Mar 31, 2018
Report on the Ind AS financial statements
1. We have audited the accompanying Ind AS financial statements of RESTILE CERAMICS LIMITED (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Ind AS financial statements
2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these Ind AS 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
3. Our responsibility is to express an opinion on these Ind AS 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 thereunder.
4. We conducted our audit of the Ind AS 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 Ind AS 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 Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the Ind AS 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 Companyâs Directors, as well as evaluating the overall presentation of the Ind AS 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 Ind AS financial statements.
Basis for Qualified Opinion
7. The Company has generated negative operating cash flows, incurred substantial operating losses and significant deterioration in value of assets used to generate cash flows all of which indicate existence of material uncertainty in the Companyâs ability to continue as a going concern for a reasonable period of time. The attached Ind AS financial statements do not include any adjustments that might result had the above uncertainties been known.
8. The Companyâs building is carried in the books at a value of Rs. 749.50 lakhs as at March 31, 2018. Independent valuation of the same during the current year has indicated impairment in value of Rs.376.20 lakhs which ought to be recognized in the Statement of Profit and Loss for the period. However, the Company has represented that under the rehabilitation scheme sanctioned by BIFR in 2002, a reserve of Rs.754.44 Lakhs had been created (upon capital reduction) towards adjustment of possible impairment in value of Property, plant and Equipment and that Steps are being initiated to adjust the impairment in value against the reserve with the approval of NCLT. Consequently, the said impairment in value of Building has not been recognized in the Statement.
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 Ind AS 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, 2018, and its loss 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 (including other Comprehensive Income), 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 Ind AS financial statements comply with the Indian 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, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 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 âAnnexure Aâ. Our report expresses a modified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting.
(g) With respect to the other matters to be included in the Auditorâs 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 Ind AS financial statements - Also Refer Note 38 to the Ind AS 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 were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
11. As required by the Companies (Auditorâs Report) Order, 2017 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
(Referred to in paragraph 10(f) under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date) Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
1. We have audited the internal financial controls over financial reporting of Restile Ceramics Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
2. The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
6. A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Qualified Opinion
8. According to the information and explanations given to us and based on our audit, the following material weakness has been identified as at March 31, 2018:
The Company does not have an appropriate internal control system for assessing and recognising impairment to the Fixed Assets of the Company and this could potentially result in the Company recognising Fixed Assets at erroneous values.
9. A âmaterial weaknessâ is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the companyâs annual or interim financial statements will not be prevented or detected on a timely basis.
10. In our opinion and to the best of our information and according to the explanations given to us, except for the effects/possible effects of the material weakness described in paragraph 8 above on the achievement of the objectives of the control criteria, the Company has maintained, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as of March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
11. We have considered the material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the financial statements of the Company for the year ended March 31, 2018, and the said material weakness has affected our opinion on the financial statements of the Company and we have accordingly, issued a qualified opinion on the financial statements of the Company for the year ended March 31, 2018.
(Referred to in paragraph 11 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date on the accounts of RESTILE CERAMICS LIMITED (âthe Companyâ) for the year ended March 31, 2018)
(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, 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.
(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 and no material discrepancies have been reported that needs to be dealt with in books of accounts.
(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 from the public during the year and accordingly, the provisions of Clause 5 of paragraph 3 of the Order are not applicable to the Company.
(vi) In our opinion and according to the information and explanations given to us, the requirement for maintenance of cost records pursuant to the Companies (Cost Records and Audit) Rules, 2014 specified by the Central Government of India under section 148 of the Companies Act, 2013 are not applicable to 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, employeeâs state insurance, income tax, sales tax, service tax, excise, value added tax and other statutory dues with the appropriate authorities during the year. The arrears of such dues outstanding for more than six months as at March 31, 2018 are:
Nature of Dues |
Amount (Rs. Lakhs) |
Sales Tax |
20.07 |
VAT |
0.97 |
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 except as stated below.
Nature of Dues |
Amount (Rs. Lakhs) |
Income tax demand |
4.91 |
(viii) There are no loans or borrowings from financial institution, government, banks or in the form of debentures.
