price risk.
Mar 31, 2016
1. In the opinion of the Board and to the best of their knowledge,
value on realisation of assets, other than fixed assets & non-current
investments in the ordinary course of the business, would not be less
than the amount at which they are stated in the Balance Sheet.
2. During the year, Insurance Company has settled the claim in
respect of aggregate loss claim filed by the Company of Rs. 2568.23
lacs due to outbreak of fire in factory premises of the Company,
Situated at Sector-60, Noida in the financial year ended 31st March
2012. In settlement thereof, Insurance Company has paid a sum of Rs.
2072.60 lacs. Out of short amount received, Rs. 214.71 Lacs are
capitalised along with the value of assets reinstated, not allowed on
account of upgradation in technology of assets replaced and balance
Rs.280.92 lacs has been disclosed as "Loss on Settlement of Fire Claim
" and disclosed under Note No."28(B)" .
3. Balances of some of the parties are subject to reconciliation &
confirmations.
4. a) Rupees have been rounded off to the nearest thousand.
b) Previous Year figures have been recasted / regrouped/ reclassified,
wherever considered necessary.
Mar 31, 2014
1. SHARE CAPITAL
A AUTHORISED
The Company''s Authorised Capital is of Rs.34000.00 lacs (previous year
same) distributed into 1,90,00,000 (previous year same) preference
Shares of Rs.100/- each and 15,00,00,000 (previous year same) Equity
Shares of Rs. 10/- Each.
Further, the Issued, Subscribed and paid-up Capital of the Company
includes 54,65,840 (previous year same ) Equity Shares lying with
Depository, representing 27,32,920 (previous year same) Global
Depository Receipts (GDRs), issued through an international offering in
US Dollars, outstanding as at Balance Sheet date.
C RESTRICTION ON VOTING RIGHTS
Holders of GDRs have no voting rights in respect of underlying shares
represented by the GDRs. However Depository can exercise the power to
vote in respect of shares represented by the GDRs as directed by the
Board, in terms of the conditions contained in offering circular.
Registered holders of Shares, withdrawn from the deposit facility will
be entitled to vote and exercise other direct shareholder rights.
However the holders of the GDRs are entitled to portion of the annual
dividend, if any declared, on the shares represented by the outstanding
GDRs.
(Rs.in lacs)
As At As At
31.03.2014 31.03.2013
2. Contingent liabilities not provided
for in respect of:
i) Guarantees issued by Banks 2124.05 1286.41
ii) Corporate Guarantees issued for
facilities taken by foreign 213907.50 175904.20
subsidiaries / step down
subsidiaries from Banks
iii) Import duty obligations on
outstanding export commitment 2264.64 2854.16
under Advance license / EPCG
Schemes
iv) letters of Credit (Unexpired)
issued by Banks (net of Margin) 6121.32 6355.77
v) Show cause notice / demands of
Excise Authorities in 8038.09 6384.20
respect of Excise Duty & Service
Tax not acknowledged by the
Company and are contested /
appealed / replied.
vi) Additional demands raised by the
Income Tax Department, 519.04 480.71
which are under rectification &
appeal
vii) Additional demands raised by the
Sales Tax Department, 791.91 204.63
which are under rectification &
appeal
viii) Demand raised by pF authority for
alleged lower contribution 27.73 27.73
of pF and is under appeal
ix) Amount demanded by the erstwhile
workers of the Company 10.48 9.77
and are pending in labour Court
x) Claims against the Company/
disputed liabilities not 415.86 419.67
acknowledged as debt.
3. Ministry of Corporate Affairs (MCA) has passed an order on 9th
October 2013, wherein MCA has not acceded to the request made by the
Company for waiver of recovery of excess remuneration paid by the
company to its Chairman & Managing Director during the period from
2004-05 to 2008-09, aggregating to Rs.1184.79 lacs. Accordingly the
Chairman & Managing Director has refunded the amount determined as
excess paid in the past, to the Company.
4. In the opinion of the Board and to the best of their knowledge,
value on realisation of assets, other than fixed assets & non-current
investments in the ordinary course of the business, would not be less
than the amount at which they are stated in the Balance Sheet.
5. Aggregate claim bill of Rs.2568.23 Lacs was fled during the year
ended 31st March,2012, with insurance company, out of which Rs.2454.41
lacs is covered on re-instatement basis, towards machines, buildings,
cables etc. destroyed during outbreak of fire in factory premises of the
Company, situated at Sector 60, NOIDA and balance of Rs.113.82 lacs
towards stock of materials, to be recovered from the insurance company.
