INDUS GAS LIMITED

Interim / Quarterly Report • Dec 14, 2017

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RNS Number : 2884Z

Indus Gas Limited

14 December 2017

Unaudited Condensed Consolidated Interim Financial Statements

Indus Gas Limited and its subsidiaries

Six months ended 30 September 2017

Indus Gas Limited (AIM:INDI.L), an oil & gas exploration and development company with assets in India, is pleased to report its interim results for the six month period ending 30 September 2017.

Consolidated reported adjusted revenues, operating profit and profit before tax for the interim period ending 30 September 2017 were US$ 29.39m (US$ 27.39 interim 2016),US$ 25.63m (US$ 22.33m interim 2016) and US$ 23.63m (US$ 22.61m interim 2016) respectively.

The Company has continued to make provision for a notional deferred tax liability of US$ 7.92m (US$ 9.94m interim 2016), in accordance with IFRS requirements.

The Integrated Field Development Plan for the SSG (Pariwar) & SSF (B&B) area of 2,000 km2 was approved by the Directorate General of Hydrocarbons (DGH) and Ministry of Petroleum and Natural Gas (MoP&NG). The revised Field Development Plan ('FDP') in respect of the SGL area for the enhancement of production to about 90mmscfd has been approved by the Management Committee having representative of MoP&NG, DGH & Contractors/Companies.

The Company continues to realise US$5 per mmBtu in respect of its existing gas sales contract. Discussions for the second contract with GAIL and RRVUNL for the additional gas supplies to the 160 MW turbine at Ramgarh are expected to be finalized in first quarter of 2018. The gas turbine has been procured by RRVUNL and the gas price needs to be mutually agreed. Discussions are also being held for finalising the gas pipeline to evacuate additional gas supply from the Non-SGL area of the block.

Commenting, Peter Cockburn, Chairman of Indus, said:

"The approval of integrated FDP for SSG and SSF and revised FDP of SGL is a major milestone achieved by the company in this period. The revenues are now expected to increase substantially once the additional gas supplies commence."

For further information please contact:

Indus Gas Limited

Peter Cockburn

Bruce McNaught                                        +44 (0) 20 7877 0022

Arden Partners plc

Steve Douglas                                              +44 (0) 20 7614 5900

Unaudited Condensed Consolidated Statement of Financial Position

(All amounts in US$, unless otherwise stated)

	Notes	As at 30 September 2017	As at 30 September 2016	As at      31 March 2017
		(Unaudited)	(Unaudited)	(Audited)
ASSETS
Non-current assets
Intangible assets: exploration and evaluation   assets	7
Property, plant and equipment	8	684,756,815	599,706,703	639,862,170
Tax assets		2,264,090	1,962,498	2,165,313
Other assets		885	885	885
Total non-current assets		687,021,790	601,670,086	642,028,368
Current assets
Inventories		5,860,552	4,549,391	5,581,503
Trade receivables		11,879,600	2,973,857	2,045,252
Recoverable from related party		-	12,003,316	-
Other current assets		74,368	7,204,623	38,784
Cash and cash equivalents		1,674,929	10,316,555	11,401,788
Total current assets		19,489,449	37,042,742	19,067,327
Total assets		706,511,239	638,717,828	661,095,695
LIABILITIES AND EQUITY
Shareholders' equity
Share capital		3,619,443	3,619,443	3,619,443
Additional paid-in capital		46,733,689	46,733,689	46,733,689
Currency translation reserve		(9,313,781)	(9,313,781)	(9,313,781)
Merger reserve		19,570,288	19,570,288	19,570,288
Retained earnings		84,357,719	55,923,065	68,639,613
Total  shareholders' equity		144,967,358	116,532,704	129,249,252
LIABILITIES
Non-current liabilities
Long term debt , excluding current portion	9	151,559,044	262,221,896	239,647,360
Provision for decommissioning		1,426,125	1,218,750	1,321,033
Deferred tax liabilities (net)		66,768,667	50,387,937	58,848,114
Payable to related parties, excluding current portion	11	171,354,704	132,271,106	149,071,994
Deferred revenue		25,563,995	25,563,995	25,563,995
Total non-current liabilities		416,672,535	471,663,684	474,452,496
Current liabilities
Current portion of long term debt	9	116,535,739	44,923,382	46,614,354
Current portion payable to related parties	11	23,137,203	299,187	5,570,622
Accrued expenses and other liabilities		121,318	221,785	131,885
Deferred revenue		5,077,086	5,077,086	5,077,086
Total current liabilities		144,871,346	50,521,440	57,393,947
Total liabilities		561,543,881	522,185,124	531,846,443
Total liabilities and equity		706,511,239	638,717,828	661,095,695

