We have audited the attached Balance Sheet of Rama Phosphates Limited
 as at 31st March, 2011 and also the Profit and Loss Account for the
 year ended on that date, and also the cash flow statement for the year
 ended on that date. 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.
 
 1.  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 check 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.
 
 2.  As required by the Companies (Auditor''s Report) Order, 2003 as
 amended by the Companies (Auditor''s Report) Order, 2004 issued by the
 Central Government of India in terms of section 227(4A) of the
 Companies Act, 1956, we enclose in the Annexure a statement on the
 matters specified in paragraphs 4 and 5 of the said Order.
 
 3.  Further to our comments in the Annexure referred to 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 purpose of our
 audit;
 
 b) In our opinion, proper books of accounts as required by the law have
 been kept by the Company so far as it appears from our examination of
 the books.
 
 c) The Balance Sheet, the Profit and Loss Account and the Cash Flow
 statement dealt with by this report are in agreement with the books of
 account;
 
 d) In our opinion, the Profit and Loss Account and Balance Sheet comply
 with the Accounting Standards referred to in sub-section (3C) of
 section 211 of the Companies Act, 1956;
 
 e) In our opinion and based on the information and explanations given
 to us, none of the directors are disqualified as on 31st March, 2011
 from being appointed as directors in terms of clause (g) of sub-section
 (1) of section 274 of the Companies Act, 1956;
 
 Further in our opinion and to the best of our information and according
 to the explanations given to us, the said accounts read together with
 the notes thereon, give the information required by the Companies Act,
 1956, in the manner so required and subject to:
 
 1.  Note – 14 regarding non-disclosure of amounts overdue to micro,
 small and medium enterprises.
 
 2.  Note – 17 regarding certain interest free advances made to related
 parties; give a true and fair view:
 
 i.  in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2011; and
 
 ii.  in the case of the Profit and Loss Account, of the profit of the
 Company 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 THE AUDITOR''S REPORT
 
 (Referred to in paragraph 2 of our Report of even date on the accounts
 of Rama Phosphates Limited for the year ended 31st March, 2011.)
 
 1.  In respect of its Fixed assets:
 
 a) The Company has maintained proper records showing full particulars
 including quantitative details and situations of fixed assets on the
 basis of available information;
 
 b) Management has certified that they have carried out physical
 verification of fixed assets and no material discrepancies have been
 noticed on such verification.
 
 c) The Company has not disposed off any substantial part of fixed
 assets so as to affect its going concern.
 
 2.  In respect of its inventories:
 
 a) The inventories have been physically verified by the management
 during the year. In our opinion, the frequency of verification is
 reasonable.
 
 b) In our opinion, the procedures of physical verification of stocks
 followed by the management are reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 c) No material discrepancies have been noticed on physical verification
 of stocks as compared to book records in so far as it appears from our
 examination of the books.
 
 3.  a) According to the information and explanations given to us, the
 company has not granted any loans, secured or unsecured to the
 companies, firms or other parties covered in the register required to
 be maintained under section 301 of the Companies Act, 1956. Accordingly
 sub clause (b), (c) and (d) are not applicable.
 
 e) The company has an outstanding loan from one party covered under the
 register required to be maintained under section 301 of the Companies
 Act, 1956, amounting to Rs.6 Crores of which Rs. 1,80,36,664/- was
 repaid during the year.
 
 f) In our opinion and according to the information and explanation
 given to us, the rate of interest and other terms and conditions are
 prima facie not prejudicial to the interest of the Company.
 
 g) The payments of Principal amount and interest relating to this loan
 are regular.
 
 4.  In our opinion and according to the information and explanations
 given to us, there are adequate internal control systems commensurate
 with the size of the Company and nature of its business with regard to
 purchase of inventory, fixed assets and for sale of goods and services.
 During the course of our audit, no major weakness has been noticed in
 the internal controls.
 
 5.  a) The company has entered into a contract for repayment of loan
 alongwith interest with a party and the same has been entered into the
 register maintained under section 301 of the Companies Act, 1956.
 
 b) The rate of interest is reasonable having regard to the prevailing
 market rates at the relevant time.
 
