A.  METHOD OF ACCOUNTING:
 
 The financial statements have been prepared under the historical cost
 convention and materially comply with the mandatory Accounting Standard
 issued by The Institute of Chartered Accountants of India. The
 Company follows Mercantile System of accounting and recognised Income
 and Expenditures on accrual basis.
 
 B.  USE OF ESTIMATES:
 
 The presentation of financial statements, in conformity with the
 generally accepted accounting principles, requires estimates and
 assumptions to be made that affect the reported amount of assets and
 liabilities on the date of the financial statements and the reported
 amount of revenues and expenses during the reporting period. Difference
 between the actual result and estimates are recognised in the period in
 which the results are known / materialised.
 
 C.  FIXED ASSETS:
 
 Expenditure, which are of capital nature, are capitalised at
 acquisition cost, which comprises net purchases price (net of rebates
 and discounts), levies and any directly attributable cost of bringing
 the assets to its working condition for the intended use.
 
 D.  DEPRECIATION:
 
 Depreciation on Fixed Assets has been provided on Written Down Value
 Method as per the classification and on the basis of rates prescribed
 in Schedule XIV to the Companies Act, 1956 except that Commercial
 Aircraft are depreciated on the basis of Straight Line Method at the
 rates calculated on the basis of expected useful life of the said
 assets.
 
 The depreciation charged for the assets which have been impaired are
 adjusted to allocate the assets revised carrying amount less its
 residual value, if any, over its remaining useful life.
 
 Depreciation on fixed assets added/disposed off during the year is
 provided on pro-data basis. Fixed assets costing below Rs. 5000/- fully
 depreciated in the year of acquisition.
 
 E.  MISCELLANEOUS EXPENDITURE:
 
 Preliminary and Share issue expenses are written off over a period of
 Five years from the year of commencement of business.
 
 Deferred Revenue Expenditure is written off over a period of Three to
 Five years depending upon the nature and benefit of such expenditure in
 future.
 
 F.  REVENUE RECOGNITION:
 
 a) The revenue and expenditure related to Air Charter Services and
 Financing Services are accounted on going concern basis.
 
 b) Interest income/expense is recognised using the time proportion
 method based on the rates implicit in the transaction.
 
 c) Other receipts/incomes are recognised when the right to receive the
 same is established, i.e. accrual basis.
 
 G.  INVESTMENTS:
 
 Investments are either classified as current or long term based on the
 management''s intention at the time of purchase. Long Term and Unquoted
 Current Investments are stated at cost and Quoted Current Investments
 at lower of cost or market value.  Provision for diminution in the
 value of Long Term Investment is made only if such a decline is other
 than temporary in the opinion of management.
 
 Unquoted Investments in subsidiary companies being long term in nature
 are valued at cost and no loss is recognized in the fall in their net
 worth, if any, unless there is permanent fall in their value.
 
 H.  FOREIGN CURRENCYTRANSACTIONS:
 
 All income and expenditure items are accounted for on the basis of
 exchange rate prevailing on the date of transaction. The net exchange
 difference arising from realization of foreign currency and transaction
 amount has been dealt with in the profit and loss account and
 capitalized where it relates to fixed assets. Current Assets and
 Current Liabilities in foreign currency are accounted for at the rate
 prevailing as on the date of Balance Sheet.
 
 I.  EMPLOYEES BENIFITS:
 
 The liability for Gratuity is provided on the basis of Valuation
 carried out at the end of each financial year internally by the
 Company.
 
 Retirement benefits in the form of Provident Fund are charged to the
 Profit and Loss Account for the year when the contributions to the
 respective funds are due.
 
 Leave encashment benefit is accounted for on basis of valuation made at
 the end of each financial year by the company.
 
 J.  BORROWING COSTS:
 
 Borrowing costs that are allocated to the acquisition or construction
 of qualifying assets are capitalised as part of cost of such assets. A
 qualifying asset is one that necessarily takes substantial period of
 time to get ready for intended use. All other borrowing costs are
 charged to revenue
 
 K.  PROVISIONS:
 
 A provision is recognized when there is a present obligation as a
 result of past event and it is probable that an outflow of resources
 will be required to settle the obligation, in respect of which a
 reliable estimate can be made. Provisions are not discounted to its
 present value and are determined based on best estimate required to
 settle the obligation at the balance sheet date. These are reviewed at
 each balance sheet date and adjusted to reflect the current best
 estimates.
 
 L.  INTANGIBLE ASSETS:
 
 Costs relating to computer software which is acquired are capitalized
 and amortized/ depreciated on a written down value basis on the basis
 of rates provided in schedule XIV to the Companies Act.
 
 M.  IMPAIRMENT:
 
 The carrying value of intangible assets is reviewed for impairment at
 each Balance Sheet date to ascertain if there is any indication of
 impairment based on internal/external factors. An impairment loss is
 recognised whenever the carrying amount of an asset exceeds its
 recoverable amount. The recoverable amount is the greater of the
 asset''s net selling price and value in use.  In assessing value in use,
 the estimated future cash flows are discounted to their present value
 at the weighted average cost of capital.
 
 After impairment, depreciation is provided on the revised carrying
 amount of the asset over its remaining useful life.
 
 N.  TAXATION:
 
 Provision for current Tax is made and retained in accounts on the basis
 of estimated tax liability as per the applicable provisions of the
 Income Tax Act, 1961 including provisions regarding minimum alternate
 tax and considering Assessment orders and decisions of the appellate
 authorities in company''s case.
 
 Deferred tax for timing differences between tax profits and book
 profits is accounted for using the tax rates and laws that have been
 enacted or substantially enacted as of the Balance Sheet date. Deferred
 Tax assets are recognized to the extent there is reasonable certainty
 that theses assets can be realised in future.
 
 O.  CONTINGENT LIABILITY:
 
 Liabilities, though contingent, are provided for is there are
 reasonable prospects of such liabilities maturing. Other contingent
 liabilities, barring frivolous claims not acknowledged as debt, are
 disclosed by way of note.
 
 P.  EARNING PER SHARE (BASIC AND DILUTED):
 
 Basic and diluted earnings (loss) per share are calculated by dividing
 the net profit or loss for the year attributable to equity shareholders
 by the weighted average number of equity share outstanding during the
 year