Restile Ceramics Ltd Management Discussions

Jul 24, 2024|03:12:00 PM

Restile Ceramics Ltd Share Price Management Discussions


Global Economy

The global ceramic tiles market size grew from $106.5 billion in 2022 to $117.25 billion in 2023 at a compound annual growth rate (CAGR) of 10.1%. The ceramic tiles market size is expected to grow to $174.36 billion in 2027 at CAGR of 10.4%. The countries covered in the ceramic tiles market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK and USA.

Domestic Market

Though the present demand condition for ceramic tiles in the domestic market is subdued, that does not unduly disturb tile manufacturers, as they strongly believe that the long term India story is still intact. Year 2022-23 was one of the toughest years for the tiles manufacturers as they had to fight multiple challenges both domestically and globally. Despite the challenges, the industry has sailed through the troubled times rather safely.

India occupies the second position in the global tile industry. While the residential sector is the primary consumer of tiles (in terms of application), demand from the commercial sector (including high-footfall infrastructure) is growing at a healthy clip owing to sustained investments by the government and private players.


Restile Ceramics Limited ("RCL") was originally incorporated as Restile Ceramics Private Limited on 26th May, 1986. Restile is known in the market for the last 3 decades for its unpolished smooth tiles and Industrial Vitrified Tiles.


(Rs. In Lakhs Except EPS)




Revenue from Operations

197.12 59.34

Other Income

65.51 23.83

Total Income

262.63 83.17

Total Expenditure (excluding depreciation)

291.36 116.57

Net Operating Profit/Loss before depreciation

(28.73) (33.40)

Less: Depreciation

(38.12) (571.94)

Net Operating Profit/Loss after depreciation

(66.85) (605.34)

Profit/(Loss) before Tax

(66.85) (605.34)

Less: Provision for taxation



Current Tax

- -

Deferred Tax Asset

- -

Net Profit/(Loss) after Tax

(66.85) (605.34)

Earnings Per Share- Basic & Diluted

(0.07) (0.62)

During the year under review, your Companys total revenue from operations increased from Rs. 197.12 Lakhs as compared to Rs. 59.34 Lakhs in the previous financial year. The Net loss changed to Rs. 66.85 Lakhs as compared to Rs. 605.34 lakhs in the previous financial year.

Key Financial Ratios (Standalone) for the Financial Year ended March 31, 2023 are provided here-below:

Key Ratios

Financial Year 20222023 Financial Year 20212022 Variance (%)

Debtors Turnover

20.05 18.40 9%

Inventory Turnover

1.73 0.38 357%

Interest Coverage Ratio

- - 0%

Current Ratio

8.79 3.23 172%

Debt Equity Ratio

-1.31 -1.34 -2%

Operating Profit Margin

-48 -96 -50%

Net Profit Margin

-34 -1020 -97%

Return on Net Worth

0.02 0.21 -89%

Remarks for Change in Ratios having more than 25% variance: The variance is due to higher Inventory Turnover, Operations and Other losses.


The Company is engaged in only one segment/product i.e. unpolished smooth tiles and Industrial Vitrified Tiles. During the financial year 2022-23, the Company has generated revenue from operations of Rs. 197.12 Lakhs, which has been increased from previous financial year 2021-22, and net loss has been reduced to Rs. 66.85 Lakhs from previous financial year 2021-22.


• The Company believes that strong internal control system and processes play a critical role in the health of the Company. The Company is having an internal control system including suitable monitoring procedures commensurate with its size of operations;

• The Companys well-defined organizational structure, documented policy guidelines, defined authority matrix and internal controls ensure efficiency of operations, compliance with internal policies and applicable laws and regulations as well as protection of resources;

• The internal control system is supplemented by extensive internal audits, regular reviews by the management and standard policies and guidelines which ensure reliability of financial and all other records;

• The Companys Internal Auditor performed regular reviews of business processes to assess the effectiveness of internal controls. Internal Audits were carried out to review the adequacy of the internal control systems, compliance with policies and procedures. The Audit Committee periodically reviews the Internal Audit reports.

