Accounting Policies of Benzo Petro International Ltd. Company

Mar 31, 2011

A) 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.

b) Capital Expenditure:

i) Cost of major civil work required for Plant and Machinery supports is considered as Plant and Machinery.

ii) Capital Assets under erection/installation are reflected in the Balance Sheet as "Capital work in Progress" including advance to suppliers, contractors and others.

iii) All Fixed Assets are recorded at cost of acquisition or construction. They are stated at historical cost. Financial cost relating to borrowed funds attributable to Construction or acquisition of Fixed Assets is included in the Gross Book value of Fixed Assets to which they relate.

c) Depreciation:

Depreciation on Fixed Assets is provided on "Straight Line Method" at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

d) Investments:

Investments are valued at Cost.

e) Inventories:

Items of Inventories are valued on the basis given below:

1. Raw Materials : At cost or Market Value, whichever is lower. (Including Gold Bars)

2. Stock in Process : At cost.

3. Finished Stocks : At cost or market value, which ever is lower.

4. Stores, Spares, Fuel : At cost And Packing Materials

f) Account of Cenvat Credit:

CENVAT Credit is accounted on the basis of Raw Materials purchased. The refund of Excise in the form of CENVAT Credit available on inputs of materials as per Excise Laws are deducted from the landed cost of the materials purchased and accordingly, closing stock of input materials are valued net of CENVAT credit.

g) Excise Duty:

Sale are net of Excise Duty, Export Sales are accounted on FO.B basis. The excise duty payable on finished goods are accounted for on the clearance of goods from the factory.

h) Revenue Recognition:

Revenue in respect of insurance/other claims, interest, commission etc is recognized only when it is reasonably certain that ultimate collection will be made

i) Contingent Liabilities:

These are disclosed by way of Notes on Accounts. Provision is made in accounts in respect of those liabilities which are likely to materialize after the year end, till the finalization of accounts and have material effect on the position stated in the Balance Sheet.

j) Foreign Exchange/Currency Conversion:

Transactions in Foreign Currency are recorded in rupees by applying rate of exchange prevailing at the time of transaction and exchange difference arising out of their settlements are dealt within the Profit and Loss Accounts as and when realized.

k) Prior Period Adjustment:

Prior Period adjustment of identifiable items of Income and Expenditure pertaining to the prior period are accounted through "prior period adjustment Account".

l) Treatment of Retirement Benefits: Gratuity:

Liability for gratuity on Balance Sheet date has been quantified by LIC of India and the contribution paid on actual valuation. Leave Encashment:

Provision for liability is made on actual leave encashment payable to employees on the Balance sheet date.

m) Impairment of Assets

An asset is treated as impaired, when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which as asset is identified as impaired. The impairment Joss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

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Mar 31, 2010

A) 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.

b) Capital Expenditure:

i) Cost of major civil work required for Plant and Machinery supports is considered as Plant and Machinery.

ii) Capital Assets under erection/installation are reflected in the Balance Sheet as "Capital work in Progress* including advance to suppliers, contractors and others.

iii) All Fixed Assets are recorded at cost of acquisition or construction. They are stated at historical cost. Financial cost relating to borrowed funds attributable to Construction or acquisition of Fixed Assets is included in the Gross Book value of Fixed Assets to which they relate.

c) Depreciation:

Depreciation on Fixed Assets is provided on Straight Line Method" at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

d) Investments: Investments are valued at Cost.

e) Inventories: Items of lnventories are valued on the basis given below:

1. Raw Materials : Atcost or Market Value, whichever is lower.

2. Stock in Process : Atcost.

3. Finished Stocks : At cost or market value, whichever is lower.

4. Stores,Spares, Fuel : At cost And Packing Materials

f) Account of Cenvat Credit:

CENVAT Credit is accounted on the basis of Raw Materials purchased. The refund of Excise in the form of CENVAT Credit available on inputs of materials as per Excise Laws are deducted from the landed cost of the materials purchased and accordingly, closing stock of input materials are valued net of CENVAT credit.

g) Excise Duty:

Sale are net of Excise Duty, Export Sales are accounted on F.O.B basis. The excise duty payable on finished goods are accounted for on the clearance of goods from the factory.

h) Revenue Recognition:

Revenue in respect of insurance/other claims, interest, commission etc is recognized only when it is reasonably certain that ultimate collection will be made.

i) Contingent Liabilities:

These are disclosed by way of Notes on Accounts. Provision is made in accounts in respect of those liabilities which are likely to materialize after the year end, till the finalization of accounts and have material effect on the position stated in the Balance Sheet.

j) Foreign Exchange/Currency Conversion:

Transactions in Foreign Currency are recorded in rupees by applying rate of exchange prevailing at the time of transaction and exchange difference arising out of their settlements are dealt within the Profit and Loss Accounts as and when realized.

k) Prior Period Adjustment:

Prior Period adjustment of identifiable items of Income and Expenditure pertaining to the prior period are accounted through "prior period adjustment Account".

l) Treatment of Retirement Benefits: Gratuity:

Estimated Liability for gratuity on Balance Sheet date has not been quantified. The same is accounted for on actual payment basis,

m) Impairment of Assets

As asset is treated as impaired, when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.