3 Material accounting policies and other
explanatory information
3.1 General information and statement of compliance
with Indian Accounting Standards (Ind AS)
'The Standalone Financial Statements have been prepared
in accordance with the accounting principles generally
accepted in India including Indian Accounting Standards
(Ind AS) prescribed under the section 133 of the Companies
Act, 2013 read with rule 3 of the Companies (Indian
Accounting Standards) Rules,2015 (as amended from time
to time) and requirements of Division II of Schedule III of
the Companies Act 2013, (Ind AS Compliant Schedule III),
as applicable to standalone financial statements.
'The standalone financial statements of the Company
for the year ended 31 March 2025 were approved and
authorised for issue by the Board of Directors on 27 April
2025 (refer note 61).
3.2 Overall considerations
These standalone financial statements have been prepared
on going concern basis using the material accounting
policies and measurement bases summarised below.
These accounting policies have been used throughout all
periods presented in the standalone financial statements.
'The standalone financial statements are presented in
Indian Rupee (INR) which is also the Functional Currency
of the Company.
AH values are rounded off to the nearest Rupees Crore
(upto two decimals) except when stated otherwise.
3.3 Historical cost convention
These standalone financial statements have been prepared
on a historical cost convention except where certain
financial assets and liabilities have been measured at fair
value as disclosed in the relevant accounting policy.
3.4 Revenue recognition
(i) Sale of natural gas
Revenue from the contracts with customers is
recognized when control of the goods or services
are transferred to the customer at an amount that
reflects the consideration to which the company
expects to be entitled in exchange for those goods or
services. Sales/Revenue, as disclosed, are inclusive of
excise duty but are net of trade allowances, rebates,
VAT and amounts collected on behalf of third parties.
The Company earns revenues primarily from sale of
natural gas. Revenue is recognized on supply of gas
to customers by metered/assessed measurements.
The Company has concluded that it is the principal
in all its revenue arrangements since it is primary
obligor in all the revenue arrangements as it has
pricing latitude and is also exposed to credit risk.
The Company considers the terms of the contract
and its customary business practices to determine the
transaction price. The transaction price is the amount
of consideration to which the Company expects to
be entitled in exchange for transferring promised
goods or services to a customer, excluding amounts
collected on behalf of third parties (for example,
indirect taxes). No element of financing is deemed
present as the credit term is not more than one year.
The transaction price is allocated by the Company
to each performance obligation (or distinct goods
or services) in an amount that depicts the amount
of consideration to which it expects to be entitled
in exchange for transferring the promised goods or
services to the customer.
For each performance obligation identified, the
Company determines at contract inception whether
it satisfies the performance obligation over time or
satisfies the performance obligation at a point in time.
If an entity does not satisfy a performance obligation
over time, the performance obligation is satisfied at
a point in time. A receivable is recognized where the
Company's right to consideration is unconditional
(i.e. only the passage of time is required before
payment of the consideration is due).
When either party to a contract has performed its
obligation, an entity shall present the contract in
the balance sheet as a contract asset or a contract
liability, depending on the relationship between the
entity's performance and the customer's payment.
(ii) Interest and dividend income
Interest income from a financial asset is recognised
when it is probable that the economic benefit will
flow to the Company and the amount of income can
be measured reliably. Interest income is accrued on
time basis, by reference to the principal outstanding
and at the effective interest rate applicable.
Dividend income from investments is recognised
when the right to receive dividend has
been established..
3.5 Grants
Grants are recognised where there is reasonable assurance
that the grant will be received and all attached conditions
will be complied with.
Grant relating to Assets (Capital Grants): In case of
grants relating to depreciable assets, the cost of the asset
is shown at gross value and grant thereon is treated as
deferred income which is recognized in the Statement of
Profit and Loss over the period and in the proportion in
which depreciation is charged.
Grant related to Income (Revenue Grants): Revenue
grants are recognised in the Statement of Profit and Loss
on a systematic basis over the periods in which the entity
recognises as expenses the related cost which the grants
are intended to compensate.
3.6 Inventories
(i) Inventory of stock-in-trade of natural gas
'Inventory of stock-in-trade of natural gas in
pipelines and cascades is valued at the lower of cost
computed on First in First Out (FIFO) basis and net
realisable value.
(ii) Inventory of stores and spares
Stores and spares are valued at weighted average cost
or net realisable value whichever is lower. Net realisable
value is the estimated selling price in the ordinary course
of business less any applicable selling expenses.
Net realisable value is the estimated selling price in
the ordinary course of business, less estimated costs
of completion and the estimated costs necessary
to make the sale.
