xvii) Provision and contingencies
a) Provisions
Provisions are recognized when there is a present obligation as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and there is a reliable estimate of the amount of the obligation. Provisions are
measured at the best estimate of the expenditure required to settle the present obligation at the
year end.
If the effect of the time value of money is material, provisions are discounted using a current pre¬
tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is
used, the increase in the provision due to the passage of time is recognized as a finance cost.
b) Contingencies
Contingent liabilities are disclosed when there is a possible obligation arising from past events,
the existence of which will be confirmed only by the occurrence or non-occurrence of one or
more uncertain future events not wholly within the control of the company or a present
obligation that arises from past events where it is either not probable that an outflow of resources
will be required to settle or a reliable estimate ofthe amount cannot be made.
Contingent liabilities and assets are not recognised in financial statements. A disclosure of the
contingent liability is made when there is a possible or a present obligation that may, but
probably will not, require an outflow ofresources.
xviii) Earnings Per Share
Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to
equity shareholders by the weighted average number of equity shares outstanding during the year.
Earnings considered in ascertaining the company's earnings per share is the net profit or loss for the
year after deducting preference dividends and any attributable tax thereto for the year. The weighted
average number of equity shares outstanding during the year and for all the years presented is
adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that
have changed the number of equity shares outstanding, without a corresponding change in
resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year
attributable to equity shareholders and the weighted average number of shares outstanding during
the year is adjusted for the effects of all dilutive potential equity shares.
xix) Dividend Distribution
The company recognizes a liability to make the payment of dividend to owners of equity, when the
distribution is authorised and the distribution is no longer at the discretion of the company. As per the
corporate laws in India, a distribution is authorised when it is approved by the shareholders. Any
interim dividend paid is recognised on approval by Board of Directors. Dividend payable / paid, is
recognised directly in equity.
xx) Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the
effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash
receipts or payment and items of income or expenses associated with investing or financing cash
flows. The cash flows from operating, investing and financing activities of the company are
segregated.
xxi) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks, cash on hand and short-term
deposits with an original maturity of three months or less, which are subject to an insignificant risk of
changes in value.
xxii) Segment Reporting
The management assesses and identifies the reportable segments in accordance with the
requirements of Ind AS 108 ‘Operating Segment’. The company has only one reportable segment
viz., “manufacture and sale of Chemicals”
xxiii) Prior Period Items
Material prior period errors are corrected retrospectively by restating the comparative amounts for
prior period presented in which the error occurred or if the error occurred before the earliest period
presented, by restating the opening statement of financial position.
3. New Standards, Interpretations and amendments to existing Ind AS:
Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing
standards under Companies (Indian Accounting Standards) Rules as issued from time to time.
i) In May 2025, MCA notified amendments to Ind AS 21 - The Effects of Changes in Foreign
Exchange Rates, applicable w.e.f. 1st April , 2025.
The Company has reviewed the amendment and based on its evaluation has determined that it
does not have any significant impact on its financial statements for the current year.
ii) In August 2025, MCA notified the following amendments to:
a) Ind AS 1, Presentation of Financial Statements and applicable w.e.f. 1st April, 2025 - The
amendment relates to classification of liabilities as current or noncurrent and non-current
liabilities with covenants. In the context of classifying a liability as current, it removes the
requirement of existence of a right to defer settlement for at least 12 months after the
reporting date and instead requires that the said right should exist on the reporting date and
have substance. The amendment also introduces guidance on classification of liabilities with
covenants. The company has no impact of these amendments in its classification criteria of
current and non-current liabilities.
b) Ind AS 7, Statement of Cash Flows and Ind AS 107, Financial Instruments: Disclosures,
applicable w.e.f. 1st April, 2025 - The amendment in Ind AS 7 requires to inform users of
financial statements of the existence of supplier finance arrangements and explain the nature
of the arrangements, the carrying amount of liabilities and the range of payment due dates.
