Auditor Report of Raasi Refractories Ltd.

Mar 31, 2024

1. We have audited the standalone financial statements of Raasi Refractories Limited (“the
Company”), which comprise the Balance Sheet as at 31^st March, 2024, the Statement of Profit
and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and
the Statement of Cash Flows for the year ended on that date and notes to the financial
statements, including a summary of material accounting policies and other explanatory
information (hereinafter referred to as the “Standalone Financial Statements”).

2. 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,
(“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of
the Company as at March 31,2024 and its profit, total comprehensive income, changes in
equity and its cash flows for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under
section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are
further described in the Auditor''s Responsibilities for the Audit of the 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 financial statements under the provisions of
the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the Code of Ethics. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.

Key Audit Matters

4. Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the standalone financial statements of the current year. These
matters were addressed in the context of our audit of the standalone financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters. In our professional judgment, we have determined that there is no key audit matter to
be communicated in our report.

Information Other than the Financial Statements and Auditor''s Report Thereon

5. 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 and
Sustainability Report, Corporate Governance and Shareholder''s Information, but does not
include the consolidated financial statements, Standalone Financial Statements and our
auditor''s report thereon.

6. Our opinion on the Financial Statements does not cover the other information and we do not
express any form of assurance conclusion thereon.

7. In connection with our audit of the Financial Statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the Financial Statements, or our knowledge obtained in the audit or otherwise appears to
be materially misstated. If, based on the work we performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Standalone
Financial Statements

8. 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. 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 implementation and maintenance of 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 statement that give a true and fair view and are free from material misstatement,
whether due to fraud or error.

9. In preparing the financial statements, management is responsible for assessing the
Company''s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless management either
intends to liquidate the Company or to cease operations, or has no realistic alternative but to
do so.

10. The Board of Directors are also responsible for overseeing the company''s financial reporting
process.

Auditor''s Responsibility for the Audit of the Financial Statements

11. Our objectives are to obtain reasonable assurance about whether the financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance with SAs will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.

12. As part of an audit in accordance with SAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:

12.1 Identify and assess the risks of material misstatement of the standalone 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.

12.2 Obtain an understanding of internal financial controls relevant to the audit in order to design
audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act,
we are also responsible for expressing our opinion on whether the Company has adequate
internal financial controls system in place and the operating effectiveness of such controls.

12.3 Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.

12.4 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 financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor''s report. However, future
events or conditions may cause the Company to cease to continue as a going concern.

12.5 Evaluate the overall presentation, structure and content of the standalone financial
statements, including the disclosures, and whether the standalone financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.

13. 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.

14. 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.

15. 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.

16. 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

17. As required by the Companies (Auditor''s Report) Order, 2020 (“the Order”) issued by the
Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in
the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to
the extent applicable.

18. As required by section 143(3) of the Act, 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 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 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 Flows 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 Ind AS
specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on March 31,
2024, and taken on record by the Board of Directors, none of the directors is disqualified
as on March 31,2024, from being appointed as a director in terms of section 164(2) of the
Act.

f) With respect to the adequacy of the internal financial controls with reference to
Standalone Financial Statements of the Company and the operating effectiveness of
such controls, refer to our separate Report in “Annexure B”.

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 effect of the pending legal proceedings against it in
its financial statements as mentioned in Note 14(3)(h) of the Notes to the Accounts.

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; and

iv. (a) The management has represented that, to the best of its 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
persons or entities, including foreign entities (“Intermediaries”),with the understanding,
whether recorded in writing or otherwise, that the Intermediary shall:

¦ directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Company or

¦ provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries;

(b) The management has represented, that, to the best of its knowledge and belief, no funds
have been received by the Company from any persons or entities, including foreign
entities (“Funding Parties”), with the understanding, whether recorded in writing or
otherwise, that the Company shall:

¦ directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Funding Party or

¦ provide any guarantee, security or the like from or 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 not proposed, declared or paid any dividend during the year.

vi. Based on our examination, the Company has used an accounting software 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 not been operated
throughout the year for all relevant transactions recorded in the software.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April
1,2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014
on preservation of audit trail as per the statutory requirements for record retention is not
applicable for the financial year ended March 31,2024.

for Narasimha Rao & Associates

Chartered Accountants
FRN 02336S

^place: htyterat^ J.Vikram Simha

Date: 31^st May, 2024 Partner

UDIN: 24228354BKALTP5733 Membership No.228354

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Mar 31, 2015

We have audited the accompanying Financial Statements of RAASI REFRACTORIES LIMITED ("the Company"), which comprises the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year the ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial control, 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 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 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 control 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 but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. 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 on the financial statements.

