Accounting Policies of Alkali Metals Ltd. Company

Mar 31, 2018

Notes to Financial Statements for the year ended March 31, 2018

1. COMPANY OVERVIEW

Alkali Metals Ltd. which was established in 1968, at Hyderabad, Telangana, 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 and API''s 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. BASIS OF PREPARATION AND MEASUREMENT

i. Statement of Compliance

The financial statements as at end of the financial year ended March 31, 2018 have been prepared in accordance with Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

For all the periods upto and including the financial year ended March 31, 2017, the Company prepared its financial statements in accordance with requirement of previous GAAP, which includes accounting standards notified under the section 133 of the Companies Act 2013 read together with Companies (Accounting Standards) Rules, 2006. The Date of transition to Ind AS is April 01, 2016. These financial statements for the financial year ended March 31, 2018 are Company''s first Ind AS financial statements. The disclosure relating to Ind AS 101, First-time adoption of Indian Accounting Standards have been given in Note no.4

ii. Accounting Convention and Basis of Measurement

The financial statements have been prepared on the historical cost convention and on an accrual basis, except for the following material items that have been measured at fair value as required by relevant Ind AS:

a. Certain financial assets and liabilities measured at fair value (refer accounting policy on financial instruments)

b. Defined benefit and other long-term employee benefits. iii. Functional and Presentation Currency

The financial statements are presented in Indian rupees, which is the functional currency of the Company and the currency of the primary economic environment in which the Company operates. All financial information presented in Indian rupees has been rounded to the nearest rupee except share and earning per share data.

iv. Use of Judgements, Estimates and Assumptions

The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses and the disclosure of contingent liabilities and assets. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Information about critical judgements in applying accounting policies, as well as estimates and assumptions in respect of the following areas, that have most significant effect to the carrying amounts within the next financial year are included in the relevant notes.

a. Useful lives of property, plant, equipment and intangibles

b. Measurement of defined benefit obligations

c. Measurement and likelihood of occurrence of provisions and contingencies

d. Recognition of deferred tax assets.

e. Impairment of intangibles

f. Expenditure relating to research and development activities. v. Operating Cycle

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

3. SIGNIFICANT ACCOUNTING POLICIES

i. Property Plant and Equipment

a) Property Plant and Equipment are measured at cost less accumulated depreciation and impairment losses.

b) The cost of property, plant and equipment includes those incurred directly for the construction or acquisition of the asset and directly attributable to bringing it to the location and condition necessary for it to be capable of operating in the manner intended by the management and includes the present value of expected cost for dismantling/ restoration wherever applicable.

c) The cost of major spares is recognised in the carrying amount of the item of property, plant and equipment in accordance with the recognition criteria set out in the standard. The carrying amount of the replaced part is derecognised at the time of actual replacement. The cost of the day-to-day servicing of the item are recognised in statement of profit and loss account.

d) Depreciation on all fixed assets is provided under straight line method over the useful life of assets specified in Part C of Schedule II to the Companies Act, 2013 and manner specified therein. Assets costing less than INR 5,000/- are fully depreciated in the year of purchase.

e) Expenditure attributable / relating to PPE under construction / erection is accounted as below:

• To the extent directly identifiable to any specific plant / unit, trail run expenditure net of revenue is included in the cost of property plant and equipment

• To the extent not directly identifiable to any specific plant / unit, is kept under "expenditure during construction" for allocation to property plant and equipment and is grouped under Capital work in progress.

ii. Intangible Assets

a) Intangible asset is recognised when it is probable that future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. Expenditure incurred for creating infrastructure facilities where the ownership does not rest with the Company and where the benefits from it accrue to the Company over a future period is also considered as intangible asset.

b) New product development expenditure, software licences, technical know-how fee, infrastructure and logistic facilities etc., are recognised as intangible asset upon completion of development and commencement of commercial production

c) Intangible assets are amortised on straight line method over their technically estimated useful life.

d) Residual values and useful lives for all intangible assets are reviewed at each reporting date. Changes if any are accounted for as changes in accounting estimates.

iii. Impairment of Asset

a) Financial Assets

Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:

• Financial assets that are debt instruments and are measured at amortized cost whether applicable for e.g. loans debt securities, deposits, and bank balances.

