1. COMPANY INFORMATION

Jainex Aamcol Limited ("the company") is a public limited company having its Registered Office in Aurangabad, Maharashtra , India, shifted from Mumbai to Aurangabad during the year. The company is listed on the Bombay Stock Exchange (BSE).The company has a manufacturing unit in Aurangabad, Maharashtra for manufacture of Gear Cutting Tools viz. gear hobs , miling cutters and spline guages.The functional and presentation currency of the company is Indian Rupee (" ") which is the currency of the primary economic environment in which the company operates. As on 31st March, 2026, Jainex Foods Pvt Ltd owns 30.13% of the equity shares of the company, and has the ability to influence the company''s operations.The financial statements for the year ended March 31,2026 were approved by the Board of Directors on May 28,2026.

2. SIGNIFICANT ACCOUNTING POLICIES2.01 ACCOUTING CONVENTION

"The significant accounting policies applied by the Company in the preparation of its financial statements are listed below. Such accounting policies have been applied consistently to all the periods presented in these financial statements, unless otherwise indicated.”

a) Statement of compliances

The financial statements have been prepared in accordance with the Indian Accounting Standards (referred to as “Ind AS”)prescribed under section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules 2015, as amended from time to time and other relevant provisons of the Act.

b) Basis of preparation

The financial statements have been prepared under the historical cost convention on the basis of going concern and in accordance with generally accepted accounting principles and Ind AS of ICAI as per provisions of the Companies Act 2013 read with notes appearing in financial statements.

c) USE OF ESTIMATES AND ACCOUNTING JUDGEMENTS Use of estimates

(i) The preparation of the financial statements require the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates, are recognised in the periods in which the results are known / materialised.

(ii) Impairment (IND. AS 36)

"Impairment of assets has been recognized and losses, where ever applicable; has been charged to Profit & Loss account.”

As of each balance sheet date, the carrying amount of assets is tested for impairment so as to determine :-

i. the provision for impairment loss, if any, required, or

ii. the reversal, if any, required or impairment has been recognized in previous year.

(iii) Useful life of property, plant and equipment and intangible assets (IND. AS 16)

The Company reviews the useful life of property, plant and equipment and intangible assets at the end of each balance sheet date. The re-assessment may result in change in depreciation and amortization expense in future periods.

(iv) Taxes on Income and evaluation of Deferred Tax Assets :- (IND AS 12)

Current tax is determined as the amount of tax payable in respect of taxable income for the year, as per applicable tax rates and laws.

Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets on timing differences, being the difference between taxable income and accounting income that originates in one period and capable of reversal in one or more subsequent periods as described in relevant Note to financial statements.

(v) Provisions, contingent liabilities and contingent assets (IND AS 37)

a) Provisions

The provisions are recognised and measured by using a substantial degree of estimation.

Provisions are recognized in the balance sheet when the Company has a present obligation (legal or constructive) as a result of a past event, which is expected to result in an outflow of resources embodying economic benefits which can be reliably estimated. Each provision is based on the best estimate of the expenditure required to settle the present obligation at the balance sheet date.

Constructive obligation is an obligation that derives from an entity’s actions where:

(i) by an established pattern of past practice, policies or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain responsibilities and;

(ii) as a result, the entity has created a valid expectation on the part of those other parties that it will discharge such responsibilities.

b) Contingent liabilities

Contingent liabilities are disclosed after a careful evaluation of the facts and legal aspects of the matter involved in the issue.

c) Contingent assets

Contingent assets are disclosed after a careful evaluation of the facts and legal aspects of the matter involved in the issue.

(vi) Fair value measurements of financial instruments (IND AS 32)

The company has no financial instruments / investments hence fair value measurement is not applicable.

(vii) Employee Benefits and Retirement obligations (IND AS 19)

a) Defined Contribution Plan

The state governed Provident Fund Scheme, Employees State Insurance Scheme and Employee Pension Scheme are defined contribution plans. The contribution paid / payable under the schemes are recognised during the year in which the employee renders the related services.

b) Defined Benefit Plan/ Long Term Compensated Absences.

The company''s Employees Gratuity Fund Scheme managed by the LIC of India is a defined plan. The present value of obligations based on past experience and actual valuation done by LIC read with the compliance of applicable IND AS in this regard has been considered and provided in the financial statements. Since the valuation by LIC is based on their vast experience at actuals , no acturial valuation is done by the management.

c) Compensated Absences

The company has provided for the actual leave encashment liability at the balance sheet date based on permissible accumulated leave balance of the employees at the last salary drawn as per company rules.Since leave encashment liability at actual is fully provided , no actuarial valuation is done by the management.

2.02 Property, plant and equipment (IND AS 16)

Tangible and intangible property,plant and equipment are stated at cost less accumulated depreciation and impairment.Cost includes all direct costs and expenditure incurred to bring the asset to its working condition and location for its intended use. Related trial run expenses (net of revenue), borrowing cost during constuction/irrection period and commisioning are capitalised where ever and whenever applicable. The

gain or loss arising on disposal of an item of property, plant and equipment is determined as the difference between sale proceeds and carrying value of such item, and is recognized in the statement of profit and loss.

2.03 Depreciation and amortization of property, plant and equipment and

intangible assets

a) Depreciation is provided under straight line method (SLM) to the extent depreciable based on the usefull life of most of the assets as prescribed in Schedule II of the Companies Act, 2013

b) Depreciation on Intangible assets is provided onstraight line method (SLM) and amortised over 5 years of its useful life.

c) Depreciation on additions is provided on pro-rata basis from the date of intended use.Depreciation on deletions is provided on pro-rata basis till the date of its effective use.

d) No depreciation has been provided on fixed assets where written down value has reached to 5% of the original cost and also on fixed assets not put to use.

