Gratex Annual Report 2010-11 - Bombay Stock Exchange · 2011-10-04 · Gratex - Progressing towards Growth Annual Report 2010-11 1 NOTICE Notice is hereby given that the 27th Annual

Gratex -Progressing towards Growth Annual Report 2010-11

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NOTICE

Notice is hereby given that the 27th Annual General Meeting of the members of Gratex Industries Limited will

be held on Wednesday, 21st September, 2011, at 11.30 a. m., at Giants International, 2nd Floor, Orient Club

Bldg. No. 9, Chowpatty Seaface, Mumbai - 400 007 to transact the following business:

ORDINARY BUSINESS :

1. To receive, consider and adopt the Audited Balance Sheet as at March 31, 2011 the Profit and Loss

Account for the year ended on that date and the reports of the Board of Directors and Auditors thereon.

2. To appoint a Director in place of Mrs. Promila Sharma, who retires by rotation and being eligible, offers

herself for re-appointment.

3. To appoint M/s Doshi Doshi & Associates, Chartered Accountants, (ICAI Registration No. 121773W)

in place of M/s B. H. Patel & Co., Chartered Accountants, as Statutory Auditors of the Company, for the

period commencing from the conclusion of this annual general meeting till the conclusion of the next

annual general meeting and to authorize the Board of Directors to fix their remuneration.

By Order of the Board

Place : Mumbai For Gratex Industries Limited

Date : 09.08.2011

Registered Office Karan Sharma

109, Kakad Udyog Bhavan, Managing Director

L. J. Road, Mahim, Mumbai - 400 016


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NOTES :1. A member entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy to attend and

vote instead of himself and proxy need not be a member of the company. The instrument appointing a proxy inorder to be valid must be duly filled in all respects and should be deposited at the registered office of theCompany not later than 48 hours before the commencement of the meeting.

2. Corporate members intending to send their authorized representative(s) to attend the Meeting are requested to send acertified copy of the Board Resolution authorizing such representative(s) to attend and vote on their behalf at the Meeting.

3. Members / Proxy holders are requested to bring their Attendance slip duly signed along with their copy of Annual Reportto the meeting.

4. The Register of Members and Share Transfer Books of the Company shall remain closed from Friday, 16th September,2011 to Wednesday, 21st September, 2011(both days inclusive).

5. The equity shares of the Company are compulsorily tradable in electronic form and your Company has establishedconnectivity with both the depositories i.e. NSDL and CDSL. Members are requested to avail the facility of dematerializationof the Company's shares on either of the depositories, as aforesaid.

6. The Ministry of Corporate Affairs ("MCA"), Government of India, through its Circular No. 17/2011 dated 21stApril, 2011 and Circular No. 18/2011 dated 29th April, 2011 has allowed companies to send Annual Reportcomprising of Balance Sheet, Profit & Loss Account, Director's Report, Auditor's Report and ExplanatoryStatement etc., through electronic mode to the registered e-mail address of the members. Keeping in view theunderlying theme and the circulars issued by MCA, we propose to send future communications in electronicmode to the e-mail address provided by you to the depositories and made available by them being the registeredaddress. By opting to receive communication through electronic mode you have the benefit of receivingcommunications promptly and avoiding loss in postal transit.Members who hold shares in physical form and desire to receive the documents in electronic mode are requestedto provide their details (name, folio no., e-mail id) on the space provided on the last page of this Annual Report.Members who hold shares in electronic form are requested to get their details updated with the respective Depositories.

By Order of the BoardPlace : Mumbai For Gratex Industries LimitedDate : 09.08.2011

Registered Office Karan Sharma109, Kakad Udyog Bhavan, Managing DirectorL. J. Road, Mahim, Mumbai - 400 016

APPOINTMENT/ RE-APPOINTMENT OF DIRECTORS

The Following Information is being furnished in terms of Clause 49 of the Listing Agreement in respect of the Directorretiring by rotation and proposed to be reappointed.

Particulars Profile of the Director

Name of the Director Mrs. Promila Sharma

Date of Birth 02/03/1949

Date of Appointment 09/09/1992

Qualifications Bachelors in Arts (B. A.)

Expertise in specific functional areas Mrs. Promila Sharma is a B .A. and is a Director since 2000.She is the Chief Operating Officer of M/s Marshalls Groupan Apex Body of the Group since 1975. She has 30 yearsof experience in Wallcovering Business and is activelyinvolved with the Company.

Directorships held in other Public Companies Marshalls Enterprise India Private Limited(excluding foreign companies)

Memberships/ Chairmanships ofcommittees of other public companies NIL(Includes only Audit and Shareholders /Investors Grievance Committee)

Number of Shares held in the Company 290100


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DIRECTORS' REPORT

Your Directors are pleased to present the 27th Annual Report along with the Audited Accounts of the Companyfor the financial year ended 31st March, 2011.

1. FINANCIAL HIGHLIGHTS :

The financial performance of the Company, for the year ended 31st March, 2011 is summarized below:

(Amount in Lacs)

CURRENT YEAR PREVIOUS YEAR 31.03.2011 31.03.2010

Income from Operations 413.93 320.02

Total Expenditure 405.92 298.04

Profit before Interest & Depreciation 8.006 21.62

Interest 2.882 4.00

Depreciation 0.907 1.19

Profit After Tax 4.217 16.44

2. PERFORMANCE REVIEW :

During the year under review, Income from Operations was Rs. 4,13,92,700/- against Rs.3,20,00,097/- inthe previous financial year showing an increase of Rs.93,90,603/-. However the NPAT for the year wasRs.4,21,669/- compared to Rs.16,43,781/- in the previous year.

Even though the sales showed healthy trend, we were able to generate a nominal profit due to loss incurredin the sale of old plant & machinery & other assets which were scrapped. We are hopeful that we shall beable to meet the challenges and give our shareholders their dues.

3. DIVIDEND :

Due to carry forward losses, which now stand at Rs. 56,91,677/- your Directors do not recommend anyDividend for the financial year ended 31st March, 2011.

4. OUTLOOK FOR 2011 - 12 :

The outlook for the year 2011-12 is very positive and we are targeting a further 25% increase in sales. Wecontinue to surge forward in this new era of trading and are looking at adding more products to our portfolio.

5. FIXED DEPOSITS:

During the period under review, the Company has not accepted/ renewed and deposit within the meaningof Section 58A of the Companies Act, 1956 and as such, no amount of principal / interest was outstandingas on the balance sheet date.


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6. DIRECTORS :

In accordance with the relevant provisions of the Companies Act, 1956, Mrs. Promila Sharma,Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and beingeligible, offers herself for re-appointment. The Board recommends her re-appointment at the ensuingAnnual General Meeting.