(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 Companyâs 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 not paid/provided managerial remuneration during the current year and hence our commenting on whether such remuneration is in accordance with section 197 of the Companies Act 2013 does not arise.
(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 (refer Note 36.1) 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 noncash 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
Chartered Accountants
Registration No. 01554S
M.S. Murali
Partner
Membership No. 26453
May 26, 2018
Chennai
Mar 31, 2016
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of RESTILE CERAMICS LIMITED (âthe Companyâ), 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.
Managementâs Responsibility for the Standalone Financial Statements
2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) 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.
Auditorâs 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 auditorâs 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 Companyâs 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 Companyâs 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 Companyâs 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 Companyâs 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 âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditorâs 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 (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
(Referred to in paragraph 11 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date on the accounts of RESTILE CERAMICS LIMITED (âthe Companyâ) 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, employeeâs 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 Companyâs 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
Mar 31, 2015
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
misstatement.
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
statements.
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
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 in 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 of
account.
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
losses.
iii. There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT
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
(Appeals)
Sales Tax APVAT Dy. Commissioner 2011-2012
(Appeals)
Amount of Tax
Name of the Demanded(Rs.
Statute Lakhs)
Sales Tax Tax-Rs.2899184
Penalty-Rs.5798368
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
Mar 31, 2014
We have audited the accompanying financial statements of RESTILE
CERAMICS LIMITED ("the Company"), which comprise the Balance Sheet as
at March 31,2014, 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 notified under the Companies Act, 1956 ("the
Act") read with the General Circular 15/2013 dated 13 th September 2013
of the Ministry of Corporate Affairs in respect of section 133 of the
Companies Act, 2013. 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 but not for the
purpose of expressing an opinion on the effectiveness of the Company''s
internal control . 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
(a) 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.
(b) 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 estimated impairment in value of building
(Rs.522.17 lakhs) and in 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 subsec- tion (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.
(c) The liability for employee gratuity as on March 31, 2014 has been
determined on the basis of Payment of gratuity Act, 1972 and the
liability for leave encashment has been provided on actual basis
instead of on actuarial basis as per mandatory Accounting standard 15
"Employee Benefits". The effects of non compliance of the Accounting
standard 15 on the financial statement is not quantifiable
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 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 31,2014;
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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Gov- ernment of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
state-ment 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 of
account.
d) except for the matters described in the Basis of Qualified Opinion
paragraph, in our opinion, the Bal-ance Sheet, Statement of Profit and
Loss, and Cash Flow Statement comply with the Accounting Standards
notified under the Companies Act, 1956 read with the General Circular
15/2013 dated 13 September 2013 of the Ministry of Corporate affairs in
respect of section 133 of the Companies Act, 2013.
e) on the basis of written representations received from the directors
as on March 31,2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31,2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Act.
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT
Re: Restile Ceramics Limited
Referred to in paragraph 8 under Report 0n Other Legal and Regulatory
Requirements section of our report of even date In our opinion and on
the basis of such checks as we considered appropriate, and according to
the infor- mation and explanations given to us, the nature of the
Company''s business/ activities/ results during the year are such that
clauses (vi), (xiii), (xiv), (xviii), and (xx) of paragraph 4 of the
Order are not applicable to the Company. Further, in respect of other
clauses, on the basis of such checks as we considered appropri- ate, 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 any of its fixed assets during
the year and therefore our com- ment on whether the going concern has
been affected by such disposal does not arise.
2. (i) inventories have not been physically verified during the year
by the management.
(ii) the question of our commenting on procedures of the said physical
verification of the inventory fol- lowed by the management therefore
does not arise.
(iii) the Company is maintaining records of its inventories.
Inventories have not been physically verified during the year by the
management. 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.
3. (a) The Company has not granted any loans, secured or unsecured, to
companies, firms or other par- ties 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.
(b) The Company has taken interest free, unsecured loans from two
companies listed in the register maintained under Sec.301 aggregating
to Rs.240.65 lakhs during the year and the year end balance of such
loans is Rs.238.15 lakhs. The other terms and conditions of the said
loan are not prejudicial to the interests of the Company.
