3.10. Provision for Current Tax 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 amounts 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 recoveror
settle the carrying amount of its assets and liabilities.
c. Current Tax 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.
3.11. 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.
3.12. 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 Statement of Profit and Loss.
3.13. Financial Instruments (Financial Assets and Financial Liabilities):
All Financial Instruments are recognized initially at fair value. The classification of Financial Instruments
depends on the objective of the business model for which it is held and the contractual cash flows that are
solely payments of principal and interest on the principal outstanding. For the purpose of subsequent
measurement, Financial Instruments of the Company are classified into(a) Non-Derivate Financial
Instruments and (b) Derivative Financial Instruments.
a. Non-Derivative Financial Instruments:
• Security Deposits, Cash and Cash Equivalents, Other Advances, Trade Receivables and Eligible
Current and non-current financial assets are classified as financial assets under this clause.
• Loans and borrowings, trade and other payables including deposits collected from various parties
and eligible current and non-current financial liabilities are classified as financial liabilities under
this clause.
• Financial instruments are subsequently carried at amortized cost.
• Transaction costs that are attributable to the financial instruments recognized at amortized cost
are included in the fair value of such instruments.
b. Derivative Financial Instruments:
• The policy in respect of Derivatives will be formulated as and when required.
3.14. Claims
Claims by and against the Company, including liquidated damages, are recognised on acceptance basis.
3.15. Leases:
The Company’s lease asset classes primarily consist of leases for land and building. The Company assesses
whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to control the use of an identified asset, the
Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company avails
itself substantially all of the economic benefits from use of the asset through the period of the lease and (iii)
the Company has the right to direct the use of the asset. At the date of commencement of the lease, the
Company recognizes a right-of-use asset (“ROU”) and a corresponding lease liability for all lease
arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term
leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease
payments as an operating expense on a straight-line basis over the term of the lease.
As a lessee, the Company determines the lease term as the non-cancellable period of a lease adjusted with
any option to extend or terminate the lease, if the use of such option is reasonably certain.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of
the lease term and useful life of the underlying asset. The lease liability is initially measured at amortized
cost at the present value of the future lease payments. The lease payments are discounted using the interest
rate implicit in the lease.
Lease liability and Right to Use assets have been separately presented in the Balance Sheet and lease
payments have been classified as financing cash flows.
Disclosures:
18.1 Deferred payment liability - Interest Free Sales Tax Loan (IFST)
The Company was sanctioned Interest Free Sales Tax Deferment of ? 345.86 lakhs under Target - 2000 Scheme
by the State Government 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 ? 26.42 Lakhs is payable in the financial year 2025-26 hence shown under the
Other Financial Liabilities under Current Liabilities Pursuant to requirement under Ind AS 109 on financial
instruments and in view of the 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 of the IFST loan.
39. DISCLOSURE AS PER IND AS - 12 INCOME TAX
A. Income tax assessments
The Company’s income tax assessments were completed up to AY 2023- 2024.
B. The tax effects of significant temporary differences that resulted in Deferred Income Tax
Liability are as follows
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.
41 FINANCIAL INSTRUMENTS
a) Capital management
The Company manages its capital structure and makes adjustments to it, in light of changes in
economic condition. To maintain or adjust the capital structure, the Company may adjust the dividend
payment to shareholders. No changes were made in the objectives, policies and procedures in the past
three years.
The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net
debt. The Company includes within net debt, borrowings, trade and other payables, other liabilities,
less cash and cash equivalents Capital includes issued equity capital, share premium and all other
equity reserves attributable to the equity holders.
b) Financial instruments by category
The carrying and fair value of financial instruments by categories of 31stMarch 2025 and 31stMarch
2024 were as follows
c) Financial Risk Management
Financial Risk Factors:
The Company is exposed to financial risks arising from its operations and the use of financial instruments.
The key financial risks include market risk, and liquidity risk. The management reviews and design
policies and procedures to minimize potential adverse effects on its financial performance. The primary
market risk to the Company is foreign exchange risk. The Company’s exposure to credit risk is influenced
mainly by the customer repayments. The Company’s exposure to liquidity risks are on account of interest
rate risk on borrowings. The following sections provide details regarding the Company’s exposure to the
above-mentioned financial risks and the management thereof.
