Auditor Report of Murudeshwar Ceramics Ltd.

Mar 31, 2025

We have audited the standalone Ind AS financial statements of Murudeshwar Ceramics Limited (“the Company”), which
comprise the Balance Sheet as at 31^st 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.

Key Audit Matter	Auditor''s Response
1. Inventory	We have performed the following procedures w.r.t valuation of the inventory and
The Value of inventory as at 31.03.2025 is 10,868.23 lakhs which is 19.09% of total	assessment of procedures of physical verification of inventory during the period to ensure accuracy of inventory reporting
asset value. given the size of the inventory	On a sample basis, we tested the net realisable value of inventory to recent selling
balance relative to the total asset size of	prices.
the company, the valuation of inventory	We have also considered the stock audit report by Account Special Monitoring
required significant audit attention	(ASM) auditors engaged by the lending bank to ensure that there are no
As disclosed in the notes forming part of	inconsistencies in reporting
statement of accounts inventories are held	At the year end the valuation of inventory is reviewed by management and cost of
at the lower of cost or net realisable value	inventory is revalued where inventory is forecast to be sold below cost.
determined using weighted average cost	In the view of the management, basic raw material used is clay for manufacturing
The determination of valuation of inventory	of tiles and the same being a natural resources, does not have any depletion in value
requires management to exercise qualitative judgments and apply assumptions	over the passage of time.

Key Audit Matter

Auditor''s Response

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

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.

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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Mar 31, 2024

To the Members of Murudeshwar Ceramics Limited

Report on the Audit of Standalone Ind AS Financial Statement

Opinion

We have audited the standalone Ind AS financial statements of Murudeshwar Ceramics Limited (“the Company”), which comprise the Balance Sheet as at 31^st March 2024, 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, 2024, 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.

	Key Audit Matter	Auditor''s Response
	1. Inventory	We have performed the following procedures w.r.t valuation of the inventory and
	The Value of inventory as at 31.03.2024 is 11581.49 lakhs which is 21.15% of total	assessment of procedures of physical verification of inventory dunng the period to ensure accuracy of inventory reporting
	asset value, given the size of the inventory	On a sample basis, we tested the net realisable value of inventory to recent selling
	balance relative to the total asset size of	prices.
	the company, the valuation of inventory	We have also considered the stock audit report by Account Special Monitoring
	required significant audit attention	(ASM) auditors engaged by the lending bank to ensure that there are no
	As disclosed in the notes forming part of	inconsistencies in reporting
	statement of accounts inventories are held at the lower of cost or net realisable value determined using weighted average cost	At the year end the valuation of inventory is reviewed by management and cost of inventory is revalued where inventory is forecast to be sold below cost.
		In the view of the management, basic raw material used is clay for manufacturing
	The determination of valuation of inventory	of tiles and the same being a natural resources, does not have any depletion in value
	requires management to exercise qualitative judgments and apply assumptions	over the passage of time.

	Key Audit Matter	Auditor''s Response
	2. Property, Plant and Equipment Additions to Fixed assets during the year were 7745.42 lakhsfincluding 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	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.

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 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 dunng 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 forexpressing 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 (1) 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 2024 taken on record by the Board of Directors of the Company, none of the directors is disqualified as on 31 March 2024 from being appointed as a director in terms of Section 154 (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:

l. 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 31,2024 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 the audit trail feature being tampered with.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1, 2023, reporting under Rule 11(g) ofthe 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.

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: 29.05.2024 UDIN-24217422BKCMTR6458

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Mar 31, 2018

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of M/s MURUDESHWAR CERAMICS LTD. (“the Company”), which comprise the Balance Sheet as at March 31, 2018, and 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 then ended and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone 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 the Companies (Indian Accounting Standards) Rules, 2015, as amended, 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 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the Order issued under Section 143(11) of the Act.

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

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 Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its profit, total comprehensive income, the changes in equity and its cash flows for the year ended on that date.

