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SENSEX NIFTY India | Accounting Policy > Textiles - Processing > Accounting Policy followed by Omnitex Industries - BSE: 514324, NSE: N.A

Omnitex Industries

BSE: 514324|ISIN: INE814D01010|SECTOR: Textiles - Processing
Apr 25, 16:00
Omnitex Industries is not listed on NSE
Mar 14
Accounting Policy Year : Mar '15
 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 (Accounts) Rules 2014 and the
 relevant provisions of the Companies Act, 2013
 2.  Valuation of Inventories:
 Inventories are valued at Lower of Cost and Net Realisable Value. Cost
 comprises all cost of purchase, 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:
 Long Term Investments 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.  Fixed Assets:
 a.  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
 i. In respect of Fixed Assets existing as at 1st April 2014 hereinafter
 referred to as effective date being date on which Schedule II of the
 Companies Act 2013 came into force:
 The useful life of the asset is considered as provided in Schedule II
 to the Companies Act 2013.  From the life of the asset as computed
 above, the number of years (part of the year is considered full for
 this purpose) for which the asset was in existence prior to the
 effective date was reduced and balance life in years ascertained. The
 net asset value as on the effective date after adjusting for residual
 value was divided by the balance useful life in years of the asset and
 depreciation per year is arrived at.
 In respect of office unit, the useful life is considered from the year
 in which the occupation certificate was issued by the relevant
 authorities and not from the year of purchase.
 ii. In respect of Fixed Assets acquired/constructed after 1st April
 Depreciation is provided after taking into account useful lives of such
 assets in accordance with Schedule II of the Companies Act 2013
 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
 c.  Monetary assets and liabilities in foreign currency, which are
 outstanding at the year end, are translated at the year end closing
 exchange rate and the resultant exchange differences are recognized 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
 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
 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 Statement on accrual
 11. Taxation:
 a.  In accordance with Accounting Standard 22 - Accounting for Taxes on
 Income (AS-22), notified by the Companies (Accounts) Rules, 2014, 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 estimates. A contingent
 liability is disclosed if 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. Contingent Assets are neither
 recognized nor disclosed in the financial statements.
Source : Dion Global Solutions Limited
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