Accounting Policies of Gratex Industries Ltd. Company

Mar 31, 2015

I. Basis Of Preparation Of Financial Statements

The financial statements have been prepared and presented under the historical cost convention using the accrual basis of accounting in accordance with the accounting principles generally accepted in India and are in accordance with the applicable Accounting Standards, Guidance Notes and the relevant provisions of the Companies Act, 2013.

II. Use Of Estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known / materialized

III. Revenue Recognition

Revenue is recognised to the extend that it is probable that the economic benefits will accrue to the Company and the revenue can be reliably measured.

A Income from Operating / Tading Activities:

Revenue from sale of trading materials is recognized on transfer of significant risks and rewards of ownership to the buyer. Revenue recognition is postponed to the extent of significant uncertainty.

B Interest:

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

C Others:

Other Revenues / Incomes and Costs / Expenditure are generally accounted on accrual, as they are earned or incurred.

IV. Tangible Assets and Depreciation / Amortisation

A. Tangible Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation / amortisation and accumulated impairment losses, if any.

B. Depreciation is provided on the Written down value Method at the rates and in the manner specified in Schedule II to the Companies Act, 2013. Depreciation on additions to assets or on sale/disposal of assets is calculated pro-rata from the date of such addition, or upto the date of such sale/disposal, as the case may be.

C. Leasehold Land, being held under a very long lease and in the nature of a perpetual asset has not been amortised.

D The Company has not been maintaining proper records to show full particulars including quantitative details and situation of the fixed assets and has also not maintained Fixed Assets Register Item Wise .

V. Inventories

Inventories are stated at Cost or Net Realizable Value, whichever is lower.

Cost of Inventory includes Invoice rate as increased by related government duties and charges and other related direct costs.

Method of valuation is first in first out (FIFO) basis.

VI. Employee Benefits

Employee benefits in the nature of short term employee benefits as well as post term employee benefits are recognised as an expence in the statement of Profit & Loss for the year in which thery are incurred.

VII. Borrowing Costs

Interests and other borrowing costs attributable to qualifying assets are allocated as part of the cost of development of such assets. Such allocation is suspended during extended periods in which active development is interrupted. Other borrowing costs are charged to the Profit and Loss Statement.

VIII. Foreign Currency Transactions

A. All transaction in foreign currency are recorded in the reporting currency, at the rates of exchange prevailing on the dates the relevant transactions take place.

B. Monetary Assets and Liabilities in foreign currency, outstanding at the close of the year are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of Balance Sheet. Resultant gain or loss is accounted during the year.

IX. Segment Reporting

The company is engaged in the business of Trading of Wall Papers and Related Products, which as per Accounting Standards AS-17-'Segment Reporting' is considered to be the only reportable business segment. The Company is also operating within the same geographical segment. Hence, disclosures under AS-17 are not applicable.

X. Taxations

Income tax expense comprises Current Tax and Deferred Tax charge or credit. Provision for current tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year. The deferred tax asset and deferred tax liability is calculated by applying tax rate and laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognized, only if there is a virtual certainty of its realization, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of its realization. At each Balance Sheet date, the carrying amounts of deferred tax assets are reviewed to reassure realization.

XI. Impairment of Assets

The carrying amount of assets is reviewed at each Balance Sheet date. If there is any indication of impairment based on internal/external factors, i.e. when the carrying amount of the assets exceeds the recoverable amount, an impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. An impairment loss recognised in prior accounting periods is reversed or reduced if there has been a favourable change in the estimate of the recoverable amount.

XII. Provisions, Contingent Liability and Contingent Assets

Provisions involving a substantial degree of estimation in measurement are recognised when there is present obligation as a result of past events and its probable there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the financial statement. Contingent assets are neither recognised not disclosed in the financial statements.

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Mar 31, 2014

I. Basis Of Preparation Of Financial Statements

The financial statements have been prepared and presented under the historical cost convention using the accrual basis of accounting in accordance with the accounting principles generally accepted in India and are in accordance with the applicable Accounting Standards, Guidance Notes and the relevant provisions of the Companies Act, 1956.

