1. We have audited the attached balance sheet of Gujarat Craft
Industries Limited as at March 31, 2012, the statement of profit & loss
and also 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.
2. 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 provides a reasonable basis for
3. As required by the Companies (Auditors'' 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
4. Further to our comments in the Annexure referred to in paragraph 3
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
(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 the
(iii) The balance sheet, statement of profit and loss and cash flow
statement dealt with by this report are in agreement with the books of
(iv) In our opinion, the balance sheet, statement of profit & loss and
cash flow statement dealt with by this report comply with accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956.
(v) On the basis of the written representations received from
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, on
the said date.
(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
subject to non-provision of doubtful debts of Rs. 868 (in Rs.000), (refer
note 32) and its consequential effects on profit and loss statement and
reserves, 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;
(b) in the case of the statement of profit & loss, of the ''Profit'' of
the company for the year ended on that date;
(c) in the case of the cash flow statement, of the cash flows for the
year ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR AUDITORS'' REPORT TO THE
MEMBERS OF GUJARAT CRAFT INDUSTRIES LIMITED, ON THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012.
(i) Fixed Assets register is under compilation. We are informed by the
management that they have verified the fixed assets during the year.
However, in absence of proper fixed assets register material
discrepancies if any, could not be noticed between physical
verification and book records. Hence, the fixed assets as appearing in
books of account are carried in financial statements.
The company has not disposed off substantial part of fixed assets
during the year.
(ii) (a) As explained to us, the inventory have been physically
verified during the year by the management. In our opinion, the
frequency of verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the company has maintained proper records of inventory and
the discrepancies noticed on such physical verification between
physical stocks and book records were not material and have been
adequately dealt with in the books of account.
(iii) (a) The company has granted as well as taken unsecured, interest
free demand loans, to and from companies listed in the register
maintained under section 301 of the Act. The number of companies to
whom loans granted during the year is one. The maximum amount involved
during the year was Rs. 515 (in Rs.000) and year-end balance of loans given
to such companies is Nil. The number of companies from whom loans taken
during the year is ten. The maximum amount involved during the year was
95,642 (in Rs.000) and the year-end balance of loans taken from such
companies is 68,811 (in Rs.000).
(b) In our opinion, the rate of interest and other terms and conditions
of such loans taken by the company, are prima facie not prejudicial to
the interest of the company. The principal amount is repayable by the
company as agreed in contract.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchase of inventory, fixed assets and for the
sale of goods. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal controls.
(v) According to the information and explanations given to us, we are
of the opinion that there are no contracts or arrangements that need to
be entered into the register maintained under section 301 of the
Companies Act during the year.
(vi) According to the information and explanations given to us, the
company has not accepted any deposits from the public falling within
the purview of section 58A of the Companies Act, 1956 and the rules
framed there under.
(vii) In our opinion, the company has an internal audit system
commensurate with the size of the company and the nature of its
(viii) We have broadly reviewed the cost records maintained by the
company pursuant to the rules made by the Central Government for
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956, and are of the opinion that prima facie, the prescribed
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 or complete.
(ix) (a) The company is generally regular in depositing undisputed
provident fund, investor education & protection fund, employees state
insurance, income tax, sales tax, wealth tax, service tax, custom duty,
excise duty, cess and other material statutory dues, wherever
applicable, have been generally regularly deposited with the
appropriate authorities, except Income Tax under the Income Tax Act
(b) According to the information and explanations given to us, no
undisputed amount in respect of aforesaid statutory dues were
outstanding except for Income tax amounting to 410 (in Rs.000) as at 31st
March, 2012 for a period of more than six months from the date they
(c) According to the information and explanations given to us, as at
the balance sheet date there were no dues of sales tax, income tax,
custom duty, wealth tax, service tax, excise duty and cess which have
not been deposited on account of dispute.
(x) The company has no accumulated losses and has not incurred any cash
losses during the current financial year or for immediately preceding
(xi) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to
banks. The company has not obtained any borrowings from financial
institutions or by way of debentures.
(xii) In our opinion and according to the information and explanation
given to us, no loans and advances have been granted on the basis of
security by way of pledge of shares, debentures and other securities.
(xiii) According to information and explanation given to us, the
company has not given guarantee for loans taken by others from banks or
(xiv) To the best of our knowledge and belief and according to the
information and explanations given to us, in our opinion, the term
loans raised during the year were prima facie been used for the purpose
for which they were raised.
(xv) According to the information and explanations given to us and on
an overall examination of the balance sheet of the company, we report
that no funds raised on short-term basis have been used for long-term
(xvi) During the year, the company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under section 301 of the Companies Act, 1956.
(xvii)The company has not issued any debentures during the year.
(xviii) The company has not raised any money by way of public issue
during the year.
(xix) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the company
was noticed or reported during the year.
(xx) In our opinion and according to the information and explanations
given to us, the nature of the company''s business/activities during the
year are such that clause; 4(xiii) provisions of any special statute applicable to chit fund, 4(xiv) dealing
or trading in shares,
securities, debentures and other investments of Company (Auditors''
Report) Order, 2003 are not applicable to the company.
For KANTILAL PATEL & Co.
Firm Registration No. 104744W
(Gopal S. Baldi)
Membership No.: 125930
Place : Ahmedabad
Date : 30th May, 2012