Critical Accounting Policies
 
 The financial statements of the Company are prepared under the
 historical cost convention on an accrual basis and in accordance with
 the applicable mandatory accounting standards and other provisions of
 the Companies Act. Our significant accounting policies.
 
 1.  Basis of Accounting
 
 a) Financial statements have been prepared under the historical cost
 convention in accordance with the generally accepted accounting
 principles and the provisions of the Companies Act, 1956.
 
 b) The Company follows the accrual system of accounting on a going
 concern basis.
 
 2.  Fixed Assets and Capital Work in Progress
 
 Fixed assets are stated at cost of acquisition or construction. All
 cost relating to the acquisition and installation of fixed assets are
 capitalized and includes borrowing cost directly attributable to
 Company.
 
 3.  Depreciation
 
 The Company is providing depreciation on depreciable fixed assets at
 the rates provided on Straight Line Method basis at the rates provided
 by the schedule XIV of The Companies Act, 1956 from the date of actual
 put to use i.e. on pro-rata basics.
 
 4.  Revenue Recognition
 
 Sales are accounted for on dispatch of goods to the customers and are
 exclusive of the Excise, sales return, and vat.
 
 5.  Inventories
 
 Inventories of Raw materials and stores/spares & consumables etc. are
 valued at cost determined on FIFO basis. Finished goods and process
 stock include cost of conversion and other cost incurred in bringing
 the inventories to their present.
 
 6.  Retirement Benefits
 
 Liabilities in respect of bonus, gratuity, retirement benefit & leave
 encashment is being accounted for on cash basis.
 
 7.  Borrowing Cost
 
 Borrowing costs directly attributable to the acquisition and
 construction of qualifying fixed assets are capitalized as part of the
 cost of the assets, up to the date the asset is put to use. Other
 borrowing costs are charged to the Profit and Loss Account.
 
 8.  Preliminary Expenditure
 
 Preliminary Expenditure is apportioned in five equal installments,
 commencing from the year in which the expenditure has been incurred.
 
 9.  Taxes on Income
 
 Taxes on Income is determined as the amount of tax payable in respect
 of taxable income for the year and provided at the end of the year as
 per the prevailing provisions of the Income Tax Act, 1961. Deferred tax
 liabilities and assets are recognized at substantively enacted tax
 rates, subject to consideration of prudence, on timing differences,
 being the difference between taxable incomes and accounting income that
 originates in one period and are capable of reversal in one or more
 subsequent periods. The Company is eligible for exemption u/s 80 IB
 since year 1999-2000.
 
 10.  Contingent Liability
 
 Contingent Liability are determined on the basis of available
 information and explanation and are disclosed by way of note to the
 accounts. Provision is made in the accounts in respect of those
 contingencies which are likely to materialize into liabilities after
 the year end, till the finalization of accounts and have material
 effect on the position stated in the balance sheet. All liabilities
 have been provided for in the accounts except liabilities of a
 contingent nature, which have been disclosed at their estimated valuing
 the notes to the accounts.