Basis for qualified opinion

i. Attention is invited to Note No: 8 to Financial Statements regarding Loans from financial Institutions and in respect of the same an interest of Rs. 239.35 lacs (including previous years) is not provided. The profits and reserves of the company do not reflect the correct position to that extent and liability of the company is also understated to that extent.

ii. Attention is invited to Note No: 8 to Financial Statements regarding outstanding Statutory Liabilities and in respect of the same the interest / penalty payable is not provided. Due to absence of full details the amount of Interest / penalty could not be quantified.

iii. Attention is invited to Note No: 17 to Financial Statements, regarding the Other Income and in respect of the interest income the accrued interest of Rs.2.85 lacs on bank deposits is not recognized, the revenue of the Company & assets of the company are understated to that extent.

iv. As stipulated in the provisions of Section 138 of Companies Act, 2013, the company has not appointed an Internal Auditor.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the matter described in the Basis for Qualified Opinion Paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view inconformity 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 March 31, 2015;

b) in the case of Statement of Profit and Loss, 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.

Emphasis Matter

We draw attention to the following matters:

a) Note No: 10 to the financial statements on the matter of providing depreciation on fixed assets. The company has provided depreciation on Straight Line Method as per the provisions of (Schedule XIV) Companies Act, 1956 where as the company has to provide depreciation as per the provisions of (Schedule II) Companies Act, 2013.

b) Note No: 12 to the financial statements on matters relating to Inventories: The factory of the company was not functioning for about 18 Months due to various reasons like shortage of power, labour problems, shortage of raw materials, financial constraints etc, and the factory started operations from the middle of the financial year by which time most of the stocks are reported to be obsolete. Hence there is substantial depletion in the value of closing stock at the end of the financial year.

c) The confirmation of balances of payable & receivables have not been obtained. The receivables are netted from the trade payables and short term loans. There are some old claims, receivables in respect of which no provision is made for doubtful/irrecoverable debts as the company is hopeful of recovery /adjustment. Hence we are unable to express our opinion on payables & receivables and the consequent effect on the Financial Statements. Other Matter:

During the financial year on 28th February 2015 on behalf of Mr. Konda Laxmaiah & M/s. Ram Laxman Parboiled Rice Private Limited an open offer to the equity share holders of the company was made pursuant to and in compliance of SEBI Regulations, 2011 for substantial acquisition and takeover of the company.

Report on other Legal and Regulatory Requirements.

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, and on the basis of such checks of the books and records of the Company information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143(3) of the Act, we report that:

a. We have sought and, except for the possible effect of the matter described in point (a) of the emphasis paragraph above, 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, except as discussed in the basis for qualified opinion paragraph above in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books

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

d. In our opinion, except as discussed in the basis for qualified opinion paragraph above, and AS 15 on Accounting for Employee Benefits, the 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, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

f. The report on matters relating to Internal Financial Controls over financial reporting and the operating effectiveness of the same as specified in clause (i), is not mandatory for the Financial Year ending 31st March 2015, as per the Government of India notification dated October 14, 2014 on the same matter.

g. With respect to the other matters included in the Auditor's Report and in accordance with Rule 11 of Companies (Audit and Auditors) Rules, 2014 and in our opinion and to the best of our information and explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 23.1 to the financial statements;

ii. The Company has not made provision, as required under the applicable law or accounting standards, as the company is not foreseeing any material losses.

