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Rain Industries Ltd.

BSE: 500339 Sector: Others
NSE: RAIN ISIN Code: INE855B01025
BSE 00:00 | 01 Mar 164.15 -1.30
(-0.79%)
OPEN

171.00

HIGH

172.00

LOW

163.00

NSE 00:00 | 01 Mar 164.20 -1.45
(-0.88%)
OPEN

170.00

HIGH

172.35

LOW

163.00

OPEN 171.00
PREVIOUS CLOSE 165.45
VOLUME 272340
52-Week high 175.35
52-Week low 44.90
P/E 202.65
Mkt Cap.(Rs cr) 5,521
Buy Price 163.55
Buy Qty 80.00
Sell Price 164.15
Sell Qty 1056.00
OPEN 171.00
CLOSE 165.45
VOLUME 272340
52-Week high 175.35
52-Week low 44.90
P/E 202.65
Mkt Cap.(Rs cr) 5,521
Buy Price 163.55
Buy Qty 80.00
Sell Price 164.15
Sell Qty 1056.00

Rain Industries Ltd. (RAIN) - Auditors Report

Company auditors report

To the Members of Rain Industries Limited

Report on the Audit of the Standalone Ind AS Financial Statements

OPINION

We have audited the standalone Ind AS financial statements of Rain Industries Limited("the Company") which comprise the standalone balance sheet as at 31 December2019 and the standalone statement of profit and loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cash flowsfor the year then ended and notes to the standalone Ind AS financial statementsincluding a summary of the significant accounting policies and other explanatoryinformation.

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 Companies Act 2013 ("Act") in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted inIndia of the state of affairs of the Company as at 31 December 2019 and profit and othercomprehensive income changes in equity and its cash flows for the year ended on thatdate.

BASIS FOR OPINION

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act.

Our responsibilities under those SAs are further described in the Auditor'sResponsibilities for the Audit of the Standalone Ind AS financial statements section ofour report. We are independent of the Company in accordance with the Code of Ethics issuedby the Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the standalone Ind AS financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

KEY AUDIT MATTERS

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone Ind AS financial statements of the currentperiod. These matters were addressed in the context of our audit of the standalone Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

The key audit matter How the matter was addressed in our audit
Investments As disclosed in note 5 of standalone Ind AS financial statements the Company has investments in subsidiaries and associates of '9169.65 Million. In view of the significance of the matter we applied the following audit procedures in this area
The said investments are carried at cost less allowance for impairment if any. • Assessment of whether there were indications of impairment of such investments. We have assessed on whether management has estimated the recoverable amounts of these investments the assumptions used by the management in making such estimates and the allowance for impairment.
The Management reviews regularly whether there are any indicators of impairment of the said investments by reference to the requirements under Ind AS 36. • Comparison of the carrying values of the company's investment in subsidiaries and associates with their respective net assets value and discussion with management of the performance and their outlook.
The management carries out impairment assessment for each investment by:
• Comparing the carrying value of each investment with the net worth of each company based on audited financials.
As impairment assessment involves significant assumption and judgement we regard this as Key audit matter

OTHER INFORMATION

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon. The Company's annual report is expected to be made available to us after the dateof this auditor's report.

Our opinion on the standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information identified above and in doing soconsider whether the other information is materially inconsistent with the standalone IndAS financial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.

When we read the annual report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE IND AS FINANCIAL STATEMENTS

The Company's management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone Ind ASfinancial statements that give a true and fair view of the state of affairs profit andother comprehensive income changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the standalone Ind AS financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the standalone Ind AS financial statements management and Board ofDirectors are responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company's financial reportingprocess.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE IND AS FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone Ind AS financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone Ind AS financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the standalone IndAS financial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone Ind AS financialstatements of the current period and are therefore the key audit matters.

We describe these matters in our auditors' report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

(A) 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 standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theInd AS specified under section 133 of the Act.

e) On the basis of the written representations received from the directors as on takenon record by the Board of Directors none of the directors is disqualified as on 31December 2019 from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B"

(B) With respect to the other matters to be included in the Auditors' 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 as at 31 December 2019on its financial position in its standalone Ind AS financial statements - Refer Note 31 tothe standalone Ind 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 tothe Investor Education and Protection Fund by the Company.

iv. The disclosures in the standalone Ind AS financial statements regarding holdings aswell as dealings in specified bank notes during the period from 8 November 2016 to 30December 2016 have not been made in these financial statements since they do not pertainto the financial year ended 31 December 2019.

(C) With respect to the matter to be included in the Auditors' Report under section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

for B S R & Associates LLP

Chartered Accountants

ICAI Firm Registration No. 116231W/W-100024

Sriram Mahalingam

Partner

Membership No: 049642

UDIN: 20049642AAAAAR5374

Place: Hyderabad

Date: February 28 2020

ANNEXURE A

TO THE INDEPENDENT AUDITORS' REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS OFRAIN INDUSTRIES LIMITED FOR THE PERIOD ENDED 31 DECEMBER 2019

With reference to Annexure A referred to in our Report of even date to the Members ofRain Industries Limited ("the Company") on the standalone Ind AS financialstatements for the year ended 31 December 2019 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 annually. In our opinion the periodicity of physicalverification is reasonable having regard to the size of the Company and nature of itsassets. In accordance with the program fixed assets have been physically verified duringthe year and no material discrepancies were noticed on such physical verification.