Ind AS 107 has been amended to add supplier finance arrangements as a factor that may
cause concentration of liquidity risk. The company has reviewed the amendment and based
on its evaluation has determined that it does not have any impact in its financial statements.
c) Ind AS 12, Income Taxes: International Tax Reform - Pillar Two Model Rules applicable
immediately - The amendments provide a temporary mandatory relief from deferred tax
accounting for top-up tax and disclose that they have applied the relief. The remaining
disclosure requirements apply for annual reporting periods beginning on or after
1st April, 2025
The amendments had no impact on the company’s financial statements as the company is not
in scope ofthe Pillar Two model rules.
14.1 The Company has only one class of issued, subscribed and paid-up equity shares having a par value
of ' 10 each per share. Each holder of equity shares is entitled to one vote per share. The Company
declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is
subject to the approval of the shareholders in the Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive
remaining assets of the Company, after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by each of the shareholders.
*During the year, the Company has presented accumulated Other Comprehensive Income (‘OCI’) separately. In
earlier years, OCI balances were included in Retained Earnings. Accordingly, comparative balances as at
1st April 2024 have been regrouped/reclassified. This regrouping has no impact on total equity or profit of the
Company.
Nature and purpose of reserves:
Security premium: This is the premium received on issue of equity shares and will be utilised as per the
applicable provisions of the Act.
Revaluation Reserve: This is the revaluation reserve created on revaluation of company's land during
FY 1992-93.
Capital Reserve: This is the Investment Subsidy received under Govt. scheme during FY 2014-15.
General reserves: This is the amount transferred from retained earnings and will be utilised as per the applicable
provisions of the Act.
Retained earnings: This is the profits that the company has earned till date, less transfers to General Reserves,
Dividends or other distribution to the shareholders.
Other comprehensive income: This comprises of actuarial gain/(loss) [net of taxes] at the end of the reporting
period.
16.1 Deferred payment liability - Interest free sales tax loan
The Company was sanctioned Interest Free Sales Tax Deferment of ' 345.86 lakhs under Target -
2000 Scheme by the Government of Andhra Pradesh vide final eligibility Certificate No. LR
4/2001/0878/0878/ID dt. 24th July 2001, for a period of 14 years starting from 20th March 1999 to
19th March 2013. The Company has availed itself of total Sales Tax Deferment of ' 269.79 Lakhs up
to 31st March 2013 and the same is shown as liability in the Balance Sheet. The repayment started
from March, 2016 and the Company has made the payments as per the final eligibility certificate. An
amount of ' 27.56 lakhs is payable in the financial year 2026-27 hence shown under the Other
Financial Liabilities under Current Liabilities Pursuant to requirement under Ind AS 109 on
financial instruments and in view ofthe option exercised under Ind AS 101 on first time adoption of
Ind AS, un-winding of interest using effective interest rate was made and the deferred grant carved
out, from the said loan, is being amortised in equal installments over the remaining repayment
period ofthe IFST loan.
Security Details for Cash Credit and Export Packing Credit:
Working Capital Loan from Bank and interest accrued on the loan are secured by hypothecation of raw
materials, work in progress, finished goods, stores and spares and book debts of the Company and a first
charge on all Movable and immovable properties as mentioned below and personal guarantee of the
Managing Director of the Company.
a. ) Equitable Mortgage on unit III industrial land admeasuring Ac 16.42, located in JNPC Pharma city,
Plot No 36, 37 & 38 under Sy No part of2,3,4,7,8,10 & 12 of Thanam Revenue village of Parwada
Mandal in Vizag standing in the name of company M/s Alkali Metals Ltd.
b. ) Equitable Mortgage on unit II industrial land admeasuring Ac 5.15 along with buildings situated at
Sy No 299, 300, 301 and 302, Dommara Pochampally, RR Dist (Unit II) belongs to company
M/s Alkali Metals Ltd.
c. ) Equitable Mortgage on industrial land admeasuring 25051.84 Sq Yds along with building at Unit I
situated at Plot No B5, Block 3, Uppal IDA, Hyderabad belongs to M/s Alkali Metals Ltd.