The cost of inventories comprises of all costs of
purchase and other costs incurred in bringing the
inventory to its present location and condition.
3.7 Foreign currency transactions and translations
i. Initial recognition
Transactions in foreign currencies are recorded
on initial recognition in the functional currency
at the exchange rates prevailing on the date of
the transaction.
ii. Measurement at the balance sheet date
Foreign currency monetary items of the Company,
outstanding at the balance sheet date are restated at
the year-end rates. Non-monetary items which are
carried at historical cost denominated in a foreign
currency are reported using the exchange rate at
the date of the transaction. Non-monetary items
measured at fair value in a foreign currency are
translated using the exchange rates at the date when
the fair value is determined.
iii. Treatment of exchange difference
Exchange differences that arise on settlement of
monetary items or on reporting at each balance
sheet date of the Company's monetary items at the
closing rate are recognised as income or expenses in
the period in which they arise.
3.8 Leases
The Company assesses at contract inception whether
a contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset
for a period of time in exchange for consideration.
The Company as a lessee
Leases are recognised as a right-of-use asset and a
corresponding liability at the date at which the leased
asset is available for use by the Company. Contracts
may contain both lease and non-lease components. The
Company allocates the consideration in the contract
to the lease and non-lease components based on their
relative stand-alone prices.
Assets and liabilities arising from a lease are initially
measured on a present value basis. Lease liabilities include
the net present value of the following lease payments:
• fixed payments (including in -substance fixed
payments), less any lease incentives receivable
• variable lease payment that are based on an index or
a rate, initially measured using the index or rate as at
the commencement date
• amounts expected to be payable under residual
value guarantees, if any
• the exercise price of a purchase option if any, if the
Company is reasonably certain to exercise that option
• payment for penalties for terminating the
lease, if the lease term reflects the Company
exercising that option
The lease payments are discounted using the interest
rate implicit in the lease. If the rate cannot be readily
determined, which is generally the case for leases in the
Company, the lessee's incremental borrowing rate is used,
being the rate that the individual lessee would have to pay
to borrow the funds necessary to obtain an asset of similar
value to the right-of-use asset in a similar economic
environment with similar terms, security and conditions.
Lease payments are allocated between principal and
finance cost. The finance cost is charged to the statement
of profit and loss over the lease period so as to produce a
constant periodic rate of interest on the remaining balance
of the liability for each period. Variable lease payments
that depends on sales are recognised in the statement of
profit and loss in the period in which the condition that
triggers those payments occurs.
Right-of-use assets are measured at cost
comprising the following:
• the amount of the initial measurement of lease liability
• any lease payments made at or before
the commencement date less any lease
incentives received
• any initial direct costs; and
• an estimate of costs to be incurred by the lessee
in dismantling and removing the underlying
asset or restoring the underlying asset or site on
which it is located.
Right-of-use assets are generally depreciated over the
shorter of the asset's useful life and the lease term on a
straight-line basis. In addition, the right- of- use asset
is periodically reduced by impairment losses, if any, and
adjusted for certain remeasurement of the lease liability.
Payments associated with short-term leases are
recognised on a straight-line basis as an expense in the
statement of profit and loss. Short term leases are the
leases with a lease term of 12 months or less. Further, rental
payments for the land where lease period is considered to
be indefinite or indeterminable, these are charged off to
the statement of profit and loss.
3.9 Employee benefits
Employee benefits include provident fund, pension fund,
gratuity and compensated absences.
Defined contribution plans
The Company's contribution to provident fund and
pension fund is considered as defined contribution plan
and is charged as an expense as they fall due based on the
amount of contribution required to be made and when
services are rendered by the employees. The Company
has no legal or constructive obligation to pay contribution
in addition to its fixed contribution.
Defined benefit plans
The liability or asset recognised in the balance sheet in respect
of gratuity is the present value of the defined benefit obligation
at the end of the reporting period less the fair value of plan
assets. The defined benefit obligation is calculated annually
by actuaries using the projected unit credit method. The
present value of the defined benefit obligation is determined
by discounting the estimated future cash outflows by
reference to market yields at the end of the reporting period
on government bonds that have terms approximating to
the terms of the related obligation. The net interest cost is
calculated by applying the discount rate to the net balance
of the defined benefit obligation and the fair value of plan
assets. This cost is included in employee benefit expense in
the statement of profit and loss. Remeasurement gains and
losses arising from experience adjustments and changes in
actuarial assumptions are recognised in the period in which
they occur, directly in other comprehensive income. They
are included in retained earnings in the statement of changes
in equity and in the balance sheet. Changes in the present
value of the defined benefit obligation resulting from plan
amendments or curtailments are recognized immediately in
the statement of profit and loss as past service cost.
