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Notes to Accounts of Mold-Tek Technologies Ltd.

Mar 31, 2023

The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

Rental expense recorded for short-term leases was '' 14.38 lakhs for the year ended March 31,2023 and '' 26.94 lakhs for the year ended March 31,2022.

As per the Scheme of Arrangement approved by the Honourable High court of Andhra Pradesh vide its order dated 25th July, 2008, share capital of the company was restructured into 30,90,024 equity share of '' 10 each consequent to the demerger of the plastics division of the company into a separate company, viz., Mold-Tek Plastics Limited (since renamed as, Mold-Tek Packaging Limited).

Pursuant to the Shareholders approval dated 3 Feb 2016, Company''s Equity shares of '' 10/- each were split into five Equity shares of '' 2/- each fully paid up, resulting in increase in no of shares from 53,11,056 equity shares of '' 10/- each to 2,65,55,280 equity shares of '' 2/- each.

2,27,795 equity shares of '' 2 each issued at a premium of '' 10.20 per share on 20th April 2016 by way of Employees Stock Option Scheme.

2,86,232 equity shares of '' 2 each issued at a premium of '' 12.60 per share on 23rd Feb 2017 by way of Employees Stock Option Scheme.

20,000 equity shares of '' 2 each issued at a premium of '' 12.60 per share on 12th May 2017 by way of Employees Stock Option Scheme.

1,11,490 equity shares of '' 2 each issued at a premium of '' 10.20 per share on 20th August 2017 by way of Employees Stock Option Scheme.

2,20,690 equity shares of '' 2 each issued at a premium of '' 12.6 per share on 16th November 2017 by way of Employees Stock Option Scheme.

22,825 equity shares of '' 2 each issued at a premium of '' 12.60 per share on 2nd December 2017 by way of Employees Stock Option Scheme.

1,18,295 equity shares of '' 2 each issued at a premium of '' 10.20 per share on 30th May 2018 by way of Employees Stock Option Scheme.

2,83,721 equity shares of '' 2 each issued at a premium of '' 12.60 per share on 09th November 2018 by way of Employees Stock Option Scheme.

1,07,950 equity shares of '' 2 each issued at a premium of '' 33.00 per share on 10th October 2019 by way of Employees Stock Option Scheme.

37,200 equity shares and 49,680 equity shares of '' 2 each issued at a premium of '' 33.00 per share, on 23rd October 2020 and 12th February 2021 respectively by way of Employees Stock Option Scheme.

2,01,405 equity shares of '' 2 each issued at a premium of '' 33.00 per share, on 2nd September 2021 by way of Employees Stock Option Scheme.

(D) MTTL Employee Stock Option Scheme

1,50,000 Options have been granted to employees on 21st April 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 the rate of '' 28/- per option.

1,13,925 Options have been granted to employees on 2nd March 2015 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 the rate of '' 61/- per option.

2.00. 000 Options have been granted to employees on 3rd August 2015 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 the rate of '' 73/- per option.

6.00. 495 Options have been granted to employees on 23rd February 2022 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.

(E) Terms/Rights attached to equity shares

The Company has only one class of equity shares having a face value of '' 2/- each. Each holder of equity shares 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 reserves

(i) Capital reserve

This reserve represents the difference between the value of net assets transferred to the company in the course of Business Combinations and the considerations paid for such combinations.

(ii) Securities premium

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

(iii) Share option outstanding account

This reserves relates to stock options granted by the company to employees under the MTTL Employee Stock Option Scheme.

This reserve is transferred to securities premium or retained earnings on exercise or cancellation of vested options respectively.

(iv) General reserve

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

(v) Retained earnings

This reserve represents the cumulative profits of the company and effects of remeasurment of defined benefit obligations. This reserve is utilised in accordance with the provisions of Companies Act 2013.

(vi) Equity instruments through Other Comprehensive Income

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.

18.1 a) Working capital loans represent loans from ICICI Bank Ltd and CITI Bank N.A. The loans are repayable on demand and are secured by

(i) Pari-passu charge on present and future stocks, book debts and property, plant and equipment of the Company and first charge on immovable property belonging to the Company located at Municipal No. 8-2-293/82/A/700 and 8-2-293/82/A/700/1 in S.No. 403/1/OLD, 120(NEW) of Shaikpet Village and 102/1 of Hakeempet Village Road No.36, Jubilee Hills, Hyderabad.

(ii) Personal guarantees of Directors namely Mr J Lakshman Rao, Mr A Subramanyam and Mr P.Venkateswara Rao. b) The above loans carry floating rate of interest ranging from 8% p.a to 9% p.a.

31. Employee benefits

(i) Leave obligations

The leave obligation covers the Company''s liability for earned leave which is funded by Life Insurance Corporation of India.

(ii) 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 Life Insurance Corporation 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.

32. Financial instruments and risk management Fair values

1. The carrying amounts of trade payables, other financial liabilities (current), borrowings (current), trade receivables, cash and cash equivalents, other bank balances and loans are considered to be the same as fair value due to their short term nature.

2. Borrowings (non-current) consists of loans from banks and other financial assets (non-current) consists of rent deposits where the fair value is considered based on the discounted cash flow.

3. The fair value of forward foreign exchange contracts is calculated as the present value determined using forward exchange rates, currency basis spreads between the respective currencies and interest rate curves.

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.

Set out below, is a comparision by class of the carrying amounts and fair value of the Company''s 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 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.

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.

33. 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.

(A) Market risk

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 March 31, 2023 and March 31, 2022. 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 2023 and 31 March 2022.

(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 Company''s 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, EURO, GBP, CAD and AUD against the functional currencies of the Company. The Company''s 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 Dollar, EURO, AUD and GBP exchange rates, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities.

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 Dollar, EURO, GBP, AUD where the functional currency of the entity is a currency other than US Dollar, EURO, GBP, AUD (ill) Interest rate risk

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 Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s 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, employee advances and bank deposits which represents Company''s 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 Company''s 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, the credit risk is insignificant since the loans & advances are given to its employees only and deposits are held with reputable banks. The credit quality of the financial assets is satisfactory, taking into account the allowance for credit losses.

(ill) 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 company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

(C) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding to meet obligations when due and to close out market positions. Company''s 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.

(i) Financing arrangements:

The company had access to the following undrawn borrowing facilities at the end of the reporting period

34. Capital management

A. Capital management and Gearing Ratio

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the company''s 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.

40. Segment Information

a) The Company''s Executive Chairman, Managing Director and Chief Financial officer examine the Company''s performance from a service perspective and have identified one operating segment viz Engineering Services. Hence segment reporting is not given.

b) Information about products:

Revenue from external customers - Sale of Services '' 13325.86 Lakhs

The Group has made external sales to the following customers meeting the criteria of 10% or more of the entity revenue Customer 1 - '' 10361.56 Lakhs.

41. Share Based Payments (Ind AS 102):

The Company has granted 26,70,120 options to its eligible employees in various ESOS Schemes, details are as under:

42. Note on "Code on Social Security, 2020":

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 November 13, 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.

43. Previous year figures have been regrouped/reclassified, wherever necessary, to conform to current year presentation.


Mar 31, 2018

1 Company overview

Mold-Tek Technologies Limited (‘the Company’) is a public limited company incorporated in India having its registered office at Hyderabad, Telangana, India. The Company is engaged in providing Civil & Mechanical Engineering Services.

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.

MTTL Employee Stock Option Scheme

1,50,000 Options have been granted to employees on 21st April 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 the rate of Rs. 28/- per option.

1,13,925 Options have been granted to employees on 2nd March 2015 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 the rate of Rs. 61/- per option.

2,00,000 Options have been granted to employees on 3rd August 2015 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 the rate of Rs. 73/- per option.

The above Options of Rs. 10 face value are converted to ‘2 face value each Pursuant to the Shareholders approval dated 3 Feb 2016, Company’s Equity shares of Rs. 10/- each were split into Equity shares of Rs. 2/- each fully paid up.