• Trade Receivables

Company follows ''simplified approach'' for recognition of impairment loss allowance on trade receivables which do not contain a significant financing component. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

b) Non - financial assets

Company assesses at each reporting date whether there is any objective evidence that a non-financial asset or a group of non-financial assets is impaired. If any such indication exists, the Company estimates the amount of impairment loss.

iv. Inventories

Items of inventories are valued at lower of cost or net realisable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing them to their respective present location and condition. Cost of raw material is determined on FIFO method. Appropriate provisions will be made for non-moving / slow-moving items.

v. Foreign Currency Transactions

a) Transactions relating to non-monetary items and purchase and sale of goods / services denominated in foreign currency are recorded at the exchange rate prevailing or a rate that approximates the actual rate on the date of transaction.

b) Assets and liabilities in the nature of monetary items denominated in foreign currencies are translated and restated at prevailing exchange rates as at the end of the reporting period.

c) Exchange differences arising on account of settlement / conversion of foreign currency monetary items are recognised as expense or income in the period in which they arise.

d) Foreign currency gains and losses are reported on a net basis.

vi. Revenue Recognitions

Sales are recognised on dispatch of goods from the factory. In respect of export sales, the revenue is recognised on the basis of bill of lading. Miscellaneous sales are recognised on the basis of dispatch of goods. Other income such as interest etc., are recognised on accrual basis. Sales revenue is measured at fair value net of returns, trade discounts and volume rebates.

vii. Employee Benefits

a) Short term Benefits

All employee benefits falling due wholly within twelve months of rendering the service are classified as short-term employee benefits. The cost of the benefits like salaries, wages, medical, leave travel assistance, short term compensated absences, bonus, exgratia etc., are recognised as an expense in the period in which the employee renders the related service.

b) Post-employment benefits

• Defined Contribution Plans

The contribution paid / payable under provident fund scheme, ESI scheme, and employee pension scheme is recognised as expenditure in the period in which the employee renders the related service.

• Defined Benefit Plans

The Company''s obligation towards gratuity is a defined benefit plan. The present value of the estimated future cash flows of the obligation under such plan is determined based on actuarial valuation using the projected unit credit method. Any difference between the interest income on plan asset and the return actually achieved and any changes in the liabilities over the year due to changes in actuarial assumptions or experienced adjustments within the plan are recognised immediately in other comprehensive income and subsequently not reclassified to the statement of profit and loss.

All defined benefit plans obligations are determined based on valuation as at the end of the reporting period, made by independent actuary using the projected unit credit method. The classification of the Company''s net obligation into current and non-current is as per the actuarial valuation report.

c) Long term Employee Benefits

The obligation for long term employee benefits such as long term compensated absences, is determined and recognised in the similar manner stated in the defined benefit plan.

viii. Borrowing Cost

a) Borrowing costs incurred for obtaining assets which take substantial period to get ready for their intended use are capitalised to the respective assets wherever the costs are directly attributable to such assets and in other cases by applying weighted average cost of borrowings to the expenditure on such assets.

b) Other borrowing costs are treated as expense for the year.

c) Significant transaction costs in respect of long-term borrowings are amortised over the tenor of respective loans using effective interest method.

ix. Provision for Current and Deferred Tax

a) Current Tax

The tax currently payable is based on taxable profit for the year. Taxable profits differ from the profit as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted or substantially enacted by the end of the reporting period. In the event of tax computed as stated is less than the tax computed under section 115JB of the Income tax Act., 1961, provision for current tax will be made in accordance with such provisions.

b) Deferred Tax

Deferred tax is recognised on temporary differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised.

The carrying amount of deferred tax asset is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period to recover or settle the carrying amount of its assets and liabilities.

c) Current and deferred Tax for the year

Current and deferred tax are recognised in profit and loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.

Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognised and carried forward only to the extent there is reasonably certain that there will be sufficient future income to recover such Deferred Tax Asset.

x. Minimum Alternate Tax Credit

Minimum Alternate Tax Credit Entitlement is recognized in the books of account when there is convincing evidence that the Company will pay normal income tax during the specified period. The entitlement is reviewed at each balance sheet date with regard to the correctness of the carrying amount

xi. Research and Development

Capital expenditure incurred has been disclosed under separate heads of account and revenue expenditure incurred is charged off as a distinct item in the Profit and Loss account.

xii. Claims

Claims by and against the Company, including liquidated damages, are recognised on acceptance basis.

