1.PAGE NO :53
1.Accounting principles adopted by the company
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (IND-AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. For and up to the year ending 31 March 2016, the Company prepared its financial statements in accordance with Indian GAAP, including accounting standards notified under section 133 of the Companies Act 2013, together with para 7 of the Companies (Accounts) Rules 2014 (Indian GAAP). The financial statements for the year ended 31 March 2017 have been prepared in accordance with IND-AS. The financial statements have been prepared as a going concern on accrual basis of accounting. The company has adopted historical cost basis for assets and liabilities except for certain items which have been measured on a different basis and such basis is disclosed in the relevant accounting policy
a) Sales are recognized on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude value added tax. Any retrospective revision in prices is accounted for in the year of such revision. It is measured at fair value of consideration received or receivable, net of returns and allowances, trade discounts and volume rebates.
b) Income from Consultancy/Contract Services, if any, is recognized based on percentage Completion Method.
c) Dividend income is accounted for when the right to receive is established.
d) Claims (including interest on delayed realization from customers) are accounted for, when there is significant certainty that the claims are realizable.
e) Insurance claims are accounted for based on claims admitted by the insurers.
f) Liability in respect of Minimum Guaranteed Offtake (MGO) of Natural gas is not provided for where the same is secured by MGO recoverable from customers. Payments/receipts during the year on account of MGO are adjusted on receipt basis.
g) Minimum charges relating to transportation of LPG are accounted for on receipt basis.
h) Contributions by customers towards items of Property, Plant and Equipment, realized in pursuance of a contract after 01/04/2015 are credited to deferred revenue and are amortized over the period of contract. Any tangible assets built/to be built, wherever applicable, under such contract are stated at gross value thereof.
Tangible Assets Depreciation on Tangible PPE (including enabling assets) is provided in accordance with the manner and useful life as specified in Schedule II of the Companies Act, 2013, on straight line method (SLM) on pro-rata basis (monthly pro-rata for bought out assets), except for the assets as mentioned below
where different useful life has been taken on the basis of external / internal technical
Particulars Years Furniture and Electrical Equipment’s provided for the use of employees- 6 years
Mobile Phones provided for the use of employees- 2 years
evaluation: (i) (ii) Cost of the leasehold land is amortized over the lease period except perpetual leases. (iii) Depreciation due to price adjustment in the original cost of fixed assets is charged prospectively. B. Intangible Assets (i) Intangible assets comprising software and licenses are amortized on Straight Line Method (SLM) over the useful life from the date of capitalization which is considered not exceeding five years. Right of use (ROU) having indefinite life (for which there is no foreseeable limit to the period over which they are expected to generate net cash flows given the fact that these rights can be used even after the life of respective pipelines) are not amortized but are tested for impairment annually. (ii) After impairment of assets, if any, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. C. Capital assets facilities installed at the consumers’ premises Capital assets facilities installed at the consumers’ premises on the land whose ownership is not with the company, has been depreciated on SLM basis in accordance with the useful life as specified in Schedule II of the Companies Act, 2013.
Inventory valuation method
Inventories a) Stock of Liquefied Natural Gas (LNG) and Natural Gas in pipelines is valued at cost on First in First out (FIFO) basis or net realizable value, whichever is lower. b) Raw materials and finished goods are valued at weighted average cost or net realizable value, whichever is lower. Finished goods include excise duty and royalty wherever applicable. c) Stock in process is valued at weighted average cost or net realizable value, whichever is lower. It is valued at weighted
average cost where the finished goods in which these are to be incorporated are expected to be sold at or above the weighted average cost. d) Stores and spares and other material for use in production of inventories are valued at weighted average cost or net realizable value, whichever is lower. It is valued at weighted average cost where the finished goods in which they will be incorporated are expected to be sold at/or above cost. e) Surplus / Obsolete Stores and Spares are valued at cost or net realizable value, whichever is lower. f) Surplus / Obsolete Capital Stores, other than held for use in construction of a capital asset, are valued at lower of cost or net realizable value. g) Imported LNG in transit is valued at CIF value or net realizable value whichever is lower. h) Renewable Energy Certificates (RECs) are valued at cost on First in First out (FIFO) basis or net realizable value, whichever is lower.
Manner of recording of short term and long-term investments
Classification and treatments of extraordinary items
Accounting for benefits provided to the employees
a) All short term employee benefits are recognized at the undiscounted amount in the accounting period in which they are incurred. (b) The Company’s contribution to the Provident Fund is remi?ed to a separate trust established for this purpose based on a fixed percentage of the eligible employee’s salary and debited to Statement of Profit and Loss. Further, the company makes provision as per actuarial valuation towards any shortfall in fund assets to meet statutory rate of interest in the future period, to be compensated by the company to the Provident Fund Trust. (c) Employee Benefits under Defined Benefit Plans in respect of leave encashment, compensated absences, post-retirement medical scheme, long service award and other terminal benefits are recognized based on the present value of defined benefit obligation, which is computed on the basis of actuarial valuation using the Projected Unit Credit Method. Actuarial liability in excess of respective plan assets is recognized during the year. (d) Re-measurement including actuarial gains and losses are recognized in the balance sheet with a corresponding debit or credit to retained earnings through Statement of Profit and Loss or Other Comprehensive Income in the year of occurrence, as the case may be. Re-measurements are not reclassified to the Statement of Profit and Loss in subsequent periods. (e) Liability for gratuity as per actuarial valuation is funded with a separate trust.
Accounting for and treatment of borrowing costs
Borrowing Cost of the funds specifically borrowed for the purpose of obtaining qualifying assets and eligible for capitalization along with the cost of the assets, is capitalized up to the date when the asset is ready for its intended use after netting off any income earned on temporary investment of such funds. Other borrowing costs are recognized as expense in the year of incurrence.