(C) Terms/Rights attached to equity shares

The Company has only one class of equity shares having a face value of Rs. 2/- 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) Capital reserve

This reserve represents the difference between the value of net assets transferred to the company in the course of Business Combinations and the considerations paid for such combinations.

(i) Securities premium reserve

Securities Premium Reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provision of the act.

(iii) Share option outstanding reserve

This reserves relates to stock options granted by the company to employees under the MTTL Employee Stock Option Scheme.

This reserve is transferred to Securities premium reserve or Retained earnings on on exercise or cancellation of vested options respectively.

(iv) General reserve

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

(v) Retained earnings

This reserve represents the cumulative profits of the company and effects of remeasurment of defined benefit obligations. This reserve can be utilised in accordance with the provisions of Companies Act 2013.

i) Term loan represents loan from ICICI Bank Ltd which 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 entire current assets which inter-alia include, unbilled revenue, and such other movable assets 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) First charge by way of equitable mortgage of land measuring 988 sq. yards & building thereon in Municipal No. 8-2-293/82/A/700 and 967 sq. yards & buildings thereon in Municipal No. 8-2-293/82/ A/700/1, in Survey No. 403/1(old), 120(New) of Shaikpet Village and 102/1 of Hakeempet Village, Road No. 36, Jubilee Hills, Hyderabad belonging to the Company, except for the property or portions sold to the group company M/s. Mold-Tek Packaging Limited. The mortgage portion includes part of cellar space in the property and 930 sqft of common area in ground floor.

d) Personal guarantees of Directors namely Mr J. Lakshmana Rao, Mr A. Subramanyam, and Mr P. Venkateswara Rao.

ii) Vehicle loans from Axis Bank and State Bank of India are secured by hypothecation of the vehicles.

3.1 a) Working capital loans represent loans from ICICI Bank and CITI Bank. The loans are repayable on demand and are secured by pari-passu charge on present and future stocks, book debts and fixed assets of the Company and first charge on immovable property belonging to the Company located at Municipal No. 8-2-293/82/A/700 and 8-2-293/82/A/700/1 in S.No. 403/1/OLD, 120(NEW) of Shaikpet Village and 102/1 of Hakeempet Village Road No.36, Jubliee Hills, Hyderabad.

b) Personal guarantees of Directors namely Mr J Lakshman Rao, Mr A Subramanyam and Mr P.Venkateswara Rao and personal guarantee of Ms J Mytreyi.

c) The above loans carry floating rate of interest ranging from 9% to 11% .

4. Employee benefits

(i) Leave obligations

The leave obligation covers the Company’s liability for earned leave which is funded by Life Insurance Corporation of India.

(ii) Defined contribution plans

The Company has defined contribution plans 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 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 Life Insurance Corporation 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 obligation of leave encashment is recognised in the same manner as gratuity.

The following table sets out the amounts recognised in the financial statements in respect of gratuity plan

Fair value of plan assets — 100% with LIC of India

Expected contributions to post- employment benefit plans of gratuity for the year ending 31 March 2019 are Rs 89.58 Lakhs (Approx).

iv) Significant estimates and sensitivity Analysis

The sensitivity of the defined benefit obligation to changes in key assumptions is:

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.

5. Financial instruments and risk management Fair values

1. The carrying amounts of trade payables, other financial liabilities (current), borrowings (current), trade receivables, cash and cash equivalents, other bank balances and loans are considered to be the same as fair value due to their short term nature.

2. Borrowings (non-current) consists of loans from banks and other financial assets (non-current) consists of rent deposits where the fair value is considered based on the discounted cash flow.

3. The fair value of forward foreign exchange contracts is calculated as the present value determined using forward exchange rates, currency basis spreads between the respective currencies and interest rate curves.

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.

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

*Fair value of instruments is classified in various fair value hierarchies based on the following three levels:

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.

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.

6. 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.

(A) Market risk

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 March 31, 2018 and March 31, 2017. 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 2018 and 31 March 2017.

(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 Company’s 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, EURO, GBP, CAD and AUD against the functional currencies of the Company. The Company’s 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 Dollar, EURO, GBP, CAD and AUD exchange rates, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities.

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 Dollar, EURO, GBP, CAD and AUD, where the functional currency of the entity is a currency other than US Dollar, EURO, GBP, CAD and AUD.

(iii) Interest rate risk

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 Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s 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.

The assumed increase/decrease in interest rate for sensitivity analysis is based on the currently observable market environment

(B) Credit Risk

Financial assets of the Company include trade receivables, employee advances and bank deposits which represents Company’s 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 Company’s 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, the credit risk is insignificant since the loans & advances are given to its employees only and deposits are held with 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 company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

(C) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding to meet obligations when due and to close out market positions. Company’s 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.

7. Capital management

A. Capital management and Gearing Ratio

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the company’s 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 Company’s 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 2018 and 31 March 2017.

8. Segment Information

a) The Group’s Executive Chairman, Managing Director and Chief Financial officer examine the Group’s performance from a service perspective and have identified one operating segment viz Engineering Services. Hence segment reporting is not given.

b) Information about products:

Revenue from external customers - Sale of Services Rs. 615428.04 thousands

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

Customer 1 - Rs. 496604.69 thousands

9. Share Based Payments (Ind AS 102):

The Company has granted 15,69,625 options to its eligible employees in various ESOS Schemes, details are as under:

The weighted average share price at the date of exercise for options was Rs. 58.82 per share (March 31, 2017 Rs. 63.77 per share) and weighted average remaining contractual life for the share options outstanding as at March 31, 2018 was 0.34 years (March 31, 2017 : 2.26 years).

(C)Fair Valuation:

Weighted Average Fair value of the options granted during the year ‘ Nil (March 31, 2017 ‘ Nil)

The fair value of option have been done by an independent firm of Chartered Accountants on the date of grant using the Black-Scholes Model.

The key assumptions in the Black-Scholes Model for calculating fair value as on the date of grant:

10. First-time adoption of Ind AS Transition to Ind AS

These are the group’s 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 affected the Company’s 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 group 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 group 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 subsidiaries

Under previous GAAP, investment in subsidiaries, joint ventures and associates were stated at cost and provisions made to recognise the decline, other than temporary. Under Ind AS, the Company has considered their previous GAAP carrying amount as their deemed cost.

(iv) (iv) Share based payment transactions

Under previous GAAP, the cost of options granted under the MTTL Employee Stock Option Scheme (MTTL ESOS) [equity - settled] was recognised using the intrinsic value method. Under Ind AS, the cost of options granted under MTTL ESOS is recognised based on the fair value of the options as on the grant date. In terms of the exemptions, the fair value of unvested options as at the date of transition have been accounted for as part of reserves.

B. Ind AS mandatory exceptions

(i) Estimates

An entity’s estimates in accordance with Ind ASs 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 group made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP: -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) Fair valuation of forward contracts

Under previous GAAP, the premium or discount arising at the inception of a forward exchange contract should be amortised as expense or income over the life of the contract. Any profit or loss arising on cancellation or renewal of such a forward exchange contract should be recognised as income or as expense for the period. Under Ind AS 109, such forward contracts have to be carried at fair value through profit and loss. The profit for the year ended 31 March 2017 has increased by Rs. 11280.71 thousands on account of fair value gain.

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 AS 12 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 decreased by Rs. 831.49 thousands as at 1 April 2016 and increased by Rs. 10311.00 thousands as at 31 March 2017 respectively with a corresponding impact on retained earnings and net profit respectively.

3) 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.

4) 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. 6392.26 thousands as at 1 April 2016 and Rs. 9773.99 thousands included under provisions has been reversed with corresponding adjustments to retained earnings. Consequently the total equity increased by an equivalent amount.

5) Share based payments

Under the previous GAAP, expenditure relating to Employee stock option was valued as per Intrinsic value method. Under Ind AS, expenses are to be accounted as per Fair value method. Accordingly, expenditure of Rs. 2685.74 thousands was reversed during the year ended 31 March 2017 with a corresponding increase in net profit.