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

ii. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company does not hold any physicalinventories. Thus paragraph 3(ii) of the Order is not applicable to the Company.

iii. The Company has granted unsecured loans to one subsidiary covered in the registermaintained under Section 189 of the Companies Act 2013 ("Act"). The Company hasnot granted loans to firms limited liability partnerships or other parties covered in theregister 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 amounts which are 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 Companies Act 2013in respect of the loans given and investments. However the Company has not provided anyguarantees or security to the parties covered under Section 185 and 186 of 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 is 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 is 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 Employees' StateInsurance Income-tax Goods and Service tax and other material statutory dues havegenerally been regularly deposited during the year by the Company with the appropriateauthorities.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income- tax Goods andService tax Sales-tax Value Added Tax and other material statutory dues were in arrearsas at 31 December 2019 for a period of more than six months from the date they becamepayable.

(b) According to the information and explanations given to us there are no dues ofGoods and Service tax Sales-tax Value Added Tax which have not been deposited withappropriate authorities on account of any dispute. However the Company has the followingdisputed dues with respect to Income tax.

ANNEXURE A

TO THE INDEPENDENT AUDITORS' REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS OFRAIN INDUSTRIES LIMITED

FOR THE PERIOD ENDED 31 DECEMBER 2019 (CONTINUED)

Name of the Statute Nature of Dues Amount in millions () Period to which the amount relates Forum where the dispute is pending
Income-tax Act 1961 Income-tax and interest 91.24 (91.24) AY 2004-05 Honorable High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh
Income-tax Act 1961 Income-tax and interest 25.61 (12.8) AY 2008-09 Honorable High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh
Income-tax Act 1961 Income-tax and interest 167.70 (94.90) AY 2009-10 Honorable High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh
Income-tax Act 1961 Income-tax and interest 200.44 (10.00) AY 2010-11 Income Tax Appellate Tribunal
Income-tax Act 1961 Income-tax and interest 51.90 AY 2011-12 Income Tax Appellate Tribunal
Income-tax Act 1961 Income-tax and interest 32.60 AY 2012-13 Income Tax Appellate Tribunal
Income-tax Act 1961 Income-tax and interest 18.40 AY 2013-14 Income Tax Appellate Tribunal

(Amount in parenthesis represents amount deposited under protest with respectiveauthority)

viii. According to the information and explanations given to us and the records of theCompany examined by us the Company has not defaulted in repayment of loans and borrowingsto Banks. The Company did not have any dues to Financial Institution or Government norhas it issued any debentures as at the balance sheet date.

ix. The Company has not raised any moneys by way of initial public offer 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 material fraud on theCompany by its officers and employees or fraud by the Company has been noticed or reportedduring the course of our audit.

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 of the Act.

xii. The Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicable toit. Accordingly the provisions of Clause (xii) of the Order are not applicable to theCompany.

xiii. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has entered into transactions withrelated parties in compliance with the provisions of Section 177 and Section 188 of theAct. The details of such related party transactions have been disclosed in Note 30 to thestandalone Ind AS financial statements as required under Indian Accounting Standard 24Related Party Disclosures specified under Section 133 of the Act read with Rule 3 of theCompanies (Indian Accounting Standard) Rules 2015.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year. Accordingly the provisions ofClause (xiv) of the Order are not applicable to the Company.

xv. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with its directors or persons connected with him. Accordingly the provisionsof Clause (xv) of the Order are not applicable to the Company.

xvi. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company is not required to be registeredunder Section 45-IA of the Reserve Bank of India Act 1934. Accordingly the provisions ofClause (xvi) of the Order are not applicable to the Company.

for B S R & Associates LLP

Chartered Accountants

ICAI Firm Registration No. 116231W/W-100024

Sriram Mahalingam

Partner

Membership No: 049642

UDIN: 20049642AAAAAR5374

Place: Hyderabad

Date: February 28 2020

ANNEXURE B

TO THE INDEPENDENT AUDITORS' REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS OFRAIN INDUSTRIES LIMITED FOR THE PERIOD ENDED 31 DECEMBER 2019

Report on the internal financial controls with reference to the aforesaid standaloneInd AS financial statements under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013

(Referred to in paragraph (f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

OPINION

We have audited the internal financial controls with reference to financial statementsof Rain Industries Limited ("the Company") as of 31 December 2019 in conjunctionwith our audit of the standalone Ind AS financial statements of the Company for the yearended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 December 2019 based on the internal financial controlswith reference to standalone Ind AS financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India (the "Guidance Note").

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to standalone Ind AS financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 (hereinafterreferred to as "the Act").

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone Ind AS financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to financial statements. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols with reference to financial statements were established and maintained andwhether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to standalone Ind AS financial statementsand their operating effectiveness. Our audit of internal financial controls with referenceto standalone Ind AS financial statements included obtaining an understanding of suchinternal financial controls assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk.

The procedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the standalone Ind AS financial statements whetherdue to fraud or 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 withreference to financial statements.

MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONE IND AS FINANCIALSTATEMENTS

A company's internal financial controls with reference to standalone Ind AS financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone Ind AS financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sinternal financial controls with reference to financial statements include those policiesand procedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of standalone Ind AS financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONE IND ASFINANCIAL STATEMENTS

Because of the inherent limitations of internal financial controls with reference tostandalone Ind AS financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone Ind AS financial statements to future periods aresubject to the risk that the internal financial controls with reference to standalone IndAS financial statements may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

for B S R & Associates LLP

Chartered Accountants

ICAI Firm Registration No. 116231W/W-100024

Sriram Mahalingam

Partner

Membership No: 049642 UDIN: 20049642AAAAAR5374

Place: Hyderabad

Date: February 28 2020

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