Up to the year end, Company has received interim claim of Rs.445.18
lacs from the Insurance Company.
6: Balances of some of the parties are subject to reconciliation &
confirmations.
7 a) Rupees have been rounded off to the nearest thousand.
b) Previous Year figures have been recasted / regrouped/ reclassified,
wherever considered necessary.
8. Following disclosures are made, as per Accounting Standard-18
(AS-18), regarding, "Related party
Disclosures", issued by The Institute of Chartered Accountants of
India:- (a) list of Related parties:
i) wholly Owned Subsidiaries : Flex America Inc. (Up to 7th January,
2014), Flex Middle East FZE , UFlex Europe ltd., UFlex packaging Inc.,
UpET Holdings ltd., UTech Developers ltd.,Flex Films (USA) Inc. (Up to
6th December, 2013), Flex p Films (Brasil) Comercio De Films plasticos
ltda. and USC Holograms (p) ltd.
ii) Fellow Subsidiaries : Flex Films Europa Sp. Z.o.o, Flex p Films
(Egypt) S.A.E., UpET (Singapore) pTE. ltd., Flex Americas S.A. DE C.V.,
SD Build well pvt.ltd., Flex Films (USA) Inc. (w.e.f 7th December, 2013)
and Flex America Inc. (w.e.f 8th January, 2014)
iii) Associate : Flex Foods limited
iv) Joint Venture : Qcell limited (Till 30th September 2013) [Joint
Venture of a Wholly Owned Subsidiary]#
v) Key Management Personnel & their relatives/ HUF (also exercising
significant influence over the Company) : Mr. Ashok Chaturvedi, Chairman
& Managing Director (relative Mrs. Rashmi Chaturvedi), Mr. Ashok
Chaturvedi (HUF) and Mr. S.K. Kaushik, Whole-time Director
vi) Enterprises in which the persons referred in (v) along with their
relatives exercise significant influence : Flex International (p) ltd.,
Anshika Investments (p) ltd., Ultimate Flexipack ltd.,
A.R.Infrastructure & projects (p) ltd., Anant Overseas (p) ltd.,
Apoorva Extrusion (p) ltd., Anshika Consultants (P) Ltd., A.R. Leasing
(P) Limited, Cinfex Infotech (P) Ltd., Ultimate Enterprises (P) Ltd.,
AR Aerotech (p) ltd., AR Airways (p) ltd., Kaya Kalpa Medical Services
(p) ltd.,AC Infrastructures (p) ltd., Club One Airways (p) ltd.,Flex
Industries (p) ltd., AC Infratech (p) ltd., RC properties (p) ltd., A
to Z Infratech (p) ltd.,Ultimate Infratech (p) ltd., AKC Investments
(p) ltd.,Ganadhipati Investments (p) ltd.,Ultimate prepress llp, AKC
Retailers ltd., niksar Finvest (p) ltd.,Refex Energy (Rajasthan) (P)
Ltd., A-One Infratech (P) Ltd.,Ganadhipati Infraproject (P) Ltd.,Nirman
Overseas (P) Ltd.,Holofx Urban Infrastructures (p) ltd.,laurel Real
Estates (p) ltd.,Sungrace products (India) (p) ltd.,Virgin
Infrastructures (p) ltd.,Vendee Builders (p) ltd., Ultimate Energy
ltd., Modern Info Technology (p) ltd., liberal Advisory Services (p)
ltd., Saga Realtors (p) ltd., Genius Infratech (p) ltd. and naveli
Collections (p) ltd.
Mar 31, 2013
1: GENERAL
A. COMPANY AND ITS BACKGROUND
FLEX INDUSTRIES LIMITED an Indian Public Limited Company was
established under the Provisions of Companies Act, 1956 (No 1 of 1956).
The name of the Company was changed to UFLEX LIMITED w. e. f. 19th
March 2007.
The Company was registered with the ROC, Delhi & Haryana under the
Registration number 55-32166 dated 21st June 1988. Old Registration
number has been converted into new Corporate Identifi cation number
(CIN) L74899DL1988PLC032166.
Registered offi ce of the Company is situated at 305, 3rd Floor, Bhanot
Corner, Pamposh Enclave, Greater Kailash-I, New Delhi- 110 048.
The Company has been engaged in the manufacture and sale of fl exible
packaging products & offer a complete fl exible packaging solution to
its customers across the globe.
2. Disclosures for Assets under Operating Leases
The Company has given an aircraft on operating lease (Refer Note No.13
"Fixed Assets"). The Company has also taken certain vehicles on
operating Lease.
