1. Corporate Information
Omnitex Industries (India) Limited (“the Company”) is a listed public limited company incorporated on 30th January, 1987 under CIN L17100MH1987PLC042391 under the provisions of the Companies Act, 1956. Company's shares are listed on Bombay Stock Exchange. The Company is presently engaged in trading of fabrics and yarn.
The financial statements were approved by the Board of Directors and authorized for issue on 30th May, 2024.
2. Basis of Preparation and Measurement
A) Basis of Preparation
The financial statements are prepared in accordance with and in compliance, in all material aspects, with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the “Act”) read along with Companies (Indian Accounting Standards) Rules, as amended and other provisions of the Act. The presentation of the Financial Statements is based on Ind AS Schedule III to the Companies Act, 2013.
B) Basis of Measurement
The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, unless otherwise stated. All assets and liabilities are classified into current and non-current generally based on the nature of product/ activities of the Company and the normal time between acquisition of assets/ liabilities and their realisation / settlement in cash or cash equivalent. The Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
3. 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.
4. Property, Plant and Equipment:
• Property, plant and equipment are stated at historical cost less depreciation and impairment loss, if any.
• Historical cost includes expenditure that is directly attributable to the acquisition of the items.
• Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Company and the
cost of the item can be measured reliably.
• All other repairs and maintenance are charged to the Statement of Profit and Loss during the reporting period in which they are incurred
5. Investment Property:
• Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Company, is classified as investment property.
• Investment property is measured initially at its cost, including related transaction costs and borrowing costs where applicable.
• Subsequent expenditure is capitalized to the asset's carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably.
• All other repairs and maintenance costs are expensed when incurred.
• Investment properties are depreciated using the straight line method over their estimated useful lives which is 60 years.
6. Impairment of assets:
• At each balance sheet date, the Company reviews the carrying value of assets for any possible impairment.
• An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount.
• The recoverable amount is determined as higher of the asset's fair value less costs of disposal and value in use.
• For the purpose of assessing impairment, assets are grouped at the levels for which there are separately identifiable
cash flows (cash generating unit). Assessment is done at each Balance Sheet date as to whether there is any
indication that an impairment loss recognized for an asset in prior accounting period may no longer exist or may
have decreased, and in such cases the impairment loss is reversed to that extent.
7. Financial Assets / Liabilities:
A. Financial Assets
Initial recognition and measurement
• All financial assets are recognized initially at fair value plus transaction costs that are attributable to the acquisition of the financial asset, except in the case of financial assets not recorded at fair value through profit or loss.
• Transaction costs of financial assets carried at fair value through profit or loss are expensed through the Statement of Profit and Loss.
Subsequent measurement
• For purposes of subsequent measurement, the Company classifies its financial assets in the following measurement categories:
F Those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
F Those measured at amortized cost.
• The classification depends on the entity's business model for managing the financial assets and the contractual terms of the cash flows.
• For assets measured at fair value, gains and losses will either be recorded in Statement of Profit and Loss or other comprehensive income.
• For investments in debt instruments, this will depend on the business model in which the investment is held.
• For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income. Fair value of the unquoted shares is determined based on the income approach or the comparable market approach. For these unquoted investments categorized under Level 3, their respective cost is considered as an appropriate estimate of fair value if wide range of possible fair value measurement exists and cost represents the best estimate of fair value within that range.
Derecognition
• A financial asset is derecognized only when the rights to receive cash flows from the financial asset have expired, or the Company has transferred its rights to receive cash flows from the financial asset or has assumed an obligation to pay the received cash flows to one or more recipient.
• Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognized.
• Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognized.
• Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognized if the company has not retained control of the financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognized to the extent of continuing involvement in the financial asset.
B. Financial Liabilities
• Classification as liability or equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
• Initial recognition and measurement
Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the amortized cost unless at initial recognition, they are classified at fair value through profit or loss.
• Subsequent measurement
Financial liabilities are subsequently measured at amortized cost using the effective interest rate method. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognized in the Statement of Profit and Loss.
• Derecognition
A financial liability is derecognized when the obligation specified in the contract is discharged, cancelled or expires.
8. Borrowing Costs:
• General and Specific Borrowing Costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use.
• Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use.
• All other borrowing costs are expensed in the period in which they are incurred.
9. Depreciation:
• Depreciation is calculated using the Straight Line Method to allocate cost, net of estimated residual value over its estimated useful life.
• The useful lives and residual values are as prescribed under Schedule II to the Companies Act, 2013.
• Gains and Losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Profit and Loss.
10. Foreign Currency Transactions:
• Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions.
• Realized gains and losses on settlement of foreign currency transactions are recognized in the Statement of Profit and Loss.
• Foreign currency denominated monetary assets and liabilities at the year end are translated at the year-end exchange rates, and the resultant exchange difference is recognized in the Statement of Profit and Loss.
• Non-monetary foreign currency items are carried at cost.
11. Revenue Recognition:
• Revenue from sale of goods is recognized when all significant risk and rewards in the ownership of the goods are transferred to the buyer and it is probable that the future economic benefit will flow to the entity as per the terms of the contract, which usually co-inside with the delivery of the goods.
• Revenue from sale of goods is recognized in the Statement of Profit and Loss, net of returns, Trade Discounts, Goods and Services Tax and other taxes as may be applicable.
• Rental income from operating leases is recognized in income on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases. In such cases the revenue is recognized as per the terms of the Agreement. The respective leased assets are included in the balance sheet based on their nature.
• Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably. Interest income is accrued on time basis, by reference to the principal outstanding and at the effective interest rate applicable.
• Dividend income from investments is recognized when the right to receive dividend has been established.
12. Employee Benefits:
Short Term Employee Benefits
• Liabilities for salaries, wages and other benefits including non-monetary benefits that are expected to be settled wholly within twelve months after the end of the period in which the employees render the related service are recognized in respect of employees' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefits obligations in the Balance Sheet.
Long Term Employee Benefits Defined Contribution Plans
• Contribution to defined contribution plans such as Provident Fund, are charged to the Statement of Profit and Loss as incurred, as the Company has no further obligation beyond making these contributions.
13. Taxation:
• Tax expense for the period, comprising current tax and deferred tax, are included in the determination of the net profit or loss for the period. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with prevailing income tax law.
• Deferred tax is recognized for all the temporary differences by using the liability method, only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.
• Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date.
• At each Balance Sheet date, the Company reassesses unrecognized deferred tax assets, if any.
14. Provisions
• The Company recognizes a provision when there is a present legal or constructive obligation as result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.
• Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period.
15. Contingent Liabilities and Contingent Assets
• A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
• Contingent Assets are neither recognized nor disclosed in the financial statements.
16. Earnings Per share Basic Earnings per Share
Basic earnings per share is calculated by dividing:
The profit attributable to owners of the Company by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year.
Diluted Earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
• the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and
• the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
17. New Standards / Amendments Notified but not yet effective:
Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31st March 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
18. Rounding of Amounts
All amounts disclosed in the financial statements and notes have been disclosed in Rupees in Lakhs rounded off to two decimals as per the requirement of Schedule III, unless otherwise stated.
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