gujarat carbon and industries limitedgujarat carbon and industries limited annual report &...

GUJARAT CARBONAND

INDUSTRIES LIMITED

ANNUAL REPORT & ACCOUNTS2010-2011

DIRECTORS

Shri Ravi Prakash Ganti

Shri Sumit Jhunjhunwala

Shri K. Mukhopadhyay

Shri Hasmukh A. Patel

Shri Anand Swarup Bhargava

Shri M. C. Nalwaya (Appointed - 12-11-2010)

AUDITORS

Ramanlal G. Shah & Co.

BANKERS

Bank of Baroda

REGISTERED OFFICE

Offtel Towers, 6 th Floor, R. C. Dutt Road, VADODARA - 390 007

ANNUAL REPORT & ACCOUNTS(For the year ended 31st March, 2011)

CONTENTS Page No.

Notice ..................................................................................................................................... 1

Report of the Directors .......................................................................................................... 3

Management Discussion & Analysis Report ........................................................................ 6

Report on Corporate Governance ........................................................................................ 7

Report of the Auditors ......................................................................................................... 17

Balance Sheet ..................................................................................................................... 20

Profit & Loss Account .......................................................................................................... 21

Schedules 1 to 11 ............................................................................................................... 22

Balance Sheet Abstract ....................................................................................................... 31

Cash Flow Statement .......................................................................................................... 32

GUJARAT CARBON AND INDUSTRIES LIMITED

NOTICENOTICE is hereby given that the 34th Annual General Meeting of the Members of Gujarat Carbon and

Industries Limited will be held at the Conference Hall of Baroda Productivity Council, situated at

Productivity House, Productivity Road, Alkapuri, Vadodara- 390 007 on Thursday, the 29th September,

2011 at 11.30 a.m. to transact the following business.

ORDINARY BUSINESS

1. To receive, consider and adopt the audited Balance Sheet as at 31st March 2011 and the

Profit and Loss Account for the year ended on that date together with the reports of the

Directors and Auditors' thereon.

2. To appoint a Director in place of Shri Hasmukh A. Patel, who retires by rotation and, being

eligible, offers himself for re-appointment.

3. To appoint a Director in place of Shri Anand Swarup Bhargava, who retires by rotation and,

being eligible, offers himself for re-appointment.

4. To appoint Auditors and to fix their remuneration.

SPECIAL BUSINESS

5. To consider and if, thought fit, to pass with or without modification, the following resolution as

an Ordinary Resolution :

"RESOLVED THAT Shri Mahavir Chandra Nalwaya who was appointed as Additional Director of

the Company by the Board of Directors and who holds the office up to the date of this Annual

General Meeting under Section 260 of the Companies Act, 1956 but who is eligible for the

appointment and in respect of whom the Company has received a Notice in writing pursuant to

Section 257 of the Companies Act, 1956, from a member of the Company proposing his

appointment as Director of the Company, and who has consented to act as Director if appointed,

be and is hereby appointed as Director of the Company."

By order of the Board

R P Ganti - Director

Date : September 2, 2011

1


2

NOTES1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT

A PROXY TO ATTEND AND VOTE ON POLL INSTEAD OF HIMSELF AND THE PROXY NEEDNOT BE A MEMBER OF THE COMPANY. THE PROXY, IN ORDER TO BE EFFECTIVE, MUSTBE DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY NOT LESS THAN 48HOURS BEFORE THE COMMENCEMENT OF THE MEETING.

2. The explanatory statement concerning item no. 5 of the notice as required under Sec 173 ofThe Companies' Act, 1956 is annexed herewith

3. Relevant documents referred to in the accompanying notice are open for inspection at theRegistered Office on all working days (Mondays to Fridays) between 11:00 AM and 1:00 PMprior to the date of the Annual General Meeting

4. The Register of members and the Share Transfer Books of the Company will remain closedfrom 27-9-2011 to 29-9-2011 (both days inclusive).

5. Members are requested to intimate immediately the changes, if any, in their registered mailingaddress.

ANNEXURE TO THE NOTICEExplanatory Statement pursuant to Section 173 (2) of the Companies Act, 1956 .

Item No.5

Shri Mahavir Chandra Nalwaya was appointed as Additional Director by the Board of Directors ofthe Company. He holds the office as Director up to the date of this Annual General Meeting. A Noticehas been received from a Shareholder under Section 257 of the Companies Act, 1956 along with adeposit of Rupees 500/- proposing Shri Mahavir Chandra Nalwaya as Director at this annual generalmeeting. He has given consent to act as Director of the Company, if appointed.

Your Directors recommend that the resolution be passed.

None of the Directors except Shri Mahavir Chandra Nalwaya is concerned or interested in the aboveresolution.

By order of the Board

R P Ganti - DirectorDate : September 2, 2011


2

DIRECTORS' REPORT

To the Members of the Company for the year ended 31st March 201 1

Your Directors have pleasure in submitting the Thirty Fourth Annual Report of the Company alongwith the Audited Accounts of the Company for the year ended 31st March 2011

FINANCIAL RESULTSThe Financial Results of the Company are as under:

DIVIDENDIn view of losses for the year as well as accumulated losses of the past years, your Directors do notrecommend any dividend for the year under review.

OPERATIONSDuring the year under review the company has not carried on any production activities.

In view of the continuing non viability of MEK business, the management had decided to liquidate allsaleable assets of the company. After obtaining shareholder approval as per Sec 293 (1) (a) of TheCompanies Act, 1956, the management had been able to dispose off the plant facilities at Dhanorain the year ended March 31, 2009. During the year under review, the management has also been ableto negotiate and implement sale of the factory land and related facilities at village Dhanora for agross consideration of Rs 4.3 Cr. The funds received from the sale of the property have been primarilyutilized for settling a part of the overdue loan liabilities of the company.

FUTURE PROSPECTSThe management is in the process of working out possible business alternatives which may beprofitably pursued by the company.

SAFETY, HEALTH AND ENVIRONMENTAs no production is being carried out, there is no generation of any effluent. Adequate measures havebeen put in place to ensure safety of the plant.

INSURANCEProperties of the Company are adequately insured as required.

DIRECTORS' RESPONSBILITY STATEMENTYour Directors confirm that:

i. In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed.ii. The directors have selected such accounting policies as mentioned in Schedule No.17 of the

Annual Accounts and applied them consistently and such judgments and estimates have beenmade that are reasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March, 2011 and loss of the Company for the financial year ended on that date;

Particulars

Turnover\Income from Operations 11.30 4.81Profit/ (Loss) from Operations before Interest (9.88) (14.83)and DepreciationLoss on Sale of Assets (Land) (588.75) –Interest – –Depreciation 2.76 9.90Profit / (Loss) After Provision for Tax (683.58) (24.73)Loss Brought Forward (1853.21) (1828.48)Balance Carried to Balance Sheet (2536.79) (1853.21)

FYE March 31, 2011 FYE March 31, 2010


33

(Rs. in Lakhs)

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting recordsin accordance with the provisions of the aforesaid Act for safeguarding the assets of the Companyand for preventing & detecting fraud and other irregularities;

iv. The annual accounts have been prepared on a 'going concern' basis.

CORPORATE GOVERNANCEYour Company has taken adequate steps to ensure that all mandatory provisions of 'CorporateGovernance' as provided in the Listing Agreement with Stock Exchanges in which the Company'sShares are listed are duly complied with.

A separate report on Corporate Governance and Management Discussion & Analysis are annexedhereto along with Auditors' Certificate confirming compliance with clause - 49 of the Listing Agreement.

DIRECTORSShri H A Patel and Shri A S Bhargava retire by rotation and being eligible, offer themselves for re-appointment. You are requested to reappoint them.

Shri M C Nalwaya was appointed as additional director w.e.f November 12, 2010, and being eligibleoffers himself for reappointment. You are requested to appoint him.

