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Notes to Accounts of Rain Industries Ltd.

Dec 31, 2022

(ii) Rights, preferences and restrictions attached to the equity shares

The Company has only one class of equity shares having a par value of H 2 each per share. Each holder of equity shares is entitled to one vote per share. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. However, in case of interim dividend the profits are distributed based on approval of Board of Directors. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to number of equity shares held by the shareholders.

The Board of Directors at its meeting held on July 29, 2022 has declared an interim dividend of 50% (H 1 per equity share of par value of H 2 each amounting to H 336.35) for the financial year ended December 31, 2022.

The Board of Directors at its meeting held on October 30, 2021 has declared an interim dividend of 50% (H 1 per equity share of par value of H 2 each amounting to H 336.35) for the financial year ended December 31, 2021 and no further dividend is recommended during the year.

(i) During the financial year ended December 31, 2016, the Company had borrowed term loan of US$ 30 million from a bank which was secured by a pari passu first charge on all immovable and movable properties of Rain Cements Limited (RCL), a wholly owned subsidiary company, except for current assets of RCL (present and future) and assets charged with Axis Bank Limited for another loan availed by RCL. Further a Corporate guarantee had been issued by RCL in favour of the bank. The loan was sanctioned vide credit facilities agreement dated February 20, 2016 between the Company, RCL and the bank. No guarantee commission has been charged by RCL based on the requirements of the bank. It carries interest of 3 months LIBOR plus 300 basis points. Balance (gross of transaction costs) as at December 31, 2022 is H NIL (December 31, 2021: H 534.98).

(ii) During the financial year ended December 31, 2021, the Company borrowed Term loan of US$ 20 Million from a bank and is secured by :

a) Pari passu first charge by way of hypothecation on all movable assets both present and future of the Company;

b) Corporate guarantee of Rain CII Carbon (Vizag) Limited (RCCVL) in favour of the bank; and

c) Pledge over 1,000,000 equity shares of H 10 each held by the Company in RCCVL, a wholly owned step-down subsidiary

No guarantee commission has been charged by RCCVL based on the requirements of the bank. It carries interest of SOFR margin of 310 basis points payable monthly. The loan is repayable on November 30, 2023. Balance (gross of transaction costs) as at December 31, 2022 is H 1,655.72 (December 31, 2021: H 1,486.05)

(iii) The term loan in the previous year, post disbursal, was utilised for the purpose for which it was borrowed. As on the Balance Sheet date the Overseas Direct Investments (ODI) in the form of investments in and loans to overseas subsidiaries exceeds the term loans obtained for ODI purposes.

The Company''s exposure to liquidity risk related to trade payables is disclosed in note 29.4

The Management has identified enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at December 31, 2022 has been made in the financial statements based on information received and available with the Company. Further, in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. Auditors have placed reliance on such information provided by the management.

(viii) The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing regulations under Sections 92-92F of the Income-Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company continuously updates its documents for the international transactions entered into with the associated enterprises during the financial year. The management is of the opinion that its international transactions are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense for the year and that of provision for taxation.

Valuation Techniques:

(a) Borrowings (at amortised cost): The valuation model considers the present value of expected receipt/payment discounted using appropriate discounting rates.

(b) The fair value of trade receivables, loans, other financial assets, cash and cash equivalents, bank balances other than cash and cash equivalents, trade payables and other financial liabilities approximate their carrying amount largely due to shortterm nature of these instruments.

Note 29.2: Financial risk management

The Company has put in place risk management systems as applicable to the respective operations. The following explains the objective and processes of the Company: The Company has a system based approach to risk management, anchored to policies and procedures and internal financial controls aimed at ensuring early identification, evaluation and management of key financial risks (such as market risk, credit risk and liquidity risk) that may arise as a consequence of its business operations as well as its investing and financing activities. Accordingly, the Company''s risk management framework has the objective of ensuring that such risks are managed within acceptable and approved risk parameters in a disciplined and consistent manner and in compliance with applicable regulation. It also seeks to drive accountability in this regard.

Note 29.3: Credit risk:

Credit risk is the risk of financial loss arising from counter-party failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. The Company has a policy of dealing only with credit worthy counter parties and obtaining sufficient collateral, where appropriate as a means of mitigating the risk of financial loss from defaults. Financial instruments that are subject to credit risk and concentration thereof principally consist of trade receivables, loans receivables, investments, cash and cash equivalents. None of the financial instruments of the Company result in material concentration of credit risk.

The carrying value of financial assets represents the maximum credit risk.

Trade receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

To assess whether there is a significant increase in credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forwarding-looking information. Especially the following indicators are incorporated:

- actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the customer''s ability to meet its obligations

- actual or expected significant changes in the operating results of the customer

- significant changes in the expected performance and behaviour of the customer, including changes in the payment status of customers in the Company and changes in the operating results of the customer

Based on the above analysis, the Company does not expect any credit risk from its trade receivables for any of the years reported in this financial statements.

Investments

The Company has investments in wholly-owned and step down subsidiaries, thereby limiting the exposure to credit risk. All the counterparties have sound financial position with positive net worth. The Company does not expect any losses from nonperformance by these counter parties.

Cash and cash equivalents (including bank balances and fixed deposits):

Credit risk on cash and cash equivalent is limited as the Company generally transacts with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies.

Other financial assets:

There is no significant loss allowance for other financial assets.

Note 29.4: Liquidity risk:

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company''s reputation. The Company''s corporate treasury department is responsible for liquidity and funding as well as settlement management.

In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows. As of December 31, 2022, cash and cash equivalents are held with major banks.

Maturity of financial liabilities

The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payment and excludes impact of netting arrangements (if any):

Note 29.5: Market risk:

Market risk is the risk of loss of future earnings, fair value or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates and other market changes that effect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including deposits, foreign currency receivables, payables and borrowings.

Note 29.6: Interest rate risk:

Interest rate risk is measured by using the cashflow sensitivity for change in variable interest rates. Any movement in the market interest rates could have an impact on the Company''s cash flows as well as costs. In order to manage the Company''s position with regard to interest rate risk, it adopts a policy of ensuring an optimal mix of its interest rate risk exposure. The Company''s exposure to the risk of changes in market interest rates related primarily to the Company''s borrowing with variable interest rates.

Note 29.7 Foreign Currency risk:

Foreign currency risk is the risk impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the foreign currency borrowings, shared service arrangements with group entities, and advance to group entity. The currency in which these transactions are denominated are USD. There are no outstanding balances in any other currency apart from USD. The Company evaluates exchange rate exposure arising from foreign currency transactions.

Sensitivity Analysis:

A reasonably possible strengthening/weakening of the US dollar, Euro against all other currencies as at December 31 would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

Note 30: Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital, as well as the level of dividends to equity shareholders. The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowing and the advantages and security afforded by a sound capital position. The Company monitors capital using a ratio of ''Net debt'' to ''equity''. For this purpose, adjusted net debt is defined as total interest-bearing loans and borrowings less cash and cash equivalents. The Company''s Net debt to equity ratio is as follows.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

Note 31: Assets and liabilities related to employee benefits

a) Contribution plans:

Amounts towards defined contribution plans have been recognised under "Contributions to provident and other funds" in Note 25: H 13.82 (December 31, 2021 - H 10.98).

b) Defined Benefit plans:

The Company has a defined benefit gratuity plan in India, governed by the Payment of Gratuity Act, 1972. It entitles an employee, who has rendered at least five years of continuous service, to gratuity at the rate of fifteen days wages for every completed year of service or part thereof in excess of six months, based on the rate of wages last drawn by the employee concerned.

Inherent risk:

The plan is defined benefit in nature which is sponsored by the Company and hence it underwrites all the risk pertaining to the plan. In particular, this exposes the Company, to actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in nature, the plan is not subject to longevity risk.

The estimates of future salary increase considered in the actuarial valuation takes into account factors like inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. The expected return on plan assets is based on actuarial expectation of the average long term rate of return expected on investments of the Funds during the estimated term of the obligations.

Assumptions regarding future mortality and experience are set in accordance with published rates under Indian assured lives mortality 2012-2014. The discount rate is based on the prevailing market yield in Indian government securities as at balance sheet date for estimated term of obligation.

The managerial personnel are covered by the Company''s gratuity policy, personal accident insurance policy, mediclaim insurance policy taken and are eligible for leave encashment along with other employees of the Company. The proportionate premium paid towards these policies and provision made for leave encashment pertaining to the managerial personnel has not been included in the aforementioned disclosures as these are not determined on an individual basis.

**** Rounding off norm adopted by the company. The actual amounts is H 100.

Terms and conditions of transactions with related parties: All transactions with these related parties are priced on an arm''s length basis and resulting outstanding balances are to be settled in case within 60 days of the reporting date. None of the balance is secured.

