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Amines & Plasticizers Ltd.

You can view the entire text of Notes to accounts of the company for the latest year
Market Cap. (₹) 174.69 Cr. P/BV 2.13 Book Value (₹) 14.89
52 Week High/Low (₹) 41/26 FV/ML 2/1 P/E(X) 10.63
Bookclosure 25/09/2019 EPS (₹) 2.99 Div Yield (%) 0.94
Year End :2018-03 


Amines & Plasticizers Limited (the ‘Company’) is a public limited Company incorporated in India in the year 1973 having its registered office located at Poal & Enclave c/o Pranati Builders Private Ltd, Principal J. B. Road, Chenikuthi Guwahati-781003 and corporate office located at 6th Floor, ‘D’ Building, Shiv Sagar Estate, Dr. Annie Besant Road, Worli, Mumbai - 400018. The Company is listed on the Bombay Stock Exchange (BSE).

The Company manufactures over 50 different varieties of organic chemicals / amines/ solvents / fertilizers. The main products manufactured are Methyl Diethonalamine (MDEA) and N Methyl Morpholine Oxide (NMMO) which are used in Petrochemicals and Oil refineries, Gas plants and Textiles. The Company has manufacturing facilities at Navi Mumbai and sells its products in Indian Market and is regularly exporting to various countries.

Note :

The Authorized Share Capital of the Company stands increased after adding the Authorized Share Capital of APL Engineering Services Pvt Ltd (wholly owned subsidiary Company, which now stands amalgamated) with the Company pursuant to the Order of Amalgamation dated 22nd March 2017 passed by the Hon. National Company Law Tribunal, Guwahati Bench, Assam.

2.1 Right, Preference and Restrictions attached to Equity Shares

The Company has only one class of equity shares having par value of Rs.2 per share. Each Shareholder is entitled to one vote per share. In the event of liquidation of the Company the holder of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of all preferential payments. However, no such preferential amount exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting, except in case of interim dividend. The Board of Directors at their Meeting held on May 30, 2018 has recommended a final Dividend of 15% (30 paise per share of Face Value Rs.2/- each) for the year ended March 31, 2018.

* Note :

(i) 1335 13% Non Convertible Debentures of Rs.1 Lac each have been issued which are redeemable at par at the end of 10 years from date of allotment, viz 24-03-2025 for Rs.740.00 lakhs & 31-03-2025 for Rs.595.00 lakhs. The company has an option to redeem these debenture earlier; however, no redemption will take place before the end of 1st year.

(ii) The above debentures holders shall get pari passu charge on assets allocated at Land & Building of the company at Survey No 49, Village Vadval, Taluka Khopoli, Dist. Raigad, Maharashtra.

* Note :

The above information regarding dues to Micro & Small Enterprises has been determined to the extent such parties have been identified on basis of information collected with the Company. This has been relied upon by the auditor.

3.1 Trade Payable include Rs.173.70 lakhs ( Rs.257.89 lakhs) being the amount of acceptances of Bills of Exchange by the Company, drawn by the Suppliers.

4 Leases

a) The Company has taken certain equipments and office premises under operating lease or on rental basis. This contract is not non-cancellable and a period ranging between 11 months and above and are renewable at the mutual consent on mutually agreeable terms. The rent/lease charges paid in accordance with this agreement is debited to the statement of profit and loss for the year.

b) The Company has given its equipments and office premises under operating lease or on leave and licence basis. These agreements are generally not non-cancellable and for a period ranging between 11 months and above and are renewable at mutual consent on mutually agreeable terms. The company has taken refundable interest free security deposits in accordance with the agreed terms. The rent received in accordance with these agreements is credited to the statement of profit and loss for the year.

5 Disclosure in Respect of Related Parties pursuant to INDAS-24 “Related Party Disclosures”, are given below :

A List of Related Parties

i) Party where control exists: Subsidiaries

APL Infotech Limited

ii) Other Related parties with whom the company has entered into transactions during the year

a) Member having significant influence over the Company

Multiwyn Investments & Holdings Private Limited

b) Key Management Personnel (including non Executive Directors)

Mr. Hemant Kumar Ruia - Chairman & Managing Director

Mr. Yashvardhan Ruia -Executive Director

c) Employee’ benfitis plan where there is significant influence Amines & Plasticizers Limited Employee’s Gratuity Fund

Amines & Plasticizers Limited Employee’s Providend Fund

d) Entities over which any person described in (b) above is able to exercise significant influence

Chefair Investment Pvt. Ltd.

Ruia Gases Private Limited

* Note :

i) No amounts in respect of related parties have been provided for/ written off / written back during the year.

ii) Related party relationship is as identified by the Company and relied upon by the Auditors.