2.04 Leases (IND AS 17)

a) The company''s ''95 years Leasehold Land at MIDC Aurangabad was aquired on annual economic rent of Rupee One in 1974.

b) The company has taken a CNC hob re sharpning ( Luren Taiwan make) machine from Marathwada Auto Cluster, Waluj, Aurangabad on annual fixed rent of Rs.12 lakhs for a period of 10 years on interest free refundable deposit vide agreement dated 9th July 2022 with minimum lock in period of 3 years with an option to extend the agreement or buy the said machine at mutually agreed terms.

2.05 a) Financial assets

(i) Cash and bank balances

Cash and bank balances consist of

(i) Cash and cash equivalents includes cash in hand, balances held with banks which are readily convertible into known amounts of cash, are subject to an insignificant risk of change in value . These balances with banks are unrestricted for withdrawal and usage.

(ii) Other bank balances which includes balances and deposits with banks that are restricted for withdrawal and usage.

i(i) Other financial assets are taken at cost or net realisable value as the case

may be.

205 b) Financial Liabilities

Trade and other payables / liabilities

(i) Trade and other payables / liabilites are initially measured at fair value / cost as recorded in the books.

(ii) Interest bearing bank loans, overdrafts ,term liabilites and other debts are initially measured at fair value / cost as recorded in the books using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognized over the term of the borrowings in the statement of profit and loss.

(iii) The company de-recognizes financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or they expire.

2.06 Inventories - (IND AS 02)

(i) "Inventories of finished goods and scrap are stated at the lower of cost and net realizable value. Cost is ascertained on a weighted average basis in respect of raw materials. Costs comprise direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition in respect of work in progress. Net realizable value is the price at which the inventories can be realized in the normal course of business. The cost of conversion from their existing state to a finished condition and for the cost of marketing, selling and distribution.

(ii) Stores and spare parts are carried at lower of cost and net realizable value.

(iii) Provisions are made to cover slow moving and obsolete items based on historical experience of utilization on a product category basis, which involves individual businesses considering their product lines and market conditions. based on historical experience of utilization on a product category basis, which involves individual businesses considering their product lines and market conditions.

(iv) However, based on above, the inventories are valued as under

a) Raw materials are valued at cost.

b) Work in Progress is valued at raw material cost overheads.

c ) Finished Goods are carried at lower of cost or market value which ever is less.

d) Stores are valued at cost.

e) Tools and Spares are valued at cost .

f) Scraps are valued at realisable value

2.07 Non-current assets held for sale and discontinued operations

The company had classified as non current fixed assets held for sale at scrap value as mentioned in note to financial statements under the head Property, Plant and Equipments in year FY 19 and FY 23 and has written off as impairment under the head depreciation, amortisation, impairment in FY 20 and FY 23 due to obsolescence and thus impaired value of such assets have been considered at net realisable scrap value and is shown as other current assets.

The company has not discontinued any operations during the year.

2.08 Revenue from operations.

(i) Sales and other operational income

(a) Revenue from sale of goods is recognised when the company has transferred to the buyer the significant risks and rewards of ownership and no longer retains 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.Depending on the contractual terms, risks and rewards of ownership is transfered when the delivery is completed. In case of exports, sale delivery is completed on issuance of bill of lading/air way bill.

(b) Goods Shipped in late March 2026, reach to customer location in next year, hence there is no performce obligation pending and no effetive control of company over goods in transit, therfore revenue booked in the year of shipment.

(ii) Other income

(a) Interest income is accrued on time proportion basis by reference to the principal outstanding and effective interest rate applicable.

(b) Other income viz exchange gain/ loss , misc. receipts, bad debts recovery etc. are accounted on generally accrual basis except recovery of bad debts, misc receipts which are accounted on receipt basis

2.09 Foreign currency transactions and translations

Foreign currency transactions are recorded at exchange rates prevailing on the date of the transaction. Foreign currency denominated monetary assets and liabilities are re-translated at the exchange rate prevailing on the balance sheet date and exchange gains and losses arising on settlement and restatement are recognised in the statement of profit and loss. Non-monetary assets and liabilities that are measured in terms of historical cost in foreign currencies are not re-translated.

Assets and liabilities with functional currency other than the functional currency of the Company have been translated using exchange rates prevailing on the balance sheet date and such profit or loss arising on translation of such items has been charged to profit and loss account and no translation reserve has been created as there no such assets or liabilities having impact during the year.

2.10 Borrowing costs (IND AS 23)

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as a part of such assets till such time as the assets are ready for their intended use. Qualifying assets are assets that necessarily require a substantial period of time to get ready for their intended use. All the other borrowing cost is recognized as an expense on accrual basis.

2.11 Earnings per share (IND AS 33)

Basic/Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the number of equity shares outstanding during the year.

2.12 Segment reporting (IND AS 108)

The company''s main product lines are in gear cutting tools viz. gear hobs and miling cutters which contributes over 93% of its revenue. The contribution from the balance operation viz. spline guage is mostly involving common processes and use of the same machineries of main product lines and thus the company''s operations is considered as a single segment.

2.13 Change in Accounting Policy (IND AS 8)

There is generally no change in accounting policy.

2. SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies applied by the Company in the
preparation of its financial statements are listed below. Such accounting
policies have been applied consistently to all the periods presented in
these financial statements, unless otherwise indicated.

a) Statement of compliances

The financial statements have been prepared in accordance with the
Indian Accounting Standards (referred to as “Ind AS”)prescribed under
section 133 of the Companies Act, 2013 read with Companies (Indian
Accounting Standards) Rules 2015, as amended from time to time and
other relevant provisons of the Act.

b) Basis of preparation

The financial statements have been prepared under the historical cost
convention on the basis of going concern and in accordance with generally
accepted accounting principles and Ind AS of ICAI as per provisions of the
Companies Act 2013 read with notes appearing in financial statements.

c) USE OF ESTIMATES AND ACCOUNTING JUDGEMENTS
Use of estimates

(i) The preparation of the financial statements require the Management to
make estimates and assumptions considered in the reported amounts of
assets and liabilities (including contingent liabilities) and the reported
income and expenses during the year. The Management believes that the
estimates used in preparation of the financial statements are prudent and
reasonable. Future results could differ due to these estimates and the
differences between the actual results and the estimates, are recognised
in the periods in which the results are known / materialised.

(ii) Impairment (IND. AS 36)

Impairment of assets has been recognized and losses, where ever
applicable; has been charged to Profit & Loss account.

As of each balance sheet date, the carrying amount of assets is tested for
impairment so as to determine :-

I. the provision for impairment loss, if any, required or

ii. the reversal, if any, required or impairment has been recognized in
previous year.

(iii) Useful life of property, plant and equipment and intangible assets
:- (IND. AS 16)

The Company reviews the useful life of property, plant and equipment
and intangible assets at the end of each balance sheet date. The re¬
assessment may result in change in depreciation and amortization
expense in future periods.

(iv) Taxes on Income and evaluation of Deferred Tax Assets :-
(IND AS 12)

Current tax is determined as the amount of tax payable in respect of
taxable income for the year, as per applicable tax rates and laws.

Deferred tax is recognized, subject to the consideration of prudence in
respect of deferred tax assets on timing differences, being the difference
between taxable income and accounting income that originates in one
period and capable of reversal in one or more subsequent periods as
described in relevant Note to financial statements

2 SIGNIFICANT ACCOUNTING POLICIES

2.01 ACCOUTING CONVENTION

"The significant accounting policies applied by the Company in the preparation of its financial statements are listed below. Such accounting policies have been applied consistently to all the periods presented in these financial statements, unless otherwise indicated.

a) Statement of compliances

The financial statements have been prepared in accordance with the Indian Accounting Standards (referred to as “Ind AS”)prescribed under section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules 2015, as amended from time to time and other relevant provisons of the Act.

b) Basis of preparation

The financial statements have been prepared under the historical cost convention on the basis of going concern and in accordance with generally accepted accounting principles and Ind AS of ICAI as perprovisions of the Companies Act 2013 read with notes appearing in financial statements.

c) USE OF ESTIMATES AND ACCOUNTING JUDGEMENTS

(i) Use of estimates

The preparation of the financial statements require the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates, are recognised in the

periods in which the results are known / materialised.

(ii) Impairment (IND. AS 36)

"Impairment of assets has been recognized and losses, where ever applicable; has been charged to Profit & Loss account.

As of each balance sheet date, the carrying amount of assets is tested for impairment so as to determine -

i. the provision for impairment loss, if any, required, or

ii. the reversal, if any, required or impairment has been recognized in previous year.

(iii) Useful life of property, plant and equipment and intangible assets (IND. AS 16)

The Company reviews the useful life of property, plant and equipment and intangible assets at the end of each balance sheet date. The re-assessmentmay result in change in depreciation and amortization expense in future period s.

(iv) Taxes on Income and evaluation of Deferred Tax Assets (IND AS 12)

Current tax is determined as the amount of tax payable in respect of taxable income for the year, as per applicable tax rates and laws.

Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets on timing differences, being the difference between taxable income and accounting income that originates in one period and capable of reversal in one or more subsequent periods as described in relevant Note to financial statements.

1.1 ACCOUTING CONVENTION

The Financial Statements are prepared under the historical cost convention on the basis of going concern and in accordance with Generally Accepted Accounting Principles, Accounting Standards prescribed by ICAI and as per the provisions of the Companies Act, 1956 and Companies Act, 2013 wherever applicable.

1.2 USE OF ESTIMATES

''The preparation of the financial statements require the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year, The Management believes that the estimates used in preparation of the financia statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

1.3 REVENUE RECOGNITION (AS-91

Sale of goods

Turnover includes excise duty, educationcess, jobwork receipts and sale of scraps and does not include VAT/ CST.

1.4 MISCELLANEOUS EXPENDITURE

Expenses related to increase in authorized share capital and issue there under are amortized overa period of five years.

1.5 INVENTORIES VALUATION (AS-2)

a) Raw materials are valued at cost.

b) Work in Progress is valued at raw material cost overheads.

c) Finished Goods are carried at lower of cost or market value which ever is less.

d) Storesaretakenatcost.

e) Tools and Spares are taken at net of l/-3rd for usage.

f) Scrapat realisable value

1.6 CASH FLOW STATEMENT (AS - 3)

Cash Flow Statement is prepared under "Indirect Method".

1.7 CHANGE IN ACCOUNTING POLICIES IAS - 51

There is no change in accounting policy during the year.

1-8 DEPRECIATION (AS-6)

a) Depreciation is provided under straight line method on fixed assets except in some cases which are on WDV method as in the past in compliance with section 205 (2) (b) of the Companies, Act, 1956 at rates specified in Schedule XIV of the Companies Act, 1956 as amended from time to time.

b) Depreciation on additions/deletions is provided on pro-rata basis from the date ofsuchadditions/deletions.

c) No depreciation has been provided on fixed assets representing written down value below 5% of the original cost and fixed assets not put to use /under return.