Short-term employee benefits
'The undiscounted amount of short-term employee
benefits expected to be paid in exchange for the services
rendered by employees are recognised during the year
when the employees render the service. These benefits
include performance incentive and compensated
absences which are expected to occur within twelve
months after the end of the period in which the employee
renders the related service. The cost of such compensated
absences is accounted as under:
(a) in case of accumulated compensated absences, when
employees render the services that increase their
entitlement of future compensated absences; and
(b) in case of non-accumulating compensated
absences, when the absences occur.
Long-term employee benefits
Compensated absences which are allowed to be carried
forward over a period in excess of 12 months after the
end of the period in which the employee renders the
related service are recognised as a liability measured
on the basis of independent actuarial valuation using
the projected unit credit method. Remeasurements,
comprising of actuarial gains and losses, are recognised
immediately in the balance sheet with a corresponding
debit or credit to statement of profit and loss in the period
in which they occur.
3.10 Taxes on income
Tax expense comprises current tax and deferred tax
charge or credit. Current tax is the amount of the tax for
the period determined in accordance with the Income-
tax Act, 1961. Current tax is provided at amounts expected
to be paid using the tax rates and laws that have been
enacted or substantively enacted at the end of the
reporting period. Current income-tax relating to items
recognised outside the statement of profit and loss is
recognised outside the statement of profit and loss
(either in Other comprehensive income or in equity, as
applicable). Deferred tax is provided using the balance
sheet approach on temporary differences at the reporting
date between the tax bases of assets and liabilities and
their carrying amounts for financial reporting purposes at
the reporting date. Deferred tax assets and liabilities are
measured at the tax rates that are expected to apply in
the year when the asset is realised or the liability is settled,
based on tax rates and tax laws that have been enacted
or substantively enacted at the reporting date. Deferred
tax assets are recognised to the extent that it has become
probable that future taxable profits will allow the deferred
tax asset to be recovered. Such assets are reviewed at
each balance sheet date to reassess realisation. Deferred
tax relating to items recognised outside the statement
of profit and loss is recognised outside the statement of
profit and loss, in correlation to the underlying transaction
(either in other comprehensive income or directly in
equity, as applicable).
Deferred tax assets and deferred tax liabilities are offset if a
legally enforceable right exists to set off current tax assets
against current income-tax liabilities and the deferred
taxes relate to the same taxable entity and the same
taxation authority.
3.11 Operating cycle
Based on the nature of products/activities of the Company
and the normal time between purchase of natural gas and
their realisation in cash or cash equivalents, the Company
has determined its operation cycle as 12 months for the
purpose of classification of its assets and liabilities as
current and non-current.
3.12 Operating expenses
Operating expenses are recognised in statement of profit
or loss upon utilisation of the service or as incurred.
3.13 (a) Property, plant and equipment
i. Freehold land is carried at historical cost. All
other items of property, plant and equipment
are stated at cost less accumulated depreciation
and impairment losses, if any.
ii. Property, plant and equipment are stated
at their original cost including freight,
duties, taxes and other incidental expenses
relating to acquisition and installation.
Subsequent expenditure is capitalised only if it
is probable that the future economic benefits
will flow to the Company.
iii. Gas distribution systems are commissioned
when ready for commencement of supply of
gas to consumers. In the case of commissioned
assets where final payment to the contractors is
pending, capitalisation is made on an estimated
basis pending receipt of final bills from the
contractors subject to adjustment in cost and
depreciation in the year of final settlement.
iv. The carrying amount of assets, including
those assets that are not yet available for use,
are reviewed at each balance sheet date to
determine whether there is any indication
of impairment. If any such indication exists,
recoverable amount of asset is determined. An
impairment loss is recognised in the statement
of profit and loss whenever the carrying amount
of an asset exceeds its recoverable amount. An
impairment loss is reversed only to the extent
that the carrying amount of asset does not
exceed the net book value that would have
been determined if no impairment loss had
been recognised. (Refer Note 3.19)
v. Stores and spares which meet the definition
of property, plant and equipment (whether
as component or otherwise) and satisfy the
recognition criteria, are capitalised as property,
plant and equipment. When significant parts
of property, plant and equipment are required
to be replaced at intervals, the Company
recognises the new part with its own estimated
useful life and it is depreciated accordingly.
