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Notes to Accounts of Mold-Tek Packaging Ltd.

Mar 31, 2015

1. The previous period's figures have been reworked, regrouped, rearranged and reclassified wherever necessary. However the previous year financials are true and fair and are free from material misstatements. Accordingly, amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.

2. PRIOR PERIOD ADJUSTMENTS - EXTRAORDINARY ITEM

Prior period adjustments includes Rs.17 lakhs against leave encashment for Directors pertaining to earlier years and income of Rs.15 lakhs sales tax incentive receivable from Maharashtra Commercial Tax Department against VAT payments of previous year.

3. EVENTS OCCURING AFTER THE BALANCE SHEET (2014-15)

All the numbers have been considered in the financial statements as per Para 3.2 of AS 4.

4. CONTINGENT LIABILITIES

a. Bank guarantees

The Company has provided bank guarantees to the tune of Rs.70 lakhs comprising of bid securities and performance guarantees given to its customers/prospective customers.

b. Export obligations

The Company has a cumulative export obligation to the tune of $18 lakhs (Rs.9,34 lakhs) as on 31st March, 2015, the particulars of which are as below:

i. Of the total obligation $9 lakhs (Rs.4,07 lakhs) was against the licenses utilized against import of machinery by erstwhile Mold-Tek Technologies Limited. The Company has fulfilled the export obligations against these licenses by 31st March, 2011. The details have been submitted to customs department for redemption of licenses. Including the licenses amounting to $5 lakhs redeemed by 31st March, 2014, further licenses amounting to $1 lakh (Rs.43 lakhs) have been redeemed during the year and redemption licenses for the balance $3 lakhs (Rs.1,20 Lakhs) is awaited.

ii. Further, licenses granted under EPCG Scheme for import of machinery for which guarantee bonds valuing Rs.96 lakhs were issued to customs department. The Company has an export obligation of $9 lakhs (Rs.5,27 lakhs) against these licenses utilized for imports. The Company, till the end of the year under review, has fulfilled an obligation amounting to $9 lakhs (Rs.5,27 lakhs) including that of $4 lakhs (Rs.2,10 lakhs) fulfilled during this year.

c. No contingent liability is considered towards rebates availed on power bills in earlier years and short payments arising as a consequence thereof.

5. Related party disclosures

1. Related parties and nature of relationship

Mold-Tek Technologies Limited Group company

Friends Packaging Private Limited Relative of Director

Capricorn Industries Relative of Director

J.S. Sundaram & Co. Relative of Director

2. Key management personnel

J. Lakshmana Rao Chairman & Managing Director

A. Subramanyam Deputy Managing Director

P. Venkateswara Rao Deputy Managing Director

3. Relatives of key management personnel

A. Seshu Kumari Finance Controller

J. Navya Mythri Assistant Finance Controller


Mar 31, 2014

1. The previous period''s figures have been reworked, regrouped, rearranged and reclassified wherever necessary. However the previous year financials are true and fair and are free from material misstatements. Accordingly, amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.

2. 79,95,776 equity shares out of the issued, subscribed and paid up share capital were allotted in the financial year 2008-09 pursuant to the Scheme of Arrangement without payments being received in cash.

3. 12,40,000 equity shares of Rs. 10 each issued at a premium of Rs. 30 per share on 7th September, 2011 by way of preferential offer.

4. 19,25,000 equity shares of Rs. 10 each issued at a premium of Rs. 35.80 per share on 4th February, 2012 by way of preferential offer.

5. 46,625 equity shares of Rs. 10 each issued at a premium of Rs. 52.95 per share on 6th July, 2011 by way of Employee Stock Option Scheme.

6. 9,125 equity shares of Rs. 10 each issued at a premium of Rs. 52.95 per share on 19th December, 2011 by way of Employee Stock Option Scheme.

7. 37,800 equity shares of Rs. 10 each issued at a premium of Rs. 52.95 per share 10th July, 2012 by way of Employee Stock Option Scheme

8. 22,950 equity shares of Rs. 10 each issued at a premium of Rs. 52.95 per share 29th June, 2013 by way of Employee Stock Option Scheme

MTPL Employee Stock Option Scheme

In respect of 2,02,000 Options granted to employees on 4th June, 2010 under the Employees Stock Option scheme, in accordance with the guidelines issued by Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, at Rs. 26 per option, the discount value (Rs. 36.95) of Option is accounted as deferred employee compensation, amortised on a straight line basis over the vesting period.

During the year, 22,950 shares have been allotted to the employees against options exercised by them. 9,150 options pertaining to employees who left during the year have been lapsed as they have not exercised the option as on the date of their resignation and the employee compensation expenses pertaining these lapsed options, charged earlier against profits of the Company have been reversed along with the balance of deferred employee compensation pertaining to those options.

