Directors' Report

Dear Members,

Your Directors' have pleasure in presenting their report on the business and operations of the Company for the year ended 31st March 2015.

OPERATIONS

During the financial year, the raw material prices were very volatile, because of steep reduction in crude oil prices. Your company has shown improved performance in terms of both revenue and EBIDTA. Your Company has achieved a total revenue of Rs.318,66 lakhs (Rs.283,93 lakhs in the previous year) registering an increase of 12.23% growth over the previous year. The operating profit (EBIDTA) increased by 35.8%, from Rs.30,03 lakhs to Rs.40,77 lakhs. The Company has recorded a Net Profit of Rs.16,87 lakhs as against the profit of Rs.9,07 lakhs for 2013-14. The EPS on weighted average equity has increased from Rs.8.05 in the financial year 2013-14 to Rs.14.40 in the financial year 2014-15, leading to an increase of 78.96%.

The financial year 2014-15 has been a very successful and important year for the Company. Your Company has successfully completed its issue of shares through QIP and raised funds worth Rs.55.01 crore and allotted 24,98,350 equity shares at a price of Rs.220.17 (including Rs.210.17 towards the premium), which has resulted in increase of paid up capital to Rs.13,84,05,260. Canara Robeco Mutual Fund, SBI Mutual Funds, Principal Trustee Company Private Limited and DSP Blackrock and others have participated in the QIP. Another important milestone was reached with listing of the Company's shares on the NSE on 19th February, 2015.

FUTURE OUTLOOK

Your Company has developed 'Square pail' with IML decoration for the first time in India. Through this innovative product range, Mold-Tek is entering into Rs.1000 crore edible oil packaging segment thereby expanding its arena of operations beyond its traditional paint and lube industry. This pack has many user friendly features and offers excellent after-use benefits to the ultimate clients.

Your Company has received positive response from leading edible oil companies such as ConAgra Foods, Ghodawat Foods, Allana Group and Adani Wilmar. Trial orders are being executed for 15 litre packs and new samples of 5 litre packs were submitted for clients' approval. These 5 & 15 litre edible oil pack sales should pick up from third quarter and the Company's capacities are being expanded in all its three major plants - Hyderabad, Daman and Satara to cater to the expected demand from this new segment.

Your Company is moving into high value added IML decorated containers for not only its traditional blue chip clients in paint and lube industry but also for food and FMCG industries, where IML is proved to be the best option for hygienic and food safety standard packaging. Your Company has been expanding continuously and adding capacities in India. Company is also planning to set up a manufacturing plant abroad, in RAK-UAE. An application has been submitted to Ras Al Khaimah Free Trade Zone Authority -Government of Ras Al Khaimah, UAE for the same.

Recently, your Company has been awarded a 5-year 100% supply contract from M/s. Shell India Markets Private Limited with 11 of its major brands shifting to IML decoration. This further proves the Company's credentials as most preferred and quality supplier in Indian rigid packaging.

Steep fall in raw material prices may dampen absolute revenue numbers as we have monthly raw material adjustment policy with almost all clients. However, increased sale of high value added IML products and better capacity utilization of all the IML facilities may result in improved profitability.

Reduced raw material prices enable the Company to offer new products like edible oil packs at competitive prices to penetrate and replace traditional tin and blow molded packs.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year to which the financial statements relate and the date of this Directors' Report.

DIVIDEND

Your Directors have recommended a final dividend of Rs.2 per equity share @20% of equity share capital in addition to interim dividend of Rs.2.00 (20%) hitherto declared making a total of Rs.4.00 (40%) per equity share (Previous year: Rs.3.00 per equity share @30%) for the financial year ended 31st March 2015. The final dividend, if approved, will be paid to those Members whose names appear in Register of Members as on 21st September, 2015. In respect of shares held in dematerialized form, it will be paid to Members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited as beneficial owners as on that date. This will entail an outflow of Rs.6,64.31 lakhs (inclusive of dividend tax).

The dividend payout for the year under review has been formulated keeping in view your Company's need for capital for its growth plans and the intent to finance such plans through internal accruals to the optimum.

