Restile Ceramics Reports Reduced Q1 Loss, Appoints New Auditors Amid Going Concern Issues

Restile Ceramics Limited , a manufacturer of vitrified tiles, has reported a narrower loss for the first quarter, while also announcing key corporate appointments. The company continues to face challenges, with auditors raising concerns about its ability to continue as a going concern.

Financial Performance

For the quarter ended June 30, Restile Ceramics reported:

• A net loss of Rs 10.92 lakh, compared to a loss of Rs 23.65 lakh in the same quarter last year, marking an improvement of 53.80%.
• Revenue from operations increased to Rs 75.30 lakh from Rs 50.53 lakh year-on-year, showing a growth of 49.00%.
• Earnings per share stood at negative Rs 0.01, an improvement from negative Rs 0.02 in the corresponding quarter of the previous year.

Auditor's Concerns

The company's auditors, M.S. Krishnaswami & Rajan, issued a qualified opinion citing material uncertainty about Restile Ceramics' ability to continue as a going concern. The auditors highlighted:

• Negative operating cash flows
• Substantial operating losses
• Significant deterioration in asset values

These factors indicate the existence of material uncertainty in the company's ability to continue as a going concern for a reasonable period.

Corporate Updates

In response to these challenges, Restile Ceramics announced several corporate updates:

1. Appointment of Secretarial Auditors: The Board of Directors approved the appointment of M/s. Mitesh Shah & Co., Company Secretaries, as Secretarial Auditors for a term of five consecutive years from April 01, 2025, to March 31, 2030, subject to shareholder approval.

2. New Internal Auditor: M/s. R K Doshi & Co LLP has been appointed as the Internal Auditor for the financial year 2025-26.

3. Restructuring Plans: The company stated that it is addressing the issues of negative operating cash flows and operating losses through proposed restructuring of operations.

Segment Information

Restile Ceramics operates solely in the vitrified tiles segment, as identified by the Board of Directors acting as the Chief Operating Decision Maker (CODM) based on internal business reporting.

Trading Window

The company announced that the trading window for its securities will reopen on August 7, 2025, in compliance with the SEBI regulations on insider trading.

Despite the ongoing challenges, Restile Ceramics' management appears to be taking steps to address the concerns raised by auditors and improve its financial position. The appointment of new auditors and the proposed restructuring of operations may be seen as positive moves towards enhancing corporate governance and operational efficiency. However, investors and stakeholders should closely monitor the company's progress in implementing these measures and improving its financial performance in the coming quarters.