AUDITOR'S REPORTAs regards to the remarks in the Auditor's Report at para '1', we invite your attention to the paragraphson 'Operations' and 'Future Prospects' above.

In respect of the remarks on deferred taxation, as a matter of prudence, the management hasdecided not to recognize any deferred tax asset for the time being till there is virtual certainty of thesame getting reversed (i.e. utilized)

AUDITORSMessrs. Ramanlal G. Shah & Company, Chartered Accountants, Auditors of the Company, retire atthis Annual General Meeting and are eligible for re-appointment. You are requested to appoint themand authorize your Directors to fix their remuneration

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGOAs the company has not carried on any production or related operational activities, the requirementsof Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particularsin the Report of the Board of Directors) Rules, 1988 are not applicable. The company has also neitherearned nor spent any amount of foreign exchange.

PARTICULARS OF EMPLOYEESStatement showing particulars under Section 217 (2A) of the Companies Act, 1956 as amended,read with the Companies (Particulars of Employees) Rules, 1975 for the year ended 31st March,2011 is not given as no employee has drawn remuneration in excess of the ceiling prescribed underthe said Rules.

ACKNOWLEDGMENTYour Directors wish to express their sincere thanks to Auditors, Government, Banks and other stakeholders for their continued co-operation.

For and on behalf of the Board

R. P. Ganti S. Jhunjhunwala K. Mukhopadyay H. A. Patel M. C. Nalwaya Director Director Director Director Director


4

1. Albert Trading Company Pvt. Ltd.

2. Andhra Cements Ltd.

3. Bargate Communications Pvt. Ltd.

4. Boydell Media Pvt. Ltd.

5. Continuous Forms (Calcutta) Ltd.

6. Dail Consultants Ltd.

7. Duncans Agro Chemicals Ltd.

8. Duncans Industries Ltd

9. Duncans Tea Ltd.

10. Duncans Tea House Pvt. Ltd

11. Infratech Software Services Pvt. Ltd.

12. ISG Traders Ltd.

13. Julex Commercial Co. Ltd.

14. Kavita Marketing Pvt. Ltd.

15. Leyden Leasing & Financial Services Ltd.

16. Marleybone Travels & Resorts Pvt. Ltd.

17. Napier Softech Pvt. Ltd.

18. North India Fertiliser Limited

19. NRC Ltd.

20. Octave Technologies Pvt. Ltd.

21. Odyssey Travels Ltd.

22. Orchard Holdings Pvt. Ltd.

23. Pentonville Software Ltd.

24. Pallmall Edusystems & Medicare Services Pvt. Ltd

25. Sewand Investments Pvt. Ltd.

26. Santipara Tea Company Ltd.

27. Shubh Shanti Services Ltd.

28. Silent Valley Investment Co. Ltd.

29. Skylight Trading Co. Ltd.

30. Sprint Trading Co. Ltd.

31. Star Paper Mills Ltd.

32. Stone India Ltd.

33. Stone Intermodal Private Ltd.

34. Skylark Rubber Products Ltd.

35. Unimers India Limited

The below mentioned bodies corporate constitute a "group" pursuant to inter-se transfer ofshares amongst group companies as per SEBI ( Substantial Acquisition of Shares and Takeovers)Regulation, 1997 :


5

ANNEXURE

REPORT ON MANAGEMENT DISCUSSION AND ANALYSIS

A. INDUSTRY STRUCTURE AND DEVELOPMENT :

After a careful analysis of the MEK business scenario in India, the Company has already exitedfrom this business

B. OPPORTUNITIES AND THREATS

After the exit from the MEK business the management is now exploring possible alternativebusinesses which the company could profitably pursue.

C. RISKS AND CONCERNS

The risks and concerns would be outlined after the management has finalized the future businessstrategy and plans.

D. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Considering the absence of production activity and stable revenue stream, the company has notappointed any outside firm for carrying out internal audit.

E. MATERIAL DEVELOPMENT IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Industrial relations had been cordial till such time as production operations were continuing.

F. CAUTIONARY STATEMENT

This Report deals with the Company's objective, estimates, expectations and forecasting whichmay be forward looking within the meaning of applicable Security Laws and/or Regulations. Theaforesaid statements are based on certain premises and expectations of future events as suchthe actual results may differ materially from those expressed or implied. Government Regulation,Tax structure, demand-supply conditions, cost of raw materials & their availability, finished goodsprices and economic development within India and the countries with which the Company hasbusiness relationship will have an important bearing on the statements in the above report.

The foregoing discussions and analysis only sets out the management's perception of theCompany's operational environment in the coming months, which by its very nature is uncertainand may undergo substantial changes in view of the events taking place later. Thus, the Companyshould and need not be held responsible, if, which is not unlikely, the future turns to be somethingquite different, even materially. Subject to this management cautionary statement this discussionand analysis should be perused


6

CORPORATE GOVERNANCE REPORT

The Directors present the Company's Report on Corporate Governance.

1. COMPANY'S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCEIt has been the endeavor of the Company to achieve a high level of transparency, accountability,independent monitoring and full disclosure within the framework of legal provisions. It iscommitted to enhance the shareholder's value over a sustained period of time and be accountableto its stake holders, employees, the government, financial institutions, bankers and lenders.Corporate Governance strengthens the Company's quest for higher growth and profitability. TheCompany believes that its systems and actions must be directed to enhancing corporateperformance and maximizing shareholder value in the long term.

2. BOARD OF DIRECTORSComposition and Category

The Board comprised of Independent Directors and Non Independent Directors as per clause49 of the listing agreement.

The composition and category of the Board of Directors and also the number of other Directorshipand Committee Memberships / Chairmanships was as under:

** Represents membership of the Audit Committee, Shareholders / Investors GrievancesCommittee, Share Transfer & Finance Committee, Remuneration Committee etc. of othercompanies.

None of the Directors is a member in more than Ten Committees or is a Chairman in morethan five Committees across all companies in which he is a Director. All the Directors play anactive and important role by participating in deliberations at the Board/ Committee Meetings. TheBoard of Directors and its committees meet at regular intervals. Five meetings of the Board ofDirectors were held during the year on 30th April, 2010, 11th August, 2010, 28th August, 2010,12th November, 2010, 11th February, 2011.

Attendance of each director at the Board Meetings held during the year and at the last AnnualGeneral Meeting held on 29th September, 2010 is as under:

Name of DirectorsSr.No.

Category No. of otherDirectorships

held

1 Shri R. P. Ganti Non-Executive - - -

2 Shri Sumit Jhunjhunwala Non Executive 2 - 6

Independent

3 Shri K. Mukhopadhyay Non Executive 3 - -

4 Shri Hasmukh A Patel Non Executive - - -

Independent

5 Shri Anand Swarup Bhargava Non Executive 7 - -

6 Shri M. C. Nalwaya Non Executive

(Appointed on 22-7-2010) 1

No. of other BoardCommittees ofwhich he is a

member **

No. of Other BoardCommittees ofwhich he is aChairperson


7

Name of Director Meetings heldduring tenure of

the Director

No of Meetingsattended

Attendance atlast AGM

Shri R. P. Ganti 5 4 Attended

Shri Sumit Jhunjhunwala 5 5 Not Attended

Shri K. Mukhopadhyay 5 5 Not Attended

Shri Hasmukh A . Patel 5 5 Attended

Shri Anand Swarup Bhargava 5 4 Not Attended

Shri M.C. Nalwaya 2 2 N. A.(Appointed on 12-11-2010)

The information placed before the Board includes, as applicable:

- Annual operating plans of Business, Capital budgets and any updates.

- Quarterly results of the Company and its operating division or business segments as applicable

- Minutes of Meeting of Audit Committee and other Committees of the Board as also resolutionspassed by circulation.