II. Use Of Estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known / materialized

III. Revenue Recognition

Revenue is recognised to the extend that it is probable that the economic benefits will accrue to the Company and the revenue can be reliably measured.

A Income from Operating / Tading Activities:

Revenue from sale of trading materials is recognized on transfer of significant risks and rewards of ownership to the buyer. Revenue recognition is postponed to the extent of significant uncertainty.

B Interest:

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

C Others:

Other Revenues / Incomes and Costs / Expenditure are generally accounted on accrual, as they are earned or incurred.

IV. Tangible Assets and Depreciation / Amortisation

A. Tangible Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation / amortisation and accumulated impairment losses, if any.

B. Depreciation is provided on the Written down value Method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956. Depreciation on additions to assets or on sale/disposal of assets is calculated pro-rata from the date of such addition, or upto the date of such sale/disposal, as the case may be.

C. Leasehold Land, being held under a very long lease and in the nature of a perpetual asset has not been amortised.

D. The Company has not been maintaining proper records to show full particulars including quantitative details and situation of the fixed assets and has also not maintained Fixed Assets Register Item Wise.

V. Inventories

Inventories are stated at Cost or Net Realizable Value, whichever is lower.

Cost of Inventory includes Invoice rate as increased by related government duties and charges and other related direct costs.

Method of valuation is first in first out (FIFO) basis

VI. Employee Benefits

Employee benefits in the nature of short term employee benifits as well as post term employee benefits are recognised as an expence in the statement of Profit & Loss for the year in which thery are incurred.

VII. Borrowing Costs

Interests and other borrowing costs attributable to qualifying assets are allocated as part of the cost of development of such assets. Such allocation is suspended during extended periods in which active development is interrupted. Other borrowing costs are charged to the Profit and Loss Statement.

VIII. Foreign Currency Transactions

A. All transaction in foreign currency are recorded in the reporting currency, at the rates of exchange prevailing on the dates the relevant transactions take place.

B. Monetary Assets and Liabilities in foreign currency, outstanding at the close of the year are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of Balance Sheet. Resultant gain or loss is accounted during the year.

IX. Segment Reporting

The company is engaged in the business of Trading of Wall Papers and Related Products, which as per Accounting Standards AS-17-''Segment Reporting'' is considered to be the only reportable business segment. The Company is also operating within the same geographical segment. Hence, disclosures under AS-17 are not applicable.

X. Taxations

Income tax expense comprises Current Tax and Deferred Tax charge or credit. Provision for current tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year. The deferred tax asset and deferred tax liability is calculated by applying tax rate and laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognized, only if there is a virtual certainty of its realization, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of its realization. At each Balance Sheet date, the carrying amounts of deferred tax assets are reviewed to reassure realization.

XI. Impairment of Assets

The carrying amount of assets is reviewed at each Balance Sheet date. If there is any indication of impairment based on internal/external factors, i.e. when the carrying amount of the assets exceeds the recoverable amount, an impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. An impairment loss recognised in prior accounting periods is reversed or reduced if there has been a favourable change in the estimate of the recoverable amount.

XII. Provisions, Contingent Liability and Contingent Assets

Provisions involving a substantial degree of estimation in measurement are recognised when there is present obligation as a result of past events and its probable there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the financial statement. Contingent assets are neither recognised not disclosed in the financial statements.

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Mar 31, 2012

I. Basis Of Preparation Of Financial Statements

The financial statements have been prepared and presented under the historical cost convention using the accrual basis of accounting in accordance with the accounting principles generally accepted in India and are in accordance with the applicable Accounting Standards, Guidance Notes and the relevant provisions of the Companies Act, 1956.

II. Use Of Estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known / materialized

III. Revenue Recognition

Revenue is recognised to the extend that it is probable that the economic benefits will accrue to the Company and the revenue can be reliably measured.

A Income from Operating / Trading Activities :

Revenue from sale of trading materials is recognized on transfer of significant risks and rewards of ownership to the buyer. Revenue recognition is postponed to the extent of significant uncertainty.

