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Accounting Policies of Riba Textiles Ltd. Company

Mar 31, 2015

1- Corporate Information:

Riba Textiles Limited (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares is listed on Bombay Stock Exchange (BSE). The Company is engaged in Manufacturing & Export of terry towels.

A) Basic of Accounting & preparation of Financial Statement

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting principles in India (India GAAP) to comply with the Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 ("the 1956 Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 ("the 2013 Act") in terms of General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs) and the relevant provisions of the 1956 Act/2013 Act, as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

B) Use of estimates

The preparation of the financial statements in conformity with India GAAP requires the Management to make estimates and assumption considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the period in which the results are known/ materialize.

C) . Inventories

1. Raw materials, stores and spares are valued at cost.

2. The value of work in process is taken on estimated cost of process completed.

3. Finished goods are valued at cost or net realizable value, whichever is less.

D) Depreciation on tangible fixed assets

Depreciation is provided on straight line basis over the useful life of the assets, which is stated in schedule II of Companies Act, 2013 or reassessed by the company based on technical evaluation. Accordingly Rs. 9.67 Lac on account of assets with no remaining useful life as on 1st April 2014 has been adjusted to retained earnings.

E) Revenue recognition

Revenue including other income is recognized when no significant uncertainty as to its' determination or realization exists.

F) Export Benefits

Export Benefits available under prevalent schemes are accrued in the year when the right to receive credit as per the terms of the scheme is established in respect of exports made and are accounted to the extent there is no significant uncertainty about the measurability and ultimate realization/utilization of such benefits.

G) Tangible fixed assets

Fixed assets are recorded at cost of acquisition or construction. They are started at the historical cost less accumulated depreciation, amortization and impairment loss, if any.

H) Foreign currency transaction and translations

Transactions in foreign currency are recorded at the original rates of exchange in force at the time the transactions are effected. At the year-end, monetary items denominated in foreign currency and forward exchange contracts are reported using closing rates of exchange. Exchange differences arising thereon and on realization/payment of foreign exchange are accounted, in the relevant year, as income or expense.

In case of forward exchange contracts, or other financial instruments that are in substance forward exchange contracts, the premium or discount arising at the inception of the contracts is amortized as expense or income over the life of the contacts. Gains/losses on settlement of transactions arising on cancellation/renewal of forward exchange contracts are recognized as income or expense.

I) Investments

Long-term investments (excluding investment properties), are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties. Investment properties are carried individually at cost less accumulated depreciation and impairment, if any. Investment properties are capitalized and depreciated in accordance with the policy stated for Tangible Fixed Assets. Impairment of investment property is determined in accordance with the policy stated for Impairment of Tangible Assets.

J) Employee benefits

a) The Company contributes towards Provident Fund, Welfare fund. Fund which are defined contribution scheme. Liability in respect thereof is determined on the basis of contribution as required to be made under the statues/rules.

b) Gratuity Liability, a defined benefit scheme, and provision for compensated absences are accrued and provided for on the basis of actuarial valuations made at the year /period end.

K) Borrowing Costs

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

L) Taxes on income

Tax expenses comprise both current and deferred tax at the applicable enacted/substantively enacted rates. Current tax represents the amount of income tax payable/recoverable in respect of the taxable income/loss for the reporting period.

M) Provisions and contingencies

A provision is recognized when the Company has a present obligation as a result of a past event, for which it is probable that cash outflow will be required and a reliable estimate can be made of the amount of the obligation. A contingent liability is disclosed when the Company has a possible or present obligation where it is not probable that an outflow of resources will be required to settle it. Contingent assets are not recognized in the financial statement.

N) Earnings per share:

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding at end of the year.

O) Operating Cycle

Based on the nature of products/activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, 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.


Mar 31, 2014

A) Basic of Accounting & preparation of Financial Statement

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting principles in India (India GAAP) to comply with the Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 ("the 1956 Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 ("the 2013 Act") in terms of General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs) and the relevant provisions of the 1956 Act/2013 Act, as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

B) Use of estimates

The preparation of the financial statements in conformity with India GAAP requires the Management to make estimates and assumption considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the period in which the results are known/ materialize.