- Appointment or resignation of Chief Financial Officer and Company Secretary.

- Show cause demand, prosecution and penalty notices which are materially significant

- Fatal or serious accident, dangerous occurrences, any material effluent or pollution problems.

- Any material default in financial obligations to and by the company including substantialnon-payment for goods sold by the Company.

- Any issue which involves possible public or products liability claims of substantial nature,including any judgment or order which may have passed strictures on the conduct of thecompany or taken an adverse view, regarding another enterprise that can have negativeimplications on the company.

- Details of any joint venture or collaboration agreement.

- Transactions that involve substantial payment towards goodwill, brand equity or intellectualproperty.

- Significant labour problems and proposed solutions; any significant development in HumanResources / Industrial Relations front like signing of wages agreement, implementation ofVoluntary Retirement Scheme etc.

- Sale of material nature of investments, subsidiaries, assets which is not in normal courseof business.

- Quarterly details of foreign exchange exposures and the steps taken by management to limitthe risks of adverse exchange rate movement, if material.

- Non-compliance of any regulations, statutory or listing requirements and shareholdersservices such as non-payment of declared dividend, delay in share transfer etc.

- Quarterly summary of all long-term borrowings made, bank guarantees issued, loans andinvestments made.

- Internal Audit findings and External Audit Management Reports (through the Audit Committee)

- Status of business risk exposures in management and related action plans.


8

- Making of loans and investment of surplus funds.

- Proposal for investment, mergers and acquisitions.

- General notices of interest of Directors.

3. AUDIT COMMITTEETerms of reference(a) Primary objectives of the Audit Committee:

The Audit Committee acts as a link between the Statutory Auditors and the Board of Directors.It addresses itself to matters pertaining to adequacy of internal controls, reliability of financialstatements and other management information and adequacy of provisions of liabilities.The primary objective of the Audit Committee (the "Committee") is to monitor and provideeffective supervision of the management's financial reporting process with a view to ensureaccurate, timely and proper disclosures and the transparency, integrity and quality of financialreporting.

The Committee oversees the work carried out in the financial reporting process by themanagement, including the independent auditor, and notes the process and safeguardsemployed by each.

(b) Scope of the Audit Committee:1. Provide an open avenue of communication between the independent auditor and

the Board of Directors

2. Recommending the appointment and removal of statutory auditors, fixation of auditfees and also to approve the payment for other services

3. Meet four times a year or more frequently as circumstances require. The Audit Committeemay ask members of management or others to attend meetings and provide pertinentinformation as necessary.

4. Confirm and assure the independence of the external auditor.

5. Review with independent auditor the co-ordination of audit efforts to assurecompleteness of coverage, reduction of redundant efforts and the effective use of allaudit resources.

6. Consider and review with the independent auditor the adequacy of internal controlsincluding the computerized information system controls and security;

7. Reviewing with the management, the quarterly financial statements before submissionto the Board for approval.

8. Reviewing with the management the annual financial statements before submissionto the Board, focusing primarily on:

(a) Any changes in the accounting policies and practices

(b) The going concern assumption

(c) Compliance with accounting standards

(d) Compliance with stock exchange and legal requirements concerning financialstatements

(e) Significant adjustment arising out of audit


9

9. Consider and review with the management and the independent auditor;

(a) Significant findings during the year, including the status of previous auditrecommendations,

(b) Any difficulties encountered in the course of audit work including any restrictionson the scope of activities or access to required information.

10. Review of the following information:

(i) Management discussion and analysis of financial condition and results of operations;

(ii) Statement of significant related party transactions submitted by the management;

(iii) Management letters/letters of internal control weaknesses issued by the StatutoryAuditors

(c) Composition of the Audit Committee as on March 31, 2011

The Audit Committee comprises of three Non-Executive Directors of which two are IndependentDirectors. Mr. Sumit Jhunjhunwala, a Non-Executive Independent Director acts as the Chairmanof the Committee. The Audit Committee is constituted in accordance with the CorporateGovernance Code of the Listing Agreement and the provisions of the Companies Act, 1956. Thestatutory auditors are invited to the Audit Committee Meetings whenever required. The quorumfor the Audit Committee Meeting is two members.

The composition of the Audit Committee is as under:

1. Mr. Sumit Jhunjhunwala

2. Mr. Hasmukh A. Patel

3. Mr K. Mukhopadhyay

(d) Audit Committee Meetings and Attendance during the financial year ended March 31, 2011

During the financial year ended March 31, 2011, Five Audit Committee Meeting was held on 30thApril, 2010, 11th August, 2010, 28th August,2010, 12th November, 2010 and 11th February, 2011.The table hereunder gives the attendance record of the Audit Committee members.

Name of the Audit Committee Members No. of meetings held No. of meetings attended

Shri Sumit Jhunjhunwala 5 5

Shri Hasmukh A. Patel 5 5

Shri K. Mukhopadhyay 5 5

The Committee has recommended to the Board the appointment of M/s. R. G. Shah & Co., CharteredAccountants, as the statutory and independent auditors of the Company for the Financial Year endingMarch 31, 2012 and that necessary resolution for appointing them as auditors be placed before theshareholders.

4. REMUNERATION COMMITTEE

The broad terms of reference of the Remuneration Committee is to ensure that the remunerationpractices of the Company in respect of the Senior Executives including the Executive Directors arecompetitive keeping in view prevalent compensation packages so as to recruit and retain suitableindividual(s) in such capacity. Presently the Board has not constituted any Remuneration Committee.


10

The remuneration of the Directors is decided by the Board of Directors, keeping in view the provisions

in the Articles of Association of the Company and the Companies Act, 1956. No Director of the

company was paid any remuneration during the year. The Non Executive Independent Directors are

paid sitting fees for attending Board and Committee meetings.

The sitting fees paid for the year 2010-11 to the Directors for Board/Committee meetings are as

under: -

5. RELATED PARTIES' TRANSACTION:

Transactions with related parties are disclosed in detail in Note No.19 of Schedule 13(B) - Notes to

Accounts annexed to the financial statement for the year as well as given hereunder under the head

DISCLOSURE. Investors are requested to refer the same.

6. SHAREHOLDERS’ AND INVESTORS’ GRIEVANCE COMMITTEE

The Shareholders and Investors' Grievance Committee has been formed as per the Corporate

Governance Code prescribed in the Listing Agreement to review the status of investors grievances,

provide a mechanism for redressing such grievances and recommend measures to improve the

level of investor services.

The said committee also acts as the Share Transfer Committee to specifically look into various

issues of the Shareholders, issues of Duplicate Share Certificate, etc. This Committee has been

delegated authority by the Board to approve transfer/transmission/ transposition of shares/

debentures, issuance of share/debenture certificate etc. The Committee meets at regular intervals

to approve transfer/transmission/transposition of shares/debentures etc.

The composition of the Committee and number of the meetings held during the year are furnished

hereunder:

During the year, the Company has not received any complaints from the Stock Exchanges/ SEBI/Department of Company Affairs, which requires redress to the satisfaction of the Shareholders. Asrequired by the Stock Exchanges, the Company has designated Mr. V. S. Sirohiya, as the ComplianceOfficer to monitor the share transfer process. The Company had, during the year 2010-11 received 12applications for transfer/transmission/transposition of shares and total number of pending requests

for transfer as on 31st March, 2011 were Nil.

Name of Director Meetings held during tenure of theDirector

No of Meetings attended

Shri R P Ganti 5 5

Shri H A Patel 5 5

Shri K. Mukhopadhyay 5 -

Total

1. Mr. Sumit Jhunjhunwala 10000 5000 - 1500

2. Mr. H. A. Patel 10000 5000 6000 21000

Board Meeting AuditCommittee

Share TransferCommittee

Rs. Rs. Rs. Rs.