(The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements)

Unaudited Condensed Consolidated Statement of Comprehensive   Income

(All amounts in US $, unless otherwise stated)

	Notes	Six months ended 30 September 2017		Six month ended 30 September 2016
		Unaudited		Unaudited
Revenue		29,391,480		27,393,016
Cost of sales		(2,688,457)		(4,013,643)
Administrative expenses		(1,071,345)		(1,048,144)
Profit from operations		25,631,678		22,331,229
Foreign exchange gain/(loss), net		(1,993,054)		277,888
Interest income		45		50
Profit before tax		23,638,669		22,609,167
Income taxes  -Deferred tax charge		(7,920,563)		(9,942,407)
Profit for the period (attributable to the shareholder of the Group)		15,718,106		12,666,760
Total comprehensive income for                 the period (attributable to the shareholders of the Group)		15,718,106		12,666,760
Earnings per share (periodic)	12
Basic		0.09		0.07
Diluted		0.09		0.07

(The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements) 

Unaudited Condensed Consolidated Statement of Changes in Equity

(All amounts in US $, unless otherwise stated)

	Share capital Number   Amount			Additional paid-in capital	Currency translation reserve	Merger reserve	Retained earnings	Total stockholders' equity
---	---	---	---	---	---	---	---	---
Balance as at 1 April 2017	182,973,924		3,619,443	46,733,689	(9,313,781)	19,570,288	68,639,613	129,249,252
Profit for the period	-		-	-	-	-	15,718,106	15,718,106
Total comprehensive income  for the period	-		-	-	-	-	15,718,106	15,718,106
Balance as at 30 September 2017	182,973,924		3,619,443	46,733,689	(9,313,781)	19,570,288	84,357,719	144,967,358
Balance as at 1 April 2016	182,973,924		3,619,443	46,733,689	(9,313,781)	19,570,288	43,256,305	103,865,944
Profit for the period	-		-	-	-	-	12,666,760	12,666,760
Total comprehensive income  for the period	-		-	-	-	-	12,666,760	12,666,760
Balance as at 30 September 2016	182,973,924		3,619,443	46,733,689	(9,313,781)	19,570,288	55,923,065	116,532,704

(The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements).

Unaudited Condensed Consolidated Statement of Cash Flows

(All amounts in US $, unless otherwise stated)

		Six months ended 30 September 2017 (Unaudited)	Six months ended 30 September 2016 (Unaudited)
(A) Cash flow from operating activities
Profit before tax		23,638,669	22,609,167
Adjustments
Unrealised exchange loss/ (gain)		1,993,054	(277,888)
Interest income		(45)	(50)
Depreciation		2,215,281	3,747,737
Changes in operating assets and liabilities
Inventories		(279,049)	(435,784)
Trade receivables		(9,834,346)	292,881
Trade and other payables		2,899,807	4,405,728
Other current and non-current assets		(35,584)	(6,965,744)
Provisions for decommissioning		105,092	86,024
Other liabilities		96,745	(159,410)
Cash generated from operations		20,799,624	23,302,661
Income taxes paid		(98,780)	(227,060)
Net cash generated from operating activities		20,700,844	23,075,601
(B) Cash flow from investing activities
Purchase of property, plant and equipment A		(18,271,141)	(50,680,860)
Interest received		35	50
Net cash used in investing activities		(18,271,106)	(50,680,810)
(C ) Cash flow from financing activities
Repayment of long term debt from banks		(20,828,000)	(14,569,586)
Repayment to/ Proceeds from Related Party		17,209,839	218,269
Payment of interest		(8,539,329)	(9,114,813)
Net cash generated from/(used in) financing activities		(12,157,490)	(23,466,160)
Net change in cash and cash equivalents		(9,727,752)	(51,071,374)
Cash and cash equivalents at the beginning of the period		11,401,788	61,081,916
Effect of exchange rate change on cash and cash equivalents		893	306,014
Cash and cash equivalents at the end of the period		1,674,929	10,316,555
Cash and cash equivalents comprises of
balances with banks		1,674,929	10,316,555