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 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 Statement of Cash Flow dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act.

e) On the basis of the written representations received from the directors of the Company as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 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 of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

g) 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, as amended, in our opinion and to the best of our information and according to the explanations given to us

i) The Company does not have any pending litigations which would impact its financial position

ii) The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor''s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.

(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements'' section of our report to the Members of M/s MURUDESHWAR CERAMICS LTD. of even date)

Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub- section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of M/s MURUDESHWAR CERAMICS LTD. (“the Company”) as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that.

(1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section of our report to the Members of M/s MURUDESHWAR CERAMICS LTD. of even date)

i. In respect of the Company''s fixed assets :

a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. The Company has a program of verification to cover all the items of fixed assets in a phased manner which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c. According to the information and explanations given to us, the records examined by us and based on the examination of the conveyance deeds provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company.

ii. In respect to Inventories

a. The management has conducted physical verification of inventory at reasonable intervals

b. The procedures of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of companies operations and nature of business

c. The company is maintaining proper records of inventory and discrepancies are reported during the physical verification of inventory by management.

iii. According to the information and explanations given to us, the Company has not granted unsecured loans to any bodies corporate, covered in the register maintained under Section 189 of the Companies Act, 2013, and accordingly Clause 3(III) (a) to (c) are bit applicable to company and hence cannot be commented upon

iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

v. The Company has not accepted deposits during the year and does not have any unclaimed deposits as at March 31, 2018 and therefore, the provisions of the clause 3 (v) of the Order are not applicable to the Company.

vi. The maintenance of cost records has not been specified by the Central Government under Section 148(1) of the Companies Act, 2013 for the business activities carried out by the Company. Thus reporting under clause 3(vi) of the order is not applicable to the Company.

vii. According to the information and explanations given to us, in respect of statutory dues :

a. The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Goods and Service Tax, Value Added Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

b. There were no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Value Added Tax, Goods and Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues in arrears as at March 31, 2018 for a period of more than six months from the date they became payable.

viii. In our opinion and according to explanations given to us, the company has not defaulted in the repayment of dues to banks, financial institutions. The company has not issued any debentures.

ix. (a) Based on audit procedures performed and information and explanations given to us by the management, the company has not raised moneys by way of Initial public offer or Further Public offer including debt instruments. The funds raised during the year are applied for the purposes for which they are raised.

(b) According to the information and explanation provided to us, the company has raised new term loans during the year. The term loans outstanding at the beginning of the year and those raised during the year have been applied for the purposed for which they were raised.

x. According to the information provided to us and to the best of our knowledge no fraud by the Company or no material fraud on the Company by its officers or employees has been noticed or reported during the year.

xi. In our opinion and according to the information and explanations given to us, the Company has paid/provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of the Order is not applicable to the Company.

xiii. In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

xiv. (a) Based on audit procedures performed and information and explanations given to us by the management, the company has made preferential allotment of shares/convertible share warrants during the year by allotting 22,50,000 Equity shares pursuant to conversion of first tranche of convertible Share warrants to promoter/ Promoter Group company M/s Murdeshwar Power Corporation Limited on preferential allotment basis during the year under review. Accordingly the relevant provision of the order has been complied with.

(b) Based upon audit procedures performed and the explanation and information given to us by the management, the company has not made any fully/partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the order are not applicable to the company and hence cannot be commented upon.

xv. In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its Directors or persons connected to its directors and hence provisions of Section 192 of the Companies Act, 2013 are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

For K.A.RAGHUPATHY & CO.,

Chartered Accountants

ICAI FIRM REGN. No. : 011573S

( K.A.RAGHUPATHY)

Place : Bengaluru Partner

Date : May 30, 2018 Membership No:218041

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Mar 31, 2016

Report on the Financial Statements

We have audited the accompanying financial statements of Murudeshwar Ceramics Limited (''the Company'') which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss for the year, the Cash flow statement for the year ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements :

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility :

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

- We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

- We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

- We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

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 Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements :

As required by Section 143 (3) of the Act, we report that :

1) 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.

