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Auditor Report of Rajasthan Cylinders & Containers Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Rajasthan Cylinders & Containers Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and Cash Flow Statement, and a summary of significant accounting policies and other explanatory information for the year then ended.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to preparation of these financial statements that give a true and fair view of financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into the account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the financial statements.

Basis for Qualified Opinion

(i) Non provision of demand by Competition Commission of India Rs 2,30,84,886/- (Previous Year ended 31/03/2014 Rs. 2,30,84,886/-) pending litigation refer Note No. 2.30

(ii) Non provision of gratuity for the year Rs. 3,70,071/- and Cumulative upto 31/03/2015 Rs. 18,33,509/- (Previous Year Rs. (2,36,854)/- and Cumulative upto 31/03/2014 Rs. 14,63,438/-) refer note No. 2.34.

(iii) Non provision of accrued leave pay for the year Rs. 1,96,364/- and Cumulative upto 31/03/2015 Rs. 10,16,094/- (Previous Year Rs. (52,396)/- and Cumulative upto 31/03/2014 Rs. 8,19,730/-) refer note No. 2.35.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India,

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

(b) In the case of the Statement of Profit and Loss, of the Loss for the year ended on that date; and

(c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by section 143(3) of the Act, we report that:

(a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

(b) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) The matter described in the Basis for Qualified Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the company.

(f) On the basis of written representations received from the directors as on 31st March, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

(g) The qualification relating to the maintenance of accounts and other matters connected there with are stated in the Basis for Qualified Opinion paragraph above.

(h) With respect to the other matters included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rule, 2014 in our opinion and to the best of our information and according to the explanation given to us:

i. The Company has disclosed the impact of pending litigation on its financial position in its financial statements- Refer Note No. 2.30 to the financial statements.

ii. The Company does not have any long term contracts including derivative, contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE FORMING PART OF THE INDEPENDENT AUDITOR'S REPORT OF Rajasthan Cylinders & Containers Limited

Referred to in paragraph under the heading of "Report on other Legal & Regulatory Requirements" of our report of even date to the Members of Rajasthan Cylinders & Containers Limited on the financial statement for the year ended March 31st 2015;

i (a) As explained to us, the Company generally maintains proper records showing full particulars including quantitative details and situation of fixed Assets.

(b) As informed to us, part of the assets have been physically verified by the management in accordance with a phased programme of verification; however such physical verification reports were not available for our verification. As informed to us, no material discrepancies have been noticed on such verification.

ii (a) As per information furnished, the inventory lying at its location has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination, in our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii. According to information and explanations given to us, company has given advances to 4 Companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act 2013.

(a) The principal and interest (wherever charged) amounts are repayable on demand and there is no repayment schedule. Out of four parties, the company has not charged interest from three parties on the balance outstanding at the beginning of the year.

(b) The said advances are repayable on demand and there is no overdue amount exceeding one lakh at the year end.

iv. In our opinion and according to information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for purchases of inventory and fixed assets and for the sale of goods & services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control.

v. In our opinion and according to the information and explanations given to us, the company has not accepted any deposits. Therefore, the provision of Sections 73 to 76 or any other relevant provisions of companies act and the rules framed thereunder and the directives issued by Reserve Bank of India are not applicable.

vi. As explained to us, the Central Government has prescribed maintenance of the cost records u/s 148(1) of the Companies Act, 2013 in respect to the company's products. We are of the opinion that prima facie, the prescribed accounts and records have been made and maintained by the company. However we have not made detailed examination of such records.

vii. (a) According to the records of the company produced for our verification, the company is generally regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with appropriate authorities wherever applicable. According to the information and explanation given to us, no undisputed arrears of statutory dues were outstanding as at 31/03/2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, disputed amounts payable in respect of certain statutory dues and demands outstanding at the year end were as follows :-

Name of statute Nature of Dues Amount Period to which (Rs.) the amount Appropriate authorities Disputed

Rajasthan Deferment Difference Rs. 38,82,397 2011-12 & VAT/CST against VAT Credit & (Against which 2012-13 Pending C-Form Rs. 1,25,000/- Deposited)

Name of statute Dispute Pending with



Rajasthan Dy..Commissioner of VAT/CST Sales Tax (Appeals)

(c). According to the information and explanation given to us, there is no amount which was required to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of Companies Act, 1956 (1 of 1956) and rules made thereunder.

viii. The company does not have accumulated losses as at 31/3/2015. The company has incurred cash losses during the financial year covered under audit but not in the immediately preceding financial year.

ix. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institution and bank.

x. In our opinion and according to the information given to us, the terms and conditions of Guarantee given by the company for the loans/limits taken by Agribiotech Industries Ltd., an associate company from the bank outstanding since earlier year were not prejudicial to the interest of the company. However, the guarantee so given has been withdrawn during the year.

xi. According to the information and explanation given to us and records examined by us, the company has not taken any term loan during the year.

xii. Based upon the audit procedures performed and information and explanations given by the management, no fraud on or by the company has been noticed or reported during the year in the course of audit.

For S.S. SURANA & CO. Chartered Accountants (FRN. 001079C) Place: Jaipur Sd/- Date: 14/05/2015 (Prahalad Gupta) Partner Membership No. 074458

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