Liberty Phosphate Ltd Merged Auditor Reports

To,

The Members,

Liberty Phosphate Limited,

Report on the Financial Statements

We have audited the accompanying financial statements of Liberty Phosphate Limited (the Company), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year ended on above date, and a summary of significant accounting policies and other explanatory information.

Managements Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (the Act). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Companys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the 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, 2013;

(b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2003 (the Order) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, 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 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, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the 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 as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

	For K.L. Vyas & Company,	For V. Shah & Associates,
	Chartered Accountants	Chartered Accountants
	FRN: 003289C	FRN: 109816W
	(K.L. Vyas)	(V.R.Shah)
Place of Signature: Mumbai.	Partner	Proprietor
Date : 17th April, 2013	M. No. 72043	M. No. 34994

ANNEXURE REFERRED TO IN CLAUSE 1 OF REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF LIBERTY PHOSPHATE LIMITED ON THE ACCOUNTS AS AT AND FOR THE YEAR ENDED 31ST MARCH, 2013.

(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) We are informed that the fixed assets of the company have been physically verified by the Management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the company and nature of its assets. Pursuant to the programme, physical verification was carried out during the year and no material discrepancies were noticed.

(c) During the year, the company has not disposed off a major part of the plant and machinery, which has affected the going concern status of the Company.

(ii) (a) We are informed that the inventories of the Company have been physically verified by the Management during the year. In respect of inventories lying with third parties, these have been confirmed by them.

(b) In our opinion, the procedures for physical verification of inventories followed by Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the records of the Company, we are of the opinion that the company is maintaining proper records of inventories. The discrepancies noticed on verification between the physical and book records were not material.

(iii) (a) 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.

(b) The Company has taken interest free unsecured loan from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 amounting to Rs. 126.93 Lacs (Previous Year – Rs. 321.57 Lacs) and balance due at the year end is amounting to 126.93 Lacs (Previous Year – Rs. 321.57 Lacs).

(c) (i)We are further to inform that the unsecured loan taken from the companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 are not prima-facie prejudicial to the interest of the company as the same were interest free and was stated to be on long term basis, and accordingly there was no stipulation as to the payment of principal and interest thereon during the intervening period of currency of the Unsecured Loans.

(ii) Since the company has not granted any loan to any company, firm or other parties covered under the register maintained under section 301 of the companies Act, 1956, therefore the provision of clause – 4 (iii) of the Companies (Auditors Report) Order,2003 are not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and also for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the particulars of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been so entered in the register required to be maintained under that Section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the company has not accepted deposits from the public except deposits exempt under The Companies (Acceptance of Deposits) Rules, 1975 during the year under review. As such, the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public are not attracted.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account relating to materials, labour and other items of cost 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 we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of records with a view to determine whether they are accurate & complete.

(ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, service tax & Cess and other material statutory dues as may be applicable to it.

(b) According to the information and explanations given to us, there are no undisputed amount payable in respect of Income Tax, Sales Tax, Custom Duty, Excise Duty, Service Tax & Cess, which were in arrears, as at 31st March, 2013 for a period of more than six months from the date, same are became payable.

(c) According to the information and explanations given to us, details of the dues of sales tax, income tax, customs duty, wealth tax, excise duty and service tax & cess which have not been deposited on account of any dispute are given below.

Name of Statute	Nature of Dues	Period to which the amount relates	Forum where the dispute is pending	Total Amount (Rs.in Lacs)
Central Sales Tax Act & Gujarat Sales Tax Act.	Purchase Tax, Interest & Penalty	1999-2000.	Honourable Sales Tax Tribunal, Ahmedabad.	13.02
Rajasthan Value Added Tax, 2003.	Reversal of the Input Tax Credit	2009-10.	Additional Commissioner of Commercial Taxes(Appels) Udaipur, Rajasthan	67.64
Income Tax Act, 1961	Income Tax & Interest thereon	1993-1994(A.Y. 1994 -1995)	ITAT, Ahmedabad	3.50
Customs Act, 1962	Customs duty on import of Raw Material	2005-2006	Honourable High Court of Mumbai.	31.73
		2006-2007		32.44
		2007-2008		11.51
		2008-2009		125.68
		2009-2010		81.55
		2010-2011		61.25
				344.16
Total				428.32

(x) The company does not have accumulated losses. The company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks and debenture holders.

(xii) In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the company is not a chit fund or a nidhi mutual benefit fund/ society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xiv) 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 (Auditors Report) Order, 2003 are not applicable to the company.

(xv) According to information and explanations given to us, company has not given any guarantee for loans taken by others from the banks or financial institutions.

(xvi) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were raised.

(xvii) 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 there are no funds raised on short-term basis that have been used for long-term investment. (xviii) According to the information and explanations given to us, the company has not made any Preferential Allotment Shares to the parties covered in the Register maintained u/s 301 of the Companies Act.

(xix) We are to inform that the no debentures have been issued by the company during the year under review.

(xx) The Company has not raised any money by way of public issue during the year under review.

(xxi) In our opinion and according to the information and explanations given to us, no material fraud on or by the company has been noticed or reported during the year.

	For K.L. Vyas & Company,	For V. Shah & Associates,
	Chartered Accountants	Chartered Accountants
	FRN: 003289C	FRN: 109816W
	(K.L. Vyas)	(V.R.Shah)
Place of signature :Mumbai.	Partner	Proprietor
Date : 17th April, 2013	M. No. 72043	M. No. 34994