6) Fair Valuation of rent deposits

Under previous GAAP, rent deposits were shown at cost. Under Ind AS, these are recognised at fair value using discounted cash flow method. The difference between carrying amount under previous GAAP and fair value under Ind AS is shown as prepaid rent, to be amortised over the lease period. Accordingly, expense of Rs. 140.56 thousands and income of Rs. 111.90 thousands was recognised during the year ended 31 March 2017 with a corresponding impact on net profit.

7) Expected credit loss on trade receivables

As per Ind AS 109, expected credit loss is calculated for trade receivables using the lifetime cycle approach. Accordingly, an amount of Rs. 13228.79 thousands and Rs. 578.77 thousands is provided as on 1 April 2016 and 31 March 2017 respectively with a corresponding impact on retained earnings and net profit respectively.

8) 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 ‘other comprehensive income’ includes remeasurements of defined benefit plans. The concept of ‘other comprehensive income’ did not exist under previous GAAP.

9) 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.

10) Cash flow from financing activities

Other bank balances (disclosed under Note 9) are not considered as part of cash and cash equivalents under Ind AS and the movement of other bank balances amounting to Rs. 1557.67 thousands is the variance in net decrease in cash and cash equivalents as at 31 March 2017.


Mar 31, 2016

1. The previous year''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 As per the Scheme of Arrangement approved by the Honorable High court of Andhra Pradesh vide its order dated 25th July, 2008, entire share capital of the company was restructured into 30,90,024 equity share of Rs.10 each consequent to the demerger of the plastics division of the company into a separate company, viz., Mold-Tek Plastics Limited (Since renamed as, Mold-Tek Packaging Limited).

3 5,00,000 equity shares of Rs.10 each issued at a premium of Rs.38 per share on 24th April, 2006 by way of preferential offer.

4 5,24,957 equity shares of Rs.10 each issued at a premium of Rs.65 per share on 8th April, 2010 by way of preferential offer.

5 37,125 equity shares of Rs.10 each issued at a premium of Rs.60.00 per share on 29th April, 2011 by way of Employee Stock Option Scheme.

6 5,10,000 equity shares of Rs.10 each issued at a premium of Rs.70 per share on 29th June, 2011 by way of preferential offer.

7 26,200 equity shares of Rs.10 each issued at a premium of Rs.60.00 per share on 29th May, 2012 by way of Employee Stock Option Scheme.

8 10,900 equity shares of Rs.10 each issued at a premium of ''60.00 per share on 17th April, 2014 by way of Employee Stock Option Scheme.

9 9,850 equity shares of Rs.10 each issued at a premium of Rs.60.00 per share on 2nd March 2015 by way of Employee Stock Option Scheme.

10 6,00,000 equity shares of Rs.10 each issued at a premium of Rs.21.20 per share on 19th August 2015 by way of preferential offer

11 2000 equity shares of Rs.10 each issued at a premium of Rs.18.00 per share on 26th October, 2015 by way of Employee Stock Option Scheme.

12 Pursuant to the Shareholders approval dated 3 Feb 2016, Company''s Equity shares of Rs.10/- each were split into five Equity shares of Rs.2/- each fully paid up, resulting in increase in no of shares from 53,11,056 equity shares of Rs.10/- each to 2,65,55,280 equity shares of Rs.2/- each.

MTTL Employee Stock Option Scheme

1,50,000 Options have been granted to employees on 21st April 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 the rate of Rs.28/- per option.

1,13,925 Options have been granted to employees on 2nd March 2015 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 the rate of Rs.61/- per option.

2,00,000 Options have been granted to employees on 3rd August 2015 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 the rate of Rs.73/- per option.

The above Options of Rs.10 face value are converted to Rs.2 face value each Pursuant to the Shareholders approval dated 3 Feb 2016, Company''s Equity shares of Rs.10/- each were split into Equity shares of Rs.2/each fully paid up.

* based on the Split up of shares of Rs.10 each to Rs.2 each

The Discount value (Rs.17.94) of Option on 5,69,625 Options is accounted as deferred Employee Compensation which is either amortized on a straight line basis over the vesting period or on the basis of option exercised whichever is earlier.

The Discount value (Rs.21.46) of Option on 10,00,000 options is accounted as deferred Employee Compensation which is either amortized on a straight line basis over the vesting period or on the basis of option exercised whichever is earlier.

During the year Board of Directors at their meeting held on 10th March 2016 has declared an interim dividend of Rs.0.6 per equity share and the Board of Directors at their Meeting held on May 17, 2016 has recommended a final dividend of Rs.0.20 per equity share.

Notes:

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 borrower''s entire current assets which inter-alia include, work in process, and such other movable 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) First charge by way of equitable mortgage of land measuring 988 sq. yards & building thereon in Municipal No. 8-2-293/82/ A/700 and 967 sq. yards & buildings thereon in Municipal No. 8-2-293/82/ A/700/1, in Survey No. 403/1(old), 120(New) of Shaikpet Village and 102/1 of Hakeempet Village, Road No. 36, Jubilee Hills, Hyderabad belonging to the Company expect 6000 sft at 3rd Floor" of the above, undivided share of 416 sq. yards and building of 10,348.88 sq. feet are sold by the company to M/s Mold-Tek Packaging Limited under NOC from M/s. ICICI Bank Limited.

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

The Company is availing four vehicle loans from various financial institutions. While for one Vehicle loans repayment schedule is over 36 monthly installments, another Vehicle loans repayment schedule is over 84 monthly installments, the balance two vehicle loans are repayable in 60 monthly installments. The Company has availed Term Loan of Rs. 2 Cr from ICICI Bank Limited payable in 16 Quarterly Instalments of Rs. 12.50 Lakhs each Quarter. As of 31st March 2016, two Installments were repaid by the Company.

The Company collected security deposits from Employees and same is to be repaid to employees as per service agreement norms.

a. During the year company has made a provision of Rs.55.64 Lakhs towards current cost of Gratuity and after considering settlements to the tune of Rs.10.27 Lakhs made during the year, a closing provision of Rs.150.96 lakhs based on Actuarial Valuation is maintained.

b. During the year the Company has made a provision of Rs.8.55 Lakhs towards Corporate Social Responsibility & after considered the eligible spent of Rs.0.20 lakhs during the year, resulting in balance provision at Rs.11.04 Lakhs at the balance sheet date.

c. The company has entered into a scheme with Life Insurance Corporation of India to administer Gratuity fund and will be contributing the balance monies to the fund.

13. Deferred Tax

Deferred Tax liability at the beginning of the year was Rs.59.83 Lakhs along with the current year Deferred Tax Liability Rs.49.43 Lakhs, stands at Rs.109.26 Lakhs.

Total liability for leave encashment based on actuarial valuation as at the end of the year Rs.52.95 lakhs has been provided for.

The structure raised on the 4th floor of the existing facility is yet to be regularized by the concerned authorities.

During the year the company has sold to Mold Tek Packaging Limited a portion of fully furnished Ground floor building accommodation of 1677.38 Sq ft along with proportionate undivided share of land based on the Valuation report dated 9th March 2016 and sale agreement dated 21st Mar 2016. Other formalities have been completed before the balance sheet is approved by the board.

During the year the employee cost relating to the persons who worked on product development projects, which are pending completion as at year end are transferred to Capital Work in Progress as part of the product development costs. Once these products are developed fully, the company is confident of earning revenues through these products in the immediate future (financial year 2017-18) failing which the same will be charged off in the year in which the product becomes redundant.

In the opinion of the management there are no assets of the company carried in the financial statements whose value in use stands diminished vis-a-vis their carrying cost, and hence no provision or charge off is considered necessary.

The investment pertains to the investment in the company''s wholly owned subsidiaries. Cross Roads Detailing Inc and RMM Global Inc situated in the USA. The investments have been tested for impairment during the previous year and are disclosed at lower of impaired value or cost. A nominal increase or decrease in the value of the investment as on the balance sheet is not considered as permanent in nature and hence carried at previous year values.

