Home  »  Company  »  Omnitech InfoSolutio  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Omnitech InfoSolutions Ltd. Company

Mar 31, 2014

A. Basis of preparation of Financial Statements :

The financial statements have been prepared under historical cost convention on the accrual basis of accounting in accordance with the accounting principles generally accepted in India (GAAP) and in compliance with the Accounting Standards issued by The Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956 as adopted consistently by the company.

Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company.

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made, that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported year. Differences between the actual results and estimates are recognized in the year in which the results are known / materialized.

b. Revenue recognition:

Revenue from sales in respect of hardware is recognized when they are completed with passing of the title and are exclusive of sales tax, octroi and other incidental expenses.

Revenue from software development is recognized in accordance with the percentage of completion method and revenue from sale of licenses of software products and other products is recognized on delivery / installation, as the case may be.

Revenue from IT infrastructure networking, annual service contracts and facilities management services is deferred and recognized ratably over the period of the underlying maintenance agreement.

Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividend Income is recognized when the shareholders'' right to receive payment is established by the Balance Sheet Date.

c. ExuendKure:

Expenses are accounted on accrual basis and the provisions are made for all known losses and liabilities. No provisions are made towards likely expenses on providing post-sales client support for fixed priced contracts as well as in respect of annual technical service contracts in so far as it pertains to the period beyond the current accounting year.

d. Fixed Assets and Depreciation :

A. Fixed Assets

Fixed assets are stated at their original cost of acquisition including incidental expenses related to acquisition & installation of the concerned assets less accumulated depreciation and impairment losses, if any,.

Costs that are directly associated with identifiable and unique software products controlled by the Company, whether developed in-house or acquired, and have probable economic benefits exceeding the cost are recognized as product development.

Assets acquired under lease are at cost of acquisition including incidental expenses related to acquisition & installation of such assets.

Advances paid towards acquisition of fixed assets and the cost of assets not ready for use as at the Balance Sheet date are disclosed under capital work-in-progress.

B. Depreciation /Amortization.

Depreciation on Software and Computer Systems is provided based on Management''s estimate of useful life of Software/System however subject to maximum period of 6 years. Depreciation on Fixed Assets other than Land and those mentioned above has been provided on Straight Line Method at the following rates:

Product Development Expenses capitalized are amortized over its useful life for a period not exceeding ten years. ,

Leasehold assets are amortized over the period of lease.

Miscellaneous expenditure is amortized over a period of 5 years from the year in which it has been incurred,

e. Impairment of Assets:

Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognized in the income statement for items of fixed assets carried at cost. The recoverable amount is higher of an assets net selling price and value in use. The net selling price is the amount obtained from the sale of an asset in an arm''s length transaction while value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset, from its disposal at the end of its useful life.

Investments are classified into current investment and iong term investments. Current investments are stated at iower of cost or fair market vaiue. Long Term investments are stated at cost less provision for permanent diminution in vaiue if any, of investments.

h. Foreign Exchange Transactions:

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Realized gains and losses on settlement of foreign currency transactions are recognized in the Profit and Loss account. Foreign currency assets and liabilities at the year end are translated at the year end exchange rates and the resultant exchange difference is recognized in the Profit and Loss Account. Exchange differences relating to fixed assets are adjusted in the cost of the respective assets.

i. Research & Development:

1. Revenue expenditure on R&D is charged of to profit & loss account in the year in which it is incurred where the Company is not certain of realizing future economic benefits from such activities.

2. Capital expenditure on R&D is included under the relevant fixed assets.

j. Employee Benefits:

(a) Short Term Employee Benefits

All short term employee benefits such as salaries, wages, bonus, medical benefits which fall due within 12 months of the period in which the employee renders the related services are charged to the profit and loss account.

(b) Long Term & Post- Employment Benefits

(i) Defined Contribution Plan

Company''s contribution paid/payable during the year towards Provident Fund Scheme, ESIC is recognized in the Profit & Loss Account.

(il) Defined Benefit Plan

The Company''s Gratuity Benefit Scheme is a defined benefit plan. The Company''s liability for gratuity is determined by actuarial valuation made at the end of each financial year using the projected unit credit method. Actuarial gains and Losses are immediately recognized in Profit & Loss Account as income and expense.

k. Borrowing Costs:

Borrowing costs directly attributable to acquisition, construction and production of qualifying assets are capitalized as a part of the cost of such asset up to the date of completion. Other borrowing costs are charged to the Profit & Loss Account.

