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SENSEX NIFTY India | Notes to Account > Plastics > Notes to Account from Astral Poly Technik - BSE: 532830, NSE: ASTRAL

Astral Poly Technik

BSE: 532830|NSE: ASTRAL|ISIN: INE006I01046|SECTOR: Plastics
Nov 15, 16:00
1.9 (0.17%)
Nov 15, 15:57
1.95 (0.18%)
VOLUME 74,733
Mar 18
Notes to Accounts Year End : Mar '19

An asset is treated as current when it is:

1. Expected to be realized or intended to be sold or consumed in normal operating cycle;

2. Held primarily for the purpose of trading;

3. Expected to be realized within twelve months after the reporting period, or

4. Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when:

1. It is expected to be settled in normal operating cycle;

2. It is held primarily for the purpose of trading;

3. It is due to be settled within twelve months after the reporting period, or

4. There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.

u) Critical accounting judgements and key sources of estimation uncertainty

The preparation of the financial statements in conformity with the Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities and disclosures as at date of the financial statements and the reported amounts of the revenues and expenses for the years presented. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates under different assumptions and conditions. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Key sources of estimation uncertainty

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing as material adjustment to the carrying amounts of assets and liabilities within next financial year.

i. Useful lives of property, plant and equipment and intangible assets

As described in Note 2(g), the Company reviews the estimated useful lives and residual values, if any, of property, plant and equipment and intangible assets at the end of each reporting period. During the current financial year, the management determined that there were no changes to the useful lives and residual values of the property plant and equipment and intangible assets.

ii. Impairment of Investment in Subsidiaries and Joint Venture

The investment in subsidiaries and joint venture are tested for impairment in accordance with provisions applicable to impairment of non-financial assets. The determination of recoverable amounts of the Company''s investments in subsidiaries and involves significant judgments. Market related information and estimates are used to determine the recoverable amount. Key assumptions on which management has based its determination of recoverable amount includes weighted average cost of capital and estimated operating margins.

Basis the above determination of recoverable amount, the management has concluded that there is no impairment in investments of subsidiaries and joint venture.

iii. Impairment of goodwill

With respect to the Goodwill of RS,1,921.98 Lacs, the recoverable amount of cash generating units (CGU) has been determined based on value in use calculations. Recoverable amounts for these CGUs has been determined based on value in use for which cash flow forecasts of the related CGU and discount rate ranging from 12.5% to 15% has been applied. The values assigned to the assumption reflect past experience and are consistent with the management''s plans for focusing operations in these markets. The management believes that the planned market share growth is reasonably achievable.

An analysis of the sensitivity of the computation to a change in key parameters (operating margin, discount rate and growth rate), based on a reasonable assumptions, did not identify any probable scenario in which the recoverable amount of the CGU would decrease below its carrying amount.

iv. Fair valuation of Intangible assets on acquisition (refer note 38)

a) Rights, preferences and restrictions attached to shares :

The Company has issued only one class of equity shares having value of RS,1 per Share. Each holder of equity shares is entitled to one vote per share and are entitled to dividend as and when declared. All shares rank equally with regard to the Company''s residual assets after distribution of all preferential amounts.

e) Stock options granted under the Employee Stock Options scheme :

1 Details of the Employee stock option plan of the company :

Astral Poly Technik Limited (the Company) formulated Employees Stock Option Scheme viz. Astral Employee Stock Option Scheme 2015 (the Scheme) for the benefit of employees of the Company. Shareholders of the Company approved the Scheme by passing special resolution through postal ballot dated October 21, 2015. Under the said Scheme as approved by the Shareholders, Nomination and Remuneration Committee is empowered to grant stock options to eligible employees of the Company, up to 1,50,000 over a period of five years from the date of passing of resolution by shareholders. Minimum vesting period of stock option is one year and exercise period of stock option is one year from the date of vesting.

The Committee granted 16,282 stock options on November 14, 2015, 21,600 stock options on MarcRs,30, 2017, 22,400 stock options on November 13, 2017 totaling 60,282 stock options till date. Exercise price of all stock options were RS,50/- share. Each stock option is exercisable into one equity share of face value of RS,1/- each.

