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 relevant provisions of the Companies Act, 1956.
 
 All assets and liabilities have been classified as current or
 non-current as per the company''s normal operating cycle and other
 criteria set out in the Revised Schedule VI to the Companies Act, 1956.
 Based on the nature of product and the time between the acquisition of
 assets for processing and their realization in cash and cash
 equivalents, the Company has ascertained its operating cycle as 12
 months for the purpose of current -non current classification of assets
 and liabilities.
 
 B) Fixed Assets and Depreciation
 
 (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.
 
 Depreciation on sale /deduction from Fixed Assets is provided for up to
 the month of sale, deduction, discarded as the case may be.
 
 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 market 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 market value whichever is
 lower.
 
 f) Scrap is valued at estimated realisable value.
 
 E) Revenue Recognition
 
 (a) Revenue is recognized to the extent that it is probable that the
 economic benefits will flow to the company and the revenue can be
 reliably measured. The company collects sales tax and value added tax
 (VAT) on behalf of Government and therefore these are not economic
 benefit flowing to the company. Hence they are excluded from revenue.
 
 (b) Sales:
 
 Sales of goods is recognized when the significant risks and rewards of
 ownership of goods have passed to buyer.
 
 (c) Export Benefits :
 
 Incomes in respect of Duty Drawback and Duty Entitlement Pass Book
 Scheme (DEPB) in respect of exports made during the year are accounted
 on accrual basis. Profit or losses on transfer of DEPB licenses are
 accounted in year of the sales. Duty free imports of material under
 Advance License matched with the export made against the said licenses.
 
 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 in
 the profit and loss account.
 
 (b) Contribution to Provident Fund and Superannuation is accounted for
 on accrual basis.
 
 H) Foreign Exchange Transactions
 
 (a) Foreign currency transactions are recorded at the exchange rates
 prevailing on the date of the respective transactions. Monetary items
 denominated in foreign currencies at the year-end and not covered under
 forward exchange contracts are translated at year-end rate.
 
 (b) 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.
 
 I) Amortization of Miscellaneous Expenditure
 
 Preliminary expenses & Amalgamation expenses have been amortized over a
 period of five years in equal installments.
 
 J) Income Tax Expenses
 
 - Income tax expenses comprise current tax and deferred tax charge or
 credit.
 
 - Current Tax
 
 The current charge for income tax 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.
 
 K) 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.
 
 L) Prior Period Adjustment
 
 Expenses and income pertaining to earlier/previous years are accounted
 as prior period items.
 
 M) 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.
 
 N) Provisions, Contingent Liabilities and Contingent Assts
 
 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.