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AUDITOR'S REPORT

Restile Ceramics Ltd.

You can view full text of the latest Auditor's Report for the company.
Market Cap. (₹) 91.89 Cr. P/BV -2.90 Book Value (₹) -3.22
52 Week High/Low (₹) 14/5 FV/ML 10/1 P/E(X) 0.00
Bookclosure 12/09/2024 EPS (₹) 0.00 Div Yield (%) 0.00
Year End :2025-03 

We have audited the accompanying Financial Statements of RESTILE CERAMICS LIMITED ("the
Company"), which comprise the Balance Sheet as at March 31, 2025, the Statement of Profit and Loss,
Statement of Changes in Equity and Statement of Cash flows for the year then ended, and a summary of
the material accounting policies and other explanatory information.

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 Indian Accounting Standards prescribed under Section
133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015, as amended, ("Ind AS")
and other Accounting principles generally accepted in India, of the state of affairs of the Company as at
March 31, 2025, the loss and total comprehensive income, changes in equity and its cash flows for the
year ended on that date.

Basis for Qualified Opinion

(i)The Company has generated negative cashflows from operations, 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 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.

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section
143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in
the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered
Accountants of India together with the ethical requirements that are relevant to our audit of the financial
statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have
fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current year. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. We have determined the matters described below to be the key
audit matters to be communicated in our report

Key Audit Matter Description

Response to Key Audit Matter

A. Revenue Recognition

Reference may be made to note 1B.6 of
Material accounting policies and note 38 to
the financial statements of the Company.
Revenue recognition is inherently an area of
audit risk, which we have substantially
focused on mainly covering the aspects of
cut off. Considering the impact of Ind AS 115
and cut-off are key audit matters

Principal Audit Procedures

Audit procedures relating to revenue comprised
of test of controls and substantive procedures
including the following:

i. We performed procedures to assess the design
and internal controls established by the
management and tested the operating
effectiveness of relevant controls related to the
recognition of revenue.

ii. Selected a sample of continuing and new
contracts, and tested the operating
effectiveness of the internal control, relating to
identification of the distinct performance
obligations and determination of transaction
price. We carried out a combination of
procedures involving enquiry and observation,
reperformance and inspection of evidence in
respect of operation of these controls.

iii. We have tested, on a sample basis, whether
specific revenue transactions around the
reporting date has been recognised in the
appropriate period by comparing the
transactions selected with relevant underlying
documentation, including goods delivery notes,
customer acknowledgement/proof of
acceptance and the terms of sales.

iv. We have also validated subsequent credit
notes and sales returns up to the date of this
Report to ensure the appropriateness and
accuracy of the revenue recognition.

v. We have tested journal entries on a sample
basis to identify any unusual or irregular items.

vi. We also considered the adequacy of the
disclosures in Company's financial statements in
relation to Ind AS 115 and were satisfied they
meet the disclosure requirements.

Conclusion

Based on the procedures performed above, we
did not find any material exceptions with
regards to timing of revenue recognition and
were satisfied they meet the disclosure
requirements of Ind AS 115 Revenue From
contracts with Customer.

B. Inventory valuation

Reference may be made to note 1C of
Material accounting policies and note 22 to
the financial statements of the Company.

> Under Ind AS 2 Inventories, materials and
other supplies held for use in production
are not written down below cost if the
finished goods in which they will be
incorporated are expected to be sold at or
above cost. The valuation of raw material
and other supplies held for production
have been an area of our focus in view of
loss incurred and the inability to have
operating margins. The valuation of
finished goods has also been focused
upon in view of the production of goods
having ceased and the passage of time
that has lapsed.

Considering the above risks valuation of
Inventory in accordance with Ind AS 2 has
thus been considered as a key audit
matter.

Principal Audit Procedures

Our audit procedures comprised of the
following:

1. We performed procedures to assess the
design and internal controls established
by the management and tested the
operating effectiveness of relevant
controls related to the valuation of
inventory.

2. We have selected a sample of items of
Raw materials and other supplies held
for production to check whether the
rate per unit adopted for valuation is
reflective of the last purchase rate
(Realizable price). Similarly, the rate per
unit of various finished goods have been
checked on a sample basis as to whether
they reflect the net sale price (Realizable
price).

3. Also obtained management's
assessment of impairment in the value
of inventory carried in the books of
accounts.

Conclusion:

Based on the procedures performed above, we
have concluded that management has complied
with the measurement and disclosure
requirements of IND AS 2 "Inventories".

C. Impairment of Property Plant and
Equipment

The recoverable value of the Property
Plant and Equipment requires
significant judgment of the
management and hence considered to
be a significant matter.

Principal Audit Procedures

We have performed the following list of audit
procedures

1. Evaluated the design and effectiveness
of internal controls established by the
Company relating to assessment of the
impairment

2. Obtained and evaluated the
management's assessment of
impairment.

3. Obtained the valuation report obtained
by the Company.

Conclusion:

Based on the procedures performed above,
we have concluded that management has
complied with the measurement and
disclosure requirements of IND AS 16.

D. Non-Payment/belated payment of
Statutory Dues

Company has not paid/paid belatedly
various Undisputed Statutory dues
including Income Tax and applicable
Value Added Tax.

