Dec 31, 2023
Rain Industries Limited
We have audited the accompanying standalone financial statements of Rain Industries Limited (the âCompanyâ), which comprise the Balance Sheet as at December 31, 2023, the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as the âstandalone financial statementsâ).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013, as amended (âthe Actâ) 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 December 31, 2023, its profit including other comprehensive loss, its cash flows and the changes in equity for the year ended on that date.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act.
Our responsibilities under those Standards are further described in the âAuditor''s Responsibilities for the Audit of the standalone financial statements'' section of our report. We are independent of the Company in accordance with the âCode of Ethics'' issued by the Institute of Chartered Accountants of India (âICAIâ) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the year ended December 31, 2023. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report.
We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.
Key audit matters |
How our audit addressed the key audit matter |
Impairment assessment of non-current investments in subsidiaries carried at cost (as described in note 5 of the |
|
standalone financial statements) |
|
As at December 31, 2023, the Company has investments |
Our audit procedures included, among others |
of I 9,986.12 million in subsidiaries. As per requirement of |
the following: |
Ind AS 36 "Impairment of assets", the management at each reporting date reviews whether there are any indicators of impairment of the investments in subsidiaries and where impairment indicators exist, the management estimates the |
⢠Assessed the Company''s accounting policies with respect to impairment in accordance with Ind AS 36 "Impairment of assets". |
recoverable amounts of the investments, using discounted |
⢠Obtained an understanding of the process, tested the |
cash-flow model. |
design, implementation and operating effectiveness |
Significant judgements are required to determine the key assumptions used in the discounted cash flow models, |
of key internal controls related to investment impairment assessment. |
such as: |
⢠We assessed the methodology applied by the |
⢠Projected net operating cash-flows in the years 1-5; |
Company in its impairment analysis. In making this assessment, we also evaluated the competence, |
⢠Stable long-term growth rates beyond five years and in |
objectivity and professional qualification of |
perpetuity; and |
Company''s specialists involved in the process. |
⢠Discount rates that represent the current market |
⢠With the assistance of a specialist engaged by us, we |
assessment of the risks specific to the subsidiary, |
assessed the assumptions around the key drivers of |
taking into consideration the time value of money. |
the net operating cash flow forecasts, discount rates |
The impairment testing includes sensitivity testing of key assumptions, including net operating cash flows, long term |
and terminal growth rates used, in consideration of the current and estimated future economic conditions. |
growth rates and discount rate. |
⢠We discussed potential changes in key drivers as |
The impairment testing is considered a key audit matter because the assumptions involved are highly judgmental and are affected by future market and economic conditions which are inherently uncertain, and because of the materiality of the balance to the standalone financial |
compared to previous year/ actual performance with management in order to evaluate whether the inputs and assumptions such as discount rates and terminal growth rates used in the cash flow forecasts were suitable. |
statements as a whole. |
⢠Assessed the recoverable value headroom |
by performing sensitivity testing of key assumptions used. |
|
⢠We assessed the adequacy of the disclosures in |
|
relation to the impairment testing as described in the standalone financial statements. |
The Company''s Board of Directors are responsible for the other information. The other information comprises the information included in the Annual Report but does not include the standalone financial statements and our auditor''s report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the standalone financial statements, or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 the 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to the standalone financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the year ended December 31, 2023, and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The standalone financial statements of the Company for the year ended December 31, 2022, included in these standalone financial statements, have been audited by the predecessor auditor who expressed an unmodified opinion on those statements on February 27, 2023.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1â a statement on the matters specified in paragraphs 3 and 4 of the Order.
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 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 including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with
by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on December 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on December 31, 2023 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report;
(g) In our opinion, the managerial remuneration for the year ended December 31, 2023 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(h) 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, as amended 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 standalone financial statements
- Refer note 32 to the standalone financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. a) The management has represented
that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend
or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come
to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.
v. The interim dividend declared and paid by the Company during the year and until the date of this audit report is in accordance with section 123 of the Act.
vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only w.e.f. financial year beginning April 1, 2023, reporting under this clause is not applicable.
