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Auditor Report of Rain Industries Ltd.

Dec 31, 2015

We have audited the accompanying financial statements of Rain Industries Limited ('the Company'), which comprise the Balance Sheet as at 31 December 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information (collectively referred as "financial statements").

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act and the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and rules made there under, to the extent applicable.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India (ICAI). Those Standards and other pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 December 2015, and its profit 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, 2015 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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 best of our knowledge and belief were necessary for the purpose of our audit.

b) in our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) on the basis of written representations received from the directors as on 31 December 2015, and taken on record by the Board of Directors, none of the director is disqualified as on 31 December 2015, from being appointed as a director in terms of Section 164 (2) of the Act.

f) with respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and 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 financial position in its Financial Statements as at 31 December 2015 - Refer note 24 to the Financial Statements;

(ii) the Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses; and

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

The Annexure referred to in our report of even date to the Members of Rain Industries Limited ("the Company") on the financial statements for the year ended 31 December 2015. We report that:

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

(b) The Company has a regular program of physical verification of its fixed assets by which all fixed assets are verified once in two years. In our opinion, the periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with the programmed all the fixed assets were verified during the year and no material discrepancies were observed on such verification.

(ii) As explained to us, the Company's activities primarily include service revenue and trading in inventory of petroleum coke products. The sales made to its customers are on a high sea sale basis. Accordingly, it does not hold any physical inventories. Thus, paragraph 3(ii) of the Order is not applicable.

(iii) The Company has granted unsecured loan to one subsidiary company covered in the register maintained under section 189 of the Companies Act 2013 ("Act"). The Company has not granted loans to firms or other parties covered in the register maintained under Section 189 of the Act.

a. In case of the loans granted to the Company listed in the register maintained under section 189 of the Act, the borrower has been regular in repaying the principal amounts as stipulated and in the payment of the interest.

b. There are no overdue amounts of more than rupees one lakh in respect of loans granted to the Company covered in the register maintained under section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchase of certain items of inventories and fixed assets are for the Company's specialized requirements and similarly certain goods sold and services rendered are for the specialized requirement of the buyers and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, with regard to purchase of inventories and fixed assets and with regard to sale of goods and services. We have not observed any major weaknesses in the internal control system during the course of our audit.

(v) The Company has not accepted any deposits from the public within the meaning of Section 73, 74 and 76 of the Act and the rules framed there under to the extent notified.

(vi) The Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Act for any of the services rendered by the Company.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident fund, Income tax, Service tax, Value added tax, Wealth tax, Cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Employees' state insurance, Sales tax, Duty of Customs and Duty of Excise.

According to the information and explanations given to us, there are no undisputed amounts payable in respect of Provident fund, Income tax, Wealth tax, Cess, Value added tax, Service tax and other material statutory dues that were in arrears as at 31 December 2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Sales tax, Value added tax, Wealth tax, Service tax and Cess, which have not been deposited with appropriate authorities on account of any disputes. However, the Company disputes the following Income tax dues:

Name of the Nature of the Amount in Period to which the Statute Dues Millions (Rs.) amount relates

Income Tax Income Tax 91.24 AY 2004-05 Act, 1961 and interest (91.24)*

Income Tax Income Tax 158.77 AY 2008-09 Act, 1961 and interest (12.81)*

Income Tax Income Tax 167.76 AY 2009-10 Act, 1961 and interest (94.90)*

Income Tax Income Tax 200.44 AY 2010-11 Act, 1961 and interest (10.00)*

Income Tax Income Tax 57.74 AY 2011-12 Act, 1961 and interest



Name of the statute Forum where dispute is pending

Income Tax Act, 1961 Honorable High Court of Andhra Pradesh

Income Tax Act, 1961 Income Tax Appellate Tribunal

Income Tax Act, 1961 Income Tax Appellate Tribunal

Income Tax Act, 1961 Income Tax Appellate Tribunal

Income Tax Act, 1961 Deputy Commissioner of Income Tax

(Amount in parenthesis represents payment under protest)

As explained to us, the Company did not have any dues on account of Duty of Excise and Duty of Customs.

(c) According to the information and explanation given to us, the amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there under has been transferred to such fund within time.

(viii)The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanation given to us, the Company has not defaulted in repayment of dues to its bankers and financial institutions. The Company did not have any outstanding debentures during the year.

