Dear Members of
Your Directors have pleasure in presenting their report the business and operations ofthe Company for the year ended 31st March 2018.
|FINANCIAL RESULTS || || |
| ||STANDALONE ||CONSOLIDATED |
| ||2017-18 ||2016-17 ||2017-18 ||2016-17 |
|Revenue from operations ||33946 ||30080 ||34684 ||30137 |
|Other income ||105 ||156 ||96 ||84 |
|Total income ||34051 ||30236 ||34780 ||30221 |
|Profit before Finance cost depreciation & tax ||6452 ||5343 ||6250 ||5123 |
|Finance cost ||411 ||231 ||463 ||244 |
| ||1184 ||992 ||1315 ||1031 |
|Profit before Tax ||4857 ||4120 ||4472 ||3848 |
|Provision for current tax ||1393 ||1362 ||1393 ||1362 |
|Provision for deferred tax ||295 ||69 ||295 ||69 |
|Net profit (After Tax) ||3169 ||2689 ||2784 ||2417 |
|Other comprehensive income (net of tax ) ||(7) ||(12) ||(7) ||(12) |
|Profit brought forward from previous years ||4333 ||3100 ||4061 ||3100 |
|Amount available for appropriation ||7495 ||5777 ||6838 ||5505 |
|Less: Appropriation || || || || |
|Transferred to general reserve ||405 ||361 ||405 ||361 |
|Dividend on equity shares (excluding tax) ||443 ||900 ||443 ||900 |
|Tax on dividends ||90 ||183 ||90 ||183 |
|Other adjustments ||34 ||0 ||34 ||0 |
|Closing Balance of retained earnings ||6523 ||4333 ||5866 ||4061 |
Your Company has shown a healthy performance at consolidated level in terms of revenueEBIDTA & PAT. Your Company has achieved a total revenue of Rs34684 lakhs fromRs30137 lakhs in the previous year with a growth rate of 15.08%. The operating profit(EBIDTA) increased by 22% from Rs5123 lakhs to Rs6250 lakhs overall resulting sharpincrease in net profits by 15% amounting Rs2784 lakhs as against the profit Rs2417 lakhsfor financialyear 2016-17. The EPS on weighted average equity has increased from Rs8.73 inthe financial year 2016-17to Rs10.05 in the financial year 2017-18 leading to an increaseof 15%.
Your Company is setting up two new manufacturing plants for Asian Paints at Mysore andVizag. The construction Mysore by October/November 2018 and Vizag by January 2019. Thefirst order has been received from Asian Paints limited; Mysore and the same will beexecuted by end of the September 2018 from our existing plants till production start atour Mysore plant.
Your Company introduced a range of new oval tubs for ice creams chocolates biscuitsand other food products by adding 12 molds and required machines and robots. The Companyreceived excellent response from industry leaders like Vadilal Lazza Heritage Scoopsand many other brands Your Company's Q-Packs of 515 and 17 liters packs are gettingbetter acceptance and sales are gradually pickup from Edible Oil and Ghee segments. FromOctober 2018 Company is launching a new set of retail packs for Ghee and spices and otherfood products in the range of 50ml to 1000 ml packs. New enquiries from major MNCs in Foodand FMCG are also under development which may add to sales from the 4th quarter of comingFinancial Year. The above developments will keep up the growth prospects for the Companyin the coming quarters and inthe next Financial year.
The company has also started developing IML decoration on curved surfaces. This maylead us nto packaging for cosmetics which is a good value adding line of business
Your Company has received credit rating from two agencies D&B RatingandICRA.
The credit rating is 5A1 and conditionisstated as Good. D&B Indicative Risk Ratingof 5A1 implies that the Company has a tangible net worth of Rs89859 lakhs and above asper the latest available financial 2 indicates that the overall status of the Company isstrong.