4. FIRST TIME ADOPTION OF IND AS

These financial statements of Alkali Metals Limited, for the financial year ended March 31, 2018 have been prepared in accordance with Ind AS. For the purpose of transition to Ind AS, the Company has followed the guidance prescribed in Ind AS 101 - first time adoption of Indian Accounting Standards, with effect from April 01, 2016 as the transition date and IGAAP as the previous GAAP.

The transition to Ind AS has resulted in changes in the presentation of the financial statements, disclosures in the notes thereto and accounting policies and principles. The Accounting policies set out in Note 3 have been applied in preparing the financial statements for the year ending March 31, 2018 and the comparative information. An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s Balance sheet, statement of profit and loss, is set out in note 6. Exemptions on first time adoption of Ind AS availed in accordance with Ind AS 101, have been set out in note 5.

5. EXEMPTIONS AVAILED ON FIRST TIME ADOPTION OF IND AS 101

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS and exemptions from other Ind AS. The Company has accordingly applied the following exemptions.

a) Deferred Government Grants

The Company is permitted to apply the requirements under Ind AS 109, financial instruments and Ind AS 20, accounting for government grants and disclosure of government assistance, prospectively to government loans existing at the date of transition to Ind AS. Accordingly, the measurement of borrowings - interest free sales tax loan (IFST) is made prospectively.

b) Property, Plant and Equipment and Intangibles

The Company may elect to use the previous GAAP carrying amount as the deemed cost for measurement of items of property, plant and equipment and intangibles assets at the date of transition to Ind AS. Accordingly the Company adopted the previous GAAP carrying amount that existed at the date of transition to Ind AS.

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Mar 31, 2017

A) Basis of Preparation of Financial Statement:

The Financial Statements are preps on going concern assumption and under the historical cost convention, except for certain fixed assets which revalued in accordance with generally accepted Accounting principles in India and the provisions of the Companies Act 2013.

B) Use of Estimates:

The preparation of financial statements and assumption to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result: and estimates are recognized in the period in which the results are known / materialized.

C) Fixed Assets:

Fixed assets are stated at cost net of civet / value added tax and includes amounts added on revaluation, less accumulated depreciation, and impairment of loss, if any. All costs including financing costs till commencement of production, net charges on foreign exchange contracts and adjustments arising from exchange rate variation attributable to the fixed assets are capitalized as p the applicable standards.

D) Depreciation and Amortization:

Depreciation on all fixed assets is provided on systematic basis on straight-line method on the basis of useful lives specified in Schedule -II of the Companies Act, 2013. Intangible Asset (Computer Software) is mortised over a period of five years.

E) Impairment of Asset:

The Carrying amount of asset is reviewed at balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated. The recoverable amount is the greater of the assets net selling price and value in use which is determined based on the estimated future cash flow discounted to their present values. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating un exceeds its recoverable amount. Impairment loss is 2013 if there has been change in the estimates used to determine the recoverable amount.

F) Inventories:

Items of inventories are valued at lower of cost or net realizable value after providing of obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing them to their respective present location and condition. Cost of raw material is determined on FIFO method.

G) Foreign Currency Transactions:

Foreign Currency Transaction are recorded at change rates prevailing at the transaction date. Current Assets and Current Liabilities relating Foreign Currency Transactions remaining unsettled at the balance Sheet date are translated year end rates. The result gain/ loss, if any, is recognized in Profit &Loss Account.

H) Turnover:

Sales are recognized on dispatch of goods from the factory.

I) Employee Benefits:

i. Gratuity:

The Company contributes towards Group Gratuity Fund (defined benefit retirement plan) administered by the Life Insurance Corporation Of India, for eligible employees. Under this scheme the settlement obligation remains thither Company, while the Life Insurance Corporation of India administers the scheme and determines the premium to be contributed by the Company. The plan provides for a lump-sum payment to the vested employees on retirement or termination of employment, based on the respective employees ’salary and the years of service with the Company.

ii. Provident Fund:

Retirement benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged off to the profit and loss account of the year when the contributions the fund are due. There are no other obligations other than the contributions to be remitted to t Provident Fund Authorities.

iii. Leave Encashment:

Provision for Leave Encashment is recognized in the books as per the actuarial valuation.