(x) According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

(xi) According to the information and explanations given to us, and on overall examination of the balance sheet, the term loans taken by the Company have been applied for the purpose for which they were raised.

(xii) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

for B S R & Associates LLP

Chartered Accountants

ICAI Firm registration number: 116231W/W-100024



Sriram Mahalingam

Hyderabad Partner

19 February 2016 Membership Number: 049642


Dec 31, 2014

We have audited the accompanying financial statements of Rain Industries Limited (Formerly Rain Commodities Limited), ("the Company"), which comprises the Balance Sheet as at December 31, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act") and Section 133 of the Companies Act, 2013 ("2013 Act") to the extent applicable. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act/ 2013 Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at December 31, 2014;

(b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the 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, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227 (3) of the Act/ Section 143(3) of the 2013 Act to the extent applicable, we report that:

(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act and Section 133 of the 2013 Act to the extent applicable;

(e) on the basis of written representations received from the directors as on December 31, 2014, and taken on record by the Board of Directors, none of the director is disqualified as on December 31, 2014, from being appointed as a director in terms of sub-section (2) of Section 164 of the 2013 Act.

The Annexure referred to in Independent Auditor''s Report of even date to the members of Rain Industries Limited(formerly Rain Commodities Limited) ("the Company") on the financial statements for the year ended December 31, 2014. We report that:

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

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified once in a period of two years. In our opinion, the periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with the policy, physical verification of all fixed assets was carried during the previous financial year.

(c) Fixed assets disposed of during the year were not substantial, and therefore, do not affect the going concern assumption.

(ii) (a) As explained to us, the Company''s activities primarily include service revenue and trading in inventory of petroleum coke products. No trading activity was carried out during the year and no inventory was held during and as at the year end. Thus, paragraph 4(ii) of the Order is not applicable.

(iii) (a) The Company has granted loans to two subsidiary companies covered in the register maintained under Section 301 of the Companies Act, 1956("the Act")/ Section 189 of the Companies Act, 2013 ("2013 Act") (as applicable). The maximum amount outstanding during the year was Rs. 3,023,013 thousands and the year-end balance of such loans was Rs.2,495,991 thousands. The Company has not granted any loan to firms or other parties covered in the register maintained under Section 301 of the Act/ Section 189 of the 2013 Act (as applicable).

(b) In our opinion, the rate of interest and other terms and conditions on which loans have been granted to two subsidiary companies listed in the register maintained under Section 301 of the Act/Section 189 of the 2013 Act (as applicable) are not, prima facie, prejudicial to the interest of the Company.

(c) In the case of loans granted to two subsidiary companies listed in the register maintained under Section 301 of the Act/ Section 189 of the 2013 Act (as applicable), the borrowers have been generally regular in repaying the principal amounts as stipulated and in the payment of interest.

(d) There are no overdue amounts of more than Rupees one lakh in respect of loans granted to two subsidiary companies listed in the register maintained under Section 301 of the Act/ Section 189 of the 2013 Act (as applicable).

(e) The Company has not taken any loans from companies, firms or other parties listed in the register maintained under Section 301 of the Act/ Section 189 of the 2013 Act (as applicable) and accordingly clause 4(iii)(f) and clause 4(iii)(g) of the Order is not applicable.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories and fixed assets are for the Company''s specialised requirement and that goods sold and services rendered are for the specialised requirement of the buyers and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system with regard to purchase of inventories and fixed assets and with regard to sale of goods and services. We have not observed any major weaknesses in the internal control system during the course of the audit.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts and arrangements referred to in Section 301 of the Act/ Section 189 of the 2013 Act (as applicable) have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs.5 lakhs with any party during the year have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time except for certain services rendered that are for the specialised requirements of the buyers for which suitable alternative sources are not readily available to obtain comparable quotations. However, on the basis of information and explanations provided, the same appears reasonable.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii)The Central Government of India has not prescribed the maintenance of cost records under Section 209(1)(d) of the Act/Section 148(2) of the 2013 Act (as applicable) for any of the goods sold/ services rendered by the Company.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Income-tax, Sales-tax, Wealth Tax, Customs Duty, Service Tax, Investor Education and Protection Fund and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Employees'' State Insurance and Excise duty.

