A. System of Accounting :-
 
 The Company follows the accrual system of accounting except in case of
 interest on allotment/call money in arrears on shares which are
 accounted for as and when received due to practical difficulties.
 
 B. Revenue Recognition :-
 
 Except as otherwise stated all items of revenue income and expenses are
 accounted for under the natural heads of accounts.  These are accounted
 for on accrual basis except In case of
 
 i. Sales are recognised at the point of despatch of finished goods to
 the customers and is reported inclusive of excise duty and net of
 returns.
 
 ii. Gratuity and Bonus liability to staff to be accounted for on
 payment basis.
 
 C. Depreciation on all the Fixed Assets is charged on Straight Line
 Method at the applicable rates provided schedule XIV of the Companies
 Act 1956.  Deprecation on additions have been calculated on Pro-rata
 basis.  No Depreciation has been charged on Assets of Vidhata Katha &
 Allied Industries
 
 D. Stock In Trade : Inventories are valued as under :
 
 i) Raw Material : At Cost
 
 ii) Finished Goods & Semi Finished Goods : Market Price
 
 iii) Store & Spare, Packing Materials : At Cost
 
 E. Miscellaneous Expenditure
 
 Preliminary and Share issue Expenses are amortized over a period of 10
 year.