Notes to Accounts of Alkali Metals Ltd.

Mar 31, 2018

Notes to Account

38. Disclosure as per Schedule III of the Act and Ind AS-37 on Provisions, Contingent Liabilities and Contingent assets

i. CONTINGENT LIABILITIES

Claim against the Company not acknowledged as debts: (All figures in INR)

	March 31 ,2018	March 31, 2017
Sewerage cess claimed by HMWS & SB	3,423,498	3,014,786

ii. COMMITMENTS

(All figures in INR)

	March 31 ,2018	March 31, 2017
Estimated amount of contracts remaining to be executed on capital account and not provided for	2,921,711	2,921,711

39. Disclosure as per Ind AS - 12 Income tax

A. Income tax assessments:

The Company''s income tax assessments were completed upto A.Y. 2015-16

B. The tax effects of significant temporary differences that resulted in deferred income tax asset and liability are as follows: (All figures in INR)

Particulars	March 31 ,2018	March 31, 2017	April 1, 2016
Difference in WDV of PPE and Intangible assets	(213,126,542)	(220,853,441)	(229,733,871)
Carried forward losses	265,471,851	284,144,490	284,436,338
Post Employment Benefits	5,341,807	3,139,145	1,895,411
Other disallowances	-	-	-
Net timing differences	57,687,117	66,430,194	56,597,877
Deferred Taxes Asset there on at applicable rates	15,894,243	21,963,815	18,712,956

40. Disclosure as per Ind AS-19 - Employee benefits A. Defined Contribution Plan

Contribution to Defined Contribution Plan recognised as expenses for the financial year as under: (All figures in INR)

	2017-18	2016-17
Employer''s Contribution to Provident Fund	2,705,357	2,854,583
Employer''s Contribution to ESI	434,524	415,695

B. Defined Benefit Plan

I. Gratuity obligation of the Company

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 recognised 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 obligation for leave encashment is recognised in the books as per Actuarial Valuation.

Assets and Liability (Balance sheet position)

(All figures in INR)

Particulars	March 31, 2018	March 31, 2017
Present value of obligation	11,222,225	10,791,850
Fair value of plan assets	(141,455)	(119,802)
Surplus / (deficit)	956,170	550,177
Contributions paid	1,686,443	-
Net asset / (liability)	13,723,383	11,222,225

Expense recognised during the period

(All figures in INR)

Particulars	March 31, 2018
In Income statement (P&L A/c - expense provision)	1,892,157
In other comprehensive income (Balance sheet item)	(390,941)

Changes in the present value of obligation

(All figures in INR)

Particulars	For the period ending
	March 31 ,2018	March 31 ,2017
Present value of obligations as at the beginning	12,929,309	11,841,256
Interest cost	880,486	871,442
Current Service Cost	823,695	794,179
Past service cost - (Vested benefits)	1,000,000	-
Benefits Paid	-	(319,460)
Actuarial (Gain) / Loss on obligation	(246,795)	(258,108)
Present value of obligations as at the end	15,386,695	12,929,309
Bifurcation of net liability
Current liability (Short Term)	3,759,934	2,178,915
Non-current liability (Long Term)	11,626,761	10,750,394
Net liability	1,663,312	1,707,084

Changes in the fair value of plan assets

(All figures in INR)

Particulars	For the period ending
	March 31 ,2018	March 31, 2017
Fair value of plan assets as at the beginning	11,222,225	10,791,850
Adjustment to opening Fair value of plan asset	(141,455)	(119,802)
Return on plan assets excluding Interest Income	144,146	85,418
Contributions by employer	1,686,443	-
Interest Income	812,024	784,219
Benefits Paid	-	(319,460)
Fair value of plan assets as at the end	13,723,383	11,222,225

Expense recognised in the Income Statement

(All figures in INR)

Particulars	March 31, 2018
Current Service Cost	823,695
Past Service Cost	1,000,000
Interest Cost	68,462
Expense recognised in the Income statement	1,892,157

Other Comprehensive Income

(All figures in INR)

