liberty phosphate limited - coromandel · 2014-03-06 · 24th annual report 2011-12 liberty...

LIBERTY PHOSPHATE LIMITED

TWENTY FOURTH ANNUAL REPORT 2011-2012

24th Annual Report 2011-12 Liberty Phosphate Ltd.

LIBERTY PHOSPHATE LIMITED

ANNUAL REPORT 2011-12

CONTENTS

S. No. Item Page No.

1 Board of Directors 1

2 Notice 2

3 Directors' Report 11

4 Auditors' Report 30

5 Balance Sheet as at 31st March, 2012. 34

6 Statement of Profit & Loss for the year ended 31st March, 2012. 35

7 Cash Flow Statement 36

8 Notes on Financial Statements 39

9 Auditors' Report on Consolidated Financial Statements 56

10 Consolidated Balance Sheet as at 31st March, 2012. 57

11 Consolidated Statement of Profit and Loss for the year ended 58 31st March, 2012.

12 Consolidated Cash Flow Statement 59

13 Notes on Consolidated Financial Statements 63

14 Financial Information of Subsidiary Company 79

Attendance Slip & Proxy Form


Shri Abdul Razak Dawood Dhanani - Chairman Emeritus

BOARD OF DIRECTORS 1. Shri Raoof Razak Dhanani - Chairman & Managing Director 2. Shri Shakil Zakaria Memon - Whole time Director 3. Shri Firoz Asgar Khambati - Director 4. Shri Salim Sherani - Director 5. Shri Abdul Mabood Shaikh - Whole time Director 6. Shri Hemant Motilal Shah - Director 7. Shri Zafar Ullah Khan - Whole time Director 8. Shri Ajay Paliwal - Director

Statutory Auditors M/s. V. Shah & Associates, Chartered Accountants 12, Dhayber Colony, Behind Baroda High School, Near Pologround, Baroda- 390 001.

M/s. K. L. Vyas & Company, Chartered Accountants

Shop No.2, 2nd

Floor, Parshwanath Dava Bazar, 6, Hazareshwar Colony, Udaipur- 313 001

Bankers Canara Bank, State Bank of India, IDBI Bank Limited, State Bank of Patiala Karur Vysya Bank

Works

F-227, Mewar Industrial Area, Madri, Udaipur –313 003 (Rajasthan).

74/75/83, G.I.D.C., Nandesari-391 340 Dist.: Vadodara (Gujarat).

19, Bhimpura Industrial Area, Jagpura Kota (Rajasthan).

Survey No. 122 & 129, Rasal, Tal. Sudhagad, Dist.: Raigad (Maharashtra).

Registered Office

74/75, G.I.D.C., Nandesari-391 340

Distt.: Vadodara (Gujarat)

Company Secretary Ms.Rehanuma Khan

1


N O T I C E

NOTICE is hereby given that the Twenty Fourth Annual General Meeting of the Members of LIBERTY PHOSPHATE LIMITED will be held at Sayaji Hotel, Sayajigunj, Kala Goda, Baroda

(Gujarat) on Thursday, the 23rd day of August, 2012, at 2.30 P.M. to transact the following business:

ORDINARY BUSINESS :

(1) To receive, consider and adopt the Audited Accounts of the Company for the year ended on

31.03.2012 along with the Report of the Directors' and Auditors' thereon.

(2) To declare dividend on 8% Cumulative Redeemable Preference Shares.

(3) To declare dividend on Equity Shares.

(4) To appoint a Director in place of Shri Firoz Asgar Khambhati, who retires by rotation and being eligible, offers himself for reappointment.

(5) To appoint a Director in place of Shri Hemant Motilal Shah, who retires by rotation and being eligible,

offers himself for reappointment.

(6) To appoint Joint Auditors and fix their remuneration and in this regard, to consider and if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution :

"RESOLVED THAT the retiring Joint Statutory Auditors of the Company M/s.V. Shah & Associates, Chartered Accountants, Vadodara (ICAI registration No. FRN 109816W) and M/s. K. L. Vyas & Company, Chartered Accountants, Udaipur (ICAI registration No. FRN 003289C), be and are hereby appointed as Joint Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting of the Company on such remuneration as shall be fixed by the Board of Directors of the Company.”

SPECIAL BUSINESS:

(7) To consider and, if thought fit, to pass with or without modification(s), the following

resolution as an Ordinary Resolution: "RESOLVED that in accordance with the provisions of sections 198, 269 and 309 read with Schedule XIII and all other applicable provisions, if any, of the Companies Act,1956 or any statutory modification or re-enactment thereof and in terms of Clause 125 of Articles of Association of the company, approval of the members be and is hereby accorded to the re-appointment of Shri Shakil Zakaria Memon as Wholetime Director of the Company for a period of three years with effect from 01.04.2012 on the terms and conditions including remuneration as set out in the explanatory statement annexed to the notice convening the meeting with liberty to Board of Directors (hereinafter referred to as “the Board”) which term shall be deemed to include any committee of the Board constituted to exercise its powers including the powers conferred by this resolution to alter and vary the terms and conditions of appointment and/or remuneration subject to the same not exceeding the limits specified under Schedule XIII to the Companies Act, 1956 or any statutory modification or re- enactment thereof.”

“RESOLVED FURTHER THAT the remuneration paid/payable to Shri Shakil Zakaria Memon as Whole time Director as per Resolution approved in the meeting of Board of Directors held on 8

th

February, 2012 for the period from 01.04.2012 to 23.08.2012, be and is hereby ratified.”

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“RESOLVED FURTHER THAT the Board be and is hereby authorised to do all such acts, deeds, matters and things as may be necessary or desirable to give effect to this Resolution."


resolution as an Ordinary Resolution:

"RESOLVED THAT in accordance with the provisions of section 198, 269 , 309 and 317 read with Schedule XIII and all other applicable provisions, if any, of the Companies Act, 1956, or any statutory modifications or re-enactment thereof and in terms of Clause 125 of Articles of Association of the company, approval of the members be and is hereby accorded to the reappointment of Shri Raoof Razak Dhanani, as Managing Director of the Company for a period of five years with effect from 01.07.2012 on the terms and conditions including remuneration as set out in the explanatory statement annexed to the notice convening the meeting with liberty to Board of Directors (hereinafter referred to as “The Board”) which term shall be deemed to include any committee of the Board constituted to exercise its powers including the powers conferred by this resolution to alter and vary the terms and conditions of appointment and/or remuneration subject to the same not exceeding the limits specified under Schedule XIII of the Companies Act, 1956 or any statutory modification or re- enactment thereof.

“RESOLVED FURTHER THAT the remuneration paid/payable to Shri Raoof Razak Dhanani as Managing Director as per Resolution approved in the meeting of Board of Directors held on 16

th

June, 2012 for the period from 01.07.2012 to 23.08.2012 be and is hereby ratified.”

“RESOLVED FURTHER THAT the Board be is hereby authorized to do all acts and take all such steps as maybe necessary, proper or expedient to give effect to this resolution.”


resolution as an Ordinary Resolution :

"RESOLVED that in accordance with the provisions of sections 198, 269 and 309 read with Schedule XIII and all other applicable provisions, if any, of the Companies Act,1956 or any statutory modification or re-enactment thereof and in terms of Clause 125 of Articles of Association of the company, approval of the members be and is hereby accorded to the re-appointment of Shri Abdul Mabood Shaikh as Wholetime Director of the Company for a period of three years with effect from 01.11.2012 on the terms and conditions including remuneration as set out in the explanatory statement annexed to the notice convening the meeting with liberty to Board of Directors (hereinafter referred to as “the Board”) which term shall be deemed to include any committee of the Board constituted to exercise its powers including the powers conferred by this resolution to alter and vary the terms and conditions of appointment and/or remuneration subject to the same not exceeding the limits specified under Schedule XIII to the Companies Act, 1956 or any statutory modification or re- enactment thereof.”

“RESOLVED FURTHER THAT the Board be and is hereby authorised to do all such acts, deeds, matters and things as may be necessary or desirable to give effect to this Resolution."

Registered Office: 74/75,GIDC, Nandesari, District : Vadodara PIN - 391 340 Place : Baroda. Dated : 16

th June, 2012

By the Order of Board

For and on behalf of

Liberty Phosphate Ltd.

REHANUMA KHAN Company Secretary

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NOTES:

(1) A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and on a

poll to vote instead of himself and the proxy need not be a member of the Company. Proxies, in order

to be effective, should be deposited at the Registered Office of the Company not less than 48 hours

before the commencement of the meeting.

(2) The Register of Members and Share Transfer Books of the Company in respect of Equity Shares shall

r e m a i n c l o s e d f r o m 1 8 . 0 8 . 2 0 1 2 t o 2 3 . 0 8 . 2 0 1 2 ( b o t h d a y s i n c l u s i v e ) f o r t h e

purpose of payment of dividend and Annual General Meeting.

(3) Members are requested to bring their copies of Annual Report at the time of attending the Annual

General Meeting.

(4) Any query related to accounts should be notified to the Company at least 7 days before the

date of the Annual General Meeting.

(5) The Securities and Exchange Board of India has mandated compulsory trading of the Company's

equity shares in demat form for all the investors. The International Securities Identification number

(ISIN) code is INE 639 D 01011.

(6) Members are hereby informed that dividend which remain unclaimed /unencashed over a period of 7

years have to be transferred by the Company to the Investor Education and Protection Fund

constituted by the Central Government under section 205A and 205C of the Companies Act,1956.

The interim dividend and final dividend declared by the Company on 30.10.2010 & 14.09.2011 if

remained unclaimed /unencashed /unpaid will be transferred to such fund of the Central

Government on 30.10.2017 & 14.09.2018 respectively. It may be noted no claim of the shareholder

will be entertained for the unclaimed dividend which has been transferred to the credit of the Investor

Education and Protection Fund constituted by the Central Government under section 205B of the

Companies Act, 1956.

In view of the above, the Shareholders are advised to send all the unencashed dividend warrants to

the Registered Office of the Company for revalidation and encash them before the due date for

transfer to the Central Government .

(7) An Explanatory Statement pursuant to section 173(2) of the Companies Act, 1956 in respect of Item

No. 7 to 9 is annexed herewith and forms part of the Notice.

Explanatory Statement pursuant to Section 173 (2) of the Companies Act, 1956.

Item No.7

The Board of Directors of the company (the 'Board') at its meeting held on 8th February, 2012 has, subject to the

approval of members, re-appointed Shri Shakil Zakaria Memon as Wholetime Director for a period of Three

years from the expiry of his term on 31st

Committee and approved by the Board.

March, 2012, on the remuneration determined by the Remuneration

It is proposed to seek members' approval for the re-appointment of and remuneration payable to Shri Shakil

Zakaria Memon as Wholetime Director in terms of the applicable provisions of the Companies Act, 1956 (“the

Act”).

Broad particulars of the terms of re-appointment of and remuneration payable to Shri Shakil Zakaria Memon

are as under:-

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REMUNERATION :

(a) Salary & Allowances

Basic Salary : Rs.27500/- to 50000/- per month.

Allowances : Maximum upto 150% of the Basic Salary.

(b) Shri Shakil Zakaria Memon shall also be entitled to the following perquisites which shall not be

included in the computation of the ceiling on remuneration as specified in (a) above.

(i) Gratuity payable at a rate not exceeding half a month's salary for each completed year of service.

(ii) Contribution to Provident Fund, Superannuation Fund or Annuity Funds to the extent these either

singly or put together are not taxable under the Income Tax Act, 1961.

(iii) Encashment of Leave at the end of the tenure.

(c) Reimbursement of Expenses :

Reimbursement of expenses incurred for travelling, boarding and lodging including for their

respective spouses and attendant(s) during business trips; provision of Car for use on the Company's

business; telephone expenses at residence and club membership shall be reimbursed and not

considered as perquisites.

The salary and perquisites together will, however, not exceed the limits provided in Schedule XIII Part II

Section II Paragraph (1)(A) read with Section 198, 269 and 309 of the Act.

Either party giving a three-month notice in writing may terminate the Agreement at any time.

The draft agreement to be entered between the Company and Shri Shakil Zakaria Memon is available for

inspection by the members of the Company upto the date of the meeting at its Registered Office between 10.30

A.M. and 1.30 P.M. on any working day except holidays.

This should also be treated as an abstract of terms and conditions pursuant to Section 302 of the Companies

Act, 1956.

The Board commends the resolution as set out at Item No.7 of the notice for your approval.

Shri Shakil Zakaria Memon is deemed to be interested or concerned in the resolution, which pertains to the re-

appointment and remuneration payable to him.

None of the other Directors of the Company is interested or concerned in passing of the resolution.

Item No.8

The Board of Directors of the company (the 'Board') at its meeting held on 16th

June, 2012 has, subject to the approval of members, re-appointed Shri Raoof Razak Dhanani as Managing Director for a period of five years from the expiry of his present term on 30

th June, 2012, on the remuneration determined

by the Remuneration Committee of the Board and approved by the Board.

It is proposed to seek members' approval for the re-appointment of and remuneration payable to Shri Raoof Razak Dhanani as Managing Director in terms of the applicable provisions of the Companies Act, 1956 (“the Act”).

Broad particulars of the terms of re-appointment of and remuneration payable to Shri Razak Dhanani are as under:-

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I. Payable when the company has adequate profit :

(a) Salary, Perquisites and Allowances per month :

(Rs.in Lacs)

Name Salary Perquisites and Allowances

Shri Raoof Razak Dhanani 8.00 2.00

The perquisites and allowances, as aforesaid, shall include accommodation (furnished or otherwise) or house rent allowance in lieu thereof; house maintenance allowance together with reimbursement of expenses and/or allowances for utilization of gas, electricity, water furnishing and repairs; medical reimbursement; leave travel concession for self and family including dependents; medical insurance and such other perquisites and/or allowances. The said perquisites and allowances shall be evaluated, wherever applicable, as per the provisions of Income Tax Act, 1961 or any rules there under or any statutory modification(s) or re-enactment thereof; in the absence of any such rules, perquisites and allowances shall be evaluated at actual cost. The Company's contribution to Provident Fund, Superannuation or Annuity Fund, to the extent these singly or together are not taxable under the Income Tax Law, Gratuity payable and encashment of leave shall not be included for the purpose of computation of the overall ceiling of remuneration. The increment in salary and perquisites and remuneration by way of incentive/bonus payable to Shri Raoof Razak Dhanani, as may be determined by the Board and/or the Remuneration Committee of the Board, is not to be included for the purpose of computation of the aforesaid ceiling of remuneration provided that such payment shall be within the overall ceiling of remuneration permissible under the Act.

(b) Commission : The amount of commission payable shall be calculated at and will not exceed 5% of the net profit calculated as per the provisions of Section 349 and other applicable provisions, if any, of the Companies Act, 1956, after taking into consideration the amount of Salary and Perquisites as stated in (a) above. In other words, the remuneration payable to Shri Raoof Razak Dhanani shall not in any case exceed 5% of the net profit calculated as per the provisions of Section 349 and other applicable provisions of the Companies Act, 1956 taken together Salary & Perquisites as stated in (a) above and the commission.

(c) Reimbursement of Expenses: Reimbursement of expenses incurred for traveling, boarding and lodging including for their respective spouses and attendant(s) during business trips; provision of Car for use on the Company's business; telephone expenses at residence and club membership shall be reimbursed and not considered as perquisites.

II. Payable when the company has inadequate profit or incurred loss :

(a) Salary, Perquisites and Allowances per month : (Rs.in Lacs)

Name Salary

Shri Raoof Razak Dhanani 2.00

(b) Shri Raoof Razak Dhanani shall also be entitled to the following perquisites which shall not be



6


(ii) Contribution to Provident Fund, Superannuation Fund or Annuity Funds to the extent these either

singly or put together are not taxable under the Income Tax Act, 1961.



Reimbursement of expenses incurred for traveling, boarding and lodging including for their




Either party giving six months notice in writing may terminate the agreement at any time.

The draft agreement to be entered into between the Company and Shri Raoof Razak Dhanani is available for

inspection by the members of the Company up to the date of this meeting at its Registered Office between 10.30


This may be treated as an abstract of the draft agreement between the Company and Shri Raoof Razak Dhanani,

pursuant to Section 302 of the Companies Act, 1956.

The Board recommends the resolution as set out at Item No.8 of the notice for your approval.

Shri Raoof Razak Dhanani is interested or concerned in the resolution which pertains to his re-appointment

and remuneration payable to him.


Item No. 9 The Board of Directors of the company (the 'Board'), at its meeting held on 16

th June, 2012 has, subject to

the approval of members, re-appointed Shri Abdul Mabood Shaikh as Wholetime Director for a period of

three

years from the expiry of his present term on 31st October, 2012, on the remuneration determined by the

Remuneration Committee of the Board and approved by the Board.

It is proposed to seek members' approval for the re-appointment of and remuneration payable to Shri Abdul

Mabood Shaikh as Wholetime Director in terms of the applicable provisions of the Companies Act, 1956 (“the

Act”).

Broad particulars of the terms of re-appointment of and remuneration payable to Shri Abdul Mabood Shaikh

are as under:-

(a) Salary & Allowances

Basic Salary

Allowances

: Rs.20000/- to 50000/- per month.

: Maximum upto 150% of the Basic Salary.

(b) Shri Abdul Mabood Shaikh shall also be entitled to the following perquisites which shall not be


7



(ii) Contribution to Provident Fund, Superannuation Fund or Annuity Funds to the extent these

either singly or put together are not taxable under the Income Tax Act, 1961.



Reimbursement of expenses incurred for traveling, boarding and lodging including for their




The salary and perquisites together will, however, not exceed the limits provided in Schedule XIII Part II

Section II Paragraph (1)(A) read with Section 198, 269 and 309 of the Act.

Either party giving a three month's notice in writing may terminate the Agreement at any time.

The draft agreement to be entered between the Company and Shri Abdul Mabood Shaikh is available for

inspection by the members of the Company upto the date of the meeting at its Registered Office between 10.30


This may be treated as an abstract of terms and conditions of the draft agreement between the Company and

Shri Abdul Mabood Shaikh pursuant to Section 302 of the Companies Act, 1956.

The remuneration has been approved by the Remuneration Committee.

The resolution as set out at Item No. 9 of the accompanying Notice is recommended for passing.

Shri Abdul Mabood Shaikh is deemed to be interested or concerned in the resolution, which pertains to the

appointment and remuneration payable to him.


Registered Office: 74/75,GIDC, Nandesari, District : Vadodara PIN - 391 340 Place : Baroda.

Dated : 16th June, 2012

By the Order of Board

For and on behalf of

Liberty Phosphate Ltd.

REHANUMA KHAN Company Secretary

8


Brief resume and other information in respect of Director(s) seeking appointment/re-appointment at the Annual General Meeting in accordance with the Clause- 49 of the Listing Agreement with the Stock Exchange:

Shri Firoz Asgar Khambati

Shri Firoz Asgar Khambhati, aged 45 years, has rich and varied experience in commercial activities.

He is director in the Company since 31.07.2006.

Nature of expertise in specific functional area : Commercial.

He is Director in Liberty Pesticides & Fertilizers Limited.

He is not Chairman /Member of the Committee(s) of Board of Directors of any other Company.

He does not hold any share of the Company as on the date of this Notice.

Shri Hemant Motilal Shah

Shri Hemant Motilal Shah, aged 52 years, is associated with the company since 27th

March, 2010 as an Independent Director of the company. He has rich experience in commercial activities.

He is Chairman of the following Committees of the Board of Directors of the Company:

1. Audit Committee 2. Remuneration Committee. 3. Shareholders/Investors Grievance Committee.

Nature of expertise in specific functional area: Commercial

He is not a director in any other company. Hence, he is not Chairman/Member of the committee(s) of Board of Directors of any other Company.

He does not hold any share of the Company as on the date of this Notice.

Shri Shakil Zakaria Memon

Shri Shakil Zakaria Memon, aged 42 years, is associated with the company since 1987, and at present, he is head of Nandesari Unit of the company, and is looking after entire activities the unit. He has in depth experience in marketing of SSP fertilizer.

He is member of the following Committees of the Board of Directors of the Company :

1. Audit Committee 2. Shareholders/Investors Grievance Committee.

Nature of expertise in specific functional area : Marketing.

9


He is a Director in other following companies :

1. Liberty Pesticides & Fertilizers Limited 2. Liberty Urvarak Limited 3. Tungabhadra Fertilizers & Chemicals Co. Ltd. 4. Durg Manures & Chemicals Co. Ltd. 5. Rama Buildcare Pvt. Ltd.

He does not hold any share of the company as on the date of this Notice.

Shri Raoof Razak Dhanani

Shri Raoof Razak Dhanani, aged 48 years is a Promoter Director of the company, and is looking after entire affairs of the company. He has in depth experience about running an SSP industry.

He is not Chairman or member of any committee of the Board of Directors of the company.

He is a director in other following companies :

1. Tungabhadra Fertilizers & Chemicals Co. Ltd.

2. A. R. Hospitality Limited

He holds 383412 shares of the company as on the date of this Notice.

Shri Abdul Mabood Shaikh

Shri Abdul Mabood Shaikh, aged 50 years is associated with the company since 2004. At present, he is looking after production activities of Pali (Maharashtra) Unit of the company. He is not Chairman or member of any committee of the Board of Directors of the company. Nature of expertise in specific functional area: Production He is not a director in any other company. He does not hold any share of the company as on the date of this Notice.