1.9 TANGIBLE/INTANGIBLE FIXED ASSETS (AS-10)

a) Fixed Assets are stated at cost (net of cenvat wherever availed) and includes an amount of Rs.339.21 lacs added on revaluation of Fixed Assets viz. Leasehold Land, Building and Plant & Machinery of company''s Unit at Aurangabad, carriedout by an approved valuer during FY 99, less accumulated depreciation. The gross and net block of fixed assets are therefore more by Rs. 339.21 lacs (Rs. 339.21 lacs) and Rs. 57.11 lacs (Rs. 59.09 lacs) respectively and the corresponding effect has been given in the Revaluation Reserve Account. Depreciation (cumulative as well asforthe year) on the revalued amount added to fixed assets on account of revaluation isadjusted by transfer of equivalent amount from Revaluation Reserve Account created on revaluation of fixed assets to Profit & Loss Account.

b) Leasehold land is shown at revalued cost.

1.10 TRANSACTION OF FOREIGN CURRENCY ITEMS f AS - 111

a) Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction.

b) Monetary items denominated in foreign currencies (such as cash, receivables, payables etc.) outstanding at the year end are translated at exchange rates applicable on that date.

c) Non-monetary items denominated in foreign currency (such asfixed assets) are valued at forward contract exchange rate contracted for the such liability, whereverapplicable.

d) Any gains or losses arising due to exchange differences arising on translation or settlement are accounted for in the profit & loss account with regard to revenue items. Similarly FX gain or loss arisingon account of capital items are debited /credited to capex items.

e) In the case of forward exchange contracts, the premium or discount arising at the inception of such contracts, is amortised as income or expense overthe life of the contract as well as exchange difference on such contracts, i.e. diference between exchange rate at the reporting / settlement date and the exchange rate on the date of inception/the last reporting date, is recognised as income/expense for the period.

1.11 EMPLOYEE BENEFITS (AS -15 Revised)

a) Defined Contribution Plan

The state governed Provident Fund Scheme, Employees State Insurance Scheme and Employee Pension Scheme are defined contribution plans. The contribution paid / payable underthe schemes is recognised during the year in which the employee renders the related services.

b) Defi ned benefit plan/ Lone Term Compensated Absences.

The compa ny''s Employees 6ratu ity Fu nd Sche me managed by the LIC of India is a defined plan. The present value of obligation based on actuarial valuation using the Projected Unit Credit Method is not determined and any effect thereof will be provided/accounted as and when finalized.

c) Compensated Absences

The company has provided forthe leave encashment liability at the balance sheet date based on permissible accumulated leave balance of the employees at the last salary drawn. Liability as per actuarial valuation is not determined and any effect thereof will be provided/accounted as and when finalized. The company has no defined benefit plan forthis purpose as yet.

1.12 BORROWING COST (AS-161

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as a part of such assets till such time as the assets are ready for their intended use. Qualifying assets are assets that necessarily require a substantial period of time to get ready for their intended use. All the other borrowing cost is recognized as an expense.

1.13 LEASES fAS-19)

Leasehold land comprising only on account of revaluation is amortized over the period of lease.

1.14 TAXES ON INCOME (AS-22)

a) Current tax is determined as the amount of tax payable in respect of taxable income forthe year, as per applicable tax rates and laws.

b) Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets on timing differences, being the difference between taxable income and accounting income that originates in one period and capable of reversal in one or more subsequent periods.

1.15 DISCONTINUING OPERATIONS (AS - 24)

The Company has not discontinued any operations during the year.

1.16 IMPAIRMENT OF ASSETS (AS-28)

a) Impairment of assets has been recognized and losses if any has been charged to Profit & Loss account.

b) As of each balance sheet date, the carrying amount of assets is tested for impairment so as to determine

i. the provision for impairment loss, if any, required, or

ii. the reversal, if any, required or impairment has recognized in previous year.

1.17 PROVISIONS. CONTINGENT LIABILITIES AND CONTINGENT ASSETS f AS-29)

a) The provisions are recognised and measured by using a substantial degree of estimation.

b) Contingent liabilities and contingent assets are disclosed after a careful evaluation of the facts and legal aspects of the matter involved in issue.

1.18 BUSINESS SEGMENT

The company operates in a business segment viz. Gear Cutting, Special Cutting Tools and Spline Gauges and is considered single segment operations.

1.19 EARNINGS PER SHARE (AS - 201

Basic/Diluated earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the number of equity shares outstanding during the year.

1.1 ACCOUTING CONVENTION

The Financial Statements are prepared underthe historical cost convention on the basis of going concern and in accordance with Generally Accepted Accounting Principles, Accounting Standards prescribed by ICAI and as per the provisions of the Companies Act, 1956.

1.2 USE QF ESTIMATE?

''The preparation of the financial statements require the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financia statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised In the periods in which the results are known / materialise.

1.3 REVENUE RECOGNITION (AS-9) Sale of goods

Turnover includes excise duty, educationcess, jobwork receipts and sale of scraps and does notinclude VAT/CST.

1.4 MISCELLANEOUS EXPENDITURE

Expenses related to increase in authorized share capital and issue there under are amortized overa period of five years.

1.5 INVENTORIES VALUATION (AS - 2)

a) Raw materials are valued at cost.

b) Workin Progress is valued at raw material cost overheads.

c) Finished Goods are carried at lower of cost or market value which ever is less.

d) Storesaretakenatcost.

e) Tools and Spares are taken at net of l/3rd for usage.

f) Scrapat realisable value

1.6 CASH FLOWSTATEMENT(AS-31

Cash Flow Statement is prepared under "Indirect Method".

1.7 CHANGE IN ACCOUNTING POLICIES (AS-5)

There is no change in accounting policy during the year.