No trade or other receivables are due by directors or other officers of the Company or any of them either severally or jointly with any other persons or amounts due by firms or private limited companies respectively in which any director is a partner or a director or a member.

The Company has a process whereby periodically all long-term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that there are no material foreseeable losses on such long term contracts which needs to be provided for in the books of account.

The Company has reviewed all its pending litigations including legal proceedings initiated in the ordinary course of business except as disclosed above. The Company does not expect the outcome of these proceedings to have a material and adverse effect on its financial position and accordingly no adjustment in respect thereof is expected.

Note 34: Additional Regulatory Information

(i) The title deeds of immovable properties are held in the name of the Company except the property held at Srinagar Colony, Hyderabad which is held in the name of Priyadarshini Cement Limited (erstwhile name of the Company).

(ii) The Company has not revalued its Property, plant and equipment and intangible assets during the year.

(iii) During the year there are no loans or advances in the nature of loans that are granted to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person that are repayable on demand.

(iv) There are no proceedings initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

(v) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

Based on the estimates prepared by the management, the Company will receive dividends from their wholly owned subsidiaries in

the subsequent financial year, which shall be utilised by the Company to meet its obligations, where required in the coming year.

Definition of Ratios:

(a) Current Ratio: The numerator consists of current assets and the denominator consists of current liabilities.

(b) Debt-Equity Ratio: The numerator consists of Borrowings including lease liabilities and the denominator consists of Equity.

(c) Debt Service Coverage Ratio: The numerator consists of Earnings before interest, depreciation and tax excluding share of associates and the denominator consists of borrowings repaid during the year including interest thereon.

(d) Return on Equity Ratio: The numerator consists of Profit after tax and the denominator consists of Equity.

(e) Trade Receivables Turnover Ratio: The numerator consists of Revenue from operations and the denominator consists of Average Trade receivables.

(f) Trade Payables Turnover Ratio: The numerator consists of total purchases of stock-in-trade and the denominator consists of Average Trade payables.

(g) Net Capital Turnover Ratio: The numerator consists of revenue from operations and the denominator consists of average working capital (current assets minus current liabilities).

(h) Net Profit Ratio: The numerator consists of Profit after tax and the denominator consists of Revenue from operations.

(i) Return on Capital employed: The numerator consists of Earnings before interest and taxes and the denominator consists of equity,total borrowings and deferred tax liabilities,net of intangible assets.

(j) Return on Investment: The numerator consists of interest income earned on fixed deposits and loans and the denominator consists of average fixed deposits held and loans given.

(vii) The Company has Wholly Owned Subsidiaries in USA and one of the step down Wholly Owned US Subsidiaries has made investment in Rain CII Carbon (Vizag) Limited, India during 2010; which is in compliance with the structure as per Foreign Exchange Management (Overseas Investment) Directions, 2022 and Foreign Exchange Management (Overseas Investment) Rules, 2022 as on 31 December 2022. Given the ambiguity prevalent under the foreign exchange law during 2010, no prior approval from Reserve Bank of India (''RBI'') was considered necessary at that time. The Company will approach RBI seeking clarification in this regard.

(viii) The Company has not advanced or loaned or invested funds, to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(ix) The Company have not received any fund, from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (Ultimate Beneficiaries) or

b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(x) The Company does not have any undisclosed income in terms of any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income in the tax assessment.

(xi) During the year, the Company has not entered into any transactions companies struck off under section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956.

(xii) The Company does not trade in crypto currency or virtual currency.

Note 36: Corporate Social Responsibility

As per Section 135 of the Companies Act, 2013, a Corporate Social responsibility (CSR) Committee has been formed by the Company. The proposed areas for CSR activities, as per the CSR policy of the Company are promotion of education, rural development activities, medical facilities, employment and ensuring environmental sustainability which are specified in Schedule VII of the Companies Act, 2013. Expenditure incurred under Section 135 of the Companies Act, 2013 on CSR activities are as below:

The CSR amount is incurred towards Promotion of Health and Education

Note 37: The Company has leased its assets to its wholly owned subsidiaries in India. The leases are operating and cancellable in nature. There are no finance leases.

Note 38: The Company applies the short-term lease recognition exemption to its short-term leases of building (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to building lease that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

Note 39: Segment Reporting

In accordance with Indian Accounting Standard (Ind AS) 108 on Operating segments, segment information has been given in the consolidated financial statements of the Company, and therefore no separate disclosure on segment information is given in these financial statements.

Note 40: On 24 March 2021, the Ministry of Corporate Affairs (MCA) through notification, amended Schedule III to the Companies Act, 2013, applicable for financial period commencing from 1 April 2021. The Company has incorporated the changes as per the said amendment in these financial statements.


Dec 31, 2018

Notes:

A) The term loan of USD 20 Million, provided during the financial year ended December 31, 2015, carries interest of 3 months Libor plus 260 basis points. This loan has been repaid by Rain Commodities (USA) Inc. as bullet payment in November 2018. Balance as at December 31, 2018 is Rs, Nil (December 31, 2017: Rs, 926.99).

B) The term loan of USD 30 Million, provided during the year 2016, carries interest of 3 months Libor plus 425 basis points. This loan is repayable by Rain Commodities (USA) Inc. in quarterly installments starting from December 2019. Balance as at December 31, 2018 is Rs, 1,674.96 (December 31, 2017: Rs, 1,91790).

C) The loan of USD 20 Million, provided during the financial year ended December 31, 2018, carries interest of 3 months Libor plus 240 basis points for year one and two and interest of 3 months Libor plus 315 basis points for year three. This loan is repayable by Rain Commodities (USA) Inc. as a bullet repayment on October 25, 2021. Balance as at December 31, 2018 is Rs, 1,395.80 (December 31, 2017: Rs, Nil).

D) These loan were given for the purpose of making investment in subsidiaries outside India.

(i) Trade receivables amounting to Rs, 327.16 (December 31, 2017: Rs, 15.12) are due from related parties. For the terms and conditions, Refer Note 30.

(ii) The Company''s exposure to credit and currency risk and loss allowances related to trade receivables are disclosed in Note 273 and 277

(iii) Receivables are pledged with banks against borrowings availed from banks. Refer note 15 for the same.

Cash and bank balances are pledged to fulfill colateral requirements against borrowings availed from banks. Refer note15 for the same.

(ii) Rights, preferences and restrictions attached to the equity shares

The Company has only one class of equity shares having a par value of '' 2 each per share. Each holder of equity shares is entitled to one vote per share. The final dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting. However, in case of interim dividend the profits are distributed based on approval of Board of Directors. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to number of equity shares held by the shareholders.

The Board of Directors at its meeting held on August 11, 2017 has declared an interim dividend of 50% ('' 1 per equity share of par value of Rs, 2 each amounting to Rs, 336.35, including tax on dividend) for the half year ended June 30, 2017. Further, the Board of Directors at its meeting held on February 28, 2018 has recommended a final dividend of 50% (Rs, 1 per equity share of par value Rs, 2 each amounting to Rs, 336.35, including tax on dividend) which was approved by shareholders on May 11, 2018. Accordingly, provision for proposed dividend and dividend distribution tax is recognized in the financial statements for the year ended December 31, 2018.

The Board of Directors at its meeting held on November 14, 2018 has declared an interim dividend of 50% (Rs, 1 per equity share of par value of Rs, 2 each amounting to Rs, 336.35, including tax on dividend) for the financial year ended December 31, 2018 and no further dividend recommended during the year.

(iv) There are no shares issued pursuant to contract without payment being received in cash during the period of five years immediately preceding the reporting date.

Notes:

(i) During the financial year ended December 31, 2015, the Company has borrowed Term loan of USD 20 Million from a bank and is secured by:

(a) Pari passu first charge on movable assets of the Company including current assets of the Company,

(b) First Ranking exclusive charge and Hypothecation over its designated account.

(c) First ranking exclusive pledge on 1,000,000 equity shares held by the Company in Rain CII Carbon (Vizag) Limited, a wholly-owned step-down subsidiary Company,

It carries interest of 3 months Libor plus 235 basis points. The loan has been fully repaid in November 2018. Balance as at December 31, 2018 is Rs, Nil (December 31, 2017: Rs, 1,278.60).

NOTE 1: NON-CURRENT BORROWINGS (CONTINUED)

(ii) During the financial year ended December 31, 2016, the Company has borrowed Term loan of USD 30 Million from a bank and is secured by a pari passu first charge on all immovable and movable properties present and future of Rain Cements Limited, a wholly-owned subsidiary Company. The loan has been sanctioned vide credit facilities agreement dated February 20, 2016 between the Company, Rain Cements Limited and the bank. It carries interest of 3 months Libor plus 400 basis points. Balance as at December 31, 2018 is Rs, 2,093.70 (December 31, 2017: Rs, 1,91790).