• Our Internal Auditor, M/s. R K Doshi & Co LLP, Chartered Accountants, has certified that the Company maintains an adequate system of internal financial controls, evaluates and assesses its adequacy and effectiveness in a satisfactory manner which takes care of requirements under the Companies Act, 2013.


• Introduction of vitrified and porcelain tiles ("tiles of the future") in the Indian market - internationally these are already major sellers - these categories account for approximately 1012% for all organized sales in the Indian ceramic tiles industry.

• Rising demand for tiles as it is widely used today as it can keep temperature reduced.

Threats and Challenges:

• Since the vitrified market enjoys consistent growth and assured returns, companies in the organized and unorganized sector are expected to come up with latest technology, which may result in pressure on the realizations. However, the uniqueness of the products will help us in garnering the Project and Industrial sector which help in overcoming the competition.

• Changing market trends on faster basis.

• Economic recession in business cycles affecting income and business.


Risk is an integral part of the business and almost every business decision requires the management to balance risk and reward. The ability to manage risks across geographies, products, asset classes, customer segments and functional departments is of paramount importance for the hindrance free growth of every organization.

In the business world, the different types of risks have come to mean an impediment towards the achievement of an organizations objectives. Your Company is exposed to specific risks that are particular to its business and the environment in which it operates. Due to rapid changes in the technologies, business dimensions and complexities, regulatory changes and environmental concerns, new and various types of risks have emerged. So, in the era of fast changing global economy, multiplicity of legal compliances, cross border business transactions and to ensure the survival, viability and sustainability of business, the management of various types of risks have gained utmost importance.

The company specific risks remain large which is same as enumerated last year. The Company is consuming LPG which is a petroleum product for firing the tiles. The prices of petroleum products depend upon international market and subject to volatility. Some of the competitors who have the facilities of natural gas, tax incentives etc. are dominating the market. There may be a threat from some of the larger capacity players, who have varied range of products, effects and colors to dominate market presence.


Our constant efforts to offer superior quality, technologically driven and innovative products enable us to develop and nourish deep customer relationships. With unwavering focus on innovation, brand equity, technology adoption, quality adherence to international standards and investment in R&D, we relentlessly strive to improve the loyalty of both institutional and retail customers. This enables us to gain large scale acceptance in both Indian and overseas markets.

Our investment and focus in R&D have enabled us to give us an edge over competition. In addition, it also helps us to expand customer base and command a premium in the market. We strive to leverage our R&D investments to increase profit and build long-term shareholder value.


The key priorities as we step into F.Y. 2024 will mainly revolve around gaining market access, expanding the network and network monetization, as we continue to look out for M&A opportunities. All these factors will help us in achieving our targets. The Ceramic Tiles market is expected to register fluctuating growth trends in the long term, while inflation and supply chain concerns are expected to continue in 2023.


The management had adopted/followed strategic plans which has reduced the losses of the organization and also increased revenue from operations as compared to previous financial year 2021-22. The management will make new strategies and plans for the increased production and profitability of the Company in the near future.


We believe that human capital plays a crucial role in business growth. Our talented and dedicated employee base has enabled us to achieve our strategic goals. Our HR policies are employee-friendly, nurturing a safe, conducive and productive work environment. This not only enables sustainable business growth but also ensures high productivity, employee satisfaction and motivation, and superior retention ratio. As on March 31, 2023, your Company had a total head count of 9 employees. The Directors wish to place on record their appreciation and acknowledgment for the efforts and dedication and contributions made by employees at all levels during the year under review.

Your Company has adopted people practices that enable us to attract and retain talent in an increasingly competitive market and to foster a work culture that is always committed to providing the best opportunities to employees to realize their potential. We are committed as an equal opportunity employer and follow non-discrimination in all our practices. All employees, from a new joiner to a tenured one, are provided tailored learning opportunities as per their role, level, and specific focus area.


Statements in this Report, particularly those which relate to Management Discussion and Analysis, describing the Companys objectives, projections, estimates and expectations may constitute Forward Looking Statements within the meaning of applicable laws and regulations. Our Company undertakes no obligation or liability to update or revise any forward-looking statements publicly, whether as a result of new information, future events or otherwise actual results, performance, or achievements could differ materially from those either expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements and read in conjunction with financial statements included herein.

