1.0 Corporate Information
BIZOTIC COMMERCIAL LIMITED is a Limited Company, incorporated under
the provisions of Companies Act, 2013 and having CIN: U74999GJ2016PLC094934.
The Company is mainly engaged in the business of trading of fabric material and
garment and other commodities. The Registered office of the Company is situated
at 15, Ashwamegh Warehouses, Ujala Circle, Sarkhej, Dascroi, Ahmedabad,
Gujarat - 382210 India.
1.1 Basis of preparation of financial statements
a. Accounting Convention: -
These financial statements of the Company have been prepared in
accordance with Generally Accepted Accounting Principles in India (“Indian
GAAP”). Indian GAAP comprises mandatory accounting standards as
prescribed under Section 133 of the Companies Act, 2013 (“the Act”) read
with the Rule 7 of the Companies (Accounts) Rules, 2014. The financial
statements have been prepared on an accrual basis and under the Historical
Cost Convention. and the Companies (Accounting Standards) Amendment
Rules 2016 and the relevant provisions of the Companies Act, 2013.
b. Functional and Presentation Currency
The functional and presentation currency of the company is Indian rupees.
This financial statement is presented in Indian rupees.
All amounts disclosed in the financial statements and notes are rounded off
to lakhs the nearest INR rupee in compliance with Schedule III of the Act,
unless otherwise stated.
Due to rounding off, the numbers presented throughout the document may
not add up precisely to the totals and percentages may not precisely reflect
the absolute figures.
c. Use of Estimates and Judgments
The preparation of financial statement in conformity with accounting
standard requires the Management to make estimates, judgments, and
assumptions. These estimates, judgments and assumptions affects the
application of accounting policies and the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
financial statement and reported amounts of revenue and expenses during the
period. Accounting estimates could change form period to period. Actual
result could differ from those estimates. As soon as the Management is aware
of the changes, appropriate changes in estimates are made. The effect of such
changes is reflected in the period in which such changes are made and, if
material, their effects are disclosed in the notes to financial statement.
Estimates and underlying assumptions are reviewed at each balance sheet
date. Revisions to accounting estimates are recognised in the period in which
the estimate is revised and in future periods affected.
d. Current and Non - Current Classification
An asset or a liability is classified as Current when it satisfies any of the
following criteria:
i. It is expected to be realized / settled, or is intended for sales or
consumptions, in the Company's Normal Operating Cycle;
ii. It is held primarily for the purpose of being traded.
iii. It is expected to be realized / due to be settled within twelve months
after the end of reporting date;
1v. The Company does not have an unconditional right to defer the
settlement of the liability for at least twelve months after the reporting
date.
All other assets and liabilities are classified as non-current.
For the purpose of Current / Non - Current classification of assets and
liabilities, the Company has ascertained its operating cycle as twelve
months. This is based on the nature of services and the time between the
acquisition of the assets or liabilities for processing and their realization in
Cash and Cash Equivalents.
1.2 Basis of Preparation
a) Property, Plant & Equipment and Intangible Assets: -
i. The company has adopted Cost Model to measure the gross carrying
amount of Property Plant & Equipment.
ii. Tangible Property Plant & Equipment are stated at cost of acquisition
less accumulated depreciation. Cost includes the purchase price and all
other attributable costs incurred for bringing the asset to its working
condition for intended use.
iii. Intangible assets are stated at the consideration paid for acquisition and
customization thereof less accumulated amortization.
iv. Cost of fixed assets not ready for use before the balance sheet date is
disclosed as Capital Work in Progress.
v. Cost of Intangible Assets not ready for use before the balance sheet date
is disclosed as Intangible Assets under Development.
b) Depreciation / Amortisation: -
Depreciation has been provided under Straight Line Method at the rates
prescribed under schedule III of the Companies Act, 2013 on single shift and
Pro Rata Basis to result in a more appropriate preparation or presentation
of the financial statements.
In respect of assets added/sold during the year, pro-rata depreciation has
been provided at the rates prescribed under Schedule II.
Intangible assets being Software are amortized over a period of its useful
life on a straight-line basis, commencing from date the assets are available
to the company for its use.
c) Impairment of Assets: -
An asset is treated as impaired when the carrying cost of an asset exceeds
its recoverable value. An impairment loss is charged to the Statement of
Profit and Loss in the year in which an asset is identified as impaired. The
impairment loss recognised in prior period is reversed if there has been a
change in the estimate of the recoverable amount.
d) Investments: -
• Investments that are readily realizable and intended to be held for not more
than a year from the date on which such investments are made are classified
as current investments. All other investments are classified as long-term
investments.
• On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges such
as brokerage, fees and duties. If an investment is acquired, or partly
acquired, by the issue of shares or other securities, the acquisition cost is the
fair value of the securities issued. If an investment is acquired in exchange
for another asset, the acquisition is determined by reference to the fair value
of the asset given up or by reference to the fair value of the investment
acquired, whichever is more clearly evident. There is no investment made
by Company.