IMPORTANT COMMUNICATION TO MEMBERS

The Ministry of Corporate Affairs has taken a “Green Initiative in Corporate Governance “ by allowing paperless compliances by the companies and has permitted service of documents including Annual Report to its members through electronic modes. In this backdrop, the Company has given an option to the shareholders to receive the Annual Report through e-mail and is sending the Annual Report through e- mail to those members whose registered e-mail ids are available with us. To further support this initiative Members, whose e-mail ids have not been registered so far, are requested to register their e-mail addresses with their respective Depository Participant, in respect of holdings in Demat form and, with the Company's RTA, M/s. Link Intime India Private Ltd., in respect of shares held in physical form.

10


To The Members of Liberty Phosphate Limited

DIRECTORS' REPORT

The Directors of your Company have pleasure in presenting Twenty Fourth Annual Report and the Audited Accounts of your Company for the year ended 31.03.2012.

FINANCIAL RESULTS: Your Company's performance during the year as compared with that of the previous year is summarized below:

(Rs in Lakhs)

Particulars 2011-12 2010-11

Turnover including Other Income 48961.67 36783.31

Profit before Interest, Depreciation and Tax 9570.43 6421.20

Less : Financial Charges 1240.13 697.49

Less : Depreciation 290.19 281.40

Profit before tax 8040.11 5442.31

Deferred tax (liability)/Assets (270.82) 0.59

Provision for current Taxation 2379.60 1887.05

Income Tax of Earlier Years 1.69 37.33

Profit after tax 5391.38 3518.52

Add: Profit brought forward from previous year 6250.74 3208.31

Amount available for appropriation 11642.12 6726.83

Appropriation

Interim Dividend – Equity - 86.63 Arrears of Preference Dividend - 120.00 Proposed Dividend - Preference shares

- Equity Shares 40.00

259.89 40.00 86.63

Dividend Distribution Tax 49.65 54.86 Transfer to General Reserve 404.36 87.97 Surplus Carried Forward 10888.22 6250.74

DIVIDEND:

Your Directors are pleased to recommend dividend at the rate of Rs.0.80 per share on 8% Cumulative Redeemable Preference Share of nominal value of Rs. 10/- per share for the year 2011-12.

For the year 2011-12, your Directors are pleased to recommend dividend at the rate of Rs. 1.80 per share on equity shares of nominal value of Rs. 10/- per share.

11


The payment of the aforesaid dividend is subject to the approvals of the members to be obtained at the ensuing

Annual General Meeting and shall be paid to those members as per the law whose name appear in the Register

of members of the Company as on the book closure date.

OPERATIONS:

During the year under review your Company recorded a turnover of Rs.48659.39 Lakhs and earned a net

profit after tax of Rs.5391.38 Lakhs after providing for Income Tax as compared with the corresponding

figures in the previous year of Rs.36418.76 Lakhs and Rs.3518.52 Lakhs respectively. The turnover and net

profit after tax registered an increase of 33.61% and 53.23% over the corresponding figures of previous year.

The increase in profitability is due to constant endeavour of the management with regard to cost control and

cost reduction backed by higher capacity utilization.

UPCOMING UNIT AT RAE BAREILLY:

During the year under review, your company decided to install a SSP Plant of 132000 MT/annum capacity at

Rae Bareilly in the State of Uttar Pradesh to cater the needs of the farmers to a larger extent and to unleash the

marketing potential of the region.

PRODUCTION

During the year under review, your company achieved production of 483053 MT of Single Super Phosphate,

NPK Mixed Fertilizers and Magnesium Sulphate as against production of 386016 MT in the previous year

recording growth of 25.14%.

SUBSIDIARY:

In view of the General Circular No.2/2011, No.5/12/2007-CL-III dated 8th

February, 2011 issued by

the Government of India, Ministry of Corporate Affairs, the Board of Directors of the Company has given

their consent by passing a resolution for not attaching the Balance Sheet of its wholly owned subsidiary viz;

Liberty Pesticides and Fertilizers Limited, and accordingly has not attached the Balance Sheet of the

Subsidiary as required pursuant to section 212 of the Companies Act, 1956. Any shareholder desirous of

obtaining the annual accounts of the subsidiary company and the related detailed information may write to

the company for the same.

The annual accounts of the subsidiary may be inspected by any member at the Registered Office of the holding

company or at the Registered Office of the subsidiary company during working days in the office hours.

DIRECTORATE :

In accordance with the Article 110 of the Articles of Association of the Company, Shri Firoz Asgar Khambhati

and Shri Hemant Motilal Shah, retire by rotation and being eligible have offered themselves for

re- appointment.

Your Directors recommend the above appointment/re-appointment.

LISTING OF SHARES :

The Equity Shares of your Company are listed on Bombay Stock Exchange Limited, P. J. Towers, Dalal

Street, Mumbai-400001, and the listing fees for the year 2011-12 has been paid.

12


DEPOSITS:

During the year under review the Company has not invited / received deposits from public under Section 58A

of the Companies Act, 1956.

CONSOLIDATION OF ACCOUNTS:

As required under Clause 32 of the Listing Agreement with the Stock Exchange, at which the Equity Shares of

the Company are listed and traded, the Audited Consolidated Financial Statements form part of the Annual

Report.

AUDITORS :

M/s. V. Shah & Associates, Chartered Accountants, Vadodara and M/s. K. L. Vyas & Co.,

Chartered Accountants, Udaipur, Joint Statutory Auditors of the Company retire and being eligible

have offered themselves for re-appointment.

Your Directors request to accord approval to the appointment of the auditors and fixation of their

remuneration..

COST AUDITORS:

Pursuant to directions from the Ministry of Corporate Affairs, H. R. Kapadia , Cost Accountant, has been

appointed as Cost Auditor for the year 2011-2012. He is required to submit the report to the

Central Government within 180 days from the end of the accounting year. The due date for filing the

Cost Audit Reports for the financial year ended March 31, 2012 is September 30, 2012.

The due date for filing the Cost Audit Report for the financial year ended March 31, 2011 was 30th September,

2011, and the Cost Audit Reports were filed by the Cost Auditor on October 11, 2011.

AUDITORS' REPORT:

The Auditors' observations are self explanatory and hence do not call for any further clarification under section

217 of the Companies Act, 1956.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of sub-section (2AA) of Section 217 of the Companies Act, 1956, your Directors

confirm:

(i) that in the preparation of the Annual Accounts, the applicable Accounting Standards have been

followed along with proper explanation relating to material departures;

(ii) that the Directors have selected such Accounting Policies and applied them consistently and made

judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state

of affairs of the Company at the end of the financial year as on 31st March, 2012 and of the profit of

the Company for that year;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting

records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of

the Company and for preventing and detecting fraud and other irregularities; and

(iv) that the Directors have prepared the Annual Accounts on going concern basis.

13


CORPORATE GOVERNANCE:

In compliance with the listing agreement with the Stock Exchange, the Report on Corporate Governance is

enclosed as Annexure 'A'

MANAGEMENT DISCUSSIONS AND ANALYSIS:

In compliance with the listing agreement with the Stock Exchange, the Report on Management Discussions

and Analysis is enclosed as Annexure 'B'.

PARTICULARS OF EMPLOYEES:

As required by the provisions of Sub Section (2A) of Section 217 of the Companies Act, 1956 read with the

Companies (Particulars of Employees) Rules 1975, as amended, particulars of the employees are set out in the

Annexure to the Directors' Report. However, as per provisions of Section 219(1)(b)(iv) of the Companies Act,

1956, the report and the accounts are being sent to all the shareholders excluding the aforesaid information.

Any shareholder, interested in obtaining such particulars may write to the Company Secretary at the registered

office of the company for a copy of the same.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

EARNINGS AND OUTGO :

In pursuance to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of

Particulars in the Report of Board of Directors) Rules, 1988 the relevant information is annexed as Annexure

'C'

ACHIEVEMENT & AWARDS:

During the year under review, your company has received FAI Award for over all best performance of an

operating fertilizer unit of Single Super Phosphate for the year 2010-11, which was received by Shri R. R.

Dhanani, Chairman & Managing Director of your company from Shri Shrikant Jaina, Hon'ble State Miniser

(Fertilizer & Chemicals), Government of India during the 47th

International Annual Conference of

the Fertilizer Association of India at Delhi.

ACKNOWLEDGMENT:

The Directors acknowledge with gratitude the co-operation extended by bankers (i.e. Canara Bank, State Bank

of India, IDBI Bank Limited, State Bank of Patiala & Karur Vysya Bank), Railway Authorities, and various

Central and State Government authorities. The Directors also wish to place on record their appreciation to the

team of executives, staff and workers who have shown devotion and efficiency in performing their jobs.

For and on behalf of the Board of Directors

Place : Baroda.

Date : 16th June, 2012

R.R.DHANANI

Chairman & Managing Director

14


ANNEXURE 'A' TO THE DIRECTORS' REPORT

CORPORATE GOVERNANCE REPORT FOR THE YEAR APRIL 1st , 2011 TO

MARCH 31st , 2012.

INTRODUCTION Your Company has complied in all material respects with the requirements of Corporate Governance Code as per the Clause 49 of the Listing Agreement with the Stock Exchange.

A report on the implementation of the Corporate Governance Code of the Listing Agreement by the Company is furnished below.

1. COMPANY'S PHILOSOPHY :

Your Company lays much emphasis on conducting business based on highest standards of corporate governance and transparent working based on integrity, fairness, equity and individual accountability. Every effort is directed towards enhancing shareholders' value and safeguarding their wealth on sustainable basis.

The company promotes ethical conduct of business and ensures compliance of applicable laws, rules and regulations. All stake holders such as Shareholders, Investors, Bankers, and Institutions etc. are well updated with the information so that they are in a position to take considered decision.

2. BOARD OF DIRECTORS AND BOARD PROCEDURE:

(i) Composition of Board: The Board of Directors of the Company consists of Directors having

varied experience in different areas. The composition of the Board is in conformity with the provisions of Clause 49 of the Listing Agreement. The Company has an Executive Chairman.

The composition and other details are as under :

Name of

Director Category

of Director No. of the

other

directorship

held

Membership in

committee of

other companies

held

No. of

Board

meetings

held

No. of

Board

meetings

attended

Attendance in

last AGM held

- Yes/No

Shri R. R. Dhanani

Promoter

Executive Two NIL 11 8 Yes

Shri S. Z.

Memon Executive Five NIL 11 11 Yes

Shri Abdul

Mabood

Shaikh

Executive NIL NIL 11 9 No

Shri Zafar

Ullah Khan Executive NIL NIL 11 8 Yes

Shri Firoz

Asgar

Khambati

Non-

Executive One NIL 11 8 No

Shri Salim

Sherani Non-


Shri Hemant

Motilal Shah Non- Executive

NIL NIL 11 9 Yes

Shri Ajay

Paliwal Non-


15


(ii) None of the Directors is a member of more than ten Board level Committees of public

limited companies in which they are Directors or a Chairman of more than five such Committees.

(iii) During the period from 1st April, 2011 to 31

st March, 2012, eleven Board Meetings were held with

at least one meeting in every quarter at the following dates: 13.04.2011, 13.05.2011,

13.07.2011,

29.07.2011, 11.08.2011, 10.09.2011, 28.10.2011, 11.11.2011, 04.02.2012, 08.02.2012 and

17.03.2012. The gap between two consecutive meetings was not more than four months.

(iv) I Information placed before the meeting:

The Board of the Company is presented with the notes in respect of the information covering matters

listed below, as and when applicable, from time to time.

i) Annual operating plans and budgets, capital budgets, updates.

ii) Quarterly results for the Company and its operating divisions or business segments.

iii) Minutes of the meetings of audit committee and other committees of the Board.

iv) Information on recruitment and remuneration of senior officers just below the Board level.

v) Materially important show cause, demand, prosecution and penalty notices.

vi) Any material effluent or pollution problems, fatal or serious accidents, dangerous

occurrences.

vii) Any material significant default in financial obligations to and by the Company or

substantial non-payment for goods sold by the Company.

viii) Any issue, which involves possible public or product liability claims of substantial nature.

ix) Details of any joint venture or collaboration agreement.

x) Transactions that involve substantial payment towards goodwill, brand equity or intellectual

property.

xi) Significant labour problems and their proposed solutions.

xii) Sale of material nature of investments, subsidiaries, assets that is not in normal course of

business.

xiii) Quarterly details of foreign exchange exposures and the steps taken by management to limit

the risks of adverse exchange rate movement.

xiv) Non-compliance of any regulatory, statutory nature or listing requirements and shareholders

service such as non-payment of dividend and delay in share transfer.

3. AUDIT COMMITTEE :

The composition of the Audit Committee as on 31.03.2012 is as under:

(a) Shri Hemant Motilal Shah– Chairman

(b) Shri Firoz Asgar Khambati

(c) Shri S. Z. Memon

(d) Shri Ajay Paliwal

(e) Shri Salim Sherani

Ms. Rehanuma Khan, Company Secretary acts as Secretary to the Committee.

Two-third members of the Committee are independent and non-executive directors.

Brief description of terms of reference:

i) Oversight of the Company's financial reporting process and the disclosures of its financial

information to ensure that the financial statement is correct, sufficient and credible.

ii) Recommending the appointment and removal of external auditors, fixation of audit fee and

also approval for payment for any other services.

16


iii) Reviewing with management the annual financial statements before submission to the board,

focusing primarily on:

a. Matters required to be included in the Director's Responsibility Statement to be

included in the Board's report in terms of clause (2AA) of section 217 of the Companies

Act, 1956

b. Any Changes in accounting policies and practices.

b. Major accounting entries based on exercise of judgment by management

c. Qualification in draft audit report.

d. Significant adjustments arising out of audit.

e. The going concern assumption.

f. Compliance with accounting standards.

g. Compliance with stock exchanges and legal requirements concerning financial

statements.

iv) Any related party transaction i.e. transactions of the Company of material nature, with

promoters or the management, their subsidiaries or relatives etc. that may have potential

conflict with the interests of the Company at large.

v) Reviewing with the management, external and internal auditors, and the adequacy of internal

control systems.

vi) Reviewing the adequacy of internal audit function, including the structure of internal audit

department, staffing and seniority of the official heading the department, reporting structure,

coverage and frequency of internal audit.

vii) Discussion with internal auditors about any significant findings and follow up

thereon.

viii) Reviewing the findings of any internal investigations by the internal auditors into matters

where there is suspected fraud or irregularity or a failure of internal control systems of a

material nature and reporting the matter to the board.

ix) Discussion with external auditors before the audit commences, nature and scope of audit as

well as post–audit discussion to ascertain any area of concern.

x) Reviewing the Company's financial and risk management policies.

xi) To look into reasons for substantial defaults in the payment to the depositors, debenture

holders, shareholders (in case of non payment of declared dividends) and creditors.

xii) Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

Minutes of each Audit Committee were placed before and discussed in the Board.

Five meetings of the Audit Committee were held during the year on 13.05.2011, 29.07.2011, 11.08.2011,

11.11.2011 and 08.02.2012. The necessary quorum was present at the meetings. The attendance of each

member of the Committee is given below:

Name of Director Number of meetings held Number of Meetings attended Shri Hemant Motilal Shah 5 5 Shri Firoz Asgar Khambati 5 4 Shri S. Z. Memon 5 5 Shri Ajay Paliwal 5 5 Shri Salim Sherani 5 2

17


4. REMUNERATION COMMITTEE:

The Remuneration Committee comprised of the following persons:



(c) Shri Ajay Paliwal

(d) Shri Salim Sherani

Ms. Rehanuma Khan, Company Secretary acts as the Secretary to the Committee.

(i) Brief description of terms of reference:

a. Frame Company's policies on Board and Directors with the approval of the Board.

b. Review and recommend compensation payable to the executive directors including

revision.

(ii) The Remuneration Committee is functioning under the Chairmanship of Shri Hemant

Motilal Shah. The other members of the Committee are Shri Firoz Asgar Khambati, Shri

Ajay Paliwal and Shri Salim Sherani. The members of the Committee are independent,

Non- executive Directors.

(iii) During the year under review, the meetings of Remuneration Committee was held on

08.02.2012 to recommend the re-appointment of Shri S. Z. Memon as Wholetime Director

and terms & conditions of remuneration in respect of the re-appointment. The necessary

quorum was present at the meeting. The attendance of each member of the Committee is

given below:

Name of Director Number of

meetings held Number of Meetings

attended

Shri Hemant Motilal Shah 1 1 Shri Firoz Asgar Khambati 1 1

Shri Salim Abdul A ziz Sherani 1 1 Shri Ajay Paliwal 1 1

5. MANAGEMENT:

(i) MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion and Analysis is attached herewith and forms part of this

Annual Report.

(ii) DISCLOSURES:

(a) Transactions with the related parties are disclosed at Note No. 28.15 in “Notes on

Accounts” annexed to the Accounts in the Annual Report.

(b) No transaction of material nature has been entered into by the Company with its Directors

or Management and their relatives, etc. that may have a potential conflict with the interests

of the Company. The Register of Contracts containing transactions in which directors are

interested, is placed before the Board regularly.

18


(c) There have been no instances of non-compliance by the Company on any matter related to

capital markets. Hence, the question of penalties or strictures being imposed by SEBI or the

stock exchange or any statutory authorities does not arise.

(d) Though there is no formal Whistle Blower Policy, the Company takes cognizance

of complaints made and suggestions given by the employees and others. Even

anonymous complaints are looked into and whenever necessary, suitable corrective steps

are taken. No employee of the Company has been denied access to the Audit Committee

of the Board of Directors of the Company.

(e) In the preparation of financial statements, the Company has followed the Accounting

Standards issued by The Institute of Chartered Accountants of India to the extent

applicable.

(f) A certificate from CEO and CFO was placed before the Board.

(g) The Company has periodic review and reporting to the Board of Directors of

risk assessment by the senior executives with a view to minimize risk.

(h) The details of the remuneration paid/ payable to the Directors and their relationship with

other directors, if any, are as under :

Name of the

Director Relationship

with other directors

Sitting

fees

(Rs. in

Lakhs)

Salaries and

perquisites

incl P. F.

Contribution

(Rs.in Lakhs)

Commi-

ssion

(Rs. In

Lakhs)

Total

(Rs. in Lakhs)

Shri R. R. Dhanani None Nil 74.36 357.06 431.42 Shri S. Z. Memon None Nil 7.08 Nil 7.08 Shri Tuntun Singh None Nil 0.13 Nil 0.13 Shri A. M. Shaikh None Nil 5.43 Nil 5.43 Shri Z. U. Khan None Nil 8. 68 Nil 8.68

Name of the

Director Service

Contract Notice

Period Severance

fees Performance

Linked Bonus Stock

options Shri R. R. Dhanani 5 years 6 months Nil Nil Nil Shri S. Z. Memon 3 years 3 months Nil Nil Nil Shri Tuntun Singh 3 years 3 months Nil Nil Nil Shri A. M. Shaikh 3 years 3 months Nil Nil Nil Shri Z. U. Khan 3 years 3 months Nil Nil Nil

Non- Executive Directors of the Company are paid sitting fee of Rs.5000/- for attending the meetings of the Board.

6. SUBSIDIARIES :

The Company has one Indian Subsidiary. As per Clause 49(III) of the Listing Agreement, it does not constitute a material non-listed Indian Subsidiary.

19

Name of Director Number of meetings held Number of Meetings

attended Shri Hemant Motilal Shah 4 4 Shri Firoz Asgar Khambati 4 3 Shri Shakil Z. Memon 4 4 Shri Ajay Paliwal 4 4 Shri Salim Sherani 4 2


7. SHAREHOLDERS:

(i) DIRECTOR SEEKING APPOINTMENT/RE-APPOINTMENT:

Disclosures about the particulars of the directors seeking appointment/re-appointment at the

ensuing annul general meeting have been furnished in the annexure to the notice convening the

Annual General Meeting.

(ii) SHAREHOLDERS / INVESTOR GRIEVANCES COMMITTEE:

The Shareholders / Investor Grievance Committee comprised of the following persons:



(c) Shri S. Z. Memon

(d) Shri Ajay Paliwal

(e) Shri Salim Sherani

The Committee met four times during the year on 13.05.2011, 11.08.2011, 11.11.2011 and

08.02.2012. The necessary quorum was present during all the meetings.

The attendance of each member of the Committee is given below :

Ms. Rehanuma Khan, Company Secretary acts as the Secretary to the Committee.

(iii) SHARE TRANSFER COMMITTEE:

Power of Attorney for transfer of shares and related matters has been given to Share Transfer

Agent i.e. M/s. Link Intime India Pvt. Ltd. (formerly known as M/s Intime Spectrum Registry

Limited) on 30.04.2007. During the year, no meeting of Share Transfer committee has been

held. On 31.03.2012, no application for share transfer was under process. On 31.03.2012, no

Demat request was under process.