11.8 DEPRECIATION (AS-6)

a) Depreciation is provided understraight line method on fixed assets except in some cases which are on WDV method as in the past in compliance with section 205 (2) (b) of the Companies, Act, 1956 at rates specified in Schedule XIV of the Companies Act, 1956 as amended from time to time.

b) Depreciation on additions/deletions is provided on pro-rata basis from the date of such additions /deletions.

c) No depreciation has been provided on fixed assets representing written down value below 5% of the original cost and fixed assets not put to use/under return.

1.9 TANGIBLE/INTANGIBLE FIXED ASSETS (AS-10)

a). Fixed Assetsare stated at cost (net of cenvatwhereveravailed) and includes an amount of Rs.343.82 lacs added on revaluation of Fixed Assets viz. Leasehold Land, Buildingand Plant & Machinery of company''s Unit at Aurangabad, carriedout by anapprovedvaluerduring FY99, less accumulated depreciation. The gross and net block of fixed assets are therefore more by Rs. 339.21 lacs (Rs. 343.82 lacs) and Rs. 59.09 lacs (Rs. 61.07 lacs) respectively and the corresponding effect has been given in the Revaluation Reserve Account. Depreciation (cumulative as well as for the year) on the revalued amount added to fixed assets on account of revaluation is adjusted by transfer of equivalent amount from Revaluation Reserve Account created on revaluation of fixed assetsto Profit & Loss Account.

b) Leasehold land is shown at revalued cost.

1.10 TRANSACTION OF FOREIGN CURRENCY ITEMS I AS -11)

a) Foreign currency transactions are recorded atthe exchange rate prevailing on the date of transaction.

b) Monetary items denominated in foreign currencies (such as cash, receivables, payables etc.) outstanding at the year end are translated at exchange rates

a pplicable on that date.

c) Non-monetary items denominated in foreign currency (such as fixed assets) are valued at forward contract exchange rate contracted forthe such liability, wherever applicable.

d) Any gains or losses arising due to exchange differences arising on translation or settlement are accounted for in the profit & loss account with regard to revenue items. Similarly FXgain or loss arising on account of capital items are debited /credited to capex items.

e) In thecase of forward exchange contracts, the premium ordiscountarisingatthe inception of such contracts, is amortised as income or expense overthe life of the contract as well as exchange difference on such contracts, i.e. diference between exchange rate atthe reporting/ settlement date and the exchange rate on the date of inception/the last reporting date, is recognised as income / expense for the period.

1.11 EMPLOYEE BENEFITS (AS-15 Revised)

a) Defined Contribution Plan

The state governed Provident Fund Scheme, Employees State Insurance Scheme and Employee Pension Scheme are defined contribution plans. The contribution paid/payable underthe schemes is re cognised duringthe year in which the employee renders the related services.

b) Defined benefit plan/ Long Term Compensated Absences.

The company''s Employees Gratuity Fund Scheme managed bythe LIC of India is a defined plan. The present value of obligation based on actuarial valuation using the Projected Unit Credit Method is not determined and any effectthereof will be provided/accounted as and when finalized.

c) Compensated Absences

The company has provided forthe leave encashment liability at the balance sheet date based on permissible accumulated leave balance of the employees at the last salary drawn. Liability as per actuarial valuation is not determined andany effectthereof will be provided/accountedasand when finalized. The company has no defined benefit plan for this purpose as yet.

1.12 BORROWING COST (AS-16)

Borrowing costs that are attributable to the acqu isition, construction or production of qualifying assets are capitalized as a part of such assets till such time as the assets are ready fortheir intended use. Qualifying assets are assets that necessarily require a substantial period of time to get ready fortheir intended use. All the other borrowing cost is recognized as an expense.

1.13 LEASES (AS-19)

Leasehold land comprising only on account of revaluation is amortized over the period of lease.

1.14 TAXES ON INCOME (AS-22)

a) Currenttax is determined as the amount of tax payable in respect of taxable income forthe year, as per applicable tax rates and laws.

b) Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets on timing differences, being the difference between taxable income and accounting income that originates in one period and capable of reversal in one or more subsequent periods.

1.15 DISCONTINUING OPERATIONS (AS -24)

The Company has discontinued the operations in respect of Broaches duringthe year but has continued its major operations.

1.16 IMPAIRMENT OF ASSETS (AS-28)

a) Impairment of assets has been recognized and losses if any has been charged to Profit & Loss account.

b) As of each balance sheet date, the carrying amount of assets is tested for impairment so as to determine -

i. the provision for impairment loss, if any, required, or ii. the reversal, if any, required or impairment has recognized in previous year.

1.17 PROVISIONS. CONTINGENT LIABILITIES AND CONTINGENT ASSETS (AS-29)

a). The provisions are recognised and measured by using a substantial degree of estimation.

b) Contingent liabilities and contingent assets are disclosed after a careful evaluation of the facts and legal aspects of the matter involved in issue.

1.18 BUSINESS SEGMENT

The company operates in a business segment viz. Gear Cutting, Special Cutting Tools and Spline Gauges and is considered single segment operations.

1.19 EARNINGS PER SHARE (AS - 20)

Basic/Diluated earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the number of equity shares outstanding during the year.

1.1 ACCOUTING CONVENTION

The Financial Statements are prepared under the historical cost convention on the basis of going concern and in accordance with Generally Accepted Accounting Principles; Accounting Standards prescribed by ICAI and as per the provisions of the Companies Act, 19S6.

1.2 USE OF ESTIMATES

The preparation of the financial statements require the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

1.3 REVENUE RECOGNITION (AS - 9)

Sale of goods

Turnover includes excise duty, educationcess, jobwork receipts and sale of scraps and does not include VAT/CST.

