1.  We have audited the attached Balance Sheet of Liberty Phosphate
 Limited as at 31st March, 2011 and also the Profit and Loss Account for
 the year ended on that date annexed thereto and 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.
 
 2.  We conducted our audit in accordance with the 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 (Auditor''s 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 enclose in the Annexure, 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 above, we report
 that:
 
 (i) 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;
 
 (ii) 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;
 
 (iii) The Balance Sheet, Profit and Loss Account & Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 (iv) 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.
 
 (v) On the basis of written representations received from the
 directors, as on 31st March, 2011 and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 31st March 2011 from being appointed as a director in terms of clause
 (g) of sub-section (1) of section 274 of the Companies Act, 1956;
 
 (vi) 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 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 31st March, 2011, and
 
 (b) In the case of the Profit and Loss Account, of the profit for the
 year ended on that date. (c) In the case of Cash Flow statement of the
 cash flow for the year ended on that date.
 
 ANNEXURE REFERRED TO IN PARAGRAPH 3 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, 2011.
 
 (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. 268.28 Lacs (Previous
 Year - Rs. 99.77 Lacs) and balance due as the year end is amounting to
 Rs. 268.28 Lacs (Previous Year - Rs. 99.77 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 are interest
 free and stated to be on long term basis, and accordingly there is 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 (Auditor''s 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, 2011 for a period of more than six months from the date,
 same 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      Period to       Forum where 
                     Dues the       which amount    the  dispute 
                                                    is  pending 
                                                
 relates Central    Purchase Tax,   1999-2000.      Honourable Sales        
 Sales Tax Act &                                    Tax Tribunal,
                                                    Ahmedabad.
 Gujarat Sales      Interest &   
 Tax Act .          Penalty  
 
 Income Tax Act,    Income Tax &    1993-1994       ITAT, Ahmedabad
 1961               Interest        (AY. 1994 -
                                    thereon 
                                    1995)
 
 Customs Act, 1962  Customs duty    2005-2006       Honourable High 
                    on import of    2006-2007       Court of Mumbai.
                    Raw Material    2007-2008
                                    2008-2009 
                                    2009-2010 
                                    2010-2011
 
 Total
 
 Name of Statute       Total Amount 
                        (Rs.in Lacs)
 
 relates Central          -   13.02
 Sales Tax Act &
 
 Gujarat Sales            
 Tax Act .
 
 Income Tax Act,          -    3.50
 1961
 
 Customs Act, 1962    31.73       -
                      32.44       -
                      11.51       -
                     125.68       -
                      81.55       -
                      61.25       -
                          -  344.16 
 
                             360.68
 
 (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 (Auditor''s 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 (Auditor''s 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) The Company has raised new term loans during the year. The term
 loans outstanding at the beginning of the year and those raised during
 the year 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 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 V. Shah & Associates,    For K. L. Vyas & Company,
                   Chartered Accountants        Chartered Accountants
                            FRN: 109816W                 FRN: 003289C
 
                            (V. R. Shah)                 (K. L. Vyas)
                              Proprietor                      Partner
                             M.No. 34994                  M.No. 72043
 
 Place : Mumbai.  
 Date  : 29th July, 2011