1.  We have audited the attached Balance Sheet of Gujarat Narmada
 Valley Fertilizers Company Limited (the Company) as at 31st March,
 2011, the Profit and Loss Account and also the Cash Flow Statement for
 the year ended on that date annexed thereto. 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 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) 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 hereto 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 accounts 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 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
 Companies Act, 1956;
 
 (e) On the basis of the written representation received from the
 Directors, as on March 31, 2011, and taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 March 31, 2011 from being appointed as a Director in terms of clause
 (g) of sub-Section (1) of Section 274 of the Companies Act, 1956.
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read with the notes
 thereon and the statement on significant accounting polices 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:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2011
 
 (ii) in the case of Profit and Loss account, of the profit for the year
 ended on that date; and
 
 (iii) in the case of Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 ANNEXURE TO AUDITORS'' REPORT (Referred to in paragraph 3 of our report
 of even date)
 
 1.  In respect of its 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 programme of physical verification of all its
 fixed assets over a period of three years, which in our opinion, is
 reasonable having regards to the size of the Company and the nature of
 its assets. In accordance with this programme, certain fixed assets
 have been verified by the management during the year and according to
 the information and explanation given to us, assets so verified have
 been substantially reconciled with the book records and no material
 discrepancies were noticed on such verification.
 
 c.  In our opinion, the Company has not disposed of substantial part of
 fixed assets during the year.
 
 2.  In respect of its inventories:
 
 a.  During the year, the management and the firm of Chartered
 Accountants have physically verified the inventories. In our opinion,
 frequency of verification is reasonable.
 
 b.  In our opinion and according to the information and explanations
 given to us, 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 has maintained proper records of inventories and no
 material discrepancies were noticed on physical verification.
 
 3.  In respect of loans granted and taken to / from parties covered in
 the register maintained u/s 301 of the Companies Act, 1956:
 
 a.  As informed, 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. Accordingly,
 provisions of paragraphs 4(iii) (b), (c) and (d) of the Companies
 (Auditor''s Report) Order, 2003 (as amended) are not applicable to the
 Company.
 
 b.  As informed, the Company has 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, provisions of paragraph 4(iii) (f) and (g) of the
 Companies (Auditor''s Report) Order, 2003 (as amended) are not
 applicable to the Company.
 
 4.  In respect of internal control:
 
 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
 purchases of inventory, fixed assets and also for sale of goods &
 services. During the course of our audit, no major weakness has been
 noticed in the internal control system in respect of these areas.
 
 5.  In respect of contracts or arrangements need to be entered into a
 register maintained u/s 301 of the Companies Act, 1956:
 
 According to the information and explanation provided by the
 management, we are of the opinion that there were no contracts /
 arrangements that need to be entered into a register in pursuance of
 Section 301 of the Companies Act, 1956.
 
 6.  In respect of deposits from public:
 
 In our opinion and according to the information and explanations given
 to us, the company has not accepted any deposits from the public during
 the year within the meaning of Sections 58A, 58AA or any other relevant
 provisions of the Companies Act, 1956 and the Companies (Acceptance of
 deposits) Rules, 1975. We are informed that, no order has been passed
 by the Company Law Board or
 
 National Company Law Tribunal or Reserve Bank of India or any Court or
 any other Tribunal.
 
 7.  In respect of internal audit system:
 
 The internal audit during the year was carried out by the firm of
 Chartered Accountants. In our opinion, the scope of internal audit
 system is adequate commensurate with the size of the Company and nature
 of its business.
 
 8.  In respect of maintenance of cost records:
 
 We have broadly reviewed the books of account 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 Companies
 Act, 1956 and are of the opinion that prima facie, the prescribed
 accounts and records have been made and maintained.
 