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

Annexure referred to in paragraph 1 of our report of even date

Re: RAASI REFRACTRORIES LIMITED

I. a) The Company has not maintained proper records showing full particular including quantitative details and situation of fixed assets.

b) As explained to us, the fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

ii. a) As explained to us, inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b) The procedures explained to us, which are followed by the management for physical verification of inventories, are in our opinion reasonable and adequate in relation to the size of the company and nature of its business.

c) The Company is maintaining proper records of inventory and the material discrepancies/ depletion noticed in the value of inventory is provided at the end of the financial year.

iii. No loans were granted by the Company, to any of the parties covered in the register maintained under section 189 of the Act. Hence the report on the related matters of this clause and sub-clauses (a) and (b) is not applicable.

iv. In our opinion and according to the information and explanations obtained by us, there is no defined adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventory and fixed assets and for sale of goods and power.

v. The Company has not accepted any deposits from the public within the meaning of sections 73 to 76 or any other relevant provisions of the Act and rules framed there under.

vi. In our opinion and according to the information and explanations obtained by us the maintenance of cost records as specified under subsection (1) of section 148 of the companies Act, 2013 is not applicable.

vii. a) The Company is generally regular in depositing undisputed statutory dues and the arrears of outstanding statutory dues as at the end of the financial year for a period of more than 6 months are as follows:

Nature of statutory dues Amount In Lacs

AP VAT 19.10

CST 4.18

Excise Duty 40.09

ESI Company's Contribution 20.53

ESI Employee's Contribution 5.75

Provident Fund Company's Contribution 51.66

Provident Fund Employee's Contribution 13.83

LIC premium recovered from Employees 10.29

Professional Tax 0.39

TPS 0.59

Total 166.41

b) According to the information and explanations given to us, the following statutory liabilities are outstanding which are disputed as at the end of Financial Year 2014-15:

Nature of Dispute Pending Amount Remarks dues before (In Lacs)

Income Tax Income Tax 14.48 Appeal filed on 13.05.2013 commissioner against the Assessment order (Appeals) Dt: 28.03.203 for AY 2010-11

Payment of Joint 47.80 Case filed by Labour for Wage Commissioner payment of wages from Jan 2014 Labour to June 2014

Provident High Court AP 90.47 Writ Petition Filed against the Fund order of Asst. PF Commissioner for payment of PY from March, 2010 to Sep, 2012

c) According to the information and explanations given to us, there are no amounts required to be transferred to Investor Education & Protection Fund under the provisions of Companies Act, 1956.

viii. The Accumulated losses, Net worth and Cash losses for the Financial Year ended 31.03.2015 and Immediately preceding year are as follows:

Particulars Amount in Lacs As at 31.03.2015 As at 31.03.2014

Accumulated Losses 2280.32 587.99

Net Worth (1624.75) 67.63

Cash Loss 1588.41 251.91

ix. Based on our procedures and as per the information and explanations given to us, the company has defaulted in re-payment of dues to Financial Institutions to the Extent of Rs. 906.02 Lacs. There are no dues to Banks & Debenture holders.

x. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

xi. According to the information and explanations given to us and records examined by us the company has not availed any term loans during the current Financial Year.

xii. During the course of our examination of the books and records of the Company, carried out in accordance with the Generally Accepted Accounting Practice in India and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company noticed or reported during the year, nor have we been informed of such case by t he management.

For SRB & Associates, Chartered Accountants, Firm Reg. No: 310009E

T. Lakshmi Narayana Partner Date: 30.05.2015 Membership No: 014674

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Mar 31, 2014

We have audited the accompanying financial statements of RAASI REFRACTORIES LIMITED which comprise the Balance sheet as at 31st March 2014, and the Statement of Profit and Loss and 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

Management is responsible for the preparation of these 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 Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. 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 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 does not give the information required by the Act in the manner so required

Basis for qualification:

1. The interest of Rs. 2,66,87,790/- on term loans from financial institutions is not provided. The losses are understated in profit & loss account to that extent.

Without qualifying our opinion on other issues we draw attention to note No 23.6, 23.7 and

24.2 in financial statements on economic sustainability of the entity in future unless mitigating measures are taken in due course by the management.

And Subject to above the financial statements 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 March 31,2014;

(b) In the case of the Profit and Loss Account, of the profit/ 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 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 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 ofouraudit;

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, and Cash Flow Statement 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, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the CompaniesAct, 1956;

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

f. Since the central government has not issued any notification as to the rate at which the cess is to be paid under section 441a of the Companies Act, 1956 nor has it issued any rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the company.

