1. Basis of Accounting: The accounts have been prepared in conformity  with the generally accepted
accounting principles as enunciated by the  relevant authorities and are based on the accrual basis of
accounting.
 
 2. Depreciation:
 (i) Leasehold land is not depreciated.
 (ii) Other Fixed Assets are depreciated on the straight line method at 
 the rates prescribed in Schedule XIV to the Companies Act, 1956.
 
 3. Amortisation: The Preliminary and Public issue expenses are amortised over a period of  ten years in
equal installments.
 
 4. Inventories: Inventories are valued at lower of cost or net realisable value.
 
 5. Retirement Benefits: Contribution to Provident Fund and Employees State Insurance Fund are made monthly
as per rules applicable and  ebited to Profit & Loss  Account on accrual basis. No provision for liability
under the Payment of Gratuity Act is necessary since the  payment of Gratuity Act is not applicable.