8. GENERAL BODY MEETINGS:

Particulars of Annual General Meetings (AGM) held in the last three years are given below:

Date Time Nature of

Meeting Venue No of Special

Resolution

Passed 31.08.2009 11.00 A.M. A.G.M. 74-75, G.I.D.C. Nandesari (Guj.) Nil 15.09.2010 11.00 A.M. A.G.M. 74-75, G.I.D.C. Nandesari (Guj.) 1 14.09.2011 11.00 A.M. A.G.M. 74-75, G.I.D.C. Nandesari (Guj.) NIL

20


POSTAL BALLOT : During the year under review, three Special Resolutions were put through postal ballot pursuant to Section 192A of the Companies Act, 1956. The postal ballot was conducted by Shri Devesh A. Pathak, Practicing Company Secretary, who was appointed as scrutinizer by the Board of Directors of the company in their meeting held on 28.10.2011.

Item No.1 :

Alteration of the Object Clause under Clause III (C) (Other Object Clause) of the Memorandum of Association of the Company by insertion of new sub clauses – (s) & (t) pursuant to Section 17 and all other applicable provisions, if any, of the Companies Act, 1956.

Item No.2 :

Commencing and undertaking all or any of the businesses specified in the newly introduced sub clauses – (s) & (t) of Clause III (C) (Other Object Clause) of Memorandum of Association as and when deemed fit by the Board upon the aforesaid sub-clauses becoming effective pursuant to Section 149(2A) and all other applicable provisions, if any, of the Companies Act, 1956.

Item No.3 :

Commencing and undertaking all or any of the businesses specified in the sub clause – (i) of Clause III (C) (Other Object Clause) of Memorandum of Association as and when deemed fit by the Board pursuant to Section 149(2A) and all other applicable provisions, if any, of the Companies Act, 1956.

Conduct of Postal Ballot exercise

The Notice of the Postal Ballot dated 28.10.2011, Postal Ballot Form and self addressed pre-paid postage envelope were sent to the shareholders. The last date for receipt of the Postal Ballot form from the shareholders was 14.12.2011.

Results of the Postal Ballot

Particulars Resolution No. 1 (Special)

Resolution No. 2 (Special)

Resolution No. 3 (Special)

No. of Shares

Percen - tage

No. of Shares

Perce - ntage

No. of Shares

Percent- age

No. of valid votes polled

85326

100.00

84826

100.00

84826

100.00

Votes cast in favour of the resolution

77281 90.57 76821 90.56 76820 90.56

Votes cast against the resolution

8045 9.43 8005 9.44 8006 9.44

No. of invalid votes polled

3014 - 3514 - 3514 -

TOTAL 88340 88340 88340

The shareholders approved the above three resolutions with requisite majority.

21


The Scrutinizer submitted his report dated 19.12.2011 with the company and based on the said

report, results of Postal Ballot were declared by Director on 19.12.2011. The results were also

intimated to Bombay Stock Exchange Limited on the same date.

9. CODE OF CONDUCT :

The Board of Directors has laid down the Code of Conduct for all the Board Members and the

members of the Senior Management of the company. Certificate from Managing Director of the

Company affirming compliance of the said Code by all the Board Members and Senior Management

of the Company to whom the Code is applicable, is annexed separately to this Report.

10. MEANS OF COMMUNICATION:

The quarterly/half yearly/ annual unaudited / audited financial results of the Company are sent to

Bombay Stock Exchange Limited where the shares of the Company are listed, immediately after

their approval by the Board.

The above results are generally published in English and Gujarati language newspapers circulating in

Gujarat.

The results are not sent to the shareholders at their home.

The Company has placed its financials on its website www.libertyphosphate.com

During the year, the Company has neither made any representation to any analyst nor has given

any press release.

11. GENERAL SHAREHOLDERS INFORMATION:

(i) Annual General Meeting:

Date and Time : 23rd August, 2012 at 2.30 P.M.

Venue : Sayaji Hotel, Sayajigunj,

Kala Goda, Baroda (Gujarat).

(ii) Financial Calendar:

Board meeting for consideration of : 16-06-2012

Accounts for the year ended on

31.03.2012.

Book Closure date : 18.08.2012 to 23.08.2012

(both days inclusive)

Board Meeting for consideration of : within one & half month from

Unaudited results for the first three the end of the quarter as

quarters of the current financial year stipulated under the listing

viz: April 01,2011 to March 31,2012 agreement with the Stock Exchange.

Board Meeting for consideration of : within two months from

22


audited results for the current financial the end of the last quarter

year ending March 31, 2012 as stipulated under the

listing agreement with the

Stock Exchange (Tentative).

(iii) Dividend Payment Date : The proposed dividend, if approved, at the

ensuing annual general meeting, will be

distributed on or around 23rd August,

2012, within the statutory time limit.

(iv) Listing on Stock Exchanges Details:

Name and address Stock Code

Bombay Stock Exchange (BSE) 530273

Phiroze Jeejeebhoy Towers, 25th Floor,

Dalal Street, Mumbai- 400 001.

Listing fee for the year 2011-12 has been paid.

(v) Stock Market Price Data and Stock Performance:

High/Low share prices during the year i.e. 1st April, 2011 to 31st March, 2012:

Month LPL’s Share Price (BSE)

(in Rs.) BSE Sensex

(in Rs.) High Low High Low

April, 2011 59.85 47.55 19811.14 18976.19

May, 20 11 66.00 53.00 19253.87 17786.13 June, 2011 73.65 59.80 18873.39 17314.38 July, 20 11 67.85 60.20 19131.70 18131.86 August, 20 11 63.25 45.00 18440.07 15765.53 Sept., 2011 64.00 48.30 17211.80 15801.01

October, 2011 61.75 52.00 17908.13 15745.43 November, 2011 68.85 54.00 17702.26 15478.69

December, 20 11 57.00 45.20 17003.71 15135.86 January, 2012 59.00 49.75 17258.97 15358.02 February, 2012 70.70 57.00 18523.78 17061.55

March, 2012 77.90 62.55 18040.69 16920.61

23


(vi) Registrar and Transfer Agent:

The Company's shares are processed and transferred by Share Transfer Agent - M/s. Link Intime India Pvt. Limited. The Company complies with the requirements of Clause - 47 of the Listing Agreement.

Address for communication : M/s. Link Intime India Private Limited B–102 & 103, Shangrila Complex, Off. HDFC Bank, Near Radhakrishna Char Rasta, Akota, Vadodara – 390 020 Phone : 0265-2356573, 2356794. Fax : 2356791 E-Mail : [email protected]

(vii) Email ID of Grievance Redressal Division/Compliance Officer :

[email protected]

website : www.libertyphosphate.com

(viii) Share Transfer System: Share transfer in physical form, if clear in all respect, are affected and returned within a period of 30 days from the date of receipt by the Share Transfer Agent. The Equity Shares of the Company are traded on the Stock Exchange compulsorily in demat mode.

(ix) Shareholding Pattern as on 31.03.2012 :

Category No. of Equity shares held Share holding %

Promoters 8211349 56.87 Financial Institutions NIL NIL Mutual Funds NIL NIL Insurance Companies NIL NIL Nationalised Banks NIL NIL Bodies Corporate 510295 3.53 Foreign Body Corporate 2000000 13.85 NRI/NR 182780 1.27 Indian Public 3533777 24.48 TOTAL 14438201 100.00

(x) Distribution of shareholding as on 31.03.2012 :

No. of Equity

Shares No. of

shareholders No. of shares held Shareholding %

1 to 500 3832 694321 4.8089 501 to 1,000 578 498296 3.4512

1,001 to 2,000 225 365148 2.5290 2,001 to 3,000 84 220839 1.5295 3,001 to 4,000 35 125584 0.8698 4,001 to 5,000 32 154927 1.0730 5,001 to 10,000 60 468770 3.2467

10,001 and above 70 11910316 82.4917 TOTAL 4916 14438201 100.0000

24


(xi) Dematerialization of share and liquidity:

Trading of the Company's shares is compulsory in dematerialized form for all investors. Out of

the issued equity shares, 1,21,80,053 equity shares have been dematerialized with the following

depositories as on 31.03.2012 representing 84.36%. SEBI issued circular No. Cir/ISD/3/2011

dated 17th

June, 2011 requiring all listed companies to achieve 100% of the promoter's

and promoter group's shareholding in dematerialized form. In compliance of the same, the

entire shareholding of the promoter and promoter group has been dematerialized within the

specified time limit. Your company request you also to get your shares dematerialized.

Description ISIN Depositories

Equity Shares INE639D01011 National Securities Depositories Limited and

Central Depository Services (India) Limited

The liquidity of shares is normal.

(xii) Location of Plant (a) 74-75, GIDC, Nandesari, Baroda. (b) F-227, M.I.A., Madri, Udaipur (Raj.). (c) 19,Bhimpura Industrial Area,Jagpura, Kota(Raj.) (d) Survey No. 122 & 129, Rasal, Tal. Sudhagad,

Dist. Raigad (Maharashtra).

(xiii) Address for communication : LIBERTY PHOSPHATE LIMITED 74/75,GIDC, Nandesari, District : Vadodara PIN - 391 340 Phone No. : 0265-3063377, 2840096 Fax No. : 0265- 3062499 E-mail : [email protected]

[email protected] Website : www.libertyphosphate.com

(xiii) The Company has not obtained any public fund in the last three years.

(xiv) Outstanding GDR/ADR : Not Applicable.

(xv) Adoption of non-mandatory The Company has, so far, not implemented Non- requirements: Mandatory requirements of the Code of Corporate

Governance other than Remuneration Committee.

ANNEXURE TO CORPORATE GOVERNANCE REPORT Declaration regarding affirmation of Code of Conduct

In terms of the requirement of Clause 49 of the Listing Agreement, this is to confirm that all the members of the Board and the Senior Management Personnel have affirmed compliance with the Code of Conduct of the company for the year ended on 31

st March, 2012.

Place : Baroda Date : 16

th June, 2012.

R. R. Dhanani Chairman & Managing Director

25


To The Board of Directors Liberty Phosphate Limited 74-75, GIDC, Nandesari, Distt. Baroda (Guj.).

Re: REPORT ON CORPORATE GOVERNANCE

We have examined the records concerning the Company's compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement entered into by the Company with the Stock Exchanges of India for the financial year ended on 31

st March, 2012.

The objective of our examination is to give our opinion on whether the Company has complied with the conditions of Corporate Governance as stipulated in the provisions of Clause 49 of the Listing Agreement entered into by the Company with the Stock Exchange.

Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of an opinion on the financial statements of the company.

We have conducted our examination on the basis of the relevant records and documents maintained by the Company and furnished to us for examination and the information and explanations given to us by the Company.

Based on such examination, in our opinion, the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement of the Stock Exchange.

We further state that such compliance is neither an assurance as to the future viability of the Company nor to the efficiency with which the management has conducted the affairs of 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) Partner Proprietor

M.No. 72043 M.No.34994

Place: Baroda

Date :16th June, 2012

26


ANNEXURE - B

MANAGEMENT DISCUSSION AND ANALYSIS

The Board takes pleasure in presenting your Company's Twenty Fourth Annual Report for the year 2011-12 along with the compliance report on Corporate Governance. This chapter on Management Discussion and Analysis forms part of the compliance report on Corporate Governance.

Industry Structure and Development:

India is basically an agricultural country and agriculture is the backbone of Indian economy. As a result, Indian fertilizer industry has tremendous scope in the country as it is one of the allied parts of agriculture providing agri-input.

However, India has a tremendous task of feeding its fast increasing population. In order to be self sufficient in food grains, heavy reliance will have to be placed on fertilizers.

Single Super Phosphate (SSP) Fertilizer industry is the pioneering fertilizer industry in the country. Since conventional agricultural practices are still being pursued by the farmers who use most efficacious quality seeds & fertilizers due to poverty, SSP fertilizer is cost effective for them as it provides phosphorous and sulphur at lower cost. Hence, small and marginal farmers prefer to use it because it is easily affordable. Major portion of agricultural land in India is Sulphur deficient, and it adversely affects the crop yield. N, P, K & S in proper ratio increases fertility of soil. Single Super Phosphate (SSP) fertilizer contains Sulphur and Calcium besides Phosphorus so it is an ideal manure to eliminate sulphur deficiency of soil resulting into increase in yield of pulses, groundnut etc. to a great extent.

Today, Indian Fertilizer Industry is developing in terms of technology. Indian manufacturers are adopting advanced manufacturing processes to prepare innovative new products for Indian agriculture. Indian farmers have started making pace with the technological development. Uses of modern techniques of sowing wherein mixture of seeds and granular fertilizer is used at the time of sowing only. This has resulted into shifting of fertilizer demand from powder to granular fertilizer. In view of this, your company has enhanced production capacity of Granulated SSP from 247500 MT/annum to 330000 MT/annum during the year under review.

The role of SSP in improving soil health of the country is recognized and is proved by the recent policy pronouncement of the Union Government. Finance Act, 2012 has given stimulus to the fertilizer industry through reduction of basic customs duty on some water soluble fertilizers and liquid fertilizers, other than urea, from 7.5 percent to 5.0 percent and from 5.0 percent to 2.5 percent. Also the import of equipment for fertilizer projects are being fully exempted from basic customs duty of 5.0 percent for 3 years. We therefore expect SSP to have a good future in the years to come.

Performance:

Registering a turnover of Rs.48659.39 Lacs, the Company has earned a net profit of Rs.5391.38 Lakhs after providing for Income Tax compared to the corresponding figures in the previous year of Rs.36418.76 Lakhs and Rs.3518.52 Lakhs respectively. Consequently the turnover and net profit have gone up by 33.61% and 53.23 % over the corresponding figures of previous year.

Production:

During the year under review, your company achieved production of 483053 MT of Single Super Phosphate, NPK Mixed Fertilizers and Magnesium Sulphate as against production of 386016 MT in the previous year recording growth of 25.14 %.

27


Internal Control Systems and their adequacy:

The Company has proper and adequate system of internal controls to protect its all assets against loss from unauthorized use or disposition and all transactions are authorized, recorded and reported in conformity with generally accepted accounting principles. The Board of Directors has an Audit Committee, whose Chairman is an Independent Director. The Committee meets periodically to review internal controls.

Human Resources:

People play a vital role in an organization's portfolio and human capital forms the critical part of its privileged assets. Company continued its commitment to acquire, develop and enhance its human potential. Company's strategy of empowering people at all levels to take decisions and encouraging free flow of information and ideas, has helped in strengthening its human capital.

Opportunities :

The Company has four manufacturing units situated at Udaipur (Rajasthan), Nandesari (Gujrat), Kota (Rajasthan) and Pali (Maharashtra) which put it in a good stead to speedily service demand. Your company is also going to establish one more Unit at Raebarely in the State of Uttar Pradesh, where Plant & Machinery is under erection, and commercial production is likely to commence somewhere in the year 2012-13 to cater demand of North and East India speedily. Proximity to raw material sources/markets coupled with a dedicated multi-disciplinary work force has all along enabled the company to respond to spurts in demand. The Company's brand of Agri Inputs “DOUBLE HORSE” is well accepted in the market as premium quality product. The company can embark upon aggressive product promotion and customer education programmes which are required since the major target customer is the poor Indian farmer. The company with its sales network has started encashing on its link with the farmer to promote other Agri Inputs. The company is in advanced stage of talks with other manufacturers to roll out newer products so as to have a larger basket of offerings to its customers.

Threats :

Increase in margins will usher in new competition even business houses with zero experience in fertilizer manufacturing entering the sector, which the company is well poised to tackle since it has been in the market for long and its brand established. Since the company's business is dependent upon policy dispensations of the Government, any change therein may likely to affect the projections and plans of the company.

Future Outlook:

For an industry dependent upon food grain production to meet the requirement of ever growing population, the future outlook is positive. Despite India being third largest producer of fertilizer in the world, there is a scope of increasing production of fertilizer to cater the demand of farmers.

Cautionary Statement:

Statement in this management discussion and analysis describing the Company's objectives, projection, estimates and expectations may be 'forward looking statements' within the meaning of applicable laws and regulations. Actual results may differ from those expressed or implied as many factors- like, availability of raw materials, changes in political and economic environment in India, applicable Statutes, Labour Relations and Interest Costs etc., may affect the company's operations.

28


ANNEXURE -C

PARTICULARS PURSUANT TO SECTION 217 (1)(e) OF THE COMPANIES ACT, 1956 READ

WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF

DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORS' REPORT FOR THE

YEAR ENDED 31ST

MARCH, 2012.

1) CONSERVATION OF ENERGY: a) The company is taking adequate steps for the conservation of energy at every stage of production. b) The step taken by the Company for conservation of energy will result in reduction of energy

consumption and consequent impact on the cost of production in the coming years. c) The information pertaining to total energy consumption and energy consumption per unit of

production.

i) POWER AND FUEL CONSUMPTION

2011 -12 2010-11 1. Electricity

a) Purchased:

Unit : ‘000 KWH

Total Amount (Rs. in Lakhs)

Rate / Unit Rs.

b) Own generation:

Units generated Units

per ltr of fuel Cost /

Unit Rs.

2. Coal

Quantity MT

Total Cost (Rs. in Lakhs)

Average rate / MT Rs.

3. Furnace Oil Quantity KL

Total Cost Rs. in Lakhs

Rate / KL Rs.

4. Other internal generation

Total Cost (Rs. in Lakhs)

Rate / Unit

12735.53

725.20

5.69

NIL

NIL

NIL

7938.879

537.61

6771.88

NIL

NIL

NIL

NIL

NIL

10287.32

522.08

5.07

NIL

NIL

NIL

5405.616

311.27

5758.25

NIL

NIL

NIL

NIL

NIL

ii) CONSUMPTION PER UNIT OF PRODUCTION

Product Standard

( if any) Year ended

31.03.201 2 Year ended

31.03.20 11 Single Super Phosphate N.A. 17.95 18.8 1

2) TECHNOLOGYABSORPTION: The Company has carried no Research and Development activities during the year under review, however the Company continues to take measures to improve the process and reduce the cost time to time when found necessary. The company has not imported any technology.

3) FOREIGN EXCHANGE EARNINGS AND OUTGO:

(Rs. in Lakhs)

Year Ended

31.03.2012 Year Ended

31.03.2011 Foreign Exchange earnings:

Exports

Foreign Exchange outgo: Foreign Travel

Raw Material

Traded Goods and spares

NIL

4.73

7199.07

1118.93

25.75

1.43

6775.26

684.97

29


AUDITORS' REPORT

The Members of Liberty Phosphate Limited,

1. ....We have audited the attached Balance Sheet of Liberty Phosphate Limited as at 31st March, 2012 and also

the Statement of Profit and Loss 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, Statement of Profit and Loss & 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, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on

31st March 2012 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, 2012, and .......... ......(b) In the case of the Statement of Profit and Loss, 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.

For K.L. Vyas & Company, For V. Shah & Associates, Chartered Accountants Chartered Accountants FRN: 003289C FRN: 109816W

Place : Baroda. (K.L. Vyas) (V.R.Shah)

Date : 16th June, 2012 Partner

M. No. 72043

30

Proprietor

M. No. 34994


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 31

ST MARCH, 2012.

(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.321.57 Lacs (Previous Year – Rs. 268.28 Lacs) and balance due at the year end is amounting to Rs.321.57 Lacs (Previous Year – Rs. 268.28 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

31


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 31

st

payable. March, 2012 for a period of more than six months from the date, same are became

(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

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 2006-2007 2007-2008

2008-2009

2009-2010 2010-2011

Honourable High Court of Mumbai.

31.73 32.44 11.51

125.68

81.55

61.25 344.16

Total 360.68

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 (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) 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

Place : Baroda. (K.L. Vyas) (V.R.Shah)

Date : 16th June, 2012 Partner

M. No. 72043

Proprietor

M. No. 34994

33


BALANCE SHEET AS AT 31ST MARCH, 2012 (Rs. In Lacs )

Particulars Note No

As at 31st March, 2012

As at 31st March, 2011

I. EQUITY AND LIABILITIES

(1) Shareholders' Funds

(a) Share Capital (b) Reserves and Surplus

(c) Money received against share warrants (2) Share application money pending allotment

(3) Non-Current Liabilities (a) Long-term borrowings

(b) Deferred tax liabilities (Net) (c) Other Long term liabilities (d) Long term provisions

(4) Current Liabilities

(a) Short-term borrowings

(b) Trade payables (c) Other current liabilities

(d) Short-term provisions Total

II.Assets (1) Non-current assets

(a) Fixed assets (i) Tangible assets (ii) Intangible assets

(iii) Capital work-in-progress (iv) Intangible assets under development

(b) Non-current investments

(c) Long term loans and advances (d) Other non-current assets

(2) Current assets (a) Current investments

(b) Inventories (c) Trade receivables (d) Cash and bank balances

(e) Short-term loans and advances (f) Other current assets

Total

Significant Accounting Policies

Notes on Financial Statements

1 2

3

4 5

6

7 8

9

10

11

12 13

14

15 16 17

18 19

1 to 28

1943.82 12270.06

- -

410.24

348.28 213.16

-

6718.29

11909.05 1749.75

1480.85

1943.82 7228.22

- -

445.62

77.46 848.49

-

5433.96

6323.95 865.17

1583.40 37043.50 24750.09

3950.55 -

503.42 -

117.54

601.67 206.02

1900.00

7548.71 16657.89 4637.94

331.81 587.95

3028.09 -

742.55 -

117.54

443.09 98.12

181.25

8903.55 6258.65 3238.02

296.70 1442.53

37043.50 24750.09

This is the Balance Sheet referred to For and on behalf of the in our Report of even date Board of Directors

For K.L.Vyas & Company, For V. Shah & Associates,

Chartered Accountants. Chartered Accountants.