11

7. GENERAL BODY MEETINGS

The details as to the timings date and venue of the last three Annual General Meetings are as under:

8. DISCLOSURES

(i) Related Party Transactions:

During the year, Company has not entered into any sale / purchase transactions with its

Associate Companies Remuneration to Directors disclosed in Clause 4 above.

(ii) Compliances by the Company:

There is no non-compliance by the Company or any penalties, strictures imposed by the

Stock Exchange, SEBI or any other statutory authority on any matter related to capital markets,

during the last three years.

(iii) Access of personnel to the Audit Committee:

The Company's personnel have access to the Chairman of the Audit Committee in cases

such as concerns about unethical behavior, frauds and other grievances. No personnel of

the Company have been denied access to the Audit Committee.

(iv) Compliance with the Mandatory requirements and Implementation of the Non-mandatory

requirements:

The Company has complied with the mandatory requirements of the Corporate Governance

Clause of Listing Agreement. The Company has not implemented the non-mandatory

requirements enlisted by way of annexure to Clause 49 of the listing agreement.

9. REPORT ON CORPORATE GOVERNANCE:

The Company has obtained a Certificate from the statutory auditors regarding compliance of

conditions of Corporate Governance as stipulated in Clause 49 which is annexed herewith.

10. CEO DECLARATION:

As required by clause 49 of the Listing Agreement, Director's declaration on compliance of the

Company's Code of Conduct is Annexed herewith.

11. MEANS OF COMMUNICATION

The financial results and notices of Board Meeting and Annual General Meeting are published in

the national and regional newspapers.

Year Date of AGM

2007-08 15/11/2008 11:30 am BPC Convention Centre

Productivity Road, Baroda





Time Venue


12

(i) Date, time and venue of Annual General Meeting 29th September, 2011 , 11:30 A.M.

of Shareholders BPC Convention Centre, Productivity

Road, Baroda-390007

(ii) Financial Calendar 2011--2012 Financial reporting for quarter ended

(tentative and subject to change) June 30, 2011 : By August, 14, 2011

September 30, 2011 : By November 15, 2011

December 31, 2011 : By February 15, 2012

March 31, 2012 : By May 15, 2012

Annual General Meeting for year ended

31st March 2012 - By September 30, 2012

(iii) Dates of book closures 27th September 2011 to 29th September,

2011 (both days inclusive)

(iv) Dividend Payment The Company has not declared any dividend

(v) Registered Office Gujarat Carbon and Industries Ltd

6th Floor, Offtel Towers, R. C. Dutt Road,

Baroda -390 007

Tel Nos.: 0265-2336468 &

Fax No: 0265-2336468

(vi) Listing on Stock Exchange Bombay Stock Exchange Limited; Vadodara

Stock Exchange

(vii) Stock Exchange Code BSE - 506457; VSE - 0118

(viii) Demat ISIN No. for NSDL / CDSL - INE 462C01010

(ix) Share Transfer Agent - In view of Common Agency requirement by SEBI, Company hasappointed Link Intime India Pvt. Ltd., Vadodara as share transfer agents.

(x) Stock Market price data

Period

April 2010 - March 2011 2.83 2.62 NA NA

Bombay Stock Exchange Vadodara Stock ExchangeHigh Low High Low

(xi) Registrar & Transfer Agent (RTA): Link Intime India Pvt. Ltd. B-102, & 103, Shangrila

Complex, First Floor, opp. HDFC Bank , Near Radhakrishna Char Rasta , Akota,Vadodara- 390 020

(xii) Share transfer system:

Share transfer in physical form can be lodged with Registered Office of the Company.Share transfer requests received are normally processed within 15 to 25 days from thedate of receipt, if the documents are complete in all respects. All requests fordematerialization of shares are processed and confirmation thereof is conveyed by the

Company's RTA to the depositories within 7 to 15 days from the date of receipt thereof.


13

No. of shareholders No. of shares %

No. of shareholders in 2668 6165018 49.80Physical mode

No. of shareholders in 3916 6215658 50.20Electronic mode

% toTotal Shares

Upto to 500 5084 878963 7.10

501 to 1000 788 686588 5.55

1001 to 2000 355 571217 4.61

2001 to 3000 122 324509 2.62

3001 to 4000 60 220102 1.78

4001 to 5000 51 243283 1.96

5001 to 10000 73 532514 4.30

10001 and above 51 8923500 72.08

Total 6584 12380676 100.00

12. DISTRIBUTION OF SHAREHOLDING AS ON 31ST MARCH, 2011

Group of Shares No. ofShareholders

No.ofShares held

13. SHAREHOLDING PATTERN AS ON 31ST MARCH, 2011

CATEGORY NO OF SHARES % OF SHAREHOLDING

Promoters 7284600 58.84

Financial Institutions & Banks 150 0.00

Bodies Corporate 476835 3.85

NRI 48788 0.39

Indian Public 4570303 36.92

Total 12380676 100.00

14. DEMATERIALISTION OF SHARES

50.20 % of the shares have been dematerialized up to 31st March, 2011.

15. PLANT LOCATION

Plant has been disposed of in earlier year

16. ADDRESS FOR CORRESPONDENCE

Gujarat Carbon and Industries Ltd.6th Floor, Offtel Towers, R. C. Dutt Roads, Baroda -390 007.Tele / Fax Nos. : 0265-2336468


14

R. P. Ganti S. Jhunjhunwala K. Mukhopadyay H. A. Patel M. C. Nalwaya Director Director Director Director Director

COMPLIANCE CERTIFICATE

ToGujarat Carbon and Industries Ltd6th Floor, Offtel TowersR.C.Dutt RoadBaroda

We have examined the compliance of conditions of Corporate Governance by Gujarat Carbon andIndustries Ltd for the year ended on 31st March, 2011 as stipulated in clause 49 of the ListingAgreement of the said Company with Stock Exchange.

The compliance of conditions of Corporate Governance is the responsibility of management.Our examination was limited to procedures and implementation thereof, adopted by the Company forensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor anexpression of opinion on the financial statement of the Company.

In our opinion and to the best of our information and according to the explanations given to us, wecertify that the Company has compiled with the conditions of Corporate Governance as stipulated inthe above mentioned Listing Agreement.

We state that in respect of investor grievance received during the year ended 31st March, 2011, noinvestor grievances are pending against the Company as per the records maintained and informationgiven by the Company and presented to the Shareholders'/Investors' Grievance Committee.

We further state that such compliance is neither an assurance as to the future viability of the Companynor the efficiency or effectiveness with which the management has conducted the affairs of theCompany.

For Ramanlal G. Shah & Co.Chartered Accountants

Jayesh R. Mehta Partner

Membership No 8683

Place : AhmedabadDate : September 2, 2011


15

CEO / CFO CERTIFICATE

To,Board of DirectorsGujarat Carbon and Industries Limited

Baroda.

We do hereby certify that:

a) We have reviewed the financial statements and the cash flow statement of the Company for theyear 2010-11 and that to the best of our knowledge and belief:

(i) These statements do not contain any materially untrue statement or omit any material fact orcontain statements that might be misleading;

(ii) These statements together present a true and fair view of the Company's affairs and are incompliance with existing accounting standards, applicable laws and regulations.

(b) There are, to the best of our knowledge and belief, no transactions entered into by the Companyduring the year which are fraudulent, illegal or violative of the Company's code of conduct.

(c) We accept responsibility for establishing and maintaining internal controls for financial reporting

and that we have evaluated the effectiveness of internal control systems of the Company pertainingto financial reporting and we have disclosed to the auditors and the audit committee, deficienciesin the design or operation of such internal controls, if any, of which we are aware and the stepswe have taken or propose to take to rectify these deficiencies.