J) Borrowing Cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that takes necessarily substance period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

K) Provision for Current and Deferred Tax:

Provision for current tax is made after taking into consideration benefits admissible under t provisions of the Income tax Act, 1961 Defied’ tax resulting from timing difference’ -between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognized and carried'' forward only to the extent there is reasonably etchant there will be sufficient future income to recover such Deferred Tax As set

L) Minimum Alternate Tax Credit:

Minimum Alternate Tax Credit Entitlement is recognized in the books of account when there convincing evidence that the Company will pay normal income tax during the specified period. The Entitlement is reviewed at each balance sheet date with regard to the correctness of the carrying amount.

M) Research and Development:

Capital expenditure incurred has been disclosed under separate heads of account and revenue expenditure incurred is charged off item in the Profit and Loss account.

N) Claims:

Claims by and against the company, including liquidated damages, are recognized on acceptance basis.

O) Exceptional / Extraordinary Items:

All the exceptional and extraordinary items are recognized as per the provisions stipulated in AS 5 Net profit or loss for the period, Prior Period Items and Changes in Accounting Policies.

Sales Tax Deferment:

The Company was sanctioned Interest Free Sales Tax Deferment of INR 34,585,650/- under Target-2000 Scheme by the Government of Andhra Pradesh vide final eligibility Certificate No.LR No.Iy4/200Y08F8/08F8/ID dt.24-07-2017 for a period of 14 years starting from 20-03-1999 to 9-03-2003. The Company has availed itself of total Sales Tax Deferment of Rs 26,979,01/- up to 31-03-2013 and the same is shown as liability in the Balance Sheet. The repayment is started from March, 206 and the Company has made the payments as per the final eligibility certificate. Amount of Rs.3,656,488 payable in the next financial year shown under the Other Current Liabilities

Disclosures:

The Company has no information as to whether any of its vendors constitute a Supplier-within the meaning of Section 2 (n) of the Micro, Small and Medium Enterprises Development Act, 2006 as no declarations were received under the said Act from them.

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Mar 31, 2016

A) Basis of Preparation of Financial Statement:

The Financial Statements are prepared on going concern assumption and under the historical cost convention, except for certain fixed assets where re-valued in accordance with generally accepted Accounting principles in India and its provisions of the Companies Act 1956.

B) Use of Estimates:

The preparation of financial statements require statements and assumption to be made that affect the reported amount of assets and liabilities on date of the financial statements and the reported amount of revenues expenses during the reporting period. Difference between the actual results and estimates organized in the period in which the results are known / materialized.

C) Fixed Assets:

Fixed assets are stated at cost net of face value added tax and includes amounts added on revaluation, less accumulated depreciation, and impairment of loss, if any. All costs including financing costs till commencement of production, net charges on foreign exchange contracts and adjustments arising from exchange rate variation attributable to the fixed assets are capitalized as per the applicable standards.

D) Depreciation and Amortization:

Depreciation on all fixed assets is provided on-straight line basis on straight-line method on the basis of useful lives specified in Schedule II- of the Companies Act, 2013. Intangible Asset (Computer Software) is amortized over a period of five years.

E) Impairment of Asset:

The Carrying amount of asset is reviewed at Balance sheet date to determine whether there is any indication of impairment. If any such indicators exist, the recoverable amount of the asset is estimated. The recoverable amount is the great of entire assets net selling price and value in use, which is determined based on the estimated for cash flow discounted to their present values. An impairment loss is recognized is never the carrying amount of meet or its cash generating unit exceeds its recoverable amount. Impairment loss versed if there has been change in the estimates used to determine the recoverable amount.

F) Inventories:

Items of inventories are valued at lower cost of net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing them to the respective present location and condition. Cost of raw material is determined on FIFO method.

G) Foreign Currency Transactions:

Foreign Currency Transaction is record exchange rates prevailing at the transaction date. Current Assets and Current Liabilities of Foreign Currency Transactions remaining unsettled at the balance Sheet date are translated the year ended rates. The result gain/ loss, if any, is recognized in Profit & Loss Account.

H) Turnover:

Sales are recognized on dispatch of goods from the factory.

I) Employee Benefits:

i. Gratuity:

The Company contributes towards Group Gratuity Fund (defined benefit retirement plan) administered by the Life Insurance Corporation Of India, for eligible employees. Under this scheme the settlement obligation remains with Company, while the Life Insurance Corporation of India administers the schemed determines the premium to be contributed by the Company. The plan provides for a lump-sum payment to the vested employees on retirement or termination of employment, based on the respective employees’ salary and the years of service with the Company.

ii. Provident Fund:

Retirement benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged off to the profit and account of the year when the contributions to the fund are due. There is no other obligation than the contributions to be remitted to the Provident Fund Authorities.

iii. Leave Encashment:

Provision for Leave Encashment is recognizing the books as per the actuarial valuation.

