We have audited the accompanying financial statements of Gujarat 
 Mineral Development Corporation Ltd., Ahmedabad which comprise the 
 Balance Sheet as at 31st March, 2012 Statement of Profit and Loss 
 Account and Cash flow statement of the Corporation for the year 
 then ended and summary of significant accounting policies and other 
 explanatory information.
 
 Management''s Responsibility for the Financial Statements
 
 Management is responsible for the preparation of these financial
 statements that give a true and fair view of the financial position,
 financial performance and cash flows of the Company in accordance with
 the accounting standards referred to in sub-section (3C) of section 211
 of the Companies Act, 1956 (the Act). This responsibility includes
 the design, implementation and maintenance of internal control relevant
 to the preparation and fair presentation of the financial statements
 that are free from material misstatement, whether due to fraud or
 error.
 
 Auditor''s Responsibility
 
 Our responsibility is to express an opinion on these financial
 statements based on our audit. We conducted our audit in accordance
 with the Standards on Auditing issued by the Institute of Chartered
 Accountants of India. Those Standards require that we comply with
 ethical requirements and plan and perform the audit to obtain
 reasonable assurance about whether the financial statements are free
 from material misstatement.
 
 An audit involves performing procedures to obtain audit evidence about
 the amounts and disclosures in the financial statements. The procedures
 selected depend on the auditor''s judgement, including the assessment of
 the risks of material misstatement of the financial statements, whether
 due to fraud or error. In making those risk assessments, the auditor
 considers internal control relevant to the Company''s preparation and
 presentation of the financial statements that give a true and fair view
 in order to design audit procedures that are appropriate in the
 circumstances. An audit also includes evaluating the appropriateness of
 accounting policies used and the reasonableness of the accounting
 estimates made by management, as well as evaluating the overall
 presentation of the financial statements.
 
 We believe that the audit evidence we have obtained is sufficient and
 appropriate to provide a basis for our audit opinion.
 
 Opinion
 
 In our opinion and to the best of our information and according to the
 explanations given to us, the financial statements give a true and fair
 view in conformity with the accounting principles I generally accepted
 in India:
 
 (a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2012;
 
 (b) in the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 (c) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 Report on Other Legal and Regulatory Requirement
 
 1.  As required by the Companies (Auditor''s Report) Order, 2003 (the
 Order) issued by the Central Government of India in terms of
 sub-section (4A) of section 227 of the Act, we give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the Order.
 
 2.  As required by section 227(3) of the Companies Act, 1956, we report
 that:
 
 a. We have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit;
 
 b. In our Opinion , proper books of account as required by law have
 been kept by the Company so far as appears from our examination of
 those books;
 
 c. The Balance Sheet, Statement of Profit and Loss and Cash flow dealt
 with by this Report are in agreement with the books of account and with
 the returns received from branches not visited by us;
 
 d. In our opinion, the Balance Sheet, Statement of Profit and Loss and
 Cash flow statement comply with the accounting standards referred to in
 sub-section (3C) of section 211 of the Act;
 
 e. As per Circular No. 8/2002 dated 22.03.2002 issued by Ministry of
 Law, Justice and Company Affairs, Government Companies have been
 exempted from the applicability of the clause (g) of sub section (1) of
 Section 274 of the Companies Act, 1956, regarding the disqualification
 of Directors under the said section.
 
 ANNEXURE TO THE INDEPENDENT AUDITOR''S REPORT
 
 (Referred to in paragraph 1 of our report of even date on the account
 of Gujarat Mineral Development Corporation Ltd, Ahmedabad for the
 period ended on 31st March, 2012)
 
 1.  a.  The Company has maintained proper record I showing full
 particulars, including quantitative I details and situation of fixed
 assets.
 
 b.  We are informed that during the period fixed assets I were
 physically verified by the management and no material discrepancies
 were noticed between the books records and physical existence of
 assets.
 
 c.  No substantial part of fixed assets has been disposed I off during
 the period as would affect going concern status of the company.
 
 2.  a.  During the year the management and the firm of I chartered
 accountants have physically verified the inventories.  In our opinion
 frequency of verification I is reasonable.
 
 b.  in our opinion and according to the information and I explanations
 given to us, the procedures of physical verification of inventories
 followed by the management are reasonable and adequate in I relation to
 the size of the Company and the nature of its business.
 
 c.  The company has maintained proper records of I inventories.  The
 discrepancies noticed on verification between the physical stock and
 book stock were not material and the same have been properly dealt with
 in the books of accounts.
 