The Board of Directors at their meeting held on 14th May, 2014 and 29th May, 2014 has recommended an interim dividend of Rs. 1.5 and a final dividend of Rs. 1.5 per equity share.

During the year, the Company has adjusted an amount of Rs. 2,44 lakhs towards deferred tax liability pertaining to the period prior to demerger, from the opening balance of surplus account.

9. Secured loans

Term loans from bank

As at the year end the company has a total secured term borrowings of Rs. 17,84 lakhs [ICICI Bank Rs. 6,12 lakhs (includes Rs. 6,00 lakhs borrowed during the reported year for modernisation of existing facilities) and Citibank Rs. 11,72 lakhs]. The same have been classified under non-current (Rs. 11,83 lakhs) and current liabilities (Rs. 6,01 lakhs).

The following assets of the Company are impacted by the said securitization:

a. Citibank has first exclusive charge by way of equitable mortgage on the factory land & buildings situated at Survey No.82/2A, Mhavashi Village, Khandala (Taluk), Satara District, Maharashtra State, belonging to the Company.

b. Citibank has first exclusive charge on plant & machinery and other fixed assets of Satara plant.

c. Both ICICI Bank and Citibank have equal pari passu charge by way of equitable mortgage on the factory land & building situated at Survey No.160/A, 161/1, 161/5, Bhimpore Village, Nani Daman, Diu & Daman, belonging to the Company (for only term loan of Rs. 13,04 lakhs from both the banks).

d. Both ICICI Bank and Citibank have first pari passu charge on plant & machinery and other movable fixed assets of Daman plant.

e. Second pari passu charge on present and future stocks and book debts of the Company.

f. Movable fixed assets of the Company except at Daman.

Hire purchase loans

The Company has been availing hire purchase loans for vehicles from various financial institutions with a tenor of 36 to 60 installments. As at the year end, the Company has total hire purchase loans of Rs. 32 lakhs which have been classified under non-current liabilities (Rs. 18 lakhs) and current liabilities (Rs. 14 lakhs).

10. Unsecured loans

The Government of Andhra Pradesh has extended the Company, the incentive of sales tax deferral scheme pursuant to which the sales tax payment attributable to the sales effected out of production is deferred (interest-free) for a period of 14 years. The Company has availed this scheme for production facility of its 2nd expansion at Annaram unit for Rs. 7,51 lakhs and production facility at Dommarapochampally unit for Rs. 4,22 lakhs.

The sales tax payment deferred in each year is repayable after the expiry of the deferment period. The Company has completed its 14 years period for both these units. The Company has been repaying installments of the deferred sales tax in accordance with the scheme. The total sales tax deferral amounts as on 31st March, 2014 stand at Rs. 8,62 lakhs classified under non-current Rs. 7,48 lakhs and current liabilities Rs. 1,14 lakhs (Rs. 1,14 lakhs paid on 20th April, 2014).

The employees'' gratuity fund scheme managed by a Trust (Life Insurance Corporation of India) is a defined plan. The present value of obligation is determined based on actuarial valuation as per Accounting Standard 15.

With respect to leave encashment, the Company has an existing provision of Rs. 25 lakhs at the beginning of the year. In the absence of actuarial valuation, the Company during the year has provided the differential amount of Rs. 14 lakhs (Rs. 16 lakhs less paid during the year Rs. 2 lakhs - current value of accumulated leaves to date Rs. 39 lakhs towards the end of the year) of which the value pertaining to earlier years Rs. 9 lakhs has been considered in prior period adjustment.

11. DEFERRED TAX LIABILITY (NET)

The cumulative deferred taxLiabiLity as on 31st March, 2014 stands at of Rs. 4,37 lakhs which includes an amount of Rs. 2,44 lakhs pertaining to liability prior to demerger. The same has been now adjusted to reserves and surplus account. In addition to the existing opening provision of Rs. 1,22 lakhs towards deferred tax liability, the company during the year has provided Rs. 46 lakhs. An amount of Rs. 25 lakhs pertaining to earlier years (post demerger) which was underprovided in earlier years, has been considered as prior period adjustments.

The Company under multiple banking facilities is availing working capital requirements from Citibank & ICICI Bank and Yes Bank. During the year, the Company has availed a working capital of Rs. 6 crore from Yes Bank Limited.

As at the year end, the Company has a total secured short term borrowings of Rs. 46.5 crore comprising of Rs. 15.5 crore from ICICI Bank (Rs. 15 crore fund based & Rs. 0.5 crore non-fund based), Rs. 25 crore of fund based limits from Citibank and Rs. 6 crore of fund based limits from Yes Bank (31st March, 2013: Rs. 40.50 crore - Rs. 40 crore fund based and Rs. 0.5 crore non-fund based).

