A) METHOD OF ACCOUNTING
 
 The Financial Statements have been prepared under the historical cost
 convention on an accrual basis and in compliance with all material
 aspect with the notified Accounting Standard by Company (Accounting
 Standard) Rules 2006 and the relevant provision of the Companies Act,
 1956.
 
 B) FIXED ASSETS
 
 Fixed assets are stated at cost of acquisition including attributable
 interest & financial costs till the date of acquisition/ installation of
 the assets and improvement thereon
 
 C) DEPRECIATION .
 
 i) Depreciation on fixed assets is provided on Straight Line Method in
 accordance with the provisions of section 205(2) of the Companies Act,
 1956 at the rates prescribed in Schedule XIV to the said Act.
 
 ii) Depreciation on the Fixed Assets added / disposed off during the
 year is calculated on pro-rata basis with reference to the date of
 addition/disposal.
 
 iii) Depreciation on assets acquired for the new project and not,put to
 use has not been provided and will be provided from the date of
 installation of the assets or the commencement of production whichever
 is later.
 
 
 D) CAPITAL WORK-IN-PROGRESS
 
 Expenditure during construction period in respect of new projects is
 included under capital work-in-progress and the same will be allocated
 to the fixed assets on commissioning of the projects.
 
 E) BORROWING COSTS
 
 Borrowing costs that are attributable to the acquisition or
 construction of qualifying assets are capitalized as part of the cost
 of such assets. A qualifying asset is one that necessarily takes
 substantial period of time to get ready for intended use. All other
 borrowing costs are charged to revenue
 
 F) INVENTORIES 
 
 i) In terms of Accounting Standard  Valuation of Inventories 
 (Revised ) (AS - 2) issued by the Institute of Chartered Accountants of
 India , Inventories of raw materials, stores and spares and packing
 materials are being valued at cost or net realizable value whichever is
 lower, cost whereof is determined on first in first out basis.
 
 ii) Stock of finished goods is being valued at cost or market value
 whichever is lower and stock of semi-finished goods is being value at
 cost, cost whereof is being determined on absorption costing basis.
 
 
 G) FOREIGN CURRENCY TRANSACTIONS
 
 i) initial Recognition
 
 Transactions denominated in foreign currencies are recorded at the
 exchange rates prevailing on the date of the transaction.
 
 ii) Conversion
 
 At the year-end, monetary items denominated in foreign currencies,
 other than those covered by forward contracts, are converted into rupee
 equivalents at the year end exchange rates.
 
 iii) Exchange Differences
 
 All exchange differences arising on settlement and conversion on
 foreign currency transaction are included in the Profit and Loss
 Account.
 
 H) INVESTMENTS
 
 Investments that are intended to be held for more than a year from the
 date of acquisition are classified as long term investments, and are
 carried at cost less any provision for permanent diminution in value.
 Investments other then long term investments being current investments
 are valued at cost or fair value whichever is lower.
 
 I) RESEARCH AND DEVELOPMENT COSTS
 
 Research and Development Costs (other than cost of fixed assets
 acquired) are charged as an expense in the year in which they are
 incurred and are reflected under the appropriate heads of account.
 
 J) MISCELLANEOUS EXPENDITURE
 
 Preliminary Expenses are being fully written off in the year in which
 they are incurred .
 
 K) RETIREMENT BENEFITS AND LEAVE ENCASHMENT
 
 Retirement benefits are dealt with in the following manner:
 
 i) Contribution to Provident Fund and Family Pension Fund are accounted
 on accrual basis with corresponding contribution to relevant
 authorities.
 
 ii) Liabilities in respect of gratuity of employees are funded under
 the employees'' group gratuity scheme with the Life Insurance
 Corporation of India -
 
 iii) Encashment of leave lying to the credit of employees is not
 provided for on actuarial basis. It is accounted on accrual , basis.
 Therefore, it is not possible to ascertain the liability at the end of
 the accounting year.
 
 L) REVENUE RECOGNITION
 
 i) Revenue in respect of sale of goods is recognized at the point of
 dispatch/passage of title of goods to the customers.
 
 ii) Sales is exclusive of Sales Tax / VAT, rebate, sales return etc.
 
 iii) All other income is accounted for on accrual basis.  
 
 iv) Purchase are stated net of discount, rate difference, purchase
 return etc.
 
 M) TAXES ON INCOME
 
 i) Tax on income for the current period is determined on the basis of
 taxable income and tax credits computed in accordance with the
 provisions of the Income Tax Act, 1961, and based on the expected
 outcome of assessments/ appeals.
 
 ii) Deferred tax is recognized on timing differences between the
 accounting income and the taxable income for the year, and quantified
 using the tax rates and laws enacted or substantively enacted as on the
 Balance Sheet date.
 
 iii) Deferred tax assets are recognized and carried forward to the
 extent that there is a reasonable certainty that sufficient future
 taxable income will be available against which such deferred tax assets
 can be realized. Deferred Tax assets are reviewed as at each balance
 sheet date.
 
 
 N) IMPAIRMENT OF ASSETS:
 
 Impairment is ascertained at each balance sheet date in respect of the
 company''s fixed assets. An impairment loss is recognized wherever the
 carrying amount of an asset exceeds its recoverable amount. The
 recoverable amount is the greater of the net selling price and value in
 use. In assessing value in use, the estimated future cash flows are
 discounted to their present value based on an appropriate discount
 factor. This is in accordance with the Accounting Standard issued in
 this regard by the Institute of Chartered Accountants of India.
 
 
 0) ACCOUNTING FOR PROVISIONS, CONTINGENT LIABILITIES a CONTINGENT
 ASSETS
 
 Provisions are recognized in terms of Accounting Standard 29 -
 Provisions, Contingent Liabilities and Contingent Assets issued by the
 ICAI, when there is a present legal or statutory obligation as a result
 of past events where it is probable that there will be outflow of
 resources to settle the obligation and when a reliable estimate of the
 amount of the obligation can be made.
 
 Contingent Liabilities are recognized only when there is a possible
 obligation arising from past events due to occurrence or non-occurrence
 of one or rnore uncertain future events not wholly within the control
 of the company or where reliable estimate of the obligation cannot be
 made. Obligations are assessed on an ongoing basis and only those
 having a largely probable outflow of resources are provided for.
 
 Contingent Assets are not recognized in the financial statements.
 
 P) SEGMENT REPORTING 
 
 The business of the company falls under a single segment i.e., 
 Writing Instrument and Stationeries. In view of the general
 clarification issued by the Institute of Chartered Accountants of India
 for companies operating in single segment, the disclosure requirement
 as per Accounting Standard 17 Segment Reporting are not applicable to
 the Company.