2) 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

3) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

4) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

5) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

6) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.

7) 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:

- The Company does not have any pending litigations which would impact its financial position.

- The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

- There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

The Annexure referred to in our Independent Auditors'' Report to the members of the Company on the financial statements for the year ended 31 March 2016, we report that :

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) The title deeds of immovable properties are held in the name of the company.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals.

(b) The procedures of physical verification of inventory followed by the management reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company is maintaining proper records of inventory and whether any material discrepancies were noticed on physical verification and if so, whether the same have been properly dealt with in the books of account

(iii) The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability partnerships or other parties covered in the Register maintained under section 189 of the Act. Accordingly, the provisions of clause 3(III) (a) to (c) of the order are not applicable to the company and hence cannot be commented upon.

(iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and I86 of the Companies Act, 2013 In respect of loans, investments, guarantees, and security.

(v) The Company has not accepted any deposits from the public and hence the directives issued by Reserve Bank of India and Provisions of Section 73 to 76 or any other relevant provisions of the Act and Companies (Acceptance of Deposit) Rules , 2015 with regard to the deposits accepted from public are not applicable.

(vi) The company does not maintain adequate cost records as prescribed under section 148(1) of the Act as Cost audit is not applicable to the company.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues were in arrears as at 31 March ,2016.

(viii) In our opinion and according to the explanation given to us, the Company has not defaulted in the repayment of dues to banks, financial institutions. The company has not issued any debentures.

(ix) Based upon the audit procedures performed and the information and explanations given by the management, the company has not raised moneys by way of Initial Public Offer or Further Public Offer including debt instruments and term loans. Accordingly, the provisions of clause 3 (ix) of the Order are not applicable to the Company and hence not commented upon.

(x) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

(xi) Based on the audit procedures performed and information and explanation given by the management , the managerial remuneration has been paid or provided in accordance with the requite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.

(xii) In our opinion, the Company is not a Nidhi company. Therefore, the provisions of clause 4(xii) of the order are not applicable to the company.

(xiii) In our opinion, all transactions with the related parties are in compliance with section 177 and 188 of Companies Act ,2013 and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

(xiv) Based upon the audit procedures and the information and explanation given by the management, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the company and hence cannot be commented upon.

(xv) Based upon the audit procedures performed and the information and explanations given by the management, the company has not entered into any non - cash transactions with directors or persons connected with him. Accordingly, the provisions of Clause 3 (xv) of the Order are not applicable to the company and hence cannot be commented upon.

(xvi) In our opinion the company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3(xvi) of the Order are not applicable to the company and hence cannot be commented upon.

For M.A.NARASIMHAN & CO.,

Chartered Accountants

ICAI FIRM REGN. No : 002347S

(M.A. PARTHA NARAYAN)

Place : Bengaluru Partner

Membership No:028994

Date : 28-05-2016

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Mar 31, 2015

We have audited the accompanying financial statements of Murudeshwar Ceramics Limited which comprise The Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and performance. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion

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 Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2015 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor''s Report) Order, 2015, issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Companies Act 2013, we give in the Annexure, a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable. As required by Section 143(3) of the Act, we report that:

a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit ;

b. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books ;

c. The balance sheet, the statement of profit and loss and the cash flow statement dealt with by this Report are in agreement with the books of account ;

d. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 ;

e. On the basis of written representations received from the directors as on 31 March, 2015, and taken on record by the Board of Directors, none of the directors are disqualified as on 31 March, 2015, from being appointed as a director in terms of section 164(2) of the Companies Act, 2013.