The additional disclosures required in terms of Accounting Standard
(AS)-19- on "Leases" are as under:
3. The Ministry of Corporate Affairs has advised that the company has
paid excess remuneration to Chairman & Managing Director for the period
from 2004-05 to 2008-09. The amount of such excess remuneration works
out to be Rs.1184.79 lacs, which in the opinion of the company do not
amount to excess remuneration. Accordingly the company had moved an
application for the waiver of the same, as per the option given by the
Ministry, which is still pending with the Ministry.
4. In the opinion of the Board and to the best of their knowledge,
value on realisation of assets, other than fi xed assets & non-current
investments in the ordinary course of the business, would not be less
than the amount at which they are stated in the Balance Sheet.
5. Defined Benefit Plan
a) Gratuity
The employees'' Group Gratuity Scheme is managed by ICICI Prudential
Life Insurance Company Limited. The present value of obligation is
determined based on actuarial valuation using the Projected Unit credit
Method, which recognizes each period of service as giving rise to
additional unit of employee benefi t entitlement and measures each unit
separately to build up the fi nal obligation. The additional disclosure
in terms of Accounting Standard-15, "Employee Benefi ts" is as under:
6. Aggregate claim bill of Rs.2893.38 lacs, was fi led during the
year ended 31st March,2012, with insurance company, out of which
Rs.2541.54 lacs is covered on re-instatement basis, towards machines,
buildings, cables etc. destroyed during outbreak of fi res in factory
premises of the Company, situated at Jammu & Sector 60, NOIDA and
balance of Rs.351.84 lacs towards stock of materials, to be recovered
from the insurance company. During the year the Company has received
interim claim of Rs.445.18 lacs from the Insurance Company and has
placed the orders on the supplier for acquisition of machine.
7. Balances of some of the parties are subject to reconciliation &
confi rmations
8. a) Rupees have been rounded off to the nearest thousand.
b) Previous Year fi gures have been recasted / regrouped/ reclassifi
ed, wherever considered necessary.
9. Following disclosures are made, as per Accounting Standard-18
(AS-18), regarding, "Related Party Disclosures", issued by The
Institute of Chartered Accountants of India:- (a) List of Related
Parties:
i) Wholly Owned Subsidiaries : Flex America Inc., Flex Middle East FZE
, Ufl ex Europe Ltd., UFlex Packaging Inc., Upet Holdings Ltd., UTech
Developers Ltd.,Flex Films (USA) Inc. and Flex P Films (Brasil)
Comercio De Films Plasticos Ltda. ii) Fellow Subsidiaries : Flex Films
Europa Sp z o.o.,Flex P Films (Egypt) S.A.E., UPET (Singapore) Pte.
Ltd., Flex Americas S.A. de C.V., SD Buildwell Pvt.Ltd. and TFlex
Americas LLC (upto 30.03.2013). iii) Associate : Flex Foods Limited
iv) Joint Venture : Qcell Limited
v) Key Management Personnel & their relatives (also exercising signifi
cant infl uence over the Company) : Mr. Ashok Chaturvedi, Chairman &
Managing Director (relative Mrs. Rashmi Chaturvedi) and Mr. S.K.
Kaushik, Whole-time Director
vi) Enterprises in which the persons referred in (v) along with their
relatives exercise signifi cant infl uence : Flex International (P)
Ltd., Anshika Investments (P) Ltd., Ultimate Flexipack Ltd.,
A.R.Infrastructure & Projects (P) Ltd., Anant Overseas (P) Ltd.,
Apoorva Extrusion (P) Ltd., Anshikha Consultants (P) Ltd., A.R.Leasing
(P) Limited, Cinfl ex Infotech (P) Ltd., Ultimate Enterprises (P) Ltd.,
AR Aerotech (P) Ltd., AR Airways (P) Ltd., Kaya Kalpa Medical Services
(P) Ltd.,AC Infrastructures (P) Ltd., Club One Airways (P) Ltd.,Flex
Industries (P) Ltd., AC Infratech (P) Ltd., RC Properties (P) Ltd., A
to Z Infratech (P) Ltd.,Ultimate Infratech (P) Ltd., AKC Investments
(P) Ltd.,Ganadhipati Investments (P) Ltd.,Ultimate Prepress LLP, AKC
Retailers Ltd., Niksar Finvest (P) Ltd.,Refex Energy (Rajasthan) (P)
Ltd., A-One Infratech (P) Ltd.,Ganadhipati Infraproject (P) Ltd.,Nirman
Overseas (P) Ltd.,Holofi x Urban Infrastructures (P) Ltd.,Laurel Real
Estates (P) Ltd.,Sungrace Products (India) (P) Ltd.,Virgin
Infrastructures (P) Ltd.,Vendee Builders (P) Ltd., Ultimate Energy
Ltd., Modern Info Technology (P) Ltd., Liberal Advisory Services (P)
Ltd. and Saga Realtors (P) Ltd.,
Mar 31, 2012
1 SHARE CAPITAL
A. AUTHORISED
The Company's Authorised Capital is of Rs. 34000.00 Lacs (Previous Year
Same) distributed into 1,90,00,000 (Previous Year Same) Preference
Shares of Rs. 100/- each and 15,00,00,000 (Previous Year Same) Equity
Shares of Rs. 10/- Each.
