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Notes to Accounts of Mold-Tek Packaging Ltd.

Mar 31, 2023

Provisions, Contingent liabilities and Contingent assets

The Company recognises provisions when there is
present obligation as a result of past event and it is
probable that there will be an outflow of resources
and reliable estimate can be made of the amount
of the obligation. If the effect of the time value of
money is material, provisions are determined by
discounting the expected future cash flows to net
present value using an appropriate pre-tax discount
rate that reflects current market assessments of the
time value of money and, where appropriate, the
risks specific to the liability. Unwinding of the
discount is recognised in the statement of profit
and loss as a finance cost. Provisions are reviewed
at each reporting date and are adjusted to the reflect
the current best estimate.

A present obligation that arises from past events
where it is either not probable that an outflow of
resources will be required to settle or a reliable
estimate of the amount cannot be made, is disclosed
as a contingent liability. Contingent Liabilities are
also disclosed when there is a possible obligation
arising from past events, the existence of which
will be confirmed only by the occurrence or nonÂ¬
occurrence of one or more uncertain future events
not wholly within the control of the Company.

Contingent assets are not recognized in financial
statements since this may result in the recognition
of income that may never be realised.

o) Financial instruments:

Financial assets and financial liabilities are

recognised when the Company becomes a party
to the contractual provisions of the instrument.
Financial assets and financial liabilities are

initially measured at fair value. Transaction costs
that are directly attributable to the acquisition or
issue of financial assets and financial liabilities
(other than financial assets and financial liabilities
at fair value through profit or loss) are added to or
deducted from the fair value of the financial assets
or financial liabilities, as appropriate, on initial
recognition. Transaction costs directly attributable
to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are
recognised immediately in profit or loss.

Financial assets

(i) Financial assets carried at amortised cost

A financial asset is subsequently measured at
amortised cost if it is held within a business
model whose objective is to hold the asset in
order to collect contractual cash flows and the
contractual terms of the financial asset give
rise on specified dates to cash flows that are
solely payments of principal and interest on
the principal amount outstanding.

(ii) Financial assets at fair value through other
comprehensive income

A financial asset is subsequently measured
at fair value through other comprehensive
income if it is held within a business
model whose objective is achieved by both
collecting contractual cash flows and selling
financial assets and the contractual terms
of the financial asset give rise on specified

dates to cash flows that are solely payments
of principal and interest on the principal
amount outstanding. Further, in case where
the Company has made an irrevocable
selection based on its business model, for its
investments which are classified as equity
instruments, the subsequent changes in fair
value are recognized in other comprehensive
income.

(iii) Financial assets at fair value through profit
or loss

A financial asset which is not classified in any
of the above categories are subsequently fair
valued through profit or loss.

(iv) The Company recognizes loss allowances
using the expected credit loss (ECL) model
for the financial assets which are not fair
valued through profit or loss. Loss allowance
for trade receivables with no significant
financing component is measured at an
amount equal to lifetime ECL. For all other
financial assets, expected credit losses are
measured at an amount equal to the 12-month
ECL, unless there has been a significant
increase in credit risk from initial recognition
in which case those are measured at lifetime
ECL. The amount of expected credit losses
(or reversal) that is required to adjust the loss
allowance at the reporting date to the amount
that is required to be recognized is recognized
as an impairment gain or loss in statement of
profit or loss.

Financial liabilities and equity instruments

1. Classification as debt or equity

Financial liabilities and equity instruments
issued by the Company are classified
according to the substance of the contractual
arrangements entered into and the definitions
of a financial liability and an equity
instrument.

2. Equity instruments

An equity instrument is any contract that
evidences a residual interest in the assets
of the Company after deducting all of its
liabilities. Equity instruments are recorded
at the proceeds received, net of direct issue
costs.

3. Financial liabilities

Trade and other payables are initially
measured at fair value, net of transaction
costs, and are subsequently measured at
amortised cost, using the effective interest
rate method where the time value of money is
significant.

Interest bearing bank loans, overdrafts and
unsecured loans are initially measured at
fair value and are subsequently measured at
amortised cost using the effective interest rate
method. Any difference between the proceeds
(net of transaction costs) and the settlement or
redemption of borrowings is recognised over
the term of the borrowings in the statement of
profit and loss.

4. Derecognition of financial instruments

The Company derecognizes a financial asset
when the contractual rights to the cash flows
from the financial asset expire or it transfers
the financial asset and the transfer qualifies for
derecognition under Ind AS 109. A financial
liability (or a part of a financial liability) is
derecognized from the Companyâs balance
sheet when the obligation specified in the
contract is discharged or cancelled or expires.

5. Fair value of financial instruments

In determining the fair value of its financial
instruments, the Company uses a variety
of methods and assumptions that are based
on market conditions and risks existing at
each reporting date. The methods used to
determine fair value include discounted cash
flow analysis, available quoted market prices
and dealer quotes. All methods of assessing
fair value result in general approximation
of value, and such value may or may not be
realized.

6. Offsetting financial instruments

Financial assets and liabilities are offset and
the net amount is reported in the balance
sheet where there is a legally enforceable
right to offset the recognized amounts and
there is an intention to settle on a net basis
or realize the asset and settle the liability
simultaneously. The legally enforceable right
must not be contingent on future events and
must be enforceable in the normal course

of business and in the event of default,
insolvency or bankruptcy of the Company or
the counterparty.

p) Earnings per share :

The basic earnings per share is computed by
dividing the profit/(loss) for the year attributable
to the equity shareholders by the weighted average
number of equity shares outstanding during the
year. For the purpose of calculating diluted earnings
per share, profit/(loss) for the year attributable to
the equity shareholders and the weighted average
number of the equity shares outstanding during
the year are adjusted for the effects of all dilutive
potential equity shares.

q) Cash and cash equivalents:

Cash and cash equivalents include cash on hand
and demand deposits with banks. Cash equivalents
are short-term balances (with an original maturity
of three months or less), highly liquid investments
that are readily convertible into known amounts of
cash and which are subject to insignificant risk of
changes in value.

r) Transactions in foreign currencies:

The financial statements of the Company are
presented in Indian rupees, which is the functional
currency of the Company and the presentation
currency for the financial statements.

Transactions in foreign currencies are recorded
at the exchange rates prevailing on the date of
transaction.

Foreign currency monetary assets and liabilities
such as cash, receivables, payables, etc., are
translated at year end exchange rates.

Exchange differences arising on settlement of
transactions and translation of monetary items are
recognised as income or expense in the year in
which they arise.

s) Segment reporting:

An operating segment is a component of the
Company that engages in business activities from
which it may earn revenues and incur expenses,
whose operating results are regularly reviewed
by the Companyâs chief operating decision maker
to make decisions for which discrete financial
information is available. Based on the management
approach as defined in Ind AS 108, the chief

operating decision maker evaluates the Companyâs
performance and allocates resources based on an
analysis of various performance indicators by
business segments and geographic segments.

t) Government grants:

Grants from the government are recognised at fair
value where there is a reasonable assurance that
the grant will be received and the Company will
comply with all attached conditions.