According to the information and explanations given to us, there are no undisputed amounts payable in respect of Provident Fund, Income-tax, Sales-tax, Wealth Tax, Customs Duty, Service Tax and other material statutory dues that were in arrears as at December 31, 2014 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Sales tax, Wealth tax, Service tax and Customs duty which have not been deposited with appropriate authorities on account of any disputes. However, the Company disputes the following Income tax dues:

Name of the Nature of the Amount in Period to which the Statute Dues thousands(Rs.) amount relates

Income Tax Income Tax 91,243 AY 2004-05 Act, 1961 and interest (91,243)*

Income Tax Income Tax 158,773 AY 2008-09 Act, 1961 and interest (12,808)*

Income Tax Income Tax 167,759 AY 2009-10 Act, 1961 and interest

Income Tax Income Tax 200,440 AY 2010-11 Act, 1961 and interest

Income Tax Income Tax 54,760 AY 2011-12 Act, 1961 and interest

Name of the Statute Forum where dispute is pending

Income Tax Act, 1961 Honorable High Court of Andhra Pradesh

Income Tax Act, 1961 Income Tax Appellate Tribunal

Income Tax Act, 1961 Income Tax Appellate Tribunal

Income Tax Act, 1961 Income Tax Appellate Tribunal

Income Tax Act, 1961 Deputy Commissioner of Income Tax

*Amount in parenthesis represents amount paid under protest.

(x) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers. The Company did not have any outstanding dues to any financial institution or debenture holders during the year.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund/ society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xvi) In our opinion and according to the information and explanation given to us and on the basis of our examination of the books of account, the term loans obtained by the Company were applied for the purpose for which such loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to companies/firms/parties covered in the register maintained under Section 301 of the Act/ Section 189 of the 2013 Act (as applicable).

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by public issues during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

for B S R & Associates LLP Chartered Accountants Firm registration Number: 116231W/ W-100024

Sriram Mahalingam Hyderabad Partner February 27, 2015 Membership Number: 049642


Dec 31, 2013

We have audited the accompanying financial statements of Rain Industries Limited (Formerly Rain Commodities Limited), ("the Company"), which comprises the Balance Sheet as at December 31, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information (collectively referred to as "financial statements").

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at December 31, 2013;

(b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the 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, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub- section (4A) of Section 227 of the Act, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227 (3) of the Act, we report that:

(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act;

(e) on the basis of written representations received from the directors as on December 31, 2013, and taken on record by the Board of Directors, none of the director is disqualified as on December 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

The annexure referred to in our report of even date to the members of Rain Industries Limited (formerly Rain Commodities Limited) ("the Company") on the financial statements for the year ended December 31, 2013. We report that:

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

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified once in a period of two years. In our opinion, the periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with the policy, all fixed assets were verified during the year and no material discrepancies were observed on such verification.

(c) Fixed assets disposed of during the year were not substantial, and therefore, do not affect the going concern assumption.

(ii) (a) As explained to us, during the year the Company primarily dealt with trading activities. The inventory purchased was sold to its customers on a high sea sale basis and no inventory was held by the Company during the year. Thus, paragraph 4(ii) of the Order is not applicable.

(iii) (a) The Company has granted loans to three companies covered in the register maintained under Section 301 of the Companies Act, 1956 ("the Act"). The maximum amount outstanding during the year was Rs. 3,039,411 thousands and the year-end balance of such loans was Rs. 1,836,928 thousands. The Company has not granted any loan to firms and other parties covered in the register maintained under Section 301 of the Act.

(b) In our opinion, the rate of interest and other terms and conditions on which loans have been granted to the three Companies listed in the register maintained under Section 301 of the Act are not, prima facie, prejudicial to the interest of the Company

(c) In the case of loans granted to the three companies listed in the register maintained under Section 301 of the Act, the borrowers have been generally regular in repaying the principal amounts as stipulated and in the payment of interest.

(d) There are no overdue amounts of more than Rupees one lakh in respect of loans granted to the three companies listed in the register maintained under Section 301 of the Act.

