STANDALONE FINANCIAL STATEMENT

NOTE # 1

R&B Denims is a Limited Company incorporated in November 2010 by the RawatKhedia and the Borana group, two amongst the most influential textile houses in the polyester hub at Surat. Both of these group(s) have a long lineage of more than 30 years each, in the textile industry, and are very well known in their areas of expertise.

The Company is engaged in to the business of manufacturing and sale of quality Denim Textile Products. Today the Company is manufacturing various types of Denim Fabric and undertaking high range of value addition with Open End Spun Yarns, Multi Count, Cottons and Polyester Spandex with Indigo Bottom Sulphur Toppings and Sulphur Bottom and Indigo Toppings with both Foam and Wet Finishes.

Since inception, growth of the company has been remarkable and company created itself a prime position among others. The brand has achieved nationwide recognision and image of its own. To enhance corporate image and brand name, Company has got listed on SME platform of Bombay Stock Exchange on 22nd April 2014. The Company successfully implemented expansion of Phase III during the year and installed machineries for value addition.

NOTE # 2

SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Accounting (AS 1)

i. The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India ("Indian 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, and guidelines issued by the Securities Exchange Board of India.

ii. These accounts are brpared on the historical cost basis and the accounting principles of a going concern.

iii. Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

2. Use of Estimates (AS 1)

The brparation of financial statement requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and differences between actual results and estimates are recognized in the periods in which the results are known / materialize.

3. Inventories (AS 2)

Stock of Raw Material and WIP is valued at cost. Finished goods are valued at cost or market value whichever is less. Cost of Raw Material and Finished Goods includes the purchase cost (Net of any taxes on which credits are received or receivable) and other incidental cost, to bring such material to its brsent location and condition.

4. Cash Flows (AS 3)

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. Cash flows from operating, investing and financing activities of the Company are segregated, accordingly.

5. Debrciation (AS 6)

Debrciation is provided on Written Down Value Method in the manners brscribed in Schedule II of Companies Act 2013 (In brvious years brceeding to brvious year, as per Schedules XIV to the Companies Act, 1956), on the basis of shifts / manners of utilization of the assets. Debrciation on additions/ disposals during the year has been provided on pro-rata basis with reference to the number of days utilized.

6. Revenue Recognition (AS 9)

Revenue is recognised when it is earned and no significant uncertainty exists as to its realisation or collection. Revenue from sale of goods is recognised on delivery of the products, when all significant contractual obligations have been satisfied, the property in goods is transferred for a price, significant risks and rewards of ownership are transferred to the customers and no effective ownership is retained. Sales are net off taxes and accounted on mercantile basis.

7. Fixed Assets (AS 10)

i. Fixed assets shown under gross block are valued at cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition and also include cost of installation wherever incurred. All br-operative costs, including specific financing cost till commencement of commercial production, net charges on foreign exchange contracts and adjustment arising from foreign exchange rate variations attributable to the fixed assets are capitalised.

ii. Debrciation on fixed assets has been charged on written down value basis, pro-rata for the period of use, by adopting the revised rates of debrciation specified in Schedule II of the Companies Act, 2013.

8. Foreign Currency Transactions (AS 11)

i. The reporting currency of the company is Indian rupees.

ii. Transactions in foreign currencies are recognized at the brvailing exchange rates on the transaction dates. Realize gain and losses on settlement of foreign currency transactions are recognized in the profit and loss account under the natural revenue heads of accounts. Exchange differences relating to fixed assets are capitalised to respective Fixed Asset.

iii. 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.

iv. In case of forward contract, foreign currency derivatives or other financial instruments that are in substance forward exchange contracts, the brmium or discount arising at the inception of the contract transactions are included in determining the net profit for the year.

9. Investments (AS 13)

Long term Investments are valued at cost. Provision for diminution is made to recognise a decline, other than temporary, in the value of investments. Current investments are stated at lower of cost or market value.

10. Employee benefits (AS 15)

Defined-contribution plans:

i. Provident fund and pension scheme are Defined Contribution Plans in the Company. The Company is a member of recognized Provident Fund scheme established under The Provident Fund & Miscellaneous Act, 1952 by the Government of India. The Company is contributing 12% of Salary & Wages of eligible employees under the scheme every month. The amount of contribution is being deposited each and every month. The contribution paid or payable under the scheme is recognized during the period under which the employee renders the related services.

ii. Employee Gratuity Fund Scheme is the Defined Benefit Plan. Provision for gratuity has been made in the accounts, in case of those employees who are eligible for the retirement benefits. Gratuity is paid at the time of retirement of employees. Provision for gratuity liability is provided based on Actuarial Valuation made.