For S.R. Batliboi & Associates LLP
Chartered Accountants ICAI Firm Registration Number: 101049W/E300004
per Vikas Pansari
Partner
Membership Number: 093649 UDIN:24093649BKGPPS2082
Place of Signature: Mumbai Date: February 23, 2024
Dec 31, 2022
To the Members of Rain Industries Limited Other Information
Report on the Audit of the Standalone Financial StatementsOpinion
We have audited the standalone financial statements of Rain Industries Limited (the "Company") which comprise the standalone balance sheet as at 31 December 2022, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies 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, of the state of affairs of the Company as at 31 December 2022, and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. We have determined that there are no key audit matters to communicate in our report.
The Company''s Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone financial statements and our auditor''s report thereon. The Annual Report is expected to be made available to us after the date of this auditor''s report.
Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
Management''s and Board of Directors'' Responsibilities for the Standalone Financial Statements
The Company''s Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/ loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management and Board of Directors are responsible for
assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.
- Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial
statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2 A. As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the 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 standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
e. On the basis of the written representations received from the directors as on 4 January 2023 taken
on record by the Board of Directors, none of the directors are disqualified as on 31 December 2022 from being appointed as a director in terms of Section 164(2) of the Act.
f. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
B. 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:
a. The Company has disclosed the impact of pending litigations as at 31 December 2022 on its financial position in its standalone financial statements
- Refer Note 33 to the standalone financial statements.
b. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
c. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
d (i) The management has represented that, to the best of their knowledge and belief, as disclosed in the Note 34(viii) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:
Dec 31, 2018
INDEPENDENT AUDITOR''S 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 Rain Industries Limited ("the Company"), which comprise the Balance Sheet as at December 31, 2018, the Statement of Profit and Loss, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and summary of the significant accounting 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 Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs, profit/loss (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.
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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
AUDITOR''S RESPONSIBILITY
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. 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 standalone Ind AS financial statements.
We are also responsible to conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the opinion.
Our conclusions are based on the audit evidence obtained up to the date of the auditor''s report. However, future events or conditions may cause an entity to cease to continue as a going concern.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide 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 explanations given to us, the aforesaid standalone Ind AS 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 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 the Order.
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 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, the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on December 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on December 31, 2018 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B"
g) 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 standalone Ind AS financial statements - Refer Note 31 to the standalone Ind AS financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company
c) In respect of the aforesaid loans, there are no amounts which are overdue for more than ninety days.
iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act, with respect to the loans given and investments made. Further, there are no guarantees and security given 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 of Sections 73, 74, 75 and 76 of the Act and the rules framed thereunder. Accordingly, paragraph 3(v) of the Order are not applicable to the Company,
vi. The Central Government has not prescribed the maintenance of cost records under Section 148 of the Act, for services rendered by the Company. Thus, paragraph 3(vi) of the Order is not applicable to the Company,
vii. (a) According to the information and explanations given to
us and on the basis 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, Employees'' State Insurance, Income tax, Goods and Service tax, Sales-tax, Value Added Tax and other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities.
According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income tax, Goods and Service tax, Sales-tax, Value Added Tax and other material statutory dues were in arrears as at December 31, 2018 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 Goods and Service Tax, Sales Tax, Value-Added Tax which have not been deposited with appropriate authorities on account of any dispute. However, the Company has the following disputed dues with respect to Income tax.
With reference to Annexure A referred to in our Report of even date to the Members of Rain Industries Limited ("the Company") on the standalone Ind AS financial statements for the year ended December 31, 2018, 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 in a phased manner over a period of two years. In our opinion, the periodicity of physical verification is reasonable having regard to the size of the Company and nature of its assets. In accordance with the programme, fixed assets have been physically verified during the previous year and no material discrepancies were noticed on such physical verification.
