1) SIGNIFICANT ACCOUNTING POLICIES
 
 i) Accounting Convention :
 
 a) The financial statements are prepared under the historical cost
 convention on the basis of going concern and in accordance with the
 accounting standards referred to in section 211(3C) of the Companies'
 Act. 1956
 
 b) The Company generally follows the mercantile system of accounting
 and recognises income and expenditure on accrual basis except those
 with significant uncertainties.
 
 ii) Fixed Assets
 
 a) The fixed assets stated at their original cost of
 acquisition/installation and included pre-operational expenses
 including borrowing cost. Fixed assets are shown net of accumulated
 depreciation.
 
 b) Capital work-in-progress is stated at the amount spent up to the
 date of the Balance sheet, however pending completion of the
 project/Assets, no depreciation is provided on the same.
 
 c) Leasehold land is shown at cost, including lease premium paid, 
 
 iii) Depreciation :
 
 a) Depreciation has been provided as per Written Down value Method
 corresponding to the rates prescribed under Schedule XIV of the
 Companies Act, 1956.
 
 b) Depreciation on additions/deletions is provided on pro-rata basis
 from/till the date of such addtionals/deletions.
 
 c) Leasehold land is amortized over the period of lease.
 
 iv) Revenue Recognition :
 
 a) Sales are shown net of Excise duty and Sales tax.
 
 v) Transaction of Foreign Currency Item.
 
 a) Transactions of foreign currencies are recorded on the date of
 commercial invoice/remittance at the exchange rates prevailing on that
 date.
 
 b) Receivable/payable excluding fixed assets in foreign currency are
 translated at the exchange rate ruling at the year and date and
 resultant gain/loss is charged to Profit & Loss Account.
 
 vi) Investments :
 
 Investment in shares of Viraj USA Inc., (wholly owned subsidiary) is
 Long term in nature in foreign currency and the same is accounted for
 at the value on the date of transaction in the books of account and
 stated at cost.
 
 vii) Inventories :
 
 a) Raw materials & stores are valued at cost on First in first out
 basis.
 
 b) Semi Finished Goods are valued at Cost of Production.
 
 c) Finished goods are valued at lower of cost or net realisable value.
 
 viii) Retirement Benefits :
 
 a) The future liabilities for payment of Gratuity & Leave Encashment as
 on 31/03/2003 is provided as per Company's Rules
 
 b) Employer's Contribution to provident Fund. Family Pension Fund are
 charged to Profit & Loss account.
 
 ix) Taxes on Income :
 
 Current Tax is determined as the amount of tax payable in respect of
 taxable income for the period. 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 on one period and capable of reversal
 in one or more subsequent periods.
 
 x) Miscellaneous Expenditure
 
 Preliminary and share issue expenses are amortized over the years.
 
 xi) Contingent Liabilities
 
 Contingent Liabilities are disclosed after a careful evaluation of the
 facts and legal aspects of the matter involved.