Government grants relating to income are
deferred and recognised in the profit or
loss over the period necessary to match
them with the costs they are intended to
compensate and presented within other income.
Government grants relating to the purchase of
Property, Plant and Equipment are included in
non-current liabilities as deferred income and are
credited to profit and loss on a straight line basis
over the expected lives of the related assets and
presented within other income.

The benefit of a government loan at below current
market rate of interest is treated as a government
grant.

u) Leases:

As a lessee:

The Company assesses whether a contract contains
a lease, at inception of a contract. A contract is, or
contains, a lease if the contract conveys the right
to control the use of an identified asset for a period
of time in exchange for consideration. To assess
whether a contract conveys the right to control the
use of an identified asset, the Company assesses
whether:

(1) The Contract involves the use of an identified
asset;

(2) The Company has substantially all the
economic benefits from use of the asset
through the period of the lease and

(3) The Company has the right to direct the use
of the asset.

The Company recognizes a right-of-use asset
(âROUâ) and a corresponding lease liability for
all lease arrangements in which it is a lessee,
except for leases with a term of twelve months
or less (short-term leases) and low value leases.
For these short-term and low value leases, the

Company recognizes the lease payments as an
operating expense on a straight-line basis over
the term of the lease. Certain lease arrangements
includes the options to extend or terminate the
lease before the end of the lease term. ROU assets
and lease liabilities includes these options when it
is reasonably certain that they will be exercised.

The right-of-use assets are initially recognized at
cost, which comprises the initial amount of the
lease liability adjusted for any lease payments
made at or prior to the commencement date of the
lease plus any initial direct costs less any lease
incentives.

They are subsequently measured at cost less
accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the
commencement date on a straight-line basis over
the balance lease term of the underlying asset.
Right of use assets are evaluated for recoverability
whenever events or changes in circumstances
indicate that their carrying amounts may not be
recoverable.

The lease liability is initially measured at
amortized cost at the present value of the future
lease payments. The lease payments are discounted
using the interest rate implicit in the lease or, if
not readily determinable, using the incremental
borrowing rates in the country of domicile of the
leases. Lease liabilities are re-measured with a
corresponding adjustment to the related right of
use asset if the Company changes its assessment
if whether it will exercise an extension or a
termination option.

Lease liability and ROU asset shall be separately
presented in the Balance Sheet and lease payments
shall be classified as financing cash flows.

As Lessor:

Leases for which the Company is a lessor is
classified as a finance or operating lease. Whenever
the terms of the lease transfer substantially all the
risks and rewards of ownership to the lessee, the
contract is classified as a finance lease. All other
leases are classified as operating leases.

When the Company is an intermediate lessor, it
accounts for its interests in the head lease and the
sublease separately. The sublease is classified as a
finance or operating lease by reference to the right-
of-use asset arising from the head lease.

For operating leases, rental income is recognized
on a straight line basis over the term of the relevant
lease.

Operating lease - Rentals payable under operating
leases are charged to the statement of profit and
loss on a straight line basis over the term of the
relevant lease unless another systematic basis is
more representative of the time pattern in which
economic benefits from the leased assets are
utilised.

v) Employee share based payments:

Equity- settled share-based payments to
employees are measured at the fair value of the
employee stock options at the grant date. The fair
value determined at the grant date of the equity-
settled share-based payments is amortised over the
vesting period, based on the Companyâs estimate of
equity instruments that will eventually vest, with a
corresponding increase in equity. At the end of each
reporting period, the Company revises its estimate
of the number of equity instruments expected to
vest. The impact of the revision of the original
estimates, if any, is recognised in the statement of
profit and loss such that the cumulative expense
reflects the revised estimate, with a corresponding
adjustment to the equity-settled employee benefits
reserve.

w) Dividend distribution:

Dividends paid is recognised in the period in which
the interim dividends are approved by the Board of
Directors, or in respect of the final dividend when
approved by shareholders.

x) Rounding off amounts:

All amounts disclosed in the financial statements
and notes have been rounded off to the nearest
lakhs as per the requirement of Schedule III, unless
otherwise stated.

y) Standards issued but not yet effective:

Ministry of Corporate Affairs (âMCAâ) notifies
new standards or amendments to the existing
standards under Companies (Indian Accounting
Standards) Rules as issued from time to time. On
31 March, 2023, MCA amended the Companies
(Indian Accounting Standards) Amendment Rules,
2023, as below:

Ind AS 1 - Presentation of Financial Statements
-This amendment requires the entities to disclose
their material accounting policies rather than their
significant accounting policies. The effective date
for adoption of this amendment is annual periods
beginning on or after 1 April, 2023. The Company
has evaluated the amendment and the impact of
the amendment is insignificant in the financial
statements.

Ind AS 8 - Accounting Policies, Changes in
Accounting Estimates and Errors -This amendment
has introduced a definition of âaccounting
estimatesâ and included amendments to Ind AS8
to help entities distinguish changes in accounting
policies from changes in accounting estimates.
The effective date for adoption of this amendment
is annual periods beginning on or after 1 April,
2023. The Company has evaluated the amendment
and there is no impact on its financial statements.

Ind AS 12 - Income Taxes-This amendment has
narrowed the scope of the initial recognition
exemption so that it does not apply to transactions
that give rise to equal and offsetting temporary
differences. The effective date for adoption of this
amendment is annual periods beginning on or after
1 April, 2023. The Company has evaluated the
amendment and there is no impact on its financial
statements.

3 Use of estimates and critical accounting judgements:

In preparation of the financial statements, the Company
makes judgements, estimates and assumptions about
the carrying values of assets and liabilities that are
not readily apparent from other sources. The estimates
and the associated assumptions are based on historical
experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.

The estimates and the underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the
estimate is revised and future periods affected.

Significant judgements and estimates relating to the
carrying values of assets and liabilities include useful
lives of property, plant and equipment and intangible
assets, impairment of property, plant and equipment,
intangible assets and investments, provision for
employee benefits and other provisions, recoverability
of deferred tax assets, commitments and contingencies.

Mar 31, 2022

1 During the year, the Company has received sales tax incentive from State Government of Maharashtra aggregating to ?89.89 lakhs under âPackage Scheme of Incentives 2008 & 2013â, pertaining to financial years 2015-16, 2016-17 & 2019-20. Further, during the year, the Company has recognised an amount of ?33.02 lakhs (P.Y ?75.27 lakhs) as incentive receivable for financial year 2021-22 in accordance with the terms of scheme.

During the year, the State Government of Andhra Pradesh has sanctioned a total incentive of ?89.75 lakhs towards sales tax under âIndustrial Development Policy 2015-20â, pertaining to financial year 2020-21.

2 During the year, the State Government of Andhra Pradesh has sanctioned a total incentive of ?30.86 lakhs towards power cost under âIndustrial Development Policy 2015-20â, pertaining to financial years 2019-20, 2020-21 and period from 1 April, 2021 to 30 September, 2021.

3 During the year, the State Government of Andhra Pradesh has sanctioned a total incentive of ?23.87 lakhs towards Land cost and Stamp duty paid by the Company under âIndustrial Development Policy 2015-20â.