The brief resume and other details relating to the Directors, who is to be re-appointed as stipulated underclause 49(IV)(G) of the Listing Agreement, is furnished in the Notice forming part of the Annual Report.

7. DIRECTORS' RESPONSIBILITY STATEMENT :

As required under Section 217(2AA) of the Companies Act, 1956, your Directors confirm having:-

l followed in the preparation of the Annual Accounts, the applicable the applicable accounting standardswith proper explanation relating to material departures if any;

l selected such accounting policies and applied them consistently and made judgments and estimatesthat are reasonable and prudent so as to give a true and fair view of the state of affairs of the Companyat the end of the financial year and of the profit or loss of the Company for that period;

l taken proper and sufficient care for the maintenance of adequate accounting records in accordancewith the provisions of the said Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; prepared the annual accounts on a going concern basis

8. CORPORATE GOVERANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

As per Clause 49 of Listing Agreement with the Stock Exchanges, a report on Corporate Governance isattached to this Report along with the Management Discussion and Analysis statement.

9. STATEMENT PURSUANT TO LISTING AGREEMENT:

The Company's Securities are listed at the Bombay Stock Exchange and The Ahmedabad Stock Exchange.

10. AUDITORS AND AUDITORS' REPORT:

M/s. B.H. Patel & Co., Chartered Accountants, Mumbai have confirmed that they are yet to complete thePeer Review Audit Process conducted by the Institute of Chartered Accountants of India. Hence they areineligible to be reappointed in the ensuing Annual General Meeting. Hence M/s. Doshi Doshi & Associates,Chartered Accountants, Mumbai have been appointed as Statutory Auditors of the Company for theFinancial Year 2011-12 and they have confirmed their eligibility as Auditors of a Listed Company.

The Company has received a confirmation from them to the effect about their eligibility under section224(1B) of the Companies Act, 1956.

The Notes on Accounts referred to in the Auditors' Report are self-explanatory and do not call for anyfurther comments.


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11. PARTICULARS OF EMPLOYEES:

Information in accordance with the provision of Section 217 (2A) of the Companies Act, 1956, read withthe Companies (Particular of Employees) Rules 1975, as amended, regarding employees to theDirectors Report is as follows.

None of the Employees of the Company are in receipt of remuneration aggregating to Rs. 24,00,000/-or more p.a. if employed for the entire year or Rs.2,00,000/- or more per month, if employed for the part ofthe year.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS / OUTGO :

In view of the nature of activities which are being carried on by the Company, Rules 2A and 2B of theCompanies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, regardingconservation of Energy and Technology absorption respectively, are not applicable.

Foreign Exchange earning of the Company during the year 2010-11 was NIL while the outgo wasEuro 4,37,360, USD 1,16,807 & GBP 5,903.

13. ACKNOWLEDGEMENTS :

Your Directors record their grateful appreciation for the encouragement, assistance, co-operation andconsistent support received from Members, Dealers, Government Authorities, Dealers, Banks, Financialinstitutions, Business Partners and Customers. The Board wishes to place on record its appreciation to thecontribution made by employees of the Company during the year under review. Your Directors are thankfulto all the Stakeholders for their continued patronage.

By Order of the Board

Place : Mumbai For Gratex Industries Limited

Date : 09.08.2011

Registered Office Karan Sharma

109, Kakad Udyog Bhavan, Managing Director

L. J. Road, Mahim, Mumbai - 400 016


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REPORT ON CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement, given below is a report on the Corporate Governancein the Company :

1. COMPANY'S PHILOSOPHY ON THE CODE OF GOVERNANCE :

The Company believes that ethics are very important in any business as they are directly related to thegoodwill of the Company.

The Corporate Governance Policy of the Company is based on principles of equity and ensures the following:

l Proper composition of the Board of Directors;

l Timely dissemination of material information to the Stakeholders concerning their interests;

l Adequate Internal Checks and Balances;

l Transparency and Accountability; and

l Compliance with the applicable laws and regulations.

2. BOARD OF DIRECTORS AND MEETINGS :

The Board of Directors of the Company has an optimum combination of executive, non-executive andindependent directors. The present strength of the Board of Directors of the Company is 8 (Eight) Directors.Five Board Meetings were held in 2010-11. The following table shows the detailed composition of Board ofDirectors as well as their attendance details at the Board Meetings:-

Name of the Director Category of No. of Board Attendance at No. of otherDirectorship meetings attended last AGM Directorship

Mr. Baldevkrishan Sharma Chairman, Executive 5 Yes 1

Ms. Promila Sharma Non-Executive, 4 No 1Promoter

Mr.K.P. Bharadwaj Non-Executive, 4 Yes NILIndependent Director

Ms. Mona Menon Non-Executive Promoter 5 Yes 1

Mr. Karan Sharma Managing Director, 5 Yes 1Executive

Mr. Pratap Menon Non-Executive 5 Yes NILIndependent Director

Mr. Pradeep Nagori Non-Executive 5 Yes NILIndependent Director

Mr. Gurvinder Singh Saggu Non-Executive 4 Yes NILIndependent Director

Code of Conduct :

The Board has laid down a Code of Conduct for all Board members and Senior Management Personnel ofthe Company. All Board members and Senior Management Personnel have affirmed compliance with theCode of Conduct.

The Code of Conduct seeks to ensure that the Directors and the Senior Management Personnel observea total commitment to their duties and responsibilities while ensuring a complete adherence with theapplicable statutes on one hand and values and ethics on the other.


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3. AUDIT COMMITTEE :

As a measure of good Corporate Governance and to provide assistance to the Board of Directors infulfilling the Board's responsibilities, an Audit Committee has been constituted. The functions of the AuditCommittee include :

l Reviewing the adequacy of internal control systems and the internal audit reports and their compliancethereof.

l Overview of the Company's financial reporting process and the disclosure of its financial informationto ensure that the financial statements are correct, sufficient and credible.

l Recommending the appointment of external auditors, fixation of their audit fee, and also approval forpayment for any other services.

l Reviewing with Management the quarterly and annual financial statements for submission to the Board.

During the year, four meetings were held one of which was before finalization of accounts. The said meetingswere held on 28th April, 2010, 11th August, 2010, 11th November, 2010 and 9th February, 2011.The constitution of the Committee and the attendance of each member of the Committee as on 31stMarch, 2011 are given below :

Name Status Number of Audit Committee meetings

Held Attended

Mr. Pradeep Nagori Chairman 4 4

Mr. Gurvinder Singh Saggu Member 4 4

Mr. Karan Sharma Member 4 4

4. SHAREHOLDERS GRIEVANCE COMMITTEE :

The Shareholders Grievances Committee was constituted to redress the shareholders' grievances/complaints relating to transfer & transmission of shares, non-receipt of annual report, dividend, sharecertificate etc and to provide the responses to the queries, if any, raised by the investors. The Committeealso considers the matters which can aid better investor services and relations.

