We have audited the accompanying financial statements of REGENCY CERAMICS LIMITED ("the company"),
which comprise the Balance Sheet as at March 31, 2025, the Statement of Profit and Loss (including other
comprehensive income), the Statement of Changes in Equity and the Statement of Cash Flows for the year
ended on that date, and a summary of the Material accounting policies and other explanatory information
(herein after referred to as "the financial statements").
In our opinion and to the best of our information and according to the explanations given to us, except for the
possible effects of our observations stated in "Basis of Qualified Opinion" section below, the accompanying
financial statements give the information required by the Companies Act, 2013 ("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 profit or loss and total comprehensive income, changes in equity and its cash flows for
the year ended on that date.
Basis for Qualified Opinion
1. Financial statements were prepared without considering the effect of the loss / damage to Buildings, Plant &
Machinery and other assets of the company. The condition of the fixed assets & its realizable value could not be
estimated post declaration of lock out of the plant on 31.01.2012. The Fixed Assets(after scrapping some Plant &
Machinery) are disclosed at book value after providing depreciation on account of efflux of time.
2. During the Year ended 31st March 2025, the company has not provided the provisional liability towards salary,
wages and other benefits to its factory employees. Further, the company has not provided for its liability towards
Gratuity and leave encashment in accordance with Ind AS-19 "Employee Benefits". We are unable to comment
upon the impact of non-provision on the profit or loss of the company for the Year ended 31st March 2025 and on
the current liabilities as at 31st March 2025.
3. Confirmation of balances was not obtained from Debtors, Creditors, loans and advances and other current assets.
4. The company did not provide the interest on Unsecured loans received from Directors and Body Corporates. Also,
interest has not been provided in respect of overdue amount payable to Micro, Small and Medium Enterprises
suppliers for a period exceeding 15 days.
5. The company has not provided liability towards interest and penalties payable on account of old statutory dues.
6. On verification of Inventory records we are unable to comment on the accuracy of valuation of Inventories.
Consequent to the above, Profit for the year ended is overstated and Liabilities as on 31st March 2025 was
understated and Shareholders Funds are Overstated to this extent.
We conducted our audit of the financial statements in accordance with the Standards on Auditing (SAs) specified
under Section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditors
responsibility for the Audit of 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 (ICAI) together with
the ethical requirements that are relevant to our audit of the financial statements under the provisions of the
Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with
these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our Qualified Opinion on the financial statements.
Material Uncertainty relating to GOING CONCERN
We draw attention to Note. NO.1 to the financial statements regarding the preparation of financial statements
on a going concern basis, despite erosion of the net worth. However, the accompanying financial statements
have been prepared on "GOING CONCERN" basis for the reasons stated in the said note. The business activities
of the Company have been initiated resulting in revenue and consequent cash flows. Our opinion is not
modified in respect of this matter.
Key Audit matters
Except for the matter described in the Basis of Qualified Opinion section and Material Uncertainty Related to
Going Concern section, we have determined that there are no other key audit matters to communicate in our
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 auditor's
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 during the course of our 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. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect
to the preparation of these financial statements that give a true and fair view of the financial position, financial
performance including other comprehensive income, cash flows and changes in equity of the Company in
accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with
relevant rules issued there under 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 the 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 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, the Board of Directors 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 the Board of Directors either intends to liquidate the company or to cease
operations, or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the Company's financial reporting process.
Auditor's Responsibility 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
scepticism 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 controls relevant to the audit in order to design audit
procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also
responsible for expressing our opinion on whether the Company has adequate internal financial controls 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.
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 the Companies (Auditor's Report) Order,2020 ("the Order") issued by the Central
Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A, a
statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.
2) 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) Except for the effects of the matters described in the "Basis of Qualified Opinion" Paragraph above, 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, statement of
changes in equity and the cash flow statement dealt with by this Report are in agreement with the books
of account,
d) Except for the effects of the matters described in the "Basis of Qualified Opinion" Paragraph, In our
opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards (Ind AS)
prescribed under Section 133 of the Act.
e) The matters described in "Basis of Qualified Opinion" paragraph and Material Uncertainty Related to
GOING CONCERN 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 directors in terms of Section 164(2) of the Act.
g) The qualification relating to maintenance of accounts and other matters connected therewith are as
stated in the "Basis of Qualified Opinion" section and paragraph 2(b) above on reporting under Section
143(3)(b) of the Act.
h) With respect to adequacy of Internal Financial Controls with reference to financial statements of the
Company and the operating effectiveness of such controls, we couldn't evaluate as Company has
insignificant Trading and Manufacturing Activities during the year under review.
i) With respect to the matter to be included in the Auditor's Report under Section 197(16) of the Act, in
our opinion and according to the information and explanations given to us, no managerial remuneration
was paid to any Director during the year. The Ministry of Corporate Affairs has not prescribed other
details under Section 197(16) which are required to be commented upon by us.
j) With respect to the other matters to be included in the Auditor's report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial
statements - Refer Note 29 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.
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 share premium 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 (a) and (b) above, contain any material misstatement.
v a. The Company had not declared or paid any dividend during the year under Report.
vi. Based on our examination, the Company has used an accounting software for maintaining its
books of account which has a feature of recording audit trail (edit log) facility. The audit trail
iture has been operated throughout the year for all transactions recorded in the accounting
Ftware. Further, during the course of our audit, we did not come across any instance of the audit
il feature being tampered with.
As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 01, 2023,
reporting under Rule 11 (g) of the Companies (Audit and Auditors) Rules, 2014 on preservation
of audit trail as per the statutory requirements for record retention is not applicable for the
financial year ended March 31, 2025.
for K.S.RAO & CO.
Chartered Accountants
Firm's Regn No. 003109S
Place: Hyderabad
Date: 29.05.2025 Sd/-
(C.Venkateshwara Rao)
Partner
Membership No. 219844
UDIN: 25219844BMOHJN8174
|