4 During the year, the Company has received an incentive of ?0.36 lakh pertaining to financial year 2016-17 under âMerchandise Exports from India Schemeâand the Company has written off the balance amount of ?8.24 lakhs.

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.

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

12.40.000 equity shares of ?10 each issued at a premium of ?30 per share on 7 September, 2011 by way of preferential offer.

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

19.25.000 equity shares of ?10 each issued at a premium of ?35.80 per share on 4 February, 2012 by way of preferential offer.

37.800 equity shares of ?10 each issued at a premium of ?52.95 per share on 5 July, 2012 by way of Employee Stock Option Scheme. 22,950 equity shares of ?10 each issued at a premium of ?52.95 per share on 28 June, 2013 by way of Employee Stock Option Scheme. 25,100 equity shares of ?10 each issued at a premium of ?52.95 per share on 13 June, 2014 by way of Employee Stock Option Scheme.

39.800 equity shares of ?10 each issued at a premium of ?52.95 per share on 25 July, 2014 by way of Employee Stock Option Scheme.

24,98,350 equity shares of ?10 each issued at a premium of ?210.17 per share on 3 February, 2015 by way of Qualified institutional placement.

5.000 equity shares of ?10 each issued at a premium of ?52.95 per share on 9 April, 2015 by way of Employee Stock Option Scheme. Shareholders on 3 February, 2016 approved the share split of ?10 each, fully paid up into 2 (Two) equity shares of ?5 each fully paid up.

The Board of Directors fixed the record date as 18 February, 2016. On 17 February, 2016 the Company has sub-divided the existing fully paid equity shares of 1,38,45,526 with face of ?10 each into 2,76,91,052 fully paid up shares with face value of ?5 each.

23,325 equity shares of ?5 each issued at a premium of ?254.85 per share on 18 October, 2019 by way of Employee Stock Option Scheme.

11,650 equity shares of ?5 each issued at a premium of ?254.85 per share on 27 October, 2019 by way of Employee Stock Option Scheme.

6,690 equity shares of ?5 each issued at a premium of ?254.85 per share on 13 August, 2020 by way of Employee Stock Option Scheme.

33,810 equity shares of ?5 each issued at a premium of ?254.85 per share on 3 October, 2020 by way of Employee Stock Option Scheme.

5,094 equity shares of ?5 each are issued at a premium of ?179 per share on 15 March, 2021 upon conversion of share warrants to Equity shares.

6,060 equity shares of ?5 each are issued at a premium of ?179 per share on 15 April, 2021 upon conversion of share warrants to Equity shares.

2,14,220 equity shares of ?5 each are issued at a premium of ?179 per share on 15 June, 2021 upon conversion of share warrants to Equity shares.

75,209 equity shares of ?5 each are issued at a premium of ?179 per share on 14 July, 2021 upon conversion of share warrants to Equity shares.

41,910 equity shares of ?5 each issued at a premium of ?254.85 per share on 28 July, 2021 by way of Employee Stock Option Scheme.

25,230 equity shares of ?5 each issued at a premium of ?254.85 per share on 28 July, 2021 by way of Employee Stock Option Scheme.

17,550 equity shares of ?5 each are issued at a premium of ?179 per share on 16 August, 2021 upon conversion of share warrants to Equity shares.

32,404 equity shares of ?5 each are issued at a premium of ?179 per share on 14 September, 2021 upon conversion of share warrants to Equity shares.

5,32,563 equity shares of ?5 each issued at a premium of ?175 per share on 9 November, 2021 upon conversion of partly paid up right equity shares to equity shares by way of Rights issue.

24,051 equity shares of ?5 each are issued at a premium of ?179 per share on 15 November, 2021 upon conversion of share warrants to Equity shares.

11,100 equity shares of ?5 each issued at a premium of ?175 per share on 4 December, 2021 upon conversion of partly paid up right equity shares to equity shares by way of Rights issue.

14,00,000 equity shares of ?5 each issued at a premium of ?735 per share on 17 December, 2021 by way of Qualified institutional placement.

59,039 equity shares of ''5 each are issued at a premium of ?179 per share on 22 December, 2021 upon conversion of share warrants to Equity shares.

23,955 equity shares of ?5 each issued at a premium of ?268.05 per share on 12 January, 2022 by way of Employee Stock Option Scheme.

13,613 equity shares of ?5 each issued at a premium of ?268.05 per share on 12 January, 2022 by way of Employee Stock Option Scheme.

21,250 equity shares of ?5 each are issued at a premium of ?179 per share on 17 January, 2022 upon conversion of share warrants to Equity shares.

28,519 equity shares of ?5 each are issued at a premium of ?179 per share on 15 February, 2022 upon conversion of share warrants to Equity shares.

9,54,827 equity shares of ?5 each are issued at a premium of ?179 per share on 11 March, 2022 upon conversion of share warrants to Equity shares.

Forfeiture of 11,667 equity shares of ?5 each issued at a premium of ?175 per share on 4 December, 2021, partly paid up ?1.25 per share.

(d) MTPL Employee Stock Option Scheme

The Company has granted 2,02,000 Options to employees on 4 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 ?26 per option.

The Company has granted 95,100 Options to employees on 20 July, 2018 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 ?208 per option.

The Company has granted 54,900 Options to employees on 20 July, 2018 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 ?234 per option.

The Company has granted 95,900 and 54,100 Options to eligible employees aggregating to 1,50,000 options on 23 December, 2020 at ?246 and ?260 respectively under the Employees Stock Option scheme, in accordance with the

(e) Issue of Shares under Rights Issue:

The Company had, issued 5,55,330 equity shares of face value of ?5 each on right basis (âRights Equity Sharesâ). In accordance with the terms of issue, ?249.90 lakhs i.e. 25% of the Issue Price per Rights Equity Share, was received from the concerned allottees on application and shares were allotted. The Board has made First and final call of ?135 per Rights Equity Share (including a premium of ?131.25per share) in November, 2021. As on 31 March, 2022, an aggregate amount of ?15.75 lakhs is unpaid which were forfeited on 18 February, 2022.

The Company had, issued 33,31,980 detachable warrants along with right equity shares stated above. In accordance with the terms of issue, ?1532.71 lakhs i.e. 25% of the Issue Price per Share warrant, was received from the concerned allottees on application and shares were allotted. As on 31 March, 2022, an aggregate amount of ?2613.38 lakhs is unpaid.

(f) Issue of Shares under Qualified Institutional Placement (QIP) Issue

The Company had, issued 14,00,000 equity shares of face value of ?5 each on Qualified Institutional Placement (âEquity Sharesâ) at an issue price of ?740 per equity share (including premium of ?735 per equity share), which is at a premium of ?17.60 per Equity Share on the floor price of ?722.40 per Equity Share through eligible Qualified Institutional Placement (âQIPâ) in terms of chapter VI of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 as amended, Section 42 & 62 and other relevant provisions of the Companies Act, 2013 read with the Regulation 176 of the SEBI ICDR Regulations. In accordance with the terms of issue, the Company has received a total amount of ?103.60 crore.