(iii) During the financial year ended December 31, 2018, the Company has borrowed Term loan of USD 20 Million from a bank and is secured by :

a) Parri passu first charge by way of hypothecation on all movable assets both present and future of the Company

b) Corporate guarantee of Rain CII Carbon (Vizag) Limited in favour of the bank

c) Pledge over 1,000,000 euity shares of Rs, 10 each held by the Company in Rain CII Carbon (Vizag) Limited, a wholly-owned step-down subsidiary

The loan is repayable on October 29, 2021. It carries interest of 3 months USD Libor plus 215 basis points for year 1 and 2 and 3 month USD LIBOR plus 290 basis points for year 3 payable monthly. Balance as at December 31, 2018 is Rs, 1,395.80 (December 31, 2017: Rs, Nil)

(iv) The term loans availed by the Company have been utilised for the purpose of investment in its wholly-owned subsidiary company which is engaged in the business of Calcined Petroleum Coke, in accordance with the sanctioned terms.

(v) The scheduled maturity of non-current borrowings and total number of installments are summarised as below:

* USD 30 Million is repayable in 10 quarterly instalements starting from December 2019.

** USD 20 Million is a bullet repayment on October 29, 2021

(vi) The aggregate amount of loans outstanding (including current maturities of non-current borrowings) guaranteed by subsidiaries is Rs, 3,489.50 (December 31, 2017 : Rs, 3,196.50). (Refer note 30)

(vii) Reconciliation of liabilities arising from financing activities*

The Company''s exposure to liquidity risk related to trade payables is disclosed in note 274

The Management has identified enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at December 31, 2018 has been made in the financial statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. Auditors have placed reliance on such information provided by the management.

(vii) The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing regulations under Sections 92-92F of the Income tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company continuously updates its documents for the international transactions entered into with the associated enterprises during the financial year. The management is of the opinion that its international transactions are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense for the year and that of provision for taxation.

Note 27.2: Financial risk management

The Company has put in place risk management systems as applicable to the respective operations. The following explains the objective and processes of the Company: The Company has a system based approach to risk management, anchored to policies and procedures and internal financial controls aimed at ensuring early identification, evaluation and management of key financial risks (such as market risk, credit risk and liquidity risk) that may arise as a consequence of its business operations as well as its investing and financing activities. Accordingly, the Company''s risk management framework has the objective of ensuring that such risks are managed within acceptable and approved risk parameters in a disciplined and consistent manner and in compliance with applicable regulation. It also seeks to drive accountability in this regard.

Note 27.3: Credit risk

Credit risk is the risk of financial loss arising from counter-party failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. The Company has a policy of dealing only with credit worthy counter parties and obtaining sufficient collateral, where appropriate as a means of mitigating the risk of financial loss from defaults. Financial instruments that are subject to credit risk and concentration thereof principally consist of trade receivables, loans receivables, investments, cash and cash equivalents. None of the financial instruments of the Company result in material concentration of credit risk.

The carrying value of financial assets represents the maximum credit risk.

Note 27.3: Credit risk (Continued)

Trade receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

To assess whether there is a significant increase in credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forwarding-looking information. Especially the following indicators are incorporated:

- actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the borrower''s ability to meet its obligations

- actual or expected significant changes in the operating results of the borrower

- significant changes in the expected performance and behavior of the borrower, including changes in the payment status of borrowers in the Company and changes in the operating results of the borrower

Based on the above analysis, the Company does not expect any credit risk from its trade receivables for any of the years reported in this financial statements.

Note 27.3: Credit risk (Continued)

Investments

The Company has investments in wholly owned and step down subsidiaries, thereby limiting the exposure to credit risk.

All the counterparties have sound financial position with positive net worth. The Company does not expect any losses from non-performance by these counter parties.

Cash and cash equivalents (including bank balances, fixed deposits and margin money with banks)

Credit risk on cash and cash equivalent is limited as the Company generally transacts with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies.

Other financial assets

There is no significant loss allowance for other financial assets.

Note 27.4: Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company''s reputation.

The Company''s corporate treasury department is responsible for liquidity and funding as well as settlement management.

In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows. As of December 31, 2018, cash and cash equivalents are held with major banks.

Maturity of financial liabilities

The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payment and excludes impact of netting arrangements (if any):

* Carrying value of borrowings is shown as net of deferred finance cost

Note 27.5: Market risk

Market risk is the risk of loss of future earnings, fair value or future cash flows that may result from a change in the price of a financial instrument . The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates and other market changes that effect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including deposits, foreign currency receivables, payables and borrowings.

Note 27.6: Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company exposure to the risk of changes in market interest rates related primarily to the Company''s current borrowing with floating interest rates.

Exposure to interest rate risk

The interest rate profile of the Company''s interest-bearing financial instruments as reported to management is as follows.

Note 27.7 Foreign Currency risk

Foreign currency risk is the risk impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the foreign currency borrowings, import of raw materials, shared service arrangements with group entities, advance to group entity, and exports of finished goods. The currency in which these transaction are denominated as USD and EUR. There are no outstanding balances in any other currency apart from USD and EUR. The Company evaluates exchange rate exposure arising from foreign currency transactions.

Sensitivity Analysis:

A reasonably possible strengthening (weakening) of the US dollar, Euro against all other currencies as at December 31, would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

NOTE 2: CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximize the shareholder value.

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital, as well as the level of dividends to equity shareholders.

The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowing and the advantages and security afforded by a sound capital position. The Company monitors capital using a ratio of ''Net debt'' to ''equity''. For this purpose, adjusted net debt is defined as total interest-bearing loans and borrowings less cash and cash equivalents. Equity comprises all components of equity excluding non-controlling interest. The Company’s Net debt to equity ratio is as follows.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

The Company monitors capital on the basis of the following gearing ratio.

NOTE 3: ASSETS AND LIABILITIES RELATED TO EMPLOYEE BENEFITS a) Contribution plans:

Amounts towards defined contribution plans have been recognized under "Contributions to provident and other funds" in Note 23: '' 11.02 (December 31, 2017 - '' 8.35).

b) Benefit plans:

The Company operates the following defined benefit plans:

(i) Gratuity

(ii) Compensated Absences

The Group has a defined benefit gratuity plan in India, governed by the Payment of Gratuity Act, 1972. It entitles an employee, who has rendered at least five years of continuous service, to gratuity at the rate of fifteen days wages for every completed year of service or part thereof in excess of six months, based on the rate of wages last drawn by the employee concerned.

Inherent risk:

The plan is defined benefit in nature which is sponsored by the Company and hence it underwrites all the risk pertaining to the plan. In particular, this exposes the Company, to actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in nature, the plan is not subject to longevity risk.

The actuarial valuation of the present value of the defined benefit obligation has been carried out as at December 31, 2018.

The following table sets forth the status of the various defined benefit plans of the Company and the amounts recognized in the Balance Sheet and Statement of Profit and Loss.

The estimates of future salary increase considered in the actuarial valuation takes into account factors like inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. The expected return on plan assets is based on actuarial expectation of the average long-term rate of return expected on investments of the Funds during the estimated term of the obligations.

Assumptions regarding future mortality and experience are set in accordance with published rates under Indian assured lifes mortality 2006-2008. The discount rate is based on the prevailing market yield in Indian government securities as at balance sheet date for estimated term of obligation.

(vii) Sensitivity analysis:

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts for the year ended December 31, 2018 shown below:

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

(viii) The expected contribution to be made by the Company during the financial year ending December 31, 2019 is Rs, 1.00.

(ix) As at December 31, 2018 the weighted average duration of the defined benefit obligation is 7.39 years.

c) Compensated absences:

The Company provides for accumulation of compensated absences by certain categories of its employees. These employees can carry forward a portion of the unutilized compensated absences and utilize it in future periods or receive cash in lieu thereof as per Company policy. The Company records an obligation for compensated absences in the period in which the employee renders the services that increases this entitlement. The total liability recorded towards this benefit as at December 31, 2018 is Rs, 6.38 (December 31, 2017 Rs, 4.65).

The principal assumptions used for computation of defined benefit plan equally apply to the computation of compensated absences and are accordingly considered in the estimation of benefits.

