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Moneycontrol.com India | Notes to Account > Chemicals > Notes to Account from Vishnu Chemicals - BSE: 516072, NSE: VISHNU
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Vishnu Chemicals

BSE: 516072|NSE: VISHNU|ISIN: INE270I01014|SECTOR: Chemicals
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Notes to Accounts Year End : Mar '19

1. Basis of Preparation of Financial Statements

a) Statement of Compliance

The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 2013 (the Act) read with Companies (Indian Accounting Standards) Rules as amended from time to time and other relevant provisions of the Act, as applicable.

b) Basis of Preparation

The financial statements have been prepared on a going concern basis and on an accrual method of accounting. Historical cost is used in preparation of the financial statements except as otherwise mentioned in the policy.

c) Functional and Presentation currency

The financial statements are prepared in INR, which is the Company''s functional currency.

d) Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:

- expected to be realised or intended to be sold or consumed in normal operating cycle,

- held primarily for the purpose of trading,

- expected to be realised within twelve months after the reporting period, or

- 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:

- it is expected to be settled in normal operating cycle,

- it is held primarily for the purpose of trading, - it is due to be settled within twelve months after the reporting period, or

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

The Company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

e) Use of Estimates and Judgments

The preparation of financial statements in conformity with Ind AS, requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as on the date of the financial statements and the income and expenditure for the reporting year. Though, these estimates a nd assumptions a re ba sed on the information avai lable at that point in time, the actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected

Critical estimates and judgments in applying accounting policies

Estimates and judgments made in applying accounting policies that have significant effect on the amounts recognized in the financial statements are as follows:

i) Property, Plant and Equipment

The charge in respect of periodic depreciation is derived after estimating the asset''s expected useful life and the expected residual value at the end of its life. The depreciation method, useful lives and residual values of Company''s assets are estimated by management at the time the asset is acquired and reviewed during each financial year.

ii) Employee Benefit Plans

Employee defined benefit plans and long term benefit plans are measured on the basis of actuarial assumptions. However, any changes in these assumptions may have impact on the reported amount of obligation and expenses.

Disclosures:

1. The Company has only one class of equity shares at a par value of Rs. 10. All the equity shares carry equal rights and obligations including for dividend and with respect to voting rights.

2. Names of shareholders holding more than 5% of the Share capital and their shareholding.

Disclosures:

A. Secured

1. Term Loans from banks represents loans from Consortium of Bankers - State Bank of India, Andhra Bank, Indian Overseas Bank and Union Bank of India. Term Loans are secured by charge on the assets acquired out of the term loan and charge on entire existing movable/ immovable assets of the Company. The above loans are further secured by personal guarantee of promoters and others. All the above securities rank in all respects pari passu amongst the consortium of bankers.

2. The term loans are repayable in predetermined periodic instalments outstanding up to 7 years period from the date of respective loan. These are repayable by 2023-24 and carry an average interest of 11.7% p.a. The aggregate amount of instalments outstanding as on March 31, 2019 is Rs. 8,065.59 Lakhs (March 31, 2018 Rs. 10,008.93 Lakhs)

3. The hire purchase loans are secured against the assets purchased out of those loans. The net carrying amount of assets acquired on hire purchase as on 31st March 2019 is Rs. 196.18 Lakhs (March 31, 2018: Rs. 198.12 Lakhs). The company had capitalized the assets at their fair value considering that the hire purchase agreements are in the nature of Finance Lease. The details are as follows:-

B) Unsecured Loans:

1 Loans from Promoters:

The loans from promoters are interest-free and unsecured in nature. There are no specified terms and conditions, however the same are amortised using effective interest rate.

C) Cumulative Redeemable Preference Shares

During the previous year , the Company has issued and allotted 7,66,37,500 7% Cumulative Redeemable Preference Shares (CRPS) of face value of Rs. 10/- each aggregating Rs. 76,63,75,000/- to the existing 7% Cumulative Redeemable Preference Shareholders in lieu of their existing 4,75,00,000 7% Cumulative Redeemable Preference Shares of face value of Rs. 10/- each aggregating Rs. 47,50,00,000/- and the outstanding accumulated dividend thereon up to March 31, 2017 amounting to Rs. 29,13,75,000.

The redemption tenure has also been extended from 10 to 15 years and are now redeemable by 31-03-2033. During the year, preference shareholders have given their consent to forego 6% of the 7% preference dividend for the financial year 2018-19. Refer to Note No. 38.

Disclosures:

A) Secured Loans:

1. The Rate of interest for loans repayable on demand from consortium of banks ranges from MCLR 3.80% to 4.95%

2. Interest rate for the Bill Discounting facility ranges from 9.10% to 14.25%

3 Security:

Working Capital Loans from Consortium Bankers consisting of State Bank of India, Union Bank of India, Indian Overseas Bank and Andhra Bank are secured by first pari passu charge by way of hypothecation of inventories, book debts and other current assets of the company, and second pari passu charge on the fixed assets of the company. The promoters have extended their personal assets as securities i.e. land, plots, buildings, shares etc.