(d) We have indicated wherever applicable to the auditors and the audit committee:-

(i) significant changes in internal control over financial reporting, if any during the year;

(ii) significant changes in accounting policies during the year and that the same have beendisclosed in the notes to the financial statements; and instances of significant fraud of which

we have become aware and the involvement therein, if any, of the management or anyemployee having a significant role in the company's internal control system over financialreporting

R P Ganti K Mukhopadhyay M. C. NalwayaDirector Director Director


16


17

AUDITORS' REPORT TO THE MEMBERS OF GUJARAT CARBON AND INDUSTRIES LIMITED

We have audited the attached Balance sheet of Gujarat Carbon and Industries Limited as at31st March 2011 and also the Profit and Loss Account and the Cash Flow Statement for the yearended on that date annexed thereto. These financial statements are the responsibility of theCompany's management. Our responsibility is to express an opinion on these financial statementsbased on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financial statements. An audit alsoincludes 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 our opinion.1. We invite your attention to Note No.1 of schedule 9B regarding the accounts being prepared

on going concern basis. However, there is no alternativeproposal to promote any other activity.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 audit;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 those books;4. The Balance sheet and the Profit and Loss Account dealt with by this report are in agreement with

the books of account;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 whichhave been disclosed in paragraph 7 below. Further reference is invited to Note 18 of Schedule9B regarding treatment of deferred tax assets, wherein the disclosure requirements of AS 22'Accounting for Taxes on Income' have not been followed regarding composition of deferredtax assets/ liabilities as on balance sheet date.

6. On the basis of the written representations received from directors of the Company and taken onrecord by the Board of Directors, we report that none of the directors is disqualified as on

31st March, 2011 from being appointed as a director of the company in terms of clause (g) ofsub-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, thesaid accounts subject to what is stated in paragraph 1 above, and:Note No. 5 of Schedule 9B: regarding non provision of interest of Rs. 87.51 lacs payable on InterCorporate Deposits. Had the above provision been considered, loss for the year would havebeen Rs. 771.09 lacs (as against reported loss figure of Rs. 683.58 lacs), accumulated losseswould have been Rs. 2624.30 lacs (as against reported figure of Rs. 2536.79 lacs) and readwith other notes thereon, given the information required by the Companies Act, 1956, in the mannerso required and give a true and fair view in conformity with the accounting principle generallyaccepted in India:


(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011.(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 ofIndia in terms of subsection 4(A) of section 227 of the Companies Act, 1956 and on the basis ofsuch checks of the books of accounts and records as we considered appropriate and the informationand explanations given to us during the course of audit, we further state that:

(i) 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) (a) The Company has maintained proper records to show full particulars, including quantitative

details and situation of fixed assets, which requires to be updated.(b) The Company 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 thenature of its business. In accordance with this programme, certain fixed assets have been

physically verified by the management during the year and according to the information andexplanations given to us, no material discrepancies have been noticed on such verification.

(iii) The Company does not have any inventories during the year.(iv) (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 registermaintained under section 301 of the Companies Act, 1956 during the year.

(b) (c) & (d) as stated in paragraph (iv) (a), the company has not granted such loans during the year.(e) (f) 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 registermaintained under section 301 of the Act during the year.

(g) As the ICD is payable on demand, payment schedule has not been fixed. The company hasprovided interest up to 31.03.2002 amounting to Rs. 920.57 lacs which is pending for payment.

No provision is made for interest payable on such Inter Corporate Deposits amounting toRs.87.51 lacs.

(v) In our opinion and according to the information and explanations given to us, there are adequateinternal control systems commensurate with the size of the company and the nature of its businesswith regard to purchase of inventory, fixed assets and with regard to the sale of goods. During thecourse of our audit, we have not observed any continuing failure to correct major weakness in

internal control system.(vi) (a)In our opinion and according to the information and explanations given to us, there are no

transactions that need to be entered into the register maintained under section 301 of theCompanies Act, 1956

(b) In our opinion and according to the information and explanations given to us, there areno transactions made in pursuance of such contracts or arrangements, and exceeding

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 has no internal audit system during the year.

18


(ix) Since there are no operations during the year, the Company has not maintained the books ofaccount prescribed under the Rules made by the Central Government for the maintenance ofcost records under section 209 (1) (d) of the Companies Act, 1956.

(x) (a)The Company is generally regular except stated here under in depositing with appropriateauthorities undisputed statutory dues including Provident Fund, Investor Education ProtectionFund, Income Tax, Sales Tax, Custom Duty, Excise duty, Cess and other material Statutory duesapplicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable inrespect of provident fund, Investor Education Protection Fund, Income Tax, Sales Tax, WealthTax, Service Tax, Custom Duty, Excise Duty, Cess were in arrears as at 31st March, 2011 for aperiod of more than six months from the date they became payable:

(c) According to the information and explanations given to us, there are no dues of Customs Duty,Wealth Tax, Service Tax, and Cess, which has not been deposited on account of any disputeexcept as stated hereunder:

Name of the Nature of Amount under Period to Forum where theStatute dues dispute (Rs. In lacs) which it relates dispute is pending

Income tax Income tax 4.30 A.Y. 2002-2003 CommissionerAct, 1961 (Appeals)

(xi) In our opinion, the accumulated losses of the company are more than fifty percent of its networth. The Company has incurred cash losses during the financial year and also incurred cashloss during the year immediately preceding financial year.

(xii) In our opinion and according to the information and explanations given to us, company has notdefaulted 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 loansand 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 anyguarantee 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 fund raised on short-term basis including othershort-term loans from companies have not been used for long term investment.

(xvii) During 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 the year.(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.Chartered Accountants

Firm Regn No 108517W

(Jayesh R. Mehta)Place : Ahmedabad PartnerDate : September 2, 2011 Membership No. 8683.

19


20

Balance Sheet as at 31st March, 2011

Schedule As At As At31-03-2011 31-03-2010

Rs in lakhs Rs in lakhs

SOURCE OF FUNDS:Shareholders' Funds:(a) Capital 1 1324.07 1341.27(b) Reserves & Surplus 2 0.00 0.00

1324.07 1341.27Loan Funds(a) Secured Loans 3 0.00 0.00(b) Unsecured Loans 1105.54 1105.54

1105.54 1105.542429.61 2446.81

APPLICATION OF FUNDS:Fixed Assets 4(a) Gross Block 47.41 1459.74(b) Less Depreciation 16.47 413.56(c) Net Block 30.94 1046.18(d) Capital Work in Progress 0.00 0.00

30.94 1046.18InvestmentsCurrent Assets, Loans & Advances 5(a) Inventories 0.00 0.00(b) Sundry Debtors 85.46 85.46(c) Cash & Bank Balances 14.57 41.48(d) Other Current Assets 245.51 235.91(e) Loans & Advances 193.18 146.29

538.72 509.14Less:Current Liabilities & Provisions 6(a) Liabilities 43.57 328.47(b) Provisions 0.00 0.00

43.57 328.47Net Current Assets 495.15 180.67PROFIT & LOSS ACCOUNT 2536.79 1853.23 Less:General Reserve 633.27 1903.52 633.27 1219.96

2429.61 2446.81NOTES TO ACCOUNTS 9NOTE :The Schedules referred to above and the attachednotes form part of the Balance SheetAs per our report attached R. P. Ganti DirectorFor Ramanlal G Shah & Co.Chartered Accountants Sumit Jhunjhunwala Director

Jayesh R Mehta K. Mukhopadhyay DirectorPartnerMembership No. 8683 H. A. Patel Director

M. C. Nalwaya DirectorDated : September 2, 2011


Profit & Loss Account for the Year Ended 31st March, 2011 Schedule For the For the

Year ended Year ended31-03-2011 31-03-2010


INCOME:Gross Sales 0.00 0.00Less: Excise Duty Recovered on Sales 0.00 0.00Net Sales 0.00 0.00Other Income 7 11.30 4.81

11.30 4.81

EXPENDITURE:Raw Material Consumed 0.00 0.00Loss on sales of Assets 588.75 0.00Expenses 8 21.18 19.64Depreciation & Write Off from Land 2.76Less : Transfer from Revaluation Reserve 0.00 2.76 9.90

612.69 29.54LOSS before previous years expenses (601.39) (24.73)Provision for Contingent Liabilities 0.00 0.00PROFIT/ (LOSS) BEFORE TAXATION (601.39) (24.73)

Provision for Taxation 82.19 0.00

LOSS AFTER TAXATION (683.58) (24.73)

Balance of Profit / ( Loss) brought forward (1853.21) (1828.48)

Balance carried forward to Balance Sheet (2536.79) (1853.21)

NOTES TO ACCOUNTS 9

Weighted average number of Equity shares 12380676 12380676

Basic and diluted earning per share (5.52) (0.20)

NOTE :The Schedules referred to above and the attachednotes form part of the Profit and Loss Account

21

As per our report attached R. P. Ganti DirectorFor Ramanlal G Shah & Co.