FRN: 003289C FRN: 109816W

(R.R.Dhanani)

CHAIRMAN & MANAGING DIRECTOR

(K.L.Vyas) (V.R. Shah)

PARTNER PROPRIETOR

M.NO. 072043 M.NO. 034994

Place : BARODA (S.Z. Memon) (Rehanuma Khan) Date : 16-06-2012 DIRECTOR COMPANY SECRETARY

34


STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2012 (Rs. In Lacs)

Particulars

Note No

For the year

ended 31st

March, 2012

For the year

ended 31st

March, 2011 CONTINUING OPERATIONS

INCOME

I. Revenue from operations

II. Other Income III. Total Revenue (I +II)

IV. Expenses:

Cost of materials consumed

Purchase of Traded Goods

(Increase)/Decrease in Inventory

Employee benefit expense

Financial costs Depreciation and amortization expense

Other expenses

Total Expenses

V. Profit before exceptional and extraordinary items

and tax (III-IV)

VI. Exceptional Items

Custom duty of Earlier Year

VII. Profit before extraordinary items and tax (V -VI)

VIII. Extraordinary Items

IX. Profit before tax (VII - VIII)

X. Tax expense:

(1) Current tax

(2) Deferred tax

(3) Income tax of earlier years

20

21

22

23

24

25

26

10

27

48659.39

302.28

36418.76

364.55 48961.67 36783.31

25352.80

1554.80

694.47

1608.49

1240.13

290.19

10180.68

16777.49

1925.15

3407.50

1238.98

697.49

281.40

6955.90 40921.56 31283.91

8040.11

-

8040.11

-

5499.40

57.09

5442.31

-

8040.11 5442.31

2379.60

270.82

(1.69)

5391.38

-

-

-

1887.05

(0.59)

37.33

3518.52

-

-

-

XI. Profit(Loss) for the year from continuing operations (IX-X) DISCONTINUING OPERATIONS

XII. Profit/(Loss) from discontinuing operations

XIII. Tax expense of discounting operations

XIV. Profit/(Loss) from Discontinuing operations(XII -

XIII) XV. Profit/(Loss) for the year (XI + XIV)

XVI. Earning per equity share of face value of Rs.10/- each

5391.38 3518.52

37.02

37.02

23.08

23.08 (1) Basic (In Rupees)

(2) Diluted (In Rupees)



1 to 28 This is the Statement of Profit & Loss referred to For and on behalf of the

in our Report of even date Board of Directors



FRN: 003289C FRN: 109816W


PARTNER PROPRIETOR

M.NO. 072043 M.NO. 034994

(R.R.Dhanani)


Place : BARODA (S.Z. Memon) (Rehanuma Khan)

Date : 16-06-2012 DIRECTOR COMPANY SECRETARY

35


CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2012 (Rs. in Lakhs)

A. CASH FLOW FROM OPERATING ACTIVITIES

31-03-2012 31-03-2011

Profit before Tax from continuing operations 8040.11 5442.31

Profit before Tax from discontinuing operations - -

Profit before Tax

Non-cash adjustment to reconcile profit before tax to net cash flows 8040.11 5442.31

Depreciation & Amortisation of Fixed Assets 290.19 281.40 Miscellaneous Expenses Written Off 4.77 49.67

Profit on Sale of Assets (Net) (93.24) (0.11) Loss on Sale of Investments 5.00 - Interest Paid 1240.11 697.49 Interest Received (177.60) (91.24) Dividend Received (14.02) -

1255.21 937.21 Operating Profit before working capital changes

Adjustments for: Increase/(Decrease) in trade payables

5585.10

(676.28)

Increase/(Decrease) in other current liabilities 948.19 (344.47) Increase/(Decrease) in other long term liabilities (635.33) 843.49 Decrease/(Increase) in trade receivable (10399.23) (3469.14) Decrease/(Increase) in long term advances (158.58) 25.31 Decrease/(Increase) in other non-current assets (112.67) (93.35) Decrease/(Increase) in short term advances (35.11) (175.86) Decrease/(Increase) in other current assets 854.59 (32.35) Decrease/(Increase) in Inventories 1354.84 1101.82

(1342.99) (1883.62)

Cash Generated from Operations 6697.12 3558.69 Less: Payment of Taxes (2746.45) (1006.34)

Net Cash Flow from Operating Activities (A) 3950.67 2552.35

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets (983.67) (1673.25)

Purchase of Investments (1900.00) (5.03) Sale/Adjustments of Fixed Assets 103.38 0.75 Sale of Investments 176.25 - Investment in Fixed Deposits (1343.13) (509.67) Interest Received 177.60 91.24 Dividend Received 14.02 -

Net Cash Flow from Investing Activities (B) (3755.55) (2095.96)

C. CASH FLOW FROM FINANCIAL ACTIVITIES

Proceeds from Long Term Borrowings 53.29 151.45 Repayment of Long Term Borrowings (88.67) (65.08) Short Term Borrowings (net) 1284.33 2098.38 Miscellaneous Expenditure Incurred - (2.50) Dividends paid (including dividend distribution tax) (147.17) (240.95) Interest Paid (1240.11) (697.49)

Net Cash Flow from Financing Activities (C) (138.33) 1243.81 D. NET INCREASE/(DECREASE) IN CASH & CASH EQUIVALENTS

56.79

1700.20

E. CASH & CASH EQUIVALENTS - OPENING BALANCE 1890.92 190.72

F. CASH & CASH EQUIVALENTS - CLOSING BALANCE 1947.71 1890.92

This is the Cash Flow Statement referred to

For and on behalf of the

in our Report of even date Board of Directors For K.L.VYAS & COMPANY, For V. Shah & Associates, Chartered Accountants Chartered Accountants FRN: 003289C FRN: 109816W


PARTNER PROPRIETOR

M.NO. 072043 M.NO. 034994

(R.R.Dhanani)


Place : BARODA (S.Z. Memon) (Rehanuma Khan) Date : 16-06-2012 DIRECTOR

36


SIGNIFICANT ACCOUNTING POLICIES

CONVENTION To prepare financial statements in accordance with applicable Accounting Standards in India. A summary of accounting

policies, which have been applied consistently, is set out below. The financial statements have also been prepared in

accordance with relevant presentational requirement of the Companies Act, 1956.

BASIS OFACCOUNTING The financial statements have been prepared under the historical cost convention and on accrual basis and on going concern

concept.

USE OF ESTIMATES The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of

assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the

reported period. Difference between the actual results and estimates are recognized in the period in which the results are

known / materialized.

FIXED ASSETS To state Fixed Assets at cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to

acquisition. In respect of major projects involving construction/fabrication, related pre-operational expenses form part of

the value of the assets capitalized. Expenses capitalized also includes applicable borrowing costs. To adjust the original cost

of fixed assets acquired through foreign currency loans at the end of each financial year by any change in liability arising out

of expressing outstanding foreign loan at the rate of exchange prevailing at the date of Balance Sheet. To capitalize software where it is expected to provide future enduring economic benefits. Capitalization costs includes

license fees and cost of implementation/system integration services. The costs are capitalized in the year in which the

relevant software is implemented for use.

All up-gradation/enhancements are generally charged off as revenue expenditure unless they bring similar significant

additional benefits. No amortization is provided in the Accounts in respect of leasehold land in view of the long term tenure, which is akin to

ownership. Depreciation on Fixed Assets is provided for on Written Down Value Method at the rates and in the manner specified in the

Schedule XIV of the Companies Act, 1956.

INVESTMENTS To state current investments at lower of cost and fair value, and long term investments are stated at cost. Where applicable,

provision is made where there is a permanent fall in valuation of long term investments.

CURRENT ASSETS Inventories are valued as: (a) Stores and Spares : at lower of cost or net realizable value (b) Raw Materials : at lower of cost or net realizable value (c) Work in process : at lower of cost or net realizable value (d) Finished Goods : at lower of cost or net realizable value

Cost is arrived at on First in First Out basis. Cost comprises expenditure incurred in normal course of the business in

bringing such inventories to its location and includes, where applicable, appropriate overheads based on normal level of

activities. Obsolete, slow moving and defective inventories are identified at the time of physical verification of inventories

and, where necessary, provision is made for such inventories.

FOREIGN CURRENCY TRANSACTIONS

(a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction.

(b) Monetary items denominated in foreign currencies at the year end are restated at the year end rates. In case of

items which are covered by forward exchange contracts, the difference between the year end rate and the rate on

the date of the contract is recognized as exchange difference and the premium paid on forward contracts is

recognized over the life of the contract.

37


(c) Non-monetary foreign currency items are carried at cost.

(d) In respect of branches, which are integral foreign operations, all transactions are translated at rates prevailing on

the date of transaction or that approximates the actual rate on the date of transaction. Branch monetary assets and

liabilities are restated at the year end rates.

(e) Any income or expense on account of exchange difference either on settlement or on translation is recognized in

the profit and loss account except in cases where they relate to acquisition of fixed assets, in which case they are

adjusted to the carrying cost of such assets.

INCOME Sales comprises sale of goods and services. Revenue in respect of purchase/sale of product and scrap is recognized at the point of receipt/despatch from/to parties

at/from plant and warehouses. Interest on Fixed Deposits with banks and other miscellaneous income are also accounted for on the accrual basis except

interest accrued on NSC, dividend and interest if any arising on income tax, sales tax and excise duty refunds.

BENEFITS TO WORKMEN Liabilities in respect of retirement benefits are provided for by monthly payments to pension and provident funds under the

Employees' Provident Funds (and Miscellaneous Provisions) Act, 1952 which are charged against revenue. Benefit in terms of workmen demand pending settlement, accumulated leave, medical reimbursement and leave travel

concession are accounted, when paid and bonus to employees, is provided for on accrual basis. Gratuity liabilities are determined as per the actuarial valuation done using the projected unit credit method. Gratuity Scheme in respect of the employees of the company is administered through Life Insurance Corporation of India

(LIC). Annual contribution as determined by the LIC are charged to the Profit & Loss Account. The additional liability, if

any, arising out of the difference between the actuarial valuation as at the Balance Sheet date and the fund balance is accrued

and provided for at the year end.

TAXES ON INCOME To provide and determine current tax as the amount of tax payable in respect of taxable income for the period. To provide and recognize deferred tax on timing differences between taxable income and accounting income subject to

consideration of prudence. Not to recognize deferred tax assets on unabsorbed depreciation and carry forward of losses unless there is virtual certainty

that there will be sufficient future taxable income available to realize such assets.

IMPAIRMENT OFASSETS Impairment is ascertained at each balance sheet date in respect of company's fixed assets. An impairment loss is recognized

wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net

selling price and value in use. In assessing value and use, the estimated future cash flows are discounted to their present

value based on an appropriate discount factor.

ACCOUNTING FOR PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS Provisions are recognized in terms of Accounting Standard 29-“Provisions, Contingent Liabilities and Contingent Assets”

issued by The Institute of Chartered Accountant of India, when there is a present legal or statutory obligation as a result of

past event where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of

the amount of the obligation can be made.

Contingent Liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or

non occurrence of one or more uncertain future events not wholly within the control of the company or where reliable

estimate of the obligation can not be made. Obligations are assessed on an ongoing basis and only those having largely

probable outflow of resources are provided for.

Contingent Assets are not recognized in the financial statements.

CLAIMS To disclose claims against the company not acknowledged as debts after a careful evaluation of the facts and legal aspect of

the matter involved.

38


NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012

Rs. in Lacs

As at 31st

March, 2012

As at 31st

March, 2011

NOTE 1.

SHARE CAPITAL

AUTHORISED SHARES

20000000 Equity Share of Rs.10/-each 2000.00 2000.00

(Previous Year 20000000 Equity Shares of Rs. 10/- each)

5000000 8% Cumulative Redeemable Preference 500.00 500.00

Shares of Rs. 10 each

(Previous year 5000000 8% Cumulative

Redeemable Preference Shares of Rs. 10 each)

ISSUED, SUBSCRIBED AND PAID UP SHARES

15000000 Equity Share of Rs.10/-each


Balance at the beginning of the year 1443.82 1443.82

Add: Issued during the year - -

Outstanding at the end of the Year 1443.82 1443.82

5000000 8% Cumulative Redeemable Preference







Total 1943.82 1943.82

a. Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of Rs.10/- per share. Each Holder of

equity shares is entitled to one per share. The company declares and pays dividends in Indian rupees. The

dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing


During the year ended 31st March 2012, the amount of per share dividend recognised as distributions to

equity shareholders was Rs.1.80 (Previous Year Rs.1.20)

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining

assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to

the number of equity shares held by the Shareholders.

b. Terms of redemption of Preference Shares

During the year ended 31st March 2008, the company issued 5000000 8% Cumulative Redeemable

Preference Shares of Rs.10/- each fully paid up. The Redeemable Preference Shares carry cumulative

rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the

ensuing Annual General Meeting.

The holders of the said shares shall have a right to attend general meetings and vote on resolution directly

affecting their interest or where the dividends in respect thereof are in arrears for not less than two years

on the date of the meeting, on all the resolution at every general meeting of the Company. In the event of winding up, the holders of the said shares shall be entitled to a preferential right of return of

the amount paid up on the shares together with arrears of cumulative preferential dividend due on the date

of winding up, but shall not have any further right or claim over the surplus assets of the Company.

The 8% Cumulative Redeemable Preference Shares will be redeemable at par in five equal installments, first

installment to start from the end of sixth year from the date of allotment.

39



Rs. in Lacs

As at 31st

March, 2012

As at 31st

March, 2011

c. Details Of Shareholders Holding More Than 5 Per Cent Shares

Name Of Shareholder No. Of Shares Held

As at 31st March,

Percentage

As at 31st March,

2012 2011 2012 2011

Equity Shares of Rs.10/- each fully paid Ms. Sumera Raoof Dhanani 2841558 2673657 19.68% 18.52% Ms. Sana Yusuf Dhanani 2092487 2367487 14.49% 16.40% Ms. Anisha Raoof Dhanani 1649191 1423056 11.42% 9.86% M/s. Blue Deebaj Chemicals LLC 2000000 2000000 13.85% 13.85%

Redeemable Preference Shares of Rs.10/- each fully paid up

Ms. Anisha Raoof Dhanani 2799148 2799148 55.98% 55.98% M/s. Blue Deebaj Chemicals LLC 2200852 2200852 44.02% 44.02%

As per records of the company, including its register of shareholders/members and other declarations

received from shareholders regarding beneficial interest, the above shareholding represents both legal

and beneficial ownerships of shares.

d. Reconciliation of number of shares outstanding is given hereunder

PARTICULARS NO. OF EQUITY SHARES NO. OF PREFERENCE SHARES As at 31st

March, 2012

As at 31st

March, 2011

As at 31st March,

2012

As at 31st March,

2011

At the beginning of the year 14438201 14438201 5000000 5000000

Add: Issued during the year - - - -

At the end of the year 14438201 14438201 5000000 5000000

NOTE 2.

RESERVES & SURPLUS

(a) Share Premium

Balance as per Last Balance Sheet 889.51 889.51

Add:- Premium on issue of shares during the year - -

Balance carried to Balance Sheet Total (a) 889.51 889.51

(b) General Reserve

Balance as per Last Balance Sheet 87.97 -

Add: Transferred from Profit and Loss Account 404.36 87.97

Balance carried to Balance Sheet Total (b) 492.33 87.97

(c) Statement of Profit & Loss.


Add: Profit /(Loss) for the year 5391.38 3518.52

Less: Appropriations

Transferred to General Reserve 404.36 87.97

Interim Dividend on Equity Shares - 86.63

Arrears of Dividend on Preference Shares - 120.00

Proposed Final Dividend on Equity Shares 259.89 86.63

Proposed Dividend on Preference Shares 40.00 40.00

Tax on Dividend 49.65 54.86

Balance of Profit /(Loss) carried to Balance Sheet Total (c) 10888.22 6250.74

Total (a+b+c) 12270.06 7228.22

40



NOTE 3.

LONG TERM BORROWINGS

SECURED LOANS

Deferred Credit against Purchase of Land $

As at 31st

March, 2012

Rs. in Lacs

As at 31st

March, 2011

From G.I.D.C. 88.67 177.34

UNSECURED LOANS #

From Related Parties

From Subsidiary Company 116.64 95.95

From Directors & their Relatives 204.93 172.33

Total 410.24 445.62

$ Deferred Credit against purchase of Land from GIDC, Bharuch, against purchase of lease hold land situated at

D-2/CH-38,GIDC, Dahej.

$ Amount Payable in 12 Quarterly Installments of Rs. 22.17 Lacs each starting from 30-06-2011 and ending on 31-03-2014.

$ Details of other Terms & Conditions are as under:

1. Rate of Interest : 12.50% p.a. (In addition to normal interest 3% will be charged for every month delayed)

2. Total No of future Installments payable as at 31st March, 2012 : 8 Quarterly Installments of Rs. 22.17 Lacs each,

out which 4 quarterly installments of Rs. 22.17 Lacs due within one year.

$ Net of Current Maturities payable with in one year from reporting date Rs.88.67 Lacs (Previous Year Rs. 88.67 Lacs)

# Loans from Related parties are on long term basis and repayable after 24 Months and are interest free.

NOTE 4.

DEFERRED TAX LIABILITIES

Deferred Tax Liability/Assets resulting from timing difference between the book Profit &

Tax profit is worked as under in terms of "Account¬ing Standard (AS-22) Accounting for taxes on Income" issued by the Institute of Chartered Accountants of India, Which is

Mandatory in nature.

Deferred Tax Liabilities

On account of Timing Difference in

In Depreciation 348.28 77.46

Deferred Tax Assets

On account of Timing Difference in

Unabsorbed Loss Carried Forward

-

-

Deferred Tax Liabilites (Net) 348.28 77.46 Amount debited/(Credited) to Profit & Loss Statement

NOTE 5.

270.82

(0.59)

OTHER LONG TERM LIABILITIES Trade Payables 19.88 43.90

Others

Advance from customers 1.64 8.98 Others 191.64 795.61

Total 213.16 848.49

41

Cash Credit 1744.59 1420.26 Buyers Credit Loan 1335.52 552.18

From Karur Vysya Bank Cash Credit - 1002.62 Buyers Credit Loan 425.30 1019.53

Cash Credit

From State Bank of India 750.81 816.75

Cash Credit 2462.07 -

Total 6718.29 5433.96



NOTE 6.

SHORT TERM BORROWINGS

SECURED LOANS

(a) From Banks Working Capital Facilities $

From IDBI Bank

As at 31st

March, 2012

Rs. in Lacs

As at 31st

March, 2011

Cash Credit - 323.29

Buyers Credit Loan - 299.33

From Canara Bank

From State Bank of Patiala

$ Working Capital limits from Consortium Member Banks are primarily secured by way of First Parri Passu Charge

through Hypothecation of the Stocks of Raw materials, material in process & finished goods and hypothecation of book

debts including the subsidy of the company

$ And also collaterly secured by way of

First pari-passu charge by way of equitable mortgage of immovable properties of the company situated at Plot No. 74,

75 and 83 at GIDC, Nandesari, Baroda (Gujarat)

First pari-passu charge by way of equitable mortgage of immovable properties of the Company situated at F-220,F-

221, F-222,F-224,F-225,F-226 & F-227, M.I.A., Madri, Udaipur (Rajasthan)

First pari-passu charge on the Land & Building, Plant & Machinery situated at Kota (Rajasthan) and Pali (Maharashtra).

First pari-passu charge to the Consortium Member Banks on Term Deposit amounting to Rs. 263.00 Lacs (Previous

Year

63.00 Lacs).

Also Secured by Personal Guarantee of Managing Director and Smt. Anisha Dhanani

NOTE 7.

TRADE PAYABLES

Total Trade Payable * 11928.93 6367.85

Less:

(a) Trade Payables having scheduled payment beyond

12 Months afer the reporting date 19.88 43.90

Balance due within normal operating cycle. Total 11909.05 6323.95

* The Company has not received information from vendors regarding

their status under the Micro, Small & Medium Enterprises

Development Act, 2006 and hence disclosure relating to amount

unpaid at the year end together with interest paid/payable under

the Act have not been given.

42



NOTE 8.

OTHER CURRENT LIABILITIES

(a) Current Maturities of Long Term Borrowings

SECURED LOANS

Term Loans from Banks

As at 31st

March, 2012

Rs. in Lacs As

at 31st

March, 2011

From Canara Bank - 151.67

Term Loans from Financial Institutions

From SIDBI - 90.00

From G.I.D.C. - 0.75

Deferred Credit against Purchase of Land

From G.I.D.C. 88.67 88.67

Total (a) 88.67 331.09

(b) Interest accrued but not due on borrowings - -

Total (b) - -

(c) Other Payables

Advance from Customers 205.52 181.26

Service Tax Payable 6.81 0.04

Income Tax deducted at source 18.28 17.88

VAT Payable 93.61 27.12

Excise Duty Payable 5.25 1.83

Creditors for Capital Goods 91.78 103.72

Book Overdrafts 62.80 0.01

Other Payables 1177.03 202.22

Total (c) 1661.08 534.08

Total (a+b+c) 1749.75 865.17

NOTE 9.

