1.  Basis of preparation of financial statements
 
 The company follows mercantile system of accounting and recognises
 Income and Expenditure,.on accrual basis. The accounts are prepared on
 historical cost basis and as a going concern, in accordance with
 normally accepted accounting principles and the provisions of the
 Companies Act, 1956 as followed consistently by the company.
 
 II.  Fixed Assets and Depreciation
 
 a) The fixed assets are stated at original cost. No revaluation has
 been made in any fixed asset.
 
 b) Depreciation is charged on Straight Line Method applying rates as
 per Schedule XIV of The Companies Act, 1956.
 
 III.  Investments
 
 Investments are stated at cost.
 
 IV.  Inventories
 
 Inventory of Securities is stated at cost.
 
 V. Preliminary and Public Issue Expenses
 
 Preliminary and Public Issue Expenses are amortised and charged to
 Profit and Loss Account to the extent of 1/10th of 2.5% of Capital
 employed.