A The purchase of property, plant and equipment above, includes additions to exploration and evaluation assets amounting to US$ 13,623,183 (previous period: US$ 18,009,154) transferred to development cost, as explained in Note 7.

(The accompanying notes are an integral part of these Unaudited Condensed Consolidated Interim Financial Statements)

Notes to Unaudited Condensed Consolidated Interim Financial Statements

(All amounts in US $, unless otherwise stated) 

1.     INTRODUCTION

Indus Gas Limited ("Indus Gas" or "the Company") was incorporated in the Island of Guernsey on 4 March 2008 pursuant to an Act of the Royal Court of the Island of Guernsey. The Company was set up to act as the holding company of iServices Investments Limited. ("iServices") and Newbury Oil Co. Limited ("Newbury"). iServices and Newbury are companies incorporated in Mauritius and Cyprus, respectively. iServices was incorporated on 18 June 2003 and Newbury was incorporated on 17 February 2005. The Company was listed on the Alternative Investment Market (AIM) of the London Stock Exchange on 6 June 2008. Indus Gas through its wholly owned subsidiaries iServices and Newbury (hereinafter collectively referred to as "the Group") is engaged in the business of oil and gas exploration, development and production.

Focus Energy Limited ("Focus"), an entity incorporated in India, entered into a Production Sharing Contract ("PSC") with the Government of India ("GOI") and Oil and Natural Gas Corporation Limited ("ONGC") on 30 June 1998 for petroleum exploration and development concession in India known as RJ-ON/06 ("the Block"). Focus is the Operator of the Block. On 13 January 2006, iServices and Newbury entered into an interest sharing agreement with Focus and obtained a 65 per cent and 25 per cent share respectively in the Block. Consequent to this, the Group acquired an aggregate of 90 per cent participating interest in the Block and the balance 10 per cent of participating interest is owned by Focus. The participating interest explained above is subject to any option exercised by ONGC in respect of individual wells (already exercised for SGL field as further explained in Note 4).

2. BASIS OF PREPARATION

The unaudited condensed consolidated interim financial statements are for the six months ended 30 September 2017 and are presented in United States Dollar (US$), which is the functional currency of the parent company and other entities in the Group. They have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required in annual financial statements in accordance with International Financial Reporting Standards as adopted by the European union, and should be read in conjunction with the consolidated financial statements and related notes of the Group for the year ended 31 March 2017.

The unaudited condensed consolidated interim financial statements have been prepared on a going concern basis.

The accounting policies applied in these unaudited condensed consolidated interim financial statements are consistent with the policies that were applied for the preparation of the consolidated financial statements for the year ended 31 March 2017.

These unaudited condensed consolidated interim financial statements are for the six months ended 30 September 2017 and have been approved for issue by the Board of Directors.

3. STANDARDS AND INTERPRETATIONS ISSUED BUT NOT EFFECTIVE AND YET TO BE      APPLIED BY THE GROUP

Summarised in the paragraphs below are standards, interpretations or amendments that have been issued prior to the date of approval of these consolidated financial statements and endorsed by EU and will be applicable for transactions in the Group but are not yet effective. These have not been adopted early by the Group and accordingly, have not been considered in the preparation of the consolidated financial statements of the Group.