The Company assumes no responsibility in respect of forward-looking statements that may be revised or modified in future on the basis of subsequent developments, information or events. The financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014.

The management of the Company has used estimates and judgments relating to the financial statements on a prudent and reasonable basis, in order that the financial statements reflect a true and fair manner, the state of affairs and profit / loss for the year. The narrative on our financial condition and result of operations should be read together with the notes to the financial statements included in the annual report. Important factors that could make a difference to the Companys operations include changes in Government regulations and tax regime, economic developments within India and abroad, financial markets etc.


[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]


The Members

Restile Ceramics Limited


204, Sakar Complex, Opp. ABS Tower,

Vaccine Crossing, Old Padra Road,

Vadodara - 390 015, Gujarat.

We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Restile Ceramics Limited (CIN: L26931GJ1986PLC102350) ("hereinafter called "the Company"). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our virtual verification of the Companys books, papers, minute books, forms and returns filed and other records maintained by the Company and to the extent the information / documents as provided by the Company, its officers, agents and authorized representatives during the conduct of Secretarial Audit, we hereby report that in our opinion, the Company has, during the audit period covering the Financial Year ended on 31st March, 2023, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records made available to us virtually / through email and as maintained by the Company for the Financial Year ended on 31st March 2023 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the Rules made thereunder (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force);

(ii) The Securities Contracts (Regulation) Act, 1956 (SCRA) and the Rules made thereunder (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force);

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force);

(iv) Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force);

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (SEBI Act) (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force):-
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018; - (Not applicable to the Company during the audit period)
(c) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;(Not applicable to the Company during the audit period)
(d) The Securities and Exchange Board of India (Issue and Listing of Non Convertible Securities) Regulations, 2021;(Not applicable to the Company during the audit period)
(e) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;
(f) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021; (Not applicable to the Company during the audit period) and
(g) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018; (Not applicable to the Company during the audit period)
(h) Other applicable laws: Based on the information provided and the representation made by the Company and its officers and also on the review of the compliance reports taken on record by the Board of Directors of the Company, in our opinion, adequate systems and process exist in the Company to monitor and ensure compliances under other applicable Acts, Laws and Regulations as applicable to the Company.
We have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards issued by The Institute of Company Secretaries of India with respect to board and general meetings.
(ii) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above:

We further report that:

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice was given to all the directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance for meetings and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

Decisions at the meetings of the Board of Directors of the Company were carried through on the basis of unanimously. There were no dissenting views by any member of the Board of Directors during the period under review.

We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines etc.

We further report that during the audit period the Company has taken following actions or entered into events having a major bearing on the Companys affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards etc.

1. The Board has approved the scheme of amalgamation of Restile Ceramics Limited ("RCL" or "Transferor Company" or "Company") with Bell Granito Ceramica Limited ("BGCL" or "Transferee Company") in its Board meeting held on 21st February, 2023.

Place: Vadodara


Date: 2nd August, 2023

Name of Company Secretary in Practice : NIRAJ TRIVEDI
C. P. No. : 3123
FCS : 3844
P. R. No. :1014/2020
UDIN : F003844E000721649

Note: This report is to be read with our letter of even date, which is annexed as Annexure I and forms an integral part of this report.


The Members

Restile Ceramics Limited


204, Sakar Complex, Opp. ABS Tower, Vaccine Crossing, Old Padra Road, Vadodara -390015, Gujarat

Our report of even date is to be read along with this letter:

1. Maintenance of secretarial record is the responsibility of the Management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

4. Wherever required, we have obtained the Management representation about the Compliance of laws, rules and regulations and happening of events etc.

5. The Compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

Place: Vadodara Date: 2nd August, 2023

Name of Company Secretary


in Practice : NIRAJ TRIVEDI

C. P. No. : 3123

FCS : 3844

P. R. No. : 1014/2020

UDIN :F003844E000721649

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