SHORT TERM PROVISIONS

(a) Provision for Employee Benefits

Provision for Salary & Wages

334.08

257.96 Provision for Bonus 22.28 22.00 Provision for PF & ESIC 12.99 11.16

Total (a) 369.35 291.12 (b) Other Provisions

Provision for Auditors Remuneration

2.30

2.53

Proposed Final Dividend 259.89 86.63 Dividend on Preference Share 40.00 40.00 Tax on Dividend 49.65 20.54 Current Tax 711.83 1080.37 Other Provisions 47.83 62.21

Total (b) 1111.50 1292.28 Total (a+b) 1480.85 1583.40

43


44


NOTE 10. FIXED ASSETS

PARTICULARS

GROSS BLOCK

DEPRECIATION

NET BLOCK

AS AT

SALE/

AS AT

31.03.2011

ADDITIONS TRANSFER 31.03.2012

AS AT

FOR THE

AS AT

31.03.2011 DEDUCTIONS

YEAR 31.03.2012

AS AT

AS AT

31.03.2012 31.03.2011

TANGIBLE ASSETS :

OWN ASSETS

LEASE HOLD LAND

AGRICULTURAL LAND

BUI LDING

PLANT & MACHINERY

LABORATORY EQUIPMENTS

FURNITURE & FIXTURES

VEHICLES

OFFICE EQUIPMENTS

DATA PROCESSING MACHINE

(Including Computers)

896.65

37.13

4.47

929.31

69.44

4.35

- 73.79

1766.83

504.59

- 2271.42

2191.59

614.28

6.12

2799.75

13.85

1.23

- 15.08

76.03

10.85

0.96

85.92

191.69

27.61

1.50

217.80

52.09

2.45

- 54.54

26.92

20.29

3.05

44.16

- -

- -

-

- -

-

626.25

- 114.65

740.90

1416.90

1.55

131.41

1546.76

6.49

- 1.15

7.64

38.08

0.32

7.42

45.18

111.29

1.16

27.90

138.03

39.77

- 1.92

41.69

18.22

2.94

5.74

21.02

929.31

896.65

73.79

69.44

1530.52

1140.58

1252.99

774.69

7.45

7.36

40.74

37.95

79.77

80.40

12.85

12.32

23.14

8.70

TOTAL (A)

INTANGIBLE ASSETS

5285.09

1222.78

16.10

6491.77

-

- -

-

2257.00

5.97 290.19

2541.22

-

- -

-

3950.55

3028.09

-

-

TOTAL (B)

TOTAL (A+B)

- -

- -

5285.09

1222.78

16.10

6491.77

- -

- -

2257.00

5.97 290.19

2541.22

- -

3950.55

3028.09

PREVIOUS YEAR

4189.15

1099.90

3.96

5285.09

1978.92

3.32

281.40

2257.00

3028.09

2210.23

CAPITAL WORK IN PROGRESS

INTANGIBLE ASSETS UNDER

DEVELOPMENT

-

- -

-

-

- -

-

-

- -

-

-

- -

-

503.42

742.55

-

-

1.

Lease

ho

ld L

and

and

Build

ing

inclu

de

s R

s.

249.2

2 L

acs (

Pre

vio

us ye

ar

Rs.

249

.22

Lacs)

pend

ing

reg

istr

atio

n w

ith

ap

pro

pria

te a

uth

ori

ty.

2.

Som

e o

f th

e v

eh

icle

s a

re i

n t

he n

am

e o

f d

irecto

rs/e

mp

loye

es.

3.

Lease

Hold

La

nd

inclu

de

s L

and a

t P

lot

No.

D-2

/CH

/38,

havin

g L

ice

nce t

o e

nte

rup

on c

um

rig

ht fo

r g

rant o

f Le

ase for

a p

erio

d o

f 99

ye

ars

by G

IDC

on t

he f

ulfill

ment

of

term

s &

conditio

ns

conta

ined

in

Allo

tme

nt

Letter

date

d 2

5-0

3-2

011 o

n c

onstr

uctio

n

of

Fert

iliser

Ma

nufa

ctu

ring

Facili

ty w

ithin

a s

tip

ula

ted pe

riod o

f 3 y

ea

rs.

4.

Cap

ita

l W

ork

in P

rog

ress in

clu

des P

re O

pera

tive

E

xpe

nses am

ounting

to

Rs.

13.2

2 L

acs (

Pre

vio

us Y

ear

Rs.

4.6

5 L

acs)

the date they are due for payment 6.12 0.68

Interest accrued on fixed deposits 94.10 25.10 Interest accrued on deposits 0.77 0.40 Preliminary Expenses not w/off - 4.77 Others 105.03 67.17

Total 206.02 98.12



Rs. in Lacs

NOTE 11.

NON CURRENT INVESTMENTS Trade Investments (Unquoted, at cost & fully paid up)

Shares of a 100% subsidiary company,

Nos. F.V.

As at 31st

March, 2012

As at 31st

March, 2011

Liberty Pesticides & Fertilizers Ltd. 750000 10.00 112.50 112.50

Shares of NECL 400 10.00 0.04 0.04

Non-Trade Investments (valued at cost unless stated otherwise) In Mutual Fund - Quoted fully paid up

50000 Units of Canara Robecco Mutual Fund 5.00 5.00

NOTE 12.

Total 117.54 117.54

Aggregate amount of Quoted investments 5.00 5.00 Market Value of Quoted investments 5.29 5.26

Aggregate book value of Un-Quoted investments 112.54 112.54

LONG TERM LOANS & ADVANCES

UNSECURED CONSIDERED GOOD (a) Capital Advances 121.64 0.69

(b) Security Deposits with Govt. & Others * 252.09 200.33

(c) Loans & Advances to Related Parties - -

(d) Advances recoverable in cash or kind or for

value to be received. 26.77 192.04

(e) Other Loans & Advances Prepaid Expenses 0.42 - Loans to Employees

Balances with Statutory/Government A thorities

0.11

200.64 -

50.03

Total 601.67 443.09 * Securities Deposits includes Deposit against House amounting to Rs.112.39 Lacs

(Previous Year Rs. 109.43 Lacs) paid to Smt. A.R. Dhanani (Relative of Key Management Personnel) NOTE 13. OTHER NON-CURRENT ASSETS

UNSECURED CONSIDERED GOOD (a) Trade Receivables

Outstanding for a period exceeding six months from

(b) Other Loans & Advances

NOTE 14. CURRENT INVESTMENTS

Non-Trade Investments (valued at cost unless stated otherwise)

Government & other securities (quoted at cost)

6.65% Fert. Co. GOI SPL 2023 Bonds 2000 Nos - 181.25 Other Investments

In Mutual Fund - Quoted fully paid up 189468.9870 Units of SBI Premier Liquid Fund 1900.00 -

Total 1900.00 181.25

Aggregate amount of Quoted investments 1900.00 181.25 Market Value of Quoted investments 1900.00 181.25 Aggregate book value of Un-Quoted investments - -

45



NOTE 15.

INVENTORIES (Valued at lower of cost and net realisable value)

As at 31st

March, 2012

Rs. in Lacs As

at 31st

March, 2011

Raw Materials 4292.05 4942.68

Finished Goods 2997.19 3610.22

Traded Goods 42.04 127.08

Packing Materials 50.98 73.38

Stores and Spares 149.26 132.24

Fuel 17.19 17.95

Total 7548.71 8903.55

NOTE 16.

TRADE RECEIVABLES

(Unsecured and Considered Good)



Others 16591.40 6001.04

Total 16657.89 6258.65

Trade Receivables includes due from Tungabhadra Fertilisers & Chemicals Co. Ltd., a Related Party,

amounting to Rs. 784.67 Lacs (Previous Year Rs. Nil)

NOTE 17.

CASH AND BANK

BALANCES Cash and cash

equivalents Balances with

banks:

On Current Accounts:

With Scheduled Banks

@ Others 1931.47

- 1858.77

- Cash on Hand 16.24 32.15

Other Bank balances

In Fixed Deposits Accounts with Scheduled Banks : *

With original maturity of more than 12 months 257.14 499.45 Others 2433.09 847.65

Total 4637.94 3238.02

@ Balances with Bank includes Unclaimed Dividend Rs. 2.16 Lacs (Previous Year Rs. Nil)

* Includes Rs. 263.00 Lacs (Previous Year Rs. 63.00 lacs) given as First pari-passu charge to the

Consortium Member Banks against Working Capital Facility.

* Includes Rs. 2427.03 Lacs (Previous Year Rs. 12.83 Lacs) Pledged with

banks for Margin Money against issue of Letter of Credit & Bank

Guarantee.

NOTE 18.

SHORT TERM LOANS & ADVANCES

(Unsecured and Considered Good)

Loans and advances to related parties

Deposits

-

-

-

-

Others

Prepaid Expenses

144.02

108.95 Loans to Employees 15.37 10.88 Balances with Statutory/Government Authorities 169.64 176.87 Others 2.78 -

Total 331.81 296.70 NOTE 19.

OTHER CURRENT ASSETS

Accrued Interest on Deposits 0.72 0.70 Prepayments against Goods * 568.42 1369.81 Prepayments against Services 17.96 70.92 Prepaid Insurance & Expenses 0.85 1.10

Total 587.95 1442.53 * Prepayments against Goods includes payment made to Liberty Urvarak Limited, a related

party, amounting to Rs. 437.88 Lacs (Previous Year Rs. Nil), against purchase of Raw Material.

46



NOTE 20.

REVENUE FROM OPERATIONS

SALE OF PRODUCTS

For the year

ended 31st

March, 2012

Rs. in Lacs

For the year

ended 31st

March, 2011


Traded Goods 1659.32 1840.14

Cost of SSP consumed for NPK manufacturing 4.37 0.99

SALE OF SERVICES

- -

OTHER OPERATING REVENUE

Scrap Sales 0.21 23.53

Others 97.19 71.55

48659.39 36418.76

Less: Excise Duty Recovered - -

20.1 Details of Products Sold/Transferred

Total 48659.39 36418.76

Finished Goods Sold

Single Super Phosphate 45861.10 33589.72

NPK mix fertiliser 630.70 581.46

Magnesium Sulphate 406.50 311.37

Total 46898.30 34482.55

Traded Goods Sold

Rock Phosphate 1564.97 678.40

Di Ammonium Phosphate - 390.87

Urea - 116.99

Muriate of Potash 9.23 25.17

TSP - 168.25

Mono Ammonium Phosphate 85.12 460.46

Total 1659.32 1840.14

NOTE 21. OTHER

INCOME INTEREST

INCOME ON Bank Deposits 174.37 71.13

Security Deposits 2.74 2.06

GOI Special Bonds 0.48 14.00

I.T. Refund - 4.04

OTHER NON OPERATING

Income on foreign currency transactions

-

245.09 Dividend on Investments 14.02 - Profit on sale of Fixed Assets 93.24 - Office Rent - 1.25 Stores Adjusted on Physical Verification 0.48 0.02 Subsidy on Freight - 8.19 Excess provision of earlier year written back

Prior Period Income -

2.46 16.37

- Miscellaneous Income 14.49 2.40

Total 302.28 364.55

47



Rs. in Lacs

NOTE 22.

COST OF MATERIALS CONSUMED

For the year

ended 31st

March, 2012

For the year

ended 31st

March, 2011

Inventory at the beginning of the year 4942.68 2685.22

Add: Purchases 24707.41 19837.18

Add: Cost of SSP Consumed for NPK Manufacturing 4.37 0.99

29654.46 22523.39

Less: Cost of Raw Material Transferred to Trading 9.61 803.22

Less: Inventory at the end of the year 4292.05 4942.68

Cost of Materials Consumed Total 25352.80 16777.49

2011-2012 2010-2011

Rs. % of Rs. % of

Consumption Consumption

Imported 9116.97 36% 5151.90 31%

Indigeneous 16235.83 64% 11625.59 69%

25352.80 100% 16777.49 100%

22.1 Details of Materials Consumed


Sulphuric Acid 5947.24 3578.00

Borax 0.32 -

Urea 96.55 128.65

Di Ammonium Phosphate 204.13 96.22


Mono Ammonium Phosphate - 38.81



Dolomite Powder 36.57 6.59

Total 25352.80 16777.49

22.2 Details of Inventory at the end of the year



Borax - 0.32

Urea 25.59 45.80






Phospho Gypsum 1.82 9.23


Total 4292.05 4942.68

NOTE 23.

PURCHASE OF TRADED GOODS



TSP - 166.61


Transferred from Raw Material

Rock Phosphate - 257.69

Urea - 125.49



Muriate of Potash Total 9.23 25.73

1554.80 1925.15

48



NOTE 24.

CHANGES IN INVENTORIES OF FINISHED GOODS AND

TRADED GOODS

For the year

ended 31st

March, 2012

Rs. in Lacs

For the year

ended 31st

March, 2011

Inventories at the end of the year


Traded Goods 42.03 127.08

3039.23 3737.30

Inventories at the beginning of the year

Finished Goods 3610.22 7099.16 Traded Goods 127.08 45.64

3737.30 7144.80 Less: Adjustment for loss due to rain 1.13 - Less: Transferred to Raw Material 2.47 -

3733.70 7144.80 (Increase)/decrease in Inventory 694.47 3407.50 24.1 Details of Inventory

Finished Goods

Single Super Phosphate

2709.77

3444.64 Magnesium Sulphate 103.98 45.16 NPK mix fertiliser 183.45 120.42

Total 2997.20 3610.22

Traded Goods

Potassium Nitrate 0.90 1.09 Potassium Sulphate 0.24 0.24 Mono Ammonium - 81.46 Ammonium Sulphate 7.28 7.28 Calcium Nitrate - 0.04 Calcite 0.70 0.70 NPK mix fertiliser 1.18 1.38 KMAG 3.60 3.60 Sulphuric Acid - 2.47 Gypsum - 0.69 GTSP 28.13 28.13

Total 42.03 127.08 NOTE 25.

EMPLOYEE BENEFIT EXPENSES

Salaries, Wages & Bonus 1400.04 1051.48 Contribution to E S I 9.18 10.68 Contribution to P F 48.67 39.66 Gratuity 28.00 30.18 House Rent 81.54 76.06 Staff & Labour Welfare 41.06 30.93

Total 1608.49 1238.98 49

Total (c) 694.12 679.69 Total (a+b+c) 10180.68 6955.90



Rs. in Lacs

NOTE 26.

FINANCIAL COSTS

INTEREST EXPENSE

Interest paid to Banks

For the year

ended 31st

March, 2012

For the year

ended 31st

March, 2011

Term Loans

Working Capital Loans

Interest paid to

Others Term Loans

Suppliers

Others

On Late deposit of Statutory dues

OTHER BORROWING COSTS

Bank Commission & Charges

Processing Charges

Foreign Exchange Fluctuation

NOTE 27.

OTHER EXPENSES

MANUFACTURING EXPENSES

Packing Material Consumed

Repairs & Maintenance & Stores Consumed

Factory Light,Water,& Generator Exp.

Fuel Consumed

Laboratory Expenses

Insurance Expenses

Loader & Shifting Expenses

Other Manufacturing expenses

SELLING AND DISTRIBUTION EXPENSES

Freight Outward

Rebate, Cash Discount & Others

Advertisement Sales

Promotion

Warehousing/Godown Rent

ADMINISTRATIVE AND OTHER EXPENSES

Office Rent & Maintenance

Guest House

Expenses Travelling

Expenses Conveyance

Expenses Printing &

Stationery Trunks &

Telephones

Membership &

Subscription Legal &

License Fees Professional &

Consultancy Auditors'

Remuneration Rent, Rates

& Taxes

Listing Fees

Vat on Stock Transfer

Postage & Telegram

Directors' Sitting Fees

Misc. Expenses

Donation

Security Watch & Wards

Service Tax

Entry Tax

Excise Duty

Loss due to Rain

Loss on sale of Investments

Sundry Balances Written off

Short provision of earlier year

Penalty on VAT, Service Tax

Miscellaneous Expenses W/off.

Public Issue Expenses W/off.

Prior Period Expenses

20.65 25.62

197.90 325.13

33.10 22.87

384.22 141.28

3.00 -

2.08 2.86

189.51 152.66

58.02 27.07

351.65 -

Total 1240.13 697.49

1221.85 944.01

658.78 636.44

752.46 545.37

537.61 311.27

11.11 10.66

13.99 8.21

42.69 34.06

202.62 55.02

Total (a) 3441.11 2545.04

3865.65 2679.83

2081.08 959.47

2.27 2.04

38.54 33.58

57.91 56.25

Total (b) 6045.45 3731.17

22.60 23.44

8.51 7.35

96.14 81.40

32.67 30.50

18.92 15.73

20.96 21.48

2.78 1.28

14.68 8.72

31.02 25.72

3.42 3.30

18.42 38.80

0.44 0.33

146.18 182.54

6.89 4.31

1.65 -

4.40 4.76

0.85 0.42

49.73 47.74

131.76 98.27

11.33 18.46

8.30 12.51

1.13 -

5.00 -

14.94 -

30.77 -

5.86 0.69

4.77 46.81

- 1.94

- 3.19

50


NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST

MARCH, 2012

NOTE 28.

28.1 Contingent liabilities not provided for:

(a) Bills discounted with bank outstanding - Rs. Nil (Previous year Rs. Nil Lacs).

(b) Letter of Credits outstanding - Rs.10766.63 Lacs (Previous year - Rs. 6418.76 Lacs) and

Margin Money given there against Rs. 2427.03 Lacs (Previous Year – Rs. 1345.90 Lacs).

(c) Guarantees given by Company's Banker on behalf of the Company –Rs 228.46 Lacs (Previous

year Rs. 70.40 Lacs).

(d) The Company has executed bonds in favour of Excise Department in connection with

purchases of raw material without levy of excise – Rs.244.00 Lacs (Previous year Rs. 184.80

Lacs).

(e) The company purchased manufacturing facilities of fertilizers from Liberty Pesticides &

Fertilizers Ltd (A subsidiary Company) on 1.10.1997. Registration of transfer is pending as

the company disputed that the registration of property in the name of company, is not liable for

the payment of stamp duty under Rajasthan Stamp Law (Adaption) Act, 1952 read with

section 9 (1) (a) of Indian Stamp Act, 1899 and accordingly preferred writ before hon'ble High

Court of Rajasthan. Likely amount of stamp duty, if any payable, will be Rs.26.85

Lacs (Previous year 26.85 Lacs).

(f) Demands of Sales Tax Authorities not acknowledged by the Company and contested/appealed,

Rs.13.02 Lacs (Previous Year Rs. 13.02 Lacs). Amount paid there against as the matter of

prudence Rs.2.77 Lacs (Previous Year- Rs.2.77 Lacs).

(g) Demand of Income Tax not acknowledged by the company and contested/appealed Rs. 03.50

Lacs (Previous year – Rs. 03.50 Lacs). Amount paid there against as the matter of prudence Rs.

03.50 Lacs (Previous year –Rs. 03.50 Lacs).

(h) Demand of Differential Customs Duty on Import of Rock Phosphate not acknowledged by the

company and contested/appealed Rs.344.16 Lacs (Previous year – Rs. 344.16).

28.2 Claims against the company not acknowledged as debts:-

Claims on account of rebate, discount & freight - Rs.Nil (Previous year- Rs. 27.95 Lacs).

28.3 Estimated capital commitments not provided for - Rs.2000.00 Lacs (Previous year Rs. 600.00

Lacs).

28.4 Depreciation for the period has been calculated at the rates and in the manner specified in

Schedule XIV to the Companies Act, 1956 vide notification No. GSR 756 (E) dated 16.12.93 of

the Department of Company Affairs, Govt. of India. For the purpose of determining the

appropriate depreciation rates, Plant and Machinery falling in the category of continuous process

plants has been identified on the basis of technical opinion obtained by the company. Extra shift

depreciation, wherever applicable is calculated on actual shift basis in respect of each plant/unit.

28.5 No provision has been made in respect of :

-fall in the value of long term investment in shares of subsidiary company and others, since in the

opinion of the management book value of the shares is sufficient to cover temporary fall in

the value of shares. Further, to inform that investment made is in the nature of trade investment.

-The Company has not received information from vendors regarding their status under the Micro,

Small & Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid

at the year end together with interest paid/payable under the Act have not been given.

51

Imported - - - - Indigenous 1221.85 100.00 944.01 100.00



MARCH, 2012

28.6 Value of Imported and Indigenous material consumed :

Year Ended Year Ended

31 -03-2012 31- 03-2011

i) Raw Material

Rs. in Lacs % of total

consumption

Rs. in Lacs % of total

consumption

Imported (Cost to the Company) 9116.97 35.96 5151.89 30.71 Indigenous 16235.83 64.04 11625.60 69.29 Total 25352.80 100.00 16777.49 100.00

ii) Components, Spare parts & stores Imported - - - Indigenous 411.72 478.21 100.00

Total 411.72 100.00 478.21 100.00

iii) Packing Material Consumed

Total 1221.85 100.00 944.01 100.00

28.7 CIF value of Imports (on accrual basis):

Year Ended 31.03.201 2

(Rs. in Lacs)

Year Ended 31.03.2011

(Rs. in Lacs)

Raw Material 7199.07 6775.26 Traded Goods 1118.93 684.97

28.8 Expenditures in Foreign Currency

Travelling 4.73 1.43

28.9 F.O.B. value of Earnings in foreign exchange

(On accrual basis)

- 25.75

28.10 Remittance in Foreign Currency on account of Dividend:

The Company has remitted Rs. 29.61 Lacs (Previous Year Rs 64.82Lacs) in foreign currencies on account of dividends during the year and does not have information as to the extent to which remittance, if any, in foreign currencies on account of dividends have been made by/on behalf of non-resident shareholders. The particulars of dividends paid to non- resident shareholders for the year 2010-2011 and 2011-2012, are as

Particulars No. of Non-

resident

Shareholders

No. of

Equity

Shares held

Amount of dividend

(Rs. In Lacs)

EQUITY SHARES 2011-2012 2010-2011

Interim dividend for 2010-2011 declared

in October 2010.

