(a) ACCOUNTING CONVENTION
 
 The Financial Statements have been prepared in accordance with
 applicable Accounting Standards in India. A summary of important
 accounting policies which have been applied consistently, is set out
 below. The financial statements have also been prepared in accordance
 with the relevant presentational requirements of the Companies Act,
 1956 of India.
 
 (b) BASIS OF ACCOUNTING
 
 The financial statements have been prepared in accordance with the
 historical cost convention as modified by revaluation of certain fixed
 assets.
 
 (c) FIXED ASSETS
 
 Land including development, certain building, and plant and machinery
 at Tea Estates as at 30th June 1984, 1st April 1990, 31st March 1993,
 31st March 1999 and 31st March 2002 are stated at valuation made by
 an approved valuer at the then current cost. Subsequent acquisition of
 these assets other than land at Estates and other fixed assets are
 stated at their purchase cost together with any incidental expenses of
 acquisition.
 
 Assets acquired on hire purchase, for which ownership will vest at a
 future date, are capitalised at cash cost.
 
 Depreciation on Fixed Assets other than Freehold and Leasehold land at
 Tea Estates including Development is provided on written down value
 method in accordance with Schedule XIV to the Companies Act, 1956.
 Additional charge of depreciation on amount added on revaluation is
 adjusted against revaluation reserve. Renewal of land lease is
 assumed, consistent with past practice.
 
 All expenditure incurred for extension of new area of cultivation are
 capitalised. However, cost of upkeep and maintenance of the areas till
 not matured for plucking and cost of replanting in existing areas are
 charged to revenue.
 
 Profit or Loss on disposal of Fixed Assets is recognised in the Profit
 and Loss Account.
 
 An impairment loss is recognised where applicable when the carrying
 value of the fixed assets of a cash generating unit exceeds its market
 value or value in use, whichever is higher.
 
 (d) INVESTMENTS
 
 Long Term Investments are stated at cost and provision is made where
 there is a fall other than temporary in valuation of investments.
 
 (e) INVENTORIES
 
 Inventories are valued at cost (net of CENVAT credit) or net realisable
 value whichever is lower. Cost is determined on weighted average basis
 and includes expenditure incurred in the normal course of business in
 bringing inventories to their location and condition including
 appropriate overheads wherever applicable. Provision is made for
 obsolete, slow-moving and defective stocks, where necessary.
 
 (f) FOREIGN CURRENCYTRANSACTIONS
 
 Transactions in foreign currency are recorded at the exchange rate
 prevailing at the date of transactions. Gains/losses arising out of
 fluctuations in the exchange rates are recognised in Profit & Loss in
 the period in which they arise except in respect of fixed assets where
 exchange variance is adjusted in the carrying amount of the respective
 fixed assets.
 
 The difference between the forward exchange rates and the exchange
 rates at the date of transactions are accounted as income or expense
 over the life of the contracts, except in respect of liabilities
 Incurred for acquiring fixed assets, in which case such differences are
 adjusted in the carrying amount of the respective fixed assets.
 
 Gains/losses arising on cancellation or renewal of forward exchange
 contracts are accounted for as income/expenses for the period except
 in case of forward exchange contracts relating to liabilities incurred
 for acquiring fixed assets, in which case such profit/loss are adjusted
 in the carrying amount of the respective fixed assets.
 
 Transactions remaning unsettled at the end of the year are translated
 at the year-end rate and gains/losses on foreign exchange rate
 fluctuations relating to current assets and liabilities, except
 inventories, is recognized in the Profit & Loss Accounts.
 
 (g) SALES
 
 Sales represent the invoiced value of goods supplied less Sales Tax.
 
 (h) INCOME FROM INVESTMENTS
 
 Income from Investments is included together with the related tax
 credit in the Profit and Loss Account.
 
 (i) REPLANTING SUBSIDY
 
 Replanting Subsidy is recognised as income in the Profit and Loss
 Account in the year of receipt.
 
 (j) COMPENSATION OF LAND
 
 Compensation in respect of certain lands acquired by the Assam
 Government under the Assam Fixation of Ceiling on Land Holdings Act,
 1956, which is yet to be determined will be accounted for as and when
 received.
 
 (k) RESEARCH AND DEVELOPMENT
 
 Research and Development Expenditure of revenue nature is charged to
 revenue and capital expenditure is treated as fixed assets.
 
 (l) RETIREMENT BENEFITS
 
 The Company makes regular contribution to provident funds,
 superannuation funds and pension funds which are fully funded and
 administrated by Trustees and are independent of Companys finance. The
 Company also contributes to gratuity fund and such contribution is
 determined by the actuary The gratuity fund is administrated by the
 Trustees and is independent of the Companys finance. Leave encashment
 benefit on retirement, where applicable is provided in the accounts as
 per actuarial valuation.
 
 (m) DEFERRED TAXATION
 
 Provision for deferred taxation is made using the liability method, at
 the current rates of taxation, on all timing differences to the extent
 that it is probable that a liability or asset will crystallise.
 Deferred tax assets are recognized subject to consideration of prudence
 and are periodically reviewed to assess realisation thereof.