Referred in paragraph (3) of our report of even date

i. a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) Based on the explanation given to us physical verification fixed assets has been conducted by the Management at reasonable intervals with regard to the size of the operations of the company.

ii. a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were not material.

iii. The company has not given loans to parties covered in the register maintained under section 189 of the Companies Act, 2013.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures that commensurate with the size of the company and the nature of its business, with regard to the purchase of inventory fixed assets and for the sale of goods and services. During the course of audit, we have not observed any continuing failure to correct major weakness in internal controls.

v. The company has not accepted any deposits from the public.

vi. Based on the explanation received and certificate provided by the cost auditor to us, the company is not required to maintain cost records as specified by the central government under sub- section(1) of Section 148, of the Companies Act, 2013.

vii. The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employee''s state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

viii. The company has no accumulated losses.

ix. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institution and bank.

x. The company has not granted any loans and advances on the basis of the security by way of pledge of shares, debentures and other securities. Further based on the explanation received the company has not given any guarantees for loans taken by others from banks or financial institutions.

xi. The term loans were applied for the purpose for which the term loans were obtained.

xii. According to the information and explanations received, no fraud on or the company has been noticed or reported during the financial year.

For M.A.NARASIMHAN & CO., Chartered Accountants ICAI FIRM REG NO : 002347S

Place : Bengaluru (M.A. PARTHA NARAYAN) Partner Date : 29-05-2015 Membership No:028994

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Mar 31, 2014

We have audited the accompanying financial statements of Murudeshwar Ceramics Limited (''the Company'') which comprise the Balance Sheet as at 31 March, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March, 2014.

(ii) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date.

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (''the Order''), as amended, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. As required by Section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the Balance Sheet, Statement of Profit and Loss dealt with by this report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956

e. On the basis of written representations received from the directors as on 31 March, 2014, and taken on record by the Board of Directors, none of the directors are disqualified as on 31 March, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

Referred in paragraph (3) of our report of even date

I. (a) The company has maintained proper records showing full particulars including quantitative details and situations of fixed assets.

(b) As explained to us physical verification of major portion of fixed assets as at 31st March 2014 was conducted by the Management during the year. In our opinion, the frequency of physical verification is reasonable. Having regard to the size of the operations of the company and on the basis of explanations received, in our opinion, the net difference found on physical verification were not significant.

(c) During the year the Company has not disposed off any major part of plant and machinery.

II. (a) The inventories except for clay, owing to its nature, have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were not material.

III. The company has not granted any loans to any company, firm or other parties covered in the register maintained under Section 301 of the Act.

IV. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to the purchases of inventory fixed assets and with regard to sale of goods. During the course of audit, we have not observed any continuing failure to correct major weakness in internal controls.

V. (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupee Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

VI. In our opinion according to the information and explanations given to us, the company has complied with the provisions of Section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptances of deposits) Rules, 1975, with regard to the deposits accepted from the public. No order has been passed by the Company Law Board in this regard.

VII. In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

VIII. We have broadly reviewed the cost records maintained by the company pursuant to Companies (Cost Accounting Records) Rules, 2011 prescribed by the central government under Section 209(1)(d), of the companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

IX. The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education fund, employees state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it. According to the information and explanations given to us, there are no dues outstanding as at the year end for a period or more than six months from the date they became payable in respect of Income tax, Wealth tax, Sales tax, Customs duty, Excise duty and cess.

X. The company has not got any accumulated losses.

XI. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institution or banks.

XII. The company has not granted any loans and advances on the basis of the security by way of pledge of shares, debentures and other securities.

XIII. In our Opinion, the company is not a chit fund or a nidhi mutual benefit fund / society. Therefore, the provisions of Clause 4(xiii) of the companies (Auditors Report) Order, 2003 are not applicable to the company.

XIV. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the companies (Auditors Report) Order, 2003 are not applicable to the company.

XV. The company has not given any guarantees for loans taken by others from banks or financial institutions.

XVI. The term loans were applied for the purpose for which the term loans were obtained.

XVII.According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we report that no funds raised on short - term basis have been used for long term investment. No long term funds have been used to financé short term assets except permanent working capital.

