Grease and flour a 12-cup bundt pan. Preheat oven to 350 degrees F.
Beat sugar and oil together. Add eggs, one at a time, beating well after each addition. Add vanilla. Mix.
In a separate bowl, mix together flour, cocoa powder, baking soda, baking powder, cinnamon and salt. Add to egg and sugar mixture. Stir in grated carrots.
Pour into prepared baking pan. Bake for 30 to 40 minutes or until an inserted toothpick comes out clean. Let cool. Unmold the cake to frost.
Icing
In the top of a double boiler, melt chocolate and water. Cool slightly.
In a mixer, beat cold cream cheese, butter and vanilla until light and fluffy. Add the chocolate mixture. Frost the unmolded cake.