Accounting Policies of Gratex Industries Ltd. Company

Mar 31, 2024

2(A) Summary of significant accounting policies

2.01 Basis of preparation

a) Compliance with Indian Accounting Standards (Ind AS)

The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified
under Section 133 of the Companies Act, 2013 (“the Act”) [Companies (Indian Accounting Standards)
Rules, 2015] and other relevant provisions of the Act.

b) Historical cost convention

The financial statements have been prepared on a historical cost basis, except for following items:

Items Measurement Basis

Certain financial assets and liabilities Fair Value

Net defined benefit (asset)/ liability Fair Value of plan assets less present value of defined

benefit obligations

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date under current market conditions,
regardless of whether that price is directly observable or estimated using another valuation technique. In
determining the fair value of an asset or a liability, the Company takes into account the characteristics of
the asset or liability if market participants would take those characteristics into account when pricing the
asset or liability at the measurement date.

c) Current versus non-current classification

All the assets and liabilities have been classified as current or non-current as per the company''s normal
operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the
nature of the products and the time between the acquisition of assets for processing and their realisation
in cash and cash equivalents, the company has ascertained its operating cycle as 12 months for the
purpose of current and non-current classification of assets and liabilities.

2.02 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker (CODM). Chairman and Managing Director of the Company has been identified as
CODM who assesses the financial performance and position of the company, and makes strategic decisions.

2.03 Foreign Currency Transactions

a) Functional and presentation currency

The financial statements are presented in Indian Rupees (INR), which is the Company''s functional and
presentation currency.

b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the Statement of profit and loss.Non-monetary items
that are measured at fair value in a foreign currency are translated using the exchange rates at the date
when the fair value was determined. Non-monetary items that are measured at historical cost in foreign
currency are translated using the exchange rate at the date of the transaction.

2.04 Revenue Recognition

Revenue is measured at the fair value of consideration received or receivable. Amounts disclosed as revenue
is exclusive of excise duty and net of discounts, volume rebates, value added taxes, goods & services tax and
amounts collected on behalf of third parties.

a) Sale of goods

Revenue from the sale of goods is recognised when the goods are delivered and titles have passed, at
which time all the following conditions are satisfied:

- the Company has transferred to the buyer the significant risks and rewards of ownership of the goods;

- the Company retains neither continuing managerial involvement to the degree usually associated with

ownership nor effective control over the goods sold;

- the amount of revenue can be measured reliably;

- it is probable that the economic benefits associated with the transaction will flow to the Company; and

- the costs incurred or to be incurred in respect of the transaction can be measured reliably.

b) Export incentives

Benefits on account of entitlement of export incentives are recognized as and when the right to receive
is established.

c) Interest income

Interest income from a financial asset is recognised when it is probable that the economic benefits will
flow to the Company and the amount of income can be measured reliably. Interest income is accrued on
a time basis, by reference to the amortised cost and at the effective interest rate applicable.

d) Dividend income

Dividend income is recognized when the right to receive is established.

2.05 Borrowing costs

General and specific borrowing costs that are attributable to the acquisition, construction or production of a
qualifying asset are capitalised as part of the cost of such asset till such time the asset is ready for its intended
use or sale and borrowing costs are being incurred. Qualifying assets are assets that necessarily takes a
substantial period of time to get ready for its intended use. All other borrowing costs are recognised as an
expense in the period in which they are incurred.

2.06 Leasing - As a lessee

Leases of property, plant and equipment where the company as lessee, has substantially all the risks and
rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease''s inception
at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The
corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities
as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is
charged to the statement of profit and loss over the lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each period.

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the company
as lessee are classified as operating leases. Payments made under operating leases (net of any incentives
received from the lessor) are charged to statement of profit and loss on a straight-line basis over the period of
the lease unless the payments are structured to increase in line with expected general inflation to compensate
for the lessor''s expected inflationary cost increases.

2.07 Employee benefits

a) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly
within 12 months after the end of the period in which the employees render the related service are
recognised in respect of employees'' services up to the end of the reporting period and are measured at
the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current
employee benefit obligations in the balance sheet.

b) Post employee obligations

The Company operates the following post-employment schemes:

- defined benefit plans such as gratuity

- defined contribution plans such as provident fund

i) Gratuity obligations

The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the
present value of the defined benefit obligation at the end of the reporting period less the fair value of plan
assets. The defined benefit obligation is determined at the year end by independent actuary using the
projected unit credit method.

