We have audited the attached Balance sheet of Gujarat Carbon and
Industries Limited as at 31st March 2012 and also the Profit and Loss
Account and the Cash Flow Statement for the year ended on that date
annexed thereto. 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.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material 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 provided a reasonable basis for
1. We Invite your attention to Note No.15 a. of notes forming part of
financial statements regard- ing the accounts being prepared on a going
concern basis. However'' there is no alternative proposal to promote any
2. We have obtained all the information and explanations'' which to the
best of our knowledge and belief were necessary for the purposes of our
3. In our opinion'' proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
4. The Balance Sheet and the Profit and Loss Account dealt with by
this report are in agreement with the books of accounts;
5. In our opinion'' the Balance Sheet and the Profit and Loss Account
dealt with by this report comply with the accounting standards referred
to in sub-section (3C) of section 211 of the Companies Act'' 1956''
except Accounting Standard 9 - ''Revenue Recognition'' the details and
effect of which have been disclosed in paragraph 7 below. Further the
disclosure requirements of AS 22 ''Accounting for Taxes on Income'' have
not been followed regarding composition and accounting of deferred tax
assets/ liabilities as on balance sheet date.
6. On the basis of the written representations received from directors
of the Company 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 of the company in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act'' 1956;
7. In our opinion and to the best of our information and according to
the explanations given to us'' the said accounts subject to what is
stated in paragraph 1 above'' and:
Note No. 15 d. regarding non provision of interest of Rs. 87.51 lacs
payable on Inter Corporate Deposits wherein had the above provision
been considered'' loss for the year would have been Rs. 87.28 lacs (as
against reported profit figure of Rs. 0.23 lacs)'' accumulated losses
would have been Rs. 2092.06 lacs (as against reported figure of Rs.
2004.78 lacs); and
read with other notes there on'' and given the information required by
the Companies Act'' 1956'' in the manner so required'' give a true and
fair view in conformity with the accounting principle 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.
(b) in the case of the Profit and Loss Account of the loss for the year
ended on that date; and
(c) in case of Cash Flow Statement'' of the cash flows for the year
ended on that date.
8. As required by the Companies (Auditor''s Report) Order'' 2003 issued
by the Central Government of India in terms of subsection 4(A) of
section 227 of the Companies Act'' 1956 and on the basis of such checks
of the books of accounts and records as we considered appropriate and
the information and explanations given to us during the course of
(i) We further state that the nature of Company''s business / activities
during the year have been such that clauses (xiii) and (xiv) of
paragraph 4 of the Companies (Auditor''s report) Order'' 2003 are not
applicable to the company.
(ii) The Company also:
(a) Has maintained proper records to show full particulars'' including
quantitative details and situation of fixed assets'' which requires to
(b) Has a program of physical verification of its fixed assets over a
period of three years'' which in our opinion'' is reasonable having
regard to the size of the Company and the nature of its business. In
accordance with this programme'' certain fixed assets are physically
verified by the management during the year and according to the
information and explanations given to us'' no material discrepancies
have been noticed on such verification.
(iii) The Company did not have any inventories during the year.
(iv) We also state that:
(a) According to the information and explanations given to us'' 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 during the year.
(b) (According to information and explanations given to us the company
has not taken any loans'' secured or unsecured from companies'' firms'' of
other parties covered in the register main- tained under section 301 of
the Act during the year.
(c) As the ICD is payable on demand'' payment schedule has not been
fixed. The company had provided interest up to 31.03.2002 amounting to
Rs. 920.57 lacs which is pending for pay- ment. No provision has been
made for interest payable on such Inter Corporate Deposits amounting to
(v) In our opinion and according to the information and explanations
given to us'' there are adequate internal control systems commensurate
with the size of the company and the nature of Its business with regard
to purchase of inventory'' fixed assets and with regard to the sale of
goods. During the course of our audit'' we have not observed any
continuing failure to correct major weakness in internal control
(vi) In our opinion and according to the information and explanations
given to us:
a. There are no transactions that need to be entered into the register
maintained under section 301 of the Companies Act'' 1956;
b. There are no transactions made in pursuance of such contracts or
arrangements'' and exceed- ing Rs. 5''00''000/- in respect Of any party
during the year.
(vii) The company has not accepted deposits from the public.
(viii) The company had no internal audit system during the year.
(ix) Since there are no operations during the year'' the Company has not
maintained the books of account prescribed under the Rules made by the
Central Government for the maintenance of cost records under section
209 (1) (d) of the Companies Act'' 1956.
(x) According to the information and explanations given to us :
a. The Company is generally regular except stated here under in
depositing with appropriate authorities undisputed statutory dues
including Provident Fund'' Investor Education Protection Fund'' Income
Tax'' Sales Tax'' Custom Duty'' Excise duty'' Cess and other material
Statutory dues applicable to it.
b. No undisputed amounts payable in respect of Provident Fund''
Investor Education Protection Fund'' Income Tax'' Sales Tax'' Wealth Tax''
Service Tax'' Custom Duty'' Excise Duty'' Cess were in arrears as at 31st
March'' 2012 for a period of more than six months from the date they
c. There are no dues of Customs Duty'' Wealth Tax'' Service Tax'' and
Cess'' which has not been deposited on account of any dispute except as
Statute Nature of Amount
under Period to Forum where
dues dispute which It dispute is
(Rs. In lacs) relates
tax Act'' 1961 Income tax 4.30 A.Y.
tax Act'' 1961 Income tax 19.79 A.Y.
tax Act'' 1961 Income tax 24.98 A.Y.
tax Act'' 1961 Income tax SK31 A.Y.
(xi) In our opinion'' the accumulated losses of the company are more
than fifty percent of its net worth. The Company has also incurred
cash loss during the year immediately preceding financial year.
(xii) In our opinion and according to the information and explanations
given to us'' company has not defaulted in repayment of Its dues to a
financial institution during the year.
(xiii) According to the information and explanations given to us'' the
company has not granted loans and advances on the basis of security by
way of pledge of shares'' debentures and other securities
(xiv) According to the information and explanations given to us'' the
company has not given any guarantee for loans taken by others from
banks or financial institutions.
(xv) The Company has not obtained any term loan during the year.
(xvi) According to the information and explanations given to us and on
an overall examination of the balance sheet of the company'' we report
that funds raised on short-term basis including other short- term loans
from companies have not been used for long term investment.
(xvii)Durlng the year the company has not made preferential allotment.
(xviii) During the period covered by our audit report'' the company has
not issued debentures.
(xix) The company has not raised monies through a public issue during
(xx) According to the information and explanations given to us'' no
fraud on or by the Company has been noticed or reported during the
course of audit.
For Ramanlal G Shah & Co.
Firm Registration No 108517W
(Vivek S. Shah)
Place: Ahmedabad Partner
Date: 26th May'' 2012 Membership No. 112269