Energy and Natural Resources
Overview of the Sector
The Energy and Natural Resources sector is a critical driver of India’s economic development, supporting infrastructure, industrialization, urbanization, and overall quality of life. It includes power generation and distribution (thermal, hydro, nuclear, and renewable), oil and gas exploration, fuel refining, and the management of natural assets like water, forests, and minerals.
India is the third-largest energy consumer in the world, with growing demand driven by a rising population, expanding industrial base, and increasing urban energy needs. The sector is witnessing rapid transformation through the government’s focus on energy security, sustainability, and clean energy. Initiatives like the National Solar Mission, Ujjwala Yojana, and the push toward green hydrogen and electric mobility reflect this shift.
Private and public sector players are both active across upstream, midstream, and downstream segments, supported by significant investment in infrastructure such as smart grids, pipelines, LNG terminals, and renewable parks. At the same time, policy reforms and digital technologies are enhancing transparency and operational efficiency across the value chain.
However, the sector faces challenges in cost recovery, subsidy accounting, environmental compliance, and capital project monitoring. From a financial and audit standpoint, robust systems are needed to track energy production, asset utilization, fuel costs, and regulatory obligations.
Proper internal controls, statutory audits, and adherence to environmental, financial, and sector-specific standards are essential to ensure accountability and sustainability in this resource-intensive industry.
As India moves toward a low-carbon economy and aims to meet ambitious renewable energy targets, the energy and natural resources sector will play a key role in shaping the country’s future — balancing economic growth with environmental stewardship.
The Energy and Natural Resources industry spans conventional and renewable energy, oil and gas, utilities, and resource management entities — all of which operate in a high-stakes, capital-intensive, and highly regulated environment. These businesses manage long-term infrastructure assets, complex supply chains, and multi-jurisdictional compliance obligations, making robust audit mechanisms indispensable.
Financial complexities in the sector arise from diverse revenue models — including regulated tariffs, energy trading, long-term power purchase agreements (PPAs), and government subsidies. Projects often involve extensive gestation periods with large-scale capital expenditure, necessitating precise capitalization of costs, interest during construction (IDC), and impairment testing of energy assets. Revenue recognition under Ind AS 115 requires close attention to performance obligations and delivery-based billing milestones, particularly for EPC contracts and capacity-based incentives.
Audit procedures are further complicated by variable input costs (such as fuel, wind, solar irradiance), operational risks, and regulatory mechanisms like Renewable Energy Certificates (RECs), feed-in tariffs, and cross-subsidy charges. Internal audits must evaluate procurement processes (especially fuel and equipment), project cost control, generation efficiency, energy accounting, and subsidy claims under government schemes.
Entities are subject to compliance under the Electricity Act, Petroleum and Natural Gas Rules, Environment Protection Act, and sectoral regulations issued by CERC, SERCs, and other authorities. Additionally, GST, TDS on royalty payments, and foreign exchange exposures in fuel imports and equipment sourcing add layers of tax and financial complexity. ESG reporting and sustainability audits are becoming increasingly critical, particularly for listed companies and those with global financing arrangements.
In an industry where infrastructure reliability, environmental responsibility, and fiscal prudence intersect, auditing plays a vital role in ensuring regulatory alignment, financial transparency, and strategic resilience — forming the foundation for long-term, sustainable energy and resource management.
The energy and natural resources sector, encompassing power generation, oil and gas, renewables, and utility services, is capital-intensive, policy-driven, and highly regulated. At P. Srinivasan & Co., we provide industry-specific audit services that address the financial, regulatory, and operational complexities faced by energy producers, distributors, and infrastructure operators. Our audits cover diverse revenue streams — including power purchase agreements (PPAs), trading margins, capacity charges, and government subsidies — ensuring accurate recognition and alignment with Ind AS 115 and sectoral regulations.
We assist in verifying capital-intensive projects involving thermal, hydro, solar, and wind assets, ensuring correct capitalization of costs, tracking of interest during construction (IDC), and compliance with depreciation norms. Our audit services extend to energy accounting, fuel cost reconciliation, REC (Renewable Energy Certificate) tracking, and evaluation of input-output ratios critical for regulatory reporting.
Entities in this sector must comply with a multi-layered regulatory framework including the Electricity Act, Petroleum and Natural Gas Rules, CERC/SERC regulations, Environment Protection Act, and taxation laws such as GST, TDS, and customs duties. We provide comprehensive statutory and internal audits that ensure compliance with these frameworks while focusing on subsidy claims, cross-subsidy charges, power trading margins, and foreign exchange exposures.
We also review internal controls related to procurement, metering systems, contractor payments, and sustainability disclosures — increasingly important for companies pursuing ESG compliance or green energy certifications. With deep domain expertise, P. Srinivasan & Co. helps energy and resource-based businesses ensure transparency, enhance governance, and maintain stakeholder trust in a sector vital to national growth and energy security.
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Systems & process setup & implementation
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Tax advisory
Designed to help clients understand and minimise the tax challenges that Educational Institutes face -
Authenticating Records
We look into the accounting records and provide valuable feedback and help the organisations win against any hurdles that come their way -
Strategize Growth
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Mergers & Acquisitions
As a Chartered Accountant, we play a crucial role in guiding businesses through the complexities of mergers and demergers.