The following stock based payment arrangement were in existence during the current and prior year


a In August 2018 and November 2018, the dividend of H 0.35 per share (total dividend RS,505.43 Lacs) and H 0.30 per share (total dividend RS,433.23 Lacs) was paid to holders of fully paid equity shares. The total dividend includes dividend distribution tax at applicable rates. b Nature and Purpose of reserve Capital reserve

The company has created capital reserve out of capital subsidies received from state Governments.

Securities premium

The amount received in excess of face value of the equity shares is recognized in Securities Premium. This reserve is available for utilization in accordance with the provisions of the Companies Act, 2013. In case of equity-settled share based payment transactions, the difference between fair value on grant date and nominal value of share is accounted as securities premium. General reserve

General reserve is created from time to time by way of transfer of profits from retained earnings for appropriation purposes. General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income.

Revaluation Reserve

The company has created revaluation reserve out of revaluation of land carried out during the year 2004-05.

Stock Options Outstanding Account

The fair value of the equity-settled share based payment transactions with employees is recognized in Statement of Profit and Loss with corresponding credit to Stock Options Outstanding Account.

Retained earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

Shares pending allotment

Shares pending allotment represents equity shares to be issued pursuant to business combination. (Note 38)


a) Refer Note 39 for information about liquidity risk.

b) Amount stated in Current maturity is disclosed under the head of Other Financial Liabilities (Current) (Note 19).

c) Term Loans are Secured by way of first charge, in respect of Fixed assets, both present and future, and second charge on entire current assets of the Company both present and future. (Note 3,9,10). Rate of interest for Rupee Term Loan ranges from 7 to 10%. Rate of interest for ECB and Foreign currency Term Loan ranges from 3 to 4%.

1 HSBC Bank Term Loan of RS,13,842.11 Lacs (as at MarcRs,31, 2018 : RS,5,368.42 Lacs) repayable within 66 months (i.e. by February 2024) including initial moratorium period of Nine months from the date of first disbursement in Nineteen quarterly instalments.

2 Corporation Bank Term Loan of H917.71 Lacs (as at MarcRs,31, 2018 : RS,2,144.11 Lacs) repayable within 72 months (i.e. by July 2020) including initial moratorium period of twelve months from the date of first disbursement in twenty quarterly equal instalments.

3 IndusInd Bank Term Loan of H Nil (as at MarcRs,31, 2018 : RS,162.95 Lacs) repaid.

4 HSBC ECB Loan of US $ 10.59 Lacs equivalent RS,732.27 Lacs (as at MarcRs,31, 2018: US $ 31.76 Lacs equivalent RS,2,070.43 Lacs) repayable within 60 months (i.e. by August 2019) including initial moratorium period of twelve months from the date of first disbursement in sixteen quarterly instalments.

d) Buyers Credit : Rate of interest for Buyer''s Credit ranges from 0.50% to 1.5%.

1 HSBC Buyers Credit of RS,557.61 Lacs (as at MarcRs,31, 2018: H Nil) repayable by October 2021. Secured by way of first charge, in respect of entire current assets of the Company both present and future.

2 RBL Bank Buyers Credit of H Nil (as at MarcRs,31, 2018: RS,483.90 Lacs) Repaid.

3 Kotak Buyers Credit of RS,107.79 (as at MarcRs,31, 2018:H Nil) repayable by April 2019.

4 Federal Buyers Credit of H631.54 (as at MarcRs,31, 2018:H Nil) repayable by January 2022.

5 Indusind Bank Buyers Credit of H Nil (as at MarcRs,31, 2018 RS,1,099.03 Lacs) ,repaid by October 2018. Secured by way of first charge, in respect of entire current assets of the Company both present and future.

e) Vehicle Loans are Secured by way of hypothecation of respective motor vehicles purchased. Rate of interest for Vehicle loan ranges from 8 to 11%.

1 ICICI Bank Limited Vehicle Loan of RS,114.60 Lacs (as at MarcRs,31, 2018 : RS,226.44 Lacs) repayable on monthly basis. Repayable by November 2020.

