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Restile Ceramics | Auditor's Report > Ceramics & Granite > Auditor's Report from Restile Ceramics - BSE: 515085, NSE: N.A
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Restile Ceramics

BSE: 515085|ISIN: INE298E01022|SECTOR: Ceramics & Granite
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Restile Ceramics is not listed on NSE
Mar 15
Auditor's Report (Restile Ceramics) Year End : Mar '16

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of RESTILE CERAMICS LIMITED (“the Company”), which comprise the Balance Sheet as at March 31, 2016, 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 Standalone Financial Statements

2. 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 standalone 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 prescribed under section 133 of the Act as applicable.

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

3. Our responsibility is to express an opinion on these standalone 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 and the Order under section 143(11) of the Act.

4. We conducted our audit of the standalone financial statements 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.

5. 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 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. 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.

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

Basis for Qualified Opinion

7. 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.

8. The Company’s building and plant and equipment are carried in the Balance Sheet at Rs.849.21 lakhs and Rs.3948.89 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 effect on statement of Profit & Loss is to be taken as unascertained as on March 31, 2016.

Opinion

9. 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 standalone 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 March 31, 2016, and its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

10. 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 purposes of our audit.

b) 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) In our opinion, except for the effect of the matters described in the Basis for qualified opinion in paragraph 8, the aforesaid standalone financial statements comply with the Accounting Standards prescribed under section 133 of the Act as applicable.

e) On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

g) With respect to the other 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 explanations 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 losses under the applicable law or accounting standards.

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

11. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.

(Referred to in paragraph 11 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date on the accounts of RESTILE CERAMICS LIMITED (“the Company”) for the year ended March 31, 2016)

(i) 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.

(c) On the basis of documents of title produced to us and the information and explanations produced to us, we are of the opinion that the title deeds of immovable properties of the Company are held in its name.

(ii) The inventories have been physically verified at the year- end by the Internal Auditor and no material discrepancies have been reported that needs to be dealt with in the Books of Account.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013

(iv) The Company has not granted any loans, made investments, provided guarantees and security covered under provisions of section 185 and 186 of the Companies Act, 2013.

(v) According to information and explanations given to us, the Company has not accepted any deposits during the year and accordingly, the provisions of Clause 5 of paragraph 3 of the Order are not applicable to the Company.

(vi) The maintenance of cost records has not been specified by the Central Government under section 148(1) of the Companies Act, 2013 for the products of the Company.

(vii) According to the information and explanations given to us and the books of account examined by us, in respect of statutory dues:

(a) Delays were noticed in depositing undisputed statutory dues including provident fund, employee’s state insurance, income tax, sales tax, value added tax and other statutory dues with the appropriate authorities during the year. The arrears of such dues outstanding as at March 31, 2016 for a period of more than six months from the date they became payable are:

Nature of Dues

Amount (Rs. Lakhs)

Sales Tax

15.32

Property Tax

2.50

Professional Tax

0.19

We are informed that the delays were caused due to financial constraints.

(b) There are no dues of income tax, service tax, excise duty, cess and customs duty, which have not been deposited on account of any dispute. Sales Tax/ Value added tax dues not deposited on account of dispute are as under

Name of the Statute

Nature of Dues

Forum where Dispute is Pending

Year to which the demand relates

Amount of Tax Demanded (Rs. Lakhs)

Sales Tax

APVAT

Dy. Commissioner (Appeals)

2010-2011

Tax - Rs.30,23,024 Paid - Rs.3,78,000 Balance Rs.26,45,024

Sales Tax

APVAT

Dy. Commissioner (Appeals)

2011-2012

Tax - Rs.4,19,876 Penalty - Rs.41,988 Paid Rs.52,500 Balance - Rs.4,10,364

(viii) As per information and explanation given to us, the bank has called upon in the earlier year itself the Company to pay back the entire working capital loan. The balance of Rs. 408.51 lakhs on April 1, 2015 was overdue to State Bank of India and the amount overdue as at the end of the year is Rs. 16.34 lakhs. There are no dues to financial institutions or debenture holders.

(ix) There are no monies raised during the year by way of public offer or further public offer (including debt instruments) and term loans.

(x) To the best of our knowledge and belief, and according to the information and explanations given to us, and considering the size and nature of the Company’s operations, no fraud by the Company and no fraud of material significance on the Company by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, the Company has paid/ provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of Paragraph 3 of the Order is not applicable to the Company.

(xiii) In our opinion and according to the information and explanations given to us the Company has complied with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of paragraph 3 of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transactions during the year with its directors or persons connected with him and hence provisions of section 192 of the Companies Act, 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For M.S.Krishnaswami & Rajan M.S.Murali

Chartered Accountants Partner

Firm Regn No: 01554S Membership No: 26453

Place: Chennai

Date: May 21, 2016

Source : Dion Global Solutions Limited
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