4. 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.
5. 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.
6. The Company did not have an internal audit system during the
financial year.
7. 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.
8.
(i) The Company has not been regular 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 31,2014 for a period
of more than six months from the date they became payable are -
Employees'' state insurance Rs.3.00 lakhs, Tax collected/deducted at
source Rs.3 lakhs, Sales Tax 20.88 lakhs, Property tax Rs.2.50 lakhs
and Professional tax Rs.2.95 lakhs. We are informed that the delays
were caused by unavoidable circumstances.
(ii) there are no dues of income tax, wealth-tax, service tax, customs
duty, excise duty and cess which have not been deposited on account of
any dispute. Sales Tax dues not deposited on account of disputes are as
under
Name of the Nature of Forum where Dispute Year to Amount of Tax
Statute the dues is Pending which the Demanded
demand (Rs. Lakhs)
relates
Sales Tax APVAT Before High court 2009-10 12.74
Andhra Pradesh
9. The Company has accumulated losses as at March 31,2014 and has
incurred cash losses in the finan- cial year ended on that date and in
the immediately preceding financial year.
10. As per information and explanation given to us, the bank has
called upon the Company on February 28, 2014 to pay back the entire
working capital loan of Rs. 500 lakhs and close the account
immediately.
11. The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
12. The company does not given any guaranty for loan taken by others.
13. Based on our audit procedures and as per information and
explanations given to us we report that the Company has not raised any
term loans during the year.
14. In our opinion and according to the information and explanations
given to us and on an overall exami- nation of the financial statements
of the Company, funds raised on short-term basis have, prima facie, not
been used for long-term investment.
15. 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
in an earlier year and outstanding is in progress.
16. According to the information and explanation given to us and based
on the audit procedures per- formed, 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
Place: Chennai M.S.Murali-Partner
Date: May 24, 2014 Membership No. : 26453
Mar 31, 2013
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
Mar 31, 2012
1) We have audited the attached Balance Sheet of RESTILE CERAMICS
LIMITED ('the Company') as at March 31, 2012, the Statement of Profit
and Loss and the Cash Flow Statement together with the Notes to
Financial Statements for the year ended on that date, annexed thereto
(collectively referred to as the financial statements), signed by us
under reference to this report. These financial statements are the
responsibility of the company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2) We conducted our audit in accordance with auditing and assurance
standards generally accepted in India. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting' principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3) As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government in terms of Section 227(4A) of the Companies
Act, 1956, we enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4) Further to our comments in the Annexure referred to in paragraph 3
above, we report as follows:
a) we have 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 appears from our examination of
those books.
c) the financial statements dealt with by this report are in agreement
with the books of account.
d) in our opinion, the aforesaid financial statements comply in all
material respects with the applicable Accounting Standards referred to
in section 211 (3C) of the Companies Act, 1956 (the Act) except that
there has been no recognition of impairment in value of Buildings (Rs.
522.17 lakhs) and in the value of Plant & Machinery (Rs. 119.87 lakhs)
as required under Accounting Standard (AS) 28-impairement of Assets.
e) in our opinion and to the best of our information and according to
the explanations given to us, the aforesaid financial statements
subject to non- recognition of impairment in value of Buildings (Rs.
522.17 lakhs) and in the value of Plant & Machinery (Rs. 119.87 lakhs)
as required under Accounting Standard (AS) 28-impairment of Assets and
its consequential impact on the toss carried forward, give the
information required by the Act, in the manner so required and also
give a true and fair view, in conformity with the accounting principles
generally accepted in India:
(Referred to in paragraph 3 of our report of even date on the accounts
for the year ended March 31, 2012 of Restile Ceramics Limited).
As required by the Companies (Auditor's Report) Order, 2003 (CARO)
issued by the Government of India in terms of section 227(4A) of the
Companies Act, 1956, and on the basis of such checks as we considered
appropriate and according to the information and explanations given to
us, 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 have been physically verified during the year by
the management at the year end.
(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 physical verification at the end of the year
have been dealt with by adopting the stocks as verified.