Working capital facilities from the banks are secured by hypothecation on the following assets of the Company:

a. First pari passu charge to three banks by way of hypothecation of the borrower''s entire current assets which inter alia include stocks of raw material, work in process, finished goods, consumable stores & spares and such other movables including book debts, outstanding monies, receivables both present and future of such form satisfactory to the bank.

b. First pari passu charge to ICICI & Citibank and second pari passu charge to Yes Bank by way of hypothecation of the borrower''s movable fixed assets of the Company (Except those specifically charged for the term loans).

c. First pari passu charge to ICICI & Citibank by way of equitable mortgage on the following immovable assets of the Company:

1. First charge by way of equitable mortgage of land measuring 6.5125 acres & building in Sy.No. 54,55/A,70, 71&72 of Annaram Village Near Air Force Academy, Jinnaram Mandal, Medak District, Telangana, belonging to the Company.

2. First charge by way of equitable mortgage of land measuring 6,413 sq. yards & and building in Sy.No. 164 part, Dammarapochampally Village, Qutubullapur, Ranga Reddy District, Telangana, belonging to the Company.

3. First charge by way of equitable mortgage of land measuring 1,066.63 sq. yards & buildings in Plot No. D-177 phase III, IDA, Jeedimetla, Qutballapur Mandal, Ranga Reddy District, Telangana belonging to the Company.

4. First charge by way of equitable mortgage of ground floor, cellar area of building bearing Municipal No. 8-2-293/82/A/700&700/1 on Plot No. 700 forming part of Sy. No. 120 (New) of Shaikpet Village and Sy. No. 102/1 of Hakimpet Village admeasuring 3,653 sft of the office space presently occupied by the vendee 50% or 930 sft of reception area of 1,860 sft all in relevance to the Ground Floor 400 sq. yards out of 1,955 sq. yds situated within the approved layout of the Jubilee Hills Co-operative House Building Limited at Road No. 36, Jubilee Hills, Hyderabad belonging to the Company.

d. Personal guarantees of J. Lakshmana Rao, A. Subramanyam, P. Venkateswara Rao and J. Mytreyi, Directors of the Company.

Unpaid dividend balance of Rs. 60 lakhs, pertains to dividend relating to earlier years which includes Rs. 18 lakhs pending transfer to trust in terms of the Scheme of Arrangement sanctioned by the Hon''ble High Court of Andhra Pradesh.

Provision for Daman unit buildings is pertaining to repairs for damages caused due to fire accident which is based on the estimated cost mentioned in insurance surveyors report.

Deposits with government bodies include amounts parked as security deposit with electricity departments (Rs. 78 lakhs) of state governments where in the manufacturing facilities are situated. Other deposits include EMD and security deposits of Rs. 54 lakhs with customers and rental deposits of Rs. 25 lakhs. Capital advances includes payment of Rs. 70 lakhs for acquisition machinery and Rs. 15 lakhs for acquiring licenses and implementing ERP.

Inventory quantities & values as at the balance sheet date are as certified by the management. Material damaged in fire includes damaged raw material, work in progress, finished goods and metal scrap which are stated at net realizable value. The Company has settled excise duty claims on these damaged stocks including metal remains as per the prevailing excise law.

Sundry debtors are subject to confirmation and reconciliation. Sundry debtors include an amount of Rs. 75 lakhs outstanding for more than 6 months against which a provision for Rs. 33 lakhs has been made, and doubtful debts amounting Rs. 21 lakhs written off during the year. However, the management expresses confidence in the recovery of the balance overdues.

The Company during the financial year suffered fire accident in its Daman unit, due to which a few fixed and current assets were damaged either partially or completely. The Company lodged a final claim for Rs. 6,99 lakhs against which an amount of Rs. 6,25 lakhs has been settled for by the insurance company, leaving damaged stock to the Company which is valued at Rs. 14 lakhs (included under inventories), resulting in a net loss of Rs. 60 lakhs (reported under extraordinary items).

96,480 shares of Mold-Tek Plastics Limited, vested in the Company in accordance with the Scheme of Arrangement approved by the Hon''ble High Court of Andhra Pradesh, are pending for transfer into a separate trust along with dividend for financial years 2007-08, 2008-09, 2009-10, 2010-11, 2012-13 and 2013-14.

12. PRIOR PERIOD ADJUSTMENTS AND EXTRAORDINARY ITEM

Prior period adjustments include deferred tax liability of Rs. 25 lakhs pertaining to earlier years (post demerger), Rs. 9 lakhs against leave encashment for employees pertaining to earlier years and income of Rs. 23 lakhs refunds received from electricity department against payments of previous year.

The net loss suffered by the Company of Rs. 60 lakhs after considering the net realizable value of partially damaged material at Rs. 14 lakhs. The amount has been reported as extraordinary item as per Para 4.2 of Accounting Standard 5.

