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Rain Industries Ltd.

BSE: 500339 Sector: Others
NSE: RAIN ISIN Code: INE855B01025
BSE 15:24 | 18 Jun 206.70 -7.20
(-3.37%)
OPEN

212.00

HIGH

216.00

LOW

204.85

NSE 15:09 | 18 Jun 207.60 -6.50
(-3.04%)
OPEN

210.00

HIGH

213.80

LOW

204.50

OPEN 212.00
PREVIOUS CLOSE 213.90
VOLUME 215083
52-Week high 475.50
52-Week low 96.85
P/E 224.67
Mkt Cap.(Rs cr) 6,952
Buy Price 206.60
Buy Qty 100.00
Sell Price 206.70
Sell Qty 584.00
OPEN 212.00
CLOSE 213.90
VOLUME 215083
52-Week high 475.50
52-Week low 96.85
P/E 224.67
Mkt Cap.(Rs cr) 6,952
Buy Price 206.60
Buy Qty 100.00
Sell Price 206.70
Sell Qty 584.00

Rain Industries Ltd. (RAIN) - Auditors Report

Company auditors report

To

The Members of

Rain Industries Limited

Report on the Standalone IND AS Financial Statements

We have audited the accompanying Standalone Ind AS financial statements of RainIndustries Limited ("the Company") which comprise the Balance Sheet as atDecember 31 2017 and the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of the significant accounting policies and other explanatoryinformation (collectively referred to as the 'Standalone Ind AS financial statements').

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Standalone Ind AS financial statements that give a true and fair view of the stateof affairs (financial position) profit or loss (financial performance including othercomprehensive income) cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) prescribed under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these Standalone Ind AS financialstatements based on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit of the Standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Standalone Ind AS financial statements. The procedures selecteddepend on the auditors' judgment including the assessment of the risks of materialmisstatement of the Standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the Standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the Standalone Ind ASfinancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thestate of affairs (financial position) of the Company as at December 31 2017 and itsprofit (financial performance including other comprehensive income) its cash flows andthe changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

2. As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

(d) In our opinion the aforesaid Standalone Ind AS financial statements comply withthe Ind AS prescribed under section 133 of the Act.

(e) On the basis of the written representations received from the directors as onDecember 31 2017 taken on record by the Board of Directors none of the directors isdisqualified as on December 31 2017 from being appointed as a director in terms ofSection 164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. the Company has disclosed the impact of pending litigations on its financialposition in its Standalone Ind AS financial statements - Refer Note 30 to the StandaloneInd AS financial statements.

ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. there has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

for B S R & Associates LLP

Chartered Accountants

ICAI Firm Registration No: 116231W/W-100024

Sriram Mahalingam

Partner

Membership No: 049642

Place : Hyderabad

Date : February 28 2018

Annexure A to the Independent Auditor's Report on the Standalone Financial Statements

With reference to the Annexure A referred to in our report of even date to the membersof Rain Industries Limited ('the Company') on the standalone Ind AS financial statementsfor the year ended December 31 2017 we report that:

i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a regular program of physical verification of its fixed assets bywhich all fixed assets are verified once in a period of two years. In our opinion theperiodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets. In accordance with this program fixed assets havebeen physically verified by Management during the year and no material discrepancies werenoticed during such verification.

(c) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties asdisclosed in the Note 3 to these Standalone Ind AS financial statements are held in thename of the Company.

ii. As explained to us the Company's activities primarily include service revenue andtrading in inventory of petroleum coke products. The sales are made to its customers on ahigh sea sale basis. Accordingly it does not hold any physical inventories. Accordinglyparagraph 3(ii) of the said order is not applicable.

iii. The Company has granted unsecured loans to one subsidiary company covered in theregister maintained under Section 189 of the Companies Act 2013 ("Act"). TheCompany has not granted loans to firms Limited Liability Partnerships or other partiescovered in the register maintained under Section 189 of the Act.

(a) In respect of the aforesaid loans the terms and conditions under which such loanswere granted are not prejudicial to the Company's interest.