NOTE 4: RELATED PARTY DISCLOSURES

a) Names of related parties and description of relationship

Sl. No. Relationship Name

(a) List of related parties where control exists

(i) Subsidiaries 1 Rain Cements Limited [RCL]

2 Renuka Cement Limited [RenCL]

3 Rain Commodities (USA) Inc. [RCUSA]

4 Rain Global Services LLC [RGS]

5 Rain Carbon Inc. [RCI]

6 Rain Carbon Holdings, LLC [RCH]

7 Rain CII Carbon (Vizag) Limited [RCCVL]

8 Rain CII Carbon LLC [RCC]

9 CII Carbon Corp [CIICC]

10 Rain Carbon GmbH (RCG)

NOTE 5: RELATED PARTY DISCLOSURES (CONTINUED)

Sl. No. Relationship Name

(a) List of related parties where control exists

11 RUTGERS Canada Inc. [RCan]

12 RUTGERS Polymers Limited [RPL]

13 Handy Chemicals (USA) Ltd [HUSA]

14 Rain Carbon BVBA

15 VFT France SA [VFSA]

16 RUTGERS Holdings Germany GmbH [RHGmbH]

17 RUTGERS Wohnimmobilien GmbH & Co.KG

18 RUTGERS Gewerbeimmobilien GmbH & Co.KG

19 RUTGERS Germany GmbH [RGmbH]

20 Rain RUTGERS LLC

21 RUTGERS Poland SP Zoo [RPZ]

22 RUTGERS Resins BV [RRBV]

23 OOO RUTGERS Severtar [OOOSevertar]

24 Severtar Holding Ltd [Severtar]

25 Rumba Invest BVBA & Co. KG [Rumba]

26 RUTGERS (Shanghai) Trading Co. Ltd.

Sl. No. Relationship Name

(b) Other related parties where transactions have taken place during the year/balances exists at year end

(ii) Associates and joint ventures of subsidiaries 1 InfraTec Duisburg GmbH (IDGmbH)

(Investment by RUTGERS Germany GmbH)

2 Rain Coke Limited (Rcoke)

(Investment by Rain Cements Limited - disposed off in December 2018)

(iii) Enterprise where key managerial personnel 1 Pragnya Priya Foundation (PPF) along with their relatives exercise significant

influence

(iv) Key Managerial Personnel (KMP) 1 Mr. Jagan Mohan Reddy Nellore

Managing Director

2 Mr. T. Srinivasa Rao Chief Financial Officer

3 Mr. S. Venkat Ramana Reddy Company Secretary

(v) Non-executive directors 1 Mr. Radha Krishna Reddy Nellore - Chairman

2 Mr. N. Sujith Kumar Reddy - Director

3 Mr. S.L. Rao - Independent Director

4 Mr. H.L. Zutshi - Independent Director

5 Mr. Varun Batra - Independent Director (since February 28, 2018)

6 Ms. Radhika Vijay Haribhakti - Independent Director

7 Ms. Nirmala Reddy - Independent Director

NOTE 30: RELATED PARTY DISCLOSURES (CONTINUED)

Long-term employee benefits paid to Key managerial personnel:

* The managerial personnel are covered by the Company''s gratuity policy, personal accident insurance policy, medical insurance policy taken and are eligible for leave encashment along with other employees of the Company. The proportionate premium paid towards these policies and provision made for leave encashment pertaining to the managerial personnel has not been included in the aforementioned disclosures as these are not determined on an individual basis.

Terms and conditions of transactions with related parties:

All transactions with these related parties are priced on an arm''s length basis and resulting outstanding balances are to be settled in case within 60 days of the reporting date. None of the balance is secured.

No trade or other receivables are due by directors or other officers of the Company or any of them either severally or jointly with any other persons or amounts due by firms or private limited companies respectively in which any director is a partner or a director or a member.

The Company has a process whereby periodically all long-term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that there are no material foreseeable losses on such long-term contracts which needs to be provided for in the books of account.

The Company has reviewed all its pending litigations including legal proceedings initiated in the ordinary course of business except as disclosed above. The Company does not expect the outcome of these proceedings to have a material and adverse effect on its financial position and accordingly no adjustment in respect thereof is expected.

NOTE 5: CORPORATE SOCIAL RESPONSIBILITY

As per Section 135 of the Companies Act, 2013, a Corporate Social Responsibility (CSR) Committee has been formed by the Company. The proposed areas for CSR activities, as per the CSR policy of the Company are promotion of education, rural development activities, medical facilities, employment and ensuring environmental sustainability which are specified in Schedule VII of the Companies Act, 2013. Expenditure incurred under Section 135 of the Companies Act, 2013 on CSR activities are as below:

Gross amount required to be spent by the Company during the year ended December 31, 2018 is Nil (December 31, 2017: Nil)

NOTE 6: Previous year''s figures have been regrouped/reclassified wherever necessary, to conform to current year''s classification/disclosure.


Dec 31, 2016

Note:

(a) 5,310,086 equity shares of Rs. 2 each fully paid-up were bought back from the shareholders pursuant to buyback of equity shares during the period from January 1, 2012 to March 29, 2012.

(b) 2,471,293 equity shares of Rs. 2 each fully paid-up were bought back from the shareholders pursuant to buyback of equity shares during the period from October 22, 2012 to December 31, 2012.

(c) 5,355,923 equity shares of Rs. 2 each fully paid-up were bought back from the shareholders pursuant to buyback of equity shares during the period from January 1, 2013 to March 31, 2013.

Notes:

(i) Term loan with the original amount of US$ 40 Million borrowed from IDBI Bank Limited, DIFC Branch, Dubai branch is secured by a pari passu:

(a) First charge on all immovable and movable properties present and future of the Company and Rain Cements Limited, a wholly owned subsidiary; and

(b) Second charge on all current assets of the Company and Rain Cements Limited, a wholly owned subsidiary Company.

It carries interest of 3 months Libor plus 400 basis points. Of the original amount of US$ 40 Million borrowed, last instalment for 24% of original amount was due on April 1, 2016 and was completely repaid.

(ii) Term loan of US$ 20 Million borrowed from IDBI Bank Limited, DIFC branch, Dubai branch, during financial year ended December 31, 2014, is secured by a pari passu first charge on all immovable and movable properties present and future of Rain Cements Limited, a wholly owned subsidiary Company.

(iii) Term loan of US$ 20 Million borrowed from Citibank, NA Nassau, Bahamas branch, during the financial year ended December 31, 2015, is secured by:

(a) Pari passu first charge on movable assets of the Company including current assets of the Company.

(b) First Ranking exclusive charge and Hypothecation over designated account No.0037315052 maintained with Citibank.

(c) First ranking exclusive pledge on 1,000,000 equity shares held by the Company in Rain CII Carbon (Vizag) Limited, a wholly owned step-down subsidiary Company.

(iv) Term loan of US$ 30 Million borrowed from IDBI Bank Limited, DIFC branch, Dubai during the current financial year ended December 31, 2016, is secured by a pari passu first charge on all immovable and movable properties present and future of Rain Cements Limited, a wholly owned subsidiary Company. The loan has been sanctioned vide credit facilities agreement dated 20 February 2016 between the Company, Rain Cements Limited and IDBI Bank Limited, DIFC branch, Dubai.

(v) Term loan from IDBI Bank Dubai branch of US$ 20 Million carries interest of 6 months Libor plus 350 basis points, Term loan from Citibank of US$ 20 Million carries interest of 3 months Libor plus 235 basis points and Term loan from IDBI Bank Dubai branch of US$ 30 Million carries interest of 3 months Libor plus 400 basis points.

(vi) The term loans availed by the Company have been utilised for the purpose of investment in its wholly owned subsidiary company which is engaged in the business of Calcined Petroleum Coke, in accordance with the sanctioned terms.

* US$ 20 Million is a bullet repayment on April 28, 2017.

**US$ 20 Million is a bullet repayment on October 31, 2018.

*** US$ 30 Million is repayable in 10 quarterly instalments starting from December 2019.

(viii) The aggregate amount of loans (including current maturities of long-term borrowings) guaranteed by others is Rs. 4,756.50 (December 31, 2015 : Rs. 3,289.97).

Note:

In the absence of virtual certainty supported by convincing evidence that there will be future taxable income against which such losses can be set off, the deferred tax asset on carry forward loss as at December 31, 2016 and 2015 are created to the extent of deferred tax liability.

B) The term loan of US$ 20 Million, provided during the financial year ended December 31, 2015, carries interest of 3 months Libor plus 260 basis points. This loan is repayable by Rain Commodities (USA) Inc. as bullet payment on October 30, 2018.

C) The term loan of US$ 30 Million, provided during the current year, carries interest of 3 months Libor plus 425 basis points. This loan is repayable by Rain Commodities (USA) Inc. in quarterly instalments starting from December 2019.

D) The loan was given for the purpose of making investment in subsidiaries outside India.

The estimates of future salary increase considered in the actuarial valuation take into account factors like inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. The expected return on plan assets is based on actuarial expectation of the average long term rate of return expected on investments of the funds during the estimated term of the obligations.

