PRIVI SPECIALITY CHEMICALS LIMITED Annual Report 2020-21

92 PRIVI SPECIALITY CHEMICALS LIMITED (Formerly known as Fairchem Speciality Limited) iii. Current and non-current classification All assets and liabilities are classified into current and non-current. Assets An asset is classified as current when it satisfies any of the following criteria: (a) it is expected to be realised in, or is intended for sale or consumption in, the Company’s normal operating cycle. (b) it is held primarily for the purpose of being traded. (c) it is expected to be realised within 12 months after the balance sheet date; or (d) it is cash or a cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the balance sheet date. Current assets include the current portion of non-current financial assets. All other assets are classified as non-current. Liabilities A liability is classified as current when it satisfies any of the following criteria: (a) it is expected to be settled in, the Company’s normal operating cycle. (b) it is held primarily for the purpose of being traded. (c) it is due to be settled within 12 months after the balance sheet date; or (d) the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date. Terms of a liability that could, at the option of the counter party, result in its settlement by issue of equity instruments do not affect its classification. Current liabilities include current portion of non-current financial liabilities. All other liabilities are classified as non-current. Operating cycle Operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents. iv. Property, Plant and Equipment (“PPE”) and depreciation I Recognition and Measurement Items of Property, Plant and Equipment are measured at cost, which includes capitalized borrowing costs less accumulated depreciation and any accumulated impairment losses. The cost of the certain items of the property, plant, and equipment as of January 1, 2005. The Company’s date of transition to the standards was determined with the reference to its fair value at the date. If significant parts of an item of Property, Plant and Equipment have different useful lives, then they are accounted for as separate items (major components) of Property, Plant and Equipment Any Gain or loss on disposal of an item of Property, Plant and Equipment is recognized in profit or loss. II Subsequent Expenditure Subsequent Expenditure is capitalized only if it is probable that the economic benefits flow to the associated with the Expenditure will flow to the entity. Depreciation and Amortisation Depreciation is calculated using the straight-line method to allocate cost of Property Plant and Equipment, net of residual values, over their estimated useful lives as per the useful life prescribed in schedule II of the Companies Act, 2013 except in case of the following class of assets where the useful life is based on technical evaluation of the management: Asset Class Years Plant and Machinery 10 Furniture & Fixtures 16 Office Equipment 10 Vehicle 11 Computer 6 NOTES TO THE STANDALONE FINANCIAL STATEMENTS for the year ended March 31, 2021 (Currency: Indian Rupees in lakhs)