PRIVI SPECIALITY CHEMICALS LIMITED Annual Report 2020-21

91 Annual Report 2020-21 CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS 1 Corporate Information Privi Speciality Chemicals Limited (Formerly known as Fairchem Speciality Limited) (‘PSCL or ‘the Company’) incorporated on May 25, 1985 under the provisions of the Companies Act, 1956 is a public company domiciled in India. The Company was incorporated as H. K. Agro Oil Ltd. and later changed its name and style to Adi Finechem Limited. The Company is primarily engaged in the manufacture and export of aroma chemicals and in trading of chemicals. The Company’s manufacturing units are located at Mahad and Jhagadia. The equity shares of the Company are listed on BSE Limited and National Stock Exchange of India Ltd. 2 Significant accounting policies This note provides a list of the significant accounting policies adopted by the Company in the preparation of these financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated. Statement of Compliance These Financial Statements of the Company comprising the Balance Sheet as at March 31, 2021, Statement of Profit and Loss (including other comprehensive income), Statement of Changes in Equity, and Cash Flow Statement for the year ended March 31, 2021, and a summary of significant accounting policies and other explanatory information have been prepared by the Company in accordance with the Indian Accounting Standards notified under Section 133 of the Companies Act, 2013 (the ‘Act’), The Audit report of statutory auditor on these standalone financial statements of the company will be addressed to the Shareholders. The standalone financial statements were authorised for issue by the Company’s Board of Directors at their meetings held on May 14, 2021. i. Basis of preparation and Presentation Basis of Preparation The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities: (i) Derivative Financial Instruments measured at fair value. (ii) Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments) (iii) Employee’s Defined Benefit Plan as per actuarial valuation. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions, regardless of whether that price is directly observable or estimated using another valuation technique. In determining the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Functional and Presentation Currency The standalone 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 values are rounded to the nearest lakh, unless otherwise stated. ii. Use of estimates, judgements, and assumptions In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of income, expenses, assets and liabilities, Actual results may differ from these estimates and assumptions. Estimate and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates are recognised prospectively. The Company has identified the following areas where significant judgements, estimates and assumptions are required. Further information on each of these areas and how they impact the various accounting policies are described below and in the relevant notes to the financial statements. Changes in estimates are accounted for prospectively. Judgements: In the process of applying the Company’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognized in the financial statements. a. Lease term, whether the Company is reasonably certain to exercise extension options – Note 4 a) Assumptions and estimation uncertainties Information about judgements in applying accounting policies, as well as estimates and assumptions that have the most significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are included in the following notes: (a) Measurement of defined benefit obligations for key actuarial assumptions - Note 31. (b) Recognition of deferred tax assets – Note 17. NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021 (Currency: Indian Rupees in lakhs)