Section 5 in The Petroleum and Natural Gas Regulatory Board (Affiliate Code of Conduct for Entities Engaged in Marketing of Natural Gas and Laying, Building, Operating or Expanding Natural Gas Pipeline) Regulations, 2008
5. Degree of accounting separation.
(1)The entity shall ensure accounting and financial separation by maintaining separate financial records and books of accounts in respect of the regulated activity in cases where-(a)the affiliate of the entity is engaged or proposes to engage in the marketing of natural gas; or(b)the entity on its own or proposes to engage in both the activities of transportation and marketing of natural gas.(2)The entity shall ensure that while undertaking the accounting and financial segregation in respect of the regulated activity under sub-regulation (1), both direct and indirect costs are fully allocated to the regulated activity in a transparent manner and without any cross-subsidization of costs with any other non-regulated activity.(3)The entity shall adhere to the accounting standards and guidelines of The Institute of Chartered Accountants of India as well as the Companies Act, 1956 and the Board may, if it deems fit, examine the appropriateness of the basis of cost allocation followed by the entity.
