TO THE MEMBERS OF
RAJASTHAN CYLINDERS AND CONTAINERS LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of Rajasthan Cylinders andContainers Limited("the Company") which comprise the Balance Sheet as at 31stMarch 2019 and the Statement of Profit and Loss (including other comprehensiveincome) Statement of Changes in Equity and the Statement of Cash Flows for the year thenended and notes to the standalone financial statements including a summary ofsignificant accounting policies and other explanatory information (hereinafter referred toas "the Standalone Financial Statements").
In our opinion and to the best of our information and according to the explanationsgiven to usexcept for the effects of the matter described in the Basis for QualifiedOpinion section of our report the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind-AS") andother accounting principlesgenerally accepted in Indiaof the state of affairs of the Company as at 31stMarch2019 and its loss (including other comprehensive income) changes in equity and its cashflows for the year ended on that date.
Basis for Qualified Opinion
(i) The Company has not provided for Bad debts (Non Current Assets- Loans) of Rs. 56.31Lakhs from a body corporate M/s Ankur Drugs and Pharma Limited which is under liquidation.(Refer Note No. 5)
(i) The interest payable u/s 16 of MSMED Act 2006 on overdue amount and otherdisclosure of trade payable to micro enterprises and small enterprises has not beenascertained and not provided for.(Refer Note No. 18)
Had the impact of above qualification in para (i) without considering para (ii) forwhich impact could not be determined been considered the loss for the year would havebeen Rs. 345.91 Lakhs as against the reported figure of Rs. 289.60 Lakhs Other equitywould have been Rs. 1831.23 Lakhs as against the reported figure of Rs. 1887.54 Lakhs andNon Current Financial assets-Loans would have been Rs. Nil as against the reported figureof Rs. 56.31 Lakhs.
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance withthe Code of Ethics issued by the Institute of Chartered Accountants of India together withthe ethical requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the ICAI'sCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our qualified opinion.
Key Audit Matters
Key Audit Matters (KAM') are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.Except for the matters described in the Basis forQualified Opinion section we have determined that there are no key audit matters tobe communicated in our report.
The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the standalone financial statements and our auditors'report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view ofthe financial position financial performance (includingother comprehensive income) changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under Section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the standalone financial statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or toceaseoperations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidencethat is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditors' report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act we givein "Annexure A" a statement on the matters specified in paragraphs 3 and 4 ofthe 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 bestof our knowledge and belief were necessary for the purposes of our audit.
b. Except for the effects of the matters described in the basis for qualified opinionparagraph above in our opinion proper books of account as required by law have been keptby the Company so far as it appears from our examination of those books.
c. The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis Report are in agreement with the books of account.
d. Except for the effects of the matters described in the basis for qualified opinionparagraph above in our opinion the aforesaid standalone financial statements comply withthe Ind AS specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
e. On the basis of the written representations received from the directors as on 31stMarch2019 taken on record by the Board of Directors none of the directors is disqualified ason 31stMarch 2019 from being appointed as a director in terms of Section 164(2)of the Act.
f. With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in"Annexure B".
g. With respect to the matter to be included in the Auditors' Report under section197(16):
In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of Section 197 of the Act.
h. With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at 31stMarch 2019 on its financial position in its standalone financial statements - Refer Note34 to the standalone financial statements;
ii. The Company did not have any long term contracts including derivative contractsfor which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
For S.S. SURANA & CO.
Membership No. 074458
ANNEXURE - A FORMING PART OF THE INDEPENDENT AUDITOR'S REPORT OF RAJASTHAN CYLINDERSAND 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 RajasthanCylinders and Containers Ltd. on the standalone financial statement for the year endedMarch 31st 2019.
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed Assets.
(b) As explained to us the company has a phased program for physical verification offixed assets. In our opinion the frequency of verification is reasonable considering thesize of the company and nature of its fixed assets. Pursuant to the program of thephysical verification of fixed assets physical verification of the assets has beencarried out during the year and no material discrepancies have been noticed on suchverification.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company except for the following immovable property:
|Name of Immovable Property ||Total Number of Cases ||Gross Block (Amount in Rs.) ||Net Block (Amount in Rs.) ||Remarks |
|Building ||2 ||966180/- ||821990/- ||Lease deed is yet to be executed and registered. |
(ii) The inventories have been physically verified by the management at reasonableintervals during the year except for goods in transit and those lying with third parties.The discrepancies noticed on verification between the physical stocks and the book recordswere not material and the same have been properly dealt with in the Books of Accounts.
(iii) According to information and explanations given to us the company has givenadvances to 3 bodies corporate covered in the register maintained under Section 189 of theCompanies Act 2013.
(a) The terms and conditions of the grant of such loans are not prejudicial to thecompany's interest.
(b) The principal amount of loan and interest is payable on demand. Repayment of Loanand interest is received as and when demanded.
(c) Since the amount of loan and interest is repayable on demand and the company hasnot recalled the loan hence there is no overdue.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made
(v) In our opinion and according to the information and explanations given to us thecompany has not accepted any deposits within in the meaning of the provisions of Sections73 to 76 or any other relevant provisions of Companies Act 2013 and the rules framedthereunder and the directives issued by Reserve Bank of India.
(vi) As explained to us the Central Government has prescribed maintenance of the costrecords under section 148(1) of the Companies Act 2013 in respect to the company'sproducts. We are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained by the company. However we have not made detailed examination ofsuch records.
(vii) (a) According to the records of the company produced for our verification thecompany is generally regular in depositing undisputed statutory dues including providentfund employees' state insurance income tax sales tax service tax custom duty exciseduty value added tax Goods and Service Tax cess and any other statutory dues toappropriate authorities wherever applicable. According to the information and explanationgiven to us no undisputed arrears of statutory dues were outstanding as on 31/03/2019 fora period of more than six months from the date they became payable.
(b) According to the information and explanations given to us there are no dues ofIncome Tax or Sales Tax or Service Tax or duty of Customs or duty of Excise or Value AddedTax or Goods and Service Tax which have not been deposited with the appropriateauthorities on account of any dispute.
(viii) Based on our audit procedures and on the basis of information and explanationsgiven to us we are of the opinion that the company has not defaulted in repayment of duesto Banks and Government. The company did not have any outstanding dues to debentureholders.
(ix) The company has not raised any money by the way of Initial Public Offer or FurtherPublic Offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.
(x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit.
(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableIndian accounting standards.
(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xv) As explained and informed to us by the management the company has not entered intoany noncash transaction with the directors or person connected with them. Accordinglyparagraph 3(xv) of the Order is not applicable.
(xvi) The company is not required to be registered under Section 45IA of the ReserveBank of India Act 1934.
For S.S. SURANA & CO.
Membership No. 074458
Annexure - B to the Independent Auditor's Report on Standalone Financial Statements ofRajasthan Cylinders and Containers Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of RajasthanCylinders and Containers Limited ("the Company") as of 31st March2019 in conjunction with our audit of the standalone financial statements of the Companyfor the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the standalone financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For S.S. SURANA & CO.
Membership No. 074458