Restile Ceramics | Auditor's Report > Ceramics & Granite > Auditor's Report from Restile Ceramics - BSE: 515085, NSE: N.A
Restile Ceramics
BSE: 515085|ISIN: INE298E01022|SECTOR: Ceramics & Granite
Nov 27, 16:01
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Restile Ceramics is not listed on NSE
« Mar 14
Auditor's Report (Restile Ceramics) Year End : Mar '15
 We have audited the accompanying financial statements of RESTILE
 CERAMICS LIMITED (the Company) which comprise the Balance Sheet as at
 31st March 2015, the Statement of Profit and Loss and the Cash Flow
 Statement for the year then ended and a summary of the significant
 accounting policies and other explanatory information.
 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 the preparation of these financial statements that give a true and
 fair view of the 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 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 there under. 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
 An audit involves performing procedures to obtain audit evidence about
 the amounts and the 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 financialcontrol 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 the whether the 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 audit opinion on the financial
 Basis for Qualified Opinion
 1. The Company has generated negative operating cash flows, incurred
 substantial operating losses, significant deterioration in value of
 assets used to generate cash flows and its loans from bank have been
 recalled by lender all of which indicate existence of material
 uncertainty in the Company''s ability to continue as a going concern for
 a reasonable period of time. The attached financial statements do not
 include any adjustments that might result had the above uncertainties
 been known.
 2. The Company''s building and plant and equipment are carried in the
 Balance Sheet at Rs.926.49 lakhs and Rs.5432.70 lakhs respectively.
 Independent valuation of the assets of the company in financial year
 2010-11 had indicated impairment of Building (Rs.522.17 lakhs) and
 Plant and Machinery (Rs.119.87 lakhs). However, considering the lapse
 of time and the depreciation being charged on the basis of estimated
 useful life of assets, the aforesaid impairment in value of assets need
 to be recomputed. /As such, the possible impairment on assets and its
 effects on statement of Profit & Loss is to be taken as unascertained
 as on March 31, 2015.
 Qualified Opinion
 In our opinion and to the best of our information and according to the
 explanations given to us, except for the effect of the matters
 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 of the state of
 affairs of the Company as at 31st March 2015,and its loss and its 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), as amended, issued by the Central Government of India in terms
 of sub-section (11) of section 143 of the Companies Act, 2013, we give
 in the Annexure a statement on the matters specified in paragraphs 3
 and 4 of the Order.
 2. As required by section 143 (3) of the Companies Act, 2013, we report
 a) We have sought and obtained all the information and explanations
 which to the best of our knowledge and belief were necessary for the
 purposes of our audit.
 b) In our opinion proper books of account as required by law have been
 kept by the Company in so far as appears from our examination of those
 c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
 Statement dealt with by this Report are in agreement with the books of
 d) Except for the matters described in the Basis of Qualified Opinion
 paragraph, 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) On the basis of the written representations received from the
 directors as on 31st March 2015, and taken on record by the Board of
 Directors, none of the directors are disqualified as on 31st March
 2015, from being appointed as a director in terms of sub-section (2) of
 section 164 of the Companies Act, 2013.
 f) With respect to the matters to be included in the Auditor''s Report
 in accordance with Rule 11 of the companies (Audit and Auditors) Rules,
 2014, in our opinion and to the best of our information and according
 to the explanation given to us:
 i. The company has, in accordance with the generally accepted
 accounting practice, disclosed the impact of pending litigations on its
 financial position in its financial statements - Also Refer Note 28.01
 to the financial statements.
 ii. The company did not have any long-term contracts including
 derivative contracts for which there were any material foreseeable
 iii. There were no amounts which were required to be transferred to the
 Investor Education and Protection Fund by the Company.
 Refer paragraph 1 under ''Report on other Legal and Regulatory
 Requirements section'' of our Report of even date on the accounts of
 Restile Ceramics Limited for the year ended March 31,2015.