This limit is also secured by Pledge of 21,30,000 equity shares of the company held by Managing
Director of the company.
i) There were no defaults as on current balance sheet date and previous year in repayment of all the
above borrowings and interest thereon.
ii) Company’s borrowings from Banks on the basis of security of current assets, the quarterly returns
or statements filed by the company with Banks are in agreement with the books of account.
iii) There are no charges or satisfaction which are yet to be registered with ROC beyond the statutory
period in respect ofthe above borrowings.
35. DISCLOSURE UNDER IND AS-115, REVENUE FROM CONTRACTS WITH CUSTOMERS
FOR THE REVENUE RECOGNISED UNDER BILL-AND-HOLD ARRANGEMENT.
During the year, upon receipt of requests from two customers situated in Belgium and Spain, who
expressed inability to receive the ordered goods from the company due to ongoing war in West Asia,
the company upon noting the fulfilment of criteria specified in IND AS-115, recognized the revenue in
respect of the invoices raised on these customers under Bill and hold arrangement
The following disclosures are made in respect of the revenue recognised under Bill-and-hold
arrangement:
i) Nature of Bill-and-Hold Arrangement
During March 2026, when the company was ready to dispatch the ordered goods to the above
customers, they requested to raise the invoice but hold the goods due to restrictions on international
movement of goods through sea route on account of war in West Asia, till further instructions. The
customers have explicitly requested the company to send the invoices for these goods as per usual
credit terms allowed to them.
On receipt ofthe request from the customers, the company identified the goods intended to be supplied
and kept the same separately and raised invoices aggregating to ' 993.40 Lakhs and recognized the
same as income under bill and hold arrangement during the current year as the criteria laid down in
IND AS-115 has been fulfilled.
Subsequent to the reporting period, goods invoiced under Bill-and-hold arrangement were delivered
to the customers.
ii) Judgements used in determining transfer of control:-
The following criteria stipulated in IND AS-115 for determining the transfer of control over the goods
to customers has been fulfilled.
• Reason for the Bill and hold Arrangement is substantive: Request from the customers expressing
inability to receive the goods with valid reason was received in-time.
• Goods intended to be supplied were complete in all respects and ready for physical transfer to the
customers
• Goods intended to be supplied to the customers were specifically identified as belonging to the
customers, segregated and kept separately.
• The company has not redirected the goods intended to the customers to any other customer or did
not otherwise use them.
• The goods which were sold under bill and hold arrangement was not considered as inventory for
reporting to the lenders as at the year end.
• The company has a present right to payment for the goods sold.
• The customers have legal title to the goods sold to them.
• The company though has not transferred physical possession of the goods sold, the customers have
control over the same.
• The customer has the significant risks and rewards of ownership ofthe goods sold.
• The customers have accepted the goods sold.
• The company has no remaining performance obligations to which the company has to allocate a
portion ofthe transaction price.
• Customers confirmed to the company that any loss to the goods sold while they are with the
company, should be to the account of customers and not to the company.
In the light of the fulfillment of the above criteria laid down in Para 38 and Paras B79 to B82 of Ind AS
115 and the subsequent delivery of the specific goods to the customers, it is determined that transfer of
control over the goods to the customers is satisfied. Accordingly, revenue from sale of goods to these
two customers has been recognized under bill and hold arrangement.
Note: In respect of item Nos. (3), (4) and (5) above, the Management, on the basis of its internal assessment
of the facts of the cases, the underlying nature of transactions, is of the view that the probability of the cases
being settled against the company is remote and accordingly do not force any adjustment to these financial
statements in this regard. Hence, the same have not been provided for.
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.
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.
38. SEGMENT REPORTING
The Managing Director of the company has been identified as the Chief Operating Decision Maker
(CODM) as required by 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.