J) Borrowing Cost:

Borrowing costs that are attributable to construction of qualifying assets are capitalized as part of the cost of such assts, qualifying asset is one that takes necessarily substantial period of time to get ready for tended use. All other borrowing costs are charged to revenue.

K) Provision for Current and Deferred Tax:

Provision for current tax is made after taking consideration benefits admissible under the provisions of the Income tax Act, 1961 Defter tax resulting from timing difference’ ’between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet deferred tax asset is recognized and carried forward only to the extent there is reasonably certain there will be sufficient future income to recover such Deferred Tax Asset.

L) Minimum Alternate Tax Credit:

Minimum Alternate Tax Credit Entitlement organized in the books of account when there is convincing evidence that the Company will pay normal income tax during the specified period. The Entitlement is reviewed at each balance sheets with regard to the correctness of the carrying amount.

M) Research and Development:

Capital expenditure incurred has been discard under separate heads of account and revenue expenditure incurred is charged off as a distinct item in the Profit and Loss account.

N) Claims:

Claims by and against the company, including changing dated damages, are recognized on acceptance basis.

O) Exceptional / Extraordinary Items:

All the exceptional and are recognized as per the provisions stipulated in AS 5- Net profit or loss for the period, Per Item and Changes in Accounting Policies.

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Mar 31, 2014

A) Basis of Preparation of Financial Statement:

The Financial Statements are prepared on going concern assumption and under the historical cost convention, except for certain fixed assets which are revalued in accordance with generally accepted Accounting principles in India and the provisions of the Companies Act 1956.

B) Use of Estimates:

The preparation of financial statements requires estimates and assumption to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

C) Fixed Assets:

Fixed assets are stated at cost net of cenvat / value added tax and includes amounts added on revaluation, less accumulated depreciation, and impairment of loss, if any. All costs including financing costs till commencement of production, net charges on foreign exchange contracts and adjustments arising from exchange rate variation attributable to the fixed assets are capitalised as per the applicable standards.

D) Depreciation:

Depreciation on all fixed assets is provided on straight-line method at the rates specified in schedule - XIV of the Companies Act 1956. Intangible Assets (Computer Software) is amortized over a period of five years

E) Impairment of Asset:

The Carrying amount of asset is reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated. The recoverable amount is the greater of the asset''s net selling price and value in use, which is determined based on the estimated future cash flow discounted to their present values. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment loss is reversed if there has been change in the estimates used to determine the recoverable amount.

F) Inventories:

Items of inventories are valued at lower of cost or net realisable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing them to their respective present location and condition. Cost of raw material is determined on FIFO method.

G) Foreign Currency Transactions:

Foreign Currency Transaction are recorded at the exchange rates prevailing at the transaction date. Current Assets and Current Liabilities relating to Foreign Currency Transactions remaining unsettled at the balance Sheet dated are translated at the year end rates. The result gain/ loss, if any, is recognised in Profit & Loss Account.

H) Turnover:

Sales are recognised on despatch of goods from the factory.

I) Employee Benefits:

i. Gratuity:

The Company contributes towards Group Gratuity Fund (defined benefit retirement plan) administered by the Life Insurance Corporation Of India, for eligible employees. Under this scheme the settlement obligation remains with the Company, while the Life Insurance Corporation Of India administers the scheme and determines the premium to be contributed by the Company. The plan provides for a lump-sum payment to the vested employees on retirement or termination of employment, based on the respective employees'' salary and the years of service with the Company.

ii. Provident Fund:

Retirement benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged off to the profit and loss account of the year when the contributions to the fund are due. There are no other obligations other than the contributions to be remitted to the Provident Fund Authorities.

iii. Leave Encashment:

Provision for Leave Encashment is recognised in the books as per the actuarial valuation.

J) Borrowing Cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

K) Provision for Current and Deferred Tax:

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income tax Act, 1961. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognised and carried forward only to the extent is reasonably certain that there will be sufficient future income to recover such Deferred Tax Asset.

