We have audited the accompanying financial statements of REGENCY CERAMICS LIMITED
(“the company”), which comprise the Balance Sheet as at March 31, 2024, 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 for 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
Standard) 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, 2024, the 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 are disclosed at book value after providing depreciation on
account of efflux of time
2. During the year, 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 of additional loss of the
company for the year and on the current liabilities as at 31.03.2024.
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 45 days.
5. The company has not provided the liability towards interest and penalties payable on account of
statutory dues.
In view of the above, the liability of the company in this regard could not be ascertained. Consequently,
we are unable to comment about the impact of the same on the loss for the year, income tax and
shareholder’s funds.
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 Related to Going Concern
We draw attention to note no. 1 to the financial statements regarding the preparation of the financial
statements on a going concern basis, despite erosion of the net worth. However, the accompanying
financial 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 matters described in the Basis for 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 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 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, except for the matters described in the Basis for qualified opinion
paragraph, 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 for 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 for qualified opinion paragraph, in
our opinion, the aforesaid Ind AS financial statements comply with the Accounting Standards
specified under Section 133 of the Act.
e) The matters described in Basis for Qualified Opinion and Material Uncertainty Relation to
Going Concern above, in our opinion, may have an adverse effect on the functioning of the
Company.
f) On the basis of written representations received from the directors as on March 31, 2024 taken
on record by the Board of Directors, none of the directors is disqualified as on March 31, 2024
from being appointed as a director in terms of Section 164(2) of the Act,
g) The qualification relating to the maintenance of accounts and other matters connected
therewith are as stated in the Basis for Qualified Opinion section and paragraph 2(b) above on
reporting under section 143(3)(b) of the Act.
h) With respect to the adequacy of the internal financial controls with reference to financial
statements of the Company and the operating effectiveness of such controls, we couldn’t
evaluate as Company didn’t have any manufacturing activity only had insignificant trading
operations during the year under review.
i) With respect to the matter to be included in the Auditors' 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. 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 feature has been operated throughout the year for all
transactions recorded in the accounting software. Further, during the course of
our audit, we did not come across any instance of the audit trail feature being
tampered with.
; 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, 2024.
for K.S.RAO & CO.
Chartered Accountants
Firm’s Regn No. 003109S
(V.VENKATESWARA RAO)
Place : Hyderabad Partner
Date : 30.05.2024 Membership No. 231388
UDIN: 24219209BKATRV1930
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