The Annexure referred to in paragraph 1 of the Auditors'' Report of even date to the members of RAASI REFRACTORIES LIMITED on the financial statement for the year ended 31st March,2014.

1. (a) The Company has not maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) Fixed assets are reported to be physically verified by the management according to a phased programme designed to cover all the fixed assets once a year, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies between the book records and the physical inventory have been reported. The inspection report of FixedAssets is not provided forverification.

(c) In our opinion and according to the information and explanations given to us, no substantial part of fixed assets has been disposed off by the Company during the year.

2. (a) The inventory has been reported to be physically verified by the management during the year-end.

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

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

(c) On the basis of our examination of the inventory records, in our opinion, the company is not maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were reported to be not material.The inspection report of Inventory is not provided forverification.

3. (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties

covered in the register maintained under section301 ofthecompaniesAct, 1956.

(b) The company has taken the following unsecured loans from companies covered in the register maintained under section 301 of the CompaniesAct, 1956.

(I) Unsecured loan taken from M/S Sarvesh Refractories Ltd in the earlier years with interest @ 1% per annum and the outstanding balance as on the Balance Sheet date is Rs 421.91 lacs as against the outstanding balance of Rs 418.15 lakhs outstanding at the end of the previous year.

(ii) Unsecured interest free loan taken from M/S Sarvesh Refractories Ltd during the earlier years Rs 100.00 lakhs for investment purpose is outstanding as on the Balance Sheet date

4. In our opinion and according to the information and explanation given to us there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. Further, on the basis of our examination of the books and records of the company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5. (a) In our opinion and according to the information and explanation given to us, the particulars of contracts or arrangements referred to in Section 301 of the CompaniesAct 1956 have been entered in the register required to be maintained under that section and the register is not produced for verifaction.

(b) In our opinion and according to the information and explanation given to us, there are no transactions made in purchase of such contracts or arrangements and exceeding Rs. five lakhs in respect of any party during the year, which have been made at prices which are not reasonable having regard to the prevailing market prices at the relevant time.

6. The company has not accepted any deposits from the public within the meaning of Sections 58Aand 58AA oftheActand the rules framed there under.

7. In our opinion, the company has no internal audit system commensurate with the size and nature of its business.

8. We have broadly reviewed the books of accounts and records maintained by the company pursuant to the rules made by the Central Government for the maintenance of Cost records under section 209(1)(d) of The CompaniesAct 1956 and the company has appointed CostAuditors also. We are of the opinion that prima facie the prescribed accounts and records have been maintained.

9. (a) According to the information and explanations given to us and records of the company examined by us, in our opinion, the company is not regular in depositing undisputed statutory dues in respect of Service Tax, Provident Fund, ESI, Sales tax, Excise duty, with the appropriate authorities.

(b) According to the information and explanations given to us and records of the company examined by us, the following undisputed statutory liabilities are outstanding for more than six months as on the Balance Sheet date.

Name of the Statue Nature of dues Amount in Rs.

Service Tax Service Tax 1860353

Employee Provident Provident Fund 5031015 Fund Act, 1952

Employee''s State ESI 1840689 Insurance Act, 1948

Sales Tax VAT/CST 2328962

Centran Excise Act, Excise duty 5665724 1944

C. The provident fund authorities have issued prohibitory orders to the bankers in view of the failure of the company to remit the statutory dues.

10. The company has accumulated losses of Rs 587.99 Lakhs as at 31st March, 2014 and it has incurred a cash loss of Rs 251.91 Lakhs in the financial year 2013-14.

11. The Company is having the following outstanding dues to financial institutions, banks or debenture holders during the year.

Company name Amount (Rs in Lacs)

SREI Equipment Finance Pvt Ltd. 177.92

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

13. In our opinion and according to the information and explanations given to us, the company is not a chit fund/nidhi /mutual benefit fund/ society. Therefore the provisions of this clause of Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks and financial institutions.

16. In our opinion and according to the information and explanations given to us the term loans have been applied for the purposes for which they were raised.