(g) Terms/Rights attached to equity shares

The Company has only one class of equity shares having a face value of ?5 each. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the equity shareholders will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Nature and purpose of other reserves

(i) Securities premium

Securities premium is used to record the premium on issue of shares. The reserve can be utilised in accordance with the provisions of the Companies Act, 2013.

(ii) Capital reserve

Capital reserve arose on account of amalgamation, transfer of forfeited shares, state subsidy and others. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

(iii) General reserve

General reserve is used for strengthening the financial position and meeting future contingencies and losses.

(iv) Share options outstanding account

The reserve represents the excess of the fair value of the options on the grant date over the exercise price which is accumulated by the Company in respect of all options that have been granted. The Company transfers the proportionate amounts, outstanding in this account, in relation to options exercised to securities premium account on the date of exercise of such options.

(v) Retained earnings

This Reserve represents the cumulative profits of the Company and effects of remeasurement of defined benefit obligations. This Reserve can be utilised in accordance with the provisions of the Companies Act, 2013.

(vi) Equity Instruments through Other comprehensive income (OCI)

This reserve represents the cumulative gains/loss (net) arising on fair valuation of Equity Instruments, net of amounts reclassified, if any, to retained earnings when those instruments are disposed off.

a) Secured loans

The following assets of the Company are given as security:

# Citicorp Finance (India) Limited has first exclusive charge by way of equitable mortgage on the factory land and building situated at Plot no.94, KIADB-Adakanhallu Industrial Area, Chikkaiahnachatra Hobli, Nanjangud Taluk, Mysore district, Karnataka belonging to the Company.

# Citi Bank N.A has first exclusive charge by way of equitable mortgage on the factory land and building situated at Plot no.2A, in Survey no. 251P, 255P, 256P, 261P, IC-PUDI village, Rambilli Mandal, Visakhapatnam district, belonging to the Company.

# Citi Bank N.A has first exclusive charge on Plant & equipment and other properties at Pudi (Visakhapatnam) Unit.

# Citi Bank N.A has first exclusive charge on Plant & equipment and other properties of Daman plant located at Survey no.160/A, 161/1 & 161/5, Bhimpore Village, Nani Daman, Daman District.

# Citi Bank N.A has first exclusive charge on Plant & equipment and other properties of Satara plant located at Survey no.82/2A, GAT no.656, Mhavashi Village, Dhawad wadi, Khandala Taluq, Pune, Satara District.

# Citi Bank N.A has first exclusive charge on Plant & equipment and other properties of Hyderabad unit located at Annaram Village, near air force academy, Medek District, Telangana State.

# Citi Bank N.A has first exclusive charge by way of equitable mortgage on the factory land and building situated at Survey no.82/2A, GAT no.656, Mhavashi Village, Dhawad wadi, Khandala Taluq, Pune, Satara District.

# Citi Bank N.A has first exclusive charge by way of equitable mortgage on the factory land and building situated at Survey no.160/A, 161/1 & 161/5, Bhimpore Village, Nani Daman, Daman District.

# Personal guarantees of J. Lakshmana Rao, A. Subramanyam and P. Venkateswara Rao directors of the Company.

# In case of vehicle loans obtained from banks and financial institutions, vehicles are offered as security.

b) Unsecured loans

The Govt. of Andhra Pradesh has extended incentive by way 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 the scheme for a production facility at Annaram for ?751.37 lakhs and another production facility at Dommarapochampally for ?421.91 lakhs. The Company has been repaying installments of the deferred sales tax in accordance with the terms of the scheme. The total sales tax deferral amount as at 31 March, 2022 stands at U28.32 lakhs (31st March 2021 ^68.31 lakhs).

The above sales tax deferment loan granted under State Investment Promotion Scheme has been considered as a government grant and the difference between the fair value and nominal value as on date is recognized as an expenses. Accordingly, an amount of ?1.69 lakhs (March 31, 2021: ?1.51 lakhs) has been recognized as an expense.

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

of the Company:

i) First Pari passu charge to the above banks by way of hypothecation of the borrowerâs entire current assets which inter-alia include stocks of raw material, work in process, finished goods, consumables, stores & spares and such other movables including book debts, outstanding monies, receivables both present and future of such form satisfactory to the bank.

ii) First Pari passu charge to the above banks by way of hypothecation of the borrowerâs movable properties of the Company (Except those specifically charged to term loan lenders).

iii) First Pari passu charge to the above banks by way of equitable mortgage on the following Immovable properties of the Company:-

I. First Charge by way of equitable mortgage of land measuring 6.5125 acres and building in Sy.No 54,55/A,70, 71&72 of Annaram Village, Near Air Force Academy, Gummadidala Mandal, Sanga Reddy District, Telangana belonging to the Company.

II. First Charge by way of equitable mortgage of land measuring 6413 Sq. Yards and building in Sy.No. 164 part, Dammarapochampally Village, Gandimaisamma Dundigal Mandal, Medchal District, Telangana belonging to the Company.

III. First charge by way of equitable mortgage of land measuring 1066.63 Sq. Yards and building in Plot No. D-177 phase III, IDA, Jeedimetla, Quthubullapur Mandal, Medchal District. Telangana belonging to the Company.

IV. 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 S.Y. No. 120 (New) of Shaikpet Village and S.Y. No 102/1 of Hakim pet Village admeasuring 3653 SFT of the office space presently occupied by the vendee 50% or 930 SFT of reception area of 1860 SFT all in relevance to the ground Floor 400 Sq.Yards out of 1955 Sq.Yards situated within the approved layout of the Jubilee Hills Co-operative House Building Ltd at Road No. 36, Jubilee hills, belonging to the Company.

V. First charge by way of equitable mortgage of land and building in Shed No. D-17 & D-18, phase III, IDA, Jeedimetla, Quthubullapur Mandal, Medchal District. Telangana belonging to the Company.

VI) Personal guarantees of J. Lakshmana Rao, A. Subramanyam, and P. Venkateswara Rao, directors of the Company.

(iii) Post- employment obligations a) Gratuity

The Company provides for gratuity for employees as per the Payment of Gratuity Act, 1972. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The Company operates post retirement gratuity plan with LIC of India. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The above sensitivity analysis is based on a change in each assumption while holding all other assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

v) Risk exposure

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

Interest rate risk

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Salary inflation risk

Higher than expected increases in salary will increase the defined benefit obligation.

Demographic risk

This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.

38. Segment Information

a) The Companyâs Executive Chairman, Managing Director and Chief Financial officer examine the Companyâs performance from a product prospective and have identified one operating segment viz Packaging Containers. Hence segment reporting is not given.

b) Information about products:

Revenue from external customers - Sale of Packaging Containers ?62,984.87 lakhs (P.Y ?47,772.14 lakhs).

The Company has made external sales to the following customers meeting the criteria of 10% or more of the entityâs revenue.

Customer 1 - ?26,778.22 lakhs.