Chartered Accountants Sumit Jhunjhunwala Director




22

Schedules forming part of the Balance Sheet as at 31st March,2011

As At As At31-03-2011 31-03-2010


SCHEDULE - 1: Share CapitalAuthorised:

12380676 Equity Share ( Previous Yr.12380676) 1238.07 1238.07of Rs. 10/- each12619324 Redeemable Cumulative Preferenceshare of Rs. 10/- each 1261.93 1261.93

Issued and Subscribed : 2500.00 2500.001,23,80,676 Equity Shares ofRs. 10/- each fully paid up(1,00,12,865 shares held by ISG Traders Ltd., the holding company, Refer Note below.) 1238.07 1238.07

1238.07 1238.071720000, 10% Redeemable CumulativePreference Shares of Rs.10/= each (See Note.2) 86.00 103.20

1324.07 1341.27Note:

1. Substantial shares of the Company were held by ISG Traders Limited(ISG), D.I.Trading Company Limited(DI)and K.V. Trading Company (K.V). A Scheme of Arrangement (Scheme) between Veeralaxmi TradingCompany Limited, U.I. Trading Company Limited, KV,DI and ISG (effective from 1st March, 2003) has beensanctioned by the Hon'ble High Court of Calcutta dated 13th May, 2003. Pursuant to the scheme, theabovementioned companies were amalgamated with ISG, hence the company became the subsidiary of ISGTraders Limited from the said date. Pending share transfer formalities said shares are still in the name ofrespective companies. .

2. Redeemable Cumulative Preference Shares are redeemable in 10 equal annual installments starting from1.4.2006

SCHEDULE - 2 Reserves and SurplusRevaluation Reserve :

Balance as per last Balance Sheet 0.00 0.00Less: (1) Amount adjusted against

depreciation for the year 0.00 0.00 (2) Amount Adjuested againt Value of 0.00 0.00

Freehold Land 0.00 0.00

General Reserve:Balance as per last Balance Sheet 633.27 633.27Add : Transferred from Capital Reserve 0.00 0.00

633.27 633.27Less: Shown by way of deduction from Profit & Loss Account 633.27 633.27

0.00 0.000.00 0.00


Schedules forming part of the Balance Sheet as at 31st March,2011As At As At

31-03-2011 31-03-2010Rs in lakhs Rs in lakhs

SCHEDULE-3 Loans Funds(a) Secured Loans:

Overdraft on Security of Fixed DepositPlaced in Bank 0.00 0.00

0.00 0.00(b) Unsecured Loans:

From Others 1105.54 1105.54(including interest accrued and dueRs.920.57 Lakhs;Previous Year Rs.920.57 Lakhs)

1105.54 1105.54

SCHEDULE-4 : Fixed Assets (Rs. in Lakhs)

GROSS BLOCK DEPRECIATION NET BLOCKCost/

Revaluationas at

1-4-2010

Freehold land 538.72 0.00 538.72 0.00 0.00 0.00 538.72Leasehold land 0.00 0.00 0.00 0.00 0.00 0.00Buildings 492.81 452.52 40.29 11.03 29.26 335.46Plant & Machinery 399.40 0.00 399.40 0.00 0.00 0.00 170.06Electrical Installations 0.39 4.66 0.00 0.00 0.00 0.06Furniture & Fixtures 7.12 7.12 5.27 1.85 1.89Office Equipment ,Air Conditioners &Refrigerators, Computer 21.30 0.00 0.00 0.00 0.00 0.00 0.00Vehicles 0.00 0.00 0.00 0.00 0.00 0.00

1459.74 0.00 1395.30 47.41 16.47 30.94 1046.18Previous Year 1459.74 0.00 0.00 1459.74 413.56 1046.18

Additions/Adjustments

Deductions/Adjustments

Cost/Revaluation

at at31-03-2011

Upto31-3-2011

Balanceas at

31-03-2010

Balanceas at

31-03-2011

SCHEDULE-5 Current Assets, Loans and Advances

(a) Inventories: 0.00 0.00

(b) Sundry Debtors (Unsecured):

Debts outstanding for a period

exceeding 6 months considered good 85.46 85.46

23


24


As At As At31-03-2011 31-03-2010


(c) Cash and Bank Balances:

Cash on hand 0.27 0.10

Current Accounts with Scheduled Banks 14.30 41.37

Short Term Deposit with Scheduled Bank 0.00 0.00

(Deposited with Bank against overdraft and

Bank guarrentee)14.57 41.48

(d) Other Current Assets:Interest receivableConsidered Good 245.51 235.91

245.51 235.91

245.51 235.91(e) Loans and advances

(Unsecured -Considered Good)

Advances recoverable in cash or inkind or for value to be received

(including for capital goods) 19.04 18.96

Deposits with Excise Authorities 12.11 12.39

Prepaid Expenses 0.00 0.00

Security Deposit with Government

departments & Other 1.45 10.51

Inter-corporate Deposits 96.25 41.25

Advance tax less Provision 64.33 63.18

193.18 146.29538.72 509.14

SCHEDULE-6 Current Liabilities and Provisions(a) Current Liabilities:

Sundry Creditors (Ref. Sch 9B, Note : 8) 29.20 312.49

Other Liabilities 14.37 15.99

43.57 328.48

(b) Provisions: - -43.57 328.48


As At As At31-03-2011 31-03-2010


SCHEDULE - 7 Other Income

Interest (Gross) (see note below) 11.26 4.80

Miscellaneous Receipts 0.04 0.01

Profit on Sale/transfer of land/lease land 0.00 0.00

Credit balances not claimed/payable 0.00 0.00

Insurance claim received 0.00 0.00

provision no longer required. 0.00 0.00

11.30 4.81

Note:

Tax Deducted at Source on Interest Rs.112535/- (Previous Year Rs. 48000/-)


25

SCHEDULE- 8 Expenses

Salary,Wages and Bonus 2.99 6.90Contribution to Provident and other Funds 0.18 0.18Contribution to Gratuity 0.00 0.00Labour and Staff Welfare 0.19 0.18Consumption of Stores and Spares 0.00 0.00Power & Fuel 4.81 0.00Rent D.G.Set 0.31 1.26Excise Duty 0.00 0.00Rates and Taxes 1.59 0.50Maintenance and Repairs : - - Building 0.00 0.00 - Plant and Machinery 0.00 0.22 - Others 0.02 0.00

0.02 0.22Insurance 0.00 0.02Travelling Expenses 1.49 1.31Miscellaneous Expenses 7.73 7.57Sundry Plant Expenses 0.00 0.01Auditors' Remuneration 0.00Audit Fees 0.90 0.90Tax Audit Fees 0.00 0.00Certification 0.51 0.18Reimbursement of Expenses 0.10 1.51 0.00 1.08Directors' Fees 0.36 0.41Bad Debts 0.00 0.00

21.18 19.64

Schedule forming part of the Balance Sheet and Profit and Loss Account for the yearended 31st March 2011Significant Accounting policies and Notes to Accounts forming part of the financial statementsfor the year ended 31st March, 2011

SCHEDULE - 9 (A) : Significant Accounting Policies

1. ACCOUNTING METHODOLOGY

The accounts have been prepared on historical cost basis of accounting, on an accrual basis andcomply with the Accounting Standards referred in Section 211 (3C) of the Companies Act, 1956,to the extent applicable. All expenses and income to the extent considered payable and receivablewith reasonable certainty are accounted for on accrual basis. Accounting policies not specificallyreferred to are consistent with generally accepted accounting practices.