• Current investments are carried at lower of cost and fair value determined
on an individual investment basis. Long term investments are carried at
cost. However, provision for diminution in value of long-term investments
is made to recognize a decline, other than temporary, on an individual
investment basis,
• Current investments are carried in the financial statements at lower of cost
and market value determined on an individual investment basis, Long-term
investments are carried at cost, However, provision for diminution in value
is made to recognize a decline other than temporary in the value of the
investments,
• Long term investments which are expected to be realized within twelve
months from the balance sheet date are presented under 'current
investments’ as 'current portion of long-term investments' in accordance
with the current / noncurrent classification of investments as per Schedule
III Division I of the Companies Act, 2013.
• The cost of investments comprises purchase price and directly attributable
acquisition charges such as brokerage, fees and duties,
• Investment transactions are accounted for on a trade date basis, In
determining the holding cost of investments and the gain or loss on sale of
investments, the ‘weighted average cost’ method is followed,
e) Government Grants and Subsidies: -
The Company is entitled to receive any subsidy from the Government
authorities or any other authorities in respect of manufacturing or other
facilities are dealt as follows:
• Grants in the nature of subsidies which are non - refundable are credited
to the respective accounts to which the grants relate, on accrual basis,
where there is reasonable assurance that the Company will comply with
all the necessary conditions attached to them,
• Grants in the nature of Subsidy which are Refundable are shown as
Liabilities in the Balance Sheet at the Reporting date,
f) Retirement Benefits: -
a) Short Term Employee Benefits:
All employee benefits payable within twelve months of rendering the
service are classified as short-term benefits. Such benefits include salaries,
wages, bonus, short term compensated absences, awards, ex-gratia,
performance pay etc. and the same are recognised in the period in which
the employee renders the related service.
b) Employment Benefits:
i) Defined Contribution Plans:
The company has Defined Contribution Plans for post-employment
benefit in the form of Provident Fund which are administered by the
Regional Provident Fund Commissioner. Provident Fund are classified
as defined contribution plans as the company has no further obligation
beyond making contributions. The company’s contributions to defined
contribution plans are charged to the Statement of Profit and Loss as and
when incurred.
ii) Defined Benefit Plans:
a) Gratuity:
The Management has decided to gratuity will be accounted in profit &
loss A/c in each financial year when the claim is recognized by the
company which is against the prescribed treatment of AS -15. The
Quantum of provision required to be made for the said retirement’s
benefits can be decided on actuarial basis and the said information could
not be gathered. To the extent of such amount, the reserve would be
lesser.
b) Leave Encashment:
The Management has decided to pay all the pending leave of the year
for the year in which the same has become payable and pending dues
are cleared.
g) Valuation of Inventory: -
Inventories of the raw material, work-in-progress, finished goods, packing
material, stores and spares, components, consumables and stock in trade
are carried at lower of cost and net realizable value. However, raw material
and other items held for use in production of inventories are not written
down below cost if the finished goods in which they will be incorporated
are expected to be sold at or above cost. The comparison of cost and net
realizable value is made on an item-by-item basis.
Cost of inventories included the cost incurred in bringing each product to
its present location and conditions are accounted as follows:
a) Raw Material: - Cost included the purchase price and other direct or
indirect costs incurred to bring the inventories into their present location
and conditions. Cost is determined on First in First out basis (FIFO).
b) Finished Goods and Work-in-Progress: - Work in progress are valued
at cost which includes raw materials and cost incurred till the stage of
production of process. Finished Goods are valued at cost or Net
realizable value whichever is lower. Cost included cost of direct
materials and the labour cost and a proportion of manufacturing
overhead based on the normal operating capacity, but excluding the
borrowing costs. Cost is determined on "First in First out basis (FIFO)".
c) Stock in Trade: - Cost included the purchase price and other direct or
indirect costs incurred in bringing the inventories to their present
location and conditions. Cost is determined on "Weighted Average Basis".
All other inventories of stores and spares, consumables, project material at
site are valued at cost. The stock of waste or scrap is valued at net realizable
value.
"Net Realizable Value” is the estimated selling price in the ordinary course
of business, less estimated costs of completion and estimated cost necessary
to make the sales of the products.
h) Revenue Recognition: -
Revenue is recognized when it is probable that economic benefit associated
with the transaction flows to the Company in ordinary course of its
activities and the amount of revenue can be measured reliably, regardless
of when the payment is being made. Revenue is measured at the fair value
of consideration received or receivable, taking into the account
contractually defined terms of payments, net of its returns, trade discounts
and volume rebates allowed.
Revenue includes only the gross inflows of economic benefits, including the
excise duty, received and receivable by the Company, on its own account.
Amount collected on behalf of third parties such as sales tax, value added
tax and goods and service tax (GST) are excluded from the Revenue.
