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Notes to Accounts of Alkali Metals Ltd.

Mar 31, 2015

Note: 1

Investment subsidy received during the year from Government of AP towards purchase of Land has been considered as Capital Reserve as per AS 12, Government Grants.

The loan is secured by hypothecation of entire fixed assets(including civil structures) purchased out of the term loan, collateral security of Land & Buildings of the Company and by personal guarantee of the Managing Director of the Company.

Term Loan from SBI is secured by first charge on Company's fixed assets financed out of the Term Loan, Collateral Security of Land & Buildings of the Company and by personal guarantee of Managing Director of the Company

The Company was sanctioned Interest Free Sales Tax Deferment of Rs,34,585,650/- under target – 2000 Scheme by the Government of Andhra Pradesh vide final eligibility Certificate No.LR No.10/4/2001/0878/0878/ID dt.24-07-2001, for a period of 14 years starting from 20- 03-1999 to 19-03-2013. The company has so far availed Sales Tax Deferment of Rs,26,979,010/- up to 31-03-2013, which is shown as liability in the Balance Sheet. The repayment of 1st year a ailment will start from the year April, 2016.

6 Security:

Working Capital Loan from bank and interest accrued on the loan are secured by hypothecation of present and future raw materials, work in progress, finished goods, stores and spares and book debts of the Company and a first charge on the immovable properties and personal guarantee of the Managing Director of the Company.

2. HISTORY:

Alkali Metals Ltd. which was established in 1968, at Hyderabad, Andhra Pradesh, India, as a closely held company, became a Public Listed company on 6th. November, 2008 being listed on BSE & NSE. Originally set up for manufacturing of Sodium Metal, the company subsequently diversified into manufacturing of Sodium derivatives, Pyridine derivatives, Fine Chemicals etc. The company is recognized as an "Export House" by DGFT and also recognized by Dept. of Science and Technology, New Delhi as an approved "In house R & D Facility". The company has three manufacturing units, at Uppal, Dommara Pochampally and JNPC Visakhapatnam.

3. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

i. Contingent Liabilities

a. Claim against the company not acknowledged as debts - (All figures in Rs,)

2014-15 2013-14

Income Tax 3,905,446 3,905,446

Sewerage cess claimed by HMWS&SB 2,188,086 1,134,441



b. Guarantees (All figures in Rs,)

2014-15 2013-14

a) Bank guarantees 760,000 372,550

b) Letters of credit 31,338,890 43,754,139

ii. COMMITMENTS

2014-15 2013-14

Estimated amount of contracts remaining to be executed on 4,851,494 -- capital account and not provided for

4. The Disclosures of Employee Benefits as required by Accounting Standard – 15 (Revised) "Employee Benefits", are given below:

i. Defined Contribution Plan

ii. Defined Benefit Plan

The Employees' Gratuity Fund Scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit to build up the final obligation.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary. The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company's policy for plan assets management.

5. DEFERRED TAX

The Company has computed Deferred Tax in accordance with the Accounting Standard on Accounting for Taxes on income (AS-22) issued by the Institute of Chartered Accountants of India. As at the end of the year, the Company has substantial amount of carried forward losses under the Income Tax Act which resulted in Deferred Tax Asset. The details of deferred tax assets and liabilities of the Company as on the date of Balance Sheet are given below:

6. Segment Reporting

As the Company is predominantly engaged in the manufacture and sale of chemicals where the risks and returns associated with the products are uniform, the Company has identified geographical segments based on location of customers as reportable segments in accordance with AS 17 issued by ICAI.

Note: The Company has no assets outside India other than the External Trade Receivables. All the assets, other than trade receivables, are shown as Unallowable Assets.

7. Figures of the previous year have been regrouped / rearranged / reclassified wherever considered necessary to conform to the classification of the current year.


Mar 31, 2014

1. HISTORY:

Alkali Metals Limited which was established in 1968, at Hyderabad, Andhra Pradesh, India, as a closely held company, became a Public Listed company on 6th. November, 2008 being listed on BSE & NSE. Originally set up for manufacturing of Sodium Metal, the company subsequently diversified into manufacturing of Sodium derivatives, Pyridine derivatives, Fine Chemicals etc. The company is recognised as an "Export House" by DGFT and also recognised by Dept. of Science and Technology, New Delhi as an approved "In house R & D Facility". The company has three manufacturing units, at Uppal, Dommara Pochampally and JNPC Visakhapatnam.

2. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

Contingent Liabilities

a. Claim against the company not acknowledged as debts -(All figures in Rs.)