Of above Rs.30 Lakhs against capital advances pertains to an advance given for land procurement for which the allotment of land is pending, failing which, the management expresses confidence in recovering the same.

14. INVENTORY AND WORK IN PROGRESS

Pertains to cost of contracted partial work completion values as at March 31, 2016 amounting to Rs.2.92 Crores (March 31, 2015: Rs.1.86 Crores) which are as certified by the management.

a. Trade receivables are subject to confirmations and reconciliations.

b. Total receivables include Rs.1585.24 Lakhs realizable in foreign currency of which Rs.1384.05 Lakhs are receivable from company''s wholly owned subsidiaries.

c. Receivables include balances of Rs.181.53lakhs in foreign currency, which are beyond 9 Months which and represented by management as being confident of recovering.

d. Of the total receivables outstanding for more than 6 months Rs.397.37 Lakhs, Rs.312.19 Lakhs are realizable in foreign currency which includes Rs.295.87 Lakhs receivable from wholly owned Subsidiaries.

e. In addition to the existing provision of Rs.39.27 lakhs which is against domestic sales, during the year, debts realizable in foreign currency to the tune Rs.198.51 Lakhs (including receivables from subsidiaries Rs.42.99 Lakhs) and Rs.2.11 Lakhs receivable from domestic customers have been written off.

Bank balances include unpaid dividend of Rs.12.18 lakhs pertaining to other share holders for earlier years.

*Other Current assets includes 1,87,600 Shares of Mold-Tek Technologies Limited which has been acquired at a cost of Rs.14.62 lakhs vested in the company in accordance with the scheme of arrangement approved by the order of Hon''ble High Court of Andhra Pradesh dated 25th July 2008. The above number includes dividend earned on the shares over the period to the tune of Rs. 2.73 Lakhs.

Foreign Exchange Gain mostly pertains to the fluctuation in the currency rates between billing and realization covered under forwards while the profit on forward contracts also includes profit pertaining to the premature cancellation of forward contracts.

Closing stock of work in progress includes cost of contracted partial work completion values as at March 31, 2016 amounting to Rs. 2.92 Crores (March 31, 2015: Rs. 1.86 Crores) primarily comprising value at cost in relation to efforts on contract on the basis of extent of completion.

a. Employee compensation expenses of Rs. 49.05 lakhs charged during the year is pertaining to the proportionate amount of the total deferred employee compensation expenses to be amortized over the vesting period of 5 years.

15. Derivatives & Forwards

During the year the company gained an amount of Rs. 92.86 Lakhs on account of forwards which includes Rs. 72.48 Lakhs earned on pre mature closure of the Forward contracts.

Unexpired Forwards:

The company entered into Foreign exchange hedging contracts by way of a forward confirmation with ICICI Bank Limited. The following are the particulars of such unexpired forward contracts as on 31.03.2016:

The impact of such transactions is recognized immediately in profit and loss account on settlement of specific transaction.

Tax disputes are in respect of demands raised by income tax department amounting to Rs.36.83 Lakhs for which the company has filed appeals with the Income Tax Appellate Tribunal.

16. Additional information pursuant to the provisions of paragraph 3, 4C and 4D of Part II of Schedule VI of the Companies Act.

a. Earnings in Foreign Currency (on accrual basis)

* Excludes payments made in respect of leave encashment of previous year.


Mar 31, 2015

1. The previous year'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. As per the Scheme of Arrangement approved by the Honorable High court of Andhra Pradesh vide its order dated 25th July, 2008, entire share capital of the company was restructured into 30,90,024 equity share of Rs.10 each consequent to the demerger of the plastics division of the company into a separate company, viz., Mold-Tek Plastics Limited (Since renamed as, Mold-Tek Packaging Limited).

3. 5,00,000 equity shares of Rs.10 each issued at a premium of '38 per share on 24th April, 2006 by way of preferential offer.

4. 5,24,957 equity shares of Rs.10 each issued at a premium of Rs.65 per share on 8th April, 2010 by way of preferential offer.

5. 37,125 equity shares of '10 each issued at a premium of '60.00 per share on 29th April, 2011 by way of Employee Stock Option Scheme.

6. 5,10,000 equity shares of Rs.10 each issued at a premium of Rs.70 per share on 29th June, 2011 by way of preferential offer.

7. 26,200 equity shares of Rs.10 each issued at a premium of Rs.60.00 per share on 29th May, 2012 by way of Employee Stock Option Scheme.

8. 10,900 equity shares of '10 each issued at a premium of '60.00 per share on 17th April, 2014 by way of Employee Stock Option Scheme.

9. 9,850 equity shares of Rs.10 each issued at a premium of Rs.60.00 per share on 2nd March 2015 by way of Employee Stock Option Scheme.

MTTL Employee Stock Option Scheme

10. 1,50,000 Options have been granted to employees on 21st April 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 the rate of Rs.28/- per option.

11. 1,15,925 Options have been granted to employees on 2nd March 2015 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 the rate of Rs.61/- per option.

12.The Discount value Rs.42) 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.

13.During the year 15,275 unexercised options granted to employees have lapsed who have left the company during vesting period. The compensation amount charged off earlier pertaining to such lapsed options along with unamortized deferred employee compensation have been accordingly reversed.

14. During the year, in compliance with Schedule II of Companies Act 2013, assets with nil useful life, valuing Rs. 113.44 Lakhs have been identified and the same has been adjusted to reserves and surplus account.

15. During the year Board of Directors at their meeting held on 15th April 2015 has declared an interim dividend of Rs. 2.0 per equity share and the Board of Directors at their Meeting held on May 19, 2015 has recommended a final dividend of Rs. 1.50 per equity share.

16. 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 barrower's entire current assets which inter- afia include, work in process, and such other movable 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) First charge by way of equitable mortgage of land measuring 988 sq. yards & building thereon in Municipal No. 8-2-293/82/A/700 and 967 sq. yards & buildings thereon in Municipal No. 8-2- 293/82/A/700/1, in Survey No. 403/1(old), 120(New) of Shaikpet Village and 102/1 of Hakeempet Village, Road No. 36, Jubilee Hills, Hyderabad belonging to the Company" of the above, undivided share of 400 sq. yards and building of 8,258 sq. feet are sold by the company to M/s Mold-Tek Packaging Limited under NOC from M/s. ICICI Bank Limited.

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

The Company is availing four vehicle loans from various financial institutions. While for one Vehicle loans repayment schedule is over 36 monthly installments, another Vehicle loans repayment schedule is over 84 monthly installments, the balance two vehicle loans are repayable in 60 monthly installments.

a. During the year company has made a provision of Rs. 101.97 Lakhs towards current cost of Gratuity and settlements to the tune of Rs. 14.58 Lakhs have been made during the year which are adjusted against the opening provision of Rs. 18.21 Lakhs, which leaves a balance provision of Rs. 105.58 lakhs based on Actuarial Valuation.

b. The company has entered into a scheme with Life Insurance Corporation of India to administer Gratuity fund and will be contributing the balance monies to the fund.

17. Deferred Tax

Deferred Tax liability at the beginning of the year was Rs. 126.17 Lakhs and resulted into Deferred Tax Asset Rs. 66.34 Lakhs for the current year, leaving a net liability of Rs. 59.83 Lakhs.

18. The investment pertains to the investment in the company's wholly owned subsidiaries. Cross Roads Detailing Inc and RMM Global Inc situated in the USA. The investments have been tested for impairment during the previous year and are disclosed at lower of impaired value or cost. A nominal increase or decrease in the value of the investment as on the balance sheet is not considered as permanent in nature and hence carried at previous year values.

a. Trade receivables are subject to confirmations and reconciliations.

b. Total receivables include Rs.1487.47 Lakhs realizable in foreign currency of which Rs.1160.04 Lakhs are receivable from company's wholly owned subsidiaries.

c. Receivables include balances of Rs.105.35 lakhs in foreign currency are beyond 9 Months which is represented by management as being confident of recovering.

d. Of the total receivables outstanding for more than 6 months Rs.257.11 Lakhs, Rs.197.34 Lakhs are realizable in foreign currency which includes Rs.105.78 Lakhs receivable from wholly owned Subsidiaries.

e. In addition to the existing provision of '39.27 lakhs which is against domestic sales, during the year, debts realizable in foreign currency to the tune of '119.15 Lakhs (including receivables from subsidiaries '66.64 Lakhs) and '7.39 Lakhs receivable from domestic customers have been written off.