40. Financial instruments and risk management

Fair values

a) The fair value of financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

b) The fair value of trade receivables, trade payables and other current financial assets and liabilities is considered to be equal to the carrying amounts of these items due to their short term nature. Where such items are non-current in nature, the same has been classified as Level 3 and fair value determined using discounted cash flow basis. Similarly, unquoted equity instruments where most recent information to measure fair value is insufficient, or if there is a wide range of possible fair value measurements, cost has been considered as the best estimate of fair value.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques, which maximise the use of observable market data and rely as little as possible on entity specific estimates. If significant inputs required to fair value an instruments are observable, the instrument is included in Level 2.

Level 3: If one or more of the significant inputs are not based on observable market data, the instruments is included in level 3.

There has been no change in the valuation methodology for Level 3 inputs during the year. The Company has not classified any material financial instruments under Level 3 of the fair value hierarchy. There were no transfers between Level 1 and Level 2 during the year.

Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realized or paid in sale transactions as of respective dates. As such, the fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date. In respect of investments as at the transaction date, the Company has assessed the fair value to be the carrying value of the investments as these companies are in their initial years of operations obtaining necessary regulatory approvals to commence their business.

The fair value of trade receivables, trade payables and other current financial assets and liabilities is considered to be equal to the carrying amounts of these items due to their short-term nature. Where such items are non-current in nature, the same has been classified as Level 3 and fair value determined using discounted cash flow basis. Similarly, unquoted equity instruments where most recent information to measure fair value is insufficient, or if there is a wide range of possible fair value measurements, cost has been considered as the best estimate of fair value.

41. Financial risk management

The Company is exposed to market risk (fluctuation in foreign currency exchange rates, price and interest rate), liquidity risk and credit risk, which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of currency risk, interest rate risk and price risk. Financial instruments affected by market risk include loans and borrowings, trade receivables and trade payables involving foreign currency exposure. The sensitivity analyses in the following sections relate to the position as at 31 March, 2022 and 31 March, 2021.

The analysis exclude the impact of movements in market variables on the carrying values of financial assets and liabilties .

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at 31 March, 2022 and 31 March, 2021.

(i) Foreign currency exchange rate risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the trade/other payables, trade/other receivables and derivative assets/liabilities. The risks primarily relate to fluctuations in US Dollar, AED against the functional currencies of the Company. The Companyâs exposure to foreign currency changes for all other currencies is not material. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks.

The following tables demonstrate the sensitivity to a reasonably possible change in US dollars and AED exchange rates, with all other variables held constant. The impact on the Companyâs profit before tax is due to changes in the fair value of monetary assets and liabilities.

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs debt obligations with floating interest rates. As the Company has certain debt obligations with floating interest rates, exposure to the risk of changes in market interest rates are dependent of changes in market interest rates. Management monitors the movement in interest rate and, wherever possible, reacts to material movements in such rates by restructuring its financing arrangement.

As the Company has no significant interest bearing assets, the income and operating cash flows are substantially independent of changes in market interest rates.

(B) Credit Risk

Financial assets of the Company include trade receivables, loans to wholly owned subsidiary, employee advances, security deposits held with government authorities and bank deposits which represents Companyâs maximum exposure to the credit risk.

With respect to credit exposure from customers, the Company has a procedure in place aiming to minimise collection losses. Credit control team assesses the credit quality of the customers, their financial position, past experience in payments and other relevant factors. The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including default risk associate with the industry and country in which customers operate. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. With respect to other financial assets viz., loans & advances, deposits with government and banks, the credit risk is insignificant since the loans & advances are given to its wholly owned subsidiary and employees only and deposits are held with government bodies and reputable banks. The credit quality of the financial assets is satisfactory, taking into account the allowance for credit losses.

(iv) Significant estimates and judgements Impairment of financial assets:

The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding to meet obligations when due and to close out market positions. Companyâs treasury maintains flexibility in funding by maintaining availability under deposits in banks.

Management monitors cash and cash equivalents on the basis of expected cash flows.

42. Capital management

A. Capital management and Gearing Ratio

For the purpose of the Companyâs capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Companyâs capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is debt divided by total capital. The Company includes within debt, interest bearing loans and borrowings.

In order to achieve this overall objective, the Companyâs capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March, 2022 and 31 March, 2021.

(1) Current Ratio increased due to decrease in debt and increase in assets on account of Qualified Institutional Placement (QIP) & rights issue money receipt.

(2) Debt-Equity Ratio decreased due to decrease in debt and increase in Equity on account of Qualified Institutional Placement (QIP) & rights issue.

(3) Debt Service Coverage Ratio increased due to lower finance cost and principal repayments of loans during the year.

(4) Net Capital Turnover Ratio decreased primarily due to increase in inventory & trade receivables and reduction of current liabilities

(5) Return on Investment increased due to receipt of good dividend during the year

b. The Company has borrowings from banks on the basis of security of current assets. The quarterly statements of current assets filed by the Company with banks are in agreement with the books of accounts.

44. Code on Social Security: The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on 13 November, 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

45. Previous year figures have been recasted/restated wherever necessary.

Mar 31, 2018

1 COMPANY INFORMATION:

Mold-Tek Packaging Limited (âthe Companyâ) is a public limited company incorporated in India having its registered office at Hyderabad, Telangana, India. The Company is involved in the manufacturing of injection-molded containers.

2 USE OF ESTIMATES AND CRITICAL ACCOUNTING JUDGEMENTS:

In preparation of the financial statements, the Company makes judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and the associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and the underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods affected.

Significant judgements and estimates relating to the carrying values of assets and liabilities include useful lives of property, plant and equipment and intangible assets, impairment of property, plant and equipment, intangible assets and investments, provision for employee benefits and other provisions, recoverability of deferred tax assets, commitments and contingencies.

a) Capital advances includes an amount paid towards import of machinery Rs.416.73 lakhs and towards construction of buildings Rs. 79.91 lakhs.

b) Deposits with Government bodies include amounts parked as security deposit with Electricity departments Rs.133.20 Lakhs with respective state governments where in the business facilities are situated.Other deposits include EMD and Security Deposits of Rs.32.59 lakhs with customers and Rental deposits of Rs.22.70 Lakhs.

*During the year the Company has received Rs.10.91 lakhs against 85% of Sales tax incentive from Maharashtra state government on account of âPackage Scheme of Incentives 2013â, pertaining to financial year 2015-16. The balance amount is expected to be received on completion of Assessment. An amount of Rs.91.05 lakhs has been considered as incentive receivable for financial year 2017-18.