Management anticipates that all of these pronouncements will be adopted by the Group in the first accounting period beginning after the effective date of each of the pronouncements. Information on the new standards, interpretations and amendments that are expected to be relevant to the Group's consolidated financial statements is provided below.

-           IFRS 9 Financial Instruments Classification and Measurement

In July 2014, the International Accounting Standards Board issued the final version of IFRS 9, Financial Instruments. The standard reduces the complexity of the current rules on financial instruments as mandated in IAS 39. IFRS 9 has fewer classification and measurement categories as compared to IAS 39 and has eliminated the categories of held to maturity, available for sale and loans and receivables. Further it eliminates the rule-based requirement of segregating embedded derivatives and tainting rules pertaining to held to maturity investments. For an investment in an equity instrument which is not held for trading, IFRS 9 permits an irrevocable election, on initial recognition, on an individual share-by-share basis, to present all fair value changes from the investment in other comprehensive income. No amount recognized in other comprehensive income would ever be reclassified to profit or loss. It requires the entity, which chooses to measure a liability at fair value, to present the portion of the fair value change attributable to the entity's own credit risk in other comprehensive income.

IFRS 9 replaces the 'incurred loss model' in IAS 39 with an 'expected credit loss' model. The measurement uses a dual measurement approach, under which the loss allowance is measured as either 12 month expected credit losses or lifetime expected credit losses. The standard also introduces new presentation and disclosure requirements.

This standard is effective for reporting periods beginning on or after 1 January 2018 with early adoption permitted. The management is currently evaluating the impact that this new standard will have on its consolidated financial statements.

-           IFRS 15 Revenue from Contracts with Customers

The International Accounting Standards Board (IASB) has published a new standard, IFRS 15 Revenue from Contracts with customers. This standard replaces IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfers of Assets from Customers, and SIC-31 Revenue- Barter Transactions involving advertising services. It sets out the requirements for recognising revenue that apply to contracts with customers, except for those covered by standards on leases, insurance contracts and financial instruments. The new standard establishes a control-based revenue recognition model and provides additional guidance in many areas not covered in detail under existing IFRSs, including how to account for arrangements with multiple performance obligations, variable pricing, customer refund rights, supplier repurchase options, and other common complexities.

This standard is effective for reporting periods beginning on or after 1 January 2018 with early adoption permitted. It applies to new contracts created on or after the effective date and to the existing contracts that are not yet complete as of the effective date.

The management is currently evaluating the impact that this new standard will have on its consolidated financial statements.

- IFRS 16 Leases

On 13 January 2016, the IASB issued the final version of IFRS 16, Leases. IFRS 16 will replace the existing leases Standard, IAS 17 Leases, and related interpretations. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases. IFRS 16 introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. The Standard also contains enhanced disclosure requirements for lessees. The effective date for adoption of IFRS 16 is annual periods beginning on or after 1 January 2019 (but not yet endorsed in EU), though early adoption is permitted for companies applying IFRS 15 Revenue from Contracts with Customers.

Management is currently evaluating the impact that this new standard will have on its consolidated financial statements.

4.  JOINTLY CONTROLLED ASSETS

As explained above, the Group through its subsidiaries has an interest sharing arrangement with Focus in the block which under IFRS 11 Joint Arrangements, is classified as a 'Joint operation'. All rights and obligations in respect of exploration, development and production of oil and gas resources under the 'Interest sharing agreement' are shared between Focus, iServices and Newbury in the ratio of 10 per cent, 65 per cent and 25 per cent respectively.

Under the PSC, the GOI, through ONGC had an option to acquire a 30 per cent participating interest in any discovered field, upon such successful discovery of oil or gas reserves, which has been declared as commercially feasible to develop.

Subsequent to the declaration of commercial discovery in SGL field on 21 January 2008, ONGC had exercised the option to acquire a 30 per cent participating interest in the discovered fields on 6 June 2008. The exercise of this option would reduce the interest of the existing partners proportionately.

On exercise of this option, ONGC is liable to pay its share of 30 per cent of the SGL field development costs and production costs incurred after 21 January 2008 and are entitled to a 30 per cent share in the production of gas subject to recovery of contract costs as explained below. 