B. ISSUED, SUBSCRIBED & PAID-UP
The issued, subscribed & Fully Paid up capital of the Company as at
31st March 2011 is of Rs. 7218.08 Lacs.
During the year, the Company has allotted 30,711 Fully paid up Equity
Shares of Rs. 10/- Each on 09/06/2011 upon conversion of the Foreign
Currency convertible Bonds (FCCB's) on request of the Foreign Currency
convertible Bonds (FCCB's) Holder.
Accordingly the issued, subscribed and fully paid up capital of the
Company is Rs. 7221.15 Lacs, represented by the 7,22,11,486 Equity
Shares of Rs. 10/- Each as at 31st March 2012. The reconciliation of
the Equity Share Capital of the Company is given as under:
Further, the issued, subscribed and paid up capital of the Company
includes 54,65,840 (Previous Year Same) Equity Shares lying with
Depository, representing 27,32,920 (Previous Year Same ) Global
Depository Receipts (GDRs), issued through an international offering in
US Dollars, outstanding as at Balance Sheet date.
Also the company has an outstanding 1,00,00,000 warrants carrying
conversion price of Rs. 300/- each as on the Balance Sheet date. These
warrants give holders the right to convert warrants into equal number
of equity shares of the company at any time within 18 Months from the
date of allotment i.e. 25th November 2010. However, the warrant holders
did not exercise their rights for conversion of warrants into equity
shares upto the due date.
C. Restriction on Voting Rights
Holders of GDRs have no voting rights in respect of underlying shares
represented by the GDRs. However Depository can exercise the power to
vote in respect of shares represented by the GDRs as directed by the
Board, in terms of the conditions contained in offering circular.
Registered holders of Shares, withdrawn from the deposit facility will
be entitled to Vote and exercise other direct shareholder rights.
However the holders of the GDRs are entitled to portion of the annual
dividend, if any declared, on the shares represented by the outstanding
GDRs.
In terms of the Resolution passed through Postal Ballot declared on
19th November 2010 the Company had allotted 135 Lacs Warrants at a
price of Rs.300/- per warrant (inclusive of premium of Rs.290/- per
warrant), which gives holders the right to convert warrant into equal
number of equity shares of the company at any time within 18 Months
from the date of allotment viz 25th November 2010.
2. LONG TERM BORROWINGS
a) The company had issued 4%, 850 FCCBs of the face value of US $
100,000 each, aggregating to US $ 85 millions redeemable on March 9,
2012 at 121.89% of the outstanding principal amount. These bonds were
convertible into equity shares of the company, at the option of the
bondholders, at any time at an exchange rate of Rs. 44.44/$ and share
price of Rs. 144.70 but with conversion price reset on each anniversary
of the FCCB issue on 8th of March. The conversion price is adjustable
downwards only but not below Rs. 144.70 as determined under rules of
SEBI. Up to the year end, Bonds aggregating to US$ 28.70 million were
converted into 79,42,197 equity shares, Bonds aggregating to US$ 47.00
million were bought back by the Company and Bonds aggregating to US$
9.30 million were redeemed on due date for payment i.e. 9th March,
2012.
Previous Year figures have been given in brackets.
* These are secured a) on pari passu basis by way of hypothecation of
specific movable properties of the Company (save and except book
debts), both present & future, subject to prior charges created and /
or to be created in favour of Company's bankers for working capital
facilities, b) by first pari passu equitable mortgage of specific
immovable properties of the Company situated at Malanpur (M.P.), Jammu
(J & K) and NOIDA (U.P.) and c) by guarantee of Chairman & Managing
Director of the Company.
** This is secured by way of first charge on the aircraft and is
guaranteed by Chairman & Managing Director of the Company.