**During the year the company has received Rs.9.88 lakhs pertaining to financial year 2015-16 and Rs.9.49 lakhs pertaining to financial year 2016-17 against Export incentive under âMerchandise Exports from India Schemeâ. An amount of Rs.11.01 lakhs has been considered as incentive receivable for financial year 2017-18.

a) 79,95,776 equity shares out of the issued, subscribed and paid up share capital were allotted in the financial year 200809 pursuant to the Scheme of arrangement without payments being received in cash.

b) 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.

c) 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

d) 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.

e) 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

f) 37,800 equity shares of Rs.10 each issued at a premium of Rs.52.95 per share on 5th July, 2012 by way of Employee Stock Option Scheme.

g) 22,950 equity shares of Rs.10 each issued at a premium of Rs.52.95 per share on 28th June, 2013 by way of Employee Stock Option Scheme.

h) 25,100 equity shares of Rs.10 each issued at a premium of Rs.52.95 per share on 13th June, 2014 by way of Employee Stock Option Scheme.

i) 39,800 equity shares of Rs.10 each issued at a premium of Rs.52.95 per share on 25th July, 2014 by way of Employee Stock Option Scheme.

j) 24,98,350 equity shares of Rs.10 each issued at a premium of Rs.210.17 per share on 3rd February, 2015 by way of Qualified institutional placement.

k) 5,000 equity shares of Rs.10 each issued at a premium of Rs.52.95 per share on 9th April, 2015 by way of Employee Stock Option Scheme.

l) Shareholders on February 3, 2016 approved the share split of Rs.10 each, fully paid up into 2 (Two) equity shares of Rs.5 each fully paid up. The Board of Directors fixed the record date as February 18, 2016. On February 17, 2016 the Company has sub-divided the existing fully paid Equity Shares of 1,38,45,526 with face of Rs.10 each into 2,76,91,052 fully paid up shares with face value of Rs.5 Each.

The Company has only one class of equity shares having a face value of Rs. 5 each. Each holder of equity share is entitled to one vote per share. The company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the company, the equity shareholders will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Nature and purpose of other reserves

(i) Securities premium Reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised in accordance with the provision of the Act.

(ii) Capital Reserve

Capital reserve arised on account of amalgamation, transfer of forfeited shares amount, state subsidy and others. The reserve can be utilised in accordance with the provision of the Act.

(iii) General Reserve

General reserve is used for strengthening the financial position and meeting future contingencies and losses.

(iv) Retained earnings

This Reserve represents the cumulative profits of the Company and effects of remeasurement of defined benefit obligations. This Reserve can be utilized in accordance with the provisions of the Companies Act, 2013.

(v) Equity Instruments through Other Comprehensive Income

This Reserve represents the cumulative gains (net of losses) arising on the revaluation of Equity Instruments measured at fair value through Other Comprehensive Income, net of amounts reclassified, if any, to Retained Earnings when those instruments are disposed off.

a) Secured loans

The Company has availed vehicle loans from various banks with a tenor of 36 to 60 monthly installments. The said loans are secured by hypothecation of vehicles. As at the year end, the Company has total amount outstanding of Rs.130.78 Lakhs which is classified under non-current liabilities (Rs.70.97 Lakhs) and current liabilities (Rs.59.81 Lakhs).

b) Unsecured loans

The Govt. 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 affected 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.751.37 Lakhs and production facility at Dommarapochampally unit for Rs.421.91 lakhs. 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 2018 stands at Rs. 270.49 lakhs (31st March 2017 Rs. 440.09 Lakhs).

Sales Tax deferment loan granted under State Investment Promotion Scheme has been considered as a government grant and the difference between the fair value and nominal value as on date is recognized as an income. Accordingly, an amount of Rs. 49.18 Lakhs (March 31, 2017: Rs. 51.13 Lakhs) has been recognized as an income. Every year charge in fair value is accounted for as an interest expense

a) The Company has availed its fund based working capital requirements from multiple banks viz., ICICI, CITI, Yes Bank and HSBC. Cash credit limits utilised as at the year end from the respective banks are as per the above table, while the total working capital limits sanctioned by the participating banks are in the table given below:

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

i) First Paripassu charge to the above four banks by way of hypothecation of the borrowerâs 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.

ii) First Paripassu charge to the above four banks by way of hypothecation of the borrowerâs movable fixed Assets of the Company (Except those specifically charged for the Wholly owned subsidiary companyâs borrowing).

iii) First Paripassu charge to the above four banks by way of Equitable Mortgage on the following Immovable Fixed Assets of the Company:-

I. 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.

II. First Charge by way of Equitable Mortgage of Land Measuring 6413 Sq. Yards and building in Sy.No. 164 part, Dammarapochampally Village, Qutubullapur, R R District, Telangana belonging to the Company.

III. First charge by way of equitable mortgage of land measuring 1066.63 Sq. Yards & Buildings in Plot No. D-177 phase III, IDA, Jeedimetla, Qutballapur Mandal, R.R. District. Telangana belonging to the Company.

IV. 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 S.Y. No. 120(New) of Shaikpet Village and S.Y. No 102/1 of Hakim pet Village admeasuring 3653 SFT of the office space presently occupied by the vendee 50% or 930 SFT of reception area of 1860 SFT all in relevance to the ground Floor 400 Sq.Yards out of 1955 Sq.Yds situated within the approved layout of the Jubilee Hills Co-operative House Building Ltd at Road No. 36 Jubilee hills, belonging to the Company.

iv) Personal guarantees of J. Lakshmana Rao, A. Subramanyam, P. Venkateswara Rao and J. Mythreyi, directors of the Company.

3. EMPLOYEE BENEFITS

(i) Leave obligations

The leave obligation covers the Companyâs liability for earned leave which is unfunded.

(ii) Defined contribution plans

The Company has defined contribution plan namely Provident fund. Contributions are made to provident fund at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the Government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the year towards defined contributions plan is as follows:

(ii) Post- employment obugahons

a) Gratuity

v) Risk exposure

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

Interest rate risk:

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Salary inflation risk:

Higher than expected increases in salary will increase the defined benefit obligation.

Demographic risk:

Bank guarantees

The Company has provided bank guarantees to the tune of Rs.72.54 lakhs comprising of bid securities and performance guarantees given to its customers / prospective customers.

Export Obligations

The Company has fulfilled the entire export obligation to the tune of $18.17Lakhs (Rs. 933.99 Lakhs) as on 31st March 2016 the particulars of which are as below:

Of the total obligation $9.02 Lakhs (Rs.406.96 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. Including the licenses amounting to $6.36 Lakhs have been redeemed up to March 31, 2018, and redemption licenses for the balance $2.66 Lakhs is awaited.

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 fulfilled the export obligation of $9.15 Lakhs (Rs.527.03 Lakhs) against these licenses utilized for imports.

4. COMMITMENTS

Capital commitments

Capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:

5. LEASES

The Company has taken land at Mysuru from Karnataka Industrial Areas Development Board on operating lease for 99 years for the purpose setting up new plant and the same is in progress as at March 31, 2018. As per the terms of the agreement, an amount of Rs.8,044 per annum (including maintenance charges) is to be paid by the Company over the period of lease.

6. SEGMENT INFORMATION

a) The companyâs Executive Chairman, Managing Director and Chief Financial officer examine the Companyâs performance from a product prospective and have identified one operating segment viz Packaging Containers. Hence segment reporting is not given.

b) Information about products:

Revenue from external customers - Sale of Packaging Containers Rs.34,889.85 Lakhs

The Company has made external sales to the following customers meeting the criteria of 10% or more of the entity revenue

Customer 1 - Rs.8,843 Lakhs

Customer 2 - Rs.3,939 Lakhs

Customer 3 - Rs.3,870 Lakhs

7. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Fair values

b) The fair value of trade receivables, trade payables and other Current financial assets and liabilities is considered to be equal to the carrying amounts of these items due to their short term nature. Where such items are Non-current in nature, the same has been classified as Level 3 and fair value determined using discounted cash flow basis. Similarly, unquoted equity instruments where most recent information to measure fair value is insufficient, or if there is a wide range of possible fair value measurements, cost has been considered as the best estimate of fair value.