2 Corporation Bank Vehicle Loan of H Nil (as at MarcRs,31, 2018 : RS,2.00 Lacs) repayable on monthly basis. Repaid by February


3 Axis Bank Limited Vehicle Loan of RS,206.76 Lacs (as at MarcRs,31, 2018 : RS, Nil) repayable on monthly basis. Repayable by January 2024.

4 Daimler Financial Services India Pvt. Ltd. Vehicle Loan of RS,26.98 Lacs (as at MarcRs,31, 2018 : H Nil) repayable on monthly basis. Repayable by June 2021.

f) Working capital loan are secured by way of first charge on entire current assets of the Company both present and future and second charge on movable and immovable fixed assets of the company.

There are numerous interpretative issues relating to the Supreme Court (SC) judgment on PF dated February 28, 2019. The company believes that the impact will not be material. The company will make necessary adjustments on receiving further clarity on the subject.

*Future cash outflows in respect of the above matters are determined only on receipt of judgments / decisions pending at various forums / authorities.


Post-employment Benefit

Defined Contribution Plan:

Amount towards Defined Contribution Plan have been recognized under Contribution to Provident and Other funds in Note 27 RS,209.09 Lacs (Previous Year: RS,147.99 Lacs).

Defined Benefit Plan:

The Company has defined benefit plans for gratuity to eligible employees, contributions for which are made to Life Insurance Corporation of India, who invests the funds as per IRDA guidelines. The details of these defined benefit plans recognized in the financial statements are as under:

General Description of the Plan:

The Company operates a defined benefit plan (the Gratuity Plan) covering eligible employees, which provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the tenure of employment.

The current service cost and the net interest expenses for the year are included in the Employee benefits expense line item in the Statement of Profit and Loss. The remeasurement of the net defined benefit liability/ asset is included in Other Comprehensive Income.

e) Investment details of plan assets:

To fund the obligations under the gratuity plan, Contributions are made to Life Insurance Corporation of India, who invests the funds as per IRDA guidelines.

g) Sensitivity analysis:

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using Projected Unit Credit method at the end of the reporting period which is the same as that applied in calculating the defined benefit obligation liability recognized in Balance Sheet.

There were no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

The Company expects to make a contribution of RS,271.41 Lacs (as at MarcRs,31, 2018 : RS,84.61 Lacs) to the defined benefit plans during the next financial year.

* For amalgamating company : 2% at all ages

Future Salary increases are based on long term average salary rise expected taking into account inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employee market. Future Separation & mortality rates are obtained from relevant data of Life Insurance Corporation of India.


The gross amount required to be spent by the Company on Corporate Social Responsibility (CSR) activities during the year as per the provision of section 135 of the Companies Act, 2013 amounts to RS,296.66 Lacs (Previous year : RS,236.47 Lacs). The revenue expenditure charged to the Statement of Profit and Loss in respect of Corporate Social Responsibility (CSR) activities undertaken during the year is RS,220.00 Lacs (Previous year : RS,241.81 Lacs) and has been paid.

Notes :

1. There are no advances which are in the nature of loans.

2. The Company has issued corporate guarantees for the loans and credit facility arrangements in respect of subsidiary and joint venture.

3. The outstanding amount for the loan is including interest receivable.


1. Name of the related parties and their relationships Sr.

,, Description of Relationship Name of Related Parties


a. Subsidiaries Astral Biochem Private Limited

Resinova Chemie Limited

Seal IT Services Limited, UK

Seal IT Services Inc, USA (Step-down subsidiary)

b. Enterprises over which Key Managerial Personal are able to Kairav Chemicals Limited exercise significant influence Saumya Polymers LLP

Astral Charitable Trust Kairamya Journeys LLP

c. Joint Venture Astral Pipes Limited

d. Key Managerial Personnel Sandeep Engineer (Managing Director)

Jagruti Engineer (Whole Time Director)

K.R. Shenoy (Independent Director)

Pradip N. Desai (Independent Director)

Narasinh K. Balgi (Independent Director)

Kaushal Nakrani (Independent Director)

Anil Kumar Jani (Non-Executive Director)

Kyle Thompson (Non-Executive Director)

Hiranand Savlani (Chief Financial Officer)

Krunal Bhatt (Company Secretary)

e. Relatives of Key Managerial Personnel Sandeep Engineer HUF

Kairav Engineer Saumya Engineer

The remuneration of key management personnel is determined by the remuneration committee. The same excludes gratuity as it is not determinable.

b. The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions.

c. The amounts outstanding are unsecured and will be settled in cash. No expense has been recognized in the current or prior years for bad or doubtful debts in respect of amounts owned by related parties.

d. Transactions/balances during and end of the year/previous year are stated without considering impact of fair valuation carried out as per Ind AS.


