Assignment 1 : Astral Poly Technik Ltd

A report submitted to

In partial fulfillment of the requirement of the course

Corporate Finance - I

By

Problem statement: Does the small shareholders in the company

have a reasonable chance of being heard?
Review Period: 2015-16
Evaluation of the company on its corporate governance

Directors
The year under review, the company has following seven directors, namely- (Astral, n.d.)
Mr. K.R. Shenoy

Chairman (Independent Director)

Mr. Sandeep P. Engineer

Managing Director

Mrs. Jagruti S. Engineer

Whole Time Director

Mr. Kyle A.Thompson

Non-Executive Director

Mr. Anil Kumar Jani

Non-Executive Director

Mr. Pradip N. Desai

Independent Director

Mr. Narasinh K. Balgi

Independent Director

Independent Directors
Three out of seven directors are independent directors- (Astral, n.d.)
Mr. K.R. Shenoy
Mr. Pradip N. Desai
Mr. Narasinh K. Balgi

Chairman (Independent Director)

Independent Director
Independent Director

Number of BoD meetings took place last year

The Board of Directors met 7 times during the year under review- (Astral, n.d.)

Meetings attended by each director- (Astral, n.d.)

Name of the Director

No. of Board Status

meetings

Mr. K.R. Shenoy

Mr. Sandeep P. Engineer
Mrs. Jagruti S. Engineer
Mr. Kyle A.Thompson
Mr. Anil Kumar Jani
Mr. Pradip N. Desai
Mr. Narasinh K. Balgi

Attended
3
7
7
1
7
6
6

Chairman (Independent Director)

Managing Director
Whole Time Director
Non-Executive Director
Non-Executive Director
Independent Director
Independent Director

Other boards in which Independent directors sit- (Ministry of Corporate Affairs

of India, n.d.)
K.R. Shenoy:
1. Resinova Chemie Limited
Pradip N. Desai

1.
2.
3.

N. Desai Enterprises (India) Privatelimited

N Desai Papers Pvt Ltd
Resinova Chemie Limited

Narasinh K. Balgi
1.
2.
3.
4.
5.

Resinova Chemie Limited

Indian Machine Tool Manufacturersassociation
Ferromatik Milacron India Privatelimited
A G Training And Innovation Centre
Plastics Machinery Manufacturersassociation Of India

Chairman & his relationship with the CEO

Mr. K. R. Shenoy is the chairman of the company. Mr. Shenoy is independent director of the
company since 2006. Mr Shenoy does not held any share in the company. No data was found
about the relationship of Mr. Shenoy and Mr. Engineer.

News items about confrontations/unanimous decisions

No data found.

Takeover defenses
As such no takeover defenses were found.

Shareholders holding more than 2% of the holding (Bloomberg, 2016)

S.N.
1
2
3
4
5
6
7
8
9
10
11

Name Of The Share Holder

Engineer Sandeep P
Saumya Polymers
Engineer Jagruti Sandee
Mehta Hansa Pravin
Specialty Process LLC
Steadview Capital Maur
Tree Line Asia Master Fund
Axis Asset Management Co Ltd
DF International Partners
ABG Capital
LTR Focus Fund

Group
Promotors
Promotors
Promotors
Promotors
Promotors
AMC
AMC
AMC
AMC
AMC
AMC

% Holding
19.77
19.43
7.64
5.57
4.97
3.94
3.03
2.85
2.84
2.8
2.24

*AMC Assets Management Company

Size of block-holders holding (Astral, n.d.)

Category
Promoters (including persons acting in concert)
Foreign Institutional Investors
Mutual Funds, Financial Institutions and Banks
Non-resident Indians/Overseas Corporate Bodies
Private Corporate Bodies
Resident Indians
Clearing members
Demat Suspense Account
Total

No
of
Shares
7,10,65,860
1,35,45,355
66,66,823
96,81,921
26,05,270
1,58,66,418
3,18,136
500
11,97,50,283

% of
Capital
59.35
11.31
5.57
8.07
2.18
13.25
0.27
0
100

Total

Current block-holders having a history of being active investors

Yes, after promotors all the top block holders are either foreign institutional investors (FIIs) or
Indian assets management companies. All these type of block holders are active investors.

