We have audited the attached Balance Sheet of RAASI CEMENT LIMITED as
 at 31st March, 2010 and also the Profit and Loss Account 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 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 iest 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.
 
 1. As required by the Companies (Auditors Report) Order, 2003 issued
 by the Central Government of India in terms of Section 227 (4-A) of the
 Companies Act, 1956, we annex hereto a statement on the matter
 specified in paragraphs 4 and 5 of the said Order.
 
 2. Further to our comments in the statement referred to in paragraph
 (1) 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.
 
 t>) 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 such
 books.
 
 c) The Balance Sheet and Profit & Loss Account referred to in this
 report are in agreement with the books of account.
 
 d) In our opinion, the Balance Sheet and Profit and Loss Account
 referred to in this report comply with the applicable 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
 and taken on record as on 31st March, 2010 by the Board of Directors,
 we report that 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 Companies Act, 1956.
 
 f) The Company has drawn up accounts on a going concern basis. We are
 of the opinion that the Going Concern basis is questionable in view of
 the operations continued to remain suspended and the consequential
 implications and adverse financial indications. Hence we are unable to
 express an opinion in this regard and its likely impact on the
 operations and the assets and liabilities of the Company.(Refer Note 11
 - Schedule 7).
 
 g) Subject to our remarks at paragraph (f) above, in our opinion and to
 the best of our information and according to the explanations given to
 us, the said Account read together with notes thereon under Schedule 7
 and Significant Accounting Policies give the information required by
 the Companies Act, 1956 in the manner so required and give a tnie 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 and
 
 ii. In the case of the Profit and Loss Account, of the Loss of the
 Company for the year ended on that date.
 
 Annexurc to Auditors Report
 Statement Referred to in Paragraph (1) of our Report of even date
 
 1.  The company has disposed of all the fixed assets during the year
 ended 31st March 2005.  Accordingly the provisions of the Companies
 (Auditors Report) Order, 2003 with regard to maintenance of Fixed
 Asset Register and Verification of Fixed Assets by the management are
 not applicable to the company.
 
 2.  The company has not dealt with stocks of finished goods, stores and
 spares and raw materials during the year 2009-10. Accordingly the
 provisions of clause 4(ii) of the Companies (Auditors Report) Order,
 2003 are not applicable to the company.
 
 3.  (a) The Company has not granted any loan secured or unsecured to
 companies, firms or other parties covered in the register maintained
 under Section 301 of tht Companies Act, 1956.  Accordingly sub clauses
 (b), (c), and (d) of clause (iii) of this order are not applicable.
 
 (b) The Company had not taken any loan, secured or unsecured from
 companies, firms or other parties covered in the register maintained
 under Section 301 of the Companies Act, 1956. Accordingly sub clauses
 (f) and (g) of clause (iii) of this order are not applicable.
 
 4.  Since the operations of the company are continued to remain
 suspended, we are unable to comment upon the internal control
 procedures.
 
 5.  In our opinion and according to the information and explanations
 given to us, and based on the representations by the management, there
 are no contracts or arrangements that need to be entered in the
 register maintained under section 301 of the Act. Accordingly sub
 clause (b) of clause (v) of this Order is not applicable to the Company
 for the current year.
 
 6.  The Company has not accepted any deposits from the public during
 the year.
 
 7.  The company has no internal audit system during the year under
 report.
 
 8.  The operations of the company are continued to remain suspended,
 hence no cost records are maintained.
 
 9.  (a) According to the information and
 
 explanations given to us, the provisions of Provident Fund, Employees
 State Insurance, Wealth Tax, Service Tax, and Custom Duty, are not
 applicable to the company at present.
 
 (b) According to the information and explanations given to us, there
 are no dues of Sales tax / income tax / customs tax / wealth tax /
 service tax / excise duty / cess which have not been deposited on
 account of any dispute except following:
 
 Name of the 
 Statute           Nature of     Amount    Period to      Forum where
                   Dues          (Rs. in   which it       dispute is 
                                                          pending
                                 Lakhs)    relates
 
 The Income Tax    Income Tax     28.88     1983-84        ITAT 
 Act, 1961
 
 The Income Tax    Income Tax      5.31     1990-91        CIT (Appeals)
 Act, 1961
 
 The Income Tax    Income Tax    810.64     1995-96        High Court of
 Act, 1961                                                 Andhra Pradesh
 
 The Income Tax    Income Tax    334.95     1981-82 to     High Court of
 Act, 1961                                  1985 - 86      Andhra Pradesh
 
 Andhra Pradesh    Sales Tax     914.13     1989-90 to     STAT/High 
                                                           Court of
 General Sales 
 Tax Act                                    1998-99        Andhra Pradesh
 
 Central Sales 
 Tax Act           Sales Tax     163.27     1991-92 to     STAT
                                            1997 - 98
 
 10.  The company has accumulated losses aggregating to Rs.
 2,41,24,060/- as at the Balance Sheet date which exceeds the paid up
 Share Capital. The Company has incurred cash losses during the
 financial year under report.
 
 11.  The company has no arrears towards term loans. Accordingly the
 provisions of clause 4(xi) of the Companies (Auditors Report) Order,
 2003 are not ?pplicabk to the company.
 
 12.  According to the information and explanations given to us, 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 company is not a Chit fund/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.
 
 14.  The company is not dealing 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.
 
 15.  According to the information and explanations given to us, the
 company has not given any guarantee for loans taken by others from
 Banks / Financial Institutions.
 
 16.  As the company has no dues towards term loans, the provisions of
 clause 4(xvi) of the Companies (Auditors Report) Order, 2003 are not
 applicable to the company.
 
 17.  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 by the con ipany.
 
 18.  The company has not made any preferential allotment of shares
 during the year to parties and companies covered in the register
 maintained under Section 301 of the Companies Act, 1956.
 
 19.  The company has not issued any debentures.
 
 20.  The company has not raised any money by public issues during the
 year.
 
 21.  In accordance with the information and explanations given to us
 and on our examination of books and records, no fraud on or by the
 company has been noticed or reported during the year.
 
 
                                          For M. Bhaskara Rao & Co.,
 
                                              Chartered Accountants 
 
                                      (Firm Registration No.000459S)
 
                                                    V.K. Muralidhar
 
                                                          - Partner 
 
                                              Membership No: 201570
 
 Place : Camp : Chennai 
 
 Date : August 13, 2010