Particulars	March 31, 2018
Actuarial (gains) / losses
Actuarial (gains) / losses on obligations	(246,795)
Actuarial (gains) / losses on plan assets	(144,146)
Total OCI	(390,941)

II. Long Term compensated absences - Leave Encashment Assets and Liability (Balance sheet position)

(All figures in INR)

Particulars	March 31, 2018	March 31, 2017
Present value of obligation	1,432,061	846,005
Fair value of plan assets	-	-
Surplus / (deficit)	(173,116)	586,056
Net asset / (liability)	1,258,945	1,432,061

Expense recognised during the period

(All figures in INR)

Particulars	March 31, 2018
In Income statement (P&L A/c - expense provision)	1,067,407

Changes in the present value of obligation

(All figures in INR)

	For the period ending
Particulars	March 31, 2018	March 31, 2017
Present value of obligations as at the beginning	1,432,061	846,005
Interest cost	97,523	40,983
Current Service Cost	969,884	948,946
Benefits Paid	-	(593,279)
Actuarial (Gain) / Loss on obligation	(1,240,523)	189,406
Present value of obligations as at the end	1,258,945	1,432,061
Bifurcation of net liability
Current liability (Short Term)	220,173	135,277
Non-current liability (Long Term)	1,038,772	1,296,784
Net liability	1,258,945	1,432,061

Changes in the fair value of plan assets

(All figures in INR)

Particulars	For the period ending
	March 31, 2018	March 31, 2017
Fair value of plan assets as at the beginning	-	-
Adjustment to opening Fair value of plan asset	-	-
Return on plan assets excluding Interest Income	-	-
Interest Income	-	-
Contribution by employer	-	593,279
Benefits Paid	-	-
Fair value of plan assets as at the end	-	-

Expense recognised in the Income Statement

(All figures in INR)

Particulars	March 31, 2018
Current Service Cost	969,884
Past Service Cost	-
Interest Cost	97,523
Expense recognised in the Income statement	1,067,407

I. Actuarial assumptions:

	Gratuity (Funded) 2017-18	Leave Encashment (Non funded) 2017-18	Gratuity (Funded) 2016-17	Leave Encashment (Non funded) 2016-17
Mortality Table (LIC)	7.33%	7.33%	6.81%	6.81%
Discount rate (per annum)	3.00%	3.00%	3.00%	3.00%
Expected rate of return on plan assets (Per annum)	10.10	9.12	10.13	9.55
Rate of escalation in salary (per annum)	5%	5%	5%	5%

The estimates of rate of escalation in salary considered in actuarial valuation, taking 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.

41. Disclosure as per Ind AS - 21 - The effects of changes in foreign exchange rates Un-hedged foreign currency exposure at the year end: (All figures in INR)

Particulars	March 31, 2018	March 31, 2017
Trade payables	95,29,996	14,176,311
Trade receivables	58,818,646	70,313,160

Particular	March 31, 2018	March 31, 2017
a. Exchange differences arising out of settlement / translation on account of export sales for the year	30,591	19,65,376
b. Exchange differences arising out of settlement / translation on account of previous year imports	633,173	(116,910)
c.Exchange differences arising out of settlement / translation on account of others	626,231	574,465
Net gain / (loss) recognised during the year	1,289,995	2,422,931

42. Disclosure as per Ind AS - 33 Earning per Share:

Particulars	March 31, 2018	March 31, 2017
Total No. of Shares	10,182,506	10,182,506
Profit after Taxes and exceptional items (In INR)	14,700,120	3,527,961
Earning per share Basic & Diluted (INR 10 per share)	1.44	0.35

43. Disclosure as per Ind AS-108 Operating segments:

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 Ind AS 108 issued by ICAI.

a. Segment Revenue:

Geographical Location	March 31 ,2018		March 31 ,2017
	INR	%	INR	%
Domestic	388,360,942	59.04	321,729,633	52.64
External	269,437,370	40.96	289,506,165	47.36
Total	657,798,312		611,235,798

b. Segment Assets (Trade Receivables):