3. the company has neither granted nor taken any loans, secured or
unsecured, to/from companies, firms or other parties covered in the
register maintained under section 301 of the Act
4. 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 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.
5. 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. -
6. 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.
7. 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 and will, in the 'ensuing year, include
operations audit as well.
8. 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.
9. (i) the company has been regular in depositing undisputed statutory
dues towards investor education and protection fund, wealth tax,
customs duty, and other material statutory dues as applicable 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
the end of the year for a period of more than six months from the date
they became payable are - Provident fund Rs. 0.56 lakhs, sales tax Rs.
29.60 lakhs, Tax collected/deducted at sourcp- Rs. 2.21 lakhs ;
Property tax-Rs. 2.49 lakhs and Professional tax- Rs. 0.12 lakhs. We
are informed that the delays were caused by unavoidable circumstances.
(ii) there are no dues of income tax/wealth-tax, service tax, customs
duty, excise duty and cess which have not been deposited on account of
any dispute. Sales Tax dues not deposited on account of disputes are as
under:
Name of the Nature of Forum where Year to Amount of
Statute the dues Dispute which is Tax
Pending demand Demanded
relates (Rs.
Lakhs)
Sales Tax APCST Deputy 2008 - 09 166.61
Commissioner
(CT) Appeals,
Punjagutta
Division,
Hyderabad,
Andhra Pradesh
10. The company has accumulated losses as at March 31, 2012 and has
incurred cash losses in the financial year ended on that date and in
the immediately preceding financial year.
11. The company has not defaulted in repayment of dues to any
financial institution, bank or debenture holders during the year.
12. The company has not granted loans and advances on the basis of
security by way of Pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to a chit fund,
nidhi or mutual benefit fund/societies are not applicable to the
company.
14. The company is not dealing or trading in shares, securities,
debentures and other investments. Accordingly the provisions of clause
4 (xiv) of the CARO are not applicable to the company.
15. No guarantees have been given during the year by the company, for
loans taken by others from banks or financial institutions.
16. The term loans availed by the company were prima facie, applied
for the purpose for which they were obtained.
17. 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.
18. The company has not made any preferential allotment of shares
during the year to any party.
19. 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
in an earlier year and outstanding, is in progress.
20. The company has not raised any money by public issues during the
year.
21. Considering the size and nature of the company's operations, no
fraud of material significance on or by the company has been noticed or
reported during the year.
For M.S. Krishnaswami & Rajan
Chartered Accountants
Registration No. 01554S
M. S. Murali
Partner
Membership No. 26453
May 29, 2012 Chennai
Mar 31, 2010
1. We have audited the attached Balance Sheet of RESTILE CERAMICS
LIMITED as at March 31, 2010, the Profit and Loss Account and the Cash
Flow Statement together with the Notes to the Accounts (financial
statements) for the year ended on that date, annexed thereto, signed by
us under reference to this report. These financial statements are the
responsibility of the companys management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing and assurance
standards generally accepted in India. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government in terms of Section 227(4A) of the Companies
Act, 1956, we enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report as follows:
a. we have 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 appears from our examination of
those books.
c. the financial statements dealt with by this report are in agreement
with the books of account.
d. in our opinion, the aforesaid financial statements comply in all
material respects with the applicable Accounting Standards referred to
in section 211(3C) of the Companies Act, 1956 (the Act).
e. in our opinion and to the best of our information and according to
the explanations given to us, the aforesaid financial statements read
with the Statement on Significant Accounting Policies and Note 9 of the
Notes to the Accounts (regarding pendency of reconciliation of balances
of certain creditors and debtors and its possible consequential impact
on financial statements), give the information required by the Act, in
the manner so required and also give a true and fair view, in
conformity with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2010;
(ii) in the case of the Profit and Loss account, of the loss for the
year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date 5.0 On the basis of written representations received
from the directors as on March 31, 2010, and taken on record by the Board of
Directors, we report that none of the directors is prima facie disqualified as on
March 31,2010 from being appointed as a director in terms of section
274 (1) (g) of the Act.