During the year, the Shareholders Grievances Committee met four times. The constitution of the Committeeand the details of attendance of each member of the Committee are given below :

Name Status Number of Shareholders GrievancesCommittee meetings

Held Attended

Mr. Pradeep Nagori Chairman 4 4

Mr. Gurvinder Singh Saggu Member 4 4

Mr. Karan Sharma Member 4 4

The Company had received no complaints during the year from the shareholders and all of them havebeen resolved to the satisfaction of the shareholders.

5. DETAILS OF REMUNERATION TO DIRECTORS :

The Company has not set up a Remuneration Committee as the aggregate value of salary and perquisitespaid for the year end 31st March, 2011 to the Directors does not exceed the prescribed limit.


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6. GENERAL BODY MEETINGS :

Details of the location, date and time of the last three Annual General Meetings (AGM) and the Resolutionspassed therein are as under :

Day, Date & Time Location Particulars of Special Business

Monday, Giants International, 1. Remuneration to20th September, 2010 2nd Floor, Orient Club Bldg. No. 9, Mr. Baldevkrishan Sharma,at 11.30 a. m. Chowpatty Seaface, Mumbai - 400 007 Chairman - Executive.

Tuesday, Giants International, 1. Alteration of Objects Clause in8th September, 2009 2nd Floor, Orient Club Bldg. No. 9, Memorandum of Association.at 12.30 p.m. Chowpatty Seaface, Mumbai - 400 007

Tuesday, Giants International, NIL23rd September, 2008 2nd Floor, Orient Club Bldg. No. 9,12 noon Chowpatty Seaface, Mumbai - 400 007

The shareholders passed all the resolutions including the special resolutions set out in the respectiveNotices. No Postal Ballots were used for voting at these meetings.

The details of Directors seeking appointment / re-appointment are provided in the Notice calling for theAnnual General Meeting.

7. DISCLOSURES :

a. There were no material significant related party transactions during the year that may have a potentialconflict with the interests of the Company at large. Transaction with related parties have been disclosedvide Notes on Accounts- Schedule 'N', forming part of the Annual Report.

b. There have been no instances of non-compliance by your Company on any matter related to thecapital markets, nor have any penalty/stricture been imposed on your Company by the Stock Exchangesor SEBI or any other statutory authority or any matter related to capital markets.

c. Your Company has complied with all the mandatory requirements of Corporate Governance as requiredby the Listing Agreements.

d. No personnel have been denied access to the Audit Committee of your Company to discuss anymatter of substance.

8. MEANS OF COMMUNICATION :

l Publication of Results The quarterly / annual results of the Company arepublished in the leading newspapers viz Financial Expressin English and Apla Mahanagar in Marathi

l Designated Email Id for redressal of In terms of Clause 47(f) of the Listing Agreement,investor complaints investors may use the E-mail ID : [email protected]

for redressal of complaints.


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9. GENERAL SHAREHOLDER'S INFORMATION :

l AGM : Date, Time and Venue Wednesday, 21st September, 2011, at 11.30 a. m., atGiants International, 2nd Floor, Orient Club Bldg. No. 9,Chowpatty Seaface, Mumbai - 400 007

l Date of Book Closure Friday, 16th September, 2011 to Wednesday,21st September, 2011

l Listing on stock exchange Yes

l Stock codes:Bombay Stock Exchange 526751Ahmedabad Stock Exchange 19673ISIN for Dematerialisation INE915E01013

l Registrar and Transfer Agents Adroit Corporate Services Pvt. Ltd.,19, Jaferbhoy Industrial Estate, Makwana Road,Marol Naka, Andheri (East), Mumbai. - 400 059.

l Share Transfer System Registrar and Transfer Agents

l Outstanding GDRs /ADRs /Warrants orany convertible instruments conversion NILdate and likely impact on equity

l Address for correspondence. Regd.Office: 109, Kakad Udyog Bhavan,L.J.Road, Mahim, Mumbai - 400 016.

Financial Calendar 2011- 2012(tentative)

Financial reporting for the quarter ending June 30, 2011 Upto August 14, 2011

Financial reporting for the half year ending September 30, 2011 Upto November 14, 2011

Financial reporting for the quarter ending December 31, 2011 Upto February 14, 2012

Financial reporting for the quarter ending March 31, 2012 Upto May 15, 2012

Annual General Meeting for the year ending March 31, 2012 Upto September 30, 2012

Note : Annual Listing fee for the financial year 2011-2012 has been paid to both the Stock Exchanges


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10. THE DISTRIBUTION OF SHAREHOLDERS AS ON 31.03.2011 IS AS FOLLOWS :

Range of No. of Amount % to Capital No. of % toHolding shares (Rs.) Shareholders Shareholders

1-500 604701 6047010 19.93 3767 91.83

501-1000 139800 1398000 4.61 166 4.05

1001-2000 130599 1305990 4.30 86 2.10

2001-3000 46400 464000 1.53 18 0.44

3001-4000 64200 642000 2.12 18 0.44

4001-5000 58100 581000 1.91 12 0.29

5001-10000 114800 1148000 3.78 15 0.37

Above 10000 1876200 18762000 61.82 20 0.48

Total 3034800 30348000 100.00 4102 100

11. SHAREHOLDING PATTERN AS ON 31ST MARCH, 2011 :

Category Sub-category No. of securities held

Promoter's holding Indian Promoters 1551200

Foreign Promoters 0

Persons Acting in Concern 0

Sub Total 1551200

Institutional Investors Mutual Funds & UTI 0

Banks, FIs, Insurance Co.s, Central /State Govt./Non-Govt. Institutions 0

FII 0

Sub-Total 0

Others Private Corporate Bodies 97279

Indian Public 1271221

Any Other 115100

Sub Total 1483600

Grand Total 3034800


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12. STOCK MARKET PRICE DATA AT BOMBAY STOCK EXCHANGE :

MONTH Bombay Stock Exchange (in Rs.)

HIGH LOW

April, 2010 5.85 5.56

May, 2010 7.4 5.82

June, 2010 7.71 7.00

July, 2010 10.62 8.09

August, 2010 9.19 7.60

September, 2010 7.84 6.34

October, 2010 10.56 7.10

November, 2010 9.99 7.74

December, 2010 7.70 6.92

January, 2011 7.28 6.56

February, 2011 7.57 7.35

March, 2011 7.20 6.85

13. COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE:

The Company has obtained a Certificate from Mr. B. M. Doshi, Practising Chartered Accountantregarding Compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing

Agreement and the same is annexed.

14. CEO AND CFO CERTIFICATION

As per the requirement of Clause 49 of the Listing Agreement, a Certificate duly signed by ManagingDirector and the Chairman of the Company has been submitted to the Board.