Geographical Location	March 31 ,2018		March 31 ,2017
	INR	%	INR	%
Domestic	82,142,964	58.24	32,475,827	31.59
External	58,826,884	41.76	70,313,160	68.41
Total	140,969,848	100.00	102,788,987	100.00

c. Other Disclosures:

Geographical Location	Carrying Amount of Segment Assets		Additions to Fixed Assets
	March 31 2018	March 31 2017	March 31 2018	March 31 2017
	INR	INR	INR	INR
Unallocable Assets	830,392,602	824,776,476	5,002,409	856,743

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

44. Disclosure as per Ind AS - 24 - Related party disclosures

(All figures in INR)

SI.No.	Particulars of the Party	Nature of Relationship	Transaction	Transactions during the year 2017-18	Closing balance at the end of the year 2017-18
1	Sri Y.S.R. Venkata Rao	Managing Director	Remuneration paid	4,997,304	-
			Commission	1,193,457
2	Mr. YV.Prashanth	Executive Director	Remuneration paid	3,225,000	-
			Commission	1,193,457	-
3	P. Sankara Rao	Chief Financial Officer	Remuneration paid	1,209,747	-
4	Ms. M. Neeharika	Company Secretary	Remuneration paid	314,368	-

45. Remuneration to Auditor (excluding GST):

(All figures in INR)

	2017-18	2016-17
Statutory Audit	550,000	400,000
Taxation Matters	75,000	50,000
Other Services	129,000	245,500

46. Previous year figures as per previous GAAP have been regrouped / re arranged / reclassified wherever considered necessary to conform to the classifications / disclosures of the current year.

As per our Report attached	For and on Behalf of Board of Directors
	Alkali Metals Limited
For C K S Associates
Chartered Accountants
FRN 007390S
N V S SRIKRISHNA	Y.S.R.VENKATA RAO	DR.J.S.YADAV
PARTNER	MANAGING DIRECTOR	CHAIRMAN
M.NO.025139	DIN: 00345524	DIN: 02014136
Place : Hyderabad	M.NEEHARIKA	P.SAN KARA RAO
Dated : 12.05.2018	COMPANY SECRETARY	CFO

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Mar 31, 2017

1. History

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 & N SE. Originally set up for manufacturing of Sodium Metal, the company subsequently diversified into manufacturing of Sodium derivatives, Pyridine derivatives, Fine Chemicals and APIs 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.

ii. Defined Benefit Plan

The Employees ’Gratuity Fund Scheme managed by a Trust is a defined benefit plan. The present value o 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 consider actuarial valuation, ka 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 temperate 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. 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 t year, the Company has substantial amount of carried forward losses under the Income Tax Act which resulted in Deferred Tax Asset. The details of and liabilities of the Company as on the date of Balance Sheet are given below:

However, as a matter of prudence, the Company has not recognized the same in the books of account.

3. Segment Reporting

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

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

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

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Mar 31, 2016

1. HISTORY

Alkali Metals Ltd. which was established in 1968, Hyderabad, Telangana, India, as a closely held company, became a Public Listed company on 6thNovember, 2008 being listed on BSE & NSE. Originally set up for manufacturing of Sodium Mehe company subsequently diversified into manufacturing of Sodium derivatives, Pyridiner derives, Fine Chemicals and APIs 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 mouse R &D Facility. ‘The company has three manufacturing units, at Uppal, Domma Pachampally and JNPC Visakhapatnam.

2. The Disclosures of Employee Benefits as by Accounting Standard ~ 5 (Revised) Employee Benefits, ’ are given below:

3. Defined Contribution Plan

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

4. Defined Benefit Plan

The Employees Gratuity Fund Scheme managed by Trust is a defined benefit plan. The present value of obligation is determined based on actual 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 build up the final obligation.

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 Accountants of India As at the end of the year, the Company has substantial amount of car forward losses under the Income Tax Act which resulted in Deferred Tax Asset. The details of¹ 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 Company has identified geographical segments based on location of customers as reportable segments accordance with AS 7 issued by ICAI.

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

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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.

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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.

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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.

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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

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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

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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