2013-14 2012-13

Income Tax 3,905,446 24,942,816

b. Guarantees (All figures in Rs.)

2013-14 2012-13

a) Bank guarantees 372,550 4,310,000

b) Letters of credit 43,754,139 52,400,043

3. The Department of Central Excise has raised a demand for an amount of Rs.2,825,718/- in connection with DTA clearances by EOU. The Company has deposited the amount and made an appeal against the Demand before the Commissioner (Appeals) which is still pending.

4. The Disclosures of Employee Benefits as required by Accounting Standard - 15 (Revised) "Employee Benefits", are given below: i. Defined Contribution Plan Contributions to defined contribution plan recognized as expenses for the year are as under:

ii. Defined Benefit Plan

The Employees'' Gratuity Fund Scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit to build up the final obligation.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary. The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company''s policy for plan assets management.

5. Segment Reporting

As the Company is predominantly engaged in the manufacture and sale of chemicals where the risks and returns associated with the products are uniform, the Company has identified geographical segments based on location of customers as reportable segments in accordance with AS 17 issued by ICAI.

6. Figures of the previous year have been regrouped / rearranged / reclassified wherever considered necessary to conform to the classification of the current year.


Mar 31, 2013

1. HISTORY:

Alkali Metals Limited which was established in 1968, at Hyderabad, Andhra Pradesh, India, as a closely held company, became a Public Listed company on 6th. November, 2008 being listed on BSE & NSE. Originally set up for manufacturing of Sodium Metal, the company subsequently diversified into manufacturing of Sodium derivatives, Pyridine derivatives, Fine Chemicals etc. The company is recognised as an "Export House" by DGFT and also recognised by Dept. of Science and Technology, New Delhi as an approved " In house R & D Facility". The company has Three manufacturing units, at Uppal, Dommara Pochampally and JNPC Visakhapatnam.

2. HISTORY:

Alkali Metals Limited which was established in 1968, at Hyderabad, Andhra Pradesh, India, as a closely held company, became a Public Listed company on 6th. November, 2008 being listed on BSE & NSE. Originally set up for manufacturing of Sodium Metal, the company subsequently diversified into manufacturing of Sodium derivatives, Pyridine derivatives, Fine Chemicals etc. The company is recognised as an "Export House" by DGFT and also recognised by Dept. of Science and Technology, New Delhi as an approved "In house R & D Facility". The company has Three manufacturing units, at Uppal, Dommara Pochampally and JNPC Visakhapatnam.

3. During the year, the Department of Central Excise has raised a demand for an amount of Rs.12,295,667/- in connection with DTA clearances by EOU. The Company has deposited the amount with the Department and subsequently made an appeal to the extent of Rs.2,825,718/- before the Commissioner (Appeals) which is still pending.

4. The Disclosures of Employee Benefits as required by Accounting Standard - 15 (Revised) "Employee Benefits", are given below:

i. Defined Contribution Plan

Contributions to defined contribution plan recognized as expenses for the year are as under:

ii. Defined Benefit Plan

The Employees'' Gratuity Fund Scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit to build up the final obligation.

5. Segment Reporting

As the Company is predominantly engaged in the manufacture and sale of chemicals where the risks and returns associated with the products are uniform, the Company has identified geographical segments based on location of customers as reportable segments in accordance with AS 17 issued by ICAI.

6. Figures of the previous year have been regrouped / rearranged / reclassified wherever considered necessary to conform to the classification of the current year.


Mar 31, 2012

1. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

i. Contingent Liabilities

a. Claim against the company not acknowledged as debts -

(All figures in Rs)

2011-12 2010-11

Income Tax 4,855,446 93,552,140

b. Guarantees (All figures in Rs)

2011-12 2010-11

a) Bank guarantees 4,310,000 4,310,000

b) Letters of credit 14,05,667 2,890,000

b) Proposed Dividend

The company proposes to declare Rs 1/- (Rs 2/-) Per Share as dividend to the equity shareholders, total dividend amounting to Rs 10,182,506/- (Rs 20,365,012/-)

ii. Defined Benefit Plan

The Employees' Gratuity Fund Scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit to build up the final obligation.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company's policy for plan assets management.

2. Segment Reporting

The Company is predominantly engaged in the manufacture and sale of chemicals where the risks and returns associated with the products are uniform. During the year under review, the Company has also engaged in trading of coal. Hence, the Company has identified the Manufacture and Trading as its primary segments for reporting as against the location of production facilities considered in the previous year, in accordance with AS-17.