On July 9, 2018, the company acquired 51% of equity share of Rex Polyextrusion Private Limited (Rex), engaged in the business of Manufacturing and supply of corrugated and other plastic piping solutions, against a consideration of RS,7,522.50 lacs paid in cash. Further, the Board has also approved the scheme of amalgamation of Rex with the Company for which the Company have issued 7,23,200 equity shares of RS,1 each fully paid up in exchange for the balance 49% of equity share of Rex. Such scheme was approved by NCLT, Ahmedabad Bench on May 2, 2019 and filed with the Registrar of Companies on May 9, 2019. The management has determined this as a subsequent adjusting event and hence, Rex has been amalgamated with effect from appointed date of July 10, 2018.

Assets acquired and Liabilities assumed on acquisition date

The fair values of the identifiable assets and liabilities of Rex Polyextrusion Private Limited as at the date of acquisition were:

* Intangible assets, which represents Brands (including trademarks and technical know-how) on the date of acquisition, has been initially recognized at its fair value, which has been determined considering the expected growth rate, discount rate and royalty rate. The values assigned to such assumptions, which involves significant judgements, are consistent with the management''s plans for focusing operations relating to the acquired Brands.

The deferred tax liability mainly comprises the tax effect of the accelerated depreciation for tax purposes of tangible and intangible assets. The goodwill of RS,1,921.98 lacs comprises the value of expected synergies arising from the acquisition.

Transaction costs of RS,195.08 lacs have been expensed and are included in other expenses.


1 Capital management

The Company manages its capital to ensure that the Company will be able to continue as going concern while maximizing the return to stakeholders through optimization of debt and equity balance.

The capital structure of the Company consists of net debt (borrowings as detailed in notes 15 and 19 off set by cash and bank balances) and total equity of the Company.

The company''s risk management committee reviews the risk capital structure of the company on semiannual basis. As part of this review the company considers the cost of capital and the risk associated with each class of capital.

3 Financial risk management objectives

The Company''s financial liabilities comprise mainly of borrowings, trade payables and other financial liabilities. The Company''s financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, loans, trade receivables and other financial assets.

The Company''s business activities are exposed to a variety of financial risks, namely market risk (including currency risk and interest rate risk), credit risk and liquidity risk.

The Company''s senior management has the overall responsibility for establishing and governing the Company''s risk management framework who are responsible for developing and monitoring the Company''s risk management policies. The Company''s risk management policies are established to identify and analyze the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Audit Committee of the Company. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.


The Company''s size and operations result in it being exposed to the following market risks that arise from its use of financial instruments:

- currency risk;

- interest rate risk

i Currency risk

The Company''s activities expose it primarily to the financial risk of changes in foreign currency exchange rates. The Company enters into a variety of derivative financial instruments to manage its exposure to foreign currency risk.

Derivative instruments:

The Company uses foreign currency forward contracts and currency options to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The use of foreign currency forward contracts is governed by the Company''s strategy approved by the Board of Directors, which provide principles on the use of such forward contracts consistent with the Company''s Risk Management Policy. The Company does not use forward contracts and Currency Options for speculative purposes.


Interest rate swaps to hedge against fluctuations in interest rate changes: As at MarcRs,31, 2019 : No. of contracts - 1 (as at MarcRs,31, 2018 : No. of contracts - 1 ).

The line items in the balance sheet that includes the above hedging instruments are other financial assets and other financial liabilities.

Foreign currency sensitivity analysis

The Company is mainly exposed to the currency : USD,EUR and GBP.