The define benefit plans expose to the Company to a number of acturial risk

a) Investment Risk : The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government/high quality bond yields; if the return on plan asset is below this rate, it will create a plan deficit.

b) Interest Risk : A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan’s debt investments.

c) Salary Risk : The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

d) Longevity Risk : The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Sensitivity analysis of 1% change in assumption used

Significant Actuarial Assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and employee turnover. The sensitivity analysis below, have been determined based on reasonable possible changes of the assumptions occurring at end of the reporting period , while holding all other assumptions constant. The result of Sensitivity analysis is given below :

6 The NCLT Guwahati Bench vide its Order dated March 22, 2017 has sanctioned the Scheme of Amalgamation of APL Engineering Services Pvt. Ltd. wholly owned Subsidiary of the Company with the Appointed date April 01, 2016. Accordingly, the Financial Statements of the Company as on April 01, 2016 include the effects of the Scheme and hence not comparable with the figures of 31st March, 2016.

7 The Company’s main business is Chemical manufacturing falls within a single business segment and therefore, segment reporting in terms Ind AS-108 “Operating Segments” is not applicable.

8 Capital Management

The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders through the optimisation of the debt and equity balance. The capital structure of the Company consists of net debt (borrowings less cash and cash equivalents, other bank balances (including noncurrent earmarked balances)).The management and the Board of Directors monitors the return on capital to shareholders. The Company may take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

9 Financial Instruments and Risk Review Financial Risks Management Framework

The Company’s business activities are exposed to a variety of financial risks, namely Liquidity Risk, Currency Exchange Risk, Interest Rate Risk, Credit Risk and Commodity Price Risk. The Company’s management and the Board of Directors has the overall responsibility for establishing and governing the Company’s risk management framework. The risk management framework works at various levels in the enterprise. The organization structure of the Company helps in identifying, preventing and mitigating risks by the concerned operational Heads under the supervision of the Chairman & Managing Director. The risk management framework is reviewed periodically by the Board and the Audit Committee keeping a check on overall effectiveness of the risk management of the Company.

Credit Risk

Credit Risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligations. Financial instruments that are subject to credit risk principally consist of trade receivables, investments, loans, cash and cash equivalents, other balances with banks and other financial assets. None of the financial instruments of the Company result in material credit risk.

Credit risk with respect to trade receivables are limited, due to the Company has a policy of dealing only with credit worthy counter parties, where appropriate as a means of mitigating the risk of financial loss from defaults. All trade receivables are reviewed and assessed for default on a quarterly basis. Our historical experience of collecting receivables is that credit risk is low. Hence, trade receivables are considered to be a single class of financial assets. Credit risk on cash and cash equivalents, other bank balances with bank are insignificant as the Company generally invest in deposits with banks. Investments primarily investments in government securities.

The Company’s maximum exposure to credit risk as at 31st March, 2018, 2017 and 1st April, 2016 is the carrying value of each class of financial assets.

Foreign Currency Risk

The Company is subject to the risk that changes in foreign currency values impact the Company’s exports revenue and imports of raw material and property, plant and equipment. As at 31st March, 2018, the net unhedged exposure to the Company on holding assets (trade receivables and capital advances) and liabilities (trade payables and capital creditors) other than in their functional currency is as under.

Interest Rate Risk

Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rates. Any movement in the reference rates could have an impact on the Company’s cash flows as well as costs. The Company is subject to variable interest rates on some of its interest bearing liabilities. The Company’s interest rate exposure is mainly related to borrowing obligations.

Commodity Price Risk

The main raw materials which the Company procures are to a great extent linked to the movement of crude prices directly or indirectly.The pricing policy of the Company final product is structured in such a way that any change in price of raw materials is passed on to the customers in the final product however, with a time lag which mitigates the rawmaterial price risk.

Liquidity risk

Liquidity Risk arises when the company is unable to meet its short term financial obligations as and when they fall due. The company maintains adequate liquidity in the system so as to meet its all financial liabilities timely. In addition to this, the company’s overall financial position is very strong so as to meet any eventuality of liquidity tightness.

Financial Instruments

Fair value measurement hierarchy

The fair value of financial instruments as below have been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements).

The categories used are as follows

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Inputs other than the quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Inputs which are not based on observable market data

* Excludes financial assets measured at Cost Valuation

The fair values of the financial assets and liabilities are defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values are consistent.

Financial assets and liabilities measured at fair value as at Balance Sheet date :

The fair value of investment in quoted Equity Shares is measured at quoted price.

The fair value of the remaining financial instruments is determined using discounted cash flow analysis.

10 Events After the Reporting Period

The Board of Directors have recommended dividend of Rs.0.30 per fully paid up equity share of Rs.2/- each, aggregating Rs.198.38 Lacs, including Rs.33.32 Lacs dividend distribution tax for the financial year 2017-18, Subject to approval of shareholders at the Annual General Meeting.

