A) Basis of Preparation :
 
 The financial statements of Suraj Limited (the Company) have been
 prepared under the historical cost convention on accrual basis of
 accounting in accordance with the Indian Generally Accepted Accounting
 Principles (GAAP) and mandatory accounting standards as specified in
 the Companies (Accounting Standards) Rules 2006, to the extent
 applicable and presentation requirements of the Companies Act, 1956
 
 B) Fixed Assets :
 
 (i) Fixed Assets :
 
 Fixed assets are stated at cost of acquisition (net of CENVAT, wherever
 applicable), less accumulated depreciation. Cost is inclusive of
 freight, duties, levies and any directly attributable cost of bringing
 the assets to their working condition for intended use. Direct costs
 are capitalized till the assets are ready to be put to use. Interest on
 borrowings, wherever applicable, attributable to new projects is
 capitalized and included in the cost of fixed assets as appropriate.
 
 (ii) Depreciation :
 
 Depreciation on fixed assets is charged on the Straight Line Method at
 the rates prescribed in Schedule XIV to the Companies Act, 1956.
 Depreciation on Plant & Machinery of the Company is charged for Triple
 Shift.
 
 C) Borrowing costs :
 
 Borrowing cost attributable to acquisition, construction or production
 of qualifying assets are capitalised as part of the cost of that asset,
 till the asset is ready for use. Other borrowing costs are recognized
 as an expense in the period in which these are incurred.
 
 D) Inventories :
 
 a) Raw Materials: Valued at cost or Market Value which ever is Lower.
 
 b) Work-in-Progress is valued at cost plus direct cost, manufacturing
 overheads and other related cost or maket value whichever is lower.
 
 c) Finished goods are valued at cost or net realizable value whichever
 is lower. The cost includes cost of production and other appropriate
 overheads.
 
 d) Goods in Transits : At Cost.
 
 e) Stores and Spares are valued at cost or maket value whichever is
 lower. 
 
  f ) Scrap is valued at estimated realisable value.
 
 E) Revenue Recognition :
 
 Sales are recognised when goods are invoiced on dispatch to customers
 and sales (Gross) are recorded inclusive of excise & VAT, and realized
 exchange fluctuations on exports and net of Sales return/ Trade
 discount. if any, Export sales is recognized at the time of dispatch.
 
 Export incentives are accounted on accrual basis and include the
 estimated value of export incentives receivable under the D.E.P.B
 scheme.
 
 F) CENVAT Credit :
 
 The CENVAT credit available on purchase of raw materials, other
 eligible inputs and capital goods is adjusted against excise duty
 payable on clearance of goods produced. The unadjusted CENVAT credit is
 shown under the head Loans and Advances
 
 G) Employee Benefits :
 
 (a) Provision for gratuity and leave encashment is made on the basis of
 actuarial valuation at the end of the year in conformity with the
 Accounting Standard - 15. Actuarial gains or losses are recognized to
 the profit and loss account.
 
 (b) Contribution to Provident Fund and Superannuation is accounted for
 on accrual basis.
 
 H) Foreign Exchange Transactions :
 
 Foreign currency transactions are recorded at the exchange rates
 prevailing on the date of the respective transactions.
 
 Exchange differences arising on foreign currency transactions settled
 during the year are recognized in the profit and loss A/c except in
 respect of fixed assets where exchange variance is adjusted to the cost
 of the respective fixed assets.
 
 Monetary items denominated in foreign currencies at the year-end and
 not covered under forward exchange contracts are translated at year-end
 rate.
 
 I) Export Benefits :
 
 The Company accounts for Export Benefits under duty exemption Advance
 License Scheme of the Government of India, in the year of Export of
 Goods.
 
 Further the export benefits for advance license during the year are
 adjusted to cost of Imported material and for pending advance licenses
 at the end of the year are accounted as stock in hand.
 
 J) Amortization of Miscellaneous Expenditure :
 
 Preliminary expenses has been amortized over a period of five years in
 equal installments.
 
 K) Income Tax Expenses :
 
 - Income tax expenses comprise current tax and deferred tax charge or
 credit.
 
 - Current Tax
 
 The current charge for income taxed is calculated in accordance with
 the relevant tax regulations applicable to the company.
 
 - Deferred tax
 
 Deferred Tax charge or credit reflects the tax effects of timing
 differences between accounting Income and taxable income for the
 period. The deferred tax charge or credit and the corresponding
 deferred tax liabilities or assets are recognized using the tax rates
 that have been enacted or substantially enacted by the Balance Sheet
 date as per the Accounting Standard - 22.
 
 L) Impairment of assets :
 
 An assets is treated as impaired when the carrying cost of assets
 exceeds its recoverable value. An impairment loss is charged to the
 Profit and Loss Account in the year in which assets is identified as
 impaired. The impairment loss recognized in prior accounting period is
 reversed if there has been change in the estimate of recoverable
 amount.
 
 M) Prior Period Adjustment :
 
 Expenses and income pertaining to earlier/previous years are accounted
 as prior period items.
 
 N) Earning Per Share :
 
 In determining earning per share, the company considers the net profit
 after tax and includes the post- tax effect of any extra ordinary
 items. The number of shares used in computing basic earning per shares
 is the weighted average number of shares outstanding during the period.
 
 O) Provisions and Contingent Liabilities and Contingent Assets :
 
 The Company creates a provision when there is present obligation as a
 result of a past event that probably requires an outflow of resources
 and a reliable estimate can be made of the amount of that obligation.
 Contingent Liabilities which are considered significant and material by
 the company are disclosed in the Notes to Accounts.contingent Assets
 are neither recognized nor disclosed.