FOR & ON BEHALF OF THE BOARD

Baldevkrishan Sharma Karan Sharma

Chairman Managing Director

PLACE : Mumbai

DATED : 09.08.2011


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MANAGEMENT DISCUSSION AND ANALYSIS

1. Industry Overview :

Gratex Industries Limited, being well known in the Industry as a pioneer, its product commands a strong

brand image. GIL has been in the forefront in launch of new designs, which make a life-style statement.

Our focus is also on the Industrial Consumer and this will significantly expand the market base.

During the year, the Company has consolidated in the area of setting up the infrastructure for efficient

Warehousing of Imported Stocks and Network Marketing on all India basis.

Significant progress is also made by the Company in installation of wallpapers by up-grading the Adhesives

used and providing technical back up support for post sales problems.

2. Perceived Business Risks :

The Company's business activities expose it to a variety of risks including survival in the highly competitive

Wallpaper Industry. Identification and management of these risks are essential to its success and

financial soundness.

3. Risk Management and Environment Policy :

Our risk management procedures ensure that the management controls risks though means of a properly

defined frame work.

The Company is committed to achieving excellence in environmental performance, and preservation and

promotion of environment are of fundamental concern in all our business activities.

4. Internal Control Systems :

The Company has a well defined organizational structure, proper policy guidelines and internal controls to

ensure efficiency of operations, compliance with applicable laws and regulations and protection of resources

from unauthorized use or losses.

Certain salient features of Internal Control Systems are :

l Regular meeting of the concerned officials at apex level to review operations and plans in key business

areas;

l Properly established Audit Committee that timely reviews the operations; and

l Preparation and monitoring of quarterly/ half yearly/ annual budgets for all operating and

service functions.


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Internal Check system and control is exercised with proper adherence to various procedures laid down

by law, rules and regulations applicable. The top management and the Audit Committee of the Board

review the findings and recommendations of the internal audit panel.

5. Social Commitment :

Your Company has commitment for fulfilling its responsibilities towards the enrichment of the society.

6. Human Resources Management :

The Company is committed to provide an environment that helps its employees and workers to deliver

their best. Therefore, the Company designs its human resource policies in such a way that it motivates the

budding professional who are led by experienced personnel. Differentiated compensation and growth

opportunities were provided to ensure retention of key talent and successors for all critical positions. The

Company ensures that the employees are encouraged to take up voluntary ventures that enable them to

work, learn and develop in such a way that their personal achievements contribute to organizational growth.

7. Cautionary Statement :

Statements in this Management Discussions and Analysis Report describing the Company's objectives,

projections, estimates and expectations may be 'forward looking statements' within the meaning of applicable

laws and regulations. Actual results might differ materially from those either expressed or implied. Important

factors that could make a difference to the Company's operations include economic conditions affecting

demand/supply and price conditions in the markets in which the company operates, changes in the

Government regulations, tax laws and other statutory and incidental factors.


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CERTIFICATE OF CHAIRMAN AND OF THE MANAGING DIRECTOR

We have reviewed the financial statements and the cash flow statement for the financial year 2010-11 and

certify that :

(a) These statements to the best of our knowledge and belief :

(i) do not contain any materially untrue statement or omit any material fact or contain statements that

might be misleading.;

(ii) present a true and fair view of the Company's affairs and are in compliance with existing accounting

standards, applicable laws and regulations.

(b) To the best of our knowledge and belief, no transactions entered into by theCompany during the period

which are fraudulent, illegal or violative of the Company's Code of Conduct.

(c) We hereby declare that all the members of the Board of Directors and Management Committee have

confirmed compliance with the Code of Conduct as adopted by the Company.

(d) We are responsible for establishing and maintaining internal controls and for evaluating the effectiveness

of the same over the financial reporting and have disclosed to the Auditors and the Audit Committee,

deficiencies in the design or operation of internal controls, if any, of which we are aware and the steps we

have taken or propose to take to rectify these deficiencies.

(e) We have also indicated to the Auditors and the Audit Committee:

(i) Significant changes in internal control during the year.

(ii) Significant changes in the accounting policies during the year and that the same have been disclosed

in the notes to the financial statements; and

(iii) Instances of significant fraud of which we have become aware and the involvements therein, if any, of

the Management or an employee having a significant role in the company's internal control system.

(iv) We affirm that we have not denied any personal access to the Audit Committee of the Company

(in respect of matters involving alleged misconduct, if any)

Baldevkrishan Sharma Karan Sharma

Chairman Managing Director

Place : Mumbai

Date : 09.08.2011


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AUDITORS' CERTIFICATE ON CORPORATE GOVERNANCE

To the Members of Gratex Industries Limited

We have examined the compliance of the conditions of Corporate Governance by M/s Gratex Industries

Limited for the year ended 31st March 2011 as stipulated in clause 49 of the Listing Agreement of the said

company with the Stock Exchanges.

The Compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination

was limited to procedures and implementation thereof, adopted by the Company for ensuring compliances of

conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements

of the Company.

Subject to aforesaid, in our opinion and to the best of information and explanation given to us, we certify that

the Company has complied in all material respects with the conditions of Corporate Governance as stipulated

in the above mentioned listing agreement.

As required by the Guidance note issued by the Institute of Chartered Accountants of India, we have to state

that the Registrar and Share Transfer Agents of the Company have certified that they have maintained the

records to show the investor's grievances against the Company and that as at 31st March 2011, there were no

grievances remaining unattended/ pending for more than 15 days.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the

efficiency or effectiveness with which the Management has conducted the affairs of the Company.

For B. H. PATEL & CO.,

Chartered Accountants

Place : Mumbai

Date : 9.08.2011 B. M. DOSHI

Proprietor

Membership No. 17370


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AUDITORS' REPORT

TO THE SHAREHOLDERS OF GRATEX INDUSTRIES LTD.

1] We have audited the Balance Sheet of GRATEX INDUSTRIES LTD. as on 31st March, 2011 togetherwith Profit and Loss Account of the Company for the year ended on that date annexed hereto.These Financial Statements are the responsibility of the Company's Management. Our responsibility is toexpress an opinion on these financial statements based on our audit.

2] We conducted our audit in accordance with auditing standards generally accepted in India. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial 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 themanagement as well as evaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.

3] As required by the Companies (Auditor Report) Order,2003 issued by the Central Government of India interms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure astatement on the matters specified in paragraphs 4 & 5 of the said order to the extent applicable.