(e) The Company has not taken any loans from companies, firms or other parties listed in the register maintained under Section 301 of the Act and accordingly clause 4(iii)(f) and clause 4(iii)(g) of the Order is not applicable.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories and fixed assets are for the Company''s specialised requirement and that goods sold and services rendered are for the specialised requirement of the buyers and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system with regard to purchase of inventories and fixed assets and with regard to sale of goods and services. We have not observed any major weaknesses in the internal control system during the course of the audit.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts and arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs.5 lakhs with any party during the year have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time except for purchase of inventories and fixed assets which are for the specialised requirements of the Company and similarly for sale of goods and certain services rendered that are for the specialised requirements of the buyers for which suitable alternative sources are not readily available to obtain comparable quotations. However, on the basis of information and explanations provided, the same appears reasonable.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii)The Central Government of India has not prescribed the maintenance of cost records under Section 209(1)(d) of the Act for any of the goods sold/ services rendered by the Company.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Income-tax, Sales-tax, Wealth Tax, Customs Duty, Service Tax and other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Investor Education and Protection Fund, Employees'' State Insurance and Excise duty.

According to the information and explanations given to us, there are no undisputed amounts payable in respect of Provident Fund, Income-tax, Sales-tax, Wealth Tax, Customs Duty, Service Tax and other material statutory dues that were in arrears as at December 31, 2013 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Sales tax, Wealth tax, Service tax and Customs duty which have not been deposited with appropriate authorities on account of any disputes. However, the Company disputes the following Income tax dues:

Name of the Nature of the Amount in Period to which the Forum where Statute Dues thousands (Rs.) amount relates dispute is pending

Income Tax Act, Income Tax 91,243 AY 2004-05 Honorable High Court 1961 and interest (91,243)* of Andhra Pradesh

Income Tax Act, Income Tax 167,759 AY 2009-10 Income Tax 1961 and interest Appellate Tribunal

*Amount in parenthesis represents amount paid under protest.

(x) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers. The Company did not have any outstanding dues to any financial institution or debenture holders during the year.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund/ society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by its subsidiaries from banks are not prejudicial to the interest of the Company.

(xvi) In our opinion and according to the information and explanation given to us and on the basis of our examination of the books of account, the term loans obtained by the Company were applied for the purpose for which such loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to companies/firms/ parties covered in the register maintained under Section 301 of the Act.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by public issues during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

for B S R & Associates LLP Chartered Accountants Firm registration Number: 116231W

Sriram Mahalingam

Hyderabad Partner

February 26, 2014 Membership Number: 049642


Dec 31, 2012

1. We have audited the attached Balance Sheet of RAIN COMMODITIES LIMITED ("the Company") as at December 31, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company''s Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor''s Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:

(a) we have obtained all the information and explanations which, to the best of 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 the Company so far as it appears from our examination of those books;

(c) the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

(e) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at December 31, 2012;

(ii) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date and

(iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

5. On the basis of the written representations received from the Directors as on December 31, 2012 taken on record by the Board of Directors, we report that none of the Directors is disqualified as on December 31, 2012 from being appointed as a director in terms of Section 274(1) (g) of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to in paragraph 3 of our report of even date)

Having regard to the nature of the Company''s business / activities / result, clauses (vi), (viii), (x), (xii), (xiii), (xiv), (xviii), (xix) and (xx) of paragraph 4 of CARO are not applicable to the Company.

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets.

(b) The Company has a regular programme of verification which provides for physical verification of all the fixed assets once in a period of two years. Accordingly no assets were due for verification during the year. In our opinion, the programme of verification is reasonable.

(c) The fixed assets disposed of during the year, in our opinion, do not constitute a substantial part of fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(ii) In respect of its inventory:

(a) As explained to us, during the year the Company primarily dealt with trading activities. The inventory purchased is sold to its customers on a high sea sale basis and no inventory was held by the Company during the year.

(b) Having regard to our comments in paragraph (a) above, clauses 4(ii)(a), 4(ii)(b) and 4(ii)(c) are not applicable.

(iii) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties listed in the Register under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Company had granted unsecured loans to three wholly owned subsidiaries amounting to Rs.1,787,723 thousands during the current year. At the year-end, the outstanding balances of loans aggregated Rs.3,012,825 thousands and the maximum amount involved during the year was Rs.3,797,499 thousands.

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interests of the Company.

(c) The receipts of principal amounts and interest have been as per stipulations and there are no overdue amounts.

The Company has not taken any loan, secured or unsecured, from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and accordingly clauses 4(iii)(e) to 4(iii)(g) of CARO are not applicable.

(iv) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weakness in such internal control system.