3. Previous year figures have been regrouped / rearranged wherever necessary


Mar 31, 2011

1. The Disclosures of Employee Benefits as required by Accounting Standard – 15 (Revised) "Employee Benefits", are given below:

ii. Defined Benefit Plan

The Employees' Gratuity Fund Scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit to build up the final obligation.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company's policy for plan assets management.

2. Contingent liabilities not provided for (Rs. in Millions)

2010-11 2009-10

a) Bank guarantees 4.31 12.25

b) Letters of credit 2.89 5.98

c) Un-executed Capital work in progress 3.07 3.82

3. Working Capital Loans from banks and interest accrued on these loans are secured by hypothecation of present and future raw materials, work in progress, finished goods, stores and spares and book debts of the company and a first charge on the immovable properties and personal guarantee of Managing Director.

4. The Company was sanctioned Interest Free Sales Tax Deferment of Rs.34,585,650/- under target – 2000 Scheme by the Government of Andhra Pradesh vide final eligibility Certificate No. LR No.10/4/2001/0878/0878/ID dt.24-07-2001, for a period of 14 years starting from 20-03-1999 to 19-03-2013. The company has so far availed Sales Tax Deferment of Rs.21,256,799/- up to 31-03-2011, which is shown as liability in the Balance Sheet. The repayment of 1st year availment will start from year 2016.

5. ii) In accordance with the Guidance Note issued by the Institute of Chartered Accountants of India, the Company has recognised MAT Credit Entitlement of Rs.19.73 Millions in the books of account for the year. MAT Credit would result in future economic benefits by way of its adjustment against the discharge of normal tax liability under the provisions of Section 115JAA of the Income Tax Act, 1961 and there is convincing evidence that the company will pay normal income tax liability during the specified period.

6. Segment Reporting

The Company is predominantly engaged in the manufacture and sale of chemicals where the risks and returns associated with the products are uniform. The Company has identified the location of production facilities and other assets as its primary segments for reporting. The Production Segments of the company are Unit-I (Uppal), Unit-II (Dommara Pochampally) and Unit-III (Visakhapatnam).

7. There are no dues to any creditors constituting "Suppliers" within the meaning of Section 2(n) of the Micro, Small and Medium Enterprises development act 2006.

8. Previous years figures have been regrouped wherever necessary


Mar 31, 2010

1. HISTORY:

Alkali Metals Ltd. which was established in 1968, at Hyderabad, Andhra Pradesh, India, as a closely held company, became a listed company on 6l November, 2008 being listed on BSE & NSE. Originally set up for manufacturing of Sodium Metal, the company subsequently diversified into manufacturing of Sodium derivatives, Pyridine derivatives, Fine Chemicals etc. The company is recognised as an "Export House" by DGFT and also recognised by Dept. of Science and Technology, New Delhi as an approved " In house R&D Facility". The company has three manufacturing units, at Uppal, Dommara Pochampally and JNPC Visakhapatnam. The unit at Dommara Pochampally and Visakhapatnam are 100% EOUs.

ii. Defined Benefit Plan

The Employees Gratuity Fund Scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit to build up the final obligation.

2. Contingent liabilities not provided for:(Rs. In Lakhs)

2009-10 2008-09

a) Bank guarantees 122.5 80.60

b) Letters of credit 59.80 121.46

c) Un-executed Capital work in 38.17 183.50 progress

3. Claim against the company not acknowledged as debts -

Income Tax 78,587,933 60,205,633

4. Working Capital Loans from banks and interest accrued on these loans are secured by hypothecation of present and future raw materials, work in progress, finished goods, stores and spares and book debts of the company and a second charge on the immovable properties and personal guarantees of some of the Directors.

5. The Company was sanctioned Interest Free Sales Tax Deferment of Rs. 34,585,650/- under Target - 2000 Scheme by the Government of Andhra Pradesh vide final eligibility Certificate No. LR No.lO/4/2001/0878/0878/ID dt. 24-07-2001, for a period of 14 years starting from 20/03/1999 to 19/03/2013. The company has so for availed Sales Tax Deferment of Rs. 19,013,999/- up to 31-03-2010, which is shown as liability in the Balance Sheet. The repayment of 1st year availment will start from year 2016.

6. Segment Reporting

The company is predominantly engaged in the manufacture and sale of chemicals where the risk and returns associated with the products are uniform. The company has identified the Geographical segments as its primary segments for reporting. The Geographical segments of the company are Europe, Japan, USA and other etc.

7. There are no due to any creditors constituting "Suppliers" within the meaning of Section 2 (n) of the Micro, Small and Medium Enterprises development act 2006.

8. Previous years figures have been regrouped wherever necessary

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