1. Related Party Disclosures

a) Names of related parties and description of relationship:

Sl.No. Relationship Name

(i) Subsidiaries 1. Rain Cements Limited [RCL]

2. Rain Coke Limited [RCoke]

3. Renuka Cement Limited [RenCL]

4. Moonglow Company Business Inc [Moonglow] (merged w.e.f. April 1, 2015)

5. Rain Commodities (USA) Inc. [RCUSA]

6. Rain Global Services LLC [RGS]

7. RGS Egypt Limited Company LLC [RGS Egypt]

8. Rain Carbon Inc. [RCI]

9. Rain Global Holdings, LLC [RGH] (merged with RCI w.e.f. November 30, 2016)

10. Rain Carbon Holdings, LLC [RCH]

11. Rain CII Carbon (Vizag) Limited [RCCVL]

12. Rain CII Carbon LLC [RCC]

13. Rain CII Carbon Mauritius Limited [RCCML] (liquidated w.e.f. August 9, 2016)

14. CII Carbon Corp [CIICC]

15. Rain CTP Inc [Rain CTP] (merged with RCC w.e.f. November 30, 2016)

16. Rain RUTGERS CTP LLC (RRCTP)

17. Rain Holdings Germany Gmbh (RainHG)

a) Names of related parties and description of relationship (Contd.)

Sl.No. Relationship Name

18. RUTGERS Canada Inc. [RCan]

19. RUTGERS Polymers Limited [RPL]

20. Handy Chemicals (USA) Ltd [HUSA]

21. RUTGERS BVBA (formerly known as RUTGERS NV [RNV])

22. RUTGERS Holdings Belgium BVBA [RHBVBA]

23. RUTGERS Belgium BVBA (Formerly known as RUTGERS Belgium NV [RBNV])

24. VFT Trading BVBA (Formerly known as VFT Trading NV [VNV])

25. VFT France SA [VFSA]

26. RUTGERS Holdings Germany GmbH [RHGmbH]

27. RUTGERS Wohnimmobilien GmbH & Co.KG

28. RUTGERS Gewerbeimmobilien GmbH & Co.KG

29. RUTGERS Germany GmbH [RGmbH]

30. RUTGERS Aromatic Chemicals GmbH [RACGmbH]

31. RUTGERS ChemTrade GmbH [RCTGmbH]

32. RUTGERS Basic Aromatics GmbH [RBAGmbH]

33. RUTGERS Poland SP Zoo [RPZ]

34. RUTGERS InfraTec GmbH [RIGmbH]

35. RUTGERS Novares GmbH [RNGmbH]

36. RUTGERS Resins BV [RRBV]

37 OOO RUTGERS Severtar [OOOSevertar]

38. Severtar Holding Ltd [Severtar]

39. Rumba Invest BVBA & Co. KG [Rumba]

40. RUTGERS (Shanghai) Trading Co. Ltd.

(ii) Associates/joint ventures of 1. Tarlog GmbH [Tarlog] subsidiaries 2. InfraTec Duisburg GmbH [IDGmbH]

(iii) Enterprise where key managerial 1. Sujala Investments Private Limited personnel along with their relatives 2. Rain Enterprises Private Limited exercise significant influence 3. Nivee Holdings Private Limited

4. Arunachala Holdings Private Limited

5. PCL Financial Services Private Limited

6. Rain Entertainment Private Limited

7. Nivee Property Developers Private Limited

8. Pragnya Priya Foundation (PPF)

(iv) Key managerial personnel 1. Mr. N. Jagan Mohan Reddy,

Managing Director

2. Mr. T. Srinivasa Rao,

Chief Financial Officer

3. Mr. S. Venkat Ramana Reddy,

Company Secretary

2. Segment Reporting

The segment results are included and presented on consolidated basis in accordance with the requirements of Accounting Standard - 17 "Segment Reporting".

3. Effective from 1 January 2015, the Management has internally reassessed and revised, wherever necessary the useful lives to compute depreciation, to conform to the requirements of the Companies Act 2013. Consequently, the carrying amount of tangible assets at 1 January 2015 is being depreciated over the revised remaining useful life of the tangible asset. The carrying value of Rs. 1.64 in case of assets with nil revised remaining useful life as at 1 January 2015 is set off against the surplus in the Statement of Profit and Loss. Further, had the Company continued with the previously assessed useful lives, charge for depreciation for the year ended 31 December 2015 would have been lower by Rs. 12.03 and the profit before tax would have been higher by such amount.

4. Long-term loans and advances

Reconciliation of opening and closing balances of Loans and advances to related parties:

5. Moon glow Company Business Inc., a step down wholly owned subsidiary and subsidiary of Rain Cements Limited, amalgamated with the Company, with effect from April 1, 2015 ("the appointed date"). The Hon''ble High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh vide its order dated July 29, 2016 granted its approval for Scheme of Arrangement between Moon glow Company Business Inc. (Step down wholly owned subsidiary), Rain Industries Limited (Ultimate Holding Company), Rain Cements Limited (wholly owned subsidiary) and their respective Shareholders and Creditors in terms of the provisions of Section(s) 391 - 394 read with Section(s) 78, 100 to 103 of the Companies Act, 1956/ Companies Act, 2013 for amalgamation of Moonglow Company Business Inc., with Rain Industries Limited.

The Board of Directors of the Company have taken on record the order of the Hon''ble High Court at Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh at their meeting held on October 8, 2016 and e-Form INC-28 along with the Court order is filed with the Registrar of Companies, Hyderabad for the States of Telangana and Andhra Pradesh on October 20, 2016.

Accordingly, the Company has recorded the assets (Investment in Rain Commodities (USA) Inc. herein after referred to as RCUSA and Balances with banks) and liabilities (Trade payables) including reserves of the Moon glow Company Business Inc., at their historical book values under "Pooling of interest method" as specified in the Scheme, and as prescribed by Accounting Standard 14 specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. Therefore, the assets, liabilities and reserves of Moon glow Company Business Inc. as at April 1, 2015 has been taken over at its book values and in the same form.

Since Rain Cements Limited, the transferor company, was wholly owned by the Company, no shares were exchanged to effect the amalgamation and the consideration is nil. Consequently, the net assets acquired, less free reserves taken over, have been added to the Capital Reserve. The amalgamation has resulted in transfer of assets, liabilities and reserves in accordance with the terms of the Scheme at the following summarised values:

6. As per section 135 of the Companies Act, 2013, a CSR Committee has been formed by the Company. The proposed areas for CSR activities, as per the CSR policy of the Company are promotion of education, rural development activities, medical facilities, employment and ensuring environmental sustainability which are specified in Schedule VII of the Companies Act, 2013.

*The above amounts are spent by the way of contribution to Pragnya Priya Foundation.

7. Previous year''s figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classification/ disclosure.


Dec 31, 2015

(i) Rights, preferences and restrictions attached to the equity shares

The Company has only one class of equity shares having a par value of Rs. 2 each per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to number of equity shares held by the shareholders.

During the year ended December 31, 2015, the amount of per share dividend recognized as distribution to equity shareholders was Rs. 1.00 (year ended December 31, 2014: Rs. 1.00)

Note:

(a) 10,000,000 equity shares of Rs. 2 each fully paid-up were bought back from the shareholders pursuant to buyback of equity shares during the period from November 14, 2011 to March 29, 2012.

(b) 2,471,293 equity shares of Rs. 2 each fully paid-up were bought back from the shareholders pursuant to buyback of equity shares during the period from October 22, 2012 to December 31, 2012.

(c) 5,355,923 equity shares of Rs. 2 each fully paid-up were bought back from the shareholders pursuant to buyback of equity shares during the period from January 1, 2013 to March 31, 2013.

(iv) There are no shares issued pursuant to contract without payment being received in cash during the period of five years immediately preceding the reporting date.

Notes:

(i) Term loan with the original amount of US$ 40 Million borrowed from IDBI Bank Limited, Dubai branch is secured by a pari passu:

(a) First charge on all immovable and movable properties present and future of the Company and Rain Cements Limited, a wholly owned subsidiary; and

(b) Second charge on all current assets of the Company and Rain Cements Limited, a wholly owned subsidiary Company.

(ii) Term loan of US$ 20 Million borrowed from IDBI Bank Limited, Dubai branch, in the previous financial year is secured by a pari passu first charge on all immovable and movable properties present and future of Rain Cements Limited, a wholly owned subsidiary Company.

(iii) Term loan of US$ 20 Million borrowed from Citibank, NA Nassau, Bahamas branch, in the current financial year is secured by:

(a) Pari passu first charge on movable assets of the Company including current assets of the Company.

(b) First Ranking exclusive charge and Hypothecation over designated account No.0037315052 maintained with Citibank

(c) First ranking exclusive pledge on 10,00,000 equity shares held by the Company in Rain CII Carbon (Vizag) Limited, a wholly owned step-down subsidiary Company.