L) Minimum Alternate Tax Credit:

Minimum Alternate Tax Credit Entitlement is recognized in the books of account when there is convincing evidence that the Company will pay normal income tax during the specified period. The Entitlement is reviewed at each balance sheet date with regard to the correctness of the carrying amount.

M) Research and Development:

Capital expenditure incurred has been disclosed under separate heads of account and revenue expenditure incurred is charged off as a distinct item in the Profit and Loss account.

N) Claims:

Claims by and against the company, including liquidated damages, are recognised on acceptance basis.

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Mar 31, 2013

A) Basis of Preparation of Financial Statement:

The Financial Statements are prepared on going concern assumption and under the historical cost convention, except for certain fixed assets which are revalued in accordance with generally accepted Accounting principles in India and the provisions of the Companies Act 1956.

B) Use of Estimates:

The preparation of financial statements requires estimates and assumption to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

C) Fixed Assets:

Fixed assets are stated at cost net of cenvat / value added tax and includes amounts added on revaluation, less accumulated depreciation, and impairment of loss, if any. All costs including financing costs till commencement of production, net charges on foreign exchange contracts and adjustments arising from exchange rate variation attributable to the fixed assets are capitalised as per the applicable standards.

D) Depreciation:

Depreciation on all fixed assets is provided on straight-line method at the rates specified in schedule - XIV of the Companies Act 1956.

E) Impairment of Asset:

The Carrying amount of asset is reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated. The recoverable amount is the greater of the asset''s net selling price and value in use, which is determined based on the estimated future cash flow discounted to their present values. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment loss is reversed if there has been change in the estimates used to determine the recoverable amount.

F) Inventories:

Items of inventories are valued at lower of cost or net realisable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing them to their respective present location and condition. Cost of raw material is determined on FIFO method.

G) Foreign Currency Transactions:

Foreign Currency Transaction are recorded at the exchange rates prevailing at the transaction date. Current Assets and Current Liabilities relating to Foreign Currency Transactions remaining unsettled at the balance Sheet dated are translated at the year end rates. The result gain/ loss, if any, is recognised in Profit & Loss Account.

H) Turnover:

Sales are recognised on despatch of goods from the factory.

I) Employee Benefits:

i. Gratuity:

The Company contributes towards Group Gratuity Fund (defined benefit retirement plan) administered by the Life Insurance Corporation Of India, for eligible employees. Under this scheme the settlement obligation remains with the Company, while the Life Insurance Corporation Of India administers the scheme and determines the premium to be contributed by the Company. The plan provides for a lump-sum payment to the vested employees on retirement or termination of employment, based on the respective employees'' salary and the years of service with the Company.

ii. Provident Fund:

Retirement benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged off to the profit and loss account of the year when the contributions to the fund are due. There are no other obligations other than the contributions to be remitted to the Provident Fund Authorities.

iii. Leave Encashment:

Provision for Leave Encashment is recognised in the books as per the actuarial valuation.

J) Borrowing Cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

K) Provision for Current and Deferred Tax:

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income tax Act, 1961. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognised and carried forward only to the extent is reasonably certain that there will be sufficient future income to recover such Deferred Tax Asset.

L) Minimum Alternate Tax Credit:

Minimum Alternate Tax Credit Entitlement is recognized in the books of account when there is convincing evidence that the Company will pay normal income tax during the specified period. The Entitlement is reviewed at each balance sheet date with regard to the correctness of the carrying amount.

M) Research and Development:

Capital expenditure incurred has been disclosed under separate heads of account and revenue expenditure incurred is charged off as a distinct item in the Profit and Loss account.

N) Claims:

Claims by and against the company, including liquidated damages, are recognised on acceptance basis.

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Mar 31, 2012

A) Basis of Preparation of Financial Statement:

The Financial Statements are prepared on going concern assumption and under the historical cost convention, except for certain fixed assets which are revalued in accordance with generally accepted Accounting principles in India and the provisions of the Companies Act 1956.

B) Use of Estimates:

The preparation of financial statements requires estimates and assumption to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

C) Fixed Assets:

Fixed assets are stated at cost net of cenvat / value added tax and includes amounts added on revaluation, less accumulated depreciation, and impairment of loss, if any. All costs including financing costs till commencement of production, net charges on foreign exchange contracts and adjustments arising from exchange rate variation attributable to the fixed assets are capitalised.