1.4 MISCELLANEOUS EXPENDITURE

Expenses related to increase in authorized share capital and issue there under are amortized over a period of five years.

1.5 INVENTORIES VALUATION (AS - 2)

a) Raw material is are value date cost.

b) Work in Progress is valued at raw material cost overheads.

c) Finished Goods are carried at lower of cost or market value which ever is less.

d) Stores are taken at cost.

e) Tools and Spares are taken at net of l/3rd for usage.

f) Scrap at realisable value

1.6 CASH FLOW STATEMENT (AS-3)

Cash Flow Statement is prepared under "Indirect Method".

1.7 CHANGE IN ACCOUNTING POLICIES (AS - 5)

There is no change in accounting policy during the year.

1.8 DEPRECIATION (AS-6)

a) Depreciation is provided under straight line method on fixed assets except in some cases which are on WDV method as in the past in compliance with section 20S (2) (b) of the Companies, Act, 1956 at rates specified in Schedule XIV of the Companies Act, 1956 as amended from time to time.

b) Depreciation on additions/deletions is provided on pro-rata basis from the date of such additions /deletions.

c) No depreciation has been provided on fixed assets representing written down value below 5% of the original cost.

1.9 TANGIBLE/INTANGIBLE FIXED ASSETS (AS-10)

a) Fixed Assets are stated at cost (net of cenvat wherever availed) and includes an amount of Rs.343.82 lacs added on revaluation of Fixed Assets viz. Leasehold Land, Building and Plant & Machinery of company's Unit at Aurangabad, carried out by an approved valuer du ring FY 99, less accumulated depreciation. The gross and net block of fixed assets are therefore more by Rs 343.82 lacs (Rs. 346.43 lacs) and Rs. 61.07 lacs (Rs. 72.17 lacs) respectively and the corresponding effect has been given in the Revaluation Reserve Account. Depreciation (cumulative as well as for the year) on the revalued amount added to fixed assets on account of revaluation is adjusted by transfer of equivalent amount from Revaluation Reserve Account created on revaluation of fixed assets to Profit& Loss Account.

b) Leasehold land is shown at revalued cost.

1.10 TRANSACTION OF FOREIGN CURRENCY ITEMS (AS-11)

a) Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction.

b) Monetary items denominated in foreign currencies (such as cash, receivables, payables etc.) outstanding at the year end are translated at exchange rates applicable on that date.

c) Non-monetary items denominated in foreign currency (such as fixed assets) are valued at forward contract exchange rate contracted for the such liability, wherever applicable.

d) Any gains or losses arising due to exchange differences arising on translation or settlement are accounted for in the profit & loss account.

e) In the case of forward exchange contracts, the premium or discount arising at the inception of such contracts, is amortised as income or expense over the life of the contract as well as exchange difference on such contracts, i.e. diference between exchange rate at the reporting/settlement date and the exchange rate on the date of inception/the last reporting date, is recognised as income / expense for the period.

1.11 EMPLOYEE BENEFITS (AS-15 Revised)

a) Defined Contribution Plan

The state governed Provident Fund Scheme, Employees State Insurance Scheme and Employee Pension Scheme are defined contribution plans. The contribution paid/payable under the schemes is recognised during the year in which the employee renders the related services.

b) Defined benefit plan/Long Term Compensated Absences.

The company's Employees Gratuity Fund Scheme managed by the UC of India is a defined plan. The present value of obligation based on actuarial valuation using the Projected Unit Credit Method is not determined and any effect thereof will be provided/accounted as and when finalized.

c) Compensated Absences

The company has provided for the leave encashment liability at the balance sheet date based on permissible accumulated leave balance of the employees at the last salary drawn. Liability as per actuarial valuation is not determined and any effect thereof will be provided /accounted as and when finalized. The company has no defined benefit plan for this purpose as yet.

1.12 BORROWING COST (AS-16)

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as a part of such assets till such time as the assets are ready for their intended use. Qualifying assets are assets that necessarily require a substantial period of time to get ready for their intended use. All the other borrowing cost is recognized as an expense.

1.13 LEASES (AS-19)

Leasehold land comprising only on account of revaluation is amortized Over the period of lease.

1.14 TAXES ON INCOME (AS-22)

a) Current tax is determined as the amount of tax payable in respect of taxable income for the year, as per applicable tax rates and laws.

b) Deferred taxis recognized, subject to the consideration of prudence in respect of deferred tax assets on timing differences, being the difference between taxable income and accounting income that originates in one period and capable of reversal in one or more subsequent periods.

1.15 DISCONTINUING OPERATIONS (AS- 24)

The Company has not discontinued any operations during the year.

1.16 IMPAIRMENT OF ASSETS (AS-28)

a) Impairment of assets has been recognized and losses if any has been charged to Profit & Loss account.

b) As of each balance sheet date, the carrying amount of assets is tested for impairment so as to determine -

i. the provision for impairment loss, if any, required, or

ii. the reversal, if any, required or impairment has recognized in previous year.

1.17 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS (AS-29)

a) The provisions are recognised and measured by using a substantial degree of estimation.

b) Contingent liabilities and contingent assets are disclosed after a careful evaluation of the facts and legal aspects of the matter involved in issue.

1.18 BUSINESS SEGMENT

The company operates in a business segment viz. Gear Cutting, Special Cutting Tools and Spline Gauges and is considered single segment operations.

1.19 EARNINGS PER SHARE (AS - 20) . Basic/Diluated earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the number of equity shares outstanding during the year.

1 ACCOUTING CONVENTION

The Financial Statements are prepared under the historical cost convention on the basis of going concern and in accordance with Generally Accepted Accounting Principles, Accounting Standards prescribed by ICAI and as per the provisions of the Companies Act, 1956.

