Fixed Assets:
 
 Fixed Assets are stated at cost of acquisition inclusive of freight,
 duties taxes incidental expenses.
 
 Investments:
 
 Investments are stated at cost.
 
 Depreciation:
 
 Depreciation on the assets of the Company except for Cigarette
 Division is provided on written down value method as per schedule XIV
 to the Companies Act, 1956. Depreciation on the assets of the
 Cigarette Division is provided on straight line basis as per schedule
 XIV to the Companies Act, 1956.
 
 Sales:
 
 Sales are inclusive of ocean freight, excise duty and packing
 charges.
 
 Inventories:
 
 a) Raw Materials and Work in progress are valued at cost or
 Realisable value which ever is less.
 
 b) Stock-in-trade is valued at lower of cost or realisable value,
 except tobacco stocks.
 
 c) Tobacco stocks are valued at Market value.
 
 Export Incentives:
 
 Import licences are taken as income to the extent they are disposed
 upto the date of finalisation of accounts.
 
 Foreign Currency Translation:
 
 1. Export sales in foreign currency are accounted for at the
 exchange rate prevailing at the time of sale. Gain/loss arising
 out of fluctuation in the exchange rates on subsequent
 realisation is taken to revenue.
 
 2. Foreign currency Bank Accounts are translated at the lower of
 transaction rate/closing rate.
 
 3. Fixed Assets are translated at the rate prevailing at the time
 of acquisition of the asset.
 
 4. Expenditure/income of foreign branches is translated at the
 closing rate.
 
 5. The Gain/loss on foreign exchange rate fluctuations relating to
 current assets and liabilities is accounted for at the closing rate.
 
 6. The Gain/loss arising out of translation referred to in para 2, 4
 and 5 above is taken to revenue.
 
 7. Retirement Benefits:
 
 a) All the employees of the Company are entitled to retirement
 benefits of Provident Fund, Gratuity and Superannuation.
 
 Contribution to gratuity and superannuation fund are made on the
 basis of demand raised by LIC, and charged to revenue accordingly.
 Provident Fund contributions are accounted for at the prescribed
 rates.
 
 b) The above liabilities are funded with Trusts duly approved by
 Income-Tax authorities (managed by LIC)/ paid to the Provident Fund
 Commissioner, as the case may be.
 
 C) Further, all the employees are eligible to leave encashment
 benefit on retirements. Since, the future liability in respect of
 this benefit cannot be ascertained and provided, the same is
 accounted in the year of payment on retirement.