Rama Phosphates Limited Report on the Audit of Financial Statements Opinion
We have audited the accompanying Financial Statements of Rama Phosphates Limited (“the Company”), which comprise of the Balance Sheet as at 31st March 2026, the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the Financial Statements, including a summary of material accounting policies and other explanatory information(hereinafter referred to as “Financial Statements”).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 (“Ind AS”) prescribed under section 133 of the Act, and other 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, 2026;
(b) in the case of the Statement of Profit and Loss (including Other Comprehensive Income), of the Profit for the year ended on that date;
(c) in the case of the Statement of Changes in Equity, of the changes in equity for the year ended on that date; and
(d) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statement in accordance with the Standards on Auditing (“SAs”) specified under section 143(10) of the Act. 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 (“the ICAI”) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the Financial Statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the financial year ended 31st March, 2026. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements.
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S.N.
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Key Audit Matters
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Auditor’s Response
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1
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Measurement of Arm's Length price for Related party transaction
Related party transactions pose significant financial reporting risk due to the possibility of transactions being conducted at prices deviating from the arm's length principle.
Under Ind AS, related party transactions are required to be disclosed in the financial statements, and determination of arm's length pricing for such transactions requires careful evaluation and scrutiny.
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1) Evaluated the Company's process for identification of related party transactions and assessed completeness and accuracy of related party disclosures, including the nature and significance of such transactions.
2) Examined the appropriateness of transfer pricing methodologies used for determining arm's length prices and assessed compliance with applicable Ind AS requirements and industry practices.
3) Assessed the selection and comparability of benchmark transactions considering industry, geography, and market conditions.
4) Reviewed supporting transfer pricing documentation and assessed the effectiveness of internal controls over identification, measurement, and disclosure of related party transactions.
5) Evaluated compliance with Ind AS 24 and relevant tax regulations, including alignment of arm's length pricing with applicable tax requirements.
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S.N.
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Key Audit Matters
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Auditor’s Response
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2
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Expected Credit Loss (ECL) on Trade Receivables:
Trade receivables are subject to Expected Credit Loss (ECL) assessment, which involves significant management judgment in estimating recoverability and determining appropriate loss allowances. The assessment considers factors such as customer creditworthiness, ageing of receivables, historical collection trends, economic conditions, and future expectations. Given the inherent estimation uncertainty and potential impact on the financial statements, adequacy of the ECL provision on trade receivables was identified as a Key Audit Matter.
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1) Evaluated the Company's process and internal controls for assessment and recognition of Expected Credit Loss (ECL) on trade receivables.
2) Assessed the appropriateness of the ECL methodology, assumptions, and estimates used by management, including ageing analysis, historical default trends, and customer creditworthiness.
3) Tested the accuracy and completeness of underlying data used in the ECL calculation and verified ageing of receivables on a sample basis.
4) Reviewed subsequent collections, customer correspondences, and other supporting evidence to assess recoverability of overdue receivables.
5) Evaluated the adequacy of disclosures relating to trade receivables and ECL provision in the financial statements in accordance with applicable Ind AS requirements.
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3
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Accounting of Government Subsidy income
The Company recognised significant subsidy income during the year and carries substantial related receivables as at the reporting date. Recognition and recoverability of these amounts involve significant management judgment in relation to interpretation and compliance with applicable government policies and notifications, reconciliation of quantities with underlying records, assessment of pending DBT claims, and evaluation of recoverability of outstanding receivables. Considering the regulatory complexities, estimation uncertainty, and potential impact on the financial statements, this matter was identified as a Key Audit Matter.
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1) Obtained understanding of the regulatory framework for fertilizer subsidy income, including DoF notifications, circulars, and guidelines, and evaluated the Company's accounting policy for subsidy recognition.
2) Tested, on a sample basis, DBT subsidy claims with dispatch records, invoices, and POS portal quantities, including significant differences identified by management.
3) Evaluated adjustment entries recorded pursuant to Government of India notifications relating to changes in subsidy rates, including assessment of whether such rate changes constituted adjusting events for financial reporting purposes, and tested the cut-off, accuracy, and valuation of the related adjustments.
4) Reviewed subsequent settlements and receipts from DoF to assess accuracy of subsidy income recognised and evaluated accounting treatment of retailer margins as per applicable guidelines and practices.
5) Tested design and operating effectiveness of controls over preparation, submission, monitoring, and accounting of subsidy claims and evaluated adequacy of related disclosures.
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4
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Capital Work-in-Progress (CWIP):
The Company carries significant Capital Work-in-Progress balances relating to assets under construction and development. Accounting for CWIP involves significant management judgment in determining eligible costs for capitalisation, allocation of finance costs, estimation of project costs and completion timelines, and assessment of directly
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1) Obtained an understanding of the Company's accounting policy and internal controls relating to CWIP capitalization, including treatment of direct costs, overheads, consumables, and finance costs.
2) Tested, on a sample basis, invoices, contracts, and work orders to verify that costs capitalized are directly attributable to eligible projects.
3) Evaluated allocation and capitalization of borrowing costs and assessed compliance with applicable accounting standards.
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Key Audit Matters
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Auditor’s Response
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attributable expenses. These estimates are subject to uncertainties arising from project delays, cost escalations, scope changes, and
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4) Reviewed project budgets, cost estimates, and completion timelines and compared them with actual progress and historical trends.
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economic conditions. Considering the materiality and extent of judgment involved, CWIP was identified as a Key Audit Matter.
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5) Performed cut-off testing to assess correct classification between CWIP and revenue expenses and evaluated CWIP disclosures in the financial statements.
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Information Other than the Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the preparation of the other information. The other information comprises of the information included in the Management Discussion, Analysis and Company’s Annual Report, but does not include the financial statements and our auditor's report thereon. The Company’s Annual Report is expected to be made available to us after the date of this auditor’s report.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
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 during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have 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 on in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Act, with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) 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.
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.
The Company's Board of Directors are also responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
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.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the 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.
• 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.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• 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 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.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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.
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.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the 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
1. As required by the Companies (Auditor's Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of section 143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, based on our audit, 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 purposes of our audit.
b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid Financial Statements have been kept 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, the Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account.
d) In our opinion, the aforesaid 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 31st March, 2026 taken on record by the Board of Directors, none of the directors are disqualified as on 31st March, 2026 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 Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls with reference to Financials Statements.
g) With respect to the other matter to be included in the Auditors' Report in accordance with the requirement of Section 197(16) of the Act, 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 read with Schedule V to 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, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements in Note 38 of the financial statements.
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.
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 person(s) or entity(ies), 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 by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like 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 person(s) or entity(ies), 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 by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(c) Based on such audit procedures as 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 (iv) (a) and (iv) (b) above, contain any material misstatement.
v. As stated in Note 46 to the Financial
Statements,
a. The final dividend paid by the Company during the year is in accordance with section
123 of the Act.
b. The interim dividend declared and paid by the Company during the year is in accordance with section 123 of the Act; and
c. As stated in Note 46 to the Financial Statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. Such dividend proposed is in accordance with Section 123 of the Act, as applicable.
vi. Based on our examination, which includes test checks, it is observed that the company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has been operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of the audit trail feature being tampered with and the audit trail has been preserved by the Company as per the statutory requirements for record retention.
For Khandelwal& Mehta LLP
Chartered Accountants Firm Regn. No. W100084
S. L. Khandelwal (Partner) M. No.: 101388 UDIN: 26101388ILVWQV8068
Place : Mumbai Date : 18th May, 2026
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