Sales :
 
 Sales comprise of sale of goods, services and realised exchange fluctuations on export receivable.  Sale of
raw materials and scrapped packing material is credited to respective consumption account.
 
 Research & Development :
 
 a) Revenue expenditure on research and development, to the extent not deferred is charged as expense in the
year in which it is incurred, whereas capital expenditure is shown as additions to Fixed Assets.
 
 b) Research and Development costs of projects are deferred to future periods after identification of new
products or improved processes with reference to their technical feasibility, the present intention of
commercialisation and the expectancy of future revenue or benefits.  These expenses are amortised over a
period not exceeding five years beginning from the year in which the projects commence commercial operations.

 
 Fixed Assets :
 
 Fixed Assets are stated at historical cost.
 
 Depreciation :
 
 a) Depreciation is provided in the accounts on Straight Line Method (SLM) in case of Plant and Machinery and
Plant for Scientific Research.  In case of other assets, it is provided an Written Down Value (WDV) method.
 
 Continuous process equipments are identified by the technical officials of the company and considered
accordingly for the purpose of determining the appropriate rate of depreciation.
 
 b) In case of assets acquired during the year, depreciation
 is provided from the date on which the assets are commissioned.
 
 c) In case of assets sold, discarded or demolished during
 the year, no depreciation is charged.
 
 d) Leasehold land is amortised over the period of lease.
 
 Retirement Benefits :
 
 a) Gratuity liability to employees is funded with the Life
 Insurance Corporation of India.
 
 b) Liability in respect of superannuation benefit extended
 to certain employees is funded by the Company with the Life
 Insurance Corporation of India at the contractual rate.
 
 Valuation of Inventories :
 
 a) Raw materials, packing materials and fuel, at cost being
 taken on FIFO basis.
 
 b) Finished and Semi-finished Goods, at lower of cost or
 net realisable value.  
 
 c) Stock-in-process, at lower of cost or net realisable value.
 
 d) Stores and spare parts, at cost.
 
 Investments :
 
 Investments are stated at cost.
 
 Foreign Currency Translation :
 
 Transactions in foreign exchange, other than those covered
 by forward contracts, are accounted at exchange rates
 prevailing on the date the transactions take place.
 
 Gains and losses arising out of fluctuations in the
 exchange rates are accounted for on realisation.
 
 Revenue Recognition :
 
 Revenue in respect of insurance claims, interest, commission etc. is recognised only when it is reasonably
certain that the ultimate collection will be made. Drawback and other export related claims as well as
dividends are accounted as and when received.
 
 Accounting of Excise/Customs Duties :
 
 Excise duty on finished goods manufactured is accounted on clearance from factories, and customs duty on
imported materials held in bond is accounted on clearance from bonded warehouse.  This has no effect an
profit for the year.  MODVAT credit is accounted by adjustment fully
 against purchase cost on receipt of relevant inputs (including capital goods).