@ This is secured a) on pari passu basis by way of second hypothecation
of specific movable properties of the Company (save and except book
debts), both present & future, subject to prior charges created and /
or to be created in favour of Company's Bankers for working capital
facilities, b) by second pari passu equitable mortgage of specific
immovable properties of the Company situated at Malanpur (M.P.), Jammu
(J & K) and NOIDA (U.P.) and c) is guaranteed by Chairman & Managing
Director of the Company.
3. DEFERRED TAX LIABILITY (NET)
In accordance with the Accounting Standard-22 (AS-22), regarding
'Accounting for Taxes on Income', issued by The Institute of Chartered
Accountants of India, the Cumulative Tax effects of significant timing
differences, that resulted in Deferred Tax Asset & Liabilities and
description of item thereof that creates these differences are as
follows :
4. SHORT TERM BORROWINGS
1. Working capital facilities from banks are secured a) on pari passu,
by way of hypothecation of stock of raw materials, semi-finished
goods, finished goods and book debts of the Company, both present and
future, b) by way of second pari passu charge on specific fixed
assets of the Company, situated at Malanpur (M.P.), Jammu (J & K) and
NOIDA (U.P.), and c) by guarantee of Chairman & Managing Director of
the Company.
2. * Guaranteed by Chairman & Managing Director of the Company.
5. TRADE PAYABLES
* The details of amounts outstanding to Micro,Small and Medium
Enterprises under the Micro,Small and Medium Enterprises Development
Act,2006 (MSMED Act),based on the available information with the
Company are as under :
1 Leasehold Land includes Rs.320.00 lacs (Previous Year Rs.320.00 lacs)
pending execution of title deed.
2 Building includes Rs. 5.30 lacs (Previous Year Rs.5.30 lacs) acquired
on ownership basis & Rs.19.85 lacs (Previous Year Rs. 19.85 lacs)
pending execution of title deed.
3 Gross Block & Capital Work in Progress includes Pre-operative
expenses, basis of which is certified by the Management.
4 Capital Work in Progress includes Rs 67.02 lacs (Previous year Rs.
238.56 lacs) in respect of Machinery in Transit.
5 Plant & Machinery includes Rs.2397.72 lacs in respect of Machineries,
destroyed during out break of fires, on which depreciation has been
ceased to be charged, from the date of fire (Refer Note No. 37 for
details).
6 Depreciation for the year includes Rs 0.52 lacs (Previous year Rs.
0.56 lacs) charged to Pre-operative expenses.
7 Gross Block includes Rs. 5.08 lacs (Previous Year Same) added on
revaluation of followings:
a. Rs. 2.27 Lacs for Building revalued as at 31st December 1987.
b. Rs. 2.81 lacs for Land revalued as at 31st December 1987.
Aggregate Market Value of Quoted Investment is Rs.4118.00 lacs
(Previous Year Rs.4768.79 lacs). In the opinion of the Management,
decline in the market value of the Investments is temporary.
* Pledged with Banks as margin for Letters of Credits, Guarantees
and Bills Discounted.
6. Disclosures for Assets under Operating Leases
The Company has given an aircraft on operating lease (Refer Note No.12
"Fixed Assets"). The Company has also taken certain vehicles on
operating Lease.
7. The Ministry of Corporate Affairs has advised that the company has
paid excess remuneration to Chairman & Managing Director for the period
from 2004-05 to 2008-09. The amount of such excess remuneration works
out to be Rs.1184.79 lacs, which in the opinion of the company do not
amount to excess remuneration. Accordingly the company had moved an
application for the waiver of the same, as per the option given by the
Ministry, which is still pending with the Ministry.
35. In the opinion of the Board and to the best of their knowledge,
value on realisation of assets, other than fixed assets & non-current
investments in the ordinary course of the business, would not be less
than the amount at which they are stated in the Balance Sheet.
8. Gratuity
The Employees' Group Gratuity Scheme is managed by ICICI Prudential
Life Insurance Company Limited. The present value of obligation is
determined based on actuarial valuation using the Projected Unit Credit
Method, which recognizes each period of service as giving rise to
additional unit of employee benefit entitlement and measures each unit
separately to build up the final obligation. The additional disclosure
in terms of Accounting Standard-15,
9. Aggregate claim biil of Rs.2893.38 lacs, has been filed during
the year,with insurance company, out of which Rs.2541.54 lacs is
covered on re-instatement basis, towards machines, buildings, cables
etc. destroyed during outbreak of fires in factory premises of the
Company, situated at Jammu & Sector 60, NOIDA and balance of Rs.351.84
lacs towards stock of materials, which will be recovered from the
insurance company.