4] Further to our comments in the annexure referred to above, we report that:

i) We have obtained all the informations and explanations which to the best of our knowledge and beliefwere necessary for the purpose of our audit.

ii) In our opinion, proper books of accounts as required by Law have been kept by the Company in so faras appears from our examination of such books.

iii) The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the booksof accounts.

iv) In our opinion, the Balance Sheet and Profit & Loss Account dealt with by this report comply with theaccounting standard referred in sub-section (3C) of section 211 of the Companies Act, 1956.

v) On the basis of written representations received from the Directors as on 31st March, 2011 and takenon record by the Board of Directors, we report that none of the Directors are disqualified as on31st March, 2011 from being appointed as Director u/s 274 (1) (g) of the Companies Act, 1956.

vi) In our opinion, and to the best of our information and according to the explanations given to us, the saidaccounts give the information required by the Companies Act, 1956 in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted in India :

i) in the case of the Balance Sheet of the State of Affairs of the Company as at March 31, 2011 and

ii) In the case of Profit and Loss Account of the Profit for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of the Cash Flow, for the year ended on that date.

For B. H. PATEL & CO.,Chartered Accountants

Place : MumbaiDate : 09.08.2011 B. M. DOSHI

Proprietor



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ANNEXURE TO THE AUDITORS' REPORT

(REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE)

i] (a) The Company has maintained proper records showing full particulars including quantitative details

and situation of fixed assets.

(b) As explained to us, physical verification of a major portion of fixed assets as at 31st March, 2011 was

conducted by the Management during the year. In our opinion, the frequency of physical verification

is reasonable. Having regard to the size of the operations of the Company and on the basis of

explanations received, in our opinion no difference was found between physical verification and the

records kept by the Company.

(c) We find from the records that company has sold entire Plant & Machinery & Motor car as they

have stopped their manufacturing activity w.e.f. 24.08.2008. Question of effect as going concern

doesn't arise.

ii] (a) As explained to us, the Company is following a system of physical verification of significant stock

at appropriate interval during the year under consideration.In our opinion the frequency of verification

is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of

physical verification of stocks followed by the Management are reasonable and adequate in relation

to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company is

maintaining proper records of inventory. The discrepancies noticed on verification between the

physical stocks and the book records were not material having regard to the size of the operations

of the Company.

iii] (a) The Company has not granted or taken any loans, secured or unsecured from Companies, Firms or

other parties listed in the register maintained u/s 301 of the Companies Act, 1956.

(b) Company has accepted unsecured loan of Rs. 4,00,000/- from Smt. Premlata Bhardwaj who

happens to be the wife of Director Shri K. P. Bhardwaj and Rs. 12,00,000/- from Smt. Promila Sharma

who happens to be the wife of Chairman Shri Baldev Sharma.

(c) In our opinion the rate of interest paid on unsecured loan is reasonable and the Company is regular

in the payment of interest.


18

iv] In our opinion and according to the information and explanations given to us, there are adequate

internal control procedure commensurate with the size of the Company and the nature of it's business

with regards to purchase of inventory, fixed assets and with regard to the sale of goods. During the course

of our audit, we have not observed any continuing failure to correct major weaknesses in internal

controls.

v] Company has not taken or given any loan applicable under section 301 of the Companies Act, 1956.

vi] Company has not accepted any public deposit and therefore section 58 A and 58 AA of the Companies

Act, 1956 does not apply.

vii] There is no separate internal audit department. However internal checks and controls at various levels

of operations are there as considered appropriate.

viii] Central Government has not prescribed maintenance of cost report u/s 209 (1)(d) of the Companies Act,

1956. Since there are no manufacturing activities the question of maintenance of cost doesn't arise.

ix] (a) Company is regular in depositing with appropriate authority undisputed statutory dues including

provident fund, employees state insurance, income tax, sales tax, custom duty, excise duty and

other material statutory dues applicable to it.

(b) According to the information and explanation given to us, there is no undisputed amount payable in

respect of income tax, sales tax, custom duty, excise duty as at 31st March, 2011 for a period of

more than six months from the date they become payable.

(c) According to the information and explanation given to us, no disputable amount due to income tax,

sales tax, custom duty, excise duty etc.

x] In our opinion there is an accumulated loss amounting to Rs. 56.92 lacs. The Company has not

incurred cash losses during the financial year covered by our audit and the immediate preceding

financial year.

xi] In our opinion and according to the information and explanations given to us, Company has not defaulted

in repayment of dues to a financial institution or bank.

xii] Company has not given or pledged in form of shares as security.

xiii] In our opinion the Company is not a Chit Fund or Nidhi / Mutual Benefit Fund / Society. Therefore the

provision of clause 4 (XIII) of the Companies (Auditor's Report) Order, 2003 are not applicable to the

Company.


19

xiv] In our opinion the Company is not dealing in or trading in shares, securities, debentures and other

investment. Accordingly the provision of clause 4 (XIV) of the Companies (Auditor's Report) Order, 2003

are not applicable to the Company.

xv] The Company has not given any guarantee for loan taken by others from banks or financial institutions.

xvi] As per information given to us, the Company has not taken any term loans during the financial year

under consideration.

xvii] According to the information and explanations given to us and on an overall examination of the balance

sheet of the Company, we report that there are no funds raised on short-term basis that have been used

for long-term investment. No long-term funds have been used to finance short-term assets except

permanent working capital.

xviii] As per information given to us, the Company has not made any preferential allotment of the shares

covered in the register maintained u/s 301 of the Companies Act, 1956.

xix] According to the information given to us, the Company has not issued any debentures during the year

under consideration.

xx] Company has not raised any public issues.

xxi] According to information and explanations given to us, no fraud on or by the Company has been noticed

or reported during the course of our audit.

For B. H. PATEL & CO.,


Place: Mumbai B. M. DOSHI

Date: 09.08.2011 Proprietor



20

BALANCE SHEET FOR THE YEAR ENDED AS ON 31ST MARCH, 2011

PARTICULARS SCHEDULES AS AT AS AT

31.03.2011 31.03.2010

(AUDITED) (AUDITED)

SOURCES OF FUNDS :

SHARE CAPITAL A 30,348,000 30,348,000

RESERVE & SURPLUS B 1,852,810 1,852,810

BORROWINGS :

SECURED LOANS C 1,810,818 3,406,222

UNSECURED LOANS D 1,600,000 1,600,000

TOTAL 35,611,627 37,207,032

APPLICATION OF FUNDS :

FIXED ASSETS E 6,888,345 11,233,673

CURRENT ASSETS, LOANS & ADVANCES F 30,215,513

LESS : CURRENT LIABILITIES & PROVISIONS G 7,183,908 23,031,605 19,860,013

PROFIT & LOSS ACCOUNT M 5,691,677 6,113,346

(Debit Balance)

