Annual Reports - Indraprastha Gas Limited

2.4 Depreciation and amortization
(Also refer to Note 5)
Depreciation is charged on a pro-rata basis on the straight line method over the estimated useful lives of assets,
determined as follows:
Mother Compressors, Online Compressors 7 years
and Booster Compressors
Leasehold land Over the period of lease
Bunkhouses 5 years
Signages 10 years
All other assets Rates prescribed under Schedule XIV
to the Companies Act, 1956
Assets costing Rs. 5,000 or less are fully depreciated in the year of purchase. Rates of depreciation are equal to or
more than Schedule XIV to the Companies Act, 1956.
2.5 Investments
Current investments are stated at the lower of cost and fair value.
2.6 Inventories
a) Stores and spares are valued at cost on weighted average basis. Provision for obsolescence is made where
necessary.
b) Stock of CNG in cascades and Natural Gas in pipelines is valued at the lower of cost on First in First out (FIFO)
basis or net realisable value.
c) Closing stock of Natural Gas in pipelines and cascades is estimated on a volumetric basis.
2.7 Revenue recognition
a) Revenue on sale of Piped Natural Gas is recognized based on consumption by the customer.
b) Revenue on sale of Compressed Natural Gas (CNG) is recognized on sale of gas to customers from CNG
stations.
c) Income from deposits is recognized on a time proportion basis. Dividend income from investment in mutual
funds is recognized, when the Company’s right to receive payment is established.
2.8 Foreign currency transactions
Transactions in foreign currency are translated at the exchange rates prevailing on the date of the transaction. Monetary
foreign currency assets and liabilities are translated at exchange rates prevailing as at the year-end. Exchange gains or
losses arising out of fluctuation in exchange rates on settlement during the year and/or translation at year-end are
recognized in the profit and loss account.
2.9 Borrowing costs
Borrowing costs that are directly attributable to the acquisition or construction of an eligible capital asset is capitalized
as a part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they
are incurred.
2.10 Retirement benefits
Incremental liabilities in respect of gratuity, leave encashment and sick leave are provided on the basis of actuarial
valuation as at the balance sheet date and are charged to the profit and loss account. Contributions for provident
fund are charged to the profit and loss account as incurred.
2.11 Operating leases
Lease rentals are recognized as an expense in the profit and loss account on straight-line basis over the term of the
lease.
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