(c) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties as disclosed in Note 3 to these standalone Ind AS financial statements, are held in the name of the Company,
ii. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company does not hold any physical inventories. 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 register maintained under Section 189 of the Companies Act, 2013 ("Act"). The Company has not granted loans to firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act.
a) In respect of the aforesaid loans, the terms and conditions under which such loans were granted are not prejudicial to the Company''s interest.
b) In respect of the aforesaid loans, the borrowers have been regular in the repayment of the principal and payment of interest, wherever stipulated.
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 |
167.70 (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 Act, 1961 Income tax Act, 1961 Income tax Act, 1961 |
Income tax and interest Income tax and interest Income tax and interest Income tax and interest |
200.44 (10.00) 51.90 32.60 18.40 |
AY 2010-11 AY 2011-12 AY 2012-13 AY 2013-14 |
Income tax Appellate Tribunal Income tax Appellate Tribunal Income tax Appellate Tribunal Income tax Appellate Tribunal |
(Amount in parenthesis represents amount deposited under protest with respective authority) standalone Ind AS financial statements as required under Indian Accounting Standard 24, Related Party Disclosures specified under Section 133 of the Act, read with Rule 3 of the Companies (Indian Accounting Standard) Rules, 2015.
xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, the provisions of Clause (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 our examination of the records of the Company, the Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly, the provisions of 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 our examination of the records of the Company, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause (xvi) of the Order are not applicable to the Company,
viii. According to the information and explanations given to us and the records of the Company examined by us, the Company has not defaulted in repayment of loans and borrowings to Banks. The Company did not have any dues to Financial Institution or Government, nor has it issued any debentures as at the balance sheet date.
ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments). In our opinion and according to the information and explanations given to us, the moneys raised by way of term loan have been applied on an overall basis for the purpose for which they were obtained.
x. According to the information and explanations given to us, no material fraud on the Company by its officers and employees or fraud by the Company has been noticed or reported during the course of our audit.
xi. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V of the Act.
xii. The Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it. Accordingly, the provisions of Clause (xii) of the Order are not applicable to the Company,
xiii. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in Note 30 to the
reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone Ind AS financial statements for external purposes in accordance with the generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have a material effect on the standalone Ind AS financial statements.
The Annexure B referred to in our Report of even date to the Members of Rain Industries Limited ("the Company") on the standalone Ind AS financial statements for the year ended December 31, 2018.
REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3 OF THE SECTION 143 OF THE COMPANIES ACT, 2013 (âTHE ACT")
We have audited the internal financial controls over financial reporting of the Company as of December 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements 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 internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
AUDITOR''S RESPONSIBILITY
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial control and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
OPINION
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at December 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants 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
Dec 31, 2016
INDEPENDENT AUDITOR''S REPORT
To the Members of Rain Industries Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Rain Industries Limited ("the Company"), which comprise the Balance Sheet as at 31 December
2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information (collectively referred to as ''the standalone financial statements'').
Management''s Responsibility for the Standalone 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 and presentation of these standalone 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 standalone 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 standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the 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. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. 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 standalone 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 standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 2016, 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, 2016'' (''the Order''), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the said 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 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 aforesaid standalone 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 the written representations received from the directors as on 31 December 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31 December 2016 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in ''Annexure B''; and
(g) 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 the pending litigations on its financial position in its standalone financial statements - refer note 24 to the standalone financial statements.
ii. the Company did not have long-term contracts including derivative contracts, for which there were no 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.
With reference to the Annexure A referred to in our report of even date to the members of Rain Industries Limited (''the Company'') on the standalone financial statements for the year ended 31 December 2016, 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 fixed assets by which all fixed assets are verified once in two years. In our opinion, the periodicity of physical verification is reasonable having regards to the size of the Company and the nature of its assets. No material discrepancies were observed on such verification.