XVIII.The company has made preferential allotment of Equity Shares pursuant to conversion of warrants into Equity Shares during the year under review to Company covered in the register maintained under Section 301 of the Act as per the SEBI guidelines.

XIX. The company has not issued any debentures.

XX. The company had not raised any money by way of public issue during the year.

XXI. According to the information and explanations given to us, no fraud on or the company has been noticed or reported during the year.

For M.A.NARASIMHAN & CO., Chartered Accountants ICAI FIRM REG NO : 002347S Place : Bangalore (M.A. PARTHANARAYAN) Partner Date : 29-05-2014 Membership No:028994

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Murudeshwar Ceramics Limited (''the Company'') which comprise the Balance Sheet as at 31 March, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March, 2013.

(ii) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date.

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (''the Order''), as amended, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. As required by Section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the Balance Sheet, Statement of Profit and Loss dealt with by this report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956

e. On the basis of written representations received from the directors as on 31 March, 2013, and taken on record by the Board of Directors, none of the directors are disqualified as on 31 March, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

Referred in paragraph (3) of our report of even date

I. (a) The company has maintained proper records showing full particulars including quantitative details and situations of fixed assets.

(b) As explained to us physical verification of major portion of fixed assets as at 31st March 2013 was conducted by the Management during the year. In our opinion, the frequency of physical verification is reasonable. Having regard to the size of the operations of the company and on the basis of explanations received, in our opinion, the net difference found on physical verification were not significant.

(c) During the year the Company has not disposed off any major part of plant and machinery.

II. (a) The inventories except for clay, owing to its nature, have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were not material.

III. The company has not granted any loans to any company, firm or other parties covered in the register maintained under Section 301 of the Act.

IV. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to the purchases of inventory fixed assets and with regard to sale of goods. During the course of audit, we have not observed any continuing failure to correct major weakness in internal controls.

V. (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupee Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

VI. In our opinion according to the information and explanations given to us, the company has complied with the provisions of Section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptances of deposits) Rules, 1975, with regard to the deposits accepted from the public. No order has been passed by the Company law Board in this regard.

VII. In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

VIII. We have broadly reviewed the cost records maintained by the company pursuant to Companies (Cost Accounting Records) Rules, 2011 prescribed by the central government under Section 209(1)(d), of the companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

IX. The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education fund, employees state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it. According to the information and explanations given to us, there are no dues outstanding as at the year end for a period or more than six months from the date they became payable in respect of Income tax, Wealth tax, Sales tax, Customs duty, Excise duty and cess.

X. The company has not got any accumulated losses.

XI. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institution or banks.

XII. The company has not granted any loans and advances on the basis of the security by way of pledge of shares, debentures and other securities.

XIII. In our Opinion, the company is not a chit fund or a nidhi mutual benefit fund/ society. Therefore, the provisions of Clause 4(xiii) of the companies (Auditors Report) Order, 2003 are not applicable to the company.

XIV. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the companies (Auditors Report) Order, 2003 are not applicable to the company.

XV. The company has not given any guarantees for loans taken by others from banks or financial institutions.

XVI. The term loans were applied for the purpose for which the term loans were obtained.

XVII.According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we report that no funds raised on short - term basis have been used for long term investment. No long term funds have been used to financé short term assets except permanent working capital.

XVIII.The company has made preferential allotment of shares and warrants during the year under review to parties and companies covered in the register maintained under section 301 of the Act as per the SEBI guidelines.

XIX. The company has not issued any debentures.

XX. The company had not raised any money by way of public issue during the year.

XXI. According to the information and explanations given to us, no fraud on or the company has been noticed or reported during the year.