The allocation of the production from the field to each participant in any year is determined on the basis of the respective proportion of each participant's cumulative unrecovered contract costs as at the end of the previous year or where there are no unrecovered contract cost at the end of previous year on the basis of participating interest of each such participant in the field. For recovery of past contract cost, production from the field is first allocated towards exploration and evaluation cost and thereafter towards development cost.

On the basis of above, gas production for the period ended 30 September 2017 is shared between Focus, iServices and Newbury in the ratio of 10 percent, 65 percent and 25 percent respectively.

The aggregate amounts relating to jointly controlled assets, liabilities, expenses and commitments related thereto that have been included in the consolidated financial statements are as follows:

Particular		Period ended 30 September 2017 (Unaudited)	Period ended 30 September 2016 (Unaudited)	Year ended 31 March 2017 (Audited)
Non-current assets		684,756,815	599,706,703	639,862,170
Current assets		5,860,552	16,552,707	5,581,503
Non-current liabilities		1,426,125	1,218,750	1,321,033
Current liabilities		22,699,519	299,187	5,250,197
Expenses (net of finance income)		2,899,807	4,405,728	11,456,179
Commitments	-		-	-

The GOI, through ONGC, has option to acquire similar participating interest in any such future successful discovery of oil or gas reserves in the Block that has been declared as commercially feasible to develop.

5.  SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these unaudited condensed interim consolidated financial statements, the significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were consistent with those that applied to the consolidated financial statements as at and for the year ended 31 March 2017.

6.  SEGMENT REPORTING

Operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segments and to assess their performance. The Company considers that it operates in a single operating segment being the extraction and production of gas.

7.  INTANGIBLE ASSETS: EXPLORATION AND EVALUATION ASSETS

Intangible assets comprise of exploration and evaluation assets. Movement in intangible assets was as under:

	In  tangible assets: exploration and evaluation assets
Balance at  01 April  2016	-
Additions A	18,009,154
Transfer to development assets B	(18,009,154)
Balance at  30 September  2016	-
Balance at  01 April  2016	-
Additions A	28,719,544
Transfer to development assets B	(28,719,544)
Balance at  31 March  2017	-
Balance at  01 April  2017	-
Additions A	13,623,183
Transfer to development assets B	(13,623,183)
Balance as at  30 September 2017	-

A The above includes borrowing costs of US$ 211,423 for the period ended 30 September 2017 (30 September 2016: US$ 133,303 and 31 March 2017: US$ 859,043). The weighted average capitalisation rate on funds borrowed generally is 6.31 per cent per annum (30 September 2016: 5.89 per cent per annum and 31 March 2017: 6.17 per cent per annum).

B On 19 November 2013, Focus Energy Limited submitted an integrated declaration of commerciality (DOC) to the Directorate General of Hydrocarbons, ONGC, the Government of India and the Ministry of Petroleum and Natural Gas. Upon submission of DOC, exploration and evaluation cost incurred on SSF and SSG field was transferred to development cost. Focus continues to carry out further appraisal activities in the Block, and exploration and evaluation cost incurred subsequent to 19 November 2013, to the extent considered recoverable as per DOC submitted by Focus, is immediately transferred on incurrence to development assets.

Subsequently on 16 August 2017, the management committee of the block (RJ/ON-06) approved the revised field development plan for SGL field , which allows for a higher gas production.  Also on 23 June 2017, the management committee of the block (Rjon-06) approved the integrated field development plan for SSG-1 and SSF-2 field area .