2 REVENUE RECOGNITION

Turnover includes excise duty, education cess, job work receipts and sale of scraps and does not include VAT/CST.

3 MISCELLANEOUS EXPENDITURE

Expenses related to increase in authorized share capital and issue thereunder are amortized over a period of five years.

4 INVENTORIES VALUATION (AS - 21

a) Raw materials are valued at cost. Cost is ascertained on FIFO basis.

b) Work in Progress is valued at raw material cost overheads.

c) Finished Goods are carried at lower of cost or market value wichever is less.

d) Stores are taken at cost.

e) Tools and Spares are taken at net of 1/3rd for usage.

f) Scrap is valued at net realisable value and is included under finished goods.

5 CASH FLOW STATEMENT (AS - 3)

Cash Flow Statement is prepared under "Indirect Method".

6 CHANGE IN ACCOUNTING POLICIES fAS - 51

a) There is no change in accounting policy during the year.

7 DEPRECIATION AS - 61

a) Depreciation is provided under straight line method on fixed assets except in some cases which are on WDV method as in the past in compliance with section 205 (2) (b) of the Companies, Act, 1956 at rates specified in Schedule XIV of the Companies Act, 1956 as amen- ded from time to time.

b) Depreciation on additions/deletions is provided on pro-rata basis from the date of such additions /deletions.

c) No depreciation has been provided on fixed assets representing written down value below 5% of the original cost.

8 FIXED ASSETS (AS-10)

a) Fixed Assets are stated at cost (net of cenvat wherever availed) and includes an amount of Rs.346.43 lacs added on revaluation of Fixed Assets viz. Leasehold Land, Building and Plant & Machinery of company's Unit at Aurangabad, carried out by an approved valuer during FY 99, less accumulated depreciation. The gross and net block of fixed assets are therefore more by Rs 346.43 lacs and Rs. (Rs. 353.70 lacs) and Rs. 72.17 lacs (Rs. 94.06 lacs)respectively and the corresponding effect has been given in the Revaluation Reserve Account. Depreciation (cumulative as well as for the year) on the revalued amount added to fixed assets on account of revaluation is adjusted by transfer of equivalent amount from Revaluation Reserve Account created on revaluation of fixed assets to Profit & Loss Account.

b) Leasehold land is shown at cost, including lease premium paid.

9 TRANSACTION OF FOREIGN CURRENCY ITEMS (AS -11)

a) Foreign currency Transactions are recorded at the exchange rates prevailing on the date of transaction.

b) Monetary items denominated in foreign currancies (such as cash, receivables, payables etc.) outstanding at the year end aretranslated at exchange rates applicable on that date.

c) Non - monetary items denominated in foreign currancy (such as fixed assets) are valued at forward contract exchange rate contracted for the such liabilty, wherever applicable.

d) Any gains or losses arising due to exchange differences arising on translation or settelment are accounted for in the profit & loss account.

e) In the case of forward exchange contracts, the premium or discount arising at the inception of such contracts, is amortised as income or expense over the life of the contract as well as exchange difference on such contracts, i.e. diference between exchange rate at the reporting / settlement date and the exchange rate on the date of inception/ the last reporting date, is recognised as income / expense for the period.

10 EMPLOYEE BENEFITS (AS -15 Revised)

a) Defined Contribution Plan

The state governed provident fund scheme, employees state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/ payable under the schemes is recognised during the period in which the employee renders the related services.

b) Defined benefit plan/ Long Term Compensated Absences.

The company's Employees Gratuity Fund Scheme managed by the LIC of India is a defined plan. The present value of obligation based on actuarial valuation using the Projected Unit Credit Method is being determined and any effect thereof will be provided / accounted as and when finalized.

c) Compensated Absences

The company has provided for the leave encashment liability at the balance sheet date based on permissible accumulated leave balance of the employees at the last salary drawn. Liability as per actuarial valuation is being determined and any effect thereof will be provided / accounted as and when finalized. The company has no defined benefit plan for this purpose as yet.

11 BORROWING COST (AS-16)

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as a part of such assets till such time as the assets are ready for their intended use. Qualifying assets are assets that necessarily require a substantial period of time to get ready for their intended use. All the other borrowing cost is recognized as an expense.

12 LEASES (AS-19)

Leasehold land is amortized over the period of lease.

13 TAXES ON INCOME (AS - 221)

a) Current tax is determined as the amount of tax payable in respect of taxable income for the period, as per applicable tax rates and laws.

b) Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets on timing differences, being the difference between taxable income and accounting income that originates in one period and capable of reversal in one or more subsequent periods.

14 DISCONTINUING OPERATIONS (AS - 24)

The Company has not discontinued any operations during the year.

15 IMPAIRMENT OF ASSETS (AS-281

a) Impairment of assets has been recognized and losses if any has been charged to profit & Loss account.

b) As of each balance sheet date, the carrying amount of assets is tested for impairment so as to determine -

(i) the provision for impairment loss, if any, required, or

(ii) the reversal, if any, required or impairment has recognized in previous periods.

16 PROVISIONS. CONTINGENT LIABILITIES AND CONTINGENT

ASSETS (AS-29)

a) The provisions are recognised and measured by using a substantial degree of estimation.

b) Contingent liabilities and contingent assets are disclosed after a careful evaluation of the facts and legal aspects of the matter involved in issue.

17 BUSINESS SEGMENT

The company operates in a business segment viz. Gear Cutting, Special Cutting Tools and Spfine Gauges and is considered single segment operations.