The following table details, Company''s sensitivity to a 5% increase and decrease in the rupee against the relevant foreign currencies. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management''s assessment of the reasonably possible change in foreign exchange rates. This is mainly attributable to the exposure outstanding not hedged on receivables and payables in the Company at the end of the reporting period. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in foreign currency rate. A positive number below indicates an increase in the profit and equity where the rupee strengthens 5% against the relevant currency. For a 5% weakening of the rupee against the relevant currency, there would be a comparable impact on the profit and equity, and the balances below would be negative.

The Company, in accordance with its risk management policies and procedures, enters into foreign currency forward contracts to manage its exposure in foreign exchange rate variations. The counter party is generally a bank. These contracts are for a period between one day and five years. The above sensitivity does not include the impact of foreign currency forward contracts and option contracts which largely mitigate the risk.

ii Interest rate risk

Interest rate risk is the risk that the future cash flow with respect to interest payments on borrowing 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 long-term debt obligation with floating interest rates.

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly higher volatility than in prior years.



Credit risk refers to the risk that a counter party will default on its contractual obligation resulting in financial loss to the Company. The Company uses its own trading records to evaluate the credit worthiness of its customers. The Company''s exposure are continuously monitored and the aggregate value of transactions concluded, are spread amongst approved counter parties (refer note 10 - Trade receivable).

The company is exposed to credit risk in relation to financial guarantees given to banks in respect of borrowings obtained by the subsidiary company and joint venture. In case of joint Venture, the Company''s share is 50% and the guarantee has been given jointly and severally by all the partners of Joint Venture.

The Company''s maximum exposure in this respect is of Rs,7,631.03 lacs as at MarcRs,31, 2019 , RS,7,044.61 lacs as at MarcRs,31, 2018 as disclosed in contingent liabilities (Note 33).


Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Company''s short-term, medium-term and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The following table shows the maturity analysis of the Company''s financial liabilities based on contractually agreed undiscounted cash flows along with its carrying value as at the Balance Sheet date.


The company has presented segment information in the Consolidated Financial Statement which is presented in the same financial report. Accordingly in terms of paragrapRs,4 of Ind AS 108 - Operating Segments, no disclosure related to segments are presented in this standalone financial statement.

During the year ended MarcRs,31, 2019, the company has made provision for diminution on its investment in Joint Venture viz : Astral Pipes Ltd, Kenya amounting to RS,199.28 Lacs (Previous year : RS,296.25 Lacs), which has been disclosed as exceptional item.


The below amendments have also became effective for the company from financial year beginning April 1, 2018. However, the management has evaluated and determined that the adoption of these amendments will not have any material impact on the standalone financial statements since there are no such transactions or the company''s existing policies are aligned to these amendments:

1. Amendment to Ind AS 12 Income Taxes - regarding recognition of deferred tax assets on unrealised losses

2. Applying Appendix B of Ind AS 21 The Effects of Changes in Foreign Exchange Rates

3. Amendment to Ind AS 28 Investments in Associates and Joint Ventures

4. Amendment to Ind AS 40 Investment Property - regarding transfer of investment property

5. Amendment to Ind AS 112 Disclosure of Interests in Other Entities - regarding disclosure requirements Standards issued but not yet effective

Ind AS 116 - Leases

Ind AS 116 Leases was notified by MCA on 30 MarcRs,2019 and it replaces Ind AS 17 Leases, including appendices thereto. Ind AS 116 is effective for annual periods beginning on or after 1 April 2019. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under Ind AS 17. Lessees will be required to separately recognize the interest expense on the lease liability and the depreciation expense on the right-of-use asset.

The company intends to adopt these standards from 1 April 2019. As the company does not have any material leases, therefore the adoption of this standard is not likely to have a material impact in its Standalone Financial Statements.


The Board of Directors, in its meeting held on May 20, 2019, has proposed a final dividend of H 0.40 per equity share for the financial year ended MarcRs,31, 2019. The proposal is subject to the approval of shareholders at the Annual General Meeting and if approved would result in a cash outflow of approximately RS,581.22 Lacs, including dividend distribution tax.

14 The figures for the previous year have been regrouped/ reclassified wherever necessary to confirm with the current year''s classification. Moreover, due to merger, figures for the current year is not comparable with the previous year to that extent.

Source : Dion Global Solutions Limited
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