*During the year company created a Mold-Tek Technologies Investment Trust as per scheme of Arrangement approved by the Hon'ble High Court of Andhra Pradesh vide its Order dated 25th July 2008. Other Current assets includes 37,520 Shares of Mold-Tek plastics Limited which has been acquired at a cost of '14.62 lakhs vested in the company in accordance with the scheme of arrangement approved by the Hon'ble High Court of Andhra Pradesh.

During the year the company transferred the above shares and accumulated dividend there on to Mold- Tek Technologies Investment Trust.

a. Gratuity Payments made during the year are amounting to Rs. 14.58 Lakhs has been adjusted

completely against provision and provision of Rs. 101.97 Lakhs ( Rs.42.92 Lakhs pertains to current year and balance provision of Rs.59.05 Lakhs pertains to earlier years) has been created.

b. Leave encashment payments made during the year are amounting to Rs. 22.08 Lakhs is charged to profit and loss account and provision of Rs.10.67 Lakhs has been created against encashable leaves.

c. Employee compensation expenses reversal is pertaining to the expenses charged off in earlier years of those employees who have left during the year without exercising the allotted grants to them.

20. Prior Period Items

Prior period adjustments of Rs.76.12 Lakhs which includes Rs.59.05 Lakhs towards Gratuity payable to Directors and Rs.17.12 Lakhs towards Leave encashment.

21. Derivatives & Forwards

During the year the company gained of Rs.60.62 Lakhs on account of forwards.

22. CONTINGENT LIABILITIES (AS ON 31.03.2015) Rs. Lakhs

Particulars As at 31st March 2015 As at 31st March 2014 (Rs. In Lakhs) (Rs. In Lakhs)

Tax Disputes 36.83 36.83

Tax disputes are in respect of demands raised by income tax department amounting to Rs.36.83 Lakhs for which the company has filed appeals with the Income Tax Appellate Tribunal.

23. RELATED PARTY DISCLOSURES

1. Related Parties and Nature of Relationship

a. Cross Roads Detailing Inc., Indiana - Subsidiary Company

b. RMM Global Inc., Indiana - Subsidiary Company

c. J. Rana Pratap - Chief Manager-NBD - Son of Chairman & Managing Director

d. A. Durga Sundeep - Chief Manager-ITB - Son of Director

e. J. Kavya- Manager Marketing & Coordination - Chairman & Managing Director's Son's Wife

2. Key Management Personnel

a. J. Lakshmana Rao, Chairman & Managing Director

b. J. Sudharani, Whole time Director, wife of Chairman & Managing Director

c. RMM Global LLC.,(USA)


Mar 31, 2014

1. The previous year''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. As per the Scheme of Arrangement approved by the Hon''ble High Court of Andhra Pradesh vide its order dated 25th July, 2008, entire share capital of the Company was restructured into 30,90,024 equity share of Rs. 10 each consequent to the demerger of the plastics division of the Company into a separate company, viz., Mold-Tek Plastics Limited (Since renamed as, Mold-Tek Packaging Limited).

2.1 5,00,000 equity shares of Rs. 10 each issued at a premium of Rs. 38 per share on 24th April, 2006 by way of preferential offer.

2.2 5,24,957 equity shares of Rs. 10 each issued at a premium of Rs. 65 per share on 8th April, 2010 by way of preferential offer.

2.3 37,125 equity shares of Rs. 10 each issued at a premium of Rs. 60 per share on 29th April, 2011 by way of Employee Stock Option Scheme.

2.4 5,10,000 equity shares of Rs. 10 each issued at a premium of Rs. 70 per share on 29th June, 2011 by way of preferential offer.

2.5 26,200 equity shares of Rs. 10 each issued at a premium of Rs. 60 per share on 29th May, 2012 by way of Employee Stock Option Scheme.

MTTL Employee Stock Option Scheme

1,50,000 Options have been granted to employees on 21st April, 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 the rate of Rs. 28 per option.

The discount value (Rs. 42) of Option is accounted as deferred employee compensation which is either amortized on a straight line basis over the vesting period or on the basis of option exercised whichever is earlier.

During the year 5,175 unexercised options granted to employees have lapsed who have left the Company during vesting period. The compensation amount charged off earlier pertaining to such lapsed options along with unamortised deferred employee compensation have accordingly been reversed.

Adjustment to surplus account pertains to the cumulative net deferred tax liability of Rs. 1,26.17 lakhs (Total liability at the beginning of the year Rs. 1,47.52 lakhs pertaining to earlier years prior to demerger, adjusted for deferred tax asset Rs. 21.35 lakhs of the current year).

During the year, the Board of Directors declared an interim dividend of Rs. 1.0 per equity share and the Board of Directors at its meeting held on 29th May, 2014 has recommended a dividend of Rs. 0.80 per equity share.

Notes:

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 barrower''s entire current assets which inter-aLia include, work-in-process, and such other movable 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. First charge by way of equitable mortgage of land measuring 988 sq. yards & building thereon in Municipal No. 8-2-293/82/A/700 and 967 sq. yards & buildings thereon in Municipal No. 8-2-293/82/A/700/1, in Survey No. 403/1 (old), 120 (New) of Shaikpet Village and 102/1 of Hakeempet Village, Road No. 36, Jubilee Hills, Hyderabad belonging to the Company. Of the above, undivided share of 400 sq. yards and building of 8,258 sq. feet are sold by the Company to M/s Mold-Tek Packaging Limited under NOC from ICICI Bank.

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

The Company is availing five vehicle loans from various financial institutions. While for two vehicle loans, repayment schedule is over 36 monthly installments, the balance three vehicle loans are repayable in 60 monthly installments.

a. Gratuity settlements to the tune of Rs. 14.14 lakhs have been made during the year, which are adjusted against the opening provision of Rs. 18.16 lakhs and during the year, the Company has made a provision of Rs. 14.19 lakhs towards current cost of gratuity which leaves a balance provision of Rs. 18.21 lakhs.

b. Total gratuity liability on actuarial valuation is Rs. 73.23 lakhs and for leave encashment Rs. 31.36 lakhs. Provision for gratuity liability as per books is maintained at Rs. 32.44 lakhs. However, as at 31st March, 2014:

i. in respect of gratuity, the liability for past service cost is Rs. 59.04 lakhs and current service cost is Rs. 14.19 lakhs, and,

ii. in respect to leave encashment, the liability for past service cost is Rs. 17.12 lakhs and current service cost is Rs. 14.24 lakhs and provision as per actuarial valuation towards current service cost is made during the year.

3. DEFERRED TAX

Deferred tax liability pertains to the cumulative deferred tax liability to earlier years prior to demerger. The total liability at the beginning of the year was Rs. 1,47.52 lakhs and resulted into deferred tax asset Rs. 21.35 lakhs for the current year. The net liability of Rs. 1,26.17 lakhs has been adjusted against reserves and surplus.

The Company during the year under review has availed fund based limit of Rs. 6.5 crore (31st March, 2013: Rs. 6.5 core) & non-fund based limit of Rs. 5.0 crore (31st March, 2013: Rs. 5.0 crore) from ICICI Bank (See note for hypothecation clause referred in Note 6).

Unpaid dividend of Rs. 12.16 lakhs above comprises of various unpaid dividend accounts and Rs. 3.82 lakhs on shares transferrable to a proposed employee trust in terms of the Scheme of Arrangement sanctioned by the Hon''ble High Court of Andhra Pradesh.