B Interest:

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

C Others:

Other Revenues / Incomes and Costs / Expenditure are generally accounted on accrual, as they are earned or incurred.

IV. Tangible Assets and Depreciation / Amortisation

A. Tangible Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation / amortisation and accumulated impairment losses, if any.

B. Depreciation is provided on the Straight Line Method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956. Depreciation on additions to assets or on sale/disposal of assets is calculated pro-rata from the date of such addition, or upto the date of such sale/disposal, as the case may be.

C. Leasehold Land, being held under a very long lease and in the nature of a perpetual asset has not been amortised.

V. Inventories

Inventories are stated at Cost or Net Realizable Value, whichever is lower.

Cost of Inventory includes Invoice rate as increased by related government duties and charges and other related direct costs.

Method of valuation is first in first out (FIFO) basis.

VI. Employee Benefits

Employee benefits in the nature of short term employee benifits as well as post term employee benefits are recognised as an expence in the statement of Profit & Loss for the year in which thery are incurred.

VII. Borrowing Costs

Interests and other borrowing costs attributable to qualifying assets are allocated as part of the cost of development of such assets. Such allocation is suspended during extended periods in which active development is interrupted. Other borrowing costs are charged to the Profit and Loss Statement.

VIII. Foreign Currency Transactions

A. All transaction in foreign currency are recorded in the reporting currency, at the rates of exchange prevailing on the dates the relevant transactions take place.

B. Monetary Assets and Liabilities in foreign currency, outstanding at the close of the year are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of Balance Sheet. Resultant gain or loss is accounted during the year.

IX. Segment Reporting

The company is engaged in the business of Trading of Wall Papers and Related Products, which as per Accounting Standards AS-17-'Segment Reporting' is considered to be the only reportable business segment. The Company is also operating within the same geographical segment. Hence, disclosures under AS-17 are not applicable.

X. Taxations

Income tax expense comprises Current Tax and Deferred Tax charge or credit. Provision for current tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year. The deferred tax asset and deferred tax liability is calculated by applying tax rate and laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognized, only if there is a virtual certainty of its realization, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of its realization. At each Balance Sheet date, the carrying amounts of deferred tax assets are reviewed to reassure realization.

XI. Impairment of Assets

The carrying amount of assets is reviewed at each Balance Sheet date. If there is any indication of impairment based on internal/external factors, i.e. when the carrying amount of the assets exceeds the recoverable amount, an impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. An impairment loss recognised in prior accounting periods is reversed or reduced if there has been a favourable change in the estimate of the recoverable amount.

XII. Provisions, Contingent Liability and Contingent Assets

Provisions involving a substantial degree of estimation in measurement are recognised when there is present obligation as a result of past events and its probable there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the financial statement. Contingent assets are neither recognised not disclosed in the financial statements.

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Mar 31, 2011

The Accounts are prepared on a Historical Cost Convention and complies with the Mandatory Accounting Standards issued by the Institute of Chartered Accountants of India. Company follows mercantile system of Accounting.

The significant accounting policies followed by the Company are as under:

2. FIXED ASSETS :

1. Expenditure which are of a capital nature are capitalised at a cost which comprises of purchase price (Net of rebates & discounts), import duties, levies and any directly attributable cost of bringing the assets to its working condition for the intended use.

Depreciation is provided from the day of asset put to use on written down value method (WDV) at the rates and in the manner specified under Schedule XIV of the Companies Act, 1956.

2. Investments are valued at it's acquisition cost.

3. We understand from the management that manufacture activities is stopped from 24th August 2008 and therefore depreciation on Plant & Machinery under the Income Tax is not claimed.

3. INVENTORIES :

Since we are traders, Stock is valued as cost or as per market price whichever is lower.

4. The Company has paid PF regularly of all employees.

5. PENDING FRAUD CASE : Rs. 616,436/- The Company has reflected the following amount under the head "Miscellaneous Expenses Not Written Off".

