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Omnitex Industries
BSE: 514324|ISIN: INE814D01010|SECTOR: Textiles - Processing
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« Mar 12
Accounting Policy Year : Mar '13
1.  Basis of Accounting:
 
 The financial statements have been prepared on the basis of historical
 costs under the accrual system of accounting and applicable Accounting
 Standards notified by the Companies (Accounting Standards) Rules, 2006
 and are in accordance with the requirements of the Companies Act, 1956.
 
 2.  Valuation of Inventories:
 
 Inventories are valued at Lower of Cost and Net Realisable Value. Cost
 comprises all cost of purchase, cost of conversion and other costs
 incurred in bringing the inventories to their present location and
 condition. The cost is arrived at on First In First Out (FIFO) basis.
 Due allowance is estimated and made for defective and obsolete items,
 wherever considered necessary.
 
 3.  Investments:
 
 Investments, being long term, are stated at cost; where there is a
 decline, other than temporary, the resultant reduction in carrying
 amount is charged to the Profit and Loss statement.
 
 4.  Valuation of Fixed Assets:
 
 a.  All the Fixed Assets are capitalised at cost (Net of refundable
 duties) inclusive of all expenses relating to the acquisition and
 installation of fixed assets and include borrowing costs attributable
 to such assets, upto the date the asset is put to use.
 
 b.  Fixed Assets except Freehold Land are valued at cost less
 depreciation. Freehold Land is shown at its Original Cost.
 
 c.  Impairment Loss is provided to the extent the carrying amount of
 assets exceeds their recoverable amount. Recoverable amount is the
 higher of an asset''s net selling price and its value in use. Value in
 use is the present value of estimated future cash flows expected to
 arise from the continuing use of an asset and from its disposal at the
 end of its useful life. Net selling price is the amount obtainable from
 the sale of an asset in an arm''s length transaction between
 knowledgeable, willing parties, less the costs of disposal.
 
 5.  Borrowing Costs:
 
 Borrowing costs that are attributable to the acquisition or
 construction of qualifying assets are capitalised as part of the cost
 of such assets. A qualifying asset is one that necessarily takes
 substantial period of time to get ready for intended use. All other
 borrowing costs are charged to the Profit and Loss Account in the year
 in which they are incurred.
 
 6.  Depreciation:
 
 a. Except for items on which 100% depreciation rates are applicable,
 depreciation is provided on Straight Line Method on pro-rata basis as
 under:
 
 i.  In respect of the items of Fixed Assets existing on the date on
 which the amended Schedule XIV came into force:
 
 The specified period of the life of the asset is recomputed by applying
 to the original cost, the revised rate of depreciation as prescribed in
 Schedule XIV of the Companies Act, 1956.  Thereafter, depreciation
 charge is calculated by allocating the unamortized value of the asset
 over the remaining part of the recomputed specified period. For
 calculating remaining part of the recomputed specified period, only
 completed years of useful life of the existing assets have been taken
 into account and fraction of the useful life already expired has been
 ignored.
 
 ii.  In respect of other items of Fixed Assets:
 
 Depreciation is provided at the rates as prescribed in Schedule XIV of
 the Companies Act, 1956.
 
 b. While applying the revised rates as per Schedule XIV of the
 Companies Act, 1956, continuous process plants as defined therein have
 been taken on technical assessment and depreciation is provided
 accordingly.
 
 7.  Foreign Currency Transactions :
 
 a.  Foreign currency transactions are recorded at the conversion rates
 prevailing on the date of transactions.
 
 b.  The exchange differences arising on the settlement of transactions
 are recognised as the gains or losses in the period in which they
 arise.
 
 c.  Monetary items i.e. items to be received or paid in Foreign
 Currencies, are translated at the exchange rates prevailing at the
 Balance Sheet date or at the Forward Contract rates, wherever such
 contracts have been entered into and resultant gains / losses are
 recognised in the Profit and Loss statement.
 
 8.  Revenue Recognition:
 
 Revenue from sale of goods is recognized when the significant risks and
 rewards of ownership of goods are passed to the buyer. Dividends are
 recorded when the right to receive payment is established.  Interest
 Income is recognized on time proportion basis. Rent and service
 receipts are accounted for on accrual basis in term of agreement with
 parties except in cases where ultimate collection is considered
 doubtful.
 
 9.  Employee Benefits:
 
 a.  The Company''s Contribution in respect of Provident Fund is charged
 to the Profit and Loss statement;
 
 b.  Provision for Gratuity to employees and Leave Encashment are
 charged to the Profit and Loss statement on the basis of actuarial
 valuation.
 
 10.  Leases:
 
 a.  Assets Leased out are charged to depreciation as per Accounting
 Standard 6 issued by the institute of Chartered Accountants of India.
 
 b.  Lease Income is recognized in Profit and Loss Account on accrual
 basis.
 
 11.  Taxation:
 
 a.  In accordance with Accounting Standard 22 - Accounting for Taxes on
 Income (AS-22), notified by the Companies (Accounting Standards) Rules,
 2006, the deferred tax for timing differences is accounted for using
 the tax rates and laws that have been enacted or substantively enacted
 by the balance sheet date.
 
 b.  Deferred tax assets arising from timing differences are recognised
 only on consideration of prudence.
 
 12.  Provisions, Contingent Liabilities and Contingent Assets
 
 A provision is recognized when the Company has a present obligation as
 a result of a past event and it is probable that an outflow of
 resources embodying economic benefits would be required to settle the
 obligation, and in respect of which a reliable estimate can be made.
 Provisions are not discounted to their present value and are determined
 based on best estimates required to settle the obligation at the
 balance sheet date. Provisions are reviewed at each balance sheet date
 and are adjusted to reflect the current best estimation. A contingent
 liability is disclosed unless the possibility of an outflow of
 resources embodying the economic benefits is remote or a reliable
 estimate of the amount of obligation cannot be made.
Source : Dion Global Solutions Limited
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