10. During the year the Company has made payment of BLR $ 800000
equivalent to Rs. 215.72 lacs to Flex P Films (Brasil) LTDA, towards
subscription of Equity Shares. On Allotment of Equity Shares, Flex P
Films (Brasil) LTDA will become a subsidiary of Uflex Limited.
11. Balances of some of the parties are subject to reconciliation &
confirmations.
12. a) Rupees have been rounded off to the nearest thousand. b)
Previous Year figures have been recasted / regrouped/ reclassified,
wherever considered necessary.
13. SEGMENT DISCLOSURE :
Consequent upon the strategic business re-structuring considering
business synergies, risks & returns and assets of the Company, there is
only one reportable segment. Accordingly, segment wise reporting is not
applicable. However geographical distribution of revenue is as under :
* Includes Scrap Sales shown under the head "Other Operating Revenue" -
Note No.- 21B.
14. Following disclosures are made, as per Accounting Standard-18
(AS-18), regarding, "Related Party Disclosures", issued by The
Institute of Chartered Accountants of India:- (a) List of Related
Parties:
i) Wholly Owned Subsidiaries : Flex America Inc., Flex Middle East FZE,
Uflex Europe Ltd., Uflex Packaging Inc., Upet Holding Ltd., U Tech
Developers Ltd. and Flex Films (USA) Inc.
ii) Fellow Subsidiaries : Flex Films Europa Sp. z.o.o.,Flex P Films
(Egypt) S.A.E., UPET (Singapore) PTE. Ltd., Flex Americas S.A. DE
C.V., SD Buildwell Pvt.Ltd. and Tflex Americas LLC
iii) Associate : Flex Foods Limited
iv) Joint Venture : Qcell Limited
v) Key Management Personnel & their relatives (also exercising signifi
cant influence over the Company) : Mr. Ashok Chaturvedi, Chairman &
Managing Director (relative Mrs. Rashmi Chaturvedi) and Mr. S.K.
Kaushik, Wholetime Director
vi) Enterprises in which the persons referred in (v) along with their
relatives exercise significant influence : Flex International (P)
Ltd., Anshika Investments (P) Ltd., Ultimate Flexipack Ltd.,
A.R.Infrastructures & Projects Pvt.Ltd., Anant Overseas (P) Ltd.,
Apoorva Extrusion (P) Ltd., Anshika Consultants (P) Ltd., A.R.Leasing
(P) Limited, Cinflex Infotech (P) Ltd., Ultimate Enterprises (P) Ltd.,
AR Aerotech (P) Ltd., AR Airways (P) Ltd., Kaya Kalpa Medical Services
(P) Ltd.,AC Infrastructures (P) Ltd., Club One Airways (P) Ltd.,Flex
Industries (P) Ltd., AC Infratech (P) Ltd., RC Properties (P) Ltd., A
to Z Infratech (P) Ltd. and Ultimate Infratech (P) Ltd.
Previous Year figures have been given in Italic.
AKC Developers Ltd., fellow subsidiary & Ultra Urban Infratech Ltd.an
associate company are not reported above, since the Company has
transferred the Management & ownership control under the agreement
dated 21st May'2010 with an understanding to transfer the entire Share
Holding on payment of the amount due under the agreement.
As per section 215(1) of the Companies Act, 1956 every Balance Sheet
and Profit and Loss Account of a Company shall be signed on behalf of
the Board of Directors by not less than two Directors of the Company
one of whom shall be a Managing Director where there is one.
However the attached Balance sheet, Statement of Profit and Loss along
with Notes and Cash Flow Statement of UFLEX Limited has not been signed
by the Managing Director as he was not present within the territory of
India at the time of the Board Meeting in which such accounts were
approved.
He had gone out of territory of India to attend some urgent business
meetings with customers which were unavoidable and therefore has not
signed the attached Balance Sheet, Statement of Profit and Loss along
with Notes and Cash Flow Statement of the Company.
As advised to the Company, when the Managing Director is not present in
India at the time of signing the Balance Sheet & Statement of Profit &
Loss, any other Director of the Company automatically get the right by
the virtue of sub-section 1(ii) and sub-section 2 of section 215 of the
Companies Act, 1956 to sign the Balance Sheet and Statement of Profit
& Loss explaining the reason for the absence of Managing Director.
Hence we are attaching this statement pursuant to section 215 (2) of
the Companies Act, 1956 and due to this reason and as authorised by the
Board of Directors, we have signed the attached Balance Sheet,
Statement of Profit and Loss along with Notes and Cash Flow Statement
of the Company.