40. LEASES
The Company's significant leasing arrangements are in respect of operating leases for premises. The
leasing arrangements are generally cancellable leases which range less than 12 months and are usually
renewable by mutual consent on agreed terms.
The Company’s objectives when managing capital are to safeguard their ability to continue as a going
concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders,
and maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the
capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to
shareholders, issue new shares or sell assets to reduce debt.
The Company’s activities expose it to a variety of financial risks, including market risks, credit risks and
liquidity risks. The Company’s primary risk management focus is to minimize potential adverse effects of
market risk on its financial performance. The Company’s risk management assessment and policies and
processes are established to identify and analyse the risks faced by the Company, to set appropriate risk
limits and controls, and to monitor such risks and compliance with the same. Risk assessment and
management policies and processes are reviewed regularly to reflect changes in market conditions and the
Company’s activities. The Board of Directors and the Audit Committee is responsible for overseeing the
Company’s risk assessment and management policies and processes.
a) Market Risk:
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity
prices, will affect the Company’s income or the value of its holdings of financial instruments. Market risk is
attributable to all market risk sensitive financial instruments including foreign currency receivables and
payables and long-term debt. The objective of market risk management is to manage and control market
risk exposures within acceptable parameters, while optimising the return
b) Foreign Currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because
of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange
rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in a
foreign currency) in United States Dollar (‘USD’)
The Company’s exposure to foreign currency risk from non-derivative financial instruments at the end of
the financial year, are as follows:
Foreign currency sensitivity
The impact on the Company’s profitability and equity is due to changes in the fair value of monetary assets
and liabilities including non-designated foreign currency derivatives are as follows:
ii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Company’s fixed rate borrowings are carried at amortised
cost and hence are not subject to interest rate risk as defined in Ind AS 107, since neither the carrying
amount nor the future cash flows will fluctuate because of a change in market interest rates. Further, the
Company’s investments in deposits is with banks and electricity authorities and therefore do not expose the
Company to significant interest rates risk. The Company’s main interest rate risk arises from borrowings
with variable rates, which expose it to cash flow interest rate risk
iii) Price risk
The Company does not have any investments which are classified in the balance sheet either as fair value
through OCI or at fair value through profit or loss.
a. Credit Risk:
Credit risk is the risk of loss that may arise on outstanding financial instruments when counter party defaults
on its obligations. The Company’s exposure to credit risk arises primarily from loans extended, security
deposits, balances with bankers and trade and other receivables. The Company minimises credit risk by
dealing exclusively with high credit rating counterparties. The Company’s objective is to seek continual
revenue growth while minimising losses incurred due to increased credit risk exposure. The Company
trades only with recognised and creditworthy third parties. It is the Company’s policy that all customers
who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable
balances are monitored on an ongoing basis with the result that the Company’s exposure to bad debts is not
significant. The company recognizes provisions for credit impaired receivables based on delay in
realisation.
Credit Risk Exposure:
At the end of the reporting period, the Company’s maximum exposure to credit risk is represented by the
carrying amount of each class of financial assets recognised in the statement of financial position. No other
financial assets carry a significant exposure to credit risk.
b. Liquidity Risk:
The Company’s principal sources of liquidity are cash and cash equivalents and the cash flow that is
generated from operations. The Company has short term borrowings from banks. Short term loans
repayable on demand from banks are obtained for the working capital requirements of the Company.
The company had following working capital at the end of the reporting year
d) Excessive risk concentration
Concentrations arise when a number of counter parties are engaged in similar business activities, or
activities in the same geographical region, or have economic features that would cause their ability to meet
contractual obligations to be similarly affected by changes in economic, political or other conditions.
Concentrations indicate the relative sensitivity of the Company’s performance to developments affecting a
particular industry.