13. EVENTS OCCURING AFTER THE BALANCE SHEET (2013-14)

All the numbers have been considered in the financial statements as per Para 3.2 of Accounting Standard 4.

14. CONTINGENT LIABILITIES

a. Bank guarantees

The Company has provided bank guarantees to the tune of Rs. 45 lakhs comprising of bid securities and performance guarantees given to its customers/prospective customers.

b. Export obligations

The Company has a cumulative export obligation to the tune of $18 lakhs (Rs. 9,34 lakhs) as on 31st March, 2014 the particulars of which are as below:

i. Of the total obligation $9 lakhs (Rs. 4,07 lakhs) was against the licenses utilised against import of machinery by erstwhile Mold-Tek Technologies Limited. The Company has fulfilled the export obligations against these licenses by March 31, 2011. The details have been submitted to customs department for redemption of licenses. Including the licenses amounting to $3 lakhs redeemed in the previous year, further licenses amounting to $2 lakhs (Rs. 98 lakhs) have been redeemed during the year and redemption licenses for the balance $4 lakhs (Rs. 1,63 lakhs) is awaited.

ii. Further, licenses granted under EPCG Scheme for import of machinery for which guarantee bonds valuing Rs. 96 lakhs were issued to customs department. The Company has an export obligation of $9 lakhs (Rs. 5,27 lakhs) against these licenses utilized for imports. The Company till the end of the year under review has fulfilled an obligation amounting to $6 lakhs (Rs. 3,08 lakhs) including that of $3 lakhs (Rs. 1,61 lakhs) fulfilled during this year. The balance export obligation of $3 lakhs (Rs. 2,19 lakhs) has to be fulfilled by March 31, 2020.

c. No contingent liability is considered towards rebates availed on power bills in earlier years and short payments arising as a consequence thereof.


Mar 31, 2013

1. PRIOR PERIOD ADJUSTMENTS

It includes gratuity of Rs.14.54 lakhs pertaining to earlier years for Wholetime Directors.

2. CONTINGENT LIABILITIES

a. Bank guarantees

The Company has provided bank guarantees to the tune of Rs.43.63 lakhs comprising of bid securities and performance guarantees given to its customers/prospective customers.

b. Export obligations

The Company has a cumulative export obligation to the tune of $ 18.17 lakhs (Rs.8,65.85 lakhs) (as on 31st March, 2013) the particulars of which are as below:

i. Of the total obligation $9.02 lakhs (Rs.4,06.96 lakhs) was against the licenses utilized against import of machinery by erstwhile Mold-Tek Technologies Limited. The Company has fulfilled the export obligations against these licenses by March 31, 2011. The details have been submitted to customs department for redemption of licenses. During the year licenses amounting to $3.23 lakhs (Rs.1,45.59 lakhs) have been redeemed and awaiting the redemption of the balance $5.79 lakhs (Rs.2,61.37 lakhs).

ii. Further, licenses granted under EPCG Scheme for import of machinery for which guarantee bonds valuing Rs.96.00 lakhs were issued to customs department. The Company has an export obligation of $9.15 lakhs (Rs.4,58.89 lakhs) against the licenses utilized for imports. During the year under review, the Company has fulfilled an obligation amounting to $2.98 lakhs (Rs.1,53.68 lakhs) and the balance export obligation of $6.18 lakhs (Rs.3,05.21 lakhs) has to be fulfilled by March 31, 2020.

c. No contingent liability is considered towards rebates availed on power bills in earlier years and short payments arising as a consequence thereof.

3. OPERATING LEASES

The Company has entered into operating lease agreements for factory buildings at Hosur (Tamil Nadu) & Dundigal (Andhra Pradesh). The maximum obligations on non-cancelable operating leases payable as per the minimum lease rentals stated in the respective agreements for tenor are as follows:

4. RELATED PARTY DISCLOSURES

1. Related parties and nature of relationship

Mold-Tek Technologies Limited Associate

Friends Packaging Private Limited Relative of Director

Tarus Industries Relative of Director

Capricon Industries Relative of Director

2. Key management personnel

J. Lakshmana Rao Chairman & Managing Director

A. Subramanyam Deputy Managing Director

P. Venkateswara Rao Deputy Managing Director

3. Relatives of key management personnel

A. Seshu Kumari Finance Controller

J. Navya Mythri Assistant Finance Controller


Mar 31, 2012

1. The previous period's figures have been reworked, regrouped, rearranged and reclassified wherever necessary. Accordingly, amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.

2.1 79,95,776 equity shares out of the issued, subscribed and paid up share capital were allotted in the financial year 2008-09 pursuant to the Scheme of Arrangement without payments being received in cash.

2.2 12,40,000 equity shares of Rs.10 each issued at a premium of Rs.30 per share on 7th September, 2011 by way of preferential offer.