(iv) Term loan with the original amount of US$ 40 Million, carries interest of 3 months Libor plus 400 basis points, Term loan from IDBI Bank Dubai branch of US$ 20 Million carries interest of 6 months Libor plus 350 basis points and Term loan from Citibank of US$ 20 Million carries interest of 3 months Libor plus 235 basis points.

(v) The term loans availed by the Company have been utilized for the purpose of investment in its wholly owned subsidiary company which is engaged in the business of Claimed Petroleum Coke, in accordance with the sanctioned terms.

* Of the original amount of US$ 40 Million borrowed, 24% of original amount on April 1, 2016.

** US$ 20 Million is a bullet repayment on April 28, 2017.

*** US$ 20 Million is a bullet repayment on October 31, 2018.

(vii) The aggregate amount of loans (including current maturities of long-term borrowings) guaranteed by others is Rs. 3,289.97 (December 31, 2014 : Rs. 2,786.52)

Note:

A) The term loan of US$ 20 Million (original amount) carries interest of 3 months Libor plus 425 basis points and balance as on December 31, 2015 is repayable by Rain Commodities (USA) Inc. as below:

(a) 24% of the original amount on March 30, 2016

B) The term loan of US$ 20 Million, provided during the previous year, carries interest of 6 months Libor plus 400 basis points. This loan is repayable by Rain Commodities (USA) Inc. as bullet payment on April 24, 2017.

C) The term loan of US$ 20 Million, provided during the current year, carries interest of 3 months Libor plus 235 basis points. This loan is repayable by Rain Commodities (USA) Inc. as bullet payment on October 30, 2018.

The estimates of future salary increase considered in the actuarial valuation takes into account factors like inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. The expected return on plan assets is based on actuarial expectation of the average long term rate of return expected on investments of the funds during the estimated term of the obligations.

1. Related Party Disclosures

a) Names of related parties and description of relationship: Sl.No. Relationship Name

(i) Subsidiaries 1. Rain Coke Limited [RCoke]

2. Rain Cements Limited [RCL]

3. Renuka Cement Limited [RenCL]

4. Moonglow Company Business Inc [Moonglow]

5. Rain Commodities (USA) Inc. [RCUSA]

6. Rain Global Services LLC [RGS]

7. RGS Egypt Limited Company LLC [RGS Egypt]

8. Rain Carbon Inc. [RCI]

9. Rain Global Holdings, LLC [RGH]

10. Rain Carbon Holdings, LLC [RCH]

11. Rain CII Carbon (Vizag) Limited [RCCVL]

12. Rain CII Carbon LLC [RCC]

13. Rain CII Carbon Mauritius Limited [RCCML]

14. CII Carbon Corp [CIICC]

15. Zhenjiang Xin Tian Tansu Co Limited [ZXTTCL]

16. Rain CTP Inc [Rain CTP]

17. Rain RUETGERS CTP LLC (RRCTP)

18. Rain Holdings Germany Gmbh (RainHG)

19. RUETGERS Canada Inc. [RCan]

20. RUETGERS Polymers Limited [RPL]

21. Handy Chemicals (USA) Ltd [HUSA]

a) Names of related parties and description of relationship (Contd.) Sl.No. Relationship Name

22. RUETGERS NV [RNV]

23. RUETGERS Holdings Belgium BVBA [RHBVBA]

24. RUETGERS Belgium NV [RBNV]

25. VFT Trading NV [VNV]

26. VFT France SA [VFSA]

27. RUETGERS Holdings Germany GmbH [RHGmbH]

28. RUETGERS Wohnimmobilien GmbH & Co.KG

29. RUETGERS Gewerbeimmobilien GmbH & Co.KG

30. RUETGERS Germany GmbH [RGmbH]

31. RUETGERS Aromatic Chemicals GmbH [RACGmbH]

32. RUETGERS ChemTrade GmbH [RCTGmbH]

33. RUETGERS Basic Aromatics GmbH [RBAGmbH]

34. RUETGERS Poland SP Zoo [RPZ]

35. RUETGERS InfraTec GmbH [RIGmbH]

36. RUETGERS Novares GmbH [RNGmbH]

37. RUETGERS Resins GmbH [RRGmbH]

38. RUETGERS Resins BV [RRBV]

39. OOO RUETGERS Severtar [OOOSevertar]

40. Severtar Holding Ltd [Severtar]

41. Rumba Invest BVBA & Co. KG [Rumba]

42. RÜTGERS (Shanghai) Trading Co. Ltd.

(ii) Associates/joint ventures of 1. Tarlog GmbH [Tarlog]

subsidiaries

2. InfraTec Duisburg GmbH [IDGmbH]

(iii) Enterprise where key managerial 1. Sujala Investments Private Limited personnel along with their relatives

2. Rain Enterprises Private Limited exercise significant influence

3. Nivee Holdings Private Limited

4. Arunachala Holdings Private Limited

5. PCL Financial Services Private Limited

6. Rain Entertainments Private Limited

7. Nivee Property Developers Private Limited

8. Pragnya Priya Foundation (PPF)

(iv) Key managerial personnel 1. Mr. N. Jagan Mohan Reddy -

Managing Director

2. Mr. T. Srinivasa Rao- Chief Financial Officer

3. Mr. S. Venkat Ramana Reddy Company Secretary

2. Segment Reporting

The segment results are included and presented on consolidated basis in accordance with the requirements of Accounting Standard - 17 "Segment Reporting".

3. Effective from 1 January 2015, the Management has internally reassessed and revised, wherever necessary the useful lives to compute depreciation, to conform to the requirements of the Companies Act 2013. Consequently, the carrying amount of tangible assets at 1 January 2015 is being depreciated over the revised remaining useful life of the tangible asset. The carrying value of Rs. 1.64 in case of assets with nil revised remaining useful life as at 1 January 2015 is set off against the surplus in the statement of profit and loss account. Further, had the Company continued with the previously assessed useful lives, charge for depreciation for the year ended 31 December 2015 would have been lower by Rs. 12.03 and the profit before tax would have been higher by such amount.

4. As per section 135 of the Companies Act, 2013, a CSR Committee has been formed by the Company. The proposed areas for CSR activities, as per the CSR policy of the Company are promotion of education, rural development activities, medical facilities, employment and ensuring environmental sustainability which are specified in Schedule VII of the Companies Act, 2013. The Company is required to spend to spend a minimum amount of Rs. 2.00 for the purpose of CSR for the year.


Dec 31, 2014

Note 1: Corporate Information

Rain Industries Limited (''the Company'') was incorporated on March 15, 1974 under the Companies Act, 1956. The Company is currently engaged in the business of trading in Carbon Products. The Company''s equity shares are Listed at BSE Limited and National Stock Exchange of India Limited in India.

The name of the Company has been changed to Rain Industries Limited from Rain Commodities Limited, pursuant to the approval received from the Registrar of Companies, Hyderabad on July 8, 2013.

2. Buy-back of Equity Shares

a. Further to the completion of the scheme of buyback approved by the board of directors on October 25, 2011, the Shareholders of the Company have accorded their approval to another scheme for buyback of equity shares of Rs.2/- each vide postal ballot on October 1, 2012. The approval was granted for buy back of a maximum of 12,700,000 equity shares through open market transactions at a price not exceeding Rs.46/- per share for an amount not exceeding Rs. 460,000. The Company commenced the buyback of equity shares on October 22, 2012 and bought back 2,471,293 equity shares of Rs.2/- each aggregating Rs. 93,677 and extinguished 2,334,185 equity shares up to December 31, 2012. The balance 137,108 equity shares were extinguished by January 4, 2013.

Further during the year ended December 31, 2013, the Company bought back and extinguished 5,355,923 equity shares of Rs.2/- each for an aggregate consideration of Rs. 202,773.

Accordingly, Rs. Nil (December 31, 2013: 10,712) has been reduced from paid-up equity share capital and in accordance with the provisions of Section 77A of the Companies Act, 1956, of the aggregate buyback consideration paid of Rs. Nil (December 31, 2013: Rs. 202,773) Rs. Nil (December 31, 2013: Rs. 192,061) has been utilised from securities premium account and Rs. Nil (December 31, 2013: Rs. 10,712) transferred to the capital redemption reserve from surplus in Statement of Profit and Loss.

3. Contingent liabilities not provided for in respect of:

As at As at December 31, December 31, 2014 2013

Matters under dispute

- Income Tax 146,993 127,205

4. Segment Reporting

The segment results are included and presented on consolidated basis in accordance with the requirements of Accounting Standard - 17 "Segment Reporting".

5. Previous year''s figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classification/ disclosure.


Dec 31, 2012

Note 1: Corporate Information

Rain Commodities Limited (''the Company'') was incorporated on March 15, 1974 under the Companies Act, 1956. The Company is currently engaged in the business of trading of Petroleum Coke.