47. DISCLOSURE PURSUANT TO REQUIREMENTS OF RULE 11(E) (I) & (II) OF THECOMPANIES (AUDIT AND AUDITORS) RULES, 2014
i. No funds have been advanced or loaned or invested (either from borrowed funds or share premium or,
any other sources or kind of funds) by the Company to or in any other person or entity, including
foreign entities (“Intermediaries") with the understanding, whether recorded in writing or otherwise,
that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate
Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the
understanding that the Company shall whether, directly or indirectly lend or invest in other persons or
entities identified by or on behalf of the Company ("Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf of the Ultimate Beneficiaries.
ii. No funds have been received by the Company from any person or entity, including foreign entity
(“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the
Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in
any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide
any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
48. CORPORATE SOCIAL RESPONSIBILITY (CSR)
As the Company is not covered U/s.135 of the Companies Act, 2013, disclosure with regard to CSR
activities is not applicable.
49. DISCLOSURE U/S.186(4) OF THE COMPANIES ACT, 2013
During the year under review, The Company has not given any loans, made Investment, given Guarantee,
provided Security to any others.
50. ADDITIONAL REGULATORY INFORMATION
i. The company has used the borrowings from Banks for the specific purpose for which they were
taken.
ii. In the opinion of the board, the assets other than PPE and Intangible assets and non-current
investments, have a value on realization in the ordinary course of business of atleast equal to the
amount at which they are stated in the balance sheet.
iii. The company has not granted any loans or advances in the nature of loans to promoters, directors,
KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly
with any other person that are repayable on demand; or without specifying any terms or period of
repayment.
iv. The company has no Capital Work-in-progress during the year.
v. No Proceeding has been initiated or pending against the company under the Benami Transactions
(Prohibition) Act, 1988 and the rules made thereunder.
vi. In respect of the borrowings from Banks on the basis of security of current assets, the quarterly
returns or statements of current assets filed by the company with the Banks are in agreement with
the books of account of the company.
vii. The company is not a declared wilful defaulter by any Bank or Financial Institution or other lender.
viii. The company has no transactions with companies struck off under Sec.248 of the companies Act,
2013 or Sec.560 of the Companies Act, 1956.
ix. There are no Charges or Satisfaction which are yet to be registered with ROC beyond the statutory
period.
x. As the Company does not have any downstream companies, the compliance with regard to the
number of layers prescribed under Clause (87) of Section 2 of the Companies Act, 2013 read with
Companies (Restrictions on Number of Layers), Rules, 2017 and the disclosure requirements of the
names of such Companies and their CIN, beyond specified layers and the relation and extent of
holding, are not applicable.
xi. The Company does not have any transaction which is not recorded in the books of account that has
been surrendered or disclosed as income during the year in tax assessments under the Income Tax,
1961. The Company does not also have any previously unrecorded income and related assets that
are properly required to be recorded in the books of account during the year.
xii. The Company has not traded or invested in crypto currency or any virtual currency during the
financial year.
xiii. During the year, no scheme of arrangements has been approved by the competent authority in terms
of Sec. 230 to 237 of the Act, in which the company is a party.
xiv. A) The company has not advanced or loaned or invested funds (either borrowed funds or share
premium or any other sources or kind of funds) to any other person(s) or entity(ies) including
foreign entities (intermediaries) with the understanding (whether recorded in writing or otherwise)
that the intermediary shall (i) directly or Indirectly lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries); or
(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
B) The company has not received any fund from any person(s) or entity (ies), including foreign
entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the
company shall (i) directly or indirectly lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (ii) provide
any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
51. Pursuant to the implementation of the new labour code effective from 21st November, 2025 by the
Government of India, the Company has reassessed the impact of the changes based on actuarial valuation
and does not have material impact on the financial statements. The Company will continue to monitor the
finalization of central and state rules, clarifications from the government on other aspects of the labour
code and will provide appropriate impact as needed.
52. Previous Year’s figures have been regrouped / reclassified wherever necessary to correspond with the
Current Year's classification/ disclosure.
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