D) Investments:

Investments in mutual funds are stated at cost and market value as on the date of Balance Sheet is disclosed in the schedule.

E) Depreciation:

Depreciation on all fixed assets is provided on straight-line method at the rates specified in schedule - XIV of the Companies Act 1956.

F) Impairment of Asset:

The Carrying amount of asset is reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated. The recoverable amount is the greater of the asset's net selling price and value in use, which is determined based on the estimated future cash flow discounted to their present values. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment loss is reversed if there has been change in the estimates used to determine the recoverable amount.

G) Inventories:

Items of inventories are valued at lower of cost or net realisable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing them to their respective present location and condition. Cost of raw material is determined on FIFO method.

H) Foreign Currency Transactions:

Foreign Currency Transaction are recorded at the exchange rates prevailing at the transaction date. Current Assets and Current Liabilities relating to Foreign Currency Transactions remaining unsettled at the balance Sheet date translated at the year-end rates. The result gain/ loss, if any, is recognised in Profit & Loss Account.

I) Turnover:

Sales are recognised on dispatch of goods from the factory.

J) Employee Benefits:

i. Gratuity:

The Company contributes towards Group Gratuity Fund (defined benefit retirement plan) administered by the Life Insurance Corporation Of India, for eligible employees. Under this scheme the settlement obligation remains with the Company, while the Life Insurance Corporation Of India administers the scheme and determines the premium to be contributed by the Company. The plan provides for a lump-sum payment to the vested employees on retirement or termination of employment, based on the respective employees' salary and the years of service with the Company.

ii. Provident Fund:

Retirement benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged off to the profit and loss account of the year when the contributions to the fund are due. There are no other obligations other than the contributions to be remitted to the Provident Fund Authorities.

iii. Leave Encashment:

Provision for Leave Encashment is recognised in the books as per the actuarial valuation.

K) Borrowing Cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

L) Provision for Current and Deferred Tax:

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income tax Act, 1961. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is not recognised in the books as matter of prudence.

M) Minimum Alternate Tax Credit:

Minimum Alternate Tax Credit Entitlement is recognized in the books of account when there is convincing evidence that the Company will pay normal income tax during the specified period. The Entitlement is reviewed at each balance sheet date with regard to the correctness of the carrying amount.

N) Research and Development:

Capital expenditure incurred has been disclosed under separate heads of account and revenue expenditure incurred is charged off as a distinct item in the Profit and Loss account.

O) Claims:

Claims by and against the company, including liquidated damages, are recognised on acceptance basis.

P) Public Issue expenses:

Public Issue expenses are written off over a period of 5 years.

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Mar 31, 2011

1. 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 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.

2. SIGNIFICANT ACCOUNTING POLICIES

A) Basis of Preparation of Financial Statement

The Financial Statements are prepared on going concern assumption and under the historical cost convention, except for certain fixed assets which are revalued in accordance with generally accepted Accounting principles in India and the provisions of the Companies Act 1956.

B) Use of Estimates

The preparation of financial statements requires estimates and assumption to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

C) Fixed Assets

Fixed assets are stated at cost net of cenvat / value added tax and includes amounts added on revaluation, less accumulated depreciation, and impairment of loss, if any. All costs including financing costs till commencement of production, net charges on foreign exchange contracts and adjustments arising from exchange rate variation attributable to the fixed assets are capitalised.

D) Investments

Investments in mutual funds are stated at cost and market value as on the date of Balance Sheet is disclosed in the schedule.

E) Depreciation

Depreciation on all fixed assets is provided on straight-line method at the rates specified in schedule – XIV of the Companies Act 1956.

F) Impairment of Asset

The Carrying amount of asset is reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated. The recoverable amount is the greater of the asset's net selling price and value in use, which is determined based on the estimated future cash flow discounted to their present values. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment loss is reversed if there has been change in the estimates used to determine the recoverable amount.

G) Inventories

Items of inventories are valued at lower of cost or net realisable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing them to their respective present location and condition. Cost of raw material is determined on FIFO method.

H) Foreign Currency Transactions

Foreign Currency Transaction are recorded at the exchange rates prevailing at the transaction date. Current Assets and Current Liabilities relating to Foreign Currency Transactions remaining unsettled at the balance Sheet date translated at the year end rates. The result gain/ loss, if any, is recognised in Profit & Loss Account.

I) Turnover

Sales are recognised on despatch of goods from the factory.