I. Deferred tax:

Deferred Income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. The differences that result between the profit considered for income taxes and the profit as per the financial statements are identified, and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on prevailing enacted or substantially enacted regulations. Deferred tax assets are recognized only if there is reasonable certainty of their realization and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

m. Provision for Tax:

Provision for current tax is determined on the basis of estimated taxable income for the period as per the provisions of Section 115JB Income Tax Act, 1961.

n. Earnings per Share (EPS):

The earnings considered in ascertaining the Company''s EPS are computed as per Accounting Standard 20 on "Earning per Share", issued by the Institute of Chartered Accountants of India. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the period. The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares unless the effect of the potential dilutive equity shares is anti-dilutive.

o. Provision and Contingent Liabilities

Provisions are recognized and computed in accordance with Accounting Standard 29 on "Provisions, Contingent Liabilities and Contingent Assets" issued by the Institute of Chartered Accountants of India i.e. they are recognized if the following conditions are satisfied:

(a) The Company has a present obligation as a result of past event;

(b) It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and

(c) A reliable estimate can be made of the amount of the obligation.

Similarly, the Contingent liabilities are disclosed in Accordance with the Accounting Standard 29 i.e. they are disclosed when the Company has a possible obligation or a present obligation and it is probable that a Cash Outflow will not be required to settle the obligation.

j>. Leases

Lease arrangements where the risks and rewards incident to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Lease rentals under operating leases are recognised in the profit and loss account on a straight-line basis over the period of lease.


Mar 31, 2012

A. Basis of preparation of Financial Statements

i. The financial statements have been prepared under historical cost convention on the accrual basis of accounting in accordance with the accounting principles generally accepted in India (GAAP) and in compliance with the Accounting Standards issued by The Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956 as adopted consistently by the company.

ii. Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company.

iii. The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made, that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported year. Differences between the actual results and estimates are recognized in the year in which the results are known / materialized.

b. Revenue recognition

i. Revenue from sales in respect of hardware is recognized when they are completed with passing of the title and are exclusive of sales tax, octroi and other incidental expenses.

ii. Revenue from software development is recognized in accordance with the percentage of completion method and revenue from sale of licenses of software products and other products is recognized on delivery / installation, as the case may be.

iii. Revenue from IT infrastructure networking, annual service contracts and facilities management services is deferred and recognized ratably over the period of the underlying maintenance agreement.

iv. Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

v. Dividend Income is recognized when the shareholders' right to receive payment is established by the Balance Sheet Date.

c. Expenditure

Expenses are accounted on accrual basis and the provisions are made for all known losses and liabilities. No provisions are made towards likely expenses on providing post-sales client support for fixed priced contracts as well as in respect of annual technical service contracts in so far as it pertains to the period beyond the current accounting year.

d. Fixed Assets and Depreciation

A. Fixed Assets

a) Fixed assets are stated at their original cost of acquisition including incidental expenses related to acquisition & installation of the concerned assets less accumulated depreciation and impairment losses, if any,.

b) Costs that are directly associated with identifiable and unique software products controlled by the Company, whether developed in-house or acquired, and have probable economic benefits exceeding the cost are recognized as product development.

c) Assets acquired under lease are at cost of acquisition including incidental expenses related to acquisition & installation of such assets.

d) Advances paid towards acquisition of fixed assets and the cost of assets not ready for use as at the Balance Sheet date are disclosed under capital work-in-progress.

B. Depreciation /Amortization

a) Depreciation on Software and Computer Systems is provided based on Management's estimate of useful life of Software/System however subject to maximum period of 6 years. Depreciation on Fixed Assets other than Land and those mentioned above has been provided on Straight Line Method at the following rates:

Asset Group Rates (SLM)

Furniture & Fixtures 6.33%

Vehicles 9.50%

Office Equipments 4.75%

Office Premises 1.63%

b) Product Development Expenses capitalized are amortized over its useful life for a period not exceeding ten years.

c) Leasehold assets are amortized over the period of lease.

d) Miscellaneous expenditure is amortized over a period of 5 years from the year in which it has been incurred.

e. Impairment of Assets

Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognized in the income statement for items of fixed assets carried at cost. The recoverable amount is higher of an assets net selling price and value in use. The net selling price is the amount obtained from the sale of an asset in an arm's length transaction while value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset, from its disposal at the end of its useful life.

f. Inventories

Inventories have been valued on the following basis:

i). Raw Materials, - At cost. packing material, stores and spares ii). Work-in-progress - At cost plus appropriate allocation of overheads. iii). Finished Goods - At cost plus appropriate allocation of overheads or net realizable value, which- ever is lower

g. Investments

Investments are classified into current investment and long term investments. Current investments are stated at lower of cost or fair market value. Long Term Investments are stated at cost less provision for permanent diminution in value if any, of investments.

h. Foreign Exchange Transactions

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Realized gains and losses on settlement of foreign currency transactions are recognized in the Profit and Loss account. Foreign currency assets and liabilities at the year end are translated at the year end exchange rates and the resultant exchange difference is recognized in the Profit and Loss Account. Exchange differences relating to fixed assets are adjusted in the cost of the respective assets.

i. Research & Development

A. Revenue expenditure on R&D is charged of to profit & loss account in the year in which it is incurred where the Company is not certain of realizing future economic benefits from such activities.

