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Notes to Accounts of Mold-Tek Technologies Ltd.

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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