GLOBAL STONE INDIA LIMITED
ANNUAL REPORT 2007-2008
THE SHARE HOLDERS OF
GLOBAL STONE INDIA LIMITED
We have audited the attached Balance Sheet of GLOBAL STONE INDIA LIMITED as
at 31st March 2008 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. '
1. We conducted our audit in accordance with the Auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
2. As required by the Companies (Auditor's Report) Order, 2003 issued by
the Central Government of India in terms of sub-section (4A) of section 227
of the Companies Act, 1956, eve enclose in the Annexure a statement on The
matters specified in paragraphs 4 and 5.of the said Order.
3. Further to our comments in the Annexure referred to above, we report
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
(ii) In our opinion, proper books of account as required by law have been
kept by the company so far as appears from our examination of those books.
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the Companies
(v) On the basis of written representations received from Mr.Ramesh Chandra
Soni, who is a director of Global Stone India Limited as on 31st March 2008
and taken on record by the Board of Directors, we report that he is
disqualified from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956; As far as other
directors are concerned, on the basis of the written representations
received from such directors, and taken on record by the Board of
Directors, we report that none of the remaining directors is disqualified
as on 315' March 2008 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
(vi) Reference is drawn to Item 3 of Schedule '0' regarding one time
settlement of dues with UTI, State Bank of India & State Bank of Mysore,
the effect of these settlements has not been considered in the accounts.
(vii) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give a
true and fair view in conformity with the accounting principles generally
accepted in India:
(a) In the case of the balance sheet, of the state of affairs of the
company as at 31st March 2008; (b) in the case of the profit and loss
account, of the loss 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
For Brahmayya & Co.,
(S. GOVINDA RAO)
Place: Bangalore Partner
Date : 30.06.2008 Membership-No. 20546
ANNEXURE TO AUDITOR'S REPORT
1. The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
2. All the Fixed assets have not been physically verified by the management
at the end of the year but there is a regular programme of verification
which, in our opinion, is reasonable having regard to the size of the
company and the nature of the assets. No material discrepancies were
noticed on such verification.
3. The Company has not disposed off any substantial part of the fixed
assets during the year.
4. The inventory has been physically verified during the year by the
management. In our opinion, the frequency of. verification is reasonable.
5. The procedures of physical verification of inventories followed by the
management are reasonable and adequate in relation to the size of the
company and the nature of its business.
6. On the basis of our examination of the records of inventory, we are of
the opinion that the company is maintaining proper records. The
discrepancies noticed on verification between the physical stocks and the
book records were not material.
7. No loans, secured or unsecured, have been taken from/granted to
Companies, Firms or other parties listed in the Register maintained under
Section 301 of the Companies Act, 1956.
8. 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 as regards purchase of
inventory, fixed assets and sale of goods. During the course of our audit,
no major weakness has been noticed in the internal controls.
9. Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that the transactions that need to be entered in the register
maintained under section 301 have been so entered.
10. In our opinion and according to the information and explanations given
to us, there are no transactions in pursuance of contracts or arrangements
entered in the register maintained under Section 301 of the Companies Act,
1956. aggregating during the year to Rs. 5,00,000 or more in respect of any
11. The Company has not accepted any deposits from the public, to which the
provisions of Sec. 58A of the Companies (Acceptance of Deposits) Rules,
1975 are applicable.
12. In our opinion, the company has an internal audit system commensurate
with the size and nature of its business.
13. As informed to us, the Central Government has not prescribed the
maintenance of cost records under section 209(1)(d) of the Companies Act,
1956, in respect of the activities of the Company.
14. As per the records and the explanation given to us, the Company is
regular in depositing undisputed statutory dues including Provident Fund,
Investor Education & Protection Fund, Employees' State Insurance, Income
tax, Sales tax, Wealth Tax, Service tax, Customs duty, Excise Duty, Cess
and other statutory dues with the appropriate authorities. There is no
amount outstanding as on 3151 March 2008 for a period of more than six
months from the (late they became payable.
15. As on 31st March 2008, according to the records of the Company and
information and explanations given to. us, following are particulars of
disputed dues that have not been deposited
Name of statute & Amount in Period to which Forum where pending
Nature of dues (Rs.lakhs) amount relates
Sales Tax 253.26 2003-04 & 2004-05 JCCT (Appeals)
KVAT ACT 2003:
Sales Tax 204.87 2005-06 JCCT (Appeals) - 3
KVAT ACT, 2003:
Sales Tax 235.39 2006-07 JCCT (Appeals) - 3
Custom Duty 4.68 2003-04 & 2004-05 Commissioner (EOU)
16. The accumulated losses of the company are more than fifty percent of
its net worth. The company has incurred cash loss during the financial year
covered by our audit, and also in the immediately preceding financial year.
17. Based on our audit procedures and on the information and explanations
given by the management, we are of the opinion that the company has
defaulted in payment of dues to financial institution and bank.. The
Company has also defaulted in payment of debenture interest accrued and due
Rs. 8789204/- on 31st March 2008 to the debenture holders.
18. The Company has not granted any Loans or advances on the basis of
Security, by the pledge of shares, debentures and other securities.
19. The Company is not dealing or trading in shares, securities and
Debentures and other Investments.
20. The Company has not given any guarantee for loans taken by others from
bank or financial institutions.
21. The Company has not taken any Term Loans.
22. The Company has not used the Short Term funds for Long Term Investments
and Vice Versa.
23. The Company has not made any preferential allotment of shares during
24. During the period covered by our audit, the company has not issued any
25. The company has created necessary securities/charges as per debenture
trust deed in respect of debentures issued and outstanding at the end of
26. The company has not raised any money by public issue during the year.
27. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by the
company has been noticed or reported during the course of our audit.
For Brahmayya & Co.,
Place: Bangalore (S. GOVININDA RAO)
Date : 30.06.2008 Partner
Membership No. 20546