Equity shares that may be allotted on or before the Book Closure will rank pari passu with the existing shares and will be entitled to receive the dividend.

TRANSFER TO RESERVE

The Directors propose to transfer a sum of Rs.2,53 lakhs (15% of the net profit) to general reserve out of the profits earned by the Company.

AUTHORISED SHARE CAPITAL

The authorized share capital of the Company has increased from Rs.13,50,00,000 to Rs.14,50,00,000 pursuant to the resolution passed by the Members of the Company in the Extra-ordinary General Meeting held on 24th December, 2014.

PAID UP SHARE CAPITAL

The paid up share capital of the Company was Rs.11,27,72,760 as on 31st March 2014, which has increased to Rs.13,84,05,260 as on 31st March, 2015.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report.

DEPOSITS

The Company has neither accepted nor renewed any deposits from public within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 during the year under review.

INTERNAL CONTROLS SYSTEMS AND ADEQUACY

The Company's internal audit systems are geared towards ensuring adequate internal controls commensurate with the size and needs of the business, with the objective of efficient conduct of operations through adherence to the Company's policies, identifying areas of improvement, evaluating the reliability of financial statements, ensuring compliances with applicable laws and regulations and safeguarding of assets from unauthorized use.

Details of the internal controls system are given in the Management Discussion and Analysis Report, which forms part of the Directors' Report.

DETAILS OF DIRECTORS/KEY MANAGERIAL PERSONNEL

At the Annual General Meeting of the Company held on 30th September, 2014, the Members had approved the appointment of T. Venkateswara Rao, P. Shyam Sunder Rao, Dr. N. V. N. Varma and Vasu Prakash Chitturi as Independent Directors for a term of five years.

All the Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and Clause 49 of the Listing Agreement entered into with the stock exchanges. In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management.

During the year, Priyanka Rajora has been appointed as Company Secretary & Compliance Officer with effect from 3rd January, 2015 and A. Seshu Kumari has been re-appointed as Chief Financial Officer.

In accordance with the provisions of Section 152 of the Act, J. Mytraeyi , Director of the Company is liable to retire by rotation and is eligible for re-appointment.

Apart from above, there have been no changes in Directors and Key Managerial Personnel.

GOVERNANCE GUIDELINES

The Company has adopted Governance Guidelines for Board, Independent Director, Key Managerial Personnel and senior managerial personnel. The Governance Guidelines cover aspects related to role of the board diversity, definition of independence, code of conduct, moral, ethics and principles to be followed.

NOMINATION, REMUNERATION AND PERFORMANCE EVALUATION POLICY

The requisite details as required by Sections 134(3)(e), Section 178(3) & (4) and Clause 49 of the Listing Agreement is provided in the Report on Corporate Governance.

SCHEME OF ARRANGEMENT

In terms of the Scheme of Arrangement, your Company has created a trust and transferred its shares to the trust so formed.

EMPLOYEE STOCK OPTION SCHEME

The Company has in operation Mold-Tek Packaging Employees Stock Option Scheme 2009 for granting stock options to the employees of the Company, in accordance with the Securities Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.

There have been no changes in the Scheme.

Disclosures pursuant to Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 is in Annexure A to this report.

The Scheme is available on the website of the Company at www.moldtekgroup.com  - Mold-Tek Packaging Limited -Investors.

TRANSACTIONS WITH RELATED PARTIES

All Related Party Transactions that were entered into during the financial year were on an arm's length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 ('the Act') and the Listing Agreement. There were no materially significant related party transactions made by the company during the year that would have required shareholder approval under Clause 49 of the Listing Agreement.

All related party transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature. A statement of all related party transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.

The Company has adopted a related party transactions policy. The policy is available on the website of the Company at www.moldtekgroup.com  - Mold-Tek Packaging Limited - Investors.

Details of the transactions with related parties are provided in the accompanying financial statements.

BOARD AND COMMITTEE MEETINGS

Details of the composition of the Board and its Committees and of the meetings held and attendance of the Directors at such meetings, are provided in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Act and the Listing Agreement.