Set out below, is a comparision by class of the carrying amounts and fair value of the Companyâs financial instruments, other than those with carrying amounts that are reasonable approximation of fair values:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 3: If one or more of the significant inputs are not based on observable market data, the instruments is included in level 3.

The fair value of trade receivables, trade payables and other Current financial assets and liabilities is considered to be equal to the carrying amounts of these items due to their short-term nature. Where such items are Non-current in nature, the same has been classified as Level 3 and fair value determined using discounted cash flow basis. Similarly, unquoted equity instruments where most recent information to measure fair value is insufficient, or if there is a wide range of possible fair value measurements, cost has been considered as the best estimate of fair value.

8. FINANCIAL RISK MANAGEMENT

(A) Market risk

The analysis exclude the impact of movements in market variables on the carrying values of financial assets and liabilties .

(i) Foreign currency exchange rate risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the trade/ other payables, trade/other receivables and derivative assets/liabilities. The risks primarily relate to fluctuations in US Dollar, AED against the functional currencies of the Company. The Companyâs exposure to foreign currency changes for all other currencies is not material. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks.

The following tables demonstrate the sensitivity to a reasonably possible change in US dollors and AED exchange rates, with all other variables held constant. The impact on the Companyâs profit before tax is due to changes in the fair value of monetary assets and liabilities.

(ii) Sensitivity

The sensitivity of profit or loss to changes in the exchange rates arises mainly from foreign currency denominated financial instruments and from foreign forward exchange contracts:

The movement in the pre-tax effect is a result of a change in the fair value of monetary assets and liabilities denominated in US dollars and AED, where the functional currency of the entity is a currency other than US dollars and AED.

(iii) Interest rate risk

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Companyâs profit before tax is affected through the impact on floating rate borrowings, as follows:

(B) Credit Risk

With respect to credit exposure from customers, the Company has a procedure in place aiming to minimise collection losses. Credit Control team assesses the credit quality of the customers, their financial position, past experience in payments and other relevant factors. The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including default risk associate with the industry and country in which customers operate. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. With respect to other financial assets viz., loans & advances, deposits with government and banks, the credit risk is insignificant since the loans & advances are given to its wholly owned subsidiary and employees only and deposits are held with government bodies and reputable banks. The credit quality of the financial assets is satisfactory, taking into account the allowance for credit losses.

(iii) Significant estimates and judgements

Impairment of financial assets:

The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

c) Liquidity risk

Management monitors cash and cash equivalents on the basis of expected cash flows.

9. CAPITAL MANAGEMENT

A. Capital management and Gearing Ratio

For the purpose of the Companyâs capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the companyâs capital management is to maximise the shareholder value.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2018 and 31 March 2017.

10. FIRST-TIME ADOPTION OF IND AS Transition to Ind AS

These are the Companyâs first financial statements prepared in accordance with Ind AS.

The accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 01 April 2016 (date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation on how the transition from previous GAAP to Ind AS has effected the Companyâs financial position, financial performance and cash flows is set out in the following tables and notes.

Exemptions and Exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A. Ind AS optional exemptions

(i) Deemed cost

Ind AS 101 permits a first time adopter to elect to continue with the carrying value for all of its Property, Plant & Equipment as recognised in the Financial Statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition, after making necessary adjustments for decommissioning liabilities. This exemption can also be used for Intangible Assets covered by Ind AS 38.

Accordingly, the Company has elected to measure all of its Property, Plant & Equipment and Intangible Assets at their previous GAAP carrying value.

(ii) Impairment of financial assets

The Company has applied the exception related to impairment of financial assets given in Ind AS 101. It has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial assets were initially recognised and compared that to the credit risk as at 01 April 2016.

(iii) Investment in subsidiary

The Company has elected to carry its investment in wholly owned subsidiary at deemed cost which is its previous GAAP carrying amount at the date of transition to Ind AS.

(iv) Sales tax deferment loan

The Company has elected to use the previous GAAP carrying amount of the Sales Tax deferment loan existing at the date of transition to Ind AS as the carrying amount of the loan in the opening Ind AS Balance sheet.

(v) Fair valuation of financial assets and liabilities

As per the Ind AS exemption, the Company has not fair valued the financial assets and liabilities retrospectively and has measured the same prospectively.

B. Ind AS mandatory exceptions

(i) Estimates

An entityâs estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with the estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

- Investment in equity instruments carried at Fair value through Other comprehensive income

- Impairment of financial asset based on expected credit loss model.

(ii) Classification and measurement of Financial Assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

D. Notes to first-time adoption

1) Borrowings

The benefit of a government loan at below current market rate of interest is treated as a government grant. The loan is recognised and measured in accordance with Ind AS 109. The benefit of the below market rate of interest is measured as the difference between the initial carrying value of the loan determined in accordance with Ind AS 109 (at Fair Value) and the proceeds received. Government grant is recognised in profit or loss on a systematic basis over the periods in which the entity recognises as expenses, the related costs for which the grants are intended to compensate. As a result other income has increased by Rs. 51.13 Lakhs towards government grant amortisation and finance cost has increased by Rs. 51.13 lakhs towards interest expense on government loan. Consequently the borrowings have been restated to Rs. 561.91 lakhs and Rs. 440.09 lakhs as at 1 April 2016 and 31 March 2017 respectively.

2) Deferred tax

Previous GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS12 requires entities to account for deferred taxes using the Balance Sheet approach, which focuses on differences between the carrying amount of an asset or liability in the Balance Sheet and its tax base. It requires recognition of tax consequences of differences between the carrying amounts of assets and liabilities and their tax base. As a result Deferred tax liability has been increased by Rs. 148.27 lakhs as at 1 April 2016 and Rs. 21.87 lakhs as at 31 March 2017 with a corresponding increase in retained earnings and net profit respectively.

3) Fair valuation of Investments

Under previous GAAP, investments in the Equity shares of Mold-Tek Technologies Limited was shown as at cost. Under Ind AS 109, fair valuation of such investments are taken to fair value through other comprehensive income. The total comprehensive income for the year ended 31 March 2017 has decreased by Rs. 491.18 lakhs on account of fair valuation.

4) Expenses directly attributable to revenue

Under the previous GAAP, Commission on sales amounting to Rs. 9.04 lakhs directly attributable to sales were recognized as part of other expenses which have been adjusted against the revenue from sale of goods under Ind AS during the year ended 31 March 2017 . There is no impact on the total equity and profit.

5) Excise duty

Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended 31 March 2017 by Rs. 3703.46 lakhs. There is no impact on the total equity and profit.

6) Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. Actuarial gains and losses and the return on plan assets , excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. There is no impact on the total equity as at 31 March 2017.