Final dividend for 2010-2011 declared in

September 2011.

PREFERENCE SHARES

Arrears of dividend of earlier years declared in October 2010.

Dividend for 2010-2011 declared in September 2011.

63 7796394 - 46.78

65 7789724 46.74 -

1 2200852 - 52.82

1 2200852 17.61 -

52



MARCH, 2012

28.11

Auditors’ remuneration:

I. Statutory Auditors:


(Rs. in Lacs)


(Rs. in Lacs)

a) Statutory Audit 1.88 1.86

b) Tax Audit 0.25 0.25

c) Taxation 0.25 0.25

d) Certification 0.25 0.25

e) Company law matters 0.25 0.25

f) Other Services 0.24 0.24

Total 3.12 3.10

II. Cost Auditors

a) Cost Audit Fees *

(Including Service Tax &

Out of Pocket Expenses)

0.30 0.20

28.12 Capitalisation of Pre Operative Expenditure :

During the Year, the company has capitalized the following expenses of revenue nature to the cost of capital work in progress. Consequently, the expenses disclosed under the respective notes are net of

amounts capitalized by the Company.

(Rs. in Lacs) PARTICULARS

Salaries & Wages 31

ST MARCH, 2012

2.99 31

ST MARCH,

2011

1.27 Consumption of stores and spares 0.59 1.12 Professional & Consultancy 4.50 0.24 Other Administrative Expenses 0.48 2.03

Total 8.56 4.66

28.13 Details of Prior Period Adjustments (Net) : (Rs. In Lacs)

PARTICULARS 31ST

MARCH, 2012 31ST

MARCH, 2011 Amount Credited

Balances of Earlier Year W/off. 0.47 0.65

Rebate & Discount 3.14 -

Discount on Purchase 2.80 - Total 6.41 0.65

Amount Debited

Rent, Rates & Taxes 0.56 1.24 Financial Charges 1.44 1.93

Other Administrative Expenses 1.95 0.67

Total 3.95 3.84

Net Adjustments Cr./(Dr.) 2.46 (3.19)

28.14 In view of mandatory Accounting Standard (AS) -15 “Accounting for Retirement Benefits in the

Financial Statements of Employers” is dealt as under:

- Liability in respect of provident fund are provided for by monthly payments to pension and

provident fund under the Employees' Provident (and Miscellaneous Provisions) Act, 1952, which

are charged against revenue.

53


NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31

ST MARCH, 2012

- Gratuity liabilities are determined as per the actuarial valuation done using the projected unit

credit method.

- Gratuity Scheme in respect of the employees of the company is administered through Life Insurance Corporation of India (LIC). Annual contribution as determined by the LIC are charged to the Profit & Loss Account. The additional liability, if any, arising out of the difference between the actuarial valuation as at the Balance Sheet date and the fund balance is accrued and provided for at the year end.

- Employees are entitled to accumulate their privilege leave within specified limits and can claim encashment thereof while in service or on separation or on superannuation or otherwise. This is not treated as specific retirement benefit and the cost thereof is accounted for in the year in which the claims are received.

28.15 Related party disclosure under Accounting Standard (AS) –18

a) The list of the related parties as identified by the management are as under: i) Enterprises over which Key Management Personnel with relatives, is able to exercise

significant influence:


2. Liberty Pesticides & Fertilizers Limited (A wholly owned subsidiary).

3. A.R. Exports.

4. Liberty Urvarak Limited.

ii) Key Management personnel of the Company: Directors of the Company

iii) Relative of Key Management personnel: 1. Smt. A.R.Dhanani 2. Smt. Suchitra Dhanani

The following transaction were carried out with related parties:

S.No. Particulars Key management

personnel and their relatives

Rs. In Lacs

Enterprises over KMP

with their relative, is

able to exercise

significant influence

Rs. In Lacs

1. Balance outstanding against purchases & sales

and advances there against,

31.03.12 31.03.11 31.03.12 31.03.11

- Debit - 1222.55 -

- Credit 300.88 214.08 - 756.95 2. Balance outstanding as Investments - - 112.50 112.50 3. Payment made on their behalf 366.09 128.49 13044.02 13660.62 4. Payment made on our behalf 0.71 188.84 12292.47 11802.87 5. Purchases of Assets - - - - 6. Service/Rent/Consultancy/Finance Charges - - - 1.14 7. Remuneration/Commission to the Directors 444.35 305.90 - - 8. Sale of goods - - 1651.83 462.39 9. Purchase of goods - - 453.92 1175.82 10. Deposits against House 112.39 109.43 - - 11. Guest House Rent 4.87 4.80 - - 12. Unsecured Loans 168.00 168.00 130.33 100.29

54



MARCH, 2012

28.16 Earning/(Loss) per share (EPS) is calculated as under:

Year Ended 31- 03-2012 Year Ended 31-03- 2011

a) Numerator:

Net Profit after tax as per Statement of Profit & Loss 5391.38 3518.52

Preference Dividend & Income Tax Thereon

(Including Arrears of Earlier Year s) (46.49) (186.42) Net Profit/(Loss) attributable to equity share holders 5344.89 3332.10

b) Denominator: Number of Equity shares

Weighted average number of equity shares outstanding during the year

14438201 14438201

14438201

14438201

c) Nominal value of Equity Shares (in Rs.) 10/- 10/-

d) Earning/(Loss) per share 37.02 23.08

28.17 Segment Reporting:

That the Board of Directors, is of the opinion that the company is engaged in manufacture & sale of Fertilizers namely Single Super Phosphate, NPK Mixture Fertilizers & MGSO4 and accordingly dealing in same segment namely Chemical Fertilizers. Likewise, the manufacturing and marketing operations of the company are also confined only in the India. As such, no segment is formed and accordingly no segment reporting is done in terms of the requirement of Accounting Standard (AS–17) “Segment Reporting” issued by the Institute of Chartered Accountants of India for the year ended 31

st March, 2012.

28.18 Impairment of Assets :

That the Board of Directors, is of the opinion that the discounted net future generation from the Assets in use & shown in the schedule of Fixed Assets, is more than the carrying amount of Fixed Assets in Balance Sheet, as such, no provision for Impairment of Assets is required to be made in terms of the requirement of Accounting Standard (AS–28) “Impairment of Assets” issued by the Institute of Chartered Accountants of India for the year ended 31

st

March'2012.

28.19 Financial Derivative Instruments and unhedged foreign currency exposure:

a. Nominal amount of derivative contracts entered into by the Company and outstanding as on 31st

march amount to Rs. Nil (Previous Year Rs. Nil).

b. Foreign currency exposures on account of Import Trade Payable and are not hedged by

derivative instruments as on 31st

March, 2012 amount to Rs. 5115.29 Lacs (Previous Year Rs.1435.69

Lacs) ((In USD 100.55 Lacs ) (Previous Year USD 32.08 Lacs)).

28.20 In the opinion of the Directors, Current Assets, Loans and Advances have the value at which they are stated in the Balance Sheet, if realized in the ordinary course of business. Further, Directors are of the opinion that all the liabilities have been duly reflected in the Balance Sheet and nothing is remained to be disclosed for. Sundry Debtors, Creditors and Advances are subject to reconciliation and confirmation.

28.21 In the opinion of Board of Directors there exists adequate accounting & internal control system designed to prevent and detect fraud or errors and in the opinion of Board of Directors that any uncorrected misstatements resulting from either fraud or errors are in the managements opinion immaterial both individually & aggregate in the Financial statements.

28.22 During the year ended 31st

March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, The company has reclassified previous year figures to conform to this year' classification.

As per our Report attached.

For K L Vyas & Company For V Shah & Associates For and on behalf of the Board Chartered Accountants FRN: 003289C

Chartered Accountants FRN: 109816W

(K L Vyas ) (V R Shah) (R R Dhanani) (S.Z.Memon)

Partner P roprietor Chairman & Managing Director Director M. No. 72043 M. No. 34994

Place : Baroda (Rehanuma Khan) Date : 16

th June, 2012 Company Secretary

55


AUDITORS' REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

To, The Board of Directors, Liberty Phosphate Limited

We have examined the attached Consolidated Balance Sheet of Liberty Phosphate Limited (hereinafter called “Company”) and it's wholly owned subsidiary Liberty Pesticides & Fertilizers Limited, as at 31

st March, 2012

(hereinafter individually called “Subsidiary” & along with the Company as “Group”) the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statements 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 the financial statements based on our audit.

We have conducted our audit in accordance with generally accepted auditing standards in India. These standards require that we plan and perform the audit to obtain reasonable assurance, whether the financial statements are prepared, in all material respects, in accordance with an identified financial reporting frame work and are free of material mis-statements. An audit includes examining on 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 statements. We believe that our audit provides a reasonable basis for our opinion.

We did not audit the financial statements of Liberty Pesticides & Fertilizers Limited, whose financial statements reflect total assets of Rs. 221.69 Lacs (Previous Year – Rs. 223.60 Lacs) as at 31

st March, 2012 and

total revenue of Rs. 24.15 Lacs (Previous Year – Rs. 11.66 Lacs) for the year ended on 31st

March, 2012. These financial statements have been audited by other auditor, whose report has been furnished to us, and in our opinion, so far as it relates to the amounts included in respect of the subsidiary, is based solely on the report of the other Auditor.

We report that the Consolidated financial Statements have been prepared by the Company, in accordance with the requirements of Accounting Standards (AS) 21 – Consolidated Financial Statements and Accounting Standard (AS) 23 – Accounting for investment in Associates in Consolidated Financial Statements, both issued by the Institute of Chartered Accountants of India, and on the basis of the separate audited financial statements of the Company, and it's subsidiary.

On the basis of the information and explanations given to us and on the consideration of the separate audit reports on individual audited financial statements of the Company, and it's subsidiary, we are of the opinion that the Consolidated Financial Statements give true and fair view in conformity with the Accounting Principles generally accepted in India :

a) In the case of Consolidated Balance Sheet, of the Consolidated State of Affairs of the Group as at

31st March, 2012.

b) In the case of the Consolidated Statement of Profit and Loss, of the Consolidated Results of the operations of the Group for the year ended on that date; and

c) In the case of the Consolidated Cash Flow Statement, of the Consolidated Cash Flows of the Group for the year ended on that date.

Place : Baroda

Date : 16th June, 2012

For K.L.Vyas & Company, Chartered Accountants FRN: 003289C

(K. L. Vyas ) Partner M.No. 72043

56

For V. Shah & Associates, Chartered Accountants FRN: 109816W

(V. R. Shah ) Proprietor M.No. 34994


Consolidated Balance Sheet as at 31st March, 2012 (Rs. In Lacs )

Particulars Note

No As at 31st

March, 2012 As at 31st

March, 2011

I. EQUITY AND LIABILITIES

(1) Shareholders' Funds (a) Share Capital (b) Reserves and Surplus

(c) Money received against share warrants (2) Share application money pending allotment

(3) Non-Current Liabilities (a) Long-term borrowings

(b) Deferred tax liabilities (Net) (c) Other Long term liabilities (d) Long term provisions (4) Current Liabilities

(a) Short-term borrowings

(b) Trade payables (c) Other current liabilities

(d) Short-term provisions Total

II.Assets (1) Non-current assets

(a) Fixed assets (i) Tangible assets (ii) Intangible assets

(iii) Capital work-in-progress (iv) Intangible assets under development

(b) Non-current investments

(c) Long term loans and advances (d) Other non-current assets

(2) Current assets (a) Current investments

(b) Inventories (c) Trade receivables (d) Cash and bank balances

(e) Short-term loans and advances (f) Other current assets

Total



1 2

3

4 5 6

7

8 9

10

11

12

13 14

15

16 17 18

19 20

1 to 29

1943.82

12377.31

- -

293.60

344.99 213.16

0.52

6718.29

11899.68 1751.17

1480.85

1943.82 7335.32

- -

349.67

74.12 848.49

0.52

5433.96

6325.78 866.82

1583.40 37023.39 24761.90

3950.55 -

503.42 - 5.04

674.12 206.02

1900.00

7550.03 16673.15 4641.04

332.07 587.95

3028.09 -

742.55 - 5.04

515.47 98.12

181.25

8928.02 6280.96 3240.45

299.42 1442.53

37023.39 24761.90

This is the Consolidated Balance Sheet referred to For and on behalf of the in our Report of even date Board of Directors



FRN: 003289C FRN: 109816W

(R.R.Dhanani)



PARTNER PROPRIETOR

M.NO. 072043 M.NO. 034994

Place : BARODA (S.Z. Memon) (Rehanuma Khan) Date : 16-06-2012 DIRECTOR COMPANY SECRETARY

57


Consolidated Statement of Profit and Loss for the year ended 31st March, 2012

(Rs. In Lacs)

Particulars

Note No

For the year ended 31st March, 2012

For the year ended 31st March, 2011

CONTINUING OPERATIONS

INCOME

I. Revenue from operations

II. Other Income

III. Total Revenue (I +II)

IV. Expenses:

Cost of materials consumed

Purchase of Traded Goods

(Increase)/Decrease in Inventory

Employee benefit expense

Financial costs

Depreciation and amortization expense

Other expenses

Total Expenses

V. Profit before exceptional and extraordinary items

and tax (III-IV)

VI. Exceptional Items

Custom duty of Earlier Year

VII. Profit before extraordinary items and tax (V -VI)

VIII. Extraordinary Items

IX. Profit before tax (VII - VIII)

X. Tax expense:

(1) Current tax

(2) Deferred tax

(3) Income tax of earlier years

21

22

23

24

25

26

27

11

28

48659.39

302.28

36418.76

364.55 48961.67 36783.31

25352.80

1554.80

694.47

1608.49

1240.13

290.19

10180.48

16777.49

1925.15

3407.50

1238.98

697.51

281.40

6956.93 40921.36 31284.96

8040.31

-

8040.31

-

5498.35

57.09

5441.26

-

8040.31 5441.26

2379.60

270.87

(1.69)

5391.53

-

-

-

1887.05

(1.29) 37.33

3518.17

-

-

-

XI. Profit(Loss) for the year from continuing operations (IX-X) DISCONTINUING OPERATIONS

XII. Profit/(Loss) from discontinuing operations

XIII. Tax expense of discounting operations

XIV. Profit/(Loss) from Discontinuing operations(XII -

XIII) XV. Profit/(Loss) for the year (XI + XIV)

XVI. Earning per equity share of face value of Rs.10/- each

5391.53 3518.17

37.02

37.02

23.08

23.08 (1) Basic (In Rupees)

(2) Diluted (In Rupees) Significant Accounting Policies


1 to 29 This is the Consolidated Statement of Profit & Loss referred to For and on behalf of the

in our Report of even date Board of Directors



FRN: 003289C FRN: 109816W

(R.R.Dhanani)



PARTNER PROPRIETOR

M.NO. 072043 M.NO. 034994

Place : BARODA (S.Z. Memon) (Rehanuma Khan)


58


CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2012

(Rs. in Lakhs)

31-03-2012 31-03-2011

A. CASH FLOW FROM OPERATING ACTIVITIES

Profit before Tax from continuing operations

Profit before Tax from discontinuing operations

8,040.31

-

5,441.26

-

Profit before Tax 8,040.31 5,441.26 Non-cash adjustment to reconcile profit before tax to net cash flows

Depreciation & Amortisation of Fixed Assets

290.19

281.40 Miscellaneous Expenses Written Off 4.77 49.67

Profit on Sale of Assets (Net) (93.24) (0.11) Loss on Sale of Investments 5.00 - Interest Paid 1240.13 697.51 Interest Received (177.59) (91.23) Dividend Received (14.02) -

Operating Profit before working capital changes

1,255.24 937.24

Adjustments for:

Increase/(Decrease) in trade payables

5573.90

(689.53) Increase/(Decrease) in other current liabilities 947.97 (344.47) Increase/(Decrease) in other long term liabilities (635.33) 843.49 Decrease/(Increase) in trade receivable (10392.19) (3,464.56) Decrease/(Increase) in long term advances (158.65) 25.45 Decrease/(Increase) in other non-current assets (112.67) (93.35) Decrease/(Increase) in short term advances (32.65) (175.86) Decrease/(Increase) in other current assets 854.58 (32.35) Decrease/(Increase) in Inventories 1377.99 1,112.58

(1321.81) (1881.36)

Cash Generated from Operations 6718.50 3559.90

Less: Payment of Taxes (2746.45) (1006.70)

Net Cash Flow from Operating Activities (A) 3972.05 2553.20

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets (983.65) (1673.25)

Purchase of Investments (1900.00) (5.03)

Sale/Adjustments of Fixed Assets 103.37 0.75

Sale of Investments 176.25 -

Investment in Fixed Deposits (1343.13) (509.67)

Interest Received 177.59 91.24

Dividend Received 14.02 -

Net Cash Flow from Investing Activities (B) (3755.55) (2095.96)

C. CASH FLOW FROM FINANCIAL ACTIVITIES

Proceeds from Long Term Borrowings 32.60 150.46

Repayment of Long Term Borrowings (88.67) (65.08)

Short Term Borrowings (net) 1284.33 2098.38

Miscellaneous Expenditure Incurred - (2.50)

Dividends paid (including dividend distribution tax) (147.17) (240.95)

Interest Paid (1240.13) (697.49)

Net Cash Flow from Financing Activities (C) (159.04) 1242.82

D. NET INCREASE/(DECREASE) IN CASH & CASH EQUIVALENTS 57.46 1700.06

E. CASH & CASH EQUIVALENTS - OPENING BALANCE 1893.35 193.29

F. CASH & CASH EQUIVALENTS - CLOSING BALANCE 1950.81 1893.35

This is the Consolidated Cash Flow Statement For and on behalf of the

referred to in our Report of even date. Board of Directors


Chartered Accountants Chartered Accountants

FRN: 003289C FRN: 109816W

(R.R.Dhanani)



PARTNER PROPRIETOR

M.NO. 072043 M.NO. 034994 (S.Z. Memon) (Rehanuma Khan)

Place : BARODA


59



CONVENTION

To prepare financial statements in accordance with applicable Accounting Standards in India. A summary of

accounting policies, which have been applied consistently, is set out below. The financial statements have also

been prepared in accordance with relevant presentational requirement of the Companies Act, 1956.

BASIS OFACCOUNTING

The financial statements have been prepared under the historical cost convention and on accrual basis and on

going concern concept.

USE OF ESTIMATES

The preparation of financial statements requires estimates and assumptions to be made that affect the

reported amount of assets and liabilities on the date of the financial statements and the reported amount

of revenues and expenses during the reported period. Difference between the actual results and

estimates are recognized in the period in which the results are known / materialized.

BASIS OF CONSOLIDATION

a. Basis of Preparation

The Consolidated Financial statements are prepared in accordance with Accounting Standard 21 on

Consolidated Financial Statements issued by the Institute of Chartered Accountants of India.

b. Principles of Consolidation

The Consolidated Financial Statements comprise the Financial Statements of Liberty Phosphate Limited

(The Holding Company) and its Wholly owned Subsidiary Company. The Consolidated Financial

Statements are prepared by adopting uniform accounting policies, in accordance with generally accepted

accounting principles in India and are presented to the extent possible, in the same manner as the Holding

Company's separate Financial Statements.

c. Company Included in Consolidation

Name of Company Shareholding

Liberty Pesticides & Fertilizers Limited. 100%

FIXED ASSETS

To state Fixed Assets at cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses

related to acquisition. In respect of major projects involving construction/fabrication, related pre-operational

expenses form part of the value of the assets capitalized. Expenses capitalized also includes applicable

borrowing costs. To adjust the original cost of fixed assets acquired through foreign currency loans at the end of

each financial year by any change in liability arising out of expressing outstanding foreign loan at the rate of

exchange prevailing at the date of Balance Sheet.

To capitalize software where it is expected to provide future enduring economic benefits. Capitalization costs

includes license fees and cost of implementation/system integration services. The costs are capitalized in the

year in which the relevant software is implemented for use.

All up-gradation/enhancements are generally charged off as revenue expenditure unless they bring similar

significant additional benefits.

No amortization is provided in the Accounts in respect of leasehold land in view of the long term tenure, which

is akin to ownership.

60



Depreciation on Fixed Assets is provided for on Written Down Value Method at the rates and in the manner

specified in the Schedule XIV of the Companies Act, 1956.

INVESTMENTS

To state current investments at lower of cost and fair value, and long term investments are stated at cost. Where

applicable, provision is made where there is a permanent fall in valuation of long term investments.