The outlookonthelong-termratingfrom ICRA has also been upgraded from stable topositive. The rating details are as follows:
|Instrument ||Rating |
|Term loan ||[ICRA] A- (Stable) |
|Long-term loans fund based ||[ICRA] A- |
|Short-term non- fund based ||[ICRA]A2+ |
|Long-term/short- term proposed ||[ICRA]A- |
CHANGE IN THE NATURE OF BUSINESS IF ANY
No change in the nature of Business
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
No material changes and commitments affectingthe financial position of the Company haveoccurred between the end of the financial year to which the financialstatements relate andthe date of this Directors' Report.
During the year 2017-18 your Company's wholly owned subsidiary company by name Mold-TekPackaging FZE in UAE has started its operations. statements of the Company prepared inaccordance with applicable Accounting Standards as specified in Companies (Accounts)Rules 2014 form part of theannual dividend if report. Pursuant to the provisionsof Section 129(3) of the Companies Act 2013 (the Act) a statement containing salientfeatures of financial statements of subsidiary in Form AOC 1 forms part of Board's Report.
Further the Highlights of the performance of subsidiary is as follows:
|Particulars ||Mold-Tek Packaging FZE (Rs) |
|Total Income ||86191357 |
|Total COGS ||101515886 |
|EBDITA ||(18824528) |
|Total Expenses ||123305256 |
|Net ordinary Income ||(37113898) |
|Current Tax ||- |
|Deferred Tax Liability ||- |
|Profit after Tax ||(37113898) |
Separate audited financial statements in respect of the subsidiary company shall bekept open for inspection at the Registered Officeof the Company during working hours for aperiod of 21days before the date of the Annual General Meeting. Your Company will alsomake available these documents upon request by any Member of the Company interested inobtaining the same. The separate audited financial statements in respect of the subsidiarycompany is also available on the website of your Company at: http:// www.moldtekgroup.com
FIRST - TIME ADOPTION OF IND AS
The financials for the year ended 31st March 2018 are the financial statementsprepared by the Company in accordance with IND AS. For the periods up to and inclusive ofyear ended March 31 2017 the Company prepared its financial statement in accordance withaccounting standards specified section133 of the Companies Act in 2013 read together withrule 7 of Companies (Accounting Standards) Rules 2014 (Previous GAAP). Reconciliation anddescription of the effect of transition from previous GAAP to IND AS on equity profit andcash flow are provided in note 41. The Balance Sheet as on the date of transition has beenprepared in accordance with IND AS 101 first adoption of Indian Accounting standards andaccordingly figures of previous years have regrouped to confirm to the current year'spresentation.
Your Directors have recommended a final dividend of Rs2.00 per equity share i.e. @40%of face value of Rs5 each in addition to interim dividend ofRs2.00 (40%) hithertodeclared Theconsolidatedfinancial making a total of Rs4.00 (80%) per equity share(previous year: Rs3.60 per equity share @72% of face the value of Rs5 each) for thefinancial year ended 31 st March approved will be paid to those 2018.Thefinal Memberswhose names appear in Register of Members as on 22nd September 2018. In respect of sharesheld in dematerialized form it will be paid to Members whose names are furnished byNational Securities Depository Limited and Central Depository Services (India) Limited asbeneficial owners as on that date. This will entail an outflow ofRs533 lakhs (Inclusive ofdividend tax).
The dividend payout for the year under review has been formulated keeping in view yourCompany's need for capital for its growth plans and the intent to finance plans throughinternal accruals to the optimum. Equity shares that may be allotted on or before the BookClosure will rank pari passu with the existing shares and will be entitled toreceive the dividend.
AUTHORIZED SHARE CAPITAL
The Authorized Share Capital of the Company as on 31st March 2018 stands atRs145000000 (Rupees Fourteen crore fifty lakhs only) divided into 29000000 (Twocrore ninety lakhs) equity shares of Rs5 (Rupees Five only) each. During the year therehas been no change in the authorized share capital of the Company.
PAID UP SHARE CAPITAL
There has been no change in share capital during the financial year. The paid up sharecapital of the Company was
Rs138455260 divided into 27691052 shares of Rs5 each as on 31st March 2018.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Loans guarantees and investments covered under Section 186 of the Act form part of thenotes to the financial statements provided in this Annual Report.
The Company has neither accepted nor renewed any of deposits from public within themeaning of Section the Act read with Companies (Acceptance of Deposits) Rules 2014 duringthe year under review.
INTERNAL CONTROLS SYSTEMS AND ADEQUACY
The Company's internal audit systems are geared towards ensuring adequate internalcontrols commensurate with the size and needs of the business with the objective ofefficient conduct of operations through adherence to the Company's policies identifyingareas of improvement evaluating the reliability of financial statements ensuringcompliances with applicable laws and regulations and safeguarding of assets fromunauthorized use.
Details of the internal controls system are given in the Management Discussion andAnalysis Report which forms part of the Board's Report.
DETAILS OF DIRECTORS/KEY MANAGERIAL PERSONNEL
All the Independent Directors have given declarations they meet the criteria ofindependence as laid down under Section 149(6) of the Act and Regulation 16 of andExchange Board of India (Listing Disclosure Requirements) Regulations 2015. In theopinion of the Board they fulfill the conditions of independence as specifiedin the Actand the Rules made thereunder and are independent of the management.
Based on the confirmations received none of the Directors are disqualified for beingappointed/re-appointed as directors in terms of Section 164 of the Companies Act 2013.
In accordance with the provisions of Section 152 of the Act J. Mytraeyi Non-ExecutivePromoter Director of the Company is liable to retire by rotation and is eligible forreappointment.
Mr. P. Shyam Sunder Rao Independent Director has been resigned from the Company witheffect from 5 th February 2018. The Board has placed its sincere appreciation for theservices rendered by him during his tenure. In the Board Meeting held on 14th May 2018Sri. Venkata Appa Rao Kotagiri and Sri. Eswara Rao Immaneni were appointed as anAdditional Director (Independent) of the company. Further they are proposed to beappointed as Director (Independent) of the company under Section 161 of the Companies Act2013 at the ensuring 21st Annual General Meeting.
In the Board Meeting held on 14th May 2018 Mr. Srinivas Madireddy was appointed as anAdditional Director (Whole time Director) of the company. Further he is proposed to beappointed as Director (Whole Time Director) of the company under Section 161 of theCompanies Act 2013 at the ensuring 21st Annual General Meeting.
EMPLOYEE STOCK OPTION SCHEME
The Company has in operation Mold-Tek Packaging Employees Stock Option Scheme-2009 forgranting stock options to the employees of the Company in accordance with theSecuritiesExchange Board of India (Employee Stock Option Scheme and Employee StockPurchase Scheme) Guidelines 1999 and Securities Exchange Board of India (Share Basedemployee benefits) The Company received approval of Members and stock exchanges forEmployees Stock Option Scheme 2016 in September and December respectively. No optionshave been granted under this scheme in the financial year. There have been no changes inthe Scheme.
Disclosures pursuant to Regulation 14 of the Securities and Exchange Board of India(Share Based Employee Benefits) Regulations2014 are enclosed as Annexure-A to thisreport. The Annexure-A is also available on website of the Company atwww.moldtekgroup.com
The Company has adopted Governance Guidelines or code of conduct on Board IndependentDirector Key Managerial Obligations and Personnel and senior managerial personnel. TheGovernance Guidelines or code of conduct cover aspects relating to Board diversitydefinition of independent directors Code of Conduct moral ethics and principles to befollowed.
NOMINATION REMUNERATION AND PERFORMANCE EVALUATION POLICY
The requisite details as required by Section 134(3)Section 178(3) & (4) of the Actand Regulation 34(2) of Securitiesand Exchange Board of India(Listing Obligations andDisclosure Requirements) Regulations 2015 is provided in the Report on CorporateGovernance.
TRANSACTIONS WITH RELATED PARTIES
The requisite details as required by Sections 134 & 188 of the Act and Regulation23 34(3) of Securities and Exchange Board of India (Listing Requirements) Regulations2015 is provided in the Report on Corporate Governance and financial statements.
