A.  Basis of preparation of Financial Statements-
 
 The financial statements are prepared on accrual basis and under the
 historical cost convention and in accordance with the generally
 accepted accounting principles in India and the provisions of Companies
 Act, 1956.
 
 B.  Use of Estimates-
 
 The preparation of financial statements require estimates and
 assumptions to be made that affect the reported amount of assets &
 liabilities on the date of financial statements and the reported amount
 of revenues and expenses during the reporting period. Differences
 between the actual results and the estimates are recognized in the
 period in which results are known/ materialized.
 
 C.  Fixed assets –
 
 Fixed assets are stated at cost net of modvat/ cenvat/ value added tax
 and include amount added on revaluation, less accumulated depreciation.
 In the case of acquisition of Dharnipur Te a Estate and Land at
 Bangalore, all expenses incurred on litigations are capitalized.
 
 D.  Depreciation-
 
 a. Depreciation on fixed assets is provided on written down value
 method at the rates and in the manner specified in Schedule XIV to the
 Companies Act, 1956.
 
 b.  Freehold land and plantation is not depreciated.
 
 c.  Depreciation on the revalued portion is debited to Revaluation
 Reserve.
 
 E.  Investments
 
 Investments are classified into current and long-term investments.
 Current investments are stated at the lower of cost and fair value.
 Long-term investments are valued at their acquisition cost. Any decline
 in the value of the said investment, other than a temporary decline is
 recognised and charged to profit and loss account.
 
 F.  Inventory-
 
 a. Stock of stores, spares part and food stuff have been taken on the
 basis of physical verification conducted by the management at the year
 end and valued at cost which is arrived at on FIFO method.
 
 b.  Stock of tea produced is valued on since sold &/or estimated sales
 realization basis.
 
 G.  Turnover:
 
 Turnover includes sale of goods, services, service tax, and excise
 duty, adjusted for discounts (net).
 
 H.  Retirement Benefits:
 
 Company''s contributions to Provident Fund are charged to Profit & Loss
 Account on accrual basis.  In respect of Gratuity, liability has been
 provided for on the basis of actuarial valuation and in respect of
 leave encashment benefits, the Company accounts for the same on cash
 basis and neither the liability is actuarially determined at the end of
 accounting period nor any provision made for accrued liability.
 
 I.  Borrowing costs:
 
 Borrowing costs are expensed in the accounting period in which it is
 incurred except where the cost is incurred during the construction of
 an asset that takes a substantial period to get ready for its intended
 use in which case it is capitalised. Borrowing cost is net of subsidy
 on interest received receivable as per the Incentive Scheme of the
 Government.
 
 J.  Provision for current & deferred tax:
 
 Tax expense comprises of both current tax and deferred tax. Deferred
 tax reflects the effect of temporary timing differences between the
 assets and liabilities recognised for financial reporting purposes and
 the amounts that are recognised for current tax purposes. As a matter
 of prudence deferred tax assets are recognised and carried forward only
 to the extent, there is certainty that sufficient future taxable income
 will be available against which such deferred tax assets can be
 realised.
 
 K.  Subsidies and Incentives :
 
 Subsidies receivable on account of capital assets or of revenue nature
 are accounted for on the basis of claims made with the concerned
 authorities.