2.3 19,25,000 equity shares of Rs.10 each issued at a premium of Rs.35.80 per share on 4th February, 2012 by way of preferential offer.

2.4 46,625 equity shares of Rs.10 each issued at a premium of Rs.52.95 per share on 6th July, 2011 by way of Employee Stock Option Scheme.

2.5 9,125 equity shares of Rs.10 each issued at a premium of Rs.52.95 per share on 19th December, 2011 by way of Employee Stock Option Scheme.

MTPL Employee Stock Option Scheme

2,02,000 Options have been granted to employees on 4th June 2010 under the Employees Stock Option Scheme, in accordance with the guidelines issued by Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 at Rs.26 per option.

The Discount value (Rs.36.95) of Option is accounted as deferred Employee Compensation which is either amortised on a straight line basis over the vesting period or on the basis of Option exercised whichever is earlier.

During the year, 55,750 number of shares has been allotted to the employees against options exercised by them. The Deferred Employee Compensation of Rs.20,59,963 pertaining to such options exercised during the year have been charged off to the Statement of Profit and Loss.

3. WARRANTS APPLICATION MONEY

a. During the year, on 7th September, 2011 the Company allotted 12,40,000 equity shares against fully convertible warrants. (12,40,000 warrants were allotted at a price of Rs.40 comprising nominal value of Rs.10 and premium of Rs.30 each on 10th March, 2010).

b. On 4th February, 2012 the Company allotted 19,25,000 equity shares against fully convertible warrants. (22,40,000 Fully convertible warrants were allotted at a price of Rs.45.80 per warrant comprising nominal value of Rs.10 and premium of Rs.35.80 on 6th August, 2011). The balance of 3,15,000 warrants are forfeited. The application money received against forfeited warrants being Rs.36,06,750 (25% of the issue price of the warrants) is transferred to capital reserve account.

The Board of Directors at its meeting held on 29th May, 2012 has recommended a final dividend of Rs.2.5 per equity share of Rs.10 each in addition to the interim divided of Rs.2.50 per equity share declared on 13th February, 2012

4.1 Secured loans

Long-term loan facilities from the banks

The Company has availed 2 long-term loan facilities from ICICI Bank Limited totaling Rs.4,50,00,000. Repayment schedule for Term Loan 1 amounting to Rs.1,00,20,000 was completed during the year. Schedule for repayment against Term Loan 2 amounting to Rs.4,49,35,251 has commenced from March, 2011 (repayable in 18 quarterly installments).

The above loans are secured by way of pledge/first charge on the following assets of the Company:

a. Land measuring 11,586 sq mtrs & building in Sy No. 160A, 161/1, 161/5, 160B of Bhimpore Village & Panchayat, Nani Daman, Daman Taluk & District, belonging to the Company;

b. Other fixed assets of the Company located at Daman.

Vehicle loans

The Company is availing 11 vehicle loans from various financial institutions of which repayment schedule for 10 vehicles is 36 monthly installments while the loan on 11th vehicle is repayable in 60 monthly installments.

Loan installments amounting to Rs.53,52,996 payable with the next 12 months (April 2012 to March 2013) have been grouped under current liabilities.

4.2 Unsecured loans

The Government of Andhra Pradesh has extended to the Company, incentive of sales tax deferral scheme pursuant to which, the sales tax attributable to the sales effected out of production is deferred (interest-free) for maximum period of 14 years or 2010 whichever is earlier. The sales tax payment deferred in each year is repayable over equal number of years commencing from the year in which the deferment period expires.

The Company has availed this scheme for its 2nd expansion at Annaram unit and Dommarapochampally unit. The Company has completed its 14 deferment years period for its Annaram unit and has commenced the repayments. Repayment of sales tax deferment availed on Dommarapochampally unit will commence from 1st April, 2014. The total sales tax deferral amount as on 31st March 2012 stands at Rs.10.73 crore.

The Company entered in to multiple banking facility by availing fund based working capital requirements from Citibank while earlier entire facilities (fund and non-fund) were availed from ICICI Bank Limited. The Company during the year under review has been sanctioned/availed working capital facility of Rs.20 crore from Citibank and Rs.15 crore (Rs.14.50 crore fund based and Rs.0.50 crore non-fund based) from ICICI Bank Limited (making a total of Rs.35 crore), against Rs.28 crore in the previous financial year.

Working capital facilities from the banks are secured by way of first charge on the following assets of the Company:

a. Paripassu first charge to both banks by way of hypothecation of the borrower's entire current assets which inter-alia include stocks of raw material, work-in-process, finished goods, consumable stores & spares and such other movables including book debts, outstanding monies, receivables both present and future of such form satisfactory to the bank.

b. Paripassu first charge to both banks by way of hypothecation of the borrower's movable fixed assets of the Company (Except movable property at Daman).

c. Paripassu first charge to both banks by way of equitable mortgage on the following immovable assets of the Company:

1. Land measuring 6.5125 acres & building in Sy. No 54,55/A,70, 71&72 of Annaram Village, Near Air Force Academy, Jinnaram Mandal, Medak District, Andhra Pradesh belonging to the Company.

