Accounting Policies of Jainex Aamcol Ltd. Company

Mar 31, 2014

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.

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Mar 31, 2013

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.

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Mar 31, 2012

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.

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Mar 31, 2011

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.

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Mar 31, 2010

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.