2. USE OF ESTIMATES

The presentation of financial statements in conformity with Generally Accepted AccountingPrinciples (GAAP) requires management to make estimates and assumptions that affects thereported amounts of assets and liabilities, and the disclosures of contingent liabilities on thedate of the financial statements. Actual results could differ from those estimates. Any revision toaccounting estimates is recognized prospectively.

3. REVENUE RECOGNITION

Revenue from sale of goods is recognized when significant risks and rewards of ownership aretransferred to the Customers. Sales are net of sales return and trade discounts.

4. FIXED ASSETS

a) Fixed Assets are carried at cost/book value and include amount added on revaluation.Depreciation is provided on revalued cost of assets (excluding land) on Straight Line Method,at rates prescribed under Schedule XIV of the Companies Act, 1956. Cost of leasehold land/land development is being amortised over the period of the lease. In respect of additions tofixed assets, depreciation is being calculated on pro-rata basis from the month of suchaddition.

b) Depreciation on Assets is provided as per Straight Line Method.

c) Financial Leases - Assets under hire purchase are capitalised and depreciated as perestimated useful life of the asset.

5. IMPAIRMENT OF ASSETS

In accordance with AS 28 on 'Impairment of Assets' issued by the Institute of Chartered Accountantsof India, where the impairment of the Company's assets related to cash generating units, thecarrying amounts of such assets are reviewed at each balance sheet date to determine whetherthere is any impairment. The recoverable amount of such assets is estimated as the higher of itsnet selling price and its value in use. An impairment loss is recognized in the profit and lossaccount when the carrying amount of such assets exceeds its recoverable amount.

6. INVENTORIES

Inventories are valued at lower of cost and estimated net realisable value. Valuation of finishedgoods represents direct cost and an appropriate portion of factory overheads which are incurredin bringing them to their present location and conditions and includes Central Excise Dutypayable. Weighted Average method is used for determination of cost.


26


7. TAXATION

a) Income tax expense comprise current tax and fringe benefit tax (i.e. amount of tax for theperiod determined in accordance with the income tax law) and deferred tax charge or credit(reflecting the tax effects of timing differences between accounting income and taxable incomefor the year)

b) The deferred tax charge or credit and the corresponding deferred tax liabilities or assets arerecognised using the tax rates that have been enacted or substantively enacted by thebalance sheet date.

c) Deferred tax is recognised, subject to the consideration of prudence on timing differences,being the difference between taxable income and accounting income that originate in oneperiod and are capable of reversal in one or more subsequent periods. Deferred tax assetincluding asset arising from unabsorbed depreciation and losses carried forward, is notrecognised unless there is virtual certainty that sufficient future taxable income will be availableagainst which deferred tax can be realised.

8. EMPLOYEE BENEFITS

a) Gratuity:

Liability under the payment of Gratuity Act, 1972 is a defined benefit obligation and is providedfor on the basis of the actuarial valuation made at the end of each financial year.

b) Provident Fund:

Retirement benefits in the form of Provident Fund / Pension Fund is a defined contributionscheme and the contributions are charged to the Profit and Loss Account of the year whenthe contributions to the respective funds are due. There are no other obligations other thanthe contribution payable to the respective funds.

c) Leave Entitlement:

Liability towards Leave Entitlement Benefit is provided for as at the Balance Sheet date asper the actuarial valuation taken at the end of the year.

Actuarial gains/ losses are immediately taken to Profit and Loss account and are not deferred.

9. TRANSACTION OF FOREIGN CURRENCY ITEMS

a) Foreign Currency transactions are recorded at the rate of exchange prevailing on the date ofthe transaction.

b) Foreign Currency transactions remaining unsettled as on the last day of the financial yearare translated at the exchange rate prevailing as on the date of Balance Sheet. The resultantdifference, if any, is dealt with in the Profit and Loss Account. Premium in respect of forwardexchange contracts is recognised over the life of the contracts.

10. BORROWING COSTS

Borrowing costs attributable to acquisition and construction of qualifying asset are capitalized asa part of the date when such asset is ready for its intended use. A qualifying asset is one thatnecessarily takes substantial period of time to get ready for intended use. All other borrowingcosts are charged to the Profit and Loss Account.


27


11. PROVISIONS AND CONTINGENT LIABILITIES

The Company recognises a provision when there is a present obligation as a result of a pastevent that probably requires an outflow of resources and a reliable estimate can be made of theamount of the obligation. A disclosure for a contingent liability is made when there is a possibleobligation or a present obligation that may, but probably will not, require an outflow of resources.Where there is possible obligation or a present obligation wheret the likelihood of outflowresources is remote, no provision or disclosure is made.

SCHEDULE - 9 (B) : Notes to Accounts

1 In terms of agreement for sale entered into with a foreign buyer and related purchase order/s, the

company has sold the entire plant and machinery and related electric installations on 'as is, what is'

basis. The management decided to account for the sale of said assets in accounts on final shipment.

As such, the loss on account of sale of said assets is accounted for during the year.

Although operations of the Company are totally ceased since March 2007 and sale of entire plant

and machinery and related electric installations are accounted during the year, accounts are prepared

on a going concern basis.

2. (a) The Company had earlier revalued leasehold land, building, plant machinery and electrical installations

of its erstwhile Carbon Black Unit (First Revaluation 30-9-1986) and also freehold land, building,

plant and machinery and electrical installations of MEK Division at the estimated market value as on

30-9-1993 resulting in the net increase of Rs.2204.61 Lakhs which was transferred to revaluation

Reserve.

Relying on legal opinion, the Company had set off debit balance of Profit and Loss Account of Rs.

2094.75 Lakhs as on 30.09.1993 against the balance of revalued assets of Carbon Black Division

as on 30.09.1986 and updated on 30.09.1993 and MEK Division as on 30.09.1993.

(b) The Company had further revalued buildings except a flat and above mentioned assets of MEK

Division at estimated market value as on 31-3-1999. The net increase in the value of such assets

amounted to Rs.2229.96 Lakhs which had been transferred to Revaluation Reserve Account.

Relying on legal opinion, the Company had set off Rs. 1140.00 Lakhs being accumulated debit

balance of Profit and Loss Account up to 30-09-1997 against Revaluation Reserve of Rs. 2229.96

lakhs created on 31-3-1999 as stated above.

3. Sales of current year Nil (Previous year Rs.Nil)

4 Cumulative Preference Shares are redeemable in 10 equal installments staring from 01.04.2006.


28


5. (i) No provision is made for interest payable on certain Intercorporate Deposits amounting to Rs866.76 lakhs (Previous Year Rs.779.25) which includes Rs.87.51 Lakhs for current year (PreviousYear Rs. 87.51 Lakhs) as the accumulated outstanding interest already provided till 31st March,2002, of Rs. 920.57 lakhs is still remaining unpaid.

(ii) Accumulated Dividend on Cumulative Preference Shares amount to Rs. 79.12 lakhs (PreviousYear Rs.68.80 lakhs).

6. In respect of pending legal suits against book debts amounting to Rs.85.46 lakh provision has notbeen considered till final outcome of the legal suits.