 In our opinion and on the basis of such checks as we considered
 appropriate, and according to the information and explanations given to
 us , the nature of the company''s business/ activities/ matters
 specified in clauses (iii),(v), (vi),(x) and (xi) of paragraph 3 of the
 Company Audit Report Rules 2015 do not apply to the company. Further,
 in respect of other clauses, on the basis of such checks as we
 considered appropriate, we report that:
 1. In respect of its fixed assets:
 (a) The company is maintaining proper records showing full particulars
 including quantitative details and situation of fixed assets.The same,
 however, needs to be updated.
 (b) The fixed assets are being physically verified under a phased
 programme of verification, which, in our opinion, is reasonable having
 regard to the nature and value of its assets, and no material
 discrepancies have been noticed on such verification carried out during
 the year in terms of the phased programme.
 2. (a) The inventories have not been physically verified at the year-
 end by the management.
 (b) The question of our commenting on procedures of the said physical
 verification of the inventory followed by the management therefore does
 not arise.
 (c) In our opinion and on the basis of our examination of the records,
 the Company is generally maintaining proper records of its inventory.
 The question of our commenting on the material discrepancies noticed on
 physical verification and whether the same have been properly dealt
 with the books of account does not arise, in view of our observation in
 (a) above.
 3. In our opinion there is an adequate internal control system
 commensurate with the size of the company and the nature of its
 business for purchase of fixed assets and inventories, and for sale of
 goods and services and for payment of expenses. Further, on the basis
 of our examination of the books and records of the company, we have
 neither come across nor have been informed of any continuing failure to
 correct major weaknesses in the aforesaid internal control system.
 4. (a) Delays were noticed in depositing undisputed income tax, sales
 tax, service tax, excise duty and cess with the appropriate authorities
 during the year. The arrears of such dues outstanding as at March 31,
 2015 for a period of more than six months from the date they became
 payable are -tax collected/deducted at source Rs.0.20 lakhs , sales Tax
 /Value added tax Rs.27.37 Lakhs, property tax Rs.2.50 lakhs and
 professional tax Rs.0.19 lakhs. Out of the above,sales Tax /Value added
 tax of Rs 4.60 Lakhs have subsequently been paid. We are informed that
 the delays were caused due to financial constraints.
 (b) There are no dues of income tax, wealth-tax, service tax, excise
 duty, cess and customs duty, which have not been deposited on account
 of any dispute. Sales Tax dues not deposited on account of dispute are
 as under
                                                            Year to which
 Name of the                            Forum where          the demand
 Statute         Nature  of Dues        Dispute is Pending   relates
 Sales Tax       Kerala Sales Tax       Dy. Commissioner       2009-2010
                                        (Appeals) Commercial
                                        Tax, Kerala
 Sales Tax       APVAT                  Dy.  Commissioner      2010-2011
 Sales Tax       APVAT                  Dy.  Commissioner      2011-2012
                          Amount of Tax
 Name of the              Demanded(Rs.
 Statute                  Lakhs)
 Sales Tax                Tax-Rs.2899184
                          Total - Rs.8697552
 Sales Tax                Tax - Rs.3023024
                          Paid - Rs.378000
                          Balance Rs.2645024
 Sales Tax                Tax - Rs.419876
                          Penalty - Rs.41988
                          Paid Rs.52500
                          Balance - Rs.410364
 (c) The Company is not required to transfer any amount to Investor
 Education and Protection Fund in accordance with relevant provisions of
 the Companies Act, 1956 (1 of 1956) and rules made there under.
 5. The accumulated losses of the Company as at March 31, 2015
 aremorethan fifty per cent of its net worth. The Company has incurred
 cash losses in the financial year ended on that date and in the
 immediately preceding financial year.
 6. As per information and explanation given to us, the bank has called
 upon the Company to pay back the entire working capital loan of Rs. 409
 lakhs and to close the account immediately.There are no dues to
 financial institutions or debenture holders.
 7. Based on the audit procedures performed, we report that no fraud of
 material significance on the Company or fraud by the Company has been
 noticed or reported during the year.
 For M.S.Krishnaswami & Rajan
 Chartered Accountants
 Firm regn No: 01554S
 M.S.Murali- Partner
 Membership No: 26453
 Place: Chennai
 Date: May 30, 2015
Source : Dion Global Solutions Limited
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