J) Employee Benefits

i. Gratuity:

The Company contributes towards Group Gratuity Fund (defined benefit retirement plan) administered by the Life Insurance Corporation Of India, for eligible employees. Under this scheme the settlement obligation remains with the Company, while the Life Insurance Corporation Of India administers the scheme and determines the premium to be contributed by the Company. The plan provides for a lump-sum payment to the vested employees on retirement or termination of employment, based on the respective employees' salary and the years of service with the Company.

ii. Provident Fund

Retirement benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged off to the profit and loss account of the year when the contributions to the fund are due. There are no other obligations other than the contributions to be remitted to the Provident Fund Authorities.

iii. Leave Encashment

Provision for Leave Encashment is recognised in the books as per the actuarial valuation.

K) Borrowing Cost

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

L) Provision for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income tax Act, 1961. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is not recognised in the books as matter of prudence.

M) Minimum Alternate Tax Credit

Minimum Alternate Tax Credit Entitlement is recognized in the books of account when there is convincing evidence that the Company will pay normal income tax during the specified period. The Entitlement is reviewed at each balance sheet date with regard to the correctness of the carrying amount.

N) Research and Development

Capital expenditure incurred has been disclosed under separate heads of account and revenue expenditure incurred is charged off as a distinct item in the Profit and Loss account.

O) Claims

Claims by and against the company, including liquidated damages, are recognised on acceptance basis.

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Mar 31, 2010

A) Basis of Preparation of Financial Statement:

The Financial Statements are prepared on going concern assumption and under the historical cost convention, except for certain fixed assets which are revalued in accordance with generally accepted Accounting principles in India and the provisions of the Companies Act 1956.

B) Use of Estimates:

The preparation of financial statemenrs requires estimates and assumption to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

C) Fixed Assets:

Fixed assets are stated at cost net of cenvat / value added tax and includes amounts added on revaluation, less accumulated depreciation, and impairment of loss, if any. All costs including financing costs till commencement of production, net charges on foreign exchange contracts and adjustments arising from exchange rate variation attributable to the fixed assets are capitalised.

D) Investments:

Investments in mutual funds are stated at cost and market value as on the date of Balance Sheet is disclosed in the schedule.

E) Depreciation:

Depreciation on all fixed assets is provided on straight-line method at the rates specified in schedule - XIV of the Companies Act 1956.

F) Impairment of Asset:

The Carrying amount of asset is reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated. The recoverable amount rs the greater of the assets net selling price and value in use, which is determined based on the estimated future cash flow discounted to their present values. An impairment loss i^, recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment loss is reversed if there has been change in the estimates used to determine the recoverable amount.

G) Inventories:

Items of inventories are valued at lower of cost or net realisable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing them to their respective present location and condition. Cost of raw material is determined on FIFO method.

H) Foreign Currency Transactions:

Foreign Currency Transaction are recorded at the exchange rates prevailing a! the transaction date. Current Assets and Current Liabilities relating to Foreign Currency Transactions remaining unsettled at the balance Sheet date translated at the year end rates. The result gain/ loss, if any, is recognised in Profit & Loss Account.

I) Turnover:

Sales are recognised on despatch of goods from the factory.

J) Employee Benefits:

i. Gratuity:

The Company contributes towards Group Gratuity Fund (defined benefit retirement plan) administered by the Life Insurance Corporation Of India, for eligible employees. Under this scheme the settlement obligation remains with the Company, while the Life Insurance Corporation Of India administers the scheme and determines the premium to be contributed by the Company. The plan provides for a lump-sum payment to the vested employees on retirement or termination of employment, based on the respective employees salary and the years of service with the Company.

ii. Provident Fund:

Retirement benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged off to the profit and loss account of the year when the contributions to the fund are due. There are no other obligations other than the contributions to be remitted to the Provident Fund Authorities.

iii. Leave Encashment:

Provision for Leave Encashment is recognised in the books as per the actuarial valuation.

K) Borrowing Cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

L) Provision for Current and Deferred Tax:

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income tax Act, 1961. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is not recognised in the books as mater of prudence.

M) Research and Development:

Capital expenditure incurred has been disclosed under separate heads of account and revenue expenditure incurred is charged off as a distinct item in the Profit and Loss account.

N) Claims:

Claims by and against the company, including liquidated damages, are recognised on acceptance basis.