Mar 31, 2011
(Rs.in lacs)
As At As At
31.03.2011 31.03.2010
1. Contingent liabilities not
provided for in respect of :
i) Guarantees issued by Banks 753.32 201.41
ii) Corporate Gurantee issued for
facilities taken by subsidiary / step 97286.00 88565.00
down subsidiaries from Banks
iii) Import duty obligations on
outstanding export commitment under 4775.86 2032.33
Advance Licence / EPCG Schemes
iv) Letters of Credit (Unexpired) issued
by Banks (Net of Margin) 2524.17 2060.54
v) Show cause notice / demands of Excise
Authorities not 5183.56 5426.02
acknowledged by the Company and are
contested / appealed / replied.
vi) Additional demands raised by the Income
Tax Department, which are 295.04 38.82
under rectification & appeal
vii) Additional demands raised by the
Sales Tax Department, which are 324.93 538.59
under rectification & appeal
viii) Demand raised by PF authority for
alleged lower contribution of PF 20.72 20.72
and are under appeal ix) Amount demanded
by the erstwhile workers of
the Company and are 12.20 45.02
pending in labour Court
x) Premium on Redemption on maturity of
outstanding Foreign Currency 914.84 2141.42
Convertible Bonds* * The holders of FCCBs are expected to opt for the
conversion rather than redemption and in that case no premium would be
payable by the Company. On this basis the amount of premium has not
been provided and is shown as contingent liability. However the
premium, if liable to be paid would be adjusted against the available
Securities Premium Account/ charged to Profit and Loss account at the
time of redemption.
3. Disclosures for Assets under Operating Leases
The Company has given an asset on operating lease grouped under the
category of Vehicles in the "Fixed Assets" - Schedule No. "7". The
Company has also taken certain vehicles on operating Lease.
7. In the opinion of the Board and to the best of their knowledge, the
value on realisation of Current Assets, Loans and Advances in the
ordinary course of the business would not be less than the amount at
which they are stated in the Balance Sheet.
8. Steps have been taken for identifying suppliers & seeking relevant
information in order to make necessary disclosures, as required under
Micro,Small & Medium Enterprises Development Act,2006.
12. Balances of some of the parties are subject to reconciliation &
confirmations.
13. a) Rupees have been rounded off to the nearest thousand.
b) Previous Year figures have been recasted / regrouped, wherever
considered necessary.
14. The name of the Company stands changed from Flex Industries
Limited to UFLEX LIMITED w.e.f. 19th March 2007.
17. Following disclosures are made, as per Accounting Standard-18
(AS-18), regarding, "Related Party Disclosures", issued by The
Institute of Chartered Accountants of India:- (a) List of Related
Parties:
i) Wholly Owned Subsidiaries : Flex America Inc., Flex Middle East FZE
, Uflex Europe Ltd., Uflex Packaging Inc. Upet Holding Ltd. and UTech
Developers Ltd.
ii) Fellow Subsidiaries : Flex Films Europa Sp Z o.o.,Flex P Films
(Egypt) S.A.E., UPET (Singapore) PTE. Ltd., Flex Americas S.A. DE C.V.,
SD Buildwell Pvt.Ltd. and Tflex Americas LLC
iii) Associate : Flex Foods Limited
iv) Joint Venture : Qcell Limited
v) Key Management Personnel & their relatives (also exercising signifi
cant influence over the Company) : Mr. Ashok Chaturvedi, Chairman &
Managing Director (relative Mrs. Rashmi Chaturvedi) and Mr. S.K.
Kaushik, Whole-time Director
vi) Enterprises in which the persons referred in (v) along with their
relatives exercise significant influence : Flex International (P)
Ltd., Anshika Investments (P) Ltd., Ultimate Flexipack Ltd.,
A.R.Infrastructure & Projects Pvt.Ltd., Anant Overseas (P) Ltd.,
Apoorva Extrusion (P) Ltd., Anshika Consultants (P) Ltd., A.R.Leasing
(P) Limited, Cinflex Infotech (P) Ltd., Ultimate Enterprises (P) Ltd.,
AR Aerotech (P) Ltd., AR Airways (P) Ltd., Kaya Kalpa Medical Services
(P) Ltd.,AC Infrastructures (P) Ltd., Club One Airways (P) Ltd.,Flex
Industries (P) Ltd., AC Infratech (P) Ltd., RC Properties (P) Ltd., A
to Z Infratech (P) Ltd. and Ultimate Infratech (P) Ltd.