The Company had C C A/c (Cash Credit Account) bearing Account No. 109 with Punjab National Bank, Shivaji Park Branch, Mumbai. during the financial year 1993-94 and 1994-95 Mr. Jatin M. Chhaya an Accountant had forged the signature of Director, Mrs. Promila Sharma and misappropriated the above stated sum. The Company on detection of above fraud lodged a complaint with the Registrar, Consumer Redressed Commission, Mumbai, Maharashtra on 11.8.l994 bearing Suit No.222/94.

An Ex-parte Order had been issued by the High Court in favour of the Company for the Civil Suit filed in the High Court vide Suit No. 2647 of 1996 against Punjab National Bank and Others.

CIVIL SUIT NO. 2647 OF 1996 : PUNJAB NATIONAL BANK & OTHERS

From the information passed by the Company, the High Court has passed the Order to withdraw the amount of Rs. 5,06,000/- deposited in the High Court by the Punjab National Bank with a condition that the Company submits a Bank Guarantee. The Bank Guarantee has been submitted by the Company. The said matter will be on the High Court Board after 3 to 4 years for contesting and till then the matter is pending.

PRIVATE COMPLAINT NO. 990/P/1995 : MR. JATIN CHHAYA V/S STATE OF MAHARASHTRA.

We understand from the Management that the hand-writing expert report other documents are received in the Court by the Mahim Police Station. The original cheques are yet to be received in the Court. The Trial is posted to proceed.

6. We understand from the management that the case filed by the Company against the Managing Director Mr. Prabodh Agarwal of M/s. Elar Fashions Ltd., Sukhsagar Building, Opera House, Mumbai-400 007 in the Economic Offences Wing had been revived and fresh proceedings under the Indian Penal Code had been activated against the Managing Director, his wife Mrs. Deepti Rani Agarwal and Mr. Mansingha for issue of false Invoices and Duplicate Share Certificates.

Mr. Mansingha was jailed for 2 days and released on Bail. The management will appear when the summons are issued to it and the matter comes up on Board.

The Red Corner Notice against the Accused was also issued by the Economic Offences Wing.

We understand from the Management that there has been no progress on the various cases filed against the Managing Director Mr. Prabodh Agarwal and Mrs. Deepti Rani Agarwal, Director of the Company. They are absconding for more than 6 years and hence the case is pending.

In view of pending litigation for a long time, management has decided to account for due interest on cash basis i.e. year in which the actual interest is received.

7. We understand from the management that in the case filed by the Company against Consortex Kal Doelitzsch (India) Ltd. formerly known as Andhra Pradesh Power Tools Ltd., against whom the Company was successful in getting an Order under the Summary Suit but the said case papers are misplaced in the record room of High Court and hence the said matter will be reconstructed in the High Court. The process will take at least two months for getting the decree copy of the case and till then the matter is pending in the High Court.

Execution Petition had filed in City Civil Court at Hyderabad and the Honorable Court had issued show cause Notice. Against respondent and the said respondent refused to accept the notice and the matter is kept for further process.

The matter under section 138 is pending in High Court Mumbai the said matter lastly on 18.06.2010 and honorable Court had given time to serve notice upon the accused respondent.

In view of pending litigation for a long time, management has decided to account for due interest on cash basis i.e. year in which the actual interest is received.

We suggested the management to make a provision for the Bad debts stated in clause no. 5,6, & 7. However the management is of the opinion that as per the advice of solicitor, provision for bad debts has not been keeping in view the litigation pending in court of law.

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Mar 31, 2010

The Accounts are prepared on a Historical Cost Convention and complies with the Mandatory Accounting Standards issued by the Institute of Chartered Accountants of India. Company follows mercantile system of Accounting.

The significant accounting policies followed by the Company are as under:

2. FIXED ASSETS :

1. Expenditure which are of a capital nature are capitalised at a cost which comprises of purchase price (Net of rebates & discounts), import duties, levies and any directly attributable cost of bringing the assets to its working condition for the intended use.

Depreciation is provided from the day of asset put to use on written down value method (WDV) at the rates and in the manner specified under Schedule XIV of the Companies Act, 1956.