3 Guarantees:

All the above loans are guaranteed by the Promoters.

B) Unsecured Loans:

Loans from Promoters disclosed here are short term in nature. There are no specified terms and conditions.

Disclosures:

The principal amount remaining unpaid as at 31.03.2019 in respect of enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) is Rs. 94.04 Lakhs (31.03.2018 - Rs. 27.71 Lakhs). The interest amount computed based on the provisions under Section 16 of the MSMED is Rs. 4.51 Lakhs

The list of undertakings covered under MSMED was determined by the company on the basis of information available with it after getting confirmation from Suppliers.

Note 2

Segment Reporting:

Operating segment is defined as a component of an entity which earns revenue, whose operating results are regularly reviewed by Chief Operating Decision Maker and for which discrete financial information is available. The Chairman and Managing Director of the Company, who regularly reviews the entity''s operating results to make decisions about allocation of resources and assessment of performance has been identified as the Chief Operating Decision Maker of the Company. As the Company is engaged in manufacture and sale of chemicals, the same constitutes a single reportable business segment as per Ind AS 108.

* Non-current assets exclude financial instruments, deferred tax assets, post-employment benefit assets and rights underinsurance contracts, loans.

Disaggregated Revenue:

As the Company is engaged in manufacture and sale of chemicals with no diversity, no separate disaggregation of revenue is reportable.

Note 3

There is no change in Equity Share Capital during the year. The Public Shareholding as on March 31, 2019 is 25%.

Note 4

During the previous year the authorized share capital of the company increased from Rs. 7500,00,000/- divided into 1,50,00,000 Equity Shares of Rs. 10/- each and 6,00,00,000 Preference Shares of Rs. 10/- each to Rs. 95,00,00,000/- divided into 1,50,00,000 Equity Shares of Rs. 10/- each and 8,00,00,000 Preference Shares of Rs. 10/- each by alteration of Clause V of Memorandum of Association the company vide shareholders postal ballot resolution dated 26th January, 2018.

Further during the previous year i.e. on 29th March, 2018, the company issued and allotted 7,66,37,500 further 7% Cumulative Redeemable Preference Shares (CRPS) of face value of Rs. 10/- each aggregating Rs. 76,63,75,000/- to the existing 7% Cumulative Redeemable Preference

Shareholders in lieu of their existing unredeemed 4,75,00,000 7% Cumulative Redeemable Preference Shares of face value of Rs. 10/- each aggregating Rs. 47,50,00,000/- and the outstanding accumulated dividend thereon amounting to Rs. 29,13,75,000/- as on 31st March, 2017 pursuant to section 55(3) of the Companies Act, 2013 read with rules made there under. Subsequently, the said allotment was ratified by the Board on receipt of the order dated 13th April, 2018 from Hon''ble National Company Law Tribunal, Bench at Hyderabad (NCLT) under section 55(3) of the Companies Act, 2013 and according to NCLT order dated 13th April, 2018 the existing 4,75,00,000 7% Redeemable Preference Shares of Rs. 10/- each deemed to have been redeemed.

The paid-up share capital of the Company as on financial year ended 31st March, 2019 and financial year ended 31st March, 2018 is Rs. 88,58,35,200/- divided into 1,19,46,020 Equity Shares of Rs. 10/- each and 7,66,37,500 Cumulative Redeemable Preference Shares of Rs. 10/- each.

Note 5 Subsidiaries:

The company has three 100% wholly owned subsidiaries - Vishnu Barium Private Limited in India and two overseas subsidiaries - Vishnu Hong Kong Limited and Vishnu South Africa Pty Limited.

Vishnu Hong Kong Limited, incorporated in Hong Kong, ceased functioning in March 2018 and a provision for the entire investment and other receivables has been made in the books of the holding company-Vishnu Chemicals Limited has been in 2018-19. The closure of the company was effected in 2018-19 as per the laws of Hong Kong and hence Vishnu Hong Kong Private Limited ceased to exist.

Vishnu South Africa Pty Limited was incorporated in 2017-18 in South Africa but is yet to commence operations. Though the incorporation was carried out, no investment towards Share Capital was made in that company as the same was not required on incorporation as per the laws of that country.

Note 6

Employee Benefits:

1. Defined Contribution Plan:

The company makes contributions towards provident fund and employee state insurance regularly at the applicable rates based on the salaries of the eligible employees. The obligation of the Company is limited to making the contributions and there is no further contractual or constructive obligation. The following are the details of contributions made during the year which are debited to Statement of Profit & Loss:

Note 7

Additional information pursuant to section 129 of the Companies Act, 2013: Salient features of the financial statements of the subsidiaries:

There are no assets and liabilities and revenue with regard to the subsidiary-Vishnu South Africa Pty Limited and another subsidiary-Vishnu Hong kong Limited which ceased operations and has been wound up.

Note 8

Figures for the previous year have been regrouped, rearranged and reclassified, wherever considered necessary, to conform to the classification/ presentation of the current year.

Source : Dion Global Solutions Limited
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