7) Proposed Dividend

Under the previous GAAP, dividends proposed by the Board of Directors after the balance sheet date but before the approval of the financial statements were considered as an adjusting event. Accordingly, provision for proposed dividend and corporate dividend tax was recognised as liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend and corporate dividend tax of Rs. 416.60 lakhs as at 1 April 2016 and Rs. 533.25 lakhs as at March 31, 2017 included under provisions has been reversed with corresponding adjustments to retained earnings. Consequently the total equity increased by an equivalent amount.

8) Other equity

Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS transition adjustments on the date of transition.

9) Other comprehensive income

Under Ind AS, all items of income and expense recognized in a period should be included in the profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit or loss as âother comprehensive incomeâ includes remeasurements of defined benefit plans. The concept of âother comprehensive incomeâ did not exist under previous GAAP.

10) Cash flow from financing activities

Other bank balances (disclosed under Note 10) are not considered as part of cash and cash equivalents under Ind AS and the movement of other bank balances amounting to Rs. 68.92 lakhs is the variance in net increase/ decrease in cash and cash equivalents as at 31 March 2017.

11) Investment properties

The Company has identified land and buildings of Rs.5.74 lakhs which was grouped under Property, plant and equipment in previous GAAP. These two amounts are classified as investment properties on the face of the balance sheet as per Ind AS 40-Investment Properties.

Mar 31, 2016

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

4. 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.

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.

6. 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.

7. 37,800 equity shares of Rs.10 each issued at a premium of Rs.52.95 per share on 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 on 29th June, 2013 by way of Employee Stock Option Scheme.

9. 25,100 equity shares of Rs.10 each issued at a premium of Rs.52.95 per share on 13th June, 2014 by way of Employee Stock Option Scheme.

10. 39,800 equity shares of Rs.10 each issued at a premium of Rs.52.95 per share on 25th July, 2014 by way of Employee Stock Option Scheme.

11. 24,98,350 equity shares of Rs.10 each issued at a premium of Rs.210.17 per share on 3rd February, 2015 by way of Qualified Institutional Placement (QIP).

12. 5,000 equity shares of Rs.10 each issued at a premium of Rs.52.95 per share on 9th April, 2015 by way of Employee Stock Option Scheme.

The Company, as a matter of practice, has transferred 15% of its net profits to general reserve.

The Board of Directors in their meeting held on 10th March, 2016 and 11th May, 2016 has recommended an interim dividend of Rs.2 and a final dividend of Rs.1.25 per equity share.

13. ALLOTMENT OF SHARES AGAINST APPLICATION MONEY

On 9th April, 2015 the Company has allotted 5,000 equity shares of Rs.10 each at a premium of Rs.52.95 per share under Employee Stock Option Scheme for which the application monies have been received during the previous financial year.

The amounts shown under the column ''Current maturities'' above, Rs.4,06 lakhs pertains to the repayment commitments of the Company during the next 12 months.

A. Secured loans

Term loans from bank

As at the year end, the Company has a total secured term borrowings of Rs.4,22 lakhs from Citibank. The same have been classified under non-current liabilities (Rs.47 lakhs) and current liabilities (Rs.3,75 lakhs).

The following assets of the Company are covered under 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, belonging to the Company.

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

c. Citibank has first 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.

d. Citibank has 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.

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.79 lakhs which have been classified under non-current liabilities (Rs.48 lakhs) and current liabilities (Rs.31 lakhs).

B. Unsecured Loans

The Government of Andhra Pradesh has extended the Company, incentive of sales tax deferral scheme pursuant to which the sales tax payment attributable to the sales affected 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 cumulated sales tax payment deferred in each year is repayable over the subsequent 14 years 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, 2016 stands at Rs.5,67 lakhs (31st March, 2015: Rs.6,58 lakhs) classified under non-current liabilities; Rs.5,67 lakhs and differential amount of Rs.91 lakhs installment pertaining to and falling due in financial year 2016-17 has already been paid towards the end of financial year 2015-16 and hence no amount is considered as current liability.

14. DEFERRED TAX LIABILITY (NET)

The cumulative deferred tax liability as on 31st March, 2016 stands at Rs.5,36 lakhs, including the current year provision of Rs.94 lakhs.

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

a. First pari passu charge to the above four 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 the above four banks 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 the above four banks by way of equitable mortgage on the following immovable fixed assets of the Company:

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

16. First charge by way of equitable mortgage of land measuring 6,413 sq. yards and building in Survey No. 164 part, Dammarapochampally Village, Qutubullapur, R. R. District, Telangana, belonging to the Company.

17. 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, R.R. District, Telangana, belonging to the Company.

18. 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 Survey No. 120 (New) of Shaikpet Village and Survey No. 102/1 of Hakimpet Village admeasuring 3,653 sq. ft. of the office space presently occupied by the vendee 50% or 930 sq. ft. of reception area of 1,860 sq. ft. all in relevance to the ground floor 400 sq. yards out of 1,955 sq. yards situated within the approved layout of the Jubilee Hills Co-operative House Building Limited at Road No. 36 Jubilee Hills, belonging to the Company.

During the year, the Company has acquired 2,191 sq. yards of land with 14,016 sq. ft. of building in Jeedimetla at a cost of Rs.2.6 crore for Modern Tool Room and IML Label printing plant, which is expected to go into production early next year. During the year, the Company has acquired 1,677 sq. ft. of fully furnished accommodation along with proportionate share of land as an extension to the existing office facility in Jubilee Hills at a cost of Rs.2.13 crore.

The Company, for a partial period during the year, has hired the same accommodation on a monthly rental basis, and has acquired it towards the end of the financial year. The possession of the property is with the Company and other formalities have been completed before the balance sheet date. Mutation of property and ownership records in respect of the property as well as other movable/non-movable assets transferred as part of the demerger processes remains pending.

Deposits with government bodies include amounts parked as security deposit with electricity departments Rs.1,01 lakhs with respective state governments wherein the manufacturing facilities are situated. Capital advances of Rs.2,64 lakhs pertain to payment for acquisition of machinery. Other deposits include EMD and security deposits of Rs.39 lakhs with customers and rental deposits of Rs.19 lakhs.

19. PRIOR PERIOD ADJUSTMENTS - EXTRAORDINARY ITEM

Prior period adjustments include Rs.13 lakhs against managerial commission for Directors pertaining to earlier years and Rs.14 lakhs of sales tax incentive excess provision pertaining to financial year 2014-15.

20. EVENTS OCCURING AFTER THE BALANCE SHEET (2015-16)

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

21. CONTINGENT LIABILITIES

a. Bank guarantees

The Company has provided bank guarantees to the tune of Rs.50 lakhs comprising of bid securities and performance guarantees given to its customers/prospective customers.

b. Export obligations

The Company has fulfilled the entire export obligation to the tune of USD 18.17 lakhs (Rs.9,34 lakhs) as on 31st March, 2016, the particulars of which are as below:

Of the total obligation USD 9.02 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 USD 6.36 lakhs have been redeemed up to 31st March, 2016, and redemption licenses for the balance USD 2.66 lakhs is awaited.

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 fulfilled the export obligation of USD 9.15 lakhs (Rs.5,27 lakhs) against these licenses utilized for imports.

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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