2. Land measuring 6413 sq. yards & building in Sy. No. 164 part, Dammarapochampally Village, Quthbullapur, Ranga Reddy District, Andhra Pradesh belonging to the Company.

3. Land measuring 1066.63 sq. yards & buildings in Plot No. D-177 phase III, IDA, Jeedimetla, Quthbullapur Mandal, Ranga Reddy District, Andhra Pradesh belonging to the Company.

4. Ground floor, cellar area of building bearing Municipal No. 8-2-293/82/A/700&700/1 on Plot No. 700 forming part of Sy. No. 120 (New) of Shaikpet Village and Sy. No. 102/1 of Hakimpet Village admeasuring 3,653 sq. ft of office space presently occupied by the vendee 50% or 930 sq. ft of reception area of 1860 sq. ft all in relevance to the ground floor 400 sq. yds out of 1,955 sq. yds situated within the approved layout of the Jubilee Hills Co-operative House Building Limited at Road No. 36, Jubilee Hills, belonging to the Company.

d. Personal guarantees of J. Lakshmana Rao, A. Subrahmanyam, P. Venkateswara Rao and J. Mytreyi, Directors of the Company.

Unpaid divided includes an amount of Rs.38.88 lakhs comprising unpaid dividend accounts of various years and an amount of Rs.13.99 lakhs transferrable to a proposed employee trust in terms of the Scheme of Arrangement sanctioned by the Hon'ble High Court of Andhra Pradesh.

* Depredation ofRs..14,82,669 has been capitalised, pertaining assets used for the purpose of generating inhouse assets during the year.

During the year, the Company has acquired 1.85 acres of land in Satara at a cost of Rs.1.33 crore for construction of a modern plant, which is ongoing.

The Company added new machinery to the tune of Rs.10.39 crore for its modernization at all units which includes IML containers at unit 1. This capital expenditure will also facilitate expansion in pail production capacity at all existing units.

The Company at the beginning of the year had 4,07,933 equity shares of Mold-Tek Technologies Limited (MTTL) carried at a value of Rs.3,06,66,503 stated as long-term investment. During the year, the Company has purchased from open market 15,500 equity shares of MTTL at a cost of Rs.9,65,577. All these shares are classified as Rs.Long-term investments.Rs.

Capital advances include Unit-3 building advance of Rs.49.93 lakhs, advance of Rs.32.82 lakhs for 33KV work at Unit-1, advance of Rs.94.76 lakhs issued for IML label cutting, lamination & slitting machine and Rs.30.6 lakhs issued towards Satara plant advances.

Inventory quantities & values are as at the Balance Sheet date and are as certified by the management.

Sundry debtors are subject to confirmation and reconciliation. Sundry debtors include an amount of Rs.65.32 lakhs outstanding for more than 6 months against which a provision for Rs.10.86 lakhs has been made. Management expresses confidence in the recovery of the balance over dues.

Bank balances include unpaid dividend of various years, FCD & share application refunds due. FCD application money of Rs.41,000 & share application money of Rs.2,34,158 were pending for more than 7 years remains yet to be transferred to the Investor Education and Protection Fund.

96,480 shares of Mold-Tek Plastics Limited, vested in your Company in accordance with the Scheme of Arrangement approved by the Hon'ble High Court of Andhra Pradesh, are pending transfer into a separate trust.

Note:

Excludes a sum of Rs.18.78 lakhs capitalized during the year allocated for expansion of facilities (31st March, 2011: Rs.16.13 lakhs) and a sum of Rs.14.65 lakhs paid towards leave encashment for earlier years which is accounted under prior period items.

Interest on working capital excludes a sum of Rs.58.25 lakhs as costs pertaining to acquisition, erection and construction of new facilities at Daman, arrived based on weighted average cost of capital as per Accounting Standard 16.

5. PRIOR PERIOD ADJUSTMENTS

Prior period items includes a sum of Rs.14,65,000 pertaining to leave encashment for earlier years ending tenure till 2008, now paid to Wholetime Directors of the Company.

6. CONTINGENT LIABILITIES

a. Bank guarantees

The Company has provided bank guarantees to the tune of Rs.47.49 lakhs comprising of bid securities and performance guarantees.

b. Export obligations

Guarantee bonds issued in favor of the customs authorities amounting to Rs.59.00 lakhs for fulfillment of export obligations of USD 3.70 lakhs equivalent to Rs.190 lakhs for import of machinery against licenses granted under EPCG Scheme. The Company has to fulfill the said export obligation by 13th March, 2020.