(v) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs.5 lakhs in respect of any party, having regard to our comments in paragraph (iv) above, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vi) In our opinion, the internal audit functions carried out during the year by a company appointed by the Management have been commensurate with the size of the Company and the nature of its business.

(vii) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income-tax, Service tax, Sales tax, Wealth tax, Customs Duty, Excise Duty and other material statutory dues in arrears as at December 31, 2012 for a period of more than six months from the date they became payable.

(c) Details of dues of Income Tax, Sales tax, Wealth tax, Service tax, Custom Duty and Excise Duty which have not been deposited as on December 31, 2012 on account of any disputes are given below :

Statue Nature of Dues Forum where Period to which Amount Dispute is pending the amount involved pertains (Rs. in thousands)

Income Tax Income Tax Commissioner of 2007-2008 14,217 Act, 1961 Tax (Appeals)

(viii)In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks.

(ix) In our opinion and according to the information and explanations given to us, the terms and conditions of guarantees given by the Company for loans taken by its subsidiaries from banks are not prima facie prejudicial to the interests of the Company.

(x) In our opinion and according to the information and explanations given to us, term loans have been applied for the purposes for which they were obtained.

(xi) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long- term investment.

(xii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company has been noticed or reported during the year.

For Deloitte Haskins & Sells

Chartered Accountants (Registration No. 008072S)

K. Rajasekhar

Partner

(Membership No. 23341)

HYDERABAD, February 20, 2013


Dec 31, 2011

1. We have audited the attached Balance Sheet of RAIN COMMODITIES LIMITED ("the Company") as at December 31, 2011, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:

(a) we have obtained all the information and explanations which, to the best of 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 the Company so far as it appears from our examination of those books;

(c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

(e) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at December 31, 2011;

(ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date and

(iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

5. On the basis of the written representations received from the Directors as on December 31, 2011 taken on record by the Board of Directors, we report that none of the Directors is disqualified as on December 31, 2011 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

ANNEXURE TO AUDITORS' REPORT

(Referred to in paragraph 3 of our report of even date)

Having regard to the nature of the Company's business / activities / result, clauses (vi), (viii), (x), (xii), (xiii), (xiv), (xviii), (xix) and (xx) of paragraph 4 of CARO are not applicable to the Company.

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets.

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) None of the fixed assets were disposed off during the year.

(ii) In respect of its inventory:

(a) As explained to us, the Company during the year primarily dealt with trading activities. The inventory purchased is sold to its customers on a High Sea Sale basis and no inventory was held by the Company during the year.

(b) Having regard to our comments in paragraph

(a) above, clauses 4(ii)(a), 4(ii)(b) and 4(ii)(c) are not applicable.

(iii) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties listed in the Register under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Company had granted unsecured loans to its two wholly owned subsidiaries during the previous year. At the year-end, the outstanding balances of loans aggregated Rs. 2,428,715 thousands and the maximum amount involved during the year was Rs. 2,980,640 thousands.

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interests of the Company.

(c) The receipts of principal amounts and interest have been as per stipulations and there are no overdue amounts.

The Company has not taken any loan, secured or unsecured, from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and accordingly clauses 4(iii)(f) and 4(iii)(g) of CARO are not applicable.

(iv) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weakness in such internal control system.

(v) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs.5 lakhs (other than loans mentioned in paragraph (iii) above) in respect of any party, having regard to our comments in paragraph (iv) above, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vi) In our opinion, the internal audit functions carried out during the year by a company appointed by the Management have been commensurate with the size of the Company and the nature of its business.

(vii) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund,

Employees' State Insurance, Income-tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income-tax, Service tax, Sales tax, Wealth tax, Customs Duty, Excise Duty and other material statutory dues in arrears as at December 31, 2011 for a period of more than six months from the date they became payable.

(c) There are no dues of Income-tax, Sales tax, Wealth tax, Service tax, Customs Duty and Excise Duty which have not been deposited as on December 31, 2011 on account of disputes.

(viii) In our opinion and according to the information and explanations given to us, having regard to the rollover of buyer's credits by the banks, the Company has not defaulted in the repayment of dues to banks.

(ix) In our opinion and according to the information and explanations given to us, the terms and conditions of guarantees given by the Company for loans taken by its subsidiaries from banks are not prima facie prejudicial to the interests of the Company.

(x) In our opinion and according to the information and explanations given to us, term loans have been applied for the purposes for which they were obtained.

(xi) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long- term investment.