2. Investments are valued at its acquisition cost.

3. We understand from the management that manufacture activities is stoped from 24th August 2008 and therefore depreciation on Plant & Machinery under the Income Tax is not claimed.

3. INVENTORIES :

Since we are traders, Stock is valued as cost as per market price which is even in lower

4. The Company has paid PF regularly of all employees.

5. PENDING FRAUD CASE : Rs.6,16,436/-The Company has reflected the following amount under the head "Miscellaneous Expenses Not Written Off".

Misappropriation from Bank to be recovered from Punjab National Bank Rs. 5.0l,000/-

Provision of interest upto 31.03.95 Rs. 1,15,436/-

Total Rs. 6,16,436/-

The Company had C C A/c (Cash Credit Account) bearing Account No. 109 with Punjab National Bank, Shivaji Park Branch, Mumbai. during the financial year 1993-94 and 1994-95 Mr. Jatin M. Chhaya an Accountant had forged the signature of Director, Mrs. Promila Sharma and misappropriated the above stated sum. The Company on detection of above fraud lodged a complaint with the Registrar, Consumer Redressed Commission, Mumbai, Maharashtra on 11.8.l994 bearing Suit No.222/94.

An Ex-parte Order had been issued by the High Court in favour of the Company for the Civil Suit filed in the High Court vide Suit No. 2647 of 1996 against Punjab National Bank and Others.

CIVIL SUIT NO. 2647 OF 1996 : PUNJAB NATIONAL BANK & OTHERS

From the information passed by the Company, the High Court has passed the Order to withdraw the amount of Rs. 5,06,000/- deposited in the High Court by the Punjab National Bank with a condition that the Company submits a Bank Guarantee. The Bank Guarantee has been submitted by the Company. The said matter will be on the High Court Board after 3 to 4 years for contesting and till then the matter is pending.

PRIVATE COMPLAINT NO. 990/P/1995 : MR. JATIN CHHAYA V/S STATE OF MAHARASHTRA.

We understand from the Management that the hand-writing expert report + other documents are received in the Court by the Mahim Police Station. The original cheques areyet to be received in the Court. The Trial is posted to proceed.

6. We understand from the management that the case filed by the Company against the Managing Director Mr. Prabodh Agarwal of M/s. Elar Fashions Ltd., Sukhsagar Building, Opera House, Mumbai-400 007 in the Economic Offences Wing had been revived and fresh proceedings under the Indian Penal Code had been activated against the Managing Director, his wife Mrs. Deepti Rani Agarwal and Mr. Mansingha for issue of false Invoices and Duplicate Share Certificates.

Mr. Mansingha was jailed for 2 days and released on Bail. The management will appear when the summons are issued to it and the matter comes up on Board

The Red Corner Notice against the Accused was also issued by the Economic Offences Wing.

We understand from the Management that there has been no progress on the various cases filed against the Managing Director Mr. Prabodh Agarwal and Mrs. Deepti Rani Agarwal, Director of the Company. They are absconding for more than 6 years and hence the case is pending.

In view of pending litigation for a long time, management has decided to account for due interest on cash basis i.e. year in which the actual interest is received.

7. We understand from the management that in the case filed by the Company against Consortex Kal Doelitzsch (India) Ltd. formerly known as Andhra Pradesh Power Tools Ltd., against whom the Company was successful in getting an Order under the Summary Suit but the said case papers are misplaced in the record room of High Court and hence the said matter will be reconstructed in the High Court. The process will take at least two months for getting the decree copy of the case and till then the matter is pending in the High Court.

Execution Petition had filed in City Civil Court at Hyderabad and the Honorable Court had issued show cause Notice. Against respondent and the said respondent refused to accept the notice and the matter is kept for further process.

The matter under section 138 is pending in High Court Mumbai the said matter lastly on 18.06.2010 and honorable Court had given time to serve notice upon the accused respondent.

In view of pending litigation for a long time, management has decided to account for due interest on cash basis i.e. year in which the actual interest is received.