17. According to the information and explanation 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 has been used for long term investment of the company.

18. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of theAct during the year.

19. The company has not issued any debentures and hence, the provisions of clause 4(xix) of the companies (Auditor Report) Order 2003 are not applicable.

20. The company has not raised any money by public issues during the year hence; the provisions of clause 4(xix) of the companies (Auditor Report) Order 2003 are not applicable.

21. It is observed that the following cases are filed against the company which are pending.

Case filed by forum Purpose Status Amount in Rs. Labour Union Labour Commissioner Wages Dues Pending 3350876 P.F. Authority Hon''ble High Court Appeal Pending 9047169 of A.P. against ATA order

22. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.

For SRB & ASSOCIATES Chartered Accountants I.C.A.I Regn. No.310009E

T. Lakshmi Narayana Date: 30.05.2014 Partner Place: Hyderabad Membership No: 14674

---

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of RAASI REFRACTORIES LIMITED which comprise the Balance sheet as at 31st March 2013, and the Statement of Profit and Loss and 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

Management is responsible for the preparation of these 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 Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. 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 als o includes evaluati ng th e appropriateness of accounting policies used and the reasonableness of the accounting estimates made by 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:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

(b) In the case of the Profit and Loss Account, of the profit/ 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 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 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, and Cash Flow Statement 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, and Cash Flow Statement comply with the

Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

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

f. Since the central government has not issued any notification as to the rate at which the cess is to be paid under section 441a of the Companies Act, 1956 nor has it issued any rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the company.

The Annexure referred to in paragraph 1 of the Auditors'' Report of even date to the members of RAASI REFRACTORIES LIMITED on the financial statement for the year ended 31st March, 2013.

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

(b) Fixed assets are physically verified by the management according to a phased programme designed to cover all the fixed assets once a year, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies between the book records and the physical inventory have been noticed.

(c) In our opinion and according to the information and explanations given to us, no substantial part of fixed assets has been disposed off by the Company during the year.

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

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

(c) On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material.

3. (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section301 of the companies Act, 1956.

(b) The company has taken the following unsecured loans from companies covered in the register maintained under section 301 of the Companies Act, 1956.

(I) Unsecured loan taken from M/S Sarvesh Refractories Ltd in the earlier years with interest @ 1% per annum and the outstanding balance as on the Balance Sheet date is Rs 418.15 lacs as against the outstanding balance of Rs 414.42 lakhs outstanding at the end of the previous year.

(ii) Unsecured interest free loan taken from M/S Sarvesh Refractories Ltd during the previous year Rs 100.00 lakhs for investment purpose is outstanding as on the Balance Sheet date

4. In our opinion and according to the information and explanation given to us there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. Further, on the basis of our examination of the books and records of the company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5. (a) In our opinion and according to the information and explanation given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section. (b) In our opinion and according to the information and explanation given to us, there are no transactions made in purchase of such contracts or arrangements and exceeding Rs. five lakhs in respect of any party during the year, which have been made at prices which are not reasonable having regard to the prevailing market prices at the relevant time.

6. The company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

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

8. According to information and explanation given to us the Central Government has not prescribed maintenance of cost records for the company as required under Section 209 (1) (d) of the Companies Act, 1956 for any of the activities of the company.

9. According to the information and explanations given to us and records of the company examined by us, in our opinion, the company is generally regular in depositing undisputed statutory dues in respect of income tax, sales tax, customs duty, excise duty, cess with the appropriate authorities.

10. The company has accumulated losses as at 31 st March, 2013 and it has incurred a cash loss of Rs 89.38 Lakhs in the financial year 2012-13.

11. The Company did not have any outstanding dues to any financial institutions, banks or debenture holders during the year.

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

13. In our opinion and according to the information and explanations given to us, the company is not a chit fund/nidhi /mutual benefit fund/ society. Therefore the provisions of this clause of Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks and financial institutions.

16. In our opinion and according to the information and explanations given to us the term loans have been applied for the purposes for which they were raised.

17. According to the information and explanation 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 has been used for long term investment of the company.

18. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19 The company has not issued any debentures and hence, the provisions of clause 4(xix) of the companies (Auditor Report) Order 2003 are not applicable.

20 The company has not raised any money by public issues during the year hence; the provisions of clause 4(xix) of the companies (Auditor Report) Order 2003 are not applicable.

21 During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.

For SRB & ASSOCIATES

Chartered Accountants

I.C.A.I Regn. No.310009E

T. Lakshmi Narayana

Date: 30.05.2013 Partner

Place: Hyderabad Membership No: 14674

---

Mar 31, 2012

1. We have audited the attached Balance sheet of RAASI REFRACTORIES LIMITED as at 31a March 2012 and the related profit & Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. 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.

3. As required by the Companies (Auditor''s Report) Order, 2003 as amended by Companies (Auditor''s Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 of The Companies Act, 1956'' of India (the ''Act'') and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, 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 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 appears from our examination of those books;

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

(d) 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 Act;

(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 is disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached there to give in the prescribed manner the information required by the Act 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 3151 March, 2012;

(ii) in the case of the Profit & Loss Account, 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.

(Referred to in paragraph 3 of the Auditors'' Report of even date to the members of RAASI REFRACTORIES LIMITED on the financial statement for the year ended 31" March, 2012)

1. (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) Fixed assets are physically verified by the management according to a phased Programme designed to cover all the fixed assets once a year, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies between the book records and the physical inventory have been noticed.

(c) In our opinion and according to the information and explanations given to us, no substantial part of fixed assets has been disposed off by the Company during the year.

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

(b) In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory by the management as compared to the records were not material.

3. According to information and explanation given to us:

(a) The company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) The company has taken the following unsecured loans from companies covered in the register maintained under section 301 of the Companies Act. 1956.

(i) Unsecured loan taken from M/s Sarvesh Refractories Ltd. in the earlier years with interest @1% per annum and the outstanding balance as on the Balance Sheet date is Rs.414.42 lakhs as against the outstanding balance of Rs.410.72 lakhs at the end of previous year.

(ii) Unsecured interest free loan taken from M/s Sarvesh Refractory Ltd in the earlier years Rs. 100.00 lakhs for investment purpose is outstanding as on the Balance Sheet date.

4. - In our opinion and according to the information and explanation given to us there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. Further, on the basis of our examination of the books and records of the company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5. (a) In our opinion and according to the information and explanation given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanation given to us, there are no transactions made in pursuance of such contracts or arrangements and exceeding Rupees. Five Lakhs in respect of any party during the year, which have been made at prices which are not reasonable having regard to the prevailing market prices at the relevant time.

6. The company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Companies Act, 1956. and the rules framed there under.

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

8. According to information and explanation given to us the Central Government has not prescribed maintenance of cost records for the company as required under Section 209 (1) (d) of the Companies Act, 1956.

9. (a) According to the information and explanations given to us and records of the company examined by us, in our opinion, the company is generally depositing undisputed statutory dues with delay inrespect of income tax, sales tax, customs duty, excise duty, cess with the appropriate authorities.

(b) The following undisputed statutory liabilities are outstanding for more than 6 months as on the balance sheet date. Provident Fund Rs. 34,58,881 T.D.S 1,19,986, CST Rs. 36,988, Vat 1,13,505, ESI Rs. 9,28,827, TDS Rs. 1,19,986 and Service Tax 13,52,781.

10. The company is having accumulated losses as at 31st March 2012 and it has not incurred any cash lossess in the current or financial year ended on that date or in the immediately preceding financial year.

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

12. The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/ societies are not applicable to the Company.

13. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

14. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks orfinancial institutions.

15. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied forthe purposes for which they were obtained.

16 . According to the information and explanation 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 of the company.

17 . The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

18. The company has not issued any debentures and hence, the provisions of clause 4 (xix) of the companies (Auditor Report) Order 2003 are not pplicable.

19. The company has not raised any money by public issues during the year hence, the provisions of clause 4(xix) of the companies (Auditor Report) Order 2003 are not applicable.

20 . During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.

For SRB & ASSOCIATES

Chartered Accountants

T. Lakshmi Narayana

Date: 30.05.2012 Partner

Place: Hyderabad Membership No: 14674

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of RAASI REFRACTORIES LIMITED as at 31st March 2010 and the related Profit & Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. 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.