Power of government in the company

No, apart from being governing body government doesnt hold any power in the company either
directly or indirectly.

Power of labour unions in the company

No, as per information available over the internet, I could not found any active labour union in
the company. And since the company has only 815 employees (Source: Annual Report 2016) so
there are negligible chances that there exists labour unions.

Different classes of shares

The company doesnt have different classes of shares, all the shares hold same king of rights.

Whether it is a group company

Yes, it is a group company. The company had 3 direct subsidiaries, 2 step down subsidiaries and
1 associate company.

Control structures (cross-holdings/self-holdings/shell companies) (Astral, n.d.)

Here is the snapshot of holding structure of Astral Poly Technik in its subsidiaries and associates.

----Source: Annual report 2016

Length of manager tenure

Mr. Sandeep P. Engineer, managing director of the company is holding the post of managing
director since its inception. Since the company got listed in the year 2006, so according to data
available he has been the managing director since then.

Potential conflicts of interest

This company is being run by its promotors, who are holding an aggregate of around 60% shares
in the company through in person or through the firms they own. Since promotors are keeping
majority in the company there are less chances of conflicts. If we think in terms of cross
holdings, then also it is not a matter of conflicts because in Astral itself no other subsidiary or
holding company holds interest.

Auditor provide services other than auditing (Astral, n.d.)

Yes, according to the notes to accounts of the company auditors are charging for other services
also. And it is also indicated that auditors provided professional services relating to the qualified
institutional investors (QIP) issues. Here is the snapshot of the same-

--Source: Annual Report 2016

Was auditor report qualified

No, auditor did not qualified the report as well as there were not any concerns or exclusions in
the auditors report.

Auditors rotation
Deloitte Haskins & Sells (Chartered Accountants) are the auditors of the company since the
company got listed (2006). So no rotation was happened during the period.

Committees on board (Astral, n.d.)

There are three committees on the board, all are comprised of independent and dependent
directorsA) Audit Committee: Three out of four members are independent directors.
B) Stakeholders relationship committee: Two out of four members are independent
directors.
C) Nomination and Remuneration Committee: Two out of four members are independent
directors.

Gender diversity on board (Astral, n.d.)

One out of seven directors is a woman director on the board or in percentage terms around 14%
of the directors are female.

Influential individuals on board

Mr. Sandeep P. Engineer and Mrs. Jagruti S. Engineer are the persons which can be said as
influential on the board. Both of them holds around 60% shares of the company (in aggregate)
either directly or indirectly so there are high chances of decisions being influence by them.

Do founders still hang on?

As mentioned earlier founders and companies controlled by them holds around 60% of the shares
in the company and Mr. Sandeep P. Engineer and Mrs. Jagruti S. Engineer are holding the post of
managing director and whole time director in the company respectively.

Conclusion:
This company is promotor oriented company where promotor holds majority of the shares in the
company. If we see the shareholding pattern of the company general public holds only around
13% of the shares. If we see the structure of the board, most of the directors including
independent directors are non-executive directors so directors who take parts in execution
decision making are only three out of them two belongs to promotors group so, it is clearly
evident that most of the executional decisions are in the hands of the promotors. Astral is the
emerging company, it has yet to explore all its potentials, in future if promotors sells out their
holdings then there are chances that it remain out of influence of the promotors.
Here in this company, government doesnt hold any power as well as there are no labour union
exists in this company. Based on the data available over the internet, till date no issues were
found regarding whistle blowing activities and confrontations by any members or stakeholders.
Since the company got listed majority of the directors are same including independent directors,
at the same times auditors of the company was also not rotated during this period of time.
So, in conclusion we can say that right now this company doesnt have much voice for the small
shareholders.

Bibliography
Astral. (n.d.). Retrieved from http://astralpipes.com/
Astral. (n.d.). Retrieved from
http://astralpipes.com/systemupload/investorrelationpdf/171_l.pdf
Bloomberg. (2016). Astral. Ahmedabad, Guajarat, India.
Ministry of Corporate Affairs of India. (n.d.). Retrieved from http://www.mca.gov.in/