1.  We have audited the attached Balance Sheet of Ramco Industries
 Limited, Rajapalayam as at 31st March, 2011 and the Profit and Loss
 account for the year ended on that date annexed thereto and the Cash
 Flow statement for the year ended on that date.  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 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 misstatements.  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 issued
 by the Central Government of India in terms of sub-section (4A) of
 section 227 of the Companies Act, 1956, we have annexed 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 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 and 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 and 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.  As per representation made by the Company and its Directors, no
 Director is disqualified from being appointed as 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 give the information
 required by the Companies Act, 1956, in the manner so required and
 gives a true and fair view in conformity with the accounting principles
 generally accepted in India:
 
 i.  in so far it relates to the Balance Sheet, of the state of affairs
 of the Company as at 31st March, 2011;
 
 ii.  in so far it relates to the Profit and Loss Account, of the profit
 of the Company for the year ended on that date;
 
 iii.  and in so far it relates to the Cash Flow statement, of the cash
 flows of the Company for the year ended on that date.
 
 ANNEXURE TO THE AUDITORS REPORT
 
 With reference to paragraph 3 of our report to the shareholders of
 Ramco Industries Limited of even date, in our opinion and to the best
 of our knowledge and belief and as per the information and explanations
 given to us and the books and records examined by us in the normal
 course of audit, we report that:
 
 i. a The Company has maintained proper records showing full particulars
 including quantitative details and situation of fixed assets.
 
 b The management at reasonable intervals has physically verified the
 fixed assets of the company and no material discrepancies were noticed
 on such verification.
 
 c The Company has not disposed of substantial part of fixed assets
 during the year and the going concern status of the company is not
 affected.
 
 ii.  a The management has conducted physical verification at reasonable
 intervals in respect of its inventory.
 
 b The procedure of physical verification of inventory followed by the
 management is reasonable and adequate in relation to the size of the
 Company and nature of its business.
 
 c The Company has maintained proper records of inventories. The
 discrepancies noticed on verification between the physical stocks and
 the books records were not material.
 
 iii. a The Company has not granted any loans to any party listed in the
 register maintained under section 301 of the Companies act, 1956.
 
 b The rate of interest and other terms and conditions of the loans
 given by the Company are not prima facie, prejudicial to the interest
 of the Company.
 
 c The payment of the principal amount and interest wherever applicable
 are regular.
 
 d There are no overdue amounts with respect to above loans.
 
 e The Company has taken loans from two parties aggregating to Rs.4.15
 crores (maximum amount outstanding at any time during the year Rs.1.42
 Crores; outstanding as on 31st March, 2011 Rs.1 Crore) from parties
 listed in the register maintained under section 301 of the companies
 act, 1956.
 
 f The rate of interest and other terms and conditions of the loans
 taken by the Company are not prima facie, prejudicial to
 
 the interest of the Company.
 
 g The loans given/taken by the Company are repayable on demand and have
 been received / paid on demand.
 
 iv. The company has an internal control system which is adequate and is
 commensurate with the size of the company and nature of its business
 for the purchase of inventory and fixed assets and for the sale of
 goods and services. There are no major weaknesses in internal control
 system.
 
 v. a Particulars of contracts or arrangements referred to in section
 301 of the Companies Act, 1956 have been so entered in the register
 maintained for such purpose.
 
 b These transactions have been made at prices which are reasonable
 having regard to the prevailing market prices at the relevant time.
 
 vi. The company has accepted deposits from the public and the
 directives issued by the Reserve Bank of India and the provisions of
 sections 58A and 58AA or any other relevant provisions of the Act and
 the rules framed there under where applicable have been complied with.
 
 vii.  The Company has an internal audit system commensurate with its
 size and nature of its business.
 
 viii. The Central Government has prescribed maintenance of cost records
 under clause (a) of sub-section (1) of section 209 of the Companies
 Act, 1956 for Textile Industry and the said records are maintained by
 the company for its Textile Division.
 
 ix. a The Company is regular in depositing undisputed statutory dues
 including Provident Fund, Investor Education and Protection Fund,
 Employees State Insurance, Income-tax, Sales-tax, Wealth-tax, Service
 tax, Customs Duty, Excise Duty, Cess and other statutory dues with the
 appropriate authorities.
 
 b The disputed statutory dues aggregating to Rs. 22.68 crores that have
 not been deposited on account of matters pending before appropriate
 authorities are as under:
 
 Sl. No.  Name of the statute Forum where dispute is pending     Amount
                                                                (Rs. In 
                                                                crores)
 
 1        Sales-tax Act High Court                               0.89
 
 2        Income Tax CIT (Appeals)                              21.79
 
 x.  The Company has no accumulated losses and has not incurred any cash
 losses during the financial year covered by our audit or in the
 immediately preceding financial year.
 
 xi.  The Company has not defaulted in repayment of dues to financial
 institutions, banks or debenture holders.
 
 xii.  The Company has not granted any loans or advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 xiii.  The Company is not a chit fund or a nidhi / mutual benefit fund
 or society. Therefore clause 4(xiii) is not applicable to the company.
 
 xiv.  The Company is not dealing or trading in shares or securities,
 debentures and other investments. Therefore clause 4(xiv) is not
 applicable to the Company.
 
 xv.  The terms and conditions of the guarantee given by the Company for
 loans taken by others from banks or financial institutions are not
 prima facie prejudicial to the interests of the Company.
 
 xvi.  The new term loans during the year were applied for the purposes
 for which these were raised.
 
 xvii.  The funds raised on short term basis have not been used for long
 term investment during the year.
 
 xviii.  The Company has not made any preferential allotment of shares
 to parties and companies covered in the register maintained under
 section 301 of the Companies Act, 1956.
 
 xix.  The Company has not issued any debentures.
 
 xx.  The Company has not raised any money by way of public issues
 during the year.
 
 xxi.  No fraud on or by the Company has been reported or noticed during
 the year.
 
 
 For M.S. Jagannathan & N. Krishnaswami           For CNGSN & Associates
                                                   Chartered Accountants
 Chartered Accountants
 FRN: 001208S                                               FRN: 004915S
 K. Srinivasan                                           C.N. Gangadaran
 Partner                                                         Partner
 Membership No.21510                                 Membership No.11205
 
 Place : Chennai
 Date  : May 25, 2011