 6.  According to the information and explanation given to us, the
 company has not accepted any deposits u/s 58A, 58AA or any other
 relevant provisions of the Companies Act, 1956, during the year.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size and the nature of the business.
 
 8.  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 in respect of the Company''s Products to which the said rules
 are made applicable, and are of the opinion that prima facie, the
 prescribed accounts have been maintained. We have, however not made a
 detailed examination of the records with a view to determine whether
 they are accurate.
 
 9.  a) According to the records of the Company, there were no
 undisputed amounts payable in respect of Provident Fund, Investor
 Education and Protection Fund, Employee''s State Insurance, Income Tax,
 Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and
 any other statutory dues outstanding as on 31st March, 2011, for a
 period of more than six months from the date they became payable,
 except entry tax demand of Rs 135.78 lacs outstanding since 2007 -
 2008, Central sales tax demand of Rs 12.29 lacs outstanding since 1995
 – 96.
 
 b) According to the records of the Company and information and
 explanations given to us there are no dues of sales tax, income tax,
 wealth tax, service tax, custom duty, excise duty on account of any
 disputes, except as given below: -
 
 Statue              Rs. In lacs  Forum where dispute is Pending
 
 Excise Duty              238.30  CESTAT - New Delhi
 
 Service Tax               44.41  Additional Commissioner - Central 
                                  Excise, Indore
 
 MP Commercial Tax          3.58  M.P Commissioner Appeal, Bhopal
 
 MP Commercial Tax          6.47  M.P. High Court, Indore
 
 MP Commercial Tax         79.30  Appellate Board, Bhopal
 
 Central Sales Tax         55.61  Appellate Board, Bhopal
 
 Rajasthan Sales Tax      704.23  Rajasthan High Court, Jodhpur
 
 Entry Tax                  0.30  Appellate Board, Bhopal
 
 Entry Tax                  0.31  Dy. Commissioner of Appeal, Indore
 
 Entry Tax                  0.60  Dy. Commissioner of Appeal, Indore
 
 Central Sales Tax        115.88  M.P.High Court
 
 Income Tax               112.90  Commissioner of Income Tax (Appeals)
 
 10.  The accumulated losses of the Company have not exceeded fifty
 percent of its net-worth as at the end of the year and the company has
 not incurred cash losses in the current and immediately preceding
 financial year.
 
 11.  On the basis of our examination of books and according to
 information and explanations given to us, the loans from
 Banks/Institutions have been restructured as per the Corporate Debt
 Restructuring package sanctioned to the Company, as a consequence there
 of, there is no default.
 
 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 or any other securities.
 
 13.  In our opinion, the Company is not a Chit Fund, Nidhi or Mutual
 Fund/Society and therefore the provisions of clause 4 (xiii) of the
 order are not applicable.
 
 14.  The Company is not dealing or trading in shares, securities,
 debentures and other investments. Accordingly, the provisions of clause
 4(xiv) of the order are not applicable.
 
 15.  According to the information and explanations given to us, and the
 representations made by the management, the Company has not given any
 guarantee for loans taken by others from any bank or financial
 institution.
 
 16.  In our opinion and on the basis of information and explanations
 given to us, term loans availed by the Company were, prima facie,
 applied by the Company for the purpose for which the loans were
 obtained.
 
 17.  According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, during the
 year no funds raised on short term basis have been used for long term
 investment.
 
 18.  On the basis of our examination of books and according to
 information and explanations given to us, the Company has made
 preferential allotment of shares to parties and companies covered in
 the register required to be maintained under section 301 of the
 Companies Act, 1956 which is as per the Board for Industrial and
 Financial Reconstruction Order, the price at which the shares are
 issued is not prejudicial to the interest of the company.
 
 19.  The Company has not issued debentures during the year.
 
 20.  The Company has not raised any money by public issue during the
 year.
 
 21.  According to the information and explanations given to us, and to
 the best of our knowledge and belief no fraud on or by the Company, has
 been noticed or reported during the year.
 
                                                  For Dayal and Lohia
 
                                                Chartered Accountants
 
                                       (Firm Registration No.102200W)
 
                                                         (Anil Lohia)
 
 Place: Mumbai                                                Partner
 
 Date : August 12, 2011                                  M.No.: 31626