B. Capital expenditure on R&D is included under the relevant fixed assets.

j. Employee Benefts

(a) Short Term Employee Benefts

All short term employee benefits such as salaries, wages, bonus, medical benefits which fall due within 12 months of the period in which the employee renders the related services are charged to the profit and loss account.

(b) Long Term & Post- Employment Benefts

(i) Defined Contribution Plan

Company's contribution paid/payable during the year towards Provident Fund Scheme, ESIC is recognized in the Profit & Loss Account.

(ii) Defined Benefit Plan

The Company's Gratuity Benefit Scheme is a defined benefit plan. The Company's liability for gratuity is determined by actuarial valuation made at the end of each financial year using the projected unit credit method. Actuarial gains and Losses are immediately recognized in Profit & Loss Account as income and expense.

k. Borrowing Costs

Borrowing costs directly attributable to acquisition, construction and production of qualifying assets are capitalized as a part of the cost of such asset up to the date of completion. Other borrowing costs are charged to the Profit & Loss Account.

l. Deferred tax

Deferred Income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. The differences that result between the profit considered for income taxes and the profit as per the financial statements are identified, and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on prevailing enacted or substantially enacted regulations. Deferred tax assets are recognized only if there is reasonable certainty of their realization and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

m. Provision for Tax

Provision for current tax is determined on the basis of estimated taxable income for the period as per the provisions of Section 115JB Income Tax Act, 1961.

n. Earnings per Share (EPS)

The earnings considered in ascertaining the Company's EPS are computed as per Accounting Standard 20 on "Earning per Share", issued by the Institute of Chartered Accountants of India. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the period. The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares unless the effect of the potential dilutive equity shares is anti-dilutive.

o. Provision and Contingent Liabilities

Provisions are recognized and computed in accordance with Accounting Standard 29 on "Provisions, Contingent Liabilities and Contingent Assets" issued by the Institute of Chartered Accountants of India i.e. they are recognized if the following conditions are satisfied:

(a) The Company has a present obligation as a result of past event;

(b) It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and

(c) A reliable estimate can be made of the amount of the obligation.

Similarly, the Contingent liabilities are disclosed in Accordance with the Accounting Standard 29 i.e. they are disclosed when the Company has a possible obligation or a present obligation and it is probable that a Cash Outflow will not be required to settle the obligation

p. Leases

Lease arrangements where the risks and rewards incident to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Lease rentals under operating leases are recognised in the profit and loss account on a straight-line basis over the period of lease.


Mar 31, 2011

1. Basis of preparation of Financial Statements :

i. The financial statements have been prepared under historical cost convention on the accrual basis of accounting in accordance with the accounting principles generally accepted in India (GAAP) and in compliance with the Accounting Standards issued by The Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956 as adopted consistently by the company.

ii. Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company.

iii. The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made, that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported year. Differences between the actual results and estimates are recognized in the year in which the results are known / materialized.

2. Revenue recognition :

A. Revenue from sales in respect of hardware is recognized when they are completed with passing of the title and are exclusive of sales tax, octroi and other incidental expenses.

B. Revenue from software development is recognized in accordance with the percentage of completion method and revenue from sale of licenses of software products and other products is recognized on delivery / installation, as the case may be.

C. Revenue from IT infrastructure networking, annual service contracts and facilities management services is deferred and recognized ratably over the period of the underlying maintenance agreement.

D. Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

E. Dividend Income is recognized when the shareholders' right to receive payment is established by the Balance Sheet Date.

3. Expenditure :

Expenses are accounted on accrual basis and the provisions are made for all known losses and liabilities. No provisions are made towards likely expenses on providing post-sales client support for fixed priced contracts as well as in respect of annual technical service contracts in so far as it pertains to the period beyond the current accounting year.