The Company has fulfilled export obligations of USD 9.02 Lakhs in the name of erstwhile Mold-Tek Technologies Limited, up to 31st March, 2011. However, the redemption of the guarantee bonds to that extent is in process.

c. No contingent liability is considered towards rebates availed on power bills in earlier years and short payments arising as a consequence thereof.


Mar 31, 2010

1. The previous years figures have been reworked, regrouped, rearranged and reclassified wherever necessary. Accordingly, amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.

2. The name of the Company has been changed from M/s. Moldtek Plastics Limited to M/s. Mold-Tek Packaging Limited as per resolution passed in EGM of the Members held on 9th February 2010. Fresh incorporation certificate incorporating the change has been received by the Company.

3. Share Capital

a. Authorised Capital is increased from Rs.9 crore to Rs.10 crore, vide ordinary resolution passed at Extraordinary General Meeting of the Members held on 9th February, 2010 by the addition of 10,00,000 equity shares of Rs.10 each ranking pari passu with existing Equity Shares of the Company.

b. During the year, the Company allotted 12,40,000 Fully Convertible Warrants (Convertible into equal number of Equity Shares within a period of 18 months from the date of allotment of Warrants) at a price of Rs.40 per Warrant (comprising nominal value of Rs.10 and premium of Rs.30 each and the issue price being not less than the price as arrived at, in accordance with the terms of Chapter VII of Securities And Exchange Board of India Regulations, 2009), vide Special Resolution passed at Extraordinary General Meeting of the Members held on 9th February, 2010 and the warrants were allotted on 10th March 2010.

The Company has received Rs.124 lakhs being the 25% of the value of the warrants as advance and the balance amount is to be received within 18 months from the date of allotment of warrants.

4. Secured Loans

Pursuant to the Scheme of Arrangement approved by the Honble High Court of Andhra Pradesh vide its Order dated 25th July 2008, term loan availed by the combined Company from M/s. ICICI Bank for Daman Plant expansion (M/s. Mold-Tek Packaging Limited) and corporate office building land (M/s. Mold-Tek Technologies Limited) is bifurcated in these financial statements in the ratio in which the facility was availed. Similarly, the cash credit/working capital facility is also bifurcated.

The ICICI Bank has accorded recognition to bifurcate the combined term loan and cash credit/working capital facility into the two separate accounts of M/s. Mold-Tek Packaging Limited and M/s. Mold-Tek Technologies Limited respectively vide their Credit Arrangement letter dated 8th April, 2009 and this was made effective from 19th August, 2009, vide a suitable credit addendum letter.

Long term loan and working capital facilities from the ICICI Bank is secured by hypothecation by way of first charge on the following assets of the Company:

a. Exclusive first charge by way of hypothecation of the borrowers entire current assets which inter- alia include stocks of raw material, work in process, finished goods, consumable stores & spares and such other movables including book debts, outstanding monies, receivables both present and future of such form satisfactory to the bank.

b. Exclusive first charge on the movable fixed assets of the Company.

c. Exclusive charge by way of equitable mortgage on the following immovable assets of the Company (subject to mutation as a consequence of the Scheme of Arrangement):

i. First charge by way of equitable mortgage of land measuring 6.5125 acres building in S.No 54,55/A,70, 71,72 of Annaram Village, near Air Force Academy, Jinnaram Mandal, Medak District, Andhra Pradesh, belonging to the Company.

ii. First charge by way of equitable mortgage of land measuring 6413 sq. yds & and building in S. No. 164 part Dammara Pochampally Village, Qutubullapur, Ranga Reddy District, Andhra Pradesh, belonging to the Company.

iii. First charge by way of equitable mortgage of land measuring 1066.63 sq. yds. & buildings in Plot No. D-177 phase III, IDA, Jeedimetla, Qutballapur Mandal, R. R. District, Andhra Pradesh belonging to the Company.

d. Personal guarantees of J. Lakshmana Rao, A. Subrahmanyam, P.Venkateswara Rao and J. Mytreyi, Directors of the Company.

5. Unsecured Loans

The Government of Andhra Pradesh has extended to the Company, the incentive of sales tax deferral scheme pursuant to which the sales tax attributable to the sales effected out of production is deferred (interest-free) for a period of 14 years. The deferred sales tax of each year is repayable after the expiry of the period deferred. Sales Tax Deferral amounts Rs.1178.60 lakhs as on 31st March, 2010 to be paid in installments commencing from 1st April 2010 and 1st April 2014.

6. Fixed Assets

During the year, the Company has acquired undivided share of 400 sq. yds. of land and ground floor portion of building at Plot No. 700 Jubilee Hills, along with furniture and electrical installations at a cost of Rs 4.40 crore for its corporate office.

All residual values of assets not in use and/or having outlived their utility have been charged off as per AS 28 concerning impairment of assets.