(b) In respect of the aforesaid loans the schedule of repayment of principal andpayment of interest has been stipulated and the party is repaying the principal amountsas stipulated and are also regular in payment of interest as applicable

(c) In respect of the aforesaid loans there are no amount which is overdue for morethan ninety days.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act with respect toloan given and investments made to the extent applicable. However the Company has notgranted any guarantee or created security to the parties covered under section 185 and 186of the Act.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under. Accordinglyparagraph 3(v) of the Order are not applicable to the Company.

vi. The Central Government of India has not specified maintenance of cost records undersub-section (1) of Section 148 of the Act for the products sold and services rendered bythe Company. Accordingly paragraph 3(vi) of the Order are not applicable to the Company.

vii. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Provident fund Income-taxSales-tax Service tax Duty of Customs Value added tax Goods and service tax and othermaterial statutory dues have generally been regularly deposited during the year with theappropriate authorities by the Company. As explained to us the Company did not have anydues on account of Employees' state insurance Duty of Excise and Cess.

According to the information and explanation given to us no undisputed amounts payablein respect of Provident fund Income-tax Sales-tax Service tax Duty of Customs Valueadded tax Goods and service tax and other material statutory dues were in arrears as atDecember 31 2017 for a period more than six months from the date they became payable.

(b) According to the information and explanations given to us and on the basis of ourexamination of records of the Company there are no duesof Service tax Duty of Customsand Value added tax which have not been deposited with the appropriate authorities onaccount of any dispute. However the Company has the following disputed dues with respectto Income tax:

Name of the Statute Nature of the Dues

Amount in millions (Rs.)

Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax and interest

91.24

AY 2004-05 Honorable High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh

(91.24)

Income Tax Act 1961 Income Tax and interest

25.61

AY 2008-09 Honorable High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh

(12.80)

Income Tax Act 1961 Income Tax and interest

166.70

AY 2009-10 Honorable High Court of Judicature at Hyderabad for the State of Telengana and the State of Andhra Pradesh

(94.90)

Income Tax Act 1961 Income Tax and interest

200.44

AY 2010-11 Income Tax Appellate Tribunal

(10.00)

Income Tax Act 1961 Income Tax and interest

57.74

AY 2011-12 Income Tax Appellate Tribunal
Income Tax Act 1961 Income Tax and interest

149.70

AY 2012-13 Income Tax Appellate Tribunal

(Amount in parenthesis represents payment under protest)

viii. According to the information and explanation given to us and the records of theCompany examined by us the Company has not defaulted in repayment of loans or borrowingsto banks.

The Company did not have any dues to financial institution or Government nor has itissued any debentures as at the balance sheet date.

ix. The Company has not raised any moneys by way of initial public offer or furtherpublic offer (including debt instruments). In our opinion and according to the informationand explanations given to us the moneys raised by way of term loan have been applied onan overall basis for the purpose for which they were obtained.

x. According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during theyear.

xi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order are notapplicable to the Company.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Standalone Ind AS financial statements asrequired by the applicable accounting standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the Order are not applicable to the Company.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransaction with the directors or persons connected with him as contemplated under theprovisions of Section 192 of the Act. Accordingly paragraph 3(xv) of the Order are notapplicable to the Company.

xvi. In our opinion and according to the information and explanation given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3(xvi) of the Order are not applicable to the Company.

For B S R & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 116231W/W-100024

Sriram Mahalingam

Partner

Membership number: 049642

Place : Hyderabad

Date : February 28 2018

Annexure B to the Independent Auditors' ReportThe Annexure B referred to inparagraph 2 (f) of our Report of even date to the Members of Rain Industries Limited onthe Standalone Ind AS financial statements for the year ended December 31 2017.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of theSection 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of RainIndustries Limited ("the Company") as at December 312017 in conjunction withour audit of the Standalone Ind AS financial statements of the Company for the year endedon that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both issued by the ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the Standalone Ind AS financial statements whether due to fraudor error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of Standalone Ind AS financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of StandaloneInd AS financial statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the StandaloneInd AS financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occurand not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at December 31 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the ICAI.

For B S R & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 116231W/W-100024

Sriram Mahalingam

Partner

Membership number: 049642

Place : Hyderabad

Date : February 28 2018.