Sale of goods is recognized at the point of dispatch of goods to customers,
sales are exclusive of Sales tax, Vat, GST and Freight Charges if any. The
revenue and expenditure are accounted on a going concern basis.
Interest Income is Recognized on a time proportion basis taking into
account the amount outstanding and the rate applicable i.e. on the basis of
matching concept.
Dividend from investments in shares / units is recognized when the
company.
As per a recent ICAI opinion, the benefit of DEPB is recognized in the year
of export itself, provided no uncertainty exists,
Other items of Income are accounted as and when the right to receive arises.
i) Accounting for effects of changes in foreign exchange rates: -
Transactions denominated in foreign currencies are normally recorded at
the exchange rate prevailing at the time of the transactions.
Any income or expenses on account of exchange difference either on
settlement or on Balance sheet Valuation is recognized in the profit and loss
account except in cases where they relate to acquisition of fixed assets in
which case they are adjusted to the carrying cost of such assets.
Commodity Hedging; - The realized gain or loss in respect of commodity
hedging contracts, the principal period of which has expired during the
year, is recognized in profit and loss account, In respect of contracts, that
are outstanding as on date of Balance sheet are valued at prevailing market
price and the resultant loss, if any, is provided,
j) Borrowing Cost: -
Borrowing Cost includes the interest, commitments charges on bank
borrowings, amortization of ancillary costs incurred in connection with the
arrangement of borrowings,
Borrowing costs that are directly attributable to the acquisition or
construction of qualifying property, plants and equipment’s are capitalized
as a part of cost of that property, plants and equipments, The amount of
borrowing costs eligible for capitalization is determined in accordance with
the Accounting Standards - 16
"Borrowing Costs”, Other Borrowing Costs are recognized as expenses in
the period in which they are incurred,
In accordance with the Accounting Standard - 16, exchange differences
arising from foreign currency borrowings to the extent that they are
regarded as adjustments to interest costs are recognized as Borrowing Costs
and are capitalized as a part of cost of such property, plants and equipment
if they are directly attributable to their acquisition or charged to the
Standalone Statement or Profit and Loss,
k) Related Party Disclosure: -
The Disclosures of Transaction with the related parties as defined in the
related parties as defined in the Accounting Standard are given in notes of
accounts,
l) Accounting for Leases: -
A lease is classified at the inception date as finance lease or an operating
lease, A lease that transfers substantially all the risk and rewards incidental
to the ownership to the Company is classified as a finance lease,
a) Operating Lease: - Rental payable under the operating lease are charged
to the Standalone Statement of Profit and Loss on a Straight-line basis over
the term of the relevant lease.
b) Finance Lease: - Finance lease is capitalized at the commencement of the
lease, at the lower of the fair value of the property or the present value of
the minimum lease payments. The corresponding liability to the lessor is
included in the Balance Sheet as a finance lease obligation. Lease payments
are apportioned between finance charges and the reduction of the lease
obligation so as to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are charged directly against the
income over the period of the lease.
The Company has not provided any of its assets on the basis of operating
lease or finance lease to others.
m) Cash flow: -
Cash flows are reported using the indirect method, whereby net profit
before tax is adjusted for the effects of transactions of a non-cash nature and
any deferrals of past or future cash receipts and payments. The cash flows
from regular operating, investing and financing activities of the company
are segregated.
n) Earnings Per Share: -
The Company reports the basic and diluted Earnings per Share (EPS) in
accordance with Accounting Standard 20, "Earnings per Share”. Basic EPS
is computed by dividing the Net Profit or Loss attributable to the Equity
Shareholders for the year by the weighted average number of equities
shares outstanding during the year. Diluted EPS
is computed by dividing the Net Profit or Loss attributable to the Equity
Shareholders for the year by the weighted average number of Equity Shares
outstanding during the year as adjusted for the effects of all potential Equity
Shares, except where the results are Anti - Dilutive.
The weighted average number of Equity Shares outstanding during the
period is adjusted for events such a Bonus Issue, Bonus elements in right
issue, share splits, and reverse share split (consolidation of shares) that have
changed the number of Equity Shares outstanding, without a
corresponding change in resources.
o) Taxes on Income: -
• Current Tax: -
Provision for current tax is made after taken into consideration benefits
admissible under the provisions of the Income Tax Act, 1961.
• Deferred Taxes: -
Deferred Income Tax is provided using the liability method on all
temporary difference at the balance sheet date between the tax basis of
assets and liabilities and their carrying amount for financial reporting
purposes.
I. Deferred Tax Assets are recognized for all deductible temporary
differences to the extent that it is probable that taxable profit will
be available in the future against which this item can be utilized.
II. Deferred Tax Assets and liabilities are measured at the tax rates
that are expected to apply to the period when the assets are
realized or the liability is settled, based on tax rates (and the tax)
that have been enacted or enacted subsequent to the balance sheet
date.
p) Discontinuing Operations: -
During the year the company has not discontinued any of its operations.
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