(xii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the company has been noticed or reported during the year.

For Deloitte Haskins & Sells Chartered Accountants Registration No. 008072S

K. Rajasekhar Partner Membership No. 23341

Hyderabad, February 21, 2012


Dec 31, 2010

1. We have audited the attached Balance Sheet of RAIN COMMODITIES LIMITED ("the Company") as at December 31, 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:

(a) we have obtained all the information and explanations which to the best of 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 the Company so far as it appears from our examination of those books;

(c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

(e) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at December 31, 2010;

(ii) in the case of the Profit and Loss Account, of the loss of the Company for the year ended on that date and

(iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

5. On the basis of the written representations received from the Directors as on December 31, 2010 taken on record by the Board of Directors, we report that, none of the Directors is disqualified as on December 31, 2010 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

ANNEXURE TO AUDITORS REPORT (Referred to in paragraph 3 of our report of even date)

Having regard to the nature of the Companys business / activities / result, clauses 4(vi), (x), (xii), (xiii), (xiv), (xviii), (xix) and (xx) of CARO are not applicable to the Company.

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets.

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) During the year, a substantial part of fixed assets of the Company was transferred pursuant to a Scheme of Arrangement (as detailed in Note III of Schedule U to the financial statements) to its wholly owned subsidiary. However such disposal has, in our opinion, not affected the going concern status of the Company.

(ii) In respect of its inventory:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties listed in the Register under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Company has granted unsecured loans aggregating Rs.2,670,396 thousands to its two wholly owned subsidiaries during the year. At the year-end, the outstanding balances of such loans aggregated Rs. 2,642,400 thousands and the maximum amount involved during the year was Rs. 2,642,400 thousands.

(b) Having regard to the Scheme of Arrangement (as detailed in note III of Schedule U to the financial statements), the rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interests of the Company.

(c) The receipt of principal amounts and interest have been as per stipulations and there are no overdue amounts.

According to the information and explanations given to us, the Company has not taken any loan, secured or unsecured, from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and accordingly clauses 4 (iii)(f) and 4(iii)(g) of CARO are not applicable.

(iv) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature for which suitable alternate sources do not exist for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weakness in such internal control system.

(v) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs.5 lakhs (other than loans mentioned in para

(iii) above) in respect of any party, having regard our comments in paragraph (iv) above, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vi) In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business.

(vii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 in respect of production of cement and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

(viii)According to the information and explanations given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including provident fund, investor education and protection fund, employees state insurance, income-tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of income-tax, service tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues in arrears as at December 31, 2010 for a period of more than six months from the date they became payable.

(c) There are no dues of income-tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited as on December 31, 2010 on account of disputes.

(ix) In our opinion and according to the information and explanations given to us, having regard to the rollover of buyers credits by the banks, the Company has not defaulted in the repayment of dues to banks.

(x) In our opinion and according to the information and explanations given to us, the terms and conditions of guarantees given by the Company for loans taken by its subsidiaries from banks are not prima facie prejudicial to the interests of the Company.

(xi) In our opinion and according to the information and explanations given to us, term loans have been applied for the purposes for which they were obtained.

(xii) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long- term investment.

(xiii)To the best of our knowledge and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For Deloitte Haskins & Sells

Chartered Accountants

Registration No. 008072S

Sd/-

K. Rajasekhar Partner Membership No.: 23341

Hyderabad, February 25, 2011


Dec 31, 2009

1. We have audited the attached Balance Sheet of Rain Commodities Limited as at December 31, 2009, the Profit and Loss Account for the year ended on that date and the Cash Flow Statement for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those, standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 [CARO], issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(a) we have obtained all the information and explanations which, to the best of 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 the Company so far as appears from our examination of those books;

(c) the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(e) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at December 31,2009;

(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

5. On the basis of written representations received from the directors as on December 31, 2009 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on December 31, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

ANNEXURE TO AUDITORS REPORT

[Referred to in paragraph 3 of the Auditors Report of even date to the Members of Rain Commodities Limited]

The nature of the Companys business/ activities during the year is such that paragraphs 4 (vi), (xii), (xiii), (xiv), (xviii), (xix), and (xx) of CARO are not applicable to the Company.

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets except for certain items of fixed assets, the quantitative details of which, we are informed, are in the process of being compiled.