C) . Inventories

1. Raw materials, stores and spares are valued at cost.

2. The value of work in process is taken on estimated cost of process completed.

3. Finished goods are valued at cost or net realizable value, whichever is less.

D) Depreciation on tangible fixed assets

Depreciation is provided using the Straight Line Method, pro rata to the period of use, as per the useful life of the assets estimated by the management or at the rates prescribed in Schedule XIV to the companies Act, 1956 whichever is higher.

E) Revenue recognition

Revenue including other income is recognized when no significantuncertainty as to its'' determination or realization exists.

F) Export Benefits

Export Benefits available under prevalent schemes are accrued in the year when the right to receive credit as per the tenns of the scheme is established in respect of exports made and are accounted to the extent there is no significant uncertainty about the measurability and ultimate realization/utilization of such benefits.

G) Tangible fixed assets

Fixed assets are recorded at cost of acquisition or construction. They are started at the historical cost less accumulated depreciation, amortization and impairment loss, if any. H)

Foreign currency transaction and translations

Transactions in foreign currency are recorded at the original rates of exchange in force at the time the transactions are effected. At the year-end, monetary items denominated in foreign currency and forward exchange contracts are reported using closing rates of exchange. Exchange differences arising thereon and on realization/payment of foreign exchange are accourted, in the relevant year, as income or expense.

In case of forward exchange contracts, or other financial instruments that are in substance forward exchange contracts, the premium or discount arising at the inception of the contracts is amortized as expense or income over the life of the contacts. Gains/losses on settlement of transactions arising on cancellation/renewal of forward exchange contracts are recognized as income or expense.

I) Investments

Long-term investments (excluding investment properties), are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties. Investment properties are carried individually at cost less accumulated depreciation and impairment, if any. Investment properties are capitalized and depreciated in accordance with the policy stated for Tangible Fixed Assets. Impairment of investment property is determined in accordance with the policy stated for Impairment of Tangible Assets.

J) Employee benefits

a) The Company contributes towards Provident Fund, Welfare fund. Fund which arc defined contribution scheme. Liability in respect thereof is determined on the basis of contribution as required to be made under the statues/rules.

b) Gratuity Liability, a defined benefit scheme, and provision for compensated absences are accrued and provided for on the basis of actuarial valuations made at the year /period end.

K) Borrowing Costs

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

L) Taxes on income

Tax expenses comprise both current and deferred tax at the applicable enacted/substantivcly enacted rates. Current tax represents the amount of income tax payabie/recoverablc in respect of the taxable income/loss for the reporting period.

M) Provisions and contingencies

A provision is recognized when the Company has a present obligation as a result of a past event, for which it is probable that cash outflow will be required and a reliable estimate can be made of the amount of the obligation. A contingent liability is disclosed when the Company has a possible or present obligation where it is not probable that an outflow of resources will be required to settle it. Contingent assets are not recognized in the financial statement.

N) Earnings per share:

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding at end of the year.

O) Operating Cycle

Based on the nature of products/activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, 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.


Mar 31, 2010

A) Basis of preparation of financial statements:

The financial statements are prepared under the historical cost convention in accordance with the generally accepted principals and the provisions of the Companys Act 1956.

B) Fixed Assets:

i) Fixed assets are shown at cost of acquisition or construction less accumulated depreciation. All

costs including financial cost till the date of commencement of commercial production are capitalized.

ii) Depreciation on fixed assets is provided by Schedule XIV to the Companys Act 1956 in state line method on prorate basis

C) Inventories

i) Raw Materials, Chemicals, Stores and Spares and Fuels are valued at cost.

ii) The value of work in process is taken on estimated cost of process completed.

iii) Finished goods are valued at cost or net realizable value, whichever is less.

D) Miscellaneous Expenditure

1) Unsecured loans are received from the promoters only.