1 ACCOUNTING ASSUMPTION
 
 The financial statements are drawn up in accordance with the historical
 cost convention on accrual basis and comply with the accounting
 standards referred to in Sec,211 (3C) of the Companies Act, 1956.
 
 2 FIXED ASSETS
 
 The excess of Equity Shares issued to the Shareholders of Nicholas
 Piramal (I) Limited over the cost of investment in Equity Shares of
 Gujarat Glass Limited (Erstwhile Gujarat Glass (P) Ltd.)is debited to
 Goodwill account under Fixed Assets. Following Accounting Standard -
 ASH Accounting for Amalgamation, Goodwill is amortized over a period
 of five years.
 
 3 INVESTMENTS
 
 Investments are classified as long-term investments and are stated at
 cost.
 
 4 REVENUE RECOGNITION
 
 Interest income is accounted on accrual basis. Dividend income is
 accounted on receipt basis.
 
 5 TAXATION
 
 A Current Tax
 
 Provision for Current income tax liability is made on estimated taxable
 income under Income Tax Act, 1961 after considering permissible tax
 exemptions, deductions and disallowances.
 
 B Deferred Tax
 
 Deferred tax resulting from timing difference between book and tax
 profits is accounted for under the liability method, at the current
 rate of tax to the extent that the timing difference are expected to
 crystallize.