11. Foreign exchange transactions

i. Foreign currency transactions are accounted for at the exchange rates brvailing at the date of the transaction. Gains and losses resulting from the settlement of such transactions are recognised in the profit and loss account. Exchange differences relating to fixed assets are adjusted in the cost of the asset.

ii. Amount payable and receivable in the foreign currency as at the year end are translated at the year end exchange rate. Gains and losses thereon are recognised in the profit and loss account.

12. Borrowing costs (AS 16)

Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalised as part of the cost of that asset till such time the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use.

13. Earnings per share (AS 20)

Basic and Diluted earnings/(loss) per share are calculated by dividing the net profit / (loss) for the period attributable to equity shareholders (after deducting brference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for any bonus shares issued during the year and also after the balance sheet date but before the date the financial statements are approved by the board of directors.

14. Taxes on income (AS 22)

Current tax - Provision for current tax is made based on tax liability computed after considering tax allowances and exemptions.

Deferred tax - Deferred tax is recognised on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax assets are recognised and carried forward to the extent that there is a reasonable or virtual certainty, as may be applicable, that sufficient future taxable income will be available against which such deferred tax asset can be realised.

15. Impairment of assets (AS 28)

An impairment loss is charged to the Statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

16. Provisions and contingent liabilities (AS 29)

A provision is recognised when the company has a brsent obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their brsent value and are determined based on best estimates required to settle the obligation at the balance sheet date.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a brsent obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably.

17. Preliminary Expenses (AS 26)

Preliminary Expenditure is written off fully during the year under its occurrence as per As 26.

NOTES FORMING PART OF FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2016

The brvious period figures have been regrouped / reclassified, wherever necessary to confirm to the current period brsentation.

Other Disclosures

1. There was no employee in receipt of remuneration aggregating to Rs. 6,000,000/- or more per year or Rs. 500,000/- or more per month for the part or whole of the year. Previous year also there was no such employee.

2. Balances of loans, advances, Cash & Bank and Creditors & Debtors are subject to confirmation and have been taken as appeared in the books of account of the company.

3. The quantity and value of closing stock is certified by the management as true and correct

4. In the absence of information regarding outstanding dues of MICRO or Small Scale Industrial Enterprise(s) as per The Micro, Small & Medium Enterprise Development Act, the Company has not disclosed the same as required by Schedule VI to the Companies Act, 1956.

5. The provision of Service Tax Expense has been made in current of Rs. 265,497 ( Pre Year Rs. 348,989)

6. The Company, being eligible for VAT subsidy under the Gujarat Textile Policy 2012, has received subsidy amount Rs. 2.05 Cr for the F.Y. 2013-14, alongwith interest and the same has been accounted as income during the year. Treatment of revenue recognition has been made as per AS 9.

7. The Company, being eligible for Power Tariff Subsidy under the Gujarat Textile Policy 2012, has received subsidy for the calendar year 2015, amount for Rs. 69.51 lakhs and the same has been accounted as income during the year. Treatment of revenue recognition has been made as per AS 9.

8. The Company, being eligible for Interest Subsidy under the Technology Upgradation Fund (TUF Scheme) has received subsidy for the F.Y. 2014-15, amount for Rs. 59.00 lakhs and the same has been accounted as income during the year. Treatment of revenue recognition has been made as per AS 9.

9. The Promoter Directors and the related parties made an Open Offer to the shareholders of the Company for acquisition of 3,638,619 equity shares of the company at a price of Rs. 10/- each. The offer commenced on 22.01.2016 and tendering period closed on 05.02.2016. The open offer was complete and successful within the given dates.

For Pradeep Singhi & Associates

Chartered Accountants

FRN : 108029W

Pradeep Kumar Singhi

Proprietor

M. No. 024612

FOR R & B DENIMS LIMITED

Sd/- Rajkumar M. Borana Director (DIN : 01091166)

Sd/- Ankur M. Borana Director  (DIN : 01091164)

Sd/-(Jyoti Agarwal) Company Secretary

Place : Surat

Date : 20/05/2016