We have audited the attached Balance Sheet of JAINEX AAMCOL LIMITED as 1 ACCOUTING CONVENTION

The Financial Statements are prepared under the historical cost convention on the basis of going concern and in accordance with Generally Accepted Accounting Principles, Accounting Standards prescribed by ICAI and as per the provisions of the Companies Act, 1956.

2 REVENUE RECOGNITION

Turnover includes excise duty, education cess, job work receipts and sale of scraps and does not include VAT/CST.

3 MISCELLANEOUS EXPENDITURE

Expenses related to increase in authorized share capital and issue thereunder are amortized over a period of five years.

4 INVENTORIES VALUATION (AS ¦ 21

a) Raw materials are valued at cost. Cost is ascertained on FIFO basis.

b) Work in Progress is valued at raw material cost.

c) Finished Goods are carried at lower of cost or market value wichever is less.

d) Stores Tools and Spares are taken at cost.

e) Scrap is valued at net realisable value and is included under finished goods.

5 CASH FLOW STATEMENT (AS - 3)

Cash Flow Statement is prepared under "Indirect Method".

6 CHANGE IN ACCOUNTING POLICIES (AS - 5)

a) There is no change in accounting policy during the year.

7 DEPRECIATION fAS - 6)

a) Depreciation is provided under straight line method on fixed assets except in some cases which are on WDV method as in the past in compliance with section 205 (2) (b) of the Companies, Act, 1956 at rates specified in Schedule XIV of the Companies Act, 1956 as amen- ded from time to time.

b) Depreciation on additions/deletions is provided on pro-rata basis from the date of such additions /deletions.

c) No depreciation has been provided on fixed assets representing written down value below 5% of the original cost.

d) Tools &.Spares are written off as and when consumed/ discarded are proportionately on usage basis

8 FIXED ASSETS (AS-10)

a) Fixed Assets are stated at cost (net of cenvat wherever availed) and includes an amount of Rs.353.70 lacs added on revaluation of Fixed

Assets viz. Leasehold Land, Building and Plant & Machinery of companys Unit at Aurangabad, carried out by an approved valuer during FY 99, less accumulated depreciation. The gross and net block of fixed assets are therefore more by Rs 353.70 lacs and Rs. 94.06 lacs(Rs. 115.70 lacs) respectively and the corresponding effect has been given in the Revaluation Reserve Account. Depreciation (cumulative as well as for the year) on the revalued amount added to fixed assets on account of revaluation is adjusted by transfer of equivalent amount from Revaluation Reserve Account created on revaluation of fixed assets to Profit & Loss Account.

b) Leasehold land is shown at cost, including lease premium paid.

9 TRANSACTION OF FOREIGN CURRENCY ITEMS (AS -11)

a) Foreign currency Transactions are recorded at the exchange rates prevailing on the date of transaction.

b) Monetary items denominated in foreign currancies (such as cash, receivables, payables etc.) outstanding at the year end are translated at exchange rates applicable on the date.

c) Non - monetary items denominated in foreign currancy (such as fixed assets) are valued at forward contract exchange rate contracted for the such liabilty.

d) Any gains or losses arising due to exchange differences arising on translation or settelment are accounted for in the profit & loss account.

e) In the case of forward exchange contracts, the premium or discount arising at the inception of such contracts, is amortised as income or expense over the life of the contract as well as exchange difference on such contracts, i.e. diference between exchange rate at the reporting / settlement date and the exchange rate on the date of inception/ the last reporting date, is recognised as income / expense for the period.

10 EMPLOYEE BENEFITS (AS -15 Revised)

a) Defined Contribution Plan

The state governed provident fund scheme, employees state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid / payable under the schemes is recognised during the period in which the employee renders the related services.

b) Defined benefit plan/Long Term Compensated Absences.

The companys Employees Gratuity Fund Scheme managed by the LIC of India is a defined plan. The present value of obligation based on actuarial valuation using the Projected Unit Credit Method is being determined and any effect thereof will be provided / accounted as and when finalized.

c) Compensated Absences

The company has provided for the leave encashment liability at the balance sheet date based on permissible accumulated leave balance of the employees at the last salary drawn. Liability as per actuarial valuation is being determined and any effect thereof will be provided / accounted as and when finalized. The company has no defined benefit plan for this purpose as yet.

11 BORROWING COST (AS-16)

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as a part of such assets till such time as the assets are ready for their intended use. Qualifying assets are assets that necessarily require a substantial period of time to get ready for their intended use. All the other borrowing cost is recognized as an expense.

12 LEASES (AS-19)

Leasehold land is amortized over the period of lease.

13 TAXES ON INCOME (AS - 22)

a) Current tax is determined as the amount of tax payable in respect of taxable income for the period, as per applicable tax rates and laws.

b) Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets on timing differences, being the difference between taxable income and accounting income that originates in one period and capable of reversal in one or more subsequent periods.

14 DISCONTINUING OPERATIONS (AS - 24)

The Company has not discontinued any operations during the year.

15 IMPAIRMENT OF ASSETS (AS-28)

a) Impairment of assets has been recognized and losses if any has been charged to profit & Loss account.

b) As of each balance sheet date, the carrying amount of assets is tested for impairment so as to determine -

(i) the provision for impairment loss, if any, required, or

16 PROVISIONS. CONTINGENT LIABILITIES AND CONTINGENT

ASSETS (AS-29)

a) The provisions are recognised and measured by using a substantial degree of estimation.

b) Contingent liabilities and contingent assets are disclosed after a careful evaluation of the facts and legal aspects of the matter involved in issue.

17 BUSINESS SEGMENT

The company operates in a business segment viz. Gear Cutting, Special Cutting Tools and Spline Gauges and is considered single segment operations.