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Rain Industries

BSE: 500339|NSE: RAIN|ISIN: INE855B01025|SECTOR: Cement - Major
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« Dec 14
Accounting Policy Year : Dec '15
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.
 
 (a) Basis of accounting and preparation of financial statements
 
 The financial statements have been prepared 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
 presented in Indian Rupees Millions.
 
 (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 the assets and liabilities have been classified as current or
 noncurrent 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 realized 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 realized 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 realization 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
 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 recognized 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
 recognized 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 recognized using the time proportion method, based
 on the transactional interest rates.
 
 Dividend income is recognized when the Company''s right to receive
 dividend is established.
 
 (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 utilized for financing the
 qualifying fixed assets and other incidental expenses.
 
 Effective from January 01, 2015, the Company has charged Depreciation
 based on the revised remaining useful life of the assets as per the
 requirement of Schedule II of the Companies Act, 2013. Depreciation on
 fixed assets is provided using the straight-line method based on the
 useful life of the assets as prescribed by Schedule II to the Companies
 Act, 2013.  Depreciation is calculated on a pro-rata basis from the
 date of installation till the date the assets are sold or disposed.
 
 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 recognized 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 amortized 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 recognized 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
 recognized 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 recognized 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
 utilized for qualifying assets, pertaining to the period from
 commencement of activities relating to construction / development of
 the qualifying asset upto the date of capitalization 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 recognized 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 recognized unless there is a virtual
 certainty that there will be sufficient future taxable income available
 to realize 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 recognized 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.
Source : Dion Global Solutions Limited
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