(i) Basis of Accounting
 
 The financial statements are prepared under historical cost convention
 on an accrual basis and are in accordance with the requirements of the
 Companies Act, 1956, and comply with the Accounting Standards referred
 to in sub-section (3C) of Section 211 of the said Act.
 
 (ii) Use of Estimates
 
 The preparation of financial statements in conformity with Generally
 Accepted Accounting Principles (GAAP) in India, requires management to
 make estimate and assumptions that affect the reported amount of assets
 and liabilities and the disclosure of contingent liabilities on the
 date of financial statements and the reported amount of revenue and
 expenses during the reporting period. Actual results could defer from
 those estimates. Any revision to accounting estimates is recognised
 prospectively in current and future period.
 
 (iii) Fixed Assets
 
 Fixed assets are stated at their original cost of acquisition and
 installation, less accumulated depreciation, amortisation and
 impairment losses if any. Cost comprises of the purchase price and any
 other directly attributable cost of bringing the asset to its working
 condition for its intended use.
 
 (iv) Borrowing Costs
 
 Borrowing costs that are directly attributable to the acquisition of
 qualifying assets are capitalised for the period until the asset is
 ready for its intended use. A qualifying asset is an asset that
 necessarily takes substantial period of time to get ready for its
 intended use. Other borrowing costs are recognised as an expense in the
 period in which they are incurred.
 
 (v) Depreciation
 
 (a) Depreciation is provided on the written down value method at the
 rates prescribed in Schedule XIV to the Companies Act, 1956. The rates
 of depreciation prescribed in Schedule XIV to the Companies Act, 1956
 are considered as the minimum rates. If the managements estimate of
 the useful life of a fixed asset at the time of acquisition of the
 asset or of the remaining useful life on a subsequent review is shorter
 than that envisaged in the aforesaid schedule, depreciation is provided
 at the higher rate based on the managements estimates of the useful
 life / remaining useful life. Pursuant to this policy, in respect of
 colour dispensers the rate of depreciation applied is 45 per cent,
 which management considers as being representative of the useful
 economic life of such assets.
 
 (b) Leasehold land and leasehold improvements are amortised over the
 primary period of lease.
 
 (c) Purchase cost and user licence fees for major software are
 amortised over a period of three years.
 
 (vi) Impairment
 
 The carrying amount of assets are reviewed at each balance sheet date
 if there is any indication of impairment based on internal / external
 factors. Impairment loss is provided to the extent the carrying amount
 of assets exceed their recoverable amount. Recoverable amount is the
 higher of an assets net selling price and its value in use. Value in
 use is the present value of estimated future cash flows expected to
 arise from the continuing use of an asset and from its disposal at the
 end of its useful life. Net selling price is the amount obtainable from
 the sale of an asset in an arms length transaction between
 knowledgeable, willing parties less the cost of disposal. If at the
 balance sheet date there is an indication that the previously assessed
 impairment loss no longer exist, the recoverable amount is reassessed
 and the asset is refected at recoverable amount subject to maximum of
 depreciable historical cost.
 
 (vii) Investments
 
 (a) Long term investments are stated at cost. A provision for
 diminution is made to recognise a decline, other than temporary, in the
 value of long term investments. The determination for dimunition is
 done separately for each individual investment.
 
 (b) Current investments, consist of investments in mutual funds, are
 stated at lower of cost and fair value where net asset value declared
 by the respective funds is considered as fair value.
 
 (c) Profit or loss on sale of investments is determined on the basis of
 weighted average carrying amount of investments disposed off.
 
 (viii) Inventories
 
 (a) Stores and spare parts are valued at cost less amounts written
 down.
 
 (b) Stock in trade comprising of raw materials, packing materials,
 stock in process and finished goods are valued at the lower of cost and
 net realisable value after making such provisions as required on
 account of damaged, unserviceable, inert and obsolete stocks. The
 comparison of the cost and net realisable value is made on item by item
 basis.
 
 (c) Cost has been arrived at on the basis of weighted average method.
 
 (d) The net realisable value of stock in process is determined with
 reference to the selling prices of related finished goods. Raw
 materials and other supplies held for use in production of inventories
 are not written down below cost except in cases where material prices
 have declined and it is estimated that the cost of finished products
 will exceed their net realisable value. In such cases, the materials
 are valued at replacement cost.
 
 (ix) Revenue Recognition
 
 (a) Sales are recognised in accordance with Accounting Standard 9 viz.
 when the seller has transferred to the buyer, the property in the
 goods, for a price, or significant risk and rewards of ownership have
 been transferred to the buyer.
 
 (b) Sales are inclusive of excise duty, processing charges, sale of
 scrap and income from services and are net of trade discount and
 product rebate.
 
 (c) Dividend income is accounted when the right to receive payment is
 established and known.
 
 (d) Interest income is recognised on the time proportion basis.
 
 (x) Employee Benefits
 
 (a) Short term employee benefits :
 
 Short term employee benefits are recognised as an expense at the
 undiscounted amount in the profit and loss account of the year in which
 the related service is rendered.