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Rain Industries Ltd.

BSE: 500339 Sector: Others
NSE: RAIN ISIN Code: INE855B01025
BSE 00:00 | 20 Feb 102.45 -1.75
(-1.68%)
OPEN

104.00

HIGH

104.60

LOW

102.00

NSE 00:00 | 20 Feb 102.40 -2.00
(-1.92%)
OPEN

104.40

HIGH

104.60

LOW

101.10

OPEN 104.00
PREVIOUS CLOSE 104.20
VOLUME 53231
52-Week high
52-Week low
P/E 91.47
Mkt Cap.(Rs cr) 3,446
Buy Price 102.45
Buy Qty 38.00
Sell Price 103.05
Sell Qty 60.00
OPEN 104.00
CLOSE 104.20
VOLUME 53231
52-Week high
52-Week low
P/E 91.47
Mkt Cap.(Rs cr) 3,446
Buy Price 102.45
Buy Qty 38.00
Sell Price 103.05
Sell Qty 60.00

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

We have audited the accompanying standalone ind AS financial statements of Rainindustries Limited ("the Company") which comprise the Balance Sheet as atDecember 31 2018 the Statement of Profit and Loss the Statement of Changes in Equityand the Statement of Cash Flows for the year then ended and summary of the significantaccounting policies and other explanatory information (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 profit/loss (including other comprehensive income) changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inindia including the Indian Accounting Standards (ind AS) prescribed under Section 133 ofthe 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 judgements 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 of theaccounting records relevant to the preparation and presentation of the standalone ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

in preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

AUDITOR'S 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 auditor's judgement 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 are also responsible to conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the entity's ability to continue as a going concern. if we conclude that amaterial uncertainty exists we are required to draw attention in the auditor's report tothe related disclosures in the financial statements or if such disclosures areinadequate to modify the opinion.

Our conclusions are based on the audit evidence obtained up to the date of theauditor's report. However future events or conditions may cause an entity to cease tocontinue as a going concern.

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 of the state of affairs of theCompany as at December 31 2018 its profit (including other comprehensive income)changes in equity and its cash flows 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 the Cash Flow Statement and theStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards prescribed under Section 133 of the Act

e) On the basis of the written representations received from the directors as onDecember 31 2018 taken on record by the Board of Directors none of the directors isdisqualified as on December 31 2018 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 with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate 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 31 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 tothe Investor Education and Protection Fund by 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 27 2019

ANNEXUREA

TO THE INDEPENDENT AUDITOR'S REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS

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 December 31 2018 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 programme of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner over a period of two years. In ouropinion the periodicity of physical verification is reasonable having regard to the sizeof the Company and nature of its assets. In accordance with the programme fixed assetshave been physically verified during the previous year and no material discrepancies werenoticed on such physical verification.

(c) In our opinion and according to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties as disclosed in Note 3 to these standalone Ind AS financial statements areheld in the name of 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 borrowers have been regular in the repaymentof the principal and payment of interest wherever stipulated.

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 Sections 185 and 186 of the Act with respectto the loans given and investments made. Further there are no guarantees and securitygiven in respect of which provisions of Sections 185 and 186 of the Act are applicable.

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 thereunder. Accordinglyparagraph 3(v) of the Order are not applicable to the Company.

vi. The Central Government has not prescribed the maintenance of cost records underSection 148 of the Act for services rendered by the Company. Thus paragraph 3(vi) of theOrder 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 Sales-tax Value Added Tax and othermaterial statutory dues have generally been regularly deposited during the year by theCompany with the appropriate authorities.

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 December 31 2018 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.

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 Honourable 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 (12.80) AY 2008-09 Honourable 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 16770 (94.90) AY 2009-10 Honourable 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 Sections 177 and 188 of the Act. Thedetails 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 Number: 116231W/W-100024

Sriram Mahalingam

Partner

Membership Number: 049642

Place: Hyderabad

Date: February 27 2019

ANNEXURE B

TO THE INDEPENDENT AUDITOR'S REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS

The Annexure B referred to in our Report of even date to the Members of Rain IndustriesLimited ("the Company") on the standalone Ind AS financial statements for theyear ended December 312018.

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 the Companyas of December 31 2018 in conjunction with our audit of the standalone Ind AS financialstatements of the Company for the year ended on 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"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

AUDITOR'S 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 applicable to an audit of internal financial control andboth issued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively 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 judgement 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 the generally accepted accounting principles. A company's internal financial controlover financial 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 withauthorisations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised 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 occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree 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 2018 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 Institute of CharteredAccountants of India.

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 27 2019