TOTAL 35,611,627 37,207,032

NOTES ON ACCOUNTS N

As per our attached report of even date

For M/S. B. H. PATEL & CO. For GRATEX INDUSTRIES LTD


B. M. DOSHI Baldevkrishan Sharma Karan Sharma

Proprietor Chairman Managing Director

Place : Mumbai

Dated : 09.08.2011


21

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED AS ON 31ST MARCH, 2011

PARTICULARS SCHEDULES AS AT AS AT

31.03.2011 31.03.2010

(AUDITED) (AUDITED)

INCOME :

SALES H 41,223,220 32,002,097

TOTAL 41,223,220 32,002,097

EXPENDITURE :

COST OF GOODS SOLD I 31,807,712 24,697,216

SELLING, ADMINISTRATION & OTHER EXPENSES J 6,497,726 3,502,924

PAYMENT TO & PROVISION FOR EMPLOYEE K 2,038,426 1,639,251

TOTAL 40,343,864 29,839,391

PROFIT/(LOSS) BEFORE INTEREST & DEPRECIATION 879,356 2,162,707

INTEREST L 288,238 399,802

DEPRECIATION 169,449 119,124

PROFIT/(LOSS) BEFORE TAXATION 421,669 1,643,781

PROVISION FOR TAXATION - -

PROVISION FOR DIVIDEND - -

NET PROFIT/(LOSS) TRANSFERRED 421,669 1,643,781


For M/S. B. H. PATEL & CO. For GRATEX INDUSTRIES LTD


B. M. DOSHI Baldevkrishan Sharma Karan Sharma

Proprietor Chairman Managing Director

Place : Mumbai

Dated : 09.08.2011


22

SCHEDULE FORMING PART OF THE BALANCE SHEET AND PROFIT & LOSS ACCOUNTFOR THE YEAR ENDED AS ON 31ST MARCH, 2011

PARTICULARS AS AT AS AT31.03.2011 31.03.2010(AUDITED) (AUDITED)

SCHEDULE "A"SHARE CAPITAL

AUTHORISED CAPITAL40,00,000 EQUITY SHARES OF RS. 10.00 EACH 40,000,000 40,000,000ISSUED, SUBSCRIBED AND PAID-UP CAPITAL30,34,800 EQUITY SHARES OF RS. 10.00 EACH 30,348,000 30,348,000

30,348,000 30,348,000SCHEDULE "B"RESERVE AND SURPLUS

CAPITAL RESERVE 1,046,026 1,046,026GENERAL RESERVE 806,783 806,783

1,852,810 1,852,810SCHEDULE "C"SECURED LOANS

BANK OF MAHARASHTRA, DADAR, MUMBAI 1,810,818 3,406,222

1,810,818 3,406,222SCHEDULE "D"UNSECURED LOANS

MRS. PREMLATA BHARDWAJ 400,000 400,000MRS. PROMILA SHARMA 1,200,000 1,200,000

1,600,000 1,600,000SCHEDULE "E"FIXED ASSETS

(As per statement attached) 6,888,345 11,233,673

6,888,345 11,233,673SCHEDULE "F"CURRENT ASSETS, LOANS & ADVANCESCURRENT ASSETSA) CLOSING STOCK 15,122,620 11,499,820

B) SUNDRY DEBTORS(Unsecured considered good)OVER SIX MONTHS 252,588 272,451

252,588 272,451C) CASH & BANK BALANCES

CASH IN HAND 67,582 51,746CASH IN BANK - 370

67,582 52,116D) LOANS & ADVANCES

ADVANCE AGAINST IMPORT AND PURCHASES 1,517,265 2,390,309ELAR FASHIONS LTD. 6,810,117 6,810,117ANDHRA PRADESH POWER TOOLS LTD. 5,720,514 5,720,514MISCELLANEOUS EXPENDITURE (To the extent not written off)MISAPPROPRIATED FROM BANK(To be recovered from PNB) 616,436 616,436DURGESH KUMAR - STAFF LOAN 1,000 7,000K.P.BHARDWAJ 2,060 -KARAN SHARMA - 2,265DEPOSITS 105,331 167,532

14,772,723 15,714,173

TOTAL (A TO D) 30,215,513 27,538,560


23

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24


PARTICULARS AS AT AS AT31.03.2011 31.03.2010(AUDITED) (AUDITED)

SCHEDULE "G"CURRENT LIABILITIES & PROVISIONSCURRENT LIABILITIES

SUNDRY CREDITORS FOR GOODS & EXPENSES 111,205.00 590,604

ADVANCE RECEIVED AGAINST SALES 7,072,703 7,056,597

VALUE ADDED TAX - 31,347

7,183,908 7,678,548

SCHEDULE "H"SALES

SALES 41,223,220 32,002,097

41,223,220 32,002,097

SCHEDULE "I"COST OF GOODS SOLD 31,807,712 24,697,216

SCHEDULE "J"SELLING, ADMINISTRATION & OTHER EXPENSESREPAIRS & MAINTENANCE - OTHERS 1,470,151 61,609

RENT, RATES & TAXES 210,528 168,807

PROFESSIONAL CHARGES 217,080 356,438

ADVERTISEMENT 26,092 81,652

PRINTING & STATIONERY 75,705 69,759

DIRECTORS REMUNERATION AND PERKS 1,088,783 1,135,651

DIRECTORS SITTING FEES 124,000 101,001

SALES DISCOUNT 72,606

RETAINERSHIP CHARGES 207,222 176,425

MOTOR CAR EXPENSES (DELIVERY VAN) 286,073 266,004

SALES PROMOTIONS 80,214 115,341

AUDIT FEES 45,000 50,000

BANK CHARGES 24,011 19,284

LOSS ON SALES OF FIXED ASSETS 1,496,267 81,724

CANTEEN EXPENSES 158,455 -

POSTAGE & TELEGRAM 23,135 20,074

GENERAL EXPENSES 232,570 76,650

FREIGHT OUTWARD 41,338 6,508

ELECTRICITY CHARGES (HEAD OFFICE) 227,680 232,870

INSURANE EXPENSES 72,307 195,418

PACKING MATERIALS 67,637 33,195

WATER CHARGES 22,516 23,435

LOADING & UN-LOADING 108,152 7,149

MEDICAL EXPENSES - 550

STAFF TRANSPORT EXPENSES 24,619 28,954

CONVEYANCE EXPENSES 112,293 88,827

TELEPHONE CHARGES 55,900 32,993

6,497,726 3,502,924


25


PARTICULARS AS AT AS AT

31.03.2011 31.03.2010

(AUDITED) (AUDITED)

SCHEDULE 'K"

PAYMENT TO & PROVISION FOR EMPLOYEES

SALARIES, WAGES, BONUS & OTHERS 1,798,379 1,522,859

EMPLOYEES CONTRIBUTION TO PF, ESIC ETC. 106,757 116,392

GRATUITY 133,290 -

2,038,426 1,639,251

SCHEDULE "L"

INTEREST

BANK 128,238 179,802

OTHERS 160,000 220,000

288,238 399,802

616,436 616,436

SCHEDULE "M"

PROFIT & LOSS ACCOUNT

(Debit Balance) (6,113,346) (7,757,127)

LESS : PROFIT/(LOSS) FOR THE YEAR 421,669.43 1,643,781

(5,691,677) (6,113,346)


26

SCHEDULE "N"

NOTES TO ACCOUNTS

1. ACCOUNTING POLICIES :

The Accounts are prepared on a Historical Cost Convention and complies with the Mandatory AccountingStandards issued by the Institute of Chartered Accountants of India. Company follows mercantilesystem 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 purchaseprice (Net of rebates & discounts), import duties, levies and any directly attributable cost ofbringing 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) atthe 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 2008and 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 ExpensesNot Written Off".