DIRECTORS' RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and the reviews performed by management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2014-15.

Accordingly, pursuant to Sections 134(3)(c) and 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

ii. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to the provisions of Section 135 of the Companies Act 2013 read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has constituted a CSR Committee. The Corporate Social Responsibility Committee comprises of three Executive Directors and one independent Director, chaired by J. Lakshmana Rao. The composition of the Corporate Social Responsibility Committee meets the requirements of Section 135 of the Companies Act, 2013. The Board of Directors, based on the recommendations of the Committee, formulated a CSR Policy. The requisite details

on CSR activities pursuant to Section 135 of the Act and as per Annexure attached to the Companies (Corporate Social Responsibility Policy) Rules, 2014 are in Annexure B to this Report.

POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at the workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has also constituted an Internal Complaints Committee, known as the Prevention of Sexual Harassment (POSH) Committee, to inquire into complaints of sexual harassment and recommend appropriate action. In the financial year 2014-15, the Company has not received any complaints which fall within the scope of this policy. The policy is available on the website of the Company at www.moldtekgroup.com  - Mold-Tek Packaging Limited -Investors.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The policy is available on the website of the Company at www.moldtekgroup.com > - Mold-Tek Packaging Limited - Investors.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant material orders have been passed by the regulators or courts or tribunals which would impact the going concern status of the Company and its future operations.

AUDITORS

Statutory Auditors

M/s. Praturi & Sriram are the statutory auditors of the Company and hold office till the conclusion of the 20th Annual General Meeting (AGM). Pursuant to the provisions of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014, Members are requested to consider the ratification of appointment of auditors for the balance term.

The notes to the accounts referred to in Auditors' Report are self-explanatory and do not call for any further comments. The Audit Report does not contain any qualification, reservation or adverse remark.

Cost Auditors

The Board has taken note of the report on Cost Audit and the Company is in the process of filing the same with the Ministry of Corporate Affairs subject to all laws, rules, regulations, clarifications, amendments, notifications, etc. issued in this behalf. For the financial year 2015-16, the appointment of Cost Auditor is not applicable to the Company.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s. P. Vijaya Bhaskar & Associates, a firm of Company Secretaries in Practice to undertake the secretarial audit of the Company for the year ended 31st March, 2015. The Secretarial Audit Report is in Annexure C. The Secretarial Audit Report for the financial year ended 31st March, 2015 does not contain any qualification, 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 exchange earnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 is in Annexure D.

PARTICULARS OF REMUNERATION

The information required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is in Annexure E.

The information required under Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure forming part of the Report.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) of the Act and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 the extract of Annual Return in form MGT 9 is provided as Annexure F.

MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE

The Management Discussion and Analysis Report and the Report on Corporate Governance, as required under Clause 49 of the Listing Agreement, forms part of the Annual Report.

Your Company is committed to the tenets of good Corporate Governance and has taken adequate steps to ensure that the requirements of Corporate Governance as laid down in Clause 49 of the Listing Agreement are complied with.

A Company Secretary in Practice has certified that conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement have been complied with by your Company and his certificate is annexed to the Report on Corporate Governance.

A declaration of Code of Conduct from J. Lakshmana Rao, Chairman and Managing Director forms part of the Corporate Governance Report.

CEO/CFO CERTIFICATION

J. Lakshmana Rao, Chairman and Managing Director and A. Seshu Kumari, Chief Financial Officer of the Company have given a certificate to the Board as contemplated in Clause 49 of the Listing Agreement.

RISK MANAGEMENT

All assets of your Company and other potential risks have been adequately insured.

EMPLOYEE RELATIONS

The relationship with the workmen and staff remained cordial and harmonious during the year and the management received full co-operation from the employees.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation and gratitude for all the assistance and support received from Citibank, Yes Bank, HSBC, ICICI Bank Limited and officials of concerned government departments for their co-operation and continued support extended to the Company. They also thank the Members for the confidence they have reposed in the Company and its management.

For and on behalf of the Board of Directors

J. LAKSHMANA RAO

Chairman & Managing Director

DIN: 00649702

Hyderabad

31st August, 2015