Accounting Policies of R J Bio Tech Ltd. Company

Mar 31, 2015

1 Method of Accounting

The accounts of the Company are prepared in accordance with the accounting principles generally accepted in India. The company has maintained its accounts on mercantile system of accounting.

2 Basis for preparation of Financial Statements

The financial statements have been prepared under the historical cost conventions and in accordance with generally accepted accounting principles. Accounting policies not specifically referred to otherwise are consistent and in accordance with generally accepted accounting principles.

3 Fixed Assets

Fixed Assets are stated at cost of acquisition/construction less accumulated depreciation. None of the fixed assets have been revalued during the year under review.

4 Depreciation

Depreciation has been calculated by WDV Method, as per Schedule II of Companies Act, 2013. The estimated useful lives of fixed assets have been revised in accordance with Schedule II to Companies Act, 2013, with effect from 1st April, 2014. Pursuant to the above mentioned changes in useful lives, for the assets whose revised useful lives have expired prior to 31st March, 2014, the net book value of such assets has been deducted from retained earnings, as per Schedule II to Companies Act, 2013.

5 Inventories

The inventory consists of stock of Seeds. The company has valued the Inventory at cost or market price, whichever is lower and on the basis of physical verification of stock by the management at the end of the year. There is no change in the method of valuation of stock as compared to previous year.

6 Revenue Recognition

The company is following the policy, which is normally followed in seed industry, of billing of its products on its dispatch to dealers and deducting whatever goods are returned after the end of season from dealers by showing it as sales return and deducting the same from sales. As it is agriculture related industry, the sale is bifurcated between " Kharif " and " Rabi " season. The unsold goods / stock lying with dealers, which is booked as sales by the company, in Kharif & Rabi season are returned by dealers after the end of Kharif season, i.e., by the end of December and that of Rabi season by the end of March.

7 Current Assets, Loans & Advances

In the opinion of the management, the value of all current assets, loans & advances and other realizable are not less than their realizable value in the ordinary course of business.

8 Accounting for Taxes on Income

The Income generated from cultivation and marketing of seeds and vegetables, which is in the nature of agricultural activity, is considered as exempt from Income Tax U/s. 10(1) of the Income Tax Act, 1961. Hence no provision has been made either for income tax, MAT or deferred tax.

9 Contingencies and events occurred after the Balance sheet date

a) No such liabilities were noticed which are contingent in nature.

b) There are no such events occurred after the Balance sheet date which will have bearing on profitability and / or State of Affairs of the company.

10 Borrowing Costs

Borrowing costs that are directly attributable to acquisition of assets has been capitalized and other borrowing costs has been treated as an expense during the period in which they have incurred.

11 Research and Development Expenditure

The company is following the policy of deferring revenue R & D expenses incurred for a total period of 4 year . Out of total revenue R & D expense incurred in a particular year, 1/4 is debited to statement of profit and loss in that year & balance 3/4 is carried as deferred revenue expenditure & transfer to statement of profit and loss, equally over a period of subsequent 3 years

12 Earnings Per Share

Basic Earning Per Share is calculated by dividing the Net Profit for the period attributable to the Equity Shareholders by the weighted average number of Equity Shares outstanding during the year.

13 Segment Reporting

The company produces and deals primarily in Seeds and as such there is a single business segment. Further, the company is engaged in providing and selling its products in single economic environment in India i.e. there is a single geographical segment. Hence, no further disclosures are made.

14 Retirement Benefits

Retirement Benefits in the form of provident fund contributions and Family Pension Fund are charged to the Profit & Loss Account of the period when the contributions to the fund are due. There are no obligations other than the contribution payable to the fund. The company has participated in Group Gratuity Cum Life Assurance Scheme of Life Insurance Corporation of India for gratuity payable to the employees and contribution thereto is charged to the Statement of Profit & Loss.

15 Cash Flow Statement

Cash Flows are reported using the Indirect method, whereby Profit Before Tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and items of Income or expense associated with investing or financing Cash flows.

16 Impairment of Assets

The carrying amount of asset is reviewed periodically for any indication of impairment based on internal/ external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the asset's net selling price & value in use. In Assessing value in use, the estimated future cash flow are discounted to their present value at the weighted average cost of capital. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

17 Foreign Currency Transactions:

Foreign currency transactions are dealt with in accordance with the Accounting Standard 11 "The Effects of Changes in Foreign Exchange Rates", notified by the Companies (Accounting Standards) Rules, 2006.

18 Operating Leases:

Assets acquired on lease where a significant portion of the risks and rewards of the ownership are retained by the lessor are classified as operating lease. Lease rentals are charged off to the Statement of Profit & Loss Account as incurred.

19 Prior Period Items

Prior Period Items are included in the respective heads of accounts and material items are disclosed by way of notes to the accounts.