Likewise, when a major overhauling/ repair is
performed, its cost is recognised on the carrying
amount of respective assets with a separate
sub-asset code, if the recognition criteria are
satisfied and the same is being depreciated
over the period till the next overhauling date is
due. All other repair and maintenance costs are
recognised in the statement of profit and loss as
and when incurred.
(b) Intangible assets
Intangible assets comprise of computer software/
licenses. Such assets acquired by the Company are
initially measured at cost. After initial recognition, an
intangible asset is carried at cost less any accumulated
amortisation and accumulated impairment loss.
Subsequent expenditure is capitalised only if it is
probable that the future economic benefits will flow
to the Company.
(c) Capital work-in-progress
Expenditure incurred during the period of construction,
including all direct and indirect expenses, incidental
and related to construction, is carried forward and on
completion, the costs are allocated to the respective
property, plant and equipment. Capital work-in¬
progress also includes assets pending installation and
not available for intended use.
3.14 Depreciation and amortisation
Depreciation is charged on a pro-rata basis on the straight
line method ('SLM') to allocate cost of the asset, net of
estimated residual value, over their estimated useful lives.
The useful lives and residual values are, as prescribed in
Schedule II to the Companies Act, 2013 which are in line
with their estimated useful life , except for the following
assets where depreciation is charged on pro-rata basis
over the estimated useful life of the assets based on
technical advice taking into account the nature of the
asset, the estimated usage of the asset, the operating
conditions of the asset, past history of replacement,
anticipated technological changes, manufacturers
warranties and maintenance support etc.:
The Overhauling cost is being depreciated over the period
till the next overhauling date is due.
The Company has installed various CNG Stations
on land leased from various government authorities
for periods ranging from one to five years. However,
assets constructed/installed on such land have been
depreciated at the rates specified in Schedule II to the
Companies Act, 2013
Based on management estimate, residual value of 5%
is considered for respective tangible assets except for
the pipeline network assets where the residual value
is considered to be NIL as their extractability after their
useful life from beneath the ground is not found feasible
on technical as well as commercial aspects.
The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate.
B. Intangible assets
Intangible assets comprising software and licenses
are amortised on straight line method (SLM) over
the useful life of five years, which represents the
management's assessment of economic useful life
of the these intangible assets.
Amortisation method, useful lives and residual
values of other intangible assets are reviewed at
each financial year - end and adjusted prospectively,
if appropriate.
3.15 Cash and cash equivalents
Cash comprises cash on hand and deposits with banks.
Cash equivalents also include short-term (with original
maturity of three months or less from the date of
acquisition), highly liquid investments that are readily
convertible into known amounts of cash and which are
subject to an insignificant risk of change in value.
3.16 Cash flow statement
Cash flows are reported using the indirect method,
whereby profit before tax is adjusted for the effects of
transactions of non-cash nature and any deferrals or
accruals of past or future cash receipts or payments.
The cash flows from operating, investing and financing
activities of the Company are segregated based on the
available information.
3.17 Earnings per share
Basic earnings per share are calculated by dividing
the net profit or loss for the year attributable to equity
shareholders by the weighted average number of equity
shares outstanding during the year. The weighted average
number of equity shares outstanding during the year is
adjusted for events such as bonus issue, bonus element
in a rights issue, share split, and reverse share split
(consolidation of shares) that have changed the number
of equity shares outstanding, without a corresponding
change in resources.
For the purpose of calculating diluted earnings per share,
the net profit or loss for the year attributable to equity
shareholders and the weighted average number of shares
outstanding during the year are adjusted for the effects of
all dilutive potential equity shares.
3.18 Equity, reserves and dividend payment
Equity shares are classified as equity. Incremental costs
directly attributable to the issue of new shares are shown
in equity as a deduction, net of tax, from the proceeds.
Retained earnings include current and prior period
retained profits. All transactions with owners of the
Company are recorded separately within equity.
The Company recognises a liability for dividends to equity
holders of the Company when the dividend is authorised
by the Board in case of Interim Dividend and by the
members in case of Final Dividend.
3.19 Impairment of property, plant and equipment, other
intangible assets and investments in subsidiary and
associates
Assets are tested for impairment whenever events or
changes in circumstances indicate that the carrying
amount may not be recoverable and impairment loss is
recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount. The recoverable
amount is higher of an asset's fair value less costs of
disposal and value in use. For the purpose of assessing
impairment, assets are evaluated at the lowest levels for
which there are separately identifiable cash inflows which
are largely independent of the cash inflows from other
assets or Company of assets (cash generating units). If
at the balance sheet date, there is an indication that a
previously assessed impairment loss no longer exists,
the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum
of depreciated historical cost and the same is accordingly
reversed in the statement of profit and loss.
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