CURRENT ASSETS

Inventories are valued as:

(a) Stores and Spares : at lower of cost or net realizable value

(b) Raw Materials : at lower of cost or net realizable value

(c) Work in process : at lower of cost or net realizable value

(d) Finished Goods : at lower of cost or net realizable value

Cost is arrived at on First in First Out basis. Cost comprises expenditure incurred in normal course of the

business in bringing such inventories to its location and includes, where applicable, appropriate overheads

based on normal level of activities. Obsolete, slow moving and defective inventories are identified at the time

of physical verification of inventories and, where necessary, provision is made for such inventories.

FOREIGN CURRENCY TRANSACTIONS

(a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the

date of the transaction.

(b) Monetary items denominated in foreign currencies at the year end are restated at the year end rates. In

case of items which are covered by forward exchange contracts, the difference between the year end

rate and the rate on the date of the contract is recognized as exchange difference and the premium paid

on forward contracts is recognized over the life of the contract.

(c) Non-monetary foreign currency items are carried at cost.

(d) In respect of branches, which are integral foreign operations, all transactions are translated at rates

prevailing on the date of transaction or that approximates the actual rate on the date of transaction.

Branch monetary assets and liabilities are restated at the year end rates.

(e) Any income or expense on account of exchange difference either on settlement or on translation is

recognized in the profit and loss account except in cases where they relate to acquisition of fixed

assets, in which case they are adjusted to the carrying cost of such assets.

INCOME

Sales comprises sale of goods and services.

Revenue in respect of purchase/sale of product and scrap is recognized at the point of receipt/despatch from/to

parties at/from plant and warehouses.

Interest on Fixed Deposits with banks and other miscellaneous income are also accounted for on the accrual

basis except interest accrued on NSC, dividend and interest if any arising on income tax, sales tax and excise

duty refunds.

61



BENEFITS TO WORKMEN

Liabilities in respect of retirement benefits are provided for by monthly payments to pension and provident

funds under the Employees' Provident Funds (and Miscellaneous Provisions) Act, 1952 which are charged

against revenue.

Benefit in terms of workmen demand pending settlement, accumulated leave, medical reimbursement and

leave travel concession are accounted, when paid and bonus to employees, is provided for on accrual basis.

Gratuity liabilities are determined as per the actuarial valuation done using the projected unit credit method.

Gratuity Scheme in respect of the employees of the company is administered through Life Insurance

Corporation of India (LIC). Annual contribution as determined by the LIC are charged to the Profit & Loss

Account. The additional liability, if any, arising out of the difference between the actuarial valuation as at the

Balance Sheet date and the fund balance is accrued and provided for at the year end.

TAXES ON INCOME

To provide and determine current tax as the amount of tax payable in respect of taxable income for the period.

To provide and recognize deferred tax on timing differences between taxable income and accounting

income subject to consideration of prudence.

Not to recognize deferred tax assets on unabsorbed depreciation and carry forward of losses unless there is

virtual certainty that there will be sufficient future taxable income available to realize such assets.

IMPAIRMENT OFASSETS

Impairment is ascertained at each balance sheet date in respect of company's fixed assets. An impairment loss

is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable

amount is the greater of the net selling price and value in use. In assessing value and use, the estimated future

cash flows are discounted to their present value based on an appropriate discount factor.

ACCOUNTING FOR PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS

Provisions are recognized in terms of Accounting Standard 29-“Provisions, Contingent Liabilities and

Contingent Assets” issued by The Institute of Chartered Accountant of India, when there is a present legal or

statutory obligation as a result of past event where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

Contingent Liabilities are recognized only when there is a possible obligation arising from past events due to

occurrence or non occurrence of one or more uncertain future events not wholly within the control of the

company or where reliable estimate of the obligation can not be made. Obligations are assessed on an ongoing

basis and only those having largely probable outflow of resources are provided for.

Contingent Assets are not recognized in the financial statements.

CLAIMS

To disclose claims against the company not acknowledged as debts after a careful evaluation of the facts and

legal aspect of the matter involved.

62


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012

Rs. in Lacs

As at 31st

March, 2012

As at 31st

March, 2011

NOTE 1.

SHARE CAPITAL

AUTHORISED SHARES

20000000 Equity Share of Rs.10/-each 2000.00 2000.00


5000000 8% Cumulative Redeemable Preference 500.00 500.00




ISSUED, SUBSCRIBED AND PAID UP SHARES

15000000 Equity Share of Rs.10/-each





5000000 8% Cumulative Redeemable Preference







a. Terms/rights attached to equity shares

Total 1943.82 1943.82

The company has only one class of equity shares having a par value of Rs.10/- per share. Each Holder of

equity shares is entitled to one per share. The company declares and pays dividends in Indian rupees. The

dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing


During the year ended 31st March 2012, the amount of per share dividend recognised as distributions

to equity shareholders was Rs.1.80 (Previous Year Rs.1.20)

In the event of liquidation of the company, the holders of equity shares will be entitled to receive

remaining assets of the company, after distribution of all preferential amounts. The distribution will be in

proportion to the number of equity shares held by the Shareholders.

b. Terms of redemption of Preference Shares

During the year ended 31st March 2008, the company issued 5000000 8% Cumulative Redeemable

Preference Shares of Rs.10/- each fully paid up. The Redeemable Preference Shares carry cumulative

dividend @8% p.a. in relation to capital paid up on them. The Company decalres and pays dividend in Indian

rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the

ensuing Annual General Meeting. The holders of the said shares shall have a right to attend general meetings and vote on resolution directly

affecting their interest or where the dividends in respect thereof are in arrears for not less than two

years on the date of the meeting, on all the resolution at every general meeting of the Company.

In the event of winding up, the holders of the said shares shall be entitled to a preferential right of return

of the amount paid up on the shares together with arrears of cumulative preferential dividend due on the

date of winding up, but shall not have any further right or claim over the surplus assets of the Company. The 8% Cumulative Redeemable Preference Shares will be redeemable at par in five equal installments, first

installment to start from the end of sixth year from the date of allotment.

63



Rs. in Lacs

As at 31st

March, 2012

As at 31st

March, 2011

c. Details Of Shareholders Holding More Than 5 Per Cent Shares

Name Of Shareholder No. Of Shares Held

As at 31st March,

Percentage

As at 31st March,

2012 2011 2012 2011

Equity Shares of Rs.10/- each fully paid Ms. Sumera Raoof Dhanani 2841558 2673657 19.68% 18.52% Ms. Sana Yusuf Dhanani 2092487 2367487 14.49% 16.40% Ms. Anisha Raoof Dhanani 1649191 1423056 11.42% 9.86% M/s. Blue Deebaj Chemicals LLC 2000000 2000000 13.85% 13.85%

Redeemable Preference Shares of Rs.10/- each fully paid up

Ms. Anisha Raoof Dhanani 2799148 2799148 55.98% 55.98% M/s. Blue Deebaj Chemicals LLC 2200852 2200852 44.02% 44.02%

As per records of the company, including its register of shareholders/members and other declarations

received from shareholders regarding beneficial interest, the above shareholding represents both

legal and beneficial ownerships of shares.

d. Reconciliation of number of shares outstanding is given hereunder

PARTICULARS NO. OF EQUITY SHARES NO. OF PREFERENCE SHARES As at 31st

March, 2012

As at 31st

March, 2011

As at 31st March,

2012

As at 31st March,

2011

At the beginning of the year 14438201 14438201 5000000 5000000

Add: Issued during the year - - - -

At the end of the year 14438201 14438201 5000000 5000000

NOTE 2.

RESERVES & SURPLUS

(a) Capital Reserve on Consolidation 46.43 46.43

Total (a) 46.43 46.43

(b) Share Premium


Add:- Premium on issue of shares during the year - -

Balance carried to Balance Sheet Total (b) 889.51 889.51

(c) General Reserve

Balance as per Last Balance Sheet 87.97 -

Add: Transferred from Profit and Loss Account 404.36 87.97

Balance carried to Balance Sheet Total (c) 492.33 87.97

(d) Statement of Profit & Loss.


Add: Profit /(Loss) for the year 5391.53 3518.17

Less: Appropriations

Transferred to General Reserve 404.36 87.97

Interim Dividend on Equity Shares - 86.63

Arrears of Dividend on Preference Shares - 120.00

Proposed Final Dividend on Equity Shares 259.89 86.63

Proposed Dividend on Preference Shares 40.00 40.00

Tax on Dividend 49.65 54.86

Balance of Profit /(Loss) carried to Balance Sheet Total (d) 10949.04 6311.41

Total (a+b+c+d) 12377.31

7335.32

64



Rs. in Lacs

As at 31st

March, 2012

As at 31st

March, 2011

NOTE 3.

LONG TERM BORROWINGS

SECURED LOANS Deferred Credit against Purchase of Land $

From G.I.D.C. 88.67 177.34

UNSECURED LOANS #

From Related Parties

From Directors & their Relatives 204.93 172.33

Total 293.60 349.67 $ Deferred Credit against purchase of Land from GIDC, Bharuch, against purchase of lease hold land situated at

D-2/CH-38,GIDC, Dahej.

$ Amount Payable in 12 Quarterly Installments of Rs.22.17 Lacs each starting from 30-06-2011 and ending on 31-03-2014.

$ Details of other Terms & Conditions are as under:

1. Rate of Interest : 12.50% p.a. (In addition to normal interest 3% will be charged for every month delayed)

2. Total No of future Installments payable as at 31st March, 2012 : 8 Quarterly Installments of Rs. 22.17 Lacs each,

out which 4 quarterly installments of Rs.22.17 Lacs due within one year.

$ Net of Current Maturities payable with in one year from reporting date Rs.88.67 Lacs (Previous Year Rs.88.67 Lacs)

# Loans from Related parties are on long term basis and repayable after 24 Months and are interest free.

NOTE 4.

DEFERRED TAX LIABILITIES

Deferred Tax Liability/Assets resulting from timing difference between the book Profit & Tax

profit is worked as under in terms of "Accounting Standard (AS-22) Accounting for

taxes on Income" issued by the Institute of Chartered Accountants of India, Which is

Mandatory in nature.

Deferred Tax Liabilities On account of Timing Difference in

In Depreciation

348.28

77.46

Deferred Tax Assets On account of Timing Difference in Unabsorbed Loss Carried Forward 3.29 3.34

Deferred Tax Liabilites (Net) 344.99 74.12

Amount debited/(Credited) to Profit & Loss Statement

270.87

(1.29)

NOTE 5. OTHER LONG TERM LIABILITIES Trade Payables 19.88 43.90

Others Advance from customers 1.64 8.98 Others 191.64 795.61

Total 213.16 848.49

65

Cash Credit 1744.59 1420.26 Buyers Credit Loan 1335.52 552.18

From Karur Vysya Bank Cash Credit

- 1002.62

Buyers Credit Loan 425.30 1019.53

Cash Credit 750.81 816.75 From State Bank of India

Cash Credit 2462.07

-

Total 6718.29 5433.96



Rs. in Lacs

NOTE 6.

LONG TERM PROVISIONS

As at 31st

March, 2012

As at 31st

March, 2011

(a) Provision for Employee Benefits 0.52 0.52

Provision for Gratuity

(b) Other Provisions -

NOTE 7.

SHORT TERM BORROWINGS

SECURED LOANS

(a) From Banks

Working Capital Facilities $

From IDBI Bank

Total 0.52 0.52

Cash Credit - 323.29

Buyers Credit Loan - 299.33

From Canara Bank

From State Bank of Patiala

$ Working Capital limits from Consortium Member Banks are primarily secured by way of First Parri Passu Charge

through Hypothecation of the Stocks of Raw materials, material in process & finished goods and hypothecation of book

debts including the subsidy of the company

$ And also collaterly secured by way of

First pari-passu charge by way of equitable mortgage of immovable properties of the company situated at Plot No. 74,

75 and 83 at GIDC, Nandesari, Baroda (Gujarat)

First pari-passu charge by way of equitable mortgage of immovable properties of the Company situated at F-220,F-

221, F-222,F-224,F-225,F-226 & F-227, M.I.A., Madri, Udaipur (Rajasthan)

First pari-passu charge on the Land & Building, Plant & Machinery situated at Kota (Rajasthan) and Pali (Maharashtra).

First pari-passu charge to the Consortium Member Banks on Term Deposit amounting to Rs. 263.00 Lacs (Previous Year

63.00 Lacs).

Also Secured by Personal Guarantee of Managing Director and Smt. Anisha Dhanani

NOTE 8.

TRADE PAYABLES

Total Trade Payable * 11919.56 6369.68

Less:

(a) Trade Payables having scheduled payment beyond

12 Months after the reporting date 19.88 43.90

Balance due within normal operating cycle. 11899.68 6325.78

* The Company has not received information from vendors regarding

their status under the Micro, Small & Medium Enterprises

Development Act, 2006 and hence disclosure relating to amount

unpaid at the year end together with interest paid/payable under

the Act have not been given.

66



Rs. in Lacs

NOTE 9.

OTHER CURRENT LIABILITIES

(a) Current Maturities of Long Term Borrowings

SECURED LOANS

Term Loans from Banks

As at 31st

March, 2012

As at 31st

March, 2011

From Canara Bank - 151.67

Term Loans from Financial Institutions

From SIDBI - 90.00

From G.I.D.C. - 0.75

Deferred Credit against Purchase of Land

From G.I.D.C. 88.67 88.67

Total (a) 88.67 331.09

(b) Interest accrued but not due on borrowings - -

Total (b) - - (c) Other Payables

Advance from Customers 205.52 181.55

Service Tax Payable 6.81 0.04

Income Tax deducted at source 18.28 17.88

VAT Payable 93.61 27.12

Excise Duty Payable 5.25 1.83

Creditors for Capital Goods 91.78 103.72

Book Overdrafts 62.80 0.01

Other Payables 1178.45 203.58

Total (c) 1662.50 535.73

Total (a+b+c) 1751.17 866.82

NOTE 10.

SHORT TERM PROVISIONS

(a) Provision for Employee Benefits

Provision for Salary & Wages

334.08

257.96 Provision for Bonus 22.28 22.00 Provision for PF & ESIC 12.99 11.16

Total (a) 369.35 291.12

(b) Other Provisions

Provision for Auditors Remuneration

2.30

2.53

Proposed Final Dividend 259.89 86.63 Dividend on Preference Share 40.00 40.00 Tax on Dividend 49.65 20.54 Current Tax 711.83 1080.37 Other Provisions 47.83 62.21

Total (b) 1111.50 1292.28 Total (a+b) 1480.85 1583.40

67


68


NOTE 11. FIXED ASSETS

PARTICULARS

GROSS BLOCK

DEPRECIATION

NET BLOCK

AS AT

SALE/

AS AT

31.03.2011

ADDITIONS

TRANSFER

31.03.2012

AS AT

FOR THE

AS AT

31.03.2011

DEDUCTIONS

YEAR

31.03.2012

AS AT

AS AT

31.03.2012

31.03.2011

TANGIBLE ASSETS :

OWN ASSETS

LEASE HOLD LAND

AGRICULTURAL LAND

BUILDING

PLANT & MACHINERY

LABORATORY EQUIPMENTS

FURNITURE & FIXTURES

VEHICLES

OFFICE EQUIPMENTS

DATA PROCESSING MACHINE

(Including Computers)

896.65

37.13

4.47

929.31

69.44

4.35

- 73.79

1766.83

504.59

- 2271.42

2191.59

614.28

6.12

2799.75

13.85

1.23

- 15.08

76.03

10.85

0.96

85.92

191.69

27.61

1.50

217.80

52.09

2.45

- 54.54

26.92

20.29

3.05

44.16

- -

- -

-

- -

-

626.25

- 114.65

740.90

1416.90

1.55

131.41

1546.76

6.49

- 1.15

7.64

38.08

0.32

7.42

45.18

111.29

1.16

27.90

138.03

39.77

- 1.92

41.69

18.22

2.94

5.74

21.02

929.31

896.65

73.79

69.44

1530.52

1140.58

1252.99

774.69

7.44

7.36

40.74

37.95

79.77

80.40

12.85

12.32

23.14

8.70

TOTAL (A)

INTANGIBLE ASSETS

5285.09

1222.78

16.10

6491.77

-

- -

-

2257.00

5.97

290.19

2541.22

-

- -

-

3950.55

3028.09

-

-

TOTAL (B)

TOTAL (A+B)

- -

- -

5285.09

1222.78

16.10

6491.77

- -

- -

2257.00

5.97

290.19

2541.22

- -

3950.55

3028.09

PREVIOUS YEAR

4189.15

1099.90

3.96

5285.09

1978.92

3.32

281.40

2257.00

3028.09

2210.23

CAPITAL WORK IN PROGRESS

INTANGIBLE ASSETS UNDER

DEVELOPMENT

-

- -

-

-

- -

-

-

- -

-

-

- -

-

503.42

742.55

-

-

1.

Le

ase

h

old

Lan

d a

nd

Bu

ildin

g

inclu

es R

s.2

49

.22

La

cs (

Pre

vio

us

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r R

s.2

49

.22

L

acs)

pe

nd

ing

re

gis

tra

tion

w

ith

app

ropriate

a

uth

ori

ty.

2.

Som

e o

f th

e v

ehic

les a

re i

n t

he n

am

e o

f d

irecto

rs/e

mplo

yee

s.

3.

Lease

H

old

Lan

d i

nclu

des Land a

t P

lot

No

. D

-2/C

H/3

8,

havin

g Lic

ence

to

en

teru

pon

cum

rig

ht

for

gra

nt

of

Lease

fo

r a p

eriod of

99 y

ears

by

GID

C on t

he f

ulfill

men

t of

term

s &

conditio

ns

conta

ined in

Allo

tment

Lette

r da

ted 2

5-0

3-2

011

on c

on

structio

n

of

Fe

rtili

se

r M

anu

factu

ring

F

acili

ty w

ithin

a s

tipu

late

d

pe

riod

of

3 y

ears

.

4.

Cap

ital

Work

in P

rogre

ss

inclu

de

s

Pre

Opera

tive

E

xpen

ses

am

ountin

g

to R

s.

13

.22 Lacs (

Pre

viou

s

Year

Rs.

4.6

5 L

acs)


Interest accrued on fixed deposits 94.10 25.10 Interest accrued on deposits 0.77 0.40 Preliminary Expenses not w/off - 4.77 Others 105.03 67.17

Total 206.02 98.12


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012 Rs. in Lacs

NOTE 12.

NON CURRENT INVESTMENTS Trade Investments (Unquoted, at cost & fully paid up)

Nos. F.V.

As at 31st

March, 2012

As at 31st

March, 2011

Shares of NECL 400 10.00 0.04 0.04

Non-Trade Investments (valued at cost unless stated otherwise) In Mutual Fund - Quoted fully paid up

50000 Units of Canara Robecco Mutual Fund 5.00 5.00

Total 5.04 5.04

NOTE 13.

Aggregate amount of Quoted investments 5.00 5.00 Market Value of Quoted investments 5.29 5.26

Aggregate book value of Un-Quoted investments 0.04 0.04

LONG TERM LOANS & ADVANCES UNSECURED CONSIDERED GOOD (a) Capital Advances 121.64 0.69

(b) Security Deposits with Govt. & Others * 254.47 202.71

(c) Loans & Advances to Related Parties # 70.00 70.00

(d) Advances recoverable in cash or kind or for value to be received. 26.84 192.04

(e) Other Loans & Advances

Prepaid Expenses 0.42 - Loans to Employees 0.11 -

Balances with Statutory/Government Authorities 200.64 50.03 Total 674.12 515.47

* Securities Deposits includes Deposit against House amounting to Rs.112.39 Lacs (Previous Year Rs. 109.43 Lacs) paid to Smt. A.R. Dhanani (Relative of Key Management Personnel)

# Loans & Advance to Related Party pertains to M/s. Tungabhadra Fertilisers & Chemicals Co. Ltd.,

a related party, amounting to Rs.70.00 Lacs (Previous Year Rs. Nil) NOTE 14.

OTHER NON-CURRENT ASSETS

UNSECURED CONSIDERED GOOD (a) Trade Receivables


(b) Other Loans & Advances

NOTE 15. CURRENT INVESTMENTS

Non-Trade Investments (valued at cost unless stated otherwise)

Government & other securities (quoted at cost)

6.65% Fert. Co. GOI SPL 2023 Bonds 2000 Nos - 181.25 Other Investments

In Mutual Fund - Quoted fully paid up 189468.9870 Units of SBI Premier Liquid Fund 1900.00 -

Total 1900.00 181.25

Aggregate amount of Quoted investments 1900.00 181.25 Market Value of Quoted investments 1900.00 181.25 Aggregate book value of Un-Quoted investments - -

69



Rs. in Lacs

NOTE 16.