For M.A.NARASIMHAN & CO.,

Chartered Accountants,

ICAI FIRM REG NO:002347S

(M.A.PARTHANARAYAN)

Place :Bangalore Partner

Date :30-05-2013 Membership No. 028994

---

Mar 31, 2012

We have audited the accompanying financial statements of Murudeshwar Ceramics Limited ('the Company') which comprise the Balance Sheet as at 31 March, 2012, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 March, 2012

(ii) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(iii) in the case of the Cash flow statement, of the cash flows for the year ended on that date.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2003 ('the Order'), as amended, issued by the Central Government of India in terms of sub-section (4a) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. As required by Section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the Balance Sheet, Statement of Profit and Loss dealt with by this report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

e. On the basis of written representations received from the directors as on 31 March, 2012, and taken on record by the Board of Directors, none of the directors are disqualified as on 31 March, 2012, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

Referred in paragraph (3) of our report of even date

I. (a) The company has maintained proper records showing full particulars including quantitative details and situations

of fixed assets.

(b) As explained to us physical verification of major portion of fixed assets as at 31st March 2012 was conducted by the Management during the year. In our opinion, the frequency of physical verification is reasonable. Having regard to the size of the operations of the company and on the basis of explanations received, in our opinion, the net difference found on physical verification were not significant.

(c) During the year the Company has not disposed off any major part of plant and machinery.

II. (a) The inventories except for clay, owing to its nature, have been physically verified during the year by the

management. In our opinion, the frequency of the verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were not material.

III. The company has not granted or taken loan from any company, firm or other parties covered in the register maintained under Section 301 of the Act.

IV. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to the purchases of inventory fixed assets and with regard to sale of goods. During the course of audit, we have not observed any continuing failure to correct major weakness in internal controls.

V. (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupee Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

VI. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of Section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptances of Deposits) Rules, 1975, with regard to the deposits accepted from the public. No order has been passed by the Company Law Board in this regard.

VII. In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

VIII. The company has been maintaining cost records as prescribed by the Central Government under Section 209(1)(d) of The Companies Act, 1956.

IX. The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education fund, employees state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it. According to the information and explanations given to us, there are no dues outstanding as at the year end for a period or more than six months from the date they became payable in respect of Income tax, Wealth tax, Sales tax, Customs Duty, Excise duty and cess.

X. According to the records of the company, there are no dues outstanding of Sales tax, Income Tax, Customs Duty, Wealth tax, Excise Duty or cess on account of any dispute.

XI. The company has not got any accumulated losses.

XII. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institution or banks.

XIII. The company has not granted any loans and advances on the basis of the security by way of pledge of shares, debentures and other securities.

XIV. In our Opinion, the company is not a chit fund or a nidhi mutual benefit fund/ society. Therefore, the provisions of Clause 4(xiii) of the companies (Auditors Report) Order 2003 are not applicable to the company.

XV. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the companies (Auditors Report) Order, 2003 are not applicable to the company.

XVI. The company has not given any guarantees for loans taken by others from banks or financial institutions.

XVII. In our opinion, the term loans were applied for the purpose for which they were raised.

XVIII. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we report that no funds raised on short - term basis have been used for long term investment. No long term funds have been used to finance short term assets except permanent working capital.

XIX. The company has made any preferential allotment of shares and warrants during the year under review to parties and companies covered in the register maintained under section 301 of the Act as per the SEBI guidelines. The price at which shares have been issued is not prejudicial to the interest of the Company.

XX. The company has not issued any debentures.

XXI. The company had not raised any money by way of public issue during the year.

XXII. According to the information and explanations given to us, no fraud on or the company has been noticed or reported during the year.

For M.A.NARASIMHAN & CO.,

Chartered Accountants,

ICAI FIRM REG NO:002347S

(M.A.PARTHANARAYAN)

Place : Bangalore Partner

Date : 30-07-2012 Membership No. 028994

---

Mar 31, 2010

We have audited the attached Balance Sheet of MURUDESHWAR CERAMICS LIMITED, as at 31 st March 2010, and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the Auditing Standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent applicable to the Company.

Further to our comments in the Annexure referred to above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

(ii) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books

(iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account

(iv) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act,. 1956.