The present value of the defined benefit obligation denominated in Indian Rupees is determined by
discounting the estimated future cash outflows by reference to market yields at the end of the reporting
period on government bonds that have terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. This cost is included in employee benefit expense in the
statement of profit and loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial
assumptions are recognised in the period in which they occur, directly in other comprehensive income.
They are included in retained earnings in the statement of changes in equity. Remeasurements are not
reclassified to profit and loss in the subsequent periods.

ii) Defined contribution plans

Provident fundThe Company pays contributions toward provident fund to the regulatory authorities as
per local regulations where the Company has no further payment obligations. The contributions are
recognised as employee benefit expense when they are due.

c) Bonus plans

The Company recognise a liability and an expense for bonuses. The Company recognise a provision
where contractually obliged or where there is a past practice that has created a constructive obligation.

2.08 Current and deferred tax

Income tax expense or credit represents the sum of the current tax and deferred tax.

Current and deferred tax is recognised in the Statement of Profit and Loss except to the extent it relates to items
recognised in ‘Other comprehensive income'' or directly in equity, in which case it is recognised in ‘Other
comprehensive income'' or directly in equity, respectively.

Current tax

Current tax payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the
Statement of profit and loss because some items of income or expense are taxable or deductible in different
years or may never be taxable or deductible. The Company''s current tax is calculated using tax rates that have
been enacted or substantively enacted by the end of the reporting period.

Current tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income taxes levied by the same taxation authority. The
Company periodically evaluates positions taken in the tax returns with respect to situations in which applicable
tax regulations are subject to interpretation and establishes provisions where appropriate. It establishes provisions
where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable in the future arising from temporary differences
between the carrying amounts of assets and liabilities in the balance sheet and the corresponding tax bases
used in the computation of taxable profit. It is accounted for using the balance sheet liability method. Deferred tax
liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised

to the extent that it is probable that taxable profits will be available against which deductible temporary differences
can be utilised. Deferred tax is calculated at the tax rates that are expected to apply in the period when the
liability is settled or the asset realised, based on tax rates that have been enacted or substantively enacted by
the reporting date.

A deferred tax asset shall be recognised for the carry-forward of unused tax losses and unused tax credits to
the extent that it is probable that future taxable profit will be available against which the unused tax losses and
unused tax credits can be utilised.

Deferred income tax assets and liabilities are off-set against each other and the resultant net amount is
presented in the Balance sheet, if and only when, (a) the Company currently has a legally enforceable right to
set-off the current income tax assets and liabilities, and (b) when the Deferred income tax assets and liabilities
relate to income tax levied by the same taxation authority.

Deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction
other than a business combination that at the time of the transaction affects neither accounting profit nor taxable
profit (tax loss).

The carrying amount of deferred tax assets is reviewed at each reporting date and adjusted to reflect changes
in probability that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

2.09 Property, plant and equipment

All items of property, plant and equipment (“PPE”) are stated at historical cost less accumulated depreciation less
accumulated impairment losses. The cost of property, plant and equipment includes purchase price including
import duties, non-refundable taxes and expenditure that is directly attributable to acquisition and installation,
cost of dismantling and removing the item and restoring the site on which it is located.

Capital work in progress is carried at cost, less any recognised impairment loss. Depreciation of these assets
commences when the assets are substantially ready for their intended use. Advances given towards acquisition
or construction of PPE outstanding at each reporting date are disclosed as Capital Advances under “Other non¬
current Assets”.

Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Company and the
cost of the item can be measured reliably.

The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All
other repairs and maintenance are charged to the statement of profit and loss during the reporting period in
which they are incurred.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits
are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement
of an item of property, plant and equipment is determined as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in statement of profit and loss.

Depreciation methods, estimated useful lives and residual value

Depreciation is provided on a pro-rata basis on the written down value method (WDV) to allocate their cost, net

Estimated useful lives, residual values and depreciation methods are reviewed annually, taking into account
commercial and technological obsolescence as well as normal wear and tear and adjusted prospectively, if
appropriate.

2.10 Impairment of non-financial assets

Non-financial assets are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset''s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset''s fair value
less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the
lowest levels for which there are separately identifiable cash inflows which are largely independent of the
cash inflows from other assets or group of assets (cash-generating units). Non-financial assets that suffered
an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

2.11 Government grants

Government grant is recognized only when there is a reasonable assurance that the entity will comply with the
conditions attaching to them and the grants will be received. Government grant related to assets is recognized
as deferred income which is recognized in the statement of profit & loss on systematic basis over the useful life
of the assets.

2.12 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost of raw materials, packing materials and
fuels comprises cost of purchases. Cost of work-in progress and finished goods comprises direct materials,
direct labour, other direct costs and related production overheads. Cost of inventories also include all other
costs incurred in bringing the inventories to their present location and condition. Cost is determined using the
first in first out (FIFO). Costs of purchased inventory are determined after deducting rebates and discounts. Net
realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale. However, these items are considered to be
realizable at cost if the finished products, in which they will be used, are expected to be sold at or above cost.