(i) Rights, preferences and restrictions attached to the equity shares

The Company has only one class of equity shares having a par value of Rs. 2 each per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to number of equity shares held by the shareholders.

During the year ended December 31, 2012, the amount of per share dividend recognized as distribution to equity shareholders was Rs. 1.10 (year ended December 31, 2011: Rs. 1.10).

(ii) Pursuant to the approval of the shareholders at the Annual General Meeting held on May 12, 2011, each equity share of the Company with a face value of Rs. 10 was sub-divided into five equity shares of Rs. 2 each, with effect from June 16, 2011, being the record date for the said sub-division.

Note:

(a) 6,000,000 equity shares of Rs. 2 each fully paid-up (represents after sub-division of 1,200,000 equity shares of Rs. 10 each) were bought back from the shareholders pursuant to buyback of equity shares made during the year ended December 31, 2008.

(b) 10,000,000 equity shares of Rs. 2 each fully paid-up were bought back from the shareholders pursuant to buyback of equity shares during the period from November 14, 2011 to March 29, 2012 (Refer Note 25).

(c) 2,471,293 equity shares of Rs. 2 each fully paid-up were bought back from the shareholders pursuant to buyback of equity shares during the period from October 22, 2012 to December 31, 2012 (Refer Note 25).

Notes:

(i) Term loans are secured by a pari passu:

(a) First charge on all immovable and movable properties and

(b) Second charge on all current assets of Rain Cements Limited, a wholly owned subsidiary of the Company.

(ii) The term loan of US$ 20 Million carries interest of 3 months Libor plus 300 basis points and is repayable to IDBI as a bullet payment in March 2013

The term loan of US$ 40 Million carries interest of 3 months Libor plus 400 bais points and is repayable to IDBI as below:

(a) 64% in 8 equal quarterly installments from April, 2014 to March, 2016

(b) 12% in April, 2016 and

(c) 24% in July, 2016

(iii) The term loans availed by the Company have been utilized for the purpose of investment in share capital and extending loan facilities to a subsidiary company, which is engaged in the business of Calcined Petroleum Coke, in accordance with the sanctioned terms. The investment in share capital is in the nature of net investment hedge and has been appropriately dealt with in the consolidated financial statements of the Company

Note:

There are no Micro and Small Enterprises to whom the Company owes dues which are outstanding for more than 45 days as at December 31, 2012 in accordance with the contractual obligations. The information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

2. Buy-back of Equity Shares

The Board of Directors of the Company, during their meeting held on October 25, 2011, approved the buyback of 10,000,000 equity shares of Rs.2/- each at maximum price of Rs.41/- per share for an amount not exceeding Rs. 350,000. The board decided to implement the buyback offer through the open market purchases in the stock exchanges.

Pursuant to the offer, the Company commenced the buyback on November 14, 2011. During the year ended December 31, 2011, the Company has bought back 4,689,914 equity shares of Rs.2/- each aggregating Rs. 137,653 and extinguished 3,723,675 equity shares upto December 31, 2011 and the balance 966,239 equity shares were extinguished subsequent to the year end. The Company bought back and extinguished the balance 5,310,086 equity shares of Rs.2/- each aggregating Rs. 182,255 during the current financial year.

Further to the completion of the scheme of buyback approved by the board of directors on October 25, 2011, the Shareholders of the Company have approved another scheme for buyback of equity shares of Rs. 2/- each vide postal ballot on October 1, 2012 through open market transactions at a price not exceeding Rs.46/- per share for an amount not exceeding Rs. 460,000. The Company commenced the buyback of equity shares on October 22, 2012 and bought back 2,471,293 equity shares of Rs.2/- each aggregating Rs. 93,677 and extinguished 2,334,185 equity shares upto December 31, 2012 and the balance 137,108 equity shares were extinguished subsequent to the year end.

Accordingly, Rs. 15,564 (December 31, 2011: 9,379) has been reduced from paid-up equity share capital and in accordance with the provisions of Section 77A of the Companies Act, 1956, Rs. 260,368 (December 31, 2011: 128,274) has been utilized from securities premium account and Rs. 15,564 (December 31, 2011: 9,379) transferred to the capital redemption reserve from surplus in statement of profit and loss.

3. Contingent liabilities not provided for in respect of:

December 31, 2012 December 31, 2011 Amount Amount

Matters under dispute

- Income Tax 25,615 85,362

Corporate Guarantee issued on behalf of wholly owned subsidiaries :

- Rain Commodities USA Inc., US$ 100 million (December 31, 2011: US$ 125 million) equivalent to 5,477,730 6,658,250

Note: During the previous year 2011, equity shares of the Company with a face value of Rs.10/- each was sub-divided into 5 equity shares of Rs.2/- each.

4. The Company has entered into operating lease agreements for vehicles. The lease rentals of Rs. 300 (December 31, 2011 - Rs. Nil) were charged off in the Statement of Profit and Loss. These agreements are cancellable in nature.

The estimates of future salary increase considered in the actuarial valuation take into account factors like inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. The expected return on plan assets is based on actuarial expectation of the average long term rate of return expected on investments of the funds during the estimated term of the obligations.

5. Segment Reporting

The segment results are included and presented on consolidated basis in accordance with the requirements of Accounting Standard - 17 "Segment Reporting".

6. The Revised Schedule VI has become effective for the periods beginning on or after April 1, 2011 for the presentation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year''s figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classification/ disclosure.


Dec 31, 2011

I. (a) Sub-division of Equity Shares:

Pursuant to the approval of the shareholders at the Annual General Meeting held on May 12, 2011, each equity share of the Company with a face value of Rs. 10/- is sub-divided into five equity shares of Rs. 2/- each, with effect from June 16, 2011, being the record date for the said sub-division. Accordingly, as required by Accounting Standard (AS) 20 'Earnings Per Share', the basic and diluted Earnings Per Share for the previous year is restated to give effect to the sub-division.

(b) Buy-back of Equity Shares

The Board of Directors of the Company, during their meeting held on October 25, 2011, approved the buy- back of 10,000,000 equity shares of Rs.2/- each at maximum price of Rs.41/- per share for an amount not exceeding Rs.350,000. The Board decided to implement the buy-back offer through the open market purchases in the Stock Exchanges.

Pursuant to the offer, the Company from November 14, 2011 to December 31, 2011, has bought back 4,689,914 equity shares of Rs.2/- each aggregating Rs. 137,653. The Company had extinguished 3,723,675 equity shares upto December 31, 2011 and the balance 966,329 equity shares were extinguished subsequent to the year end. Accordingly, Rs. 9,379 has been reduced from paid-up equity share capital and in accordance with the provisions of Section 77A of the Companies Act, 1956, Rs. 128,274 has been utilized from Securities Premium Account.

In terms of Section 77AA of the Companies Act, 1956, an amount of Rs. 9,379 has been transferred to the Capital Redemption Reserve.

II. Contingent liabilities not provided for in respect of:

December 31, 2011 December 31, 2010 Amount Amount

Matters under dispute

Income Tax 85,362 -

Corporate Guarantee issued on behalf of wholly owned subsidiaries :

Rain Commodities USA Inc.,

USD 125 million (December 31,

2010: USD 87 million) equivalent to 6,658,250 3,898,470

Rain CII Carbon (Vizag) Limited - 1,135,000

III. Micro and Small enterprises

There are no Micro and Small enterprises to whom the company owes dues, which are outstanding for more than 45 days as at December 31, 2011. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

IV. The Company has entered into various operating lease agreements for assets comprising storage facilities. The lease rentals amounting to Nil (December 31, 2010 - Rs.6,936) have been charged to revenue. These agreements are cancellable in nature and there is no restriction in respect of such leases.

V.(a) There are no outstanding contracts outstanding forward exchange contracts as at the year end.

(b) The year end receivable and payables in foreign currency which are not covered by forward covers / derivative contracts are as follows:

Note: During the current year, equity shares of the Company with a face value of Rs. 10 each was sub-divided into 5 equity shares of Rs. 2 each and as required by Accounting Standard (AS) 20, Earnings Per Share, the EPS for the previous year is restated (Refer Note III(a)).

VI. Segment Reporting

The segment results are included and presented on consolidated basis in accordance with the requirements of Accounting Standard - 17 "Segment Reporting".

VII. Pursuant to the Scheme of Arrangement amongst the Company, Rain Cements Limited (RCL) and Rain CII Carbon Vizag Limited ('the Scheme') as approved by the shareholders of the Company in the Extraordinary General Meeting held on July 29, 2010 and subsequently sanctioned by the Hon'ble High Court of Judicature, Andhra Pradesh at Hyderabad on December 29, 2010, the Cement business of the Company was transferred to and vested in RCL with effect from April 1, 2010. The Scheme was accordingly given effect in the financial statements for the year ended December 31, 2010. The figures of the previous year represent cement and trading in petroleum coke businesses from January 1, 2010 to March 31, 2010 and trading in petroleum coke business thereafter, and are hence not comparable with that of the current year.