7. It is considered prudent to make provision with accounts for Contingent liability in respect of

(a) Income Tax.Act.1961 Rs. 19.79 lakh (Previous year Rs. 19.79 lakh)

(b) Sales Tax Law Rs. .09.41 lakh (Previous year Rs. 9.41 lakh)

8. The payment against supplies from Small Scale and Ancillary Industrial Undertakings are made inaccordance with approved credit terms; and to the extent ascertained from the available information,there was no amount overdue in respect of principal and/or interest as on 31.03.2011

Sundry Creditors include Rs. NIL (Previous year Rs.NIL ) due to Small Scale and Ancillary IndustrialUndertakings to the extent such parties have been identified from available information.

9. Physical verification of stocks of raw materials, finished goods and stores has not been carried outsince no stocks are being carried.

10. Details of consumption (raw materials, stores and spares), capacity, stocks, imports and foreignexchange expenditure earnings not given as no production operations have been carried out in lasttwo years.

11. Balance of Creditors, Debtors, Loans & Advances and Deposits are subject to confirmation andadjustment, if any including security deposits, margin money lying with banks & advance paymentof taxes ( net)

12. Provision for Income Tax or Minimum Alternate Tax (under Section 115JB ofthe Income Tax Act,1961) is not considered necessary.

13. Deferred Taxation - In absence of virtual certainty of sufficient future taxable income, as a matterof prudence, the Company has not accounted for cumulative net deferred tax assets for the yearended March. 31, 2010.

14. Transactions with related parties (Rs. In Lakhs)

For 2010-11 For 2009-10

EXPENSESDirectors Sitting Fees 0.36 0.36Remuneration --- ---


29


(Rs. In Lakhs)

For 2010-11 For 2009-10

INCOME

Interest on Inter Corporate Deposit 11.25 4.80

OUTSTANDINGS

Inter Corporate Deposits including

Interest - Receivable 341.76 277.16

- Payable 1105.54 1105.54

15. Since the operations of the company, ( relating to one reportable segment viz. chemicals ) are keptin abeyance for the year, question of disclosure under AS 17 does not arise. There are no otherreportable segments of the company.

16. Previous year's figures have been regrouped/rearranged wherever necessary.


30

As per our report attached R. P. Ganti Director

For Ramanlal G Shah & Co.

Chartered Accountants Sumit Jhunjhunwala Director

Jayesh R Mehta K. Mukhopadhyay Director

Partner

Membership No. 8683 H. A. Patel Director

M. C. Nalwaya Director

Dated : September 2, 2011

COMPANY'S GENERAL BUSINESS PROFILE

I. Registration details :

Registration No. State Code Balance Sheet Date 02615 04 31-03-2011

II. Capital Raised during the year :

Public Issue Rights Issue Bonus Issue Private Placement Nil Nil Nil Nil

III. Position of Mobilisation and Deployment of Funds :

Total Liabilities 2429.61 Total Assets 2429.61Sources of FundsPaid-up Capital 1324.07 Reserves & Surplus 0.00

Secured Loans 0.00 Unsecured Loans 1105.54

Application of FundsNet Fixed Assets 30.94 Investments 0.00Net Current Assets 495.15 Accumulated Losses 1903.52

IV. Performance of the Company : Rs.in lakhs

Total Income 11.30 T otal Expenditure 612.69Profit/(Loss) before Tax (601.39) Profit/(Loss) after Tax (683.58)Earning per share (Rs.) (5.52) Dividend Rate Nil

V. Generic Names of Principal Products of the Company

Item Code No.(ITC) Code 29.14Product Description Methyl Ethyl Ketone

Item Code No.(ITC) Code 29.05Product Description Secondary Butyl Alcohol


31

Cash Flow Statement For The Period Of 12 Months Ended 31st March, 2011(Pursuant to Clause 32 of the Listing Agreement with Stock Exchanges)

For the year For the yearended ended

31-03-2011 31-03-2010Rs Rs in lakhs

A. CASH FLOW FROM OPERATING ACTIVITIESNet Profit/(Loss) before tax (601.39) (24.73)Adjustments for:Loss on Sales of Assets 588.75Loss on Sales of InvestmentDividend IncomeInterest Income (11.26)TaxationDepreciation 2.76 9.90Interest and Financial chargesOperating Profit before Working Capital Changes (21.15) (14.83)Adjustments for:(Increase) in Trade and other Receivables (56.49) (4.82)(Increase) in InventoriesIncrease / (Decrease) in Trade payables (284.90) 283.91Increase in ContingenciesCash generated from operations (362.54) 264.26Interest paidDirect Taxes paid (82.19) -Net cash from Operating activities (444.74) 264.26B CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed assetsSale of Fixed assets 423.76Interest received & Others 11.26Transfer of InvestmentsNet cash from investing activities 435.02C CASH FLOW FROM FINANCING ACTIVITIESIncrease/(Decrease) in ICDs (Set off)Increase/(Decrease) in ICDsIncrease/(Decrease) in Bank LoansRepayment of ICDs (180.00)Redemption of Preference share capital (17.20) (68.80)Repayment of LoanNet cash used in Financing activities (17.20) (248.80)NET INCREASE \ (DECREASE) IN CASH EQUIVALENT (26.92) 15.46CASH AND CASH EQUIVALENT (OPENING BALANCE) 41.48 26.02CASH AND CASH EQUIVALENT (CLOSING BALANCE) 14.56 41.48

Notes :1. Figures in bracket represent outflows2. Cash & Cash Equivalent represents Cash & Bank Balances

As per our report attached R. P. Ganti DirectorFor Ramanlal G Shah & Co.Chartered Accountants Sumit Jhunjhunwala Director




32

PROXY

GUJARAT CARBON AND INDUSTRIES LIMITEDREGISTERED OFFICE : Offtel Towers, 6th Floor, R.C. Dutt Road, VADODARA-7.

I / We ___________________________________________________________________________________________of_________________________in the District of____________________________________________________

being a member/members of the above named Company hereby apoint____________________________________

of_____________________________________in the district of _______________________________or failinghim______________________________________of________________________________in the districtof_________________________ as my/our proxy to vote for me/us on my/our behalf at the 34th AnnualGeneral Meeting of the Company to be held on the 29th Day of September 2011, at 11.30 a.m. and at anyadjournment therof.

Signed this_________________________________day of ________________________________________2011.

Signature___________________________________________________________ _________

Note : The Proxy form should be deposited at the Registered Office of the Company at Vadodara forty eighthours before the Meeting.

GUJARAT CARBON AND INDUSTRIES LIMITEDATTENDANCE SLIP

PLEASE COMPLETE THIS ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL JointShare holders may obtain additional Attendance Slip on request.(Ref. Folio No. & Name of the Members. Jointholders & address as given on the envelope IN BLOCK LETTERS to be furnished below.)

____________________________________________________________________________________________

____________________________________________________________________________________________

I hereby record my presence at the 34th Annual General Meeting of the Company to held on the 29th Dayof September 2011, at 11.30 a.m. at Conference Hall of Baroda Productivity Council, situated at ProductivityHouse, Productivity Road, Alkapuri, Vadodara - 390 007.

SIGNATURE OF THE

MEMBER OR PROXY ____________________

Notes :

1. Members/Proxy holders are requested to bring the Attendace Slip with them when they come to the meetingand hand it over at the gate after affixing their signatures on it.

2. Members are requested to advise the company indicating their Folio Nos. the change of their address,if any at the Registered Office.

(AffixRupee 1/-RevenueStamp.)

BOOK-POST(Printed Matter)

To,

If undelivered, please return to :

GUJARAT CARBON AND INDUSTRIES LIMITEDRegistered Office: Offtel Towers, 6th Floor, R.C. Dutta Road, VADODARA-390 007.

gujarat carbon and industries limitedgujarat carbon and industries limited annual report &...

Documents