The investment pertains to the investment in the Company''s wholly owned subsidiaries, Crossroads Detailing Inc and RMM Global Inc situated in the USA. The investments have been tested for impairment during the previous year and are disclosed at lower of impaired value or cost. A nominal increase or decrease in the value of the investment as on the Balance Sheet is not considered as permanent in nature and hence carried at previous year values.

4. INVENTORY AND WORK-IN-PROCESS

Pertains to cost of contracted partial work completion values as at 31st March, 2014 amounting to Rs. 1.22 crore (31st March, 2013: Rs. 1.34 crore) which are as certified by the management.

a. Trade receivables are subject to confirmation and reconciliation.

b. Total receivables include Rs. 10,30.93 lakhs realizable in foreign currency of which Rs. 7,42.07 lakhs are receivable from Company''s wholly owned subsidiaries.

c. Out of the receivables outstanding for more than 6 months of Rs. 1,54.24 lakhs, amounts realizable in foreign currency are Rs. 92.72 lakhs, which includes an amount of Rs. 85.66 lakhs receivable from wholly owned subsidiaries.

d. In addition to the existing provision of Rs. 39.27 lakhs which is against domestic sales, during the year, debts realizable in foreign currency to the tune of Rs. 79.31 lakhs (including receivables from subsidiaries Rs. 70.92 lakhs) and Rs. 3.16 lakhs receivable from domestic customers have been written off.

e. The Company has overdue balances of Rs. 71.68 lakhs in foreign currency and Rs. 22.25 lakhs on domestic sales which it has represented as being confident of recovering.

Staff advances include an amount of Rs. 2 lakhs given to senior employees and Rs. 6.04 lakhs receivable for more than 3 years from a former employee on whom a legal case is filed for recovery. Management has represented that it is confident of recovering all the amounts including that of the former employee.

Other current assets include 37,520 equity shares of Rs. 10 each of Mold-Tek Technologies Limited pending transfer to a proposed trust per Scheme of Arrangement approved by the Hon''ble High Court of Andhra Pradesh vide its Order dated 25th July, 2008.

Foreign exchange gain mostly pertains to the fluctuation in the currency rates between billing and realization.

Closing stock of work in progress includes cost of contracted partial work completion values as at 31st March, 2014 amounting to Rs. 1.22 crore (31st March, 2013: Rs. 1.34 crore) primarily comprising value in relation to efforts on contract on the basis of extent of completion.

a. Employee gratuity amounts settled during the year Rs. 14.14 lakhs has been adjusted completely against provision and provision of Rs. 14.19 lakhs has been created against current service cost.

b. Leave encashment payments made during the year are amounting to Rs. 18.34 lakhs is charged to Statement of Profit and Loss and provision of Rs. 14.24 lakhs has been created against encashable leave at current service cost.

c. Employee compensation expenses reversal is pertaining to the expenses charged off in earlier years of those employees who have left during the year without exercising the allotted grants to them.

5. Derivatives & forwards

During the year, the Company incurred loss of Rs. 111.77 lakhs on account of forwards.

6. CONTINGENT LIABILITIES Rs. Lakhs

As at 31st March

2014 2013

Tax disputes 36.83 36.83

Tax disputes are in respect of demands raised by income tax department amounting to Rs. 36.83 lakhs for which the Company has filed appeals with the Income Tax Appellate Tribunal.

7. RELATED PARTY DISCLOSURES

1. Related Parties and Nature of Relationship

a. Crossroads Detailing Inc., USA - Subsidiary company

b. RMM Global Inc., USA - Subsidiary company

c. J. Rana Pratap - Chief Manager, NBD - Son of Chairman & Managing Director

d. A. Durga Sundeep - Chief Manager, ITB - Son of Director

2. Key management personnel

a. J. Lakshmana Rao, Chairman & Managing Director

b. J. Sudha Rani, Wholetime Director, wife of Chairman & Managing Director

c. RMM Global LLC., USA

3. Associated companies

a. Mold-Tek Packaging Limited (Comprising the plastic division demerged from your Company effective 1st April, 2007.


Mar 31, 2013

1. DEFERRED TAX

Deferred tax provision in accordance with Accounting Standard 22, to the extent of Rs.147.52 lakhs is not provided for in the books, net of Rs.21.28 lakhs being deferred tax asset for the year under review.

The Company during the year under review has been sanctioned/availed enhanced fund based limit of Rs.6.5 crore (31st March, 2012: Rs.5 crore) & non-fund based limit of Rs.5.0 crore (31st March, 2012: Rs.3.20 crore) from ICICI Bank (See note for hypothecation clause referred in Note 6).

Unpaid dividend of Rs.10 lakhs above comprises of various unpaid dividend accounts and Rs.2.62 lakhs on shares transferrable to a proposed employee trust in terms of the Scheme of Arrangement sanctioned by the Hon''ble High Court of Andhra Pradesh.

The investment pertains to the investment in the Company''s wholly owned subsidiaries. Crossroads Detailing Inc and RMM Global Inc, situated in the USA. The investments have been tested for impairment during the previous year and are disclosed at lower of impaired value or cost. A nominal increase in the value of the investment as on Balance Sheet date is not considered as permanent in nature and hence carried at previous year values.

Of above, Rs.30 lakhs against capital advances pertains to an advance given for land procurement for which the allotment of land is pending, failing which, the management expresses confidence in recovering the same.

2. INVENTORY AND WORK-IN-PROCESS

Pertains to cost of contractual partial work completion values as at March 31, 2013 amounting to Rs.1.34 crore (March 31, 2012: Rs.1.98 crore) which are as certified by the management.

a. Trade receivables are subject to confirmation and reconciliation.

b. Total receivables include Rs.793.10 lakhs realizable in foreign currency of which Rs.608.79 lakhs are receivable from Company''s wholly owned subsidiaries.

c. Of the receivables outstanding for more than 6 months of Rs.136.33 lakhs, amounts realizable in foreign currency are Rs.77.67 lakhs, of which an amount of Rs.75.93 lakhs are receivable from wholly owned subsidiaries. This disclosure is made in accordance with outstanding adopted on the basis of ''due date'' in tune with Schedule VI requirements.

d. In addition to the existing provision of Rs.39.27 lakhs which is against domestic sales, during the year debts realizable in foreign currency to the tune of Rs.54.20 lakhs (including receivables from subsidiaries Rs.27.14 lakhs) have been written off.

e. The Company has balance over dues of Rs.85.91 lakhs in foreign currency and Rs.23.03 lakhs on domestic sales which it has represented as being confident of recovery.

Bank balances include unpaid dividend amounts of Rs.2.62 lakhs pertaining to proposed employees trust and Rs.7.38 lakhs pertaining to other shareholders for previous years.

Other current assets includes 37,520 equity shares of Rs.10 each of Mold-Tek Technologies Limited pending transfer to a proposed trust per Scheme of Arrangement approved by the Hon''ble High Court of Andhra Pradesh vide its Order dated 25th July, 2008.

a. Employee gratuity amounts settled during the year Rs.9.49 lakhs has been adjusted completely against provision.

b. Leave encashment payments made during the year are amounting to Rs.8.60 Lakhs is charged to the Statement of Profit and Loss.

c. Directors'' remuneration for the year excludes a sum of Rs.10.47 lakhs (31st March, 2012: Nil) paid towards gratuity for earlier years which is accounted and disclosed as prior period expenditure.

3. DERIVATIVES & FORWARDS

During the year, the Company incurred loss of Rs.233.13 lakhs on account of derivatives and forwards, comprising of Rs.188.21 lakhs and Rs.44.92 lakhs (net) on derivatives and forwards respectively.

Derivatives

Foreign exchange hedging contract with ICICI Bank vide 0P 202804 to 921, & 203502 dated 31st October, 2007 by way of an option confirmation has come to an end by September 2012.

The impact of both the transactions, derivative as well as forwards, is recognized immediately in the Statement of Profit and Loss on settlement of specific transaction.

