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Restile Ceramics
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« Mar 12
Auditor's Report (Restile Ceramics) Year End : Mar '13
Report on the Financial Statements
 
 We have audited the accompanying financial statements of RESTILE
 CERAMICS LIMITED (the Company), which comprise the Balance Sheet as
 at March 31,2013, and the Statement of Profit and Loss and Cash Flow
 Statement for the year then ended, and a summary of significant
 accounting policies and other explanatory information.
 
 Management''s Responsibility for the Financial Statements
 
 Management is responsible for 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 Standards referred to in sub-section (3C) of section 211
 of the Companies Act, 1956 (the Act) .This responsibility includes
 the design, implementation and maintenance of internal control 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 conducted our audit in''accordance
 with the Standards on Auditing issued by the Institute of Chartered
 Accountants of India. 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 control relevant to the Company''s preparation and
 fair presentation of the financial statements in order to design audit
 procedures that are appropriate in the circumstances. An audit also
 includes evaluating the appropriateness of accounting policies used and
 the reasonableness of the accounting estimates made by management, 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.
 
 Basis for Qualified Opinion
 
 The company''s building and plant and equipment are carried in the
 Balance Sheet at Rs.967.18 lakhs and Rs.5951.24 lakhs respectively.
 Management has not recognized impairment in value of building
 (Rs.522.17lakhs) andin value of plant and equipment (Rs. 119.87 lakhs)
 in the Statement of Profit and Loss as required by Accounting Standard
 28 - Impairment of Assets referred to in subsection (3C) of Section 211
 of the Act. The company''s records indicate that had management stated
 the value of building and plant and machinery after considering the
 impairment loss mentioned above, the net loss would have increased by
 Rs. 642.04 lakhs and share holders fund would have reduced by Rs.642.04
 lakhs.
 
 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 matter described
 in the Basis for qualified opinion paragraph, the 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 31,2013;
 
 b) in the case of 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.
 
 Emphasis of Matter
 
 We draw attention to note 27.7 of the notes to the Financial Statements
 regarding the financial statements having been prepared on going
 concern basis although the company has suffered recurring losses.
 
 Report on Other Legal and Regulatory Requirements
 
 1.  As required by the Companies (Auditor''s Report) Order, 2003 (the
 Order) issued by the Central Government of India in terms of
 sub-section (4A) of section 227 of the Act, we give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the Order.
 
 2.  As required by section 227(3) of the Act, we report that:
 
 a) we have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit;
 
 b) in our opinion proper books of account as required by law have been
 kept by the Company so far as appears from our examination of those
 books
 
 c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow
 Statement dealt with by this Report are in agreement with the books of1
 account.
 
 d) expect for the matter described in the Basis of Qualified Opinion
 paragraph, in our opinion, the Balance Sheet, Statement of Profit and
 Loss, and Cash Flow Statement comply with the Accounting Standards
 referred to in sub-section (3C) of Section 211 of theAct.
 
 e) on the basis of written representations received from the directors
 as on March 31, 2013, and taken on record by the Board of Directors,
 none of the directors are disqualified as on March 31,2013, from being
 appointed as a director in terms of cfause (g) of sub- section (1) of
 Section 274 of the Act.
 
 f) Since the Central Government has not issued any notification as to
 the rate at which the cess is to be paid under section 441A of the
 Companies Act, 1956 nor has it issued any Rules under the said section,
 prescribing the manner in which such cess is to be paid, no cess is due
 and payable by the Company.  ''
 
 Annexure referred to in paragraph 1 of ourReport of even date to the
 members of RESTILE CERAMICS LIMITED on the financial statements of the
 company for the year ended 31 March, 2013.
 
 On the basis of such checks as we considered appropriate and according
 to the information and explanation given to us during the course of our
 audit, we report that:
 
 1 (i) the company is maintaining records showing particulars including
 quantitative details and situation of fixed assets. The same, however,
 needs to be updated.
 
 (ii) 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.
 
 (iii) the company has not disposed off substantial part of its fixed
 assets during the year.
 
 2.  (i) inventories otherthan stores and spares have been physically
 verified during the year by the management,
 
 (ii) the procedures of the said physical verification of the inventory
 followed by the management are reasonable and adequate in relation to
 the size of the company and .  the nature of its business.
 
 (iii) the company is maintaining records of its inventories and
 discrepancies noticed on said physical verification at the end of the
 year have been dealt with by adopting the stocks as verified.  .
 