Mutation of property and ownership records in respect of Jeedimetta unit of the Company, as well as other movable/non-movable assets transferred as part of the demerger process remains pending.

A physical verification of fixed assets is not conducted during the year under review by the Company.

7. Investments

The Company originally had 20,500 equity shares of Mold-Tek Technologies Ltd acquired at a cost of Rs.5,16,938 stated as long term investments, which it sold during the year for a value of Rs.9,28,995.

Subsequently, the Company purchased 33,433 equity shares of MTTL at a cumulative value of Rs.22,29,329 and sold 14,500 of these shares at a value of Rs.8,37,229. The balance of 18,933 shares, acquired at a cost of Rs.15,21,423 are held on the balance sheet date, the market value of which is Rs.10,97,167. The diminution in value Rs. 4,24,256 has been provided in the Profit and Loss Account. All these latter shares are classified as Current Investments as distinguished from long term investments.

8. Current Assets, Loans & Advances; and Current Liabilities & Provisions

a. Inventory quantities & values as at the balance sheet date are as certified by the management.

b. The method of valuation of inventories has undergone a modification during the year with the adoption of a weighted average method over a period of one quarter instead of the hitherto adopted methodology. As a result, the inventories are valued higher by Rs.31,36,552 in respect of raw materials, work-in-process and finished goods.

c. Sundry debtors, sundry creditors for goods and capital advances, deposits, staff advances and bank balances pertaining to dividend accounts and margin monies maintained with ICICI Bank, are subject to confirmation and reconciliation. Advances include an amount of Rs.21.59 lakhs over due on account for advances for purchases/expenses and travelling expenses and not provided for, as the management express confidence in recovery of the same.

d. Sundry debtors include an amount of Rs.26.97 lakhs outstanding for more than 6 months against which a provision for Rs.14.13 lakhs exists. However, the management expresses confidence in the recovery of the balance over dues.

e. The Company opted for actuarial valuation and provided for gratuity as per the notified norms per Accounting Standard 15 (Revised).

f. Balances with banks include Rs.16.29 lakhs comprising various unpaid dividend accounts, against which corresponding liability is Rs.19.05 lakhs includes FCD & share application refunds due. During the year, unclaimed dividend pertaining to financial year 1997-98 amounting to Rs.21,217, financial year 1998-99 amounting to Rs.61,349 and financial year 1999-00 amounting to Rs.2,85,140 have been transferred to Investor Education and Protection Fund. FCD application money of Rs.41,000 & Share application money of Rs.2,34,158 pending for more than 7 years remains yet to be transferred to the Investor Education and Protection Fund.

g. Current Assets include 96,480 shares of Moldtek Plastics Limited (being 72% of 1,34,000 equity shares originally held by the erstwhile M/s. Teckmen Tools Private Limited, prior to amalgamation of that Company with Moldtek Technologies Limited, and vested in your Company) in accordance with the Scheme of Arrangement, are pending the vesting into a separate trust/trustee along with dividend for financial year 2007-08 & financial year 2008-09, in accordance with the approval of the Honble High Court of Andhra Pradesh. The corresponding dividend amounts due for the year 2007-08 & 2008-09 is Rs.3,85,920 and for the current year 2009-10 the proposed dividend amounts to Rs.2,89,440.

h. Sundry debtors show a significant rise over the previous year. While part of increase is attributable to value, the rise is mainly on account of increase in average credit period to its customers over the previous year.

Similarly, creditors also show a significant increase vis-a-vis the previous year. Again, the average credit period availed from its suppliers has increased over the previous years and hence the surge in creditors balance.

9. Contingent Liabilities

a. Bank guarantees, for which the Company has provided counter guarantee, Rs.39.71 lakhs.

b. No contingent liability is considered towards rebates availed on power bills and short payments arising as a consequence thereof.

10. During the year, the Company has received an amount of Rs.50,66,403 from the Income Tax department towards interest on the refund to be made against an appeal for the AY 1996-97. The same amount was shown in Interest and Financial Charges as interest received.

11. In accordance with the requirements for disclosure of amounts due to the Micro, Small & Medium Enterprises, the Company has not compiled the list of sundry creditors who would satisfy this criterion since no information received by the Company. In view of this, the information relating to payments overdue to Micro, Small & Medium Enterprises cannot be computed.

12. Related Party Disclosures

i. Related Parties and Nature of Relationship

a. Mold-Tek Technologies Limited Associate

b. Friends Packaging Private Limited Relative of Director

c. Tarus Industries Relative of Director ii. Key Management Personnel

a. J. Lakshmana Rao, Chairman & Managing Director

b. A. Subrahmanyam, Deputy Managing Director

c. P. Venkateswara Rao, Deputy Managing Director iii. Relatives of Key Management Personnel

a. A. Seshu Kumari, Finance Controller

 
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