4. PRIOR PERIOD ADJUSTMENTS

The amounts includes an expenses of Rs.10.47 lakhs in relation to gratuity pertaining to earlier years of managerial person/s and income of Rs.8.47 lakhs written back on account of forfeited employee stock options of employees resigned in earlier years.

5. CONTINGENT LIABILITIES Rs. Lakhs

As at 31st March

2013 2012

Tax disputes 36.83 36.83

Derivatives - 143.28

Tax disputes are in respect of demands raised by Income Tax Department amounting to Rs.36.83 lakhs for which the Company has filed an appeal with the Income Tax Appellate Tribunal.

The obligation on derivatives has come to an end, hence no contingent liability with respect to derivatives. The contingent liability is arrived based on the unexpired contracts the Company has entered into, at foreign currency rate as on 31st March, 2013; Hence, nil in case of forwards.

6. Key management personnel

a. J. Lakshmana Rao, Chairman & Managing Director

b. J. Sudha Rani, Whole time Director, wife of Chairman & Managing Director

7. Associated companies

Mold-Tek Packaging Limited (Comprising the plastic division demerged from your Company effective 1st April, 2007.

a Excludes payment made towards leave encashment for earlier years.

# Dividend payment details to related parties is disclosed for key management personnel and the shareholders holding more than 5%.


Mar 31, 2012

1. The previous year'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 As per the Scheme of Arrangement approved by the Hon'ble High Court of Andhra Pradesh vide its Order dated 25th July, 2008, entire share capital of the Company was restructured into 30,90,024 equity share of Rs.10 each consequent to the demerger of the plastics division of the Company into a separate company, viz., Mold-Tek Plastics Limited (Since renamed as, Mold-Tek Packaging Limited).

2.2 5,00,000 equity shares of Rs.10 each issued at a premium of Rs.38 per share on 24th April, 2006 by way of preferential offer.

2.3 5,24,957 equity shares of Rs.10 each issued at a premium of Rs.65 per share on 8th April, 2010 by way of preferential offer.

2.4 37,125 equity shares of Rs.10 each issued at a premium of Rs.60.00 per share on 29th April, 2011 by way of Employee Stock Option Scheme.

23.5 5,10,000 equity shares of Rs.10 each issued at a premium of Rs.70 per share on 29th June, 2011 by way of preferential offer.

MTTL Employee Stock Option Scheme

1,50,000 Options have been granted to employees on 21st April, 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 the rate of Rs.28 per option.

The discount value (Rs.42) 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, 37,125 shares have been allotted to the employees against options exercised by them. The deferred employee compensation of Rs.15,59,250 pertaining to such options exercised during the year have been charged off to Statement of Profit and Loss.

3. WARRANTS APPLICATION MONEY

During the year, on 29th June, 2011 the Company allotted 5,10,000 equity shares against fully convertible warrants. (6,55,000 warrants were allotted at a price of Rs.80 comprising nominal value of Rs.10 and premium of Rs.70 each on 1st January, 2010). The balance of 1,45,000 warrants are forfeited. The application amount on the said forfeited warrants being Rs.29,00,000 (25% of the issue price of the warrants) is transferred to capital reserve account.

During the year, the Company has forfeited convertible warrants of 16,60,000 (Convertible into equal number of equity shares within a period of 18 months from the date of allotment of warrants) issued on 9th August 2010, at a price of Rs.69.40 per warrants. The said forfeited warrants application money of Rs.2,88,01,000 (25% of the issue price of the warrants) is transferred to capital reserve account.

Notes:

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, work in process, and such other movable 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. First charge by way of equitable mortgage of land measuring 988 sq. yards & building thereon in Municipal No. 8-2-293/82/A/700 and 967 sq. yards & buildings thereon in Municipal No. 8-2-293/82/A/700/1, in Survey No. 403/1(old), 120(New) of Shaikpet Village and 102/1 of Hakeempet Village, Road No. 36, Jubilee Hills, Hyderabad belonging to the Company. Of the above, undivided share of 400 sq. yards and building of 8,258 sq. feet are sold by the Company to M/s. Mold-Tek Packaging Limited under NOC from M/s. ICICI Bank Limited.

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

The Company is availing four vehicle loans from various financial institutions. While for two vehicle loan repayment schedule is over 36 monthly installments, the balance two vehicle loans are repayable in 60 monthly installments.

a. Gratuity settlements to the tune of Rs.5.05 lakhs have been made during the year, which are adjusted against the opening provision of Rs.32.72 lakhs.

b. Total liability as per actuarial valuation as at 31st March, 2012 with respect to gratuity stands at Rs.91.21 lakhs (31st March, 2011: Rs.64.52 lakhs), against the existing provision of Rs.27.66 lakhs.

c. Leave encashment payments of Rs.7.48 lakhs have been made during the year of which an amount of Rs.3.51 lakhs is adjusted against opening provision.

d. Total liability as per actuarial valuation as at 31st March, 2012 with respect to leave encashment stands at Rs.34.59 lakhs (31st March, 2011: Rs.21.63 lakhs), for which no provision is made.

The investment in one of the company's wholly owned subsidiary has been tested for impairment during the previous year and is disclosed at impaired value. The nominal increase in the value of the investment as at Balance Sheet date is not considered as permanent in nature and hence continued to disclose at impaired value.

Capital advances are regrouped under the long-term loans and advances during the year. Of above Rs.30 lakhs pertains to an advance given for land procurement for which the allotment of land is pending, in the absence of which the management is confident of recovering the same.

During the year, margin money deposits made against the bank guarantees have been encashed on surrendering them to the bankers.

4. INVENTORY AND WORK-IN-PROGRESS

Includes unbilled revenues as at 31st March, 2012 amounting to Rs.1.98 crore (31st March, 2011: Rs.1.88 crore) the values of which as at the Balance Sheet date are as certified by the management.

a. Trade receivables are subject to confirmation and reconciliation.

b. Total receivables include Rs.664.99 lakhs realisable in foreign currency of which Rs.468.66 lakhs are receivable from Company's wholly owned subsidiaries.

c. Of the receivables outstanding for more than 6 months Rs.125.73 lakhs, amounts realizable in foreign currency are Rs.73.16 lakhs, of which an amount of Rs.59 lakhs are receivable from subsidiaries.

d. No provision has been made during the year in addition to the existing provision of Rs.39.27 lakhs which is against domestic sales. The management expresses confidence in the recovery of the balance dues.

Other current assets represents 37,520 equity shares of Rs.10 each of Mold-Tek Technologies Limited pending transfer to a proposed trust per Scheme of Arrangement approved by the Hon'ble High Court of Andhra Pradesh vide its Order dated 25th July, 2008.

Closing stock of work-in-process includes unbilled revenues as at March 31, 2012 amounting to Rs.1.98 crore (31st March, 2011: Rs.1.88 crore) primarily comprises of the revenue recognized in relation to efforts incurred on contract on the basis of extent of completion.

a. Gratuity settled during the year Rs.5.05 lakhs has been adjusted completely against provision.

b. Leave encashment payments made during the year are amounting to Rs.7.48 lakhs, while an amount of Rs.3.51 lakhs adjusted against provision, the balance of Rs.3.97 lakhs is charged to profit and loss account.

c. Gratuity and leave encashment figures do not include the amounts to be provided for the year of Rs.26.69 lakhs and Rs.12.96 lakhs respectively, based on incremental liability for the year as per actuarial valuation.

d. Directors' remuneration for the year excludes a sum of Rs.10.57 lakhs (31st March, 2011: Nil) paid towards leave encashment for earlier years which is accounted and disclosed as prior period expenditure.