Misappropriation from Bank to be recovered from Punjab National Bank Rs. 501,000/-

Provision of interest upto 31.03.95 Rs. 115,436/-

Total Rs. 616,436/-

The Company had C C A/c (Cash Credit Account) bearing Account No. 109 with Punjab NationalBank, Shivaji Park Branch, Mumbai. during the financial year 1993-94 and 1994-95 Mr. Jatin M. Chhayaan Accountant had forged the signature of Director, Mrs. Promila Sharma and misappropriated theabove 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 filedin 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 theamount of Rs. 5,06,000/- deposited in the High Court by the Punjab National Bank with a condition thatthe 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 matteris pending.


27

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 arereceived in the Court by the Mahim Police Station. The original cheques are yet to be received in theCourt. The Trial is posted to proceed.

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

Mr. Mansingha was jailed for 2 days and released on Bail. The management will appear when the summonsare 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 againstthe 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 oncash 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 ConsortexKal Doelitzsch (India) Ltd. formerly known as Andhra Pradesh Power Tools Ltd., against whom theCompany was successful in getting an Order under the Summary Suit but the said case papers aremisplaced in the record room of High Court and hence the said matter will be reconstructed in the HighCourt. The process will take at least two months for getting the decree copy of the case and till then thematter is pending in the High Court.

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

The matter under section 138 is pending in High Court Mumbai the said matter lastly on 18.06.2010 andhonorable 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 cashbasis 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 hasnot been keeping in view the litigation pending in court of law.

8. CONTINGENT LIABILITIES :

The contingent liabilities on gratuity payment is not indicated.

As at 31.03.2011 As at 31.03.2010--------------------------------------------------------------------

Payment to Directors - Directors Sitting Fees 124,000 101,000 Remuneration 1,088,783 1,135,651 No Provision for taxation has been made in view of carry forward of losses. - - Auditors Remuneration - 50,000 Expenditure in foreign currency Euro 437,360 Euro 231,394

USD 116,807 USD 47,161GBP 5,903 GBP 9,675


28

9. Information for Goods Manufactured during the year :

Since there is not any manufacture activities running, the Question of Goods manufacture

10. Information of Raw Material Consumption :

Since there is not any manufacture activities running, the Question of Raw Material Consumption

11. Information of Opening Stock, Closing Stock and Sale of Goods manufactured :

Since there is not any manufacture activities running, the Question of Opening Stock, Closing Stock andSale of Goods manufactured does not arise.

12. Breakup of expenditure incurred on employees in respect of remuneration of not less than Rs.6,00,000/-p.a. is Nil

13. Sundry Debtors/Creditors balances are subject to confirmation.

14. The following items are treated on cash basis in the book of accounts of the company.

1) Income Tax

2) Duty draw back/cash incentive/excise duty

3) Sales tax set off

4) Refund of Sales tax

5) Interest on Sticky Loans (Litigation in the High Court)

6) Property Tax

15. Previous year's figures have been regrouped/recasted wherever necessary to confirm this year'sclassification.

-------------------------------------------------------------------------------------------------------------------------------------------------


For M/S. B. H. PATEL & CO. For GRATEX INDUSTRIES LIMITEDChartered Accountants

B. M. DOSHI Baldevkrishan Sharma Karan SharmaProprietor Chairman Managing DirectorMembership No. 17370

Place : MumbaiDated : 09.08.2011


29

CASH FLOW STATEMENT FOR THE YEAR ENDED AS ON 31ST MARCH, 2011Rupees in Lakhs

2010-11 2009-10

A. Cash flow from Operating Activities Net Profit before Tax and Extraordinary Items 8.01 16.44 Adjustments for:

Depreciation .91 1.19Interest Paid 2.88 3.99

Operating Profit before Working Capital Changes 11.80 21.63

Adjustment for: Trade and Other Receivables 8.89 -17.23

Inventories -36.23 17.81 Trade Payables 1.11 -25.67

Cash generated from operations (14.43) (3.45)

Interest Paid (2.88) (3.99) Public Issue Expenses - ---

Cash flow before extraordinary items (17.31) (7.44)

Extraordinary Items -- -

Net Cash from Operating Activities (17.31) (7.44)

B. Cash from Investing Activities Purchase of Fixed Assets - - Sale of Investments - -

Other Income for Warehousing 1.50 - Interest Received - -

Net cash used in Investing Activities 1.50 -

C. Cash flow from Financing Activities

Proceeds from issue of Share Capital - - Proceeds from Long Term Borrowings 15.95 7.65

Net cash used in Financing Activities 15.95 7.65

Net increased in cash and cash equivalents 0.16 0.21CASH AND CASH EQUIVALENTS AS AT 01.04.2010 0.52 0.31

(Opening Balance)

CASH AND CASH EQUIVALENTS AS AT 31.03.2011 0.68 0.52 (Closing Balance)


B. M. DOSHI Baldevkrishan Sharma Karan SharmaProprietor Chairman Managing DirectorMembership No. 17370


We have examined the attached Cash Flow Statement of Gratex Industries Ltd. annexed to and forming part ofthe accounts for the year ended 31st March, 2011. The statement has been prepared by the Company inaccordance with the requirement of the Listing Agreement clause 32 with The Stock Exchange, Mumbai and isbased on and in agreement with the corresponding Profit and Loss Account and Balance Sheet of the Companycovered by our Report to the members of the Company.