Payment of statutory dues regularly and
within time reflects on the health of the
company apart from the need for us to
report on issues of non-compliance to
members.

We have, therefore, considered
payment of statutory dues as a key audit
matter.

Principal Audit Procedures

We have performed the following list of audit
procedures.

1. Evaluated the design and effectiveness
of internal controls established by the
Company relating to compliance with
statutory dues.

2. Obtained details of payment of various
statutory dues to be paid by company.

3. Verified that whether company has
been regular in payment of statutory
dues.

Conclusion:

Based on the above procedures performed,
we noted that

The payment of statutory dues depended
upon availability of funds and is being paid
with applicable interest and delays noted
are disclosed elsewhere in this report.

Information other than the Financial Statements and Auditor's Report thereon

The Company's Board of Directors is responsible for the other information. The other information
comprises the information included in the Annual report but does not include the financial statements
and our report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If,
based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.

Based on the draft report furnished with us, we have nothing to report in this regard.

Responsibilities of Management 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, total comprehensive income, changes in equity
and cash flows of the Company in accordance with the Ind AS and other accounting principles generally
accepted in India. This responsibility also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding of 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.

In preparing the financial statements, management is responsible for assessing the Company's ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an
audit conducted in accordance with SAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act,
we are also responsible for expressing our opinion on whether the Company has adequate internal
financial controls systems in place and the operating effectiveness of such controls

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company's ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor's
report to the related disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor's report. However, future events or conditions may cause the Company to cease to continue
as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements that, individually or in
aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the
financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i)
planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the
effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.

From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor's report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by Section143 (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 so
far as it appears from our examination of those books except for the matters stated in the
paragraph 1(i)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors)
Rules, 2014.

(c) The Balance Sheet, the Statement of Profit and Loss, including other Comprehensive income, the
Statement of Changes in Equity and the Statement of Cash Flows dealt with by this report are in
agreement with the books of account.

(d) In our opinion, except for matters described in the Basis of Qualified Opinion Paragraph, the
aforesaid Financial Statements comply with the Indian Accounting Standards prescribed under
Section 133 of the Act read with the relevant rules issued thereunder.

(e) The matters described in the Basis for Qualified Opinion paragraph above, in our opinion, may
have an adverse effect on the functioning of the Company.

(f) On the basis of the written representations received from the directors as on March 31, 2025
taken on record by the Board of Directors, none of the directors is disqualified as on March
31,2025 from being appointed as a director in terms of Section164(2) of the Companies Act, 2013.

(g) With respect to the adequacy of the Internal Financial Controls with references to Financial
Statements of the Company and the operating effectiveness of such controls, refer to our
separate report in Annexure
"A". Our report expresses an unmodified opinion on the adequacy
and operating effectiveness of the Company's internal financial controls with references to
Financial Statements.

(h) With respect to the other matters to be included in the Auditor's Report in accordance with
requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our
information and according to the explanations given to us, no remuneration other than applicable
sitting fees has been paid by the Company to its directors during the year and hence the
compliance with the provisions of the section 197 does not arise.

(i) With respect to the other matters to be included in the Auditor's Report in accordance with Rule
11 of the Companies (Audit and Auditor's) Rules, 2014, in our opinion and to the best of our
information and according to the explanation given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its
Financial Statements. (Refer Note 35)

ii. The company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses as at March 31, 2025.

iii. There were no amounts which were required to be transferred to the Investor Education
and Protection Fund by the Company.

iv. (a) The Management has represented that, to the best of its knowledge and belief, no
funds (which are material either individually or in the aggregate) have been advanced or
loaned or invested (either from borrowed funds or any other sources or kind of funds) by

the Company to or in any other person or entity, including foreign entity
("Intermediaries"), with the understanding, whether recorded in writing or otherwise,
that the Intermediary shall, whether, directly or indirectly lend or invest in other persons
or entities identified in any manner whatsoever by or on behalf of the Company
("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.

(b) The Management has represented, that, to the best of its knowledge and belief, no
funds (which are material either individually or in the aggregate) have been received by
the Company from any person or entity, including foreign entity ("Funding Parties"), with
the understanding, whether recorded in writing or otherwise, that the Company shall,
whether, directly or indirectly, lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(c) Based on the audit procedures that have been considered reasonable and appropriate
in the circumstances, nothing has come to our notice that has caused us to believe that
the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and
(b) above, contain any material misstatement.

v. There was no dividend declared / paid during the year by the company.

vi. Based on our examination which include test checks, the company has used an accounting
software for maintaining its books of account which has a feature of recording audit trail
(edit log) facility which has however not been enabled Consequently, we are unable to
comment on audit trail feature of the said software.

2. As required by the Companies (Auditor's Report) Order,2020 ("the Order") issued by the Central
Government in terms of Section 143(11) of the Act we give in "Annexure B" a statement on the matters
specified in paragraphs 3 and 4 of the Order.

For M.S. Krishnaswami & Rajan
Chartered Accountants
Registration No. 01554S
Sd/-

M.S. Murali - Partner
Membership No. 026453
UDIN: 25026453BMFXXL6960
Date: May 21, 2025
Place: Chennai

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