5. DERIVATIVES & FORWARDS

During the year, the Company incurred loss of Rs.215.93 lakhs on account of derivatives and forwards, comprising of Rs.214.73 lakhs and Rs.1.2 lakhs (net) on derivatives and forwards respectively. The details of the contracts entered into by the Company as on 31st March, 2012 are as follows:

Derivative instruments

Foreign exchange exposure of the nature of a hedging contract by way of an option confirmation with ICICI Bank Limited vide 0P 202804 to 921, & 203502 dated 31st October, 2007 with following particulars:

6. CONTINGENT LIABILITIES Rs. Lakhs

Particulars As at As at 31st March, 2012 31st March, 2011

Tax disputes 36.83 36.83

Derivatives 1,43.28 1,97.74

Tax disputes are in respect of demands raised by Income Tax Department (International Taxation) amounting to Rs.36.83 lakhs for which the Company has filed an appeal with the Income Tax Appellate Tribunal.

Contingent liabilities with respect to derivatives are arrived at based on the unexpired derivative contracts the Company has entered into, at foreign currency rate as on 31st March, 2012.

7. RELATED PARTY DISCLOSURES

1. Related parties and nature of relationship

a. Cross Roads Detailing Inc., USA - Wholly owned subsidiary

b. RMM Global Inc., USA - Wholly owned subsidiary

c. J. Rana Pratap - Management Trainee - Son of Chairman & Managing Director

2. Key management personnel

a. J. Lakshmana Rao, Chairman & Managing Director

b. J. Sudharani, Wholetime Director, wife of Chairman & Managing Director

3. Associated companies

Mold-Tek Packaging Limited (Comprising the plastic division demerged from your Company effective 1st April, 2007.


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. Share capital

As per the Scheme of Arrangement approved by the Honble High Court of Andhra Pradesh vide its order dated 25th July, 2008, the entire share capital of the company was restructured into 30,90,024 equity shares of Rs.10 each consequent to the demerger of the plastics division of the Company into a separate company, viz., Mold-Tek Plastics Limited (now, Mold-Tek Packaging Limited).

Separately 5,00,000 equity shares of Rs.10 each were issued on 24th April, 2006 (referred to in Clause 19.3 of the Scheme of Arrangement) at a premium of Rs38 per share on conversion of share warrants arising out of the preferential offer.

a. During the year, the Company allotted 6,55,000 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 Rs80 per Warrant (comprising face value of Rs10 and premium of Rs70 each), the issue price being not less than the price as arrived at, in accordance with the terms of Chapter XIII of Securities And Exchange Board of India Regulations, 2000), vide Special Resolution passed at Annual General Meeting held on 30th day of September, 2009. The said warrants are allotted on 1st January, 2010.

The Company has received Rs131 lakhs being the 25% of the value of the said warrants which is reflected as share application monies. The balance amount is to be received with in 18 months from the date of allotment of warrants.

The preferential issue to M/s. RMM Global, Inc. & M/s. Technet Engineering Services Private Limited were in terms of asset purchase agreements dated 12th February, 2009 respectively. The allotment of the said shares was completed on 8th April, 2010, and the said amounts grossing to Rs5,24,71,775 are reflected as share application monies.

3. Secured loans & Scheme of Arrangement

Pursuant to the scheme of arrangement approved by the Honble High Court of the Andhra Pradesh vide its Order of 25th July, 2008 term loan availed by the combined company from ICICI Bank for corporate office building land (Mold-Tek Technologies Limited) and Daman Plant expansion (Mold-Tek Packaging 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 accordingly accorded recognition to bifurcate the combined term loan and cash credit/working capital facility into the two separate Accounts for Mold-Tek Technologies Limited and Mold-Tek Packaging Limited, respectively vide their Credit Arrangement letter dated 30th March, 2009. The same was made effective 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. First charge by way of equitable mortgage of land measuring 988 sq. yards & buildings thereon in Municipal No.8-2-293/82/A/700 and 967 sq. yards & buildings thereon in Municipal No.8-2-293/82/A/700/ 1, in Survey No. 403/1(Old), 120(New) of Shaikpet Village and 102/1 of Hakeempet Village, Road No.36, Jubilee Hills, Hyderabad belonging to the Company valued at Rs19,53 lakhs, as per valuation report dated 6th December, 2008.

d. Personal guarantees of Directors namely J. Lakshmana Rao, A. Subrahmanyam, J. Mytreyi & P. Venkateswara Rao.

e. Pursuant to the sanction of the Scheme of Arrangement, the transfer of licenses, marks and rights away from the company remains pending. Apart from the above, certain operational exceptions prevailing are considered for disclosure under the relevant heads and groupings in these notes.

4. Derivatives & options

The Company has entered into the following derivative instruments:

5. Fixed assets

a. During the year, the Company has sold undivided share of 400 sq. yards of land and ground floor portion of corporate office building at Plot No. 700 Jubilee Hills, along with furniture, fixtures and electrical installations for Rs 4.40 crore at an overall profit of Rs1.09 crore to Mold-Tek Packaging Limited.

b. Physical verification of fixed assets has not been conducted during the year under review by the Company.

c. Goodwill of Rs3.09 crore arising from the acquisition of the assets and liabilities acquired from M/s. RMM Global Inc., USA and its subsidiary in India, M/s. Technet Engineering Services Private Limited, has been reflected under fixed assets.

The Company as per its stated policy considers that the acquisition is streamlined at the end of the financial year under review, and will amortise goodwill arising on acquisition over a period of 5 years commencing from the financial year 2010-11. Thus, no amount has been provided for towards the proportionate charging off of such goodwill in the books during the period under review.

6. Investments

a. In accordance with Accounting Standard 13, investments are stated at cost of acquisition. The cost of investments is reflected as long term investments. And any diminution in value of the same is considered temporary by the Company. Consequently, no provision is made in the accounts.

b. Investments include an amount of Rs4.58 crore in Crossroads Detailing Inc., and Rs8.15 lakhs in M/s. RMM Global Inc., both 100% American subsidiary companies.

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

a. Sundry Debtors include an amount of Rs371.54 lakhs outstanding for more than 6 months, for reasons such as possible non recoveries and back charges, against which a cautionary provision is made for Rs103.80 lakhs. The Company has written off an amount of Rs105.27 lakhs towards bad debts and unrealizable amounts out of the existing provision, and necessary approvals for any possible write offs pertaining to foreign currency debts, in accordance with RBI stipulations are awaited and to be applied for.

b. Sundry debtors also include dues from subsidiaries, M/s. Crossroads Detailing Inc., and M/s. RMM Global Inc., Indiana of Rs380.43 lakhs & Rs116.51 lakhs respectively. A review of the relevant subsidiary company accounts reveal that an amount of Rs276.63 lakhs has been realized by M/s. CRD Inc., and is utilized by them to meet its running expenditure without remittance to India. Necessary approvals pertaining to such utilization foreign currency, in accordance with RBI stipulations are awaited and to be applied for.

c. Current assets include 37,520 shares of your Company, Mold-Tek Technologies Limited (being 28% of 1,34,000 equity shares originally held by M/s. Teckmen Tools Private Limited, prior to amalgamation of that company with Moldtek Technologies Limited,) held in accordance the scheme of arrangement, and pending the vesting of the same into a separate trust/ trustee along with dividend for financial year 2007-08 & financial year 2008-09, in keeping with the approval of the Scheme of Arrangement approved by the Honble High Court of Andhra Pradesh. The corresponding dividend amounts due for the year 2007-08 & 2008-09 is a total of Rs1,50,080 and an amount of Rs1,12,560 is proposed for the current financial year 2009-10.

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

7. Related Party Disclosures

i. Related Parties and Nature of Relationship

a. Crossroads Detailing Inc., USA - Subsidiary company

b. RMM Global Inc., USA - Subsidiary company

c. J. Rana Pratap - Management Trainee - Son of Chairman & Managing Director

d. J. Sudharani, Wholetime Director, wife of Chairman & Managing Director

ii. Key Management Personnel

a. J. Lakshmana Rao, Chairman & Managing Director

b. J. Sudharani, Wholetime Director

iii. Associated Companies

Mold-tek Packaging Ltd (Comprising the plastic division demerged from your Company effective 1st April, 2007)

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