We have audited the standalone Ind AS financial statements of Murudeshwar Ceramics Limited (“the Company”), which
comprise the Balance Sheet as at 31st March 2025, and the Statement of Profit and Loss (including other comprehensive income),
Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the standalone Ind AS financial
statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as
“the standalone Ind AS financial statements”).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 and total comprehensive income, changes in equity and its cash
flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our
responsibilities under those SAs are further described in the Auditor’s Responsibilities for the Audit of the Standalone Ind AS
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 standalone
Ind AS financial statements under the provisions of the Act and the Rules there under, 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 opinion on the Standalone Financial Statements.
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 period. 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.
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Key Audit Matter
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Auditor's Response
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1. Inventory
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We have performed the following procedures w.r.t valuation of the inventory and
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The Value of inventory as at 31.03.2025 is
10,868.23 lakhs which is 19.09% of total
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assessment of procedures of physical verification of inventory during the period to
ensure accuracy of inventory reporting
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asset value. given the size of the inventory
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On a sample basis, we tested the net realisable value of inventory to recent selling
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balance relative to the total asset size of
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prices.
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the company, the valuation of inventory
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We have also considered the stock audit report by Account Special Monitoring
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required significant audit attention
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(ASM) auditors engaged by the lending bank to ensure that there are no
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As disclosed in the notes forming part of
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inconsistencies in reporting
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statement of accounts inventories are held
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At the year end the valuation of inventory is reviewed by management and cost of
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at the lower of cost or net realisable value
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inventory is revalued where inventory is forecast to be sold below cost.
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determined using weighted average cost
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In the view of the management, basic raw material used is clay for manufacturing
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The determination of valuation of inventory
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of tiles and the same being a natural resources, does not have any depletion in value
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requires management to exercise qualitative
judgments and apply assumptions
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over the passage of time.
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Key Audit Matter
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Auditor's Response
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2. Property, Plant and Equipment
Additions to Fixed assets during the year
were 2,933.87 lakhs(including CWIP of
the previous year). inappropriate timing
of capitalization of project/inappropriate
classification of categories of the items of
PPE could result in material misstatement
of CWIP/PPE with consequent impact on
depreciation charge and results for the year
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Our audit procedures included testing the design implementation and operating
effectiveness of controls in respect of review of capitalization of assets, particularly
in respect of timing of the capitalization and recording of additions to items of
various categories of PPE with source documentation, substantive testing of
appropriateness of cut-off date considered for project capitalization
We tested the source documentation to determine whether the expenditure is of
capital nature and has been approved and segregated into appropriate categories.
We reviewed operating expenses to determine the appropriateness of accounting.
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Information Other than the Financial Statements and Auditor’s Report Ihereon
The Company’s Board of Directors is responsible for the other information. The other information comprises the information included
in the Management Discussion and Analysis, Board’s Report including Annexures to Board’s Report, Business Responsibility
Report, Corporate Governance and Shareholder’s Information, but does not include the standalone financial statements and our
auditor’s report thereon.
Our opinion on the standalone 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 standalone financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the standalone 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.
Management’s Responsibility for the Standalone Ind AS financial statements
The Company's management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with
respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs, profit
/ loss, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India,
Including Indian Accounting Standard (Ind AS) specified under Section 133 of the Act read with the Companies (Indian Accounting
Standards) Rules, 2015, as amended. 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 standalone
Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone Ind AS financial statements, management and Board of Directors are 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.
Board of Directors is also responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Standalone Ind AS financial statements
Our objectives are to obtain reasonable assurance about whether the standalone Ind AS 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 standalone
Ind AS 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 standalone Ind AS 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 control 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 with reference to standalone Ind AS financial statements 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 standalone Ind AS 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 auditors'
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 standalone Ind AS financial statements, including the disclosures,
and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
Materiality
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it
probable that the economic decisions of a reasonably knowledgeable user of the standalone 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 standalone financial statements.
Communication with those charged with governance
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 standalone 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 Section 143(3) of the Act, based on our audit 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 relating to preparation of the aforesaid Ind AS financial statements
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), the statement of cash flows
dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation of the Ind AS
financial statements;
(d) In our opinion, the aforesaid Ind AS financial statements comply with the Accounting Standards specified under Section 133
of the Act read with relevant rule issued there under.
(e) On the basis of the written representations received from the Directors of the Company as on 31 March 2025 taken on record
by the Board of Directors of the Company, none of the directors is disqualified as on 31 March 2025 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 and the operating effectiveness of such
controls, refer to our separate report in “Annexure A”, which is based on the auditors’ report of the company.
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with the 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, the
remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the
Act.
(h) 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.
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 Company’s Management and the Board of Directors have represented that, to the best of their knowledge and
belief, no funds 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 Company’s Management and the Board of Directors have represented, that, to the best of their knowledge and
belief, no funds 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; and
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. The company has declared and paid dividend during the financial year under audit and is in accordance with Sec.123 of
the Companies Act,2013.
vi. Based on our examination, which included test checks, the Company has used accounting softwares for maintaining its
books of account for the financial year ended March 31, 2025 which has a feature of recording audit trail (edit log) facility
and the same has operated throughout the year for all relevant transactions recorded in the softwares. Further, during the
course of our audit we did not come across any instance of audit trial feature being tampered with. Additionally, the audit
trail has been preserved by the company as per the statutory requirements for record retention.
2. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”) issued by the Central Government of India in
terms of section 143(11) of the Act, we give in the Annexure B, a statement on the matters specified in the paragraph 3 and 4
of the order.
For K G Rao & Co.
Chartered Accountants
Firm Registration Number - 010463S
Sd/-
Krishnaraj K
Partner
Place: Bengaluru Membership Number - 217422)
Date: 29.05.2025 UDIN - 25217422BMNWUW3587
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