(b) Some of the fixed assets have been physically verified by the management in accordance with a programme of verification which provides for verification of all the fixed assets at reasonable intervals, having regard to the size of the Company and the nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute substantial part of the fixed assets of the Company and such disposal has, in. our opinion, nof, affected the going concern status of the Company.

(ii) In respect of its inventories:

(a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the Company and nature of its business.

(c) Jn our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification

(iii) (a) According to the information and explanations given to us, the company has granted unsecured loans to wholly owned subsidiary companies covered in the Register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 1,503,260 thousands and the year - end balance of the loan granted to such company was Rs.1,503,260 thousands.

(b) In our opinion and according to the information and explanations given to us, the terms and conditions of such interest free loans are not, prima facie, prejudicial to the interest of the company.

(c) In respect of the loans granted to such wholly owned subsidiaries, terms of repayment have not been stipulated and accordingly paragraphs 4 (iii) and (iy) are not applicable.

(d) According to the information and explanations given to us, the Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956 and accordingly paragraphs 4 iii(f) to iii(g) of CARO are not applicable.

(iv) In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased are of special nature for which suitable alternate sources do not exist for obtaining comparable quotations, there are adequate internal control systems commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control systems.

(v) In respect of contracts or arrangements entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) the particulars of contracts or arrangements referred toin Section 301 of the Companies Act, 1956 maintained under the said section have been so entered during the year.

(b) in our opinion and having regard to our comments in paragraph (iv) above, and according to the information and explanations given to us, the transactions made during the year in pursuance of such contracts or arrangements and exceeding a value of rupees five lacs in respect of any party, other than loans to parties referred to in paragraph (iii) (a) above, have been made at prices, which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) In our opinion, the internal audit functions carried out during the year by a company appointed by the management have been commensurate with the size of the Company and the nature of its business.

(vii) We have broadly reviewed the books of account and records maintained by the Company relating to the production of cement pursuant to the order made by the Central Government for the maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 and are. of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determining whether they are accurate or complete.

(viii) In respect of statutory dues:

(a) According to the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and any other material statutory dues applicable to it with the appropriate authorities during the year. There are no dues relating to investor education and protection fund.

(b) According to the information and explanation given to us, no undisputed amounts payable in respect of income tax, service tax, wealth tax, sales tax, customs duty, excise duty and cess were outstanding as at December 31, 2009 for a period of more than six months from the date they became payable.

(c ) According to the information and explanations given to us, details of dues of sales tax, excise duty and income tax which have not been deposited as at December 31, 2009 on account of any dispute are given below:

Name of the Nature of dues Amount Period to which Statute (in Rs. the amount Thousands) relates

Andhra Pradesh Sales tax 4,108 1994-95 General Sales Tax Act 1957 12,911 1996-97

17,626 1997-98

13,529 1997-98

Central Sales Sales tax 1,460 1995-96 Tax Act, 1956

1,311 1996-97

Central Excise Excise duty 2,747 2005-06 Act, 1944 1,145 2005-06

Andhra Pradesh VAT Salestax 58,381 2007-08 Act, 2005

95,408 2008-09

33,678 2009-10

Income tax Act, Income tax 22,527 Assessment Year 1961 2004-05



Namwe of the Statue Forum where pending

Andhra Pradesh General Sales Tax Act, 1957 Sales Tax Appellate Tribunal

Central Sales Tax Act, 1956

Central Excise A.ct, 1944 Commissioner (Appeals)

Andhra Pradesh VAT Act, 2005 High Court of Judicature of Andhra Pradesh

Income tax Act, 1961 Commissioner of Income Tax (Appeals)

(ix) The Company does not have accumulated losses and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(x) In our opinion and according to the information and explanations given to us, having regard to the rollover of buyers credits by the banks, the Company has not defaulted in repayment of dues to banks.

(xi) In our opinion, the terms and conditions on which the Company has given guarantee for loans taken by its subsidiary from banks are not prima facie prejudicial to the interests of the Company.

(xii) To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the Company were prima facie applied for the purposes for which the loans were obtained.

(xiii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, funds raised on short term basis have prima facie not been used during the year for long term investment.

(xiv)To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For Deloitte Haskins & Sells

Chartered Accountants Registration No. 0080728

K. Rajasekhar

Partner Membership No.: 23341 Place: Hyderabad Date : March 17, 2010



 
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