8.  PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment comprise of the following:

Cost	Land	Extended well test equipment	Development/ Production assets	Bunk houses	Vehicles	Other assets	Capital work-in-progress	Total
Balance as at 1 April 2017	167,248	4,120,043	668,879,209	5,926,920	4,734,619	1,576,976	1,317,908	686,722,923
Additions	-	198,669	47,332,757	7,370	29,689	10,216	43,795	47,622,496
Balance as at  30 September  2017	167,248	4,318,712	716,211,966	5,934,290	4,764,308	1,587,192	1,361,703	734,345,419
Accumulated depreciation
Balance as at 1 April 2017	-	1,870,614	34,233,251	5,388,608	3,867,798	1,500,482	-	46,860,753
Depreciation for the period	-	150,381	2,215,281	193,711	99,563	68,915	-	2,727,851
Balance as at  30 September 2017	-	2,020,995	36,448,532	5,582,319	3,967,361	1,569,397	-	49,588,604
Carrying value
As at 30 September 2017	167,248	2,297,717	679,763,434	351,9710	796,947	17,795	1,361,703	684,756,815
Cost	Land	Extended well test equipment	Development/ Production assets	Bunk houses	Vehicles	Other assets	Capital work-in-progress	Total
Balance as at  1 April 2016	167,248	3,737,654	580,789,054	5,917,523	4,576,803	1,506,289	1,227,969	597,922,540
Additions	-	382,389	88,090,155	9,397	157,816	70,687	89,939	88,800,383
Disposals	-	-	-	-	-	-	-	-
Balance as at 31 March 2017	167,248	4,120,043	668,879,209	5,926,920	4,734,619	1,576,976	1,317,908	686,722,923
Accumulated Depreciation Balance as at  1 April  2016	-	1,629,759	23,880,916	5,015,047	3,502,013	1,452,850		35,480,585
Depreciation for the year	-	240,855	10,352,335	373,561	365,785	47,632		11,380,168
Balance as at  31 March 2017	-	1,870,614	34,233,251	5,388,608	3,867,798	1,500,482	-	46,860,753
Carrying value as at 31 March 2017	167,248	2,249,429	634,645,958	538,312	866,821	76,494	1,317,908	639,862,170
Cost	Land	Extended well test equipment	Development/ Production assets	Bunk Houses	Vehicles	Other assets	Capital work-in-progress	Total
Balance as at 1 April 2016	167,248	3,737,654	580,789,054	5,917,523	4,576,803	1,506,289	1,227,969	597,922,540
Additions	-	133	41,593,793	-	-	7,541	2,092	41,603,559
Balance as at  30 September  2016	167,248	3,737,787	622,382,847	5,917,523	4,576,803	1,513,830	1,230,061	639,526,099
Accumulated depreciation
Balance as at 1 April 2016		1,629,759	23,880,916	5,015,047	3,502,013	1,452,850	-	35,480,585
Depreciation for the period	-	126,783	3,747,737	201,751	226,856	35,684	-	4,338,811
Balance as at  30 September 2016	-	1,756,542	27,628,653	5,216,798	3,728,869	1,488,534	-	39,819,396
Carrying value
As at 30 September 2016	167,248	1,981,245	594,754,194	700,7250	847,934	25,296	1,230,061	599,706,703

Borrowing costs capitalised for the period ended 30 September 2017 amounted to US$ 14,289,270 (30 September 2016: US$13,657,072 and 31 March 2017: US$ 27,753,096).

9.  LONG TERM DEBT

From banks

	Maturity	30 September 2017 (Unaudited)	30 September 2016 (Unaudited)	31 March 2017 (Audited)
Non-current portion of long term debt	2018/2021	151,559,044	189,051,995	168,252,860
Current portion of long term debt		40,405,397	42,301,806	44,069,933
Total		191,964,441	231,353,801	212,322,794

Current interest rates are variable and weighted average interest for the year was 6.31per cent per annum (30 September 2016: 5.89 per cent per annum and 31 March 2017: 6.17 per cent per annum). The fair value of the above variable rate borrowings is considered to approximate their carrying amounts.

The term loans are secured by following: -

· First charge on all project assets of the Group both present and future, to the extent of SGL Field. Development. and to the extent of capex incurred out of this facility in the rest of RJ-ON/6 field.

·      First charge on the current assets (inclusive of condensate receivable) of the Group to the extent of SGL field.