 3.  The company has not granted any loans, secured or unsecured, to
 companies, firms or other parties listed in the register maintained
 under section 301 of the Act. Consequently, the provisions of Clauses
 iii(b), iii(c) and iii(d) of the order are not applicable to the
 Company.
 
 4.  The company had taken a interest free, unsecured loan of Rs.6 Lakhs
 from a company listed in the register maintained under Sec.301 which
 was also repaid. The other terms and conditions of the said loan are
 not prejudicial to the interests of the Company.
 
 5.  There is an adequate internal control system commensurate with the
 size of the company and the nature of its business with regard to
 purchase of inventory and fixed assets, payments for expenses and for
 sale of goods and services, 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.
 
 6.  In our opinion and to the best of our knowledge and belief the
 contracts or arrangements referred to in section 301 of the Act which
 need to be entered in the register maintained under the said section
 have been so entered. The transactions made in pursuance of such
 contracts or arrangements have been made at prices which are reasonable
 having regard to the prevailing market prices at the relevant time.
 
 7.  The company has not accepted any deposits from the public to which
 the directives issued by the Reserve Bank of India and provisions of
 section 58A and 58AA or any other relevant provisions of the Act and
 the Companies (Acceptance of Deposit) Rules, 1975 apply.
 
 8.  Internal audit has been carried out by an independent Chartered
 Accountant. We are informed, that the Internal Audit function is in the
 process of being strengthened to, include operations audit as well.  ,
 
 9.  We have broadly reviewed the cost records maintained by the company
 pursuant to the Companies (Cost Accounting Records) Rules, 2011
 prescribed by the Central Government under Section 209(1 )(d) of the
 Companies Act, 1956 and are of the opinion that prima facie the
 prescribed records have been made and maintained. We have, however, not
 made a detailed examination of the cost records with a view to
 determine whether they are accurate or complete.
 
 10.  (i) According to the records of the company undisputed statutory
 dues towards investor education and protection fund, wealth tax,
 customs duty, and other material statutory dues as applicable have
 generally been deposited with the appropriate authorities.
 
 Delays were, however, noticed in depositing undisputed provident fund,
 employees''state insurance, 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 31,2013 for a period of
 more than six months fromthe date they became payable are - employees''
 state insurance Rs.5.11 lakhs sales tax Rs.27.00 lakhs, tax
 collected/deducted at source Rs.3.69 lakhs; property tax Rs.2.49 lakhs
 (paid in April''2013) and professional tax Rs.1.43 lakhs . We are
 informed that the delays were caused by unavoidable circumstances.
 
 11.  The company has accumulated losses as at March 31,2013 and has
 incurred cash losses in the financial year ended on that date and in
 the immediately preceding financial year.
 
 12.  Based on our audit procedures, we are of the opinion that the
 company has not defaulted in repayment of dues to any financial
 institution, bank or debenture holders during the year.
 
 13 The company has not granted loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 14.  The provisions of any special statute applicable to a chit fund,
 nidhi or mutual benefit fund / societies are not applicable to the
 company.
 
 15.  The company is not dealing or trading in shares, securities,
 debentures and other investments.  Accordingly the provisions of clause
 (xiv) of the order are not applicable to the company.
 
 16.  No guarantees have been given during the year by the company, for
 loans taken by others from banks or financial institutions.
 
 17.  Based on audit procedures, we report that the company has not
 raised any term loans during the year.
 
 18.  On an overall examination of the financial statements of the
 company, funds raised on short- term basis have, prima facie, not been
 used for long-term investment. -
 
 19.  Based on our.audit procedures, we report that the company has not
 made any preferential allotment of shares during the year to any party.
 
 20.  The company has not issued any debentures during the year and
 hence the question of creating a charge in respect thereof does not
 arise. The creation of charge in respect of Deep Discount Bonds issued
 man earlier year and outstanding is in progress.
 
 21.  The company has not raised any money by public issues during the
 yean
 
 22.  Based on the audit procedures performed, we report that no fraud
 of material significance on or by the company has been noticed or
 reported during the year, nor we have been informed of such an
 occurrence by the management.
 
                                     For M.S.Krishnaswami & Rajan
 
                                     Chartered Accountants '' 
 
                                     Firm Regn.No. 01554S
 
                                     Sd/-
 
                                     M.S.Murali
 
                                     Partner 
 
                                     Membership No.: 26453
 
 Place: Chennai 
 
 Date: May 30,2013
Source : Dion Global Solutions Limited
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