4. Fixed Assets and Depreciation : A. Fixed Assets

a) Fixed assets are stated at their original cost of acquisition including incidental expenses related to acquisition & installation of the concerned assets less accumulated depreciation and impairment losses, if any.

b) Costs that are directly associated with identifiable and unique software products controlled by the Company, whether developed in-house or acquired, and have probable economic benefits exceeding the cost are recognized as product development.

c) Assets acquired under lease are at cost of acquisition including incidental expenses related to acquisition & installation of such assets.

d) Advances paid towards acquisition of fixed assets and the cost of assets not ready for use as at the Balance Sheet date are disclosed under capital work-in-progress.

b) Product Development Expenses capitalized are amortized over its useful life for a period not exceeding ten years.

c) Leasehold assets are amortized over the period of lease.

d) Miscellaneous expenditure is amortized over a period of 5 years from the year in which it has been incurred.

5. Impairment of Assets:

Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognized in the income statement for items of fixed assets carried at cost. The recoverable amount is higher of an assets net selling price and value in use. The net selling price is the amount obtained from the sale of an asset in an arm's length transaction while value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset, from its disposal at the end of its useful life.

6. Inventories :

Inventories have been valued on the following basis:

i) Raw Materials, packing material, stores and spares - At cost

ii) Work-in-progress - At cost plus appropriate allocation of overheads

iii) Finished Goods - At cost plus appropriate allocation of overheads or net

realizable value, whichever is lower

7. Investments :

Investments are classified into current investment and long term investments. Current investments are stated at lower of cost or fair market value. Long Term Investments are stated at cost less provision for permanent diminution in value if any, of investments.

8. Foreign Exchange Transactions :

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Realized gains and losses on settlement of foreign currency transactions are recognized in the Profit and Loss account. Foreign currency assets and liabilities at the year end are translated at the year end exchange rates and the resultant exchange difference is recognized in the Profit and Loss Account. Exchange differences relating to fixed assets are adjusted in the cost of the respective assets.

9. Research & Development :

A. Revenue expenditure on R&D is charged to profit & loss account in the year in which it is incurred where the Company is not certain of realizing future economic benefits from such activities.

B. Capital expenditure on R&D is included under the relevant fixed assets.

10. Employee Benefits:

(a) Short Term Employee Benefits

All short term employee benefits such as salaries, wages, bonus, medical benefits which fall due within 12 months of the period in which the employee renders the related services are charged to the profit and loss account.

(b) Long Term & Post- Employment Benefits

(i) Defined Contribution Plan

Company's contribution paid/payable during the year towards Provident Fund Scheme, ESIC is recognized in the Profit & Loss Account.

(ii) Defined Benefit Plan

The Company's Gratuity Benefit Scheme is a defined benefit plan. The Company's liability for gratuity is determined by actuarial valuation made at the end of each financial year using the projected unit credit method. Actuarial gains and Losses are immediately recognized in Profit & Loss Account as income and expense.

11. Borrowing Costs :

Borrowing costs directly attributable to acquisition, construction and production of qualifying assets are capitalized as a part of the cost of such asset up to the date of completion. Other borrowing costs are charged to the Profit & Loss Account.

12. Deferred tax :

Deferred Income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. The differences that result between the profit considered for income taxes and the profit as per the financial statements are identified, and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on prevailing enacted or substantially enacted regulations. Deferred tax assets are recognized only if there is reasonable certainty of their realization and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

13. Provision for Tax:

Provision for current tax is determined on the basis of estimated taxable income for the period as per the provisions of Section 115JB Income Tax Act, 1961.

14. Earnings per Share (EPS) :

The earnings considered in ascertaining the Company's EPS are computed as per Accounting Standard 20 on "Earning per Share", issued by the Institute of Chartered Accountants of India. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the period. The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares unless the effect of the potential dilutive equity shares is anti-dilutive.

15. Provision and Contingent Liabilities

Provisions are recognized and computed in accordance with Accounting Standard 29 on "Provisions, Contingent Liabilities and Contingent Assets" issued by the Institute of Chartered Accountants of India i.e. they are recognized if the following conditions are satisfied:

(a) The Company has a present obligation as a result of past event;

(b) It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and

(c) A reliable estimate can be made of the amount of the obligation.

Similarly, the Contingent liabilities are disclosed in Accordance with the Accounting Standard 29 i.e. they are disclosed when the Company has a possible obligation or a present obligation and it is probable that a Cash Outflow will not be required to settle the obligation.

16. Leases

Lease arrangements where the risks and rewards incident to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Lease rentals under operating leases are recognised in the profit and loss account on a straight-line basis over the period of lease.









 
Subscribe now to get personal finance updates in your inbox!