30

SCHEDULE VI OF COMPANIES ACT, 1956 (PART IV)BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE

1. Registration DetailsRegistration Number 32248 State Code : 11Balance Sheet 09 08 2011

(Date) (Month) (Year)2. Capital Raised during the year (Amount in '000 )

Public Issue Right Issue Bonus Issue Private PlacementNil Nil Nil Nil

3. Position of Mobilization and Development of Fund (Amount in '000)Total Liabilities Total Assets

356.11 356.11Sources of Funds :

Paid-up Capital Reserves & Surplus303.48 1.853

Secured Loans Unsecured Loans1.810 1.600

Application of Funds :Net Fixed Assets Investments

6.888 -Net Current Assets Miscellaneous Expenditure

295.99 .616Accumulated Losses

5.7044. Performance of Company (Amount in '000)

Turnover Total Expenditure413.92 4.059

Profit before Tax Profit after Tax.800 .422

Earning per Share in rupees Dividend %-

5. Generic names of three principal products/services of the Company (as per monetary terms)Product description Item Code No.

i) Manufactures of Wall Papers Nil ii) Trading, Dealing in Imported Wall Papers Nil

Note : For ITC Code of products please refer to the publication Indian Trade Classification based on harmonizedcommodity description and coding system by Ministry of Commerce, Directorate of Commercial Intelligence &Statistics, Kolcutta - 700 001.


B. M. DOSHI Baldevkrishan Sharma Karan SharmaProprietor Chairman Managing Director


Green Initiative in Corporate Governance

Dear Shareholder,

In case you have not registered your e-mail address for receiving communication form Company in electronic

mode, you may submit the Registration Form given below at the venue of the Annual General Meeting or send

it to the Registrar And Transfer Agents. Shareholders holding shares in demat mode are requested to register

their e-mail address with the Depository Participant.

E-COMMUNICATION REGISTRATION FORM

(In terms of Circular No. 17/2011 dated 21.04.2011 and Circular No. 18/2011 dated 29.04.2011

issued by the Ministry of Corporate Affairs)

Folio No. / DP ID & Client ID : ____________________________________________________________

Name of the 1st Registered Holder : ______________________________________________________

Name of Joint Holder(s) : _______________________________________________________________

___________________________________________________________________________________

Registered Address : __________________________________________________________________

___________________________________________________________________________________

___________________________________________________________________________________

E-mail ID (to be registered) : ____________________________________________________________

I/ we Shareholder(s) of Gratex Industries Limited agree to receive communication from the Company in

electronic mode. Please register my/our above e-mail id in your records for sending communication through

e-mail.

Date : _______________ Signature : ____________________

Note : Shareholder(s) are requested to keep the Company/ Depository Participant informed as and

when there is any change in the e-mail id.


27th Annual Report 2010-2011Board Of Directors:Baldevkrishan Sharma - ChairmanKaran Sharma - Managing DirectorPromila SharmaMona MenonPratap MenonK.P. BharadwajPradeep NagoriGurvinder Singh Saggu

Registered Office :109, Kakad Udyog Bhavan,L. J. Road, Mahim,Mumbai - 400 016.Tel : 022 - 40702120 / 21Fax : 022 - 40702161Website : www.gratex.in

Auditors :

M/s. Doshi Doshi & Associates.Chartered Accountants.203, Sarda Chambers No.1,31, Kesavji Naik Road, Narsi Mehta Street,Masjid Bunder, Mumbai-400 009.

Registrar And Transfer Agents :Adroit Corporate Services Pvt. Ltd.,19, Jaferbhoy Industrial Estate,Makwana Road, Marol Naka,Andheri (East), Mumbai. - 400 059.Email : [email protected]

A Request

As a measure of economy, copies of Annual Report will notbe distributed at the Annual General Meeting. Membersare therefore requested to bring their copy of theAnnual Report to the meeting.

Factory :

Gratex House,

TTI Industrial Area, Khairne,

Thane - Belapur Road,

New Bombay - 400 703

CONTENTS

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

Directors' Report .................................................... 3

Report on Corporate Governance ........................ 6

Management Discussion and Analysis ............... 12

Auditors' Report ................................................... 16

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

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

Schedules forming part of Balance Sheet .......... 22

Notes on Balance Sheet &Profit & Loss Account ........................................... 26

Cash Flow Statement .......................................... 29

Balance Sheet Abstract & Company'sGeneral Business Profile ..................................... 30

IMPORTANT COMMUNICATION TO MEMBERS

The Ministry of Corporate Affairs (MCA) has taken a "GreenInitiative in the Corporate Governance" by allowingpaperless compliances by the Companies and has issuedcirculars stating that service of documents including AnnualReport can be sent by e-mail to its members. To supportthis green initiative of the Government in full measure,members who have not registered their e-mail addressesso far, are requested to register their e-mail addresses, inrespect of electronic holdings with the Depository throughtheir concerned Depository Participants. Members whohold shares in Physical form are requested to send theabove information i.e. e-mail address to the Company [email protected] OR to the Registrars And TransferAgents of the Company at gratexgogreen@adroitcorporate. comfor registration of their e-mail address.

Bankers:Bank of Maharashtra,Gadkari Chowk Branch, Dadar, Mumbai - 400 028.


GRATEX INDUSTRIES LIMITEDRegd. Office : 109, Kakad Udyog Bhavan, L. J. Road, Mahim, Mumbai - 400 016.

PROXY FORM

I/We____________________________________________________________ of__________________in the district of _________ being a member/members of GRATEX INDUSTRIES LIMITED hereby appoint

______________of______________ in the district of___________________ of failing him ______________of ___________ in the district of ________________________________________ as my/our proxy to votefor me/us and on my/our behalf at the TWENTY-SEVENTH ANNUAL GENERAL MEETING of the Company to

be held on 21st September, 2011 at Giants International, 2nd Floor, Orient Club Bldg. No. 9, ChowpathySeaface, Mumbai - 400 007 at 11.30 a.m. and at any adjournment thereof.

Signed this _____day of_____________2011.

Folio No.:Client ID / DP ID ________________________

NOTE : This form duly completed should be deposited at the Registered Office of the Company before 48hours of the meeting. A Proxy need not be a Member.

Signature of Shareholder

Affix Re. 1/-Revenue

Stamp

GRATEX INDUSTRIES LIMITEDRegd. Office : 109, Kakad Udyog Bhavan, L. J. Road, Mahim, Mumbai - 400 016.

ATTENDANCE SLIP

(Shareholders attending the Meeting in person or by proxy are requested to complete the attendance slip andhand over at the entrance of the Meeting hall)

I hereby record my presence at the TWENTY-SEVENTH ANNUAL GENERAL MEETING of the Company tobe held on 21st September, 2011, at the Giants International, 2nd Floor, Orient Club Bldg., No. 9, Chowpathy

Seafeace, Mumbai - 400 007 at 11.30 a.m.

Folio No. _________________________

Client ID / DP ID. ____________________________

Full name of the Shareholder / Proxy _________________________________ (in block letters)

Signature of the Shareholder/s or Proxy

PLEASE BRING THIS ATTENDANCE SLIP AT THE MEETING

Documents

Gratex Annual Report 2010-11 - Bombay Stock Exchange · 2011-10-04 · Gratex - Progressing towards Growth Annual Report 2010-11 1 NOTICE Notice is hereby given that the 27th Annual