Annual Report - 2005-06 - GAIL (India)

Schedule 12 – Interest and Finance Charges
(Rs.in Crores)
Schedule 14: Consolidated Notes on
Accounts for the Year Ended 31.03.2006
Year Ended
Year Ended
31st March, 2006 31st March, 2005
Interest
Foreign Currency Loans 0.45 0.73
On term loans 14.82 15.13
Other Loans 51.43 66.70 134.21 150.07
Other Interest 66.12 0.13
Bank Charges 0.92 0.50
Commitment and other Finance Charges 0.40 0.22
TOTAL 134.14 150.92
Schedule 13 – Prior Period Adjustments
(Rs.in Crores)
Year Ended
Year Ended
31st March, 2006 31st March, 2005
Purchase of Gas 65.45 -
Salaries, Wages and Allowances (0.04) (0.12)
Power, Fuel and Water Charges 0.35 0.66
Stores and Spares consumed (0.82) 0.03
Rent 2.09 (0.69)
Depreciation(Net) 0.97 (1.65)
Repairs and Maintenance 2.07 0.21
Consultancy Charges (0.24) 0.71
Other Expenses 1.19 0.92
TOTAL 71.02 0.07
Less :
- Sales (4.04) (0.03)
- Interest Income (0.15) (0.14)
- Miscellaneous Income 0.04 (4.15) (0.64) (0.81)
TOTAL (NET) 75.17 0.88
SIGNIFICANT ACCOUNTING POLICIES
I. BASIS OF PREPARATION
II.
The Consolidated Financial Statements
(CFS) relate to GAIL (India) Limited
(hereinafter referred as the “Company”)
and its subsidiary, Joint Ventures
and Associates. The accounts are
prepared on historical cost basis and
in accordance with the applicable
accounting standards and other
applicable relevant statues.
PRINCIPLES OF CONSOLIDATION
The consolidated Financial Statements
have been prepared in accordance with
the applicable Accounting standards
on the following basis:-
i. The Financial Statements of the
Company and its subsidiary
Companies are combined on a lineby-line
basis by adding together the
book values of like items of assets,
liabilities, income and expenses
after fully eliminating intragroup
balances and intra-group
transactions resulting in unrealized
profits or losses in accordance with
Accounting Standard (AS) 21-
“Consolidated Financial Statements”
issued by The Institute of Chartered
Accountants of India.
ii.
The financial statements of
Joint Venture Company have
been combined by applying
proportionate consolidation
method on a line by line basis on
items of assets, liabilities, income
and expenses after eliminating
proportionate share of unrealized
profits or losses in accordance with
Accounting Standard (AS) 27 on
“Financial Reporting of Interests
in Joint Ventures” issued by the
Institute of Chartered Accountants
of India.
iii. The consolidated Financial Statements are
prepared using uniform accounting policies
for like transactions and other events in
similar circumstances and are presented
to the extent possible, in the same manner
as the Company’s separate Financial
Statements except as otherwise disclosed in
the Notes to Accounts.
iv. The excess of the cost to the Company of
its investment in Subsidiaries and Joint
Ventures over its proportionate share in the
equity of the investee Company as at the
date of acquisition of stake is recognized in
the financial statements as Goodwill. In case
the cost of investment in a subsidiary or
Joint Venture is less than the proportionate
share in the equity of the investee as on
the date of the investment, the difference is
treated as Capital reserve.
v. Investments in Associates have been
accounted for using the equity method in
accordance with Accounting Standard AS-
23-“Accounting for investment in Associates
in Consolidated Financial Statements”
issued by The Institute of Chartered
Accountants of India. The excess/deficit of
cost of investment over the proportionate
share in equity of the Associate as at the
date of the acquisition of stake has been
identified as Goodwill/Capital reserve
and included in the carrying value of the
investment in Associate and disclosed
separately. The carrying amount of the
investment is adjusted thereafter for the
post acquisition change in the share of net
assets of the Associate.
vi. The accounts of all Group Companies
are drawn upto the same reporting date
as the parent entity (i.e. Financial Year
ended March 31, 2006) except for overseas
Associates. In respect of Fayum Gas, Shell
Compressed Gas and Nat Gas, the accounts
drawn up as at December 31, 2005 have
been used, and in respect of China Gas
Holding Limited, the financial
statement for six months as on
September 30, 2005 have been
used, in the absence of audited
/ unaudited accounts for the
year ending as on 31.03.2006.
No adjustments have been
done for the period subsequent
to that date, since there are no
significant transactions.
vii. In China Gas Holding GAIL’s
Share on the date of acquisition
i.e. 29.05.2005 was 9.35% which
was subsequently reduced to
8.49% on 30.09.2005 and as
on 31.03.2006 it is 7.50%. The
reduction of GAIL’s Share is due
to dilution in share capital by
further issue of Share Capital by
China Gas Holding.
viii. The financial statements of
the Subsidiary-GAIL (Global)
Singapore Pte Limited are
prepared in accordance with
Singapore Financial Reporting
Standards and converted
in Indian Rupees as per
Accounting Standard (AS 11) .
ix. The financial statements of
Fayum Gas, Shell Compressed
Gas and NatGas have been
prepared in accordance with
the Egyptian Accounting
Standards and relevant
Egyptian Laws and regulations
and according to the historical
cost basis assuming the
Company is a going concern.
While the financial statements
of China Gas Holding Limited
has been prepared in
accordance with the Hongkong
Accounting Standards and
relevant Hongkong Laws and
regulations and according
to the historical cost basis
assuming the Company is a
going concern.
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