2. 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.

3. As required by the Companies (Auditors Report) Order, 2003 as amended by Companies (Auditors Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 of The Companies Act, 1956 of India (the Act) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, 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 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 appears from our examination of those books;

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

(d) 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 Act;

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

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached there to give in the prescribed manner the information required by the Act 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 31st March, 2010;

(ii) in the case of the Profit & Loss Account, 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.

ANNEXURE TO AUDITORS REPORT

(Referred to in paragraph 3 of the Auditors Report of even date to the members of RAASI REFRACTORIES LIMITED on the financial statement for the year ended 31st March, 2010)

1. (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) Fixed assets are physically verified by the management according to a phased programme designed to cover all the fixed assets once a year, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies between the book records and the physical inventory have been noticed.

(c) In our opinion and according to the information and explanations given to us, no substantial part of fixed assets has been disposed off by the Company during the year.

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

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

(c) On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material.

3. According to information and explanation given to us:

(a) The company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) The company has taken the following unsecured loans from companies covered in the register maintained under section 301 of the Companies Act .1956 .

(i) Unsecured loan taken from M/s Sarvesh Refractories Ltd. in the earlier years with interest @1% per annum and the outstanding balance as on the Balance Sheet date is Rs 407.06 lakhs as against the outstanding balance of Rs. 403.43 lakhs at the end of previous year.

(ii) Unsecured interest free loan taken from M/s Sarvesh Refractory Ltd during the previous year Rs. 100.00 lakhs for investment purpose is outstanding as on the Balance Sheet date.

4. In our opinion and according to the information and explanation given to us there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. Further, on the basis of our examination of the books and records of the company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5. (a) In our opinion and according to the information and explanation given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanation given to us, there are no transactions made in pursuance of such contracts or arrangements and exceeding Rs. five lakhs in respect of any party during the year, which have been made at prices which are not reasonable having regard to the prevailing market prices at the relevant time.

6. The company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

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

8. According to information and explanation given to us the Central Government has not prescribed maintenance of cost records for the company as required under Section 209 (1) (d) of the Companies Act, 1956.

9. (a) According to the information and explanations given to us and records of the company examined by us, in our opinion, the company is generally regular in depositing undisputed statutory dues in respect of income tax, sales tax, customs duty, excise duty, cess with the appropriate authorities.

(b) The following undisputed statutory liabilities are outstanding for more than 6 months as on the balance sheet date.

Service Tax - Rs. 15,17,745.00

(c) According to the information and explanations given to us the following statutory dues are disputed and have not been paid.

(i) Income tax of Rs.59,72,805/- for the year F.Y 2005-06, Demand made by Dy Commissioner of Income Tax and the appeal pending before The Commissioner of Income Tax(Appeals) –IV, Hyderabad.

(ii) Sales Tax of Rs. 24,99,538 for the year 2004-05, Demand made by The Asst. Commissioner (CT), Nalgonda and on appeal by the company The Appellate Deputy Commissioner (CT), Hyderabad, Rural Division has remanded back the appeal to The Asst. Commissioner (CT), Nalgonda for revision.

10. The company has no accumulated losses as at 31st March, 2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. As per the information and explanations given to us and the records verified by us, no repayments of principal or interest have been made in case of the following financial institutions:

Particulars Principal amount Interest Period due from

Rs. Rs.

Term loan from NIA 2,57,812 4,34,922 01.04.1999

Term loan from UIIC 2,51,625 4,22,928 01.04.1999

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

13. The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/ societies are not applicable to the Company.

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

17. According to the information and explanation 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 of the company.

18. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. The company has not issued any debentures and hence, the provisions of clause 4(xix) of the companies (Auditor Report) Order 2003 are not applicable.

20. The company has not raised any money by public issues during the year hence, the provisions of clause 4(xix) of the companies (Auditor Report) Order 2003 are not applicable.

21. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.

For SRB & ASSOCIATES

Chartered Accountants

T. Lakshminarayana

Date: 27-08-2010 Partner

Place: Hyderabad Membership No.14674: