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.
1,48,499 equity shares of '2 each issued at a premium of '68.00 per share, on 23rd April, 2023 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. at the rate of '68/- per option.
(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.
(ill) 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.
(vii) Share Application Money Pending Allotment:
This represents money received towards ESOP's exercised during March, 2024 and allotted in April 2024.
29. 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, i.e. 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 plans 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.
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 2025 are Rs. 279.27 Lakhs (Approx).
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.
30. 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 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.
31. 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, 2024 and March 31, 2023.
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 2024 and 31 March 2023.
(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 no debt obligations, exposure to the risk of changes in market interest rates is nil.
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.
32. 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 2024 and 31 March 2023.
38. 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 ' 14617.23 Lakhs
The Group has made external sales to the following customers meeting the criteria of 10% or more of the entity revenue Customer 1 - ' 12437.42 Lakhs.
40. 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.
41. Previous year figures have been regrouped/reclassified, wherever necessary, to conform to current year presentation.
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