2.13 Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on
hand, demand deposits with banks, short-term highly liquid investments with an original maturity of three months
or less that are readily convertible into known amounts of cash and which are subject to insignificant risk of
changes in value.

2.14 Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.

Financial Assets

i) Classification

The Company classifies its financial assets in the following measurement categories:

- those to be measured subsequently at fair value (either through other comprehensive income, or through
profit or loss),

- those measured at amortised cost.

The classification depends on the entity''s business model for managing the financial assets and the
contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in statement of profit or loss
or other comprehensive income.

For investments in debt instruments, this will depend on the business model in which the investment is
held.

The Company reclassifies debt investments when and only when its business model for managing those
assets changes.

ii) Measurement

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through statement of profit or loss, transaction costs that are directly
attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair
value through statement of profit or loss are expensed in statement of profit or loss.

Debt instruments

Subsequent measurement of debt instruments depends on the Company''s business model for managing
the asset and the cash flow characteristics of the asset. There are three measurement categories into
which the Company classifies its debt instruments:

Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest are measured at amortised cost. A gain or loss on a
debt investment that is subsequently measured at amortised cost is recognised in statement of profit or

loss when the asset is derecognised or impaired. Interest income from these financial assets is included
in finance income using the effective interest rate method.

Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual
cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments
of principal and interest, are measured at fair value through other comprehensive income (FVOCI).
Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains
or losses, interest revenue and foreign exchange gains and losses which are recognised in profit and
loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI
is reclassified from equity to statement of profit or loss and recognised in other income. Interest income
from these financial assets is included in other income using the effective interest rate method.

Fair value through statement of profit or loss (FVTPL): Assets that do not meet the criteria for amortised
cost or FVOCI are measured at fair value through statement of profit or loss. A gain or loss on a debt
investment that is subsequently measured at fair value through statement of profit or loss is recognised
in statement of profit or loss in the period in which it arises. Interest income from these financial assets is
included in other income.

iii) Impairment of financial assets

The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial
assets which are not fair valued through statement of profit or loss. Loss allowance for trade receivables
with no significant financing component is measured at an amount equal to lifetime ECL. For all other
financial assets,credit risk is considered to be low.For trade receivables only, the Company applies the
simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime
losses to be recognized from initial recognition of the receivables. As a practical expedient, the company
uses a provision matrix to determine impairment loss of its trade receivables. The provision matrix is
based on its historically observed default rates over the expected life of the trade receivable and is
adjusted for forward looking estimates. The ECL loss allowance (or reversal) during the year is recognized
in the statement of profit and loss.

iv) De-recognition of financial assets

A financial asset is derecognised only when:

- the Company has transferred the rights to receive cash flows from the financial asset or

- retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual
obligation to pay the cash flows to one or more recipients.

Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially
all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised.
Where the entity has not transferred substantially all risks and rewards of ownership of the financial
asset, the financial asset is not derecognised.

Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards
of ownership of the financial asset, the financial asset is derecognised if the Company has not retained
control of the financial asset. Where the Company retains control of the financial asset, the asset is
continued to be recognised to the extent of continuing involvement in the financial asset.

v) Trade Receivable

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method, less provision for impairment.

Financial Liabilities

i) Classification

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity
in accordance with the substance of the contractual arrangements and the definition of a financial liability
and an equity instrument.

An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities.

ii) Measurement

Financial liabilities are initially recognised at fair value, reduced by transaction costs (in case of financial
liability not at fair value through statement of profit or loss), that are directly attributable to the issue of
financial liability. After initial recognition, financial liabilities are measured at amortised cost using effective
interest method. The effective interest rate is the rate that exactly discounts estimated future cash
outflow (including all fees paid, transaction cost, and other premiums or discounts) through the expected
life of the financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial
recognition. At the time of initial recognition, there is no financial liability irrevocably designated as measured
at fair value through statement of profit or loss.

iii) Derecognition:

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the de-recognition of the original liability and the recognition of a new liability. The
difference in the respective carrying amounts is recognised in the statement of profit or loss.

iv) Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds (net of transaction
costs) and the redemption amount is recognised in statement of profit or loss over the period of the
borrowings using the effective interest method.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount of a financial liability that has been
extinguished or transferred to another party and the consideration paid, including any non-cash assets
transferred or liabilities assumed, is recognised in statement of profit or loss.

v) Trade and other payables

Trade and other payables represent liabilities for goods and services provided to the company prior to the
end of financial year which are unpaid. They are recognised initially at their fair value and subsequently
measured at amortised cost using the effective interest method.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there
is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net
basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be
contingent on future events and must be enforceable in the normal course of business and in the event
of default, insolvency or bankruptcy of the company or the counterparty.

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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.