(c) According to the information and explanation given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties as disclosed in the Note
11 to these standalone financial statements, are held in the name of the Company.
ii. As explained to us, the Company''s activities primarily include service revenue and trading in inventory of petroleum coke products. The sales are made to its customers on a high sea sale basis. Accordingly, it does not hold any physical inventories. Therefore, clause 3(ii) of the said order is not applicable.
iii. The Company has granted unsecured loans 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, Limited Liability Partnerships or other parties covered in the register maintained under Section189 of the Act.
(a) In respect of the aforesaid loans, the terms and conditions under which such loans were granted are not prejudicial to the Company''s interest.
(b) In respect of the aforesaid loans, the schedule of repayment of principal and payment of interest has been stipulated, and the party is repaying the principal amounts, as stipulated, and are also regular in payment of interest as applicable
(c) In respect of the aforesaid loans, there are no amount which is overdue for more than ninety days.
iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 with respect to loan given and investments made to the extent applicable. However, the Company has not granted any guarantee or created security to the parties covered under section 185 and 186 of the Companies Act, 2013.
v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under.
vi. The Central Government of India has not specified maintenance of cost records under sub-section (1) of Section 148 of the Act, for the products sold and 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, Service tax, Income-tax, Value Added Tax and other material statutory dues have been regularly deposited during the year with the appropriate authorities by the Company. As explained to us, the Company did not have any dues on account of Employees'' State Insurance, Sales tax, Duty of Customs, Duty of Excise and Cess.
According to the information and explanation given to us, no undisputed amounts payable in respect of Provident Fund, Income-tax, Service tax, Value added tax and other material statutory dues were in arrears as at 31 December 2016 for a period more than six months from the date they became payable.
(b) According to the information and explanations given to us and on the basis of our examination of records of the Company, there are no dues of Service tax, value added tax which have not been deposited with the appropriate authorities on account of any dispute except for the following dues of Income-tax.
Name of the Statute |
Nature of the Dues |
Amount in Millions (Rs.) |
Period to which the amount relates |
Forum where dispute is pending |
Income Tax Act, 1961 |
Income Tax and interest |
91.24 (91.24) |
AY 2004-05 |
Honorable High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh |
Income Tax Act, 1961 |
Income Tax and interest |
25.61 (12.80) |
AY 2008-09 |
Honorable High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh |
Income Tax Act, 1961 |
Income Tax and interest |
166.70 (94.90) |
AY 2009-10 |
Honorable High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh |
Income Tax Act, 1961 |
Income Tax and interest |
200.44 (10.00) |
AY 2010-11 |
Income Tax Appellate Tribunal |
Income Tax Act, 1961 |
Income Tax and interest |
57.74 |
AY 2011-12 |
Income Tax Appellate Tribunal |
Income Tax Act, 1961 |
Income Tax and interest |
149.70 |
AY 2012-13 |
Income Tax Appellate Tribunal |
(Amount in parenthesis represents payment under protest)
(AY represents Assessment Year)
viii. According to the information and explanation given to us and the records of the Company examined by us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank. The Company did not have any dues to Government, nor has it issued any debentures as at the balance sheet date.
ix. The Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments). In our opinion and according to the information and explanations given to us, the term loans taken by the Company and applied during the year were for the purpose for which they were raised.
x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.
xi. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Section 177 and 188 of the Act, where applicable, and details of such related party transactions have been disclosed in the standalone financial statements as required under Accounting Standard (AS) 18, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
xiv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, provisions of Clause 3(xiv) of the Order are not applicable to the Company.
xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transaction with the directors or persons connected with him as contemplated under the provisions of Section 192 of the Act. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.
xvi. In our opinion and according to the information and explanation given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.
Annexure B to the Independent Auditor''s Report on the Standalone Financial Statements
Report on the Internal Financial Controls under Clause
(i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (''the Act'')
We have audited the internal financial controls over financial reporting of the Company as of 31 December 2016 in conjunction with our audit of the standalone financial statements 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 internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditor''s Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing issued by ICAI deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the standalone financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 December 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants 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 23, 2017
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
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article