Mar 31, 2010
(Rs.in lacs)
As At As At
31.03.2010 31.03.2009
1. Contingent liabilities not
provided for in respect of :
i) Guarantees issued by Banks 201.41 605.97
ii) Corporate Gurantee issued for
facilities taken by subsidiary / step
down subsidiaries from Banks 88565.00 26215.80
iii) Import duty obligations on
outstanding export commitment
under Advance Licence / EPCG Schemes 2032.33 13632.96
iv) Letters of Credit (Unexpired)
issued by Banks (Net of Margin) 2060.54 2042.45
v) Show cause notice / demands of
Excise Authorities not acknowledged
by the Company and are contested/
appealed/replied. 5426.02 4770.47
vi) Additional demands raised by the
Income Tax Department, which
are under rectification & appeal 38.82 155.02
vii) Additional demands raised by
the Sales Tax Department, which are
under rectification & appeal 538.59 413.28
viii) Demand raised by PF Authority
for alleged lower contribution of PF
authority and are under appeal 20.72 20.72
ix) Amount demanded by the erstwhile
workers of the Company and are
pending in labour Court 45.02 62.31
x) Premium on Redemption on maturity of
outstanding Foreign Currency
Convertible Bonds* 2141.42 2398.64
* The holders of FCCBs are expected to opt for the conversion rather
than redemption and in that case no premium would be payable by the
Company. On this basis the amount of premium has not been provided and
is shown as contingent liability. However the premium, if liable to be
paid would be adjusted against the available Securities Premium
Account/ charged to Profit and Loss account at the time of redemption.
2 In the opinion of the Board and to the best of their knowledge, the
value on realisation of Current Assets, Loans and Advances in the
ordinary course of the business would not be less than the amount at
which they are stated in the Balance Sheet.
3 Necessary disclosures required under Micro, Small & Medium
Enterprises Development Act, 2006, can only be considered once the
relevant information to identify the suppliers who are covered under
the said Act are received from such parties.
4 Gratuity
The Employeesà Group Gratuity Scheme is managed by ICICI Prudential
Life Insurance Company Limited. The present value of obligation is
determined based on actuarial valuation using the Projected Unit Credit
Method, which recognizes
5 Balances of some of the parties are subject to reconciliation &
confirmations.
6 a) Rupees have been rounded off to the nearest thousand.
b) Previous Year figures have been recasted / regrouped, wherever
considered necessary.
7 The name of the Company stands changed from Flex Industries Limited
to UFLEX LIMITED w.e.f. from 19th March 2007.
8 Following disclosures are made, as per Accounting Standard-18
(AS-18), regarding, "Related Party Disclosures", issued by The
Institute of Chartered Accountants of India:- (a) List of Related
Parties:
i) Wholly Owned Subsidiaries : Flex America Inc., Flex Middle East FZE
Uflex Europe Ltd., Uflex Packaging Inc.,Upet Holding Ltd. and UTech
Developers Ltd. ii) Fellow Subsidiaries : UPET (Singapore) PTE. Ltd.,
Flex Americas S.A. de C.V., Flex P Films (Egypt), UTech Retailers
Ltd.(Upto 19.03.2010), AKC Developers Ltd., SD Buildwell Pvt.Ltd. and
Ultra Urban Infratech Ltd.
(Upto 10.03.2010).
iii) Associates : Flex Foods Limited and Ultra Urban Infratech Limited
iv) Joint Venture : QCell Limited v) Key Management Personnel & their
relatives (also exercising significant influence over the Company) :
Mr. Ashok Chaturvedi, Chairman & Managing Director (relative Mrs.
Rashmi Chaturvedi) and Mr. S.K. Kaushik, Whole-time Director
vi) Enterprises in which the persons referred in (v) along with their
relatives exercise significant influence : Flex International (P) Ltd.,
Anshika Investments (P) Ltd., Ultimate Flexipack Ltd.,
A.R.Infrastructure & Projects Pvt.Ltd., Anant Overseas (P) Ltd.,
Apoorva Extrusion (P) Ltd., Anshikha Consultants (P) Ltd., A.R.Leasing
(P) Limited, Cinflex Infotech (P) Ltd., Ultimate Enterprises (P) Ltd.,
AR Aerotech (P) Ltd., AR Airways (P) Ltd., Kaya Kalpa Medical Services
(P) Ltd.,AC Infrastructures (P) Ltd., Club One Airways (P) Ltd.,Flex
Industries (P) Ltd., AC Infratech (P) Ltd., RC Properties (P) Ltd., A
to Z Infratech (P) Ltd. and Ultimate Infratech (P) Ltd.
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