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 Company’s name was changed to Rain Industries Limited from Rain Commodities Limited, pursuant to the approval received from the Registrar of Companies, Hyderabad on July 8, 2013. Note 2: Significant Accounting Policies (a) Basis of accounting and brparation of financial statements The financial statements have been brpared in accordance with accounting principles generally accepted in India (Indian GAAP). Indian GAAP comprises Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2014, other pronouncements of the Institute of Chartered Accountants of India, the relevant provisions of the Companies Act, 2013 and guidelines issued by the Securities and Exchange Board of India (SEBI) (Collectively) referred to as “IGAAP”). The financial statements are brsented in Indian Rupees Millions. (b) Use of estimates The brparation of the financial statements in conformity with the Indian GAAP requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Management believes that the estimates used in the brparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made. (c) Current and non-current classification All the assets and liabilities have been classified as current or non current as per the Company’s normal operating cycle. Assets An asset is classified as current when it satisfies any of the following criteria: i. It is expected to be realised in, or is intended for sale or consumption in, the Company’s normal operating cycle; ii. It is held primarily for the purpose of being traded; iii. It is expected to be realised within 12 months after the reporting date; or iv. It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date. Current assets include the current portion of noncurrent financial assets. All other assets are classified as non-current. Liabilities A liability is classified as current when it satisfies any of the following criteria: i. It is expected to be settled in the Company’s normal operating cycle; ii. It is held primarily for the purpose of being traded; iii. It is due to be settled within 12 months after the reporting date; or iv. The company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification. Current liabilities include current portion of non-current financial liabilities. All other liabilities are classified as non-current. Operating cycle Operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents. The Company’s operating cycle is within a period of 12 months. (d) Inventories Traded goods are valued at lower of weighted average cost and net realisable value. Goods in transit are valued at cost or below. (e) Cash Flow Statement Cash flows are reported using the indirect method, whereby net profit/ (loss) before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the company are segregated. Cash and cash equivalents for the purpose of cash flow comprise cash at bank and in hand and short term investments with an original maturity of three months or less. (f) Revenue Recognition Sales are recognised on dispatch of goods and upon transfer of property in the goods to customers. Sales are inclusive of excise duty, as applicable. Income from shared services (services provided to Group companies) is recognised by the Company on accrual basis. Income in excess of billings is disclosed under Other current assets as unbilled revenues. (g) Other Income Interest income is recognised using the time proportion method, based on the transactional interest rates. Dividend income is recognised when the Company’s right to receive dividend is established. (h) Fixed Assets, Debrciation, Impairment Fixed Assets are stated at cost/professional valuation less accumulated debrciation. Cost includes freight, installation cost, duties and taxes, interest on specific borrowings utilised for financing the qualifying fixed assets and other incidental expenses. Effective from January 01, 2015, the Company has charged Debrciation based on the revised remaining useful life of the assets as per the requirement of Schedule II of the Companies Act, 2013. Debrciation on fixed assets is provided using the straight-line method based on the useful life of the assets as brscribed by Schedule II to the Companies Act, 2013. Debrciation is calculated on a pro-rata basis from the date of installation till the date the assets are sold or disposed. NOTES FORMING PART OF THE FINANCIAL STATEMENTS Individual assets costing rupees five thousand or below are fully debrciated in the year of acquisition and put to use. All fixed assets are assessed for any indication of impairment at the end of each financial year. On such indication, the impairment loss being the excess of carrying value over the recoverable value of the assets is charged to the Statement of Profit and Loss in the respective financial years. The impairment loss recognised in prior years is reversed in cases where the recoverable value exceeds the carrying value, upon reassessment in the subsequent years. (i) Foreign Currency Transactions Transactions in foreign currency are recorded at the exchange rates brvailing on the date of the transactions. Monetary assets and liabilities denominated in foreign currency are restated at the brvailing year end rates. The resultant gain/ loss upon such restatement along with the gain/ loss on account of foreign currency transactions are accounted in the Statement of Profit and Loss. In respect of items covered by forward exchange contracts, the brmium or discount arising at the inception of such a forward exchange contract is amortised as expense or income over the life of the contract. Any profit or loss arising on cancellation or renewal of such a forward contract is recognised in the Statement of Profit and Loss. (j) Investment Long term investments are carried at cost less provision for diminution, other than temporary, if any, in the value of such investments. Current investments are carried at the lower of cost and fair value. (k) Employee Benefits Defined Contribution Plans Contributions paid/payable under defined contribution plans are recognised in the Statement of Profit and Loss each year. Contribution plans comprises of Superannuation fund covered under a scheme administered and managed by ICICI Prudential Life Insurance Company Limited, and Provident Fund is administered and managed by the Government of India. The Company makes monthly contributions and has no further obligations under the plan beyond its contributions. Defined Benefit Plans The Company has a defined benefit Gratuity plan covering all its employees. Gratuity is covered under a scheme administered by Life Insurance Corporation of India (LIC). The liability as at the balance sheet date is provided based on an actuarial valuation carried out by an independent actuary, in accordance with Accounting Standard 15 on ‘Employee Benefits’ (AS 15). All actuarial gains and losses arising during the year are recognised in the Statement of Profit and Loss of the year. Other Long-term Employee Benefits Other long term employee benefits comprise compensated absences which is provided based on an actuarial valuation carried out in accordance with AS-15 at the end of the year. Short-term Employee Benefits Employee benefits payable wholly within twelve months of receiving employee services are classified as short-term employee benefits. These benefits include salaries and wages, bonus and ex-gratia. The undiscounted amount of short term employee benefits to be paid in exchange for employee services is recognised as an expense as the related service is rendered by employees. (l) Borrowing Costs Borrowing costs include interest and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset is added to the cost of the assets. (m) Leases Assets taken on lease where the Company acquires substantially the entire risks and rewards incidental to ownership are classified as finance leases. The amount recorded is the lesser of the brsent value of minimum lease rental and other incidental expenses during the lease term or the fair value of the assets taken on lease. The rental obligations, net of interest charges are reflected as finance lease obligations. Leases that do not transfer substantially all the risks and rewards of ownership are classified as operating leases and recorded as expense as and when the payments are made over the lease term. (n) Earnings Per Share The earnings considered in ascertaining the company’s Earnings Per Share (EPS) comprise net profit after tax (and includes the post tax effect of any extra ordinary items). The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the year. Dilutive potential equity shares are deemed to be converted as of the beginning of the year, unless they have been issued at a later date. The number of shares used for computing the diluted EPS is the weighted average number of shares outstanding during the year after considering the dilutive potential equity shares. (o) Taxes on Income Current tax is determined based on the amount of tax payable in respect of taxable income for the year. Deferred tax is recognised on timing differences being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods subject to consideration of prudence. Deferred tax assets on unabsorbed debrciation and carry forward of losses are not recognised unless there is a virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets and liabilities have been measured using the tax rates and tax laws that have been enacted or substantially enacted by the Balance Sheet date. (p) Provisions and Contingencies A provision is recognised when the Company has a brsent obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their brsent value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the notes to the financial statements. 1. Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification/disclosure. For and on behalf of the Board of Directors As per our report of even date attached for B S R & Associates LLP Chartered Accountants Firm registration number: 116231W/ W-100024 N. Jagan Mohan Reddy Managing Director DIN: 00017633 N. Sujith Kumar Reddy Director DIN: 00022383 Sriram Mahalingam T. Srinivasa Rao S. Venkat Ramana Reddy Partner Chief Financial Officer Company Secretary Membership number: 049642 M.No. F29080 M.No. A14143 Place: Hyderabad Date : February 19, 2016 |