ANNEXURE TO THE AUDITORS REPORT
(Referred to in paragraph 3 of our report of even date)
As required by the Companies (Auditors Report) Order, 2003 (CARO)
issued by the Government of India in terms of section 227(4A) of the
Companies Act, 1956, and on the basis of such checks as we considered
appropriate and according to the information and explanations given to
us, 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 have been physically verified during the year by
the management at the year end.
(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 physical verification at the end of the year
have been dealt with by adopting the stocks as verified.
3. The company has neither granted nor taken any loans, secured or
unsecured, to / from companies, firms or other parties covered in the
register maintained under section 301 of the Act
4. 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 fixed assets and for sale of services. In respect of the
internal control system for purchase of inventory and sale of goods,
the same needs to be strengthened. We are informed that the said
controls have since been streamlined. On the basis of our examination
of the books and records of the company, we have come across/ have been
informed, of steps taken to correct major weaknesses in the aforesaid
internal control system.
5. To the best of our knowledge there are no contracts or arrangements
referred to in section 301 of the Act which need to be entered in the
register maintained under the said section.
6. The company has not accepted any deposits from the public to which
the provisions of section 58A and 58AA or any other relevant provisions
of the Act and the Companies (Acceptance of Deposit) Rules, 1975 apply.
7. Internal audit has been carried out by an independent Chartered
Accountant from September 2009. We are informed, that the Internal
Audit function is in the process of being strengthened and will, in the
ensuing year, include operations audit as well.
8. The Central Government has not prescribed maintenance of cost
records under section 209(1) (d) of the Act for the products dealt with
by the company.
9. (i) The company has been regular in depositing undisputed statutory
dues towards investor education and protection fund, wealth tax,
customs duty, excise duty, cess and other material statutory dues as
applicable with the appropriate authorities .Delays were, however,
noticed in depositing undisputed provident fund, employees state
insurance, income tax, sales tax, service tax, with the appropriate
authorities during the year. The arrears of such dues outstanding as at
the end of the year for a period of more than six months from the date
they became payable are -service tax- Rs.11.02 lakhs; Tax collected at
source-Rs.0.09 lakhs; Property tax-Rs.0.20 lakhs, sales tax Rs.20.74
lakhs and Tax deducted at source-Rs.1.69 lakhs. We are informed that
the delays were caused by unavoidable circumstances.
(ii)There are no dues of income tax / wealth-tax, service tax, customs
duty, excise duty and cess which have not been deposited on account of
any dispute. Sales Tax dues not deposited on account of disputes and
pending with Andhra Pradesh Appellate deputy Commissioner (Commercial
Taxes) are as under:
Year Forum where Sales Tax Amount Paid Balance Due
dispute pending Demanded
2006-07 APCST 3,337,749 417,219 29,20,530
2006-07, APVAT 3,955,954 494,494 3,461,460
2007-08 & 2008-09
10. The company has accumulated losses as at March 31,2010 and has
incurred cash losses in the financial year ended on that date and in
the immediately preceding financial year.
11. The company has not defaulted in repayment of dues to any
financial institution, bank or debenture holders during the year. The
sum of Rs.34.13 lakhs being loan together with interest thereon
outstanding at the beginning of the year was repaid on July 10,2009
with the concurrence of the said institution.
12. The company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to a chit fund,
nidhi, mutual benefit fund / societies are not applicable to the
company.
14. The company is not dealing or trading in shares, securities,
debentures and other investments. Accordingly the provisions of clause
4 (xiv) of the CARO are not applicable to the company.
15. No guarantees have been given during the year by the company, for
loans taken by others from banks or financial institutions.
16. The term loans availed by the company were prima facie, applied
for the purpose for which they were obtained.
17. 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.
18. The company has not made any preferential allotment of shares
during the year to any party.
19. The company has not issued any debentures during the year and
hence the question of creating a charge in respect thereof does not
arise.
20. The company has not raised any money by public issues during the
year.
21. No fraud of material significance on or by the company has been
noticed or reported during the year.
For M.S. Krishnaswami & Rajan
Chartered Accountants
Registration No.01554S
M.K.Rajan-Partner
Membership No.4059
May 29, 2010
Chennai
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article