INVENTORIES (Valued at lower of cost and net realisable value)

As at 31st

March, 2012

As at 31st

March, 2011

Raw Materials 4292.05 4942.67


Packing Materials 51.68 74.08

Stores and Spares 149.27 132.24 Fuel 17.19 17.96

Total 7550.03 8928.02

NOTE 17. TRADE RECEIVABLES

(Unsecured and Considered Good) Outstanding for a period exceeding six months from the date they are due for payment 81.75 279.92

Others 16591.40 6001.04

Total 16673.15 6280.96

Trade Receivables includes due from Tungabhadra Fertilisers & Chemicals Co. Ltd., a Related Party, amounting to Rs. 784.67 Lacs (Previous Year Rs. Nil)

NOTE 18. CASH AND BANK BALANCES

Cash and cash equivalents

Balances with banks:

On Current Accounts:

With Scheduled Banks @

Others 1934.10

- 1860.72

- Cash on Hand 16.71 32.63

Other Bank balances

In Fixed Deposits Accounts with Scheduled Banks : *

With original maturity of more than 12 months 257.14 499.45 Others 2433.09 847.65

Total 4641.04 3240.45

@ Balances with Bank includes Unclaimed Dividend Rs. 2.16 Lacs (Previous Year Rs. Nil) * Includes Rs. 263.00 Lacs (Previous Year Rs. 63.00 lacs) given as First pari-passu charge to the

Consortium Member Banks against Working Capital Facility.

* Includes Rs. 2427.03 Lacs (Previous Year Rs. 12.83 Lacs) Pledged with banks for Margin Money against issue of Letter of Credit & Bank Guarantee.

NOTE 19.

SHORT TERM LOANS & ADVANCES (Unsecured and Considered Good)

Loans and advances to related parties Deposits

-

-

-

-

Others Prepaid Expenses

144.02

108.95

Loans to Employees 15.37 10.88 Balances with Statutory/Government Authorities 169.87 177.10 Others 2.81 2.49

Total 332.07 299.42

NOTE 20.

OTHER CURRENT ASSETS

Accrued Interest on Deposits 0.72 0.70 Prepayments against Goods 568.42 1369.81 Prepayments against Services 17.96 70.92 Prepaid Insurance & Expenses 0.85 1.10

Total 587.95 1442.53

70



Rs. in Lacs

NOTE 21.

REVENUE FROM OPERATIONS

SALE OF PRODUCTS

For the year

ended 31st

March, 2012

For the year

ended 31st

March, 2011


Traded Goods 1659.32 1840.14

Cost of SSP consumed for NPK manufacturing 4.37 0.99

SALE OF SERVICES

- -

OTHER OPERATING REVENUE Scrap Sales 0.21 23.53

Others 97.19 71.55

48659.39 36418.76

Less: Excise Duty Recovered - -

21.1 Details of Products Sold/Transferred

Total 48659.39 36418.76

Finished Goods Sold


NPK mix fertiliser 630.70 581.46 Magnesium Sulphate 406.50 311.37

Total 46898.30 34482.55 Traded Goods Sold

Rock Phosphate 1564.97 678.40 Di Ammonium Phosphate - 390.87

Urea - 116.99


TSP 168.25


Total 1659.32 1840.14

NOTE 22. OTHER

INCOME INTEREST

INCOME ON Bank Deposits 174.37 71.13

Security Deposits 2.74 2.06 GOI Special Bonds 0.48 14.00

I.T. Refund - 4.04

OTHER NON OPERATING

Income on foreign currency transactions - 245.09

Dividend on Investments 14.02 -

Profit on sale of Fixed Assets 93.24 0.11

Office Rent - 1.14 Stores Adjusted on Physical Verification 0.48 0.02

Subsidy on Freight - 8.19

Excess provision of earlier year written back - 16.37

Prior Period Income 2.46 -

Miscellaneous Income 14.49 2.40

Total 302.28 364.55

71



Rs. in Lacs

NOTE 23.

COST OF MATERIALS CONSUMED

For the year

ended 31st

March, 2012

For the year

ended 31st

March, 2011

Inventory at the beginning of the year 4942.68 2685.22

Add: Purchases 24707.41 19837.18

Add: Cost of SSP Consumed for NPK Manufacturing 4.37 0.99

29654.46 22523.39

Less: Cost of Raw Material Transferred to Trading 9.61 803.22

Less: Inventory at the end of the year 4292.05 4942.68

Cost of Materials Consumed Total 25352.80 16777.49

2011-2012 2010-2011

Rs. % of Rs. % of

Consumption Consumption

Imported 9116.97 36% 5151.90 31%

Indigeneous 16235.83 64% 11625.59 69%

25352.80 100% 16777.49 100%

23.1 Details of Materials Consumed



Borax 0.32 -

Urea 96.55 128.65







Total 25352.80 16777.49

23.2 Details of Inventory at the end of the year



Borax - 0.32

Urea 25.59 45.80






Phospho Gypsum 1.82 9.23


Total 4292.05 4942.68

NOTE 24.

PURCHASE OF TRADED GOODS



TSP - 166.61


Transferred from Raw Material

Rock Phosphate - 257.69

Urea - 125.49




Total 1554.80 1925.15

72



Rs. in Lacs

NOTE 25.

CHANGES IN INVENTORIES OF FINISHED GOODS AND

TRADED GOODS

For the year

ended 31st

March, 2012

For the year

ended 31st

March, 2011

Inventories at the end of the year


3039.85 3761.07

Inventories at the beginning of the year


3761.07 7179.33 Less: Adjustment for loss due to rain 1.13 - Less: Transferred for Processing 23.15 10.76 Less: Transferred to Raw Material 2.47 -

3734.32 7168.57 (Increase)/decrease in Inventory 694.47 3407.50 25.1 Details of Inventory

Finished Goods

Single Super Phosphate

2709.77

3444.64 Magnesium Sulphate 103.98 45.16 NPK mix fertiliser 183.45 120.42

Total 2997.20 3610.22

Traded Goods Potassium Nitrate

0.90

1.09

Potassium Sulphate 0.24 0.24 Mono Ammonium - 81.46 Ammonium Sulphate 7.28 7.28 Calcium Nitrate - 0.04 Calcite 0.70 0.70 NPK mix fertiliser 1.18 1.38 KMAG 3.60 3.60 Sulphuric Acid - 2.47 Gypsum

GTSP 0.62

28.13 24.46

28.13

Total 42.65 150.85 NOTE 26. EMPLOYEE BENEFIT EXPENSES

Salaries, Wages & Bonus 1400.04 1051.48 Contribution to E S I 9.18 10.68 Contribution to P F 48.67 39.66 Gratuity 28.00 30.18 House Rent 81.54 76.06 Staff & Labour Welfare 41.06 30.93

Total 1608.49 1238.98

73



Rs. in Lacs

NOTE 27.

FINANCIAL COSTS

INTEREST EXPENSE

Interest paid to Banks

For the year

ended 31st

March, 2012

For the year

ended 31st

March, 2011

Term Loans 20.65 25.62

Working Capital Loans 197.90 325.13

Interest paid to Others

Term Loans 33.10 22.87

Suppliers 384.22 141.28

Others 3.00 -

On Late deposit of Statutory dues 2.08 2.86

OTHER BORROWING COSTS

Bank Commission & Charges 189.51 152.66

Processing Charges 58.02 27.09

Foreign Exchange Fluctuation 351.65 -

Total 1240.13 697.51

NOTE 28.

OTHER EXPENSES

MANUFACTURING EXPENSES

Packing Material Consumed 1221.85

Repairs & Maintenance & Stores Consumed 658.78

Factory Light,Water,& Generator Exp. 752.46

Fuel Consumed 537.61

Laboratory Expenses 11.11

Insurance Expenses 13.99

Loader & Shifting Expenses 42.69

Other Manufacturing expenses 201.62

Total (a) 3440.11

944.01

636.44

545.37

311.27

10.66

8.21

34.06

54.12

2544.14

SELLING AND DISTRIBUTION EXPENSES

Freight Outward 3865.77

Rebate, Cash Discount & Others 2081.08

Advertisement 2.27

Sales Promotion 38.54

Warehousing/Godown Rent 58.28

2679.92

959.47

2.04

33.58

57.35

ADMINISTRATIVE AND OTHER EXPENSES

Total (b) 6045.94

3732.36

Office Rent & Maintenance 22.60

Guest House Expenses 8.51

Travelling Expenses 96.14

Conveyance Expenses 32.67

Printing & Stationery 18.92

Trunks & Telephones 20.96

Membership & Subscription 2.78

Legal & License Fees 14.77

Professional & Consultancy 31.07

Auditors' Remuneration 3.59

Rent, Rates & Taxes 18.42

Listing Fees 0.44

Vat on Stock Transfer 146.18

Postage & Telegram 6.89

Directors' Sitting Fees 1.65

Misc. Expenses 4.40

Donation 0.85

Security Watch & Wards 49.73

Service Tax 131.76

Entry Tax 11.33

Excise Duty 8.30

Loss due to Rain 1.13

Loss on sale of Investments 5.00

Sundry Balances Written off 14.94

Short provision of earlier year 30.77

Penalty on VAT, Service Tax 5.86

Miscellaneous Expenses W/off. 4.77

Public Issue Expenses W/off. -

23.44

7.35

81.40

30.50

15.73

21.48

1.28

8.75

26.26

3.47

38.80

0.33

182.54

4.31

-

4.76

0.42

47.74

98.27

18.46

12.51

-

-

-

-

0.69

46.81

1.94

Prior Period Expenses - 3.19

Total (c) 694.43 680.43 Total (a+b+c) 10180.48 6956.93

74


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED

31ST MARCH, 2012

NOTE 29

29.1 Contingent liabilities not provided for:

(a) Bills discounted with bank outstanding - Rs. Nil (Previous year Rs. Nil Lacs).

(b) Letter of Credits outstanding - Rs.10766.63 Lacs (Previous year - Rs. 6418.76 Lacs) and Margin Money given there against Rs. 2427.03 Lacs (Previous Year – Rs. 1345.90 Lacs).

(c) Guarantees given by Company's Banker on behalf of the Company –Rs 228.46 Lacs (Previous year Rs. 70.40 Lacs).

(d) The Company has executed bonds in favour of Excise Department in connection with purchases of raw material without levy of excise – Rs.244.00 Lacs ( Previous year Rs. 184.80 Lacs).

(e) The company purchased manufacturing facilities of fertilizers from Liberty Pesticides & Fertilizers Ltd (A subsidiary Company) on 1.10.1997. Registration of transfer is pending as the company disputed that the registration of property in the name of company, is not liable for the payment of stamp duty under Rajasthan Stamp Law (Adaption) Act, 1952 read with section 9(1) (a) of Indian Stamp Act, 1899 and accordingly preferred writ before hon'ble High Court of Rajasthan. Likely amount of stamp duty, if any payable, will be Rs.26.85 Lacs (Previous year 26.85 Lacs).

(f) Demands of Sales Tax Authorities not acknowledged by the Company and contested/appealed, Rs.13.02 Lacs (Previous Year Rs. 13.02 Lacs). Amount paid there against as the matter of prudence Rs.2.77 Lacs (Previous Year- Rs.2.77 Lacs).

(g) Demand of Income Tax not acknowledged by the company and contested/appealed Rs. 03.50 Lacs (Previous year – Rs. 03.50 Lacs). Amount paid there against as the matter of prudence Rs. 03.50 Lacs (Previous year –Rs. 03.50 Lacs).

(h) Demand of Differential Customs Duty on Import of Rock Phosphate not acknowledged by the company and contested/appealed Rs.344.16 Lacs (Previous year – Rs. 344.16).

29.2 Claims against the company not acknowledged as debts:-

Claims on account of rebate, discount & freight - Rs.Nil (Previous year- Rs. 27.95 Lacs).

29.3 Estimated capital commitments not provided for- Rs.2000.00 Lacs (Previous year Rs. 600.00 Lacs).

29.4 Depreciation for the period has been calculated at the rates and in the manner specified in

Schedule XIV to the Companies Act, 1956 vide notification No. GSR 756 (E) dated 16.12.93 of the Department of Company Affairs, Govt. of India. For the purpose of determining the appropriate depreciation rates, Plant and Machinery falling in the category of continuous process plants has been identified on the basis of technical opinion obtained by the company. Extra shift depreciation, wherever applicable is calculated on actual shift basis in respect of each plant/unit.

29.5 No provision has been made in respect of :

- fall in the value of long term investment in shares of subsidiary company and others, since in the opinion of the management book value of the shares is sufficient to cover temporary fall in the value of shares. Further, to inform that investment made is in the nature of trade investment.

- The Company has not received information from vendors regarding their status under the Micro, Small & Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid at the year end together with interest paid/payable under the Act have not been given

75



31ST

MARCH, 2012

29.6

Auditors’ remuneration:

I. Statutory Auditors:


(Rs. in Lacs)


(Rs. in Lacs)

a) Statutory Audit 2.05 2.03

b) Tax A udit 0.25 0.25

c) Taxation 0.25 0.25

d) Certification 0.25 0.25

e) Company law matters 0.25 0.25

f) Other Services 0.24 0.24

Total 3.29 3.27

II. Cost Auditors

a) Cost Audit Fees *

(Including Service Tax &

Out of Pocket Expenses)

0.30 0.20

29.7 In view of mandatory Accounting Standard (AS) -15 “Accounting for Retirement Benefits in the Financial Statements of Employers” is dealt as under: - Liability in respect of provident fund are provided for by monthly payments to pension and

provident fund under the Employees' Provident (and Miscellaneous Provisions) Act, 1952, which are charged against revenue.

- Gratuity liabilities are determined as per the actuarial valuation done using the projected unit credit method.

- Gratuity Scheme in respect of the employees of the company is administered through Life Insurance Corporation of India (LIC). Annual contribution as determined by the LIC are charged to the Profit & Loss Account. The additional liability, if any, arising out of the difference between the actuarial valuation as at the Balance Sheet date and the fund balance is accrued and provided for at the year end.

- Employees are entitled to accumulate their privilege leave within specified limits and can claim encashment thereof while in service or on separation or on superannuation or otherwise. This is not treated as specific retirement benefit and the cost thereof is accounted for in the year in which the claims are received.

29.8 Related party disclosure under Accounting Standard (AS) –18

a) The list of the related parties as identified by the management are as under:

i) Enterprises over which Key Management Personnel with relatives, is able to exercise

significant influence:


2. A.R. Exports.

3. Liberty Urvarak Limited.

ii) Key Management personnel of the Company: Directors of the Company

iii) Relative of Key Management personnel:

1. Smt. A. R. Dhanani 2. Smt. Suchitra Dhanani

76



31ST

MARCH, 2012

The following transaction were carried out with related parties

S.No. Particulars Key management

personnel and their

relatives

Rs. In Lacs

Enterprises over KMP

with their relative, is

able to exercise

significant influence

Rs. In Lacs

1. Balance outstanding against purchases &

sales and advances there against,

31.03.12 31.03.11 31.03.12 31.03.11

- Debit - 1292.55 -

- Credit 300.88 214.08 - 686.95

2. Balance outstanding as Investments - - - - 3. Payment made on their behalf 366.09 128.49 13041.14 12618.21 4. Payment made on our behalf 0.71 188.84 12283.34 10771.75 5. Purchases of Assets - - - - 6. Service/Rent/Consultancy/Finance Charges - - - 1.14 7. Remuneration/Commission to the Directors 444.35 305.90 - - 8. Sale of goods - - 1651.83 462.39 9. Purchase of goods - - 430.13 1163.58

10. Deposits against House 112.39 109.43 - - 11. Guest House Rent 4.87 4.80 - - 12. Unsecured Loans 168.00 168.00 4.33 4.33

29.9 Earning/(Loss) per share (EPS) is calculated as under:

a) Numerator:

Year Ended

31-03-2012

Year Ended

31-03-2011

Net Profit after tax as per Statement of Profit & Loss 5391.53 3518.17

Preference Dividend & Income Tax Thereon

(Including Arrears of Earlier Year s)

(46.49) (186.42)

Net Profit/(Loss) attributable to equity share holders 5345.04 3331.75

b) Denominator:

Number of Equity shares

Weighted average number of equity shares outstanding

during the year

14438201

14438201

14438201

14438201

c) Nominal value of Equity Shares (in Rs.) 10/- 10/-

d) Earning/(Loss) per share 37.02 23.08

29.10 Segment Reporting: That the Board of Directors, is of the opinion that the company is engaged in manufacture & sale of Fertilizers namely Single Super Phosphate, NPK Mixture Fertilizers & MGSO4 and accordingly dealing in same segment namely Chemical Fertilizers. Likewise, the manufacturing and marketing operations of the company are also confined only in the India. As such, no segment is formed and accordingly no segment reporting is done in terms of the requirement of Accounting Standard (AS–17) “Segment Reporting” issued by the Institute of Chartered Accountants of India for the year ended 31

st March, 2012.

29.11 Impairment of Assets :

That the Board of Directors, is of the opinion that the discounted net future generation from the Assets in use & shown in the schedule of Fixed Assets, is more than the carrying amount of Fixed Assets in Balance Sheet, as such, no provision for Impairment of Assets is required to be made in terms of the requirement of Accounting Standard (AS–28) “Impairment of Assets” issued by the Institute of Chartered Accountants of India for the year ended 31

st March'2012.

77



31ST

MARCH, 2012

29.12 Financial Derivative Instruments and unhedged foreign currency exposure:

a. Nominal amount of derivative contracts entered into by the Company and outstanding as on 31st

march amount to Rs. Nil (Previous Year Rs. Nil)

b. Foreign currency exposures on account of Import Trade Payable and are not hedged by derivative

instruments as on 31st

March, 2012 amount to Rs. 5115.29 Lacs (Previous Year Rs.1435.69

Lacs) ((In USD 100.55 Lacs ) (Previous Year USD 32.08 Lacs)).

29.13 In the opinion of the Directors, Current Assets, Loans and Advances have the value at which they are

stated in the Balance Sheet, if realized in the ordinary course of business. Further, Directors are of

the opinion that all the liabilities have been duly reflected in the Balance Sheet and nothing is

remained to be disclosed for. Sundry Debtors, Creditors and Advances are subject to reconciliation

and confirmation.

29.14 During the year ended 31st March 2012, the revised Schedule VI notified under the Companies Act

1956, has become applicable to the company, The company has reclassified previous year figures to

conform to this year' classification.

As per our Report attached

For K L Vyas & Company

Chartered Accountants

FRN: 003289C

For V Shah & Associates

Chartered Accountants

FRN: 109816W

For and on behalf of the Board

(K L Vyas )

Partner

M. No. 72043

(V R Shah)

Proprietor

M. No. 34994

(R R Dhanani)

Chairman & Managing Director

(S.Z.Memon)

Director

Place : Baroda (Rehanuma Khan)

Date : 16th June, 2012 Company Secretary

78


Financial Information of Subsidiary Company.

(Information pursuant to direction u/s 212(8) of the Companies Act, 1956)

Rs. in Lacs

2011-12 2010-11

Name of Subsidiary : Liberty Pesticides & Fertilizers Limited.

Reporting Currency : INR INR

Exchange Rate : 1 1

Capital 75.00 75.00

Reserves 144.71 144.60

Total Assets 221.69 223.60

Total Liabilities 221.69 223.60

Investment (other than investment in

subsidiaries) Nil Nil

Turnover 24.15 11.66

Profit Before Taxation 0.20 (1.05)

Tax Expenses 0.09 (0.70)

Profit After Taxation 0.11 (0.35)

Proposed Dividend Nil Nil

Currency : Indian Indian

Place : Baroda

For and on behalf of the board

Date : 16th June, 2012 R. R. Dhanani S. Z. Memon

Chairman & Managing Director Director

(Rehanuma Khan) Company Secretary

79

LIBERTY PHOSPHATE LIMITED PROXY FORM

I/We, of in the district of being a Member/Members of the above named Company, hereby appoint of in the district of or failing him ____________________________________ of __________________ in the district of as my/our proxy to vote for me/us on my/our behalf at the TWENTY FOURTH ANNUAL GENERAL MEETING of the company to be held on Thursday, the 23

rd day of August, 2012 at

2.30 P.M. and at any adjournment thereof.

Regd.Folio No.

Affix Or Demat A/c No. Signature Revenue

Client ID No. Stamp

DP ID No. Date :

NOTES:

1. The form should be signed across the stamp as per specimen signature registered with the

Company/Depository Participant. 2. The Companies Act, 1956 lays down that the instrument appointing a proxy shall be deposited at

the Registered Office of the Company not less than FORTY EIGHT HOURS before the time fixed

for holding the Meeting. 3. A Proxy need not be a Member.

LIBERTY PHOSPHATE LIMITED Regd. office : 74/75, GIDC, Nandesari - 391340, District Vadodara

ATTENDENCE SLIP

PLEASE COMPLETE THE ATTENDENCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL.

1. Name of the Attending Member

(in Block Letters)

2. Members Folio No. Or Demat A/c No.

Client ID No. DP ID No.

3. Name of the Proxy (in Block Letters)

(To be filled in if the proxy attends instead of member)

No. of shares held :

I hereby record my presence at 24th

Annual General Meeting at Sayaji Hotel, Sayajigunj, Kala Goda,

Baroda (Gujarat) on Thursday, the 23rd

day of August, 2012 at 2:30 P.M.

Signature of the Shareholders/Proxy :

NOTES :

1. Shareholders/Proxy holders are requested to bring the attendance slip with them when they

come to the meeting.

2. Shareholders/Proxies who come to attend the meeting are requested to bring their copies of

Annual Report with them.

Book-Post

To,

If undelivered please return to :

Liberty Phosphate Ltd. 74-75, G.I.D.C., Nandesari - 391 340

Distt. Baroda, Gujarat

Printed at : Kumawat Printers, 0294-2490268

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