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Rain Industries
BSE: 500339|NSE: RAIN|ISIN: INE855B01025|SECTOR: Cement - Major
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« Dec 12
Accounting Policy Year : Dec '13
(a) Basis of accounting and preparation of financial statements
 
 The financial statements have been prepared under the historical cost
 convention on an accrual basis, to comply with the generally accepted
 accounting principles in India (Indian GAAP), the Accounting
 Standards prescribed in the Companies (Accounting Standards) Rules,
 2006 (as amended), the relevant provisions of the Companies Act, 1956
 and the guidelines issued by the Securities and Exchange Board of India
 (''SEBI''). The financial statements are presented in Indian rupees
 rounded off to the nearest thousand.
 
 (b) Use of estimates
 
 The preparation 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 preparation
 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 assets and liabilities are classified into current and non-current.
 
 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 non- current 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 operating cycle is within a period of 12 months.
 
 (d) Inventories
 
 Traded goods are valued at lower of weighted average cost and net
 realizable 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.
 
 (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.
 
 Income from shared services (services provided to Group companies) is
 recognized net of the cost incurred by the Company on accrual basis.
 Income in excess of billings have been disclosed under Other current
 assets as unbilled revenues.
 
 (h) Fixed Assets, Depreciation, Impairment
 
 Fixed Assets are stated at cost/professional valuation less accumulated
 depreciation. Cost includes freight, installation cost, duties and
 taxes, interest on specific borrowings utilised for financing the
 qualifying fixed assets and other incidental expenses.
 
 Depreciation is provided on straight-line method at the rates specified
 in the Schedule XIV to the Companies Act, 1956 or based on the
 estimated economic useful lives whichever is higher.
 
 Individual assets costing rupees five thousand or below are fully
 depreciated 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
 prevailing on the date of the transactions. Monetary assets and
 liabilities denominated in foreign currency are restated at the
 prevailing 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 premium 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 Superannuation 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 present 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 depreciation 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 present 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 present 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.
 
 (ii)   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, 2013, the amount of per share
 dividend recognised as distribution to equity shareholders was Rs. 1.00
 (year ended December 31, 2012: Rs. 1.10)
Source : Dion Global Solutions Limited
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