 9.  In respect of statutory dues:
 
 a.  According to the records of the Company, the Company is regular in
 depositing with appropriate authorities undisputed statutory dues
 including Provident Fund, Investor Education and Protection Fund,
 Employees'' State Insurance, Income Tax, Value Added Tax, Wealth Tax,
 Custom Duty, Excise Duty, Service Tax, Cess and other material
 statutory dues applicable to it.
 
 b.  According to the information and explanations given to us, no
 undisputed amounts payable in respect of Provident Fund, Investor
 Education and Protection Fund, Employees'' State Insurance, Income Tax,
 Value Added Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax,
 Cess and other material statutory dues applicable to it were
 outstanding as at March 31, 2011 for a period of more than six months
 from the date they became payable.
 
 c.  According to the records of the Company, the dues outstanding of
 Service Tax, Excise Duty, Income Tax and Cess on account of any
 dispute, are as follows:
 
 Nature of    Nature      Amount       Period to       Forum where
 Statute      of the     (Rs. in       which the       dispute is
              Dues        Lacs)        amount          pending
                                       relates
 
 Central 
 Excise       Excise      1.01         2005-2006       Pending at
 & Customs    Duty                                     Commissioner (A)
 Act, 1944    Excise     12.07         1999-2003       Pending at CESTAT
              Duty
 
              Excise    191.14         1997-2002       Pending at CESTAT
              Duty
 
              Excise      0.52         2004-2005       Pending at CESTAT
              Duty
 
              Excise     24.87         2004-2005       Pending at CESTAT
              Duty
 
              Excise      2.36         2003-2007       Pending at CESTAT
              Duty
 
              Excise  1,179.05         2003-2004       Pending at Supreme
              Duty                                     Court
 
              Service    26.27         2002-2003       Pending at Supreme
              Tax                                      Court
 
              Service    38.22         2004-2007       Pending at CESTAT
              Tax
 
              Service     1.30         2002-2005       Pending at CESTAT
              Tax
 
 UP VAT Act,  Trade      45.73         2007-2008       Pending at 
                                                       Additional
 2008         Tax                                      Commissioner of
                                                       Commercial Tax
 
 10. In respect of accumulated losses and cash losses:
 
 The Company does not have accumulated losses at the end of the
 financial year. The Company has not incurred cash losses during the
 financial year covered by audit and in the immediately preceding
 financial year.
 
 11. In respect of dues to financial institution / banks / debentures:
 
 Based on our audit procedures and according to the information and
 explanation given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to a financial
 institution or bank. The Company has no outstanding dues to debenture
 holders.
 
 12. In respect of loans and advances granted on the basis of security:
 
 According to the information and explanation given to us and based on
 the documents and records produced to us, the Company has not granted
 loans & advances on the basis of the security by way of pledge of
 shares, debentures and other securities.
 
 13. In respect of provisions applicable to Chit fund:
 
 The Company is not a chit fund or a nidhi /mutual benefit fund/
 society. Therefore, the provisions of clause 4(xiii) of the Companies
 (Auditor''s Report) Order, 2003 (as amended) are not applicable to the
 Company.
 
 14. In respect of dealing or trading in shares, securities, debentures
 and other investment:
 
 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 (Auditor''s Report) Order,
 2003 (as amended) are not applicable to the Company.
 
 15. In respect of guarantee given for loans taken by others:
 
 According to the information and explanation given to us, the Company
 has not given any guarantees for loans taken by others from banks or
 financial institutions.
 
 16. In respect of application of term loans:
 
 According to the information and explanations given to us by the
 management, term loans have been applied for the purpose for which they
 were obtained.
 
 17. In respect of funds used:
 
 According to the information and explanations given to us and on an
 overall examination of the Balance Sheet of the Company, we are of the
 opinion that funds raised on short term basis have not been used for
 long-term investments.
 
 18. In respect of preferential allotment of shares:
 
 During the year, the Company has not made any preferential allotment of
 shares to parties or companies covered in the Register maintained under
 Section 301 of the Companies Act, 1956.
 
 19. In respect of securities created for debentures:
 
 According to the records of the company, the Company has not issued any
 debentures during the year and there are no outstanding debentures
 during the year.
 
 20. In respect of end use of money raised by public issues:
 
 The Company has not raised any money by way of public issue during the
 year and therefore paragraph 4(xx) of the Companies (Auditor''s Report)
 Order, 2003 (as amended) is not applicable.
 
 21. In respect of fraud:
 
 Based upon the audit procedures performed for the purpose of reporting
 the true and fair view of the financial statements and as per the
 information and explanation given by the management, we report that no
 fraud on or by the Company has been noticed or reported during course
 of our audit.
 
                                                   For R.S.Patel & Co.
 
                                                 Chartered Accountants 
  
                                         Firm Registration No. 107758W
 
                                                         Rajan B. Shah
 
 Place:Ahmedabad                                               Partner
 
 Date :27-05-2011                                Membership No. 101998