 3.  (a&b) The company has neither granted nor taken any I loans from
 companies, firms or other parties listed in the register maintained
 under section 301 of the Companies Act 1956 or to a Company under the
 same management. Therefore requirement of sub clause (b),(c),(d) and
 (f) of clause (iii) of the order are not applicable to the company.
 
 4.  In our opinion the Company has an adequate I Internal Control
 System commensurate with the size I of the Company and nature of its
 business with regard to purchases of inventory & fixed assets and for
 sale of goods & services. During the course of I audit, we have not
 observed any major weakness in the internal controls.
 
 5.  There are no transactions that need to be entered I into register
 in pursuance of section 301 of the act. I Therefore requirement of
 sub-clause (b) of clause (v) of the order is not applicable to the
 company.
 
 6.  In our opinion and according to information and I explanation given
 to us, the company has not accepted deposits from the public during the
 period during the year within the meaning of section 58A, 58AA and
 other relevant provisions of the act.
 
 7.  Internal Audit of the company is entrusted to the firm of Chartered
 Accountants. The system is commensurate with the size and nature of the
 activities of the company.
 
 8.  We have broadly reviewed the books of accounts and record maintain
 by the corporation pursuant to the order made by the central government
 for the 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 maintained. We have however, not made a
 detailed examination of the records with a view to determine whether
 they are accurate or complete.
 
 9.  (a) According to the information and explanation given to us, there
 are no undisputed dues payable in respect of Provident Fund, Investor
 Education & Protection Fund, Employees State Insurance, Income Tax,
 Sales tax, Wealth Tax, Service tax, Excise Duty, Cess and any other
 statutory dues which are outstanding as at 31/03/2012 for a period of
 more than six months from the date they became payable.
 
 (b) The details of excise duty, income tax and sales tax not deposited
 on account of dispute is as under:
 
 Nature        Amount         Forum where dispute is pending
 of due       (Rs. in lakhs)
 
 Sales tax        106.59     Appellate tribunal and high court
 
 Income tax      3664.48     ITAT,CIT(A),High Court
 
 Excise duty      450.58     CESTAT
 
 Total           4221.65
 
 10.  The company has been registered for a period for more than five
 years and it has no accumulated losses. The company has not incurred
 cash losses during the year under audit and in the immediately
 preceding financial year. Therefore, the requirement of clause (x) of
 paragraph 4 of the Order is not applicable to the Company.
 
 11.  According to the records of the company examined by us and on the
 basis of information and explanations given to us the Company has not
 defaulted in repayment of dues to a financial institution or bank or
 debenture holders.
 
 12.  As per the information and according to the explanations given to
 us the company has not granted any loans & advances on the basis of
 security by way of pledge of other securities, and therefore
 requirement of clause (xii) of para 4 of the order is not applicable to
 the company.
 
 13.  The company is not a Chit Fund, Nidhi or Mutual benefit society.
 Hence, the requirement of clause (xiii) of paragraph 4 of the order is
 not applicable to the Company.
 
 14.  According to the information and explanation given to us, the
 company is not dealing in shares, securities, debentures and other
 investments and therefore requirement of clause (xiv) of para 4 of the
 order is not applicable to the company.
 
 15.  The company has not given any guarantee for loans taken by the
 others from banks or financial institutions.
 
 16.  The term loans obtained were applied for the purpose for which the
 loans were obtained.
 
 17.  No funds raised for short term requirements have been used for
 long-term investment.
 
 18.  During the period under audit, the company has not made any
 preferential allotment of shares to parties and companies covered in
 the Register maintained under section 301 of the Act.
 
 19.  During the period under audit, Company has not issued any
 debenture and therefore requirement of clause (xix) of the order is not
 applicable to the company.
 
 20.  During the period under audit, company has not raised any money by
 way of public issue and therefore the requirement of clause (xx) of
 paragraph 4 of the order is not applicable to the company.
 
 21.  According the information and explanation given to us, fraud on or
 by the company has not been noticed or reported during the period under
 audit.
 
                                           FOR P. SINGHVI & ASSOCIATES
 
                                                 CHARTERED ACCOUNTANTS
 
                                                         FR NO.113602W
 
 PLACE : GANDHINAGAR                                  CA NIPUN SINGHVI
 
 DATE : MAY 25, 2012                                           PARTNER
 
                                                          M.NO. 136393