VIII. The donations made by the Company to political parties during the year: Nil (December 31, 2010: CPI - Rs. 10)

IX. The term loans availed by the Company have been utilized for the purpose of investment in share capital and extending loan facilities to a subsidiary company, which is engaged in the business of Calcined Petroleum Coke. The investment in share capital is in the nature of net investment hedge and has been appropriately dealt with in the consolidated financial statements of the Company.

X. Comparative figures of the previous year where necessary, have been regrouped to conform to those of the current year. Further for reasons stated in Note XVII, previous year figures are not comparable with that of the current year.


Dec 31, 2010

I. Basis of preparation of Financial Statements

Rain Commodities Limited (the Company) follows the accrual basis of accounting. The financial statements are prepared on historical cost basis and to comply with accounting principles generally accepted in India, the Accounting Standards notified under Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

II. Contingent liabilities not provided for in respect of:

December 31, 2010 December 31, 2009 Amount Amount

Matters under dispute:

Sales Tax -- 57,046

Excise Duty -- 5,588

Income Tax -- 22,527

Bank guarantees -- 17,531

Corporate Guarantee issued on behalf of wholly owned subsidiaries :

- Rain Commodities USA Inc., USD 87 million (December 31, 2009: USD 90 million) equivalent to 3,898,470 4,201,200

- Rain CII Carbon (Vizag) Limited [formerly Rain Calciner Limited] 1,135,000 --

- Rain Cements Limited [formerly

Rain CII Carbon (India) Ltd] -- 1,035,000

III. Capital Commitments

Estimated amount of contracts remaining to be executed on capital accounts [net of capital advances - Rs. Nil (December 31, 2009 - Rs.83,471)] not provided for Rs. Nil (December 31,2009 - Rs.79,009).

IV. Micro and Small enterprises

There are no Micro and Small enterprises to whom the company owes dues, which are outstanding for more than 45 days as at December 31, 2010. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act,2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

V.The Company has entered into various operating lease agreements for assets comprising storage facilities. The lease rentals amounting to Rs. 6,936 (December 31, 2009 - Rs.27,860) have been charged to revenue. These agreements are cancellable in nature and there is no restriction in respect of such leases.

VI. (a) There are no outstanding contracts outstanding forward exchange contracts as at the year end.

VII. Related Party Disclosures

a) Names of related parties and description of relationship:

(i) Subsidiaries

a) Rain Cements Limited [formerly Rain CII Carbon (India) Limited] (RCL)

b) Rain Commodities (USA) Inc (RCUSA)

c) Moonglow Company Business Inc, BVI (Moonglow) (Subsidiary of RCL)

d) Rain Global Services LLC (RGS) (Subsidiary of RCUSA)

e) RGS Egypt Ltd.(RGSE) (Subsidiary of RGS)

f) Rain Global Services HK Limited (Subsidiary of RGS upto August 20, 2010)

g) Rain Carbon (USA) LLC (RCUSA1) (Subsidiary of RCUSA from September 15, 2010)

h) Carbon Holdings USA LLC, USA (CHUSA) with effect from April 12, 2010

i) CPC Holdings USA LLC (CPCUSA) (Subsidiary of CHUSA with effect from April 12, 2010).

j) Rain CII Carbon (Vizag) Limited

(RCCVL) (formerly Rain Calciner Limited) (Subsidiary upto May 14, 2010 and thereafter subsidiary of CPCUSA)

k) Rain CII Carbon LLC, USA (RCC)

(Subsidiary of Moonglow upto September 15, 2010 and subsidiary of CPCUSA thereafter)

l) Rain CII Carbon Mauritius Limited (RCCM) [Subsidiary of RCC]

m) CII Carbon Corp. (Subsidiary of RCC)

n) Zhenjiang Xin Tian Tansu Co. Ltd., (Subsidiary of RCCM)

(ii) Enterprise where key managerial

personnel along with their relatives exercise significant influence

Sujala Investments Private Limited

(iii) Key Management Personnel

a) Mr. N. Radha Krishna Reddy, Chairman.

b) Mr. N. Jagan Mohan Reddy, Managing Director.

c) Mr. N. Sujith Kumar Reddy, Executive Director

VIII.The following donations were made to political parties during the year: CPI - Rs.10 (Previous Year Lok Satta - Rs. 200 and CPI(ML) New Democracy Party Rs. 80)

IX. Pursuant to the Scheme of Arrangement (refer note III), the cement business of the Company was transferred to Rain Cements Limited [Formerly Rain CII Carbon (India) Limited] with effect from April 1, 2010. The figures of the previous year represent the Cement and Green Petroleum Coke trading business for the full year, hence the figures of the previous year are not comparable with that of the current year.


Dec 31, 2009

I. Organization:

Rain Commodities Limited (the Company) is engaged in the manufacture and sale of cement. The Company through its wholly owned subsidiaries - Rain Cll Carbon (India) Limited (formerly Rain Industries Limited) and Rain Cll Carbon LLC is engaged in the manufacturing and trading of Calcined Petroleum Coke and generation of Power through waste heat recovery.

II. Exceptional item represents profit on sale of long term investments in Petroleum Coke Industries Company, Kuwait.

III. Loans & Advances include an amount of Rs.120,500 (Rupees Twelve crores and five lakhs) paid as advance to certain parties in accordance with the terms of a Memorandum of Understanding (MOU) dated December 6, 2007 to acquire shares of another entity which controls certain mining lease rights. Due to non-fulfillment of certain conditions and upon expiry of the validity period of the MOU, the Company has initiated legal proceedings against these parties to recover the advance. Management is of the view, supported by legal advise, that the companys claim will result in a favourable outcome and that it has a good chance of recovering the advances paid.

IV. Contingent liabilities not provided for in respect of:

December 31, 2009 December 31, 2008 Amount Amount

Matters under dispute:

Sales Tax 57,046 73,246

Excise Duty 5,588 10,690

Income Tax 22,527 -

Bank guarantees 17,531 -

Corporate Guarantee issued on behalf of wholly owned subsidiaries :

- Rain Commodities USA Inc., USD

90 million equivalent to 4,201,200 4,360,500

- Rain CM Carbon (India) Ltd 1,035,000 535,000

V. Capital Commitments

Estimated amount oi contracts remaining to be executed on capital accounts [net of capital advances - Rs.83,471 (December 31, 2008 - Rs.64,541 )]¦ not provided for Rs.79,009 (December 31,2008 - Rs.87,186).

VI. Micro and Small enterprises

There are no Micro and Small enterprises to whom the company owes dues, which are outstanding for more than 45 days as at December 31, 2009. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act,2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

VII.The Company has entered into various operating lease agreements for assets comprising of storage facilities and an amount of Rs. 27,860 (December 31, 2008 - Rs. 30,485 ) paid under such agreements have been charged to revenue. These agreements are cancellable in nature and there is no restriction in respect of such leases.

VIII. (a) There are no forward/derivative contracts outstanding as at the balance sheet date.

IX. Related Party Disclosures

a) Names of related parties and description of relationship:

(i) Subsidiaries

a) Rain CM Carbon (India) Limited (RCCIL)

b) Rain Commodities (USA) Inc. (RCUSA)

c) Rain Calciner Limited

d) Moonglow Company Business Inc, BVI (Moonglow) (Subsidiary of RCCIL)

e) Rain Global Services LLC. (RGS) (Subsidiary of RCUSA)

f) Rain CM Carbon LLC, USA (RCC) (Subsidiary of RCCIL)

g) Rain Global Services HK Limited (Subsidiary of RGS)

h) Rain Cll Carbon Mauritius Limited

(RCCM) (Subsidiary of RCCIL) i) Cll Carbon Corp. (Subsidiary of RCC) j) Zhenjiang Xin Tian Tansu Co. Ltd.,

(Subsidiary of RCC from August 3, 2009)

(ii) Enterprise where key managerial personnel along with their relatives exercise significant influence

a) Sujala Investments Private Limited (Sujala)

(iii) Key Management Personnel

a) Mr. N. Radhakrishna Reddy, Chairman.

b) Mr. N. Jagan Mohan Reddy, Managing Director.

c) Mr. N. Sujith Kumar Reddy, Executive Director.

X. Employee Benefits

b) Defined benefit plans

The following table sets forth the status of the Gratuity Plan of the Company and the amounts recognized in the Balance Sheet and Profit and Loss Account.

XI. The following donations were made to political parties during the year : Lok Satta - Rs.200 and CPI
XII. Comparative figures of the previous year have been regrouped where necessary to conform to those of the current year.

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