Market Risk:
The Company operates internationally, and a portion of the business is transacted in foreign currencies and
consequently the Company is exposed to foreign exchange risk through its sales and services in those
countries. The exchange rate between the rupee and foreign currencies has changed substantially in recent
years and may fluctuate substantially in the future. Consequently, the results of the Company’s operations
are affected as the rupee appreciates/depreciates against these currencies. The Company leaves exchange
rate risk with regard to foreign exposures un-hedged when the local currency is appreciating against the
foreign currency.
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 counter parties. 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.
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.
As of 31st March 2025, the Company had a working capital of ? 92.52 Lakhs including cash and cash
equivalents of ? 4.15 Lakhs. As of 31st March 2024, the Company had a working capital of ? 717.17 Lakhs
including cash and cash equivalents of ? 3.83 Lakhs.
As of 31st March 2025, and 31st March 2024, the outstanding gratuity liability was ? 339.23 Lakhs and ?
307.63 Lakhs, respectively, which have been substantially funded. Accordingly, no liquidity risk is
perceived.
Interest Rate Risk:
The interest rate risk is the risk that the fair value or the future cash flows of the Company’s financial
instruments will fluctuate because of the change in market interest rates. The Company is exposed to
interest rate risks as it has significant interest-bearing working capital loans from bank. Short term loans
repayable on demand are subject to prevailing market rate fluctuations and sanctioned facilities are availed
on a need to borrow basis to ensure minimum exposure to interest rate fluctuations.
42. DIVIDEND:
The final dividend on shares is recorded as a liability on the date of approval by the shareholders and
interim dividends are recorded as a liability on the date of declaration by the Company's Board of Directors.
Income Tax consequences of dividends on financial instruments classified as equity will be recognized
according to where the entity originally recognized those past transactions or events that generated
distributable profits. The Company declares and pays dividends in Indian rupees. Companies are required
to pay/distribute dividend after deducting applicable withholding income taxes.
44. CONFIRMATION OF BALANCES:
The Company had sent letters seeking confirmation of balances to various parties under trade payables,
trade receivables, advance to suppliers and other advance from customers. Based on the confirmations
received and upon proper review, corrective actions have been initiated, and the amounts have been trued
up, accounting adjustments have been made wherever found necessary.
45. BORROWINGS SECURED AGAINST CURRENT ASSETS:
The Company files Monthly Stock Statements and Quarterly Declarations to Bank regarding the End Use
of Funds and Unhedged Foreign Currency and Investments .
The data provided by Company is in line with the Books of Accounts. The Company has not been declared
as Wilful Defaulter as per the relevant RBI Circular.
46. RELATIONSHIP WITH STRUCK OFF COMPANIES:
The Company has verified Debtors and Creditors Companies status with respect to being Struck Off and
none of them are being shown as Struck Off in the records of MCA.
*Due to Loss incurred during the current year.
** The Company has cleared the dues of creditors more promptly compared to the previous year,
resulting in a reduction in the trade payables ratio.
8. UTILISATION OF BORROWED FUNDS AND SHARE PREMIUM:
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.
49. The Company has used the borrowings from Banks and Financial institutions for their specific purpose for
which they have been taken.
50. In the opinion of the Board of Directors, all the Assets (Other than Property, Plant, Equipment, Intangible
Assets and Non-Current Investments) are expected to realise a value which is at least equivalent to the
amount at which they are stated in the financial statements, in the ordinary course of the business. The
Board is also of the opinion that no material uncertainty exists regarding the capability of the Company in
meeting its liabilities existing as on the date of Balance Sheet as and when they fall due.
51. 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.
52. With regard to Charge Creation or Satisfaction, no documents are pending for filling with Registrar of
Companies beyond the specified Statutory period.
53. 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.
54. The Company has not traded or invested in crypto currency or any virtual currency during the financial
year.
55. Previous Year’s figures have been regrouped / reclassified wherever necessary to correspond with the
Current Year's classification/ disclosure.
As per our Report attached For and on Behalf of Board of Directors
For C K S Associates Alkali Metals Limited
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 Gayathri Kesavarapu Siddharth Dubey
Dated: 19th May 2025 Chief Financial Officer C°mpany S^retaty
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