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Mar 31, 2014

1 Method of Accounting

The accounts of the Company are prepared in accordance with the accounting principles generally accepted in India. The company has maintained its accounts on mercantile system of accounting.

2 Basis for preparation of Financial Statements

The financial statements have been prepared under the historical cost conventions and in accordance with generally accepted accounting principles. Accounting policies not specifically referred to otherwise are consistent and in accordance with generally accepted accounting principles.

3 Inventories

The inventory consists of stock of Seeds. The company has valued the Inventory at cost or market price, whichever is lower and on the basis of physical verification of stock by the management at the end of the year. There is no change in the method of valuation of stock as compared to previous year.

4 Revenue Recognition

Sales are accounted for on the basis of dispatches to customers and Other Income is recorded on accrual basis.

5 Current Assets, Loans & Advances

In the opinion of the management, the value of all current assets, loans & advances and other realizables are not less than their realizable value in the ordinary course of business.

6 Accounting for Taxes on Income

a The Income generated from cultivation and marketing of seeds and vegetables, which is in the nature of agricultural activity, is fully exempt from Income Tax u/s 10(1) of the Income Tax Act, 1961. Hence no provision has been made either for income tax or deferred tax.

b Payment of MAT results in tax credit according to the Income Tax Act,1961; can be carried forward for subsequent ten years & adjusted against future tax liabilities. On the basis of estimates made by the company, the management is of the view that it would have sufficient tax liabilities to offset the MAT Credit during the prescribed carry forward period.

7 Contingencies and events occurred after the Balance sheet date

a] No such liabilities were noticed which are contingent in nature.

b] There are no such events occured after the Balance sheet date which will have bearing on profitability and / or State of Affairs of the company.

8 Borrowing Costs

Borrowing costs that are directly attributable to acquisition of assets has been capitalized and other borrowing costs has been treated as an expense during the period in which they have incurred.

9 Research and Development Expenditure

The company is following the policy of deferring revenue R & D expenses incurred for a total period of 4 year . Out of total revenue R & D expense incurred in a particular year, 1/4 is debited to statement of profit and loss in that year & balance 3/4 is carried as defered revenue expenditure & transfer to statement of profit and loss, equally over a period of subsequent 3 years

10 Deferrement of Expenditure

The company was following the policy of deferring revenue expenses related to travelling, Marketing & sales promotion expenses incurred for a total period of 2 years. Out of total revenue expenses related to travelling, Marketing & sales promotion expenses Incurred in a particular year, 1/2 was debited to statement of profit and loss in that year & balance 1/2 was carried as defered revenue expenditure & transferred to statement of profit and loss, equally over a period of subsequent year. In current year the company has changed the policy & now it is debiting 100% expenses incurred as mentioned above to Statement of Profit & Loss. Due to change in accounting policy the profit before tax of current half year ended 31.03.2014 has been decreased by Rs.75,68,046.38/-. If the company has followed accounting policy as of last year i.e deferring expenses incurred over two years the profit before tax for the Year Ended 31.03.2014 would have been Rs.5,02,89,332.65/-.

11 Earnings Per Share

Basic Earning Per Share is calculated by dividing the Net Profit for the period attributable to the Equity Shareholders by the weighted average number of Equity Shares outstanding during the year.

12 Segment Reporting

The company produces and deals primarily in Seeds and as such there is a single business segment. Further, the company is engaged in providing and selling its products in single economic environment in India i.e. there is a single geographical segment. Hence, no further disclosures are made.

13 Retirement Benefits

Retirement Benefits in the form of provident fund contributions and Family Pension Fund are charged to the Profit & Loss Account of the period when the contributions to the fund are due. There are no obligations other than the contribution payable to the fund.The company has participated in Group Gratuity Cum Life Assurance Scheme of Life Insurance Corporation of India for gratuity payable to the employees and contribution thereto is charged to the Statement of Profit & Loss.

14 Cash Flow Statement

Cash Flows are reported using the Indirect method, whereby Profit Before Tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and items of Income or expense associated with investing or financing Cash flows.

15 Impairment of Assets

The carrying amount of asset is reviewed periodically for any indication of impairment based on internal/ external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the asset''s net selling price & value in use. In Assessing value in use, the estimated future cash flow are discounted to their present value at the weighted average cost of capital. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

16 Foreign Currency Transactions:

Foreign currency transactions are dealt with in accordance with the Accounting Standard 11 “The Effects of Changes in Foreign Exchange Rates”, notified by the Companies (Accounting Standards) Rules, 2006.

17 Operating Leases:

Assets acquired on lease where a significant portion of the risks and rewards of the ownership are retained by the lessor are classified as operating lease. Lease rentals are charged off to the Statement of Profit & Loss Account as incurred.

18 Prior Period Items

Prior Period Items are included in the respective heads of accounts and material items are disclosed by way of notes to the accounts.