Note No 4(c) regarding non-Provision of Excise Duty on finished goods lying in the factory amounting to Rs 184.36 lakhs, which is not in accordance with Accounting Standard -2 issued by the Institute of Chartered Accountants of India. The same has no impact on the Profits for the year under review.

(v) On the basis of written representations received from the directors, as on 31st March 2010 and taken on record by the Board of Directors, we report that none of the director is disqualified as on 31 st March 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

• (vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

(a) in the case of the Balance Sheet, of the state of affairs of the company as at 31 st March 2010.

(b) inthe case of the profit and loss account, of the loss for the year ended on that date; and

(c) in the case of the cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

Referred in Paragraph (1) of our report of even date

1. In our opinion, the company is in the process of updating records to show full particulars including quantitative details and situation of its Fixed Assets.

2. A part of the fixed assets have been physically verified by the Management during the year, however there exists a programme of verification of the assets over a period. In our opinion, the frequency of verification of the fixedassets by the management is at reasonable intervals having regard to the size of the Company and nature of the assets and no material discrepancies were noticed between the book records and the physical inventory

v in respect of the assets physically verified.

3 The Company has not disposed off substantial part of the fixed assets during the Current Year.

4. The inventories except for clay, owing to its nature, have been physically verified during the year by the management. In our opinion, the frequency of the verification is reasonable.

5. In our opinion and according to the information and explanations given to us, the procedures of physical verification of stocks followed by the Management were found reasonable and adequate in relation to the size of the Company and the nature of its business. .

The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of accounts.

7. The company has not taken loans, from Companies, firms or other parties covered in the register maintained under section 301 of The Companies Act, 1956, during the year under review.

8. In our opinion and according to the information and explanations given to us, there are ader jate internal control procedures commensurate with the size of the Company and nature of its business with regard to the purchase of inventory and fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct the major weakness in internal controls.

9. According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained Under Section 301 of the Companies Act, 1956 have been so entered.

10. In our opinion and according to the information and explanations given to us, transactions exceeding the value of rupees five lakhs with parties listed in the register maintained under section 301 of the Companies Act, 1956 have been made at reasonable prices having regard to the prevailing market prices at the relevant time.

11. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975, with regard to the deposits accepted from the public. No order has been passed by the Company Law Board in this regard.

12. An independent firm of Chartered Accountants has conducted internal Audit during the year and it is commensurate with the size of the Company and the nature of its business.

13. The Central Government has not prescribed the maintenance of cost records under section 209{1)(d) of tfie Companies Act, 1956 for the Company.

14. The Company has generally been regular in depositing undisputed dues including Provident Fund, Investor Education and Protection fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other applicable statutory dues with appropriate authorities. According to the information and explanations given to us, there are no dues outstanding as at the year end for a period of more than six months from the date they became payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs duty, Excise Duty and Cess.

15. According to the records of the Company, there are no dues outstanding of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Excise Duty or Cess on account of any dispute.

16. In our opinion, the accumulated losses of the Company are not more than fifty percent of its net worth. The Company has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

17. As per books and records maintained by the Company and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to a financial institution, bank or debenture holders.

18. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

19. The Company has maintained proper records of the transactions and contracts of dealing in investments during the year and timely entries have been made therein. All the investments were held in the name of the Company.

20. The Companyhas given guarantees for loans taken from financial institutions and banks by others. The terms and conditions of which are not prejudicial to the interest of the company

21. In our opinion, the term loans were applied for the purpose for which they were raised.

22 According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis including other short term loans from Companies have not been used for long term purposes and vice - versa.

23. Based upon the audit procedures performed by us for expressing our opinion on these financial statements and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

24. All the other provisions of the Companies (Auditors Report) Order 2003 have been found not applicable to the Company.

For M.A.NARASIMHAN & CO., Chartered Accountants Place : Bangalore (M.A. PARTHANARAYAN) Partner Date : 05-05-2010 Membership No028994