BOARD AND COMMITTEE MEETINGS
Details of the composition of the Board and its Committees and of the Meetings held andattendance of the Directors such Meetingsare provided in theCorporateGovernance pursuantto Section 135 of Report. The intervening gap between the Meetings was within the periodprescribed under the Section173(1) of the Act and Regulation17(2) of Securities andExchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations2015.
DIRECTORS' RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory costand secretarial auditors and the reviews performed by management and the relevant BoardCommittees including the Audit Committee the Board is of the opinion that the Company'sinternal financial controls were adequate and effective during the financial Accordinglypursuant to Section 134(3)(c) and 134(5) of the Act the Board of Directors to the bestof their knowledge and ability confirm that: i. in the preparation of the annualaccounts the applicable accounting standards have been followed and that there are nomaterial departures; ii. they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company the end of thefinancialyear and of the profit of the Company for that period; iii. they have takenproper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other iv. they have prepared the annual accounts ona going concern basis;ant material orders have been passedsignific iv. they have laid downinternal financial controls to be followed by the Company and that such internal operatingfinancial effectively; v. they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to the provisions of Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 the Company has constituteda CSR Committee. The Corporate Social by the e Directors ExecutivResponsibilityCommitteecomprisesof3 and one independent Director chaired by J. LakshmanaRao. The composition of the Corporate Social Responsibility Committee meets therequirements of Section 135 of the Act. The Board of Directors based on therecommendations year. Accordingly the appointment of M/s. Anandam & Co. CharteredAccountants is being placed before the shareholders for ratification.
b. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors of the Companyhad appointed Mr. Ashish Kumar Gaggar Practicing Company Secretary undertake theSecretarial Audit of the Company for the year ended 31st March 2018. The SecretarialAudit Report is annexed as Annexure-C. The Auditors' Report and the SecretarialAudit Report for the financial year ended 31st March 2018 do not contain anyqualification reservation adverse remark or disclaimer.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134 (3) (m) of the Act read with Rule 8 of theCompanies (Accounts) Rules 2014 is annexed as Annexure-D.
PARTICULARS OF REMUNERATION
The information required under Section 197 (12) of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) annexed as Annexure-E.
The information required under Rule 5(2) and (3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided in the Annexure forming partof the Report.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) of the Act and Rule 12(1) of the Companies (Management andAdministration) Rules 2014 the extract of Annual Return in form MGT-9 is annexed as
MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE
The Management Discussion and Analysis Report and the Report on Corporate Governanceas required under Regulation 34(2) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 forms part of the AnnualReport. Your Company is committed to the tenets of good corporate governance and has takenadequate steps to ensure that the principles of corporate governance as required underSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations2015 are complied with.
A Company Secretary in Practice has certified that conditions of Corporate Governanceas stipulated under Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 have been complied with by your Company and hiscertificate is annexed Report on Corporate Governance.
A declaration of Code of Conduct from J. Lakshmana Rao Chairman & ManagingDirector forms part of the Corporate Governance Report. to
J. Lakshmana Rao Chairman & Managing Director and A. Seshu Kumari FinancialController & Chief Financial Officerof the Company have given a Board as contemplatedin Regulation17(8) of Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations2015.
All assets of your Company and other potential risks have been adequately insured.
The relationship with the workmen and staff remained cordial and harmonious during theyear and the management received full co-operation from the employees.
In the terms of provision of Section 134 (3) (ca) of the 2014 is Companies Act2013 during the year under review there was no case of offense of fraud detected by theAuditors under sub section (12) of section 143
MAINTENANCE OF COST RECORDS
The Central Government has not prescribed the maintenance of cost records under subsection(1) of section Companies Act 2013 for the products/services of the company.
Your Directors wish to place on record their appreciation and gratitude for all theassistance and support received from Citibank Yes Bank HSBC ICICI Bank and concernedgovernment departments for their co-operation and continued support extended to theCompany. They also thank the Members for the confidencethey have reposed in the Companyand its management.
|For and on behalf of the Board of Directors || |
| ||J. LAKSHMANA RAO |
|Place: Hyderabad ||Chairman & Managing Director |
|Date : 1st September 2018 ||DIN:00649702 |