11 Adoption of Indian Accounting Standards (Ind AS)

A. Mandatory exceptions to retrospective application

The Company has applied the following exceptions to the retrospective application of Ind AS as mandatorily required under Ind AS 101 “First Time Adoption of Indian Accounting Standards”.

i) Estimates

On assessment of estimates made under the Previous GAAP financial statements, the Company has concluded that there is no necessity to revise such estimates under Ind AS, as there is no objective evidence of an error in those estimates.

ii) Classification and measurement of financial assets

The classification of financial assets to be measured at amortised cost or fair value through profit & loss is made on the basis of facts and circumstances that existed on the date of transition to Ind AS.

B. Optional exemptions from retrospective application

Ind AS 101 “First time Adoption of Indian Accounting Standards” permits Companies adopting Ind AS for the first time to take certain exemptions from the full retrospective application of Ind AS during the transition. The Company has accordingly on transition to Ind AS availed the following key exemptions :

i) Deemed cost for property, plant and equipment and intangible assets

The Company has elected to measure all its property, plant and equipment and intangible assets at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS.

ii) Investments in subsidiaries

The Company has elected to measure its investments in subsidiaries at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS.

iii) Business combinations

“Ind AS 103 Business Combinations has not been applied to acquisitions of subsidiaries. The company has kept the same clasification for the past business combinations as in the previous GAAP financial statements.The company has excluded from its opening balance sheet those items recognised in accordance with previous GAAP that do not qualify for recognition as an asset or libility under Ind AS.

C. The following reconciliations provide the explanations and quantification of the differences arising from the transition from Previous GAAP to Ind AS in accordance with Ind AS 101:

i) Reconciliation of Equity as at 1st April, 2016 and 31st March, 2017

ii) Reconciliation of Statement of Profit and Loss for the year ended 31st March, 2017

iii) Adjustments to Statement of Cash Flows for the year ended 31st March, 2017

1 Investments

Under Previous GAAP, the non current quoted equity investment were measured at cost . Under Ind AS, the Company has designated these investments at fair value through profit or loss (FVTPL). Accordingly, these investments are required to be measured at fair value. At the date of transition to Ind AS, difference between the fair value of the instruments and the carrying value under Previous GAAP has been recognised in retained earnings. Fair value changes are recognised in the Statement of Profit and Loss for the year ended 31st March, 2017.

2 Borrowings

In accordance with Ind AS 109 “Financial Instruments”, transaction costs on issue of debentures are required to be considered as effective finance costs and recognised in the statement of profit and loss using the effective interest rate. Consequently, transaction costs recognised directly in equity or amortised using a different approach under the Previous GAAP has been reversed and are now recognised through the statement of profit and loss using the effective interest rate.

3 Other Comprehensive Income

Under Ind AS, all items of income and expense recognised during the year are included in the profit or loss for the year, unless Ind AS requires or permits otherwise. Items that are not recognised in profit or loss but are shown in the statement of profit and loss and other comprehensive income include re-measurement gains or losses on defined benefit plans. The concept of other comprehensive Income did not exist under the Previous GAAP.

4 Employee Benefits

In accordance with Ind AS 19, “Employee Benefits” re-measurement gains and losses on post employment defined benefit plans are recognised in other comprehensive income as compared to the statement of profit and loss under the Previous GAAP.

Interest expense/income on the net defined benefit liability/ asset is recognised in the statement of profit and loss using the discount rate used for defined benefit obligation as compared to the expected rate used for recognising income from plan assets under the Previous GAAP.

5 Deferred Taxes

In accordance with Ind AS 12, “Income Taxes”, the Company on transition to Ind AS has recognised deferred tax on temporary differences, i.e. based on balance sheet approach as compared to the earlier approach of recognising deferred taxes on timing differences , i.e. profit and loss approach. The tax impacts as above primarily represent deferred tax consequences arising out of Ind AS re-measurement changes.

6 Excise Duty

Under Previous GAAP, excise duty was netted off against sale of goods. However, under Ind AS, excise duty is included in sale of goods and is separately presented as expense on the face of Statement of Profit and Loss. Thus, sale of goods under Ind AS has increased with a corresponding increase in expenses.

7 Deemed cost for property, plant and equipment and intangible assets

The Company has elected to measure all its property, plant and equipment and intangible assets at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS. Consequently, depreciation on revaluation portion recognised directly in equity under the Previous GAAP has been reversed and are now recognised through the statement of profit and loss.

iii) Adjustments to Statement of Cash Flows for the year ended 31st March, 2017

There were no material differences between the Statement of Cash Flows presented under Ind AS and the Previous GAAP.

12 Figures of previous year have been regrouped/rearranged, wherever considered necessary to conform to the current year’s presentation.

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