· First Charge on the entire current assets of the SGL Field and to the extent of capex incurred out of this facility in the rest of RJON/6 field.

From bonds

	Maturity	30-Sep-17	30-Sep-16	31-Mar-17
		(Unaudited)	(Unaudited)	(Audited )
Non-current portion of long term debt	2018	-	73,169,901	71,394,500
Current portion of long term debt		76,130,342	2,621,576	2,544,421
Total		76,130,342	75,791,477	73,938,921

During the year ended 31 March 2016, the Group has issued SGD 100 million (US$ 74.18 million) notes under the US$ 300 million MTN programme carries interest rate of 8 per cent per annum. These notes are unsecured notes and are fully repayable at the end of 3 years i.e. April 2018. Interest on these notes is paid semi-annually.

10.  RELATED PARTY TRANSACTIONS

The related parties for each of the entities in the Group have been summarised in the table below:

Nature of the relationship	Related Party's Name
I. Holding Company	Gynia Holdings Ltd.
II. Ultimate Holding Company	Multi Asset Holdings Ltd. (Holding Company of Gynia  Holdings Ltd.)
II III. Enterprise over which Key Management                    Personnel (KMP) exercise control (with whom there are transactions)	Focus Energy Limited

Disclosure of transactions between the Group and related parties and the outstanding balances as of 30 September 2017, 30 September 2016 and 31 March 2017 are as follows:

Transactions during the period

Particulars			Period ended	Period ended
			30-Sep-17	30-Sep-16
Transactions with the Holding Company
Amount Received			17,209,839	-
Interest paid			5,072,871	4,163,497
Transactions with KMP
Short term employee benefits			150,013	94,587
Entity over which KMP exercise control
Share of cost incurred by the Focus in respect of the Block			33,727,257	28,451,839
Remittances			16,870,000	48,013,950

11. RELATED PARTY PAYABLES

Amount outstanding towards related parties

Particulars	As at 30 September 2017	As at 30 September 2016	As at 31 March 2017
Entity over which KMP exercise control
Payable/(Advance) to Focus Energy Limited	22,699,519	(12,003,316)	5,250,197
Payable with the Holding Company
Payables to Gynia Holding Limited*	171,354,704	132,271,106	149,071,994
Payable to KMP
Employee obligation	437,684	299,187	320,425

*including interest

Directors' remuneration

Directors' remuneration is included under administrative expenses, evaluation and exploration assets or development assets in the unaudited consolidated financial statements allocated on a systematic and rational manner.

Advance for expenditure/Liability payable to Focus

Liability payable to Focus represents amounts due to them in respect of the Group's share of contract costs, for its participating interest in Block RJ-ON/6 pursuant to the terms of Agreement for Assignment dated 13 January 2006 and its subsequent amendments from time to time.

The management estimates the current borrowings to be repaid on demand within twelve months from the statement of financial position date and these have been classified as current borrowings.

Liability payable to Gynia

* Borrowings from Gynia Holdings Ltd. carries interest rate of 6.5 per cent per annum compounded annually. During the current year, the entire outstanding balance (including interest) was made subordinate to the loans taken from the banks and therefore, is payable along with related interest subsequent to repayment of bank loan in year 2024.

Interest capitalised on loans above have been disclosed in notes 7 and 8.

12. EARNINGS PER SHARE

The calculation of the earnings per share is based on the profits attributable to ordinary shareholders divided by the weighted average number of shares issued during the period.

Calculation of basic and diluted earnings per share is as follows:

		Period ended 30 September 2017	Period ended 30 September 2016
Profit attributable to shareholders of Indus Gas Limited, for basic and dilutive		15,718,106	12,666,760
Weighted average number of shares (used for basic profit per share)		182,973,924	182,973,924
Diluted weighted average number of shares (used for diluted profit per share		182,973,924	182,973,924
Basic earnings per share (US$)		0.09*	0.07*
Diluted earnings per share (US$)		0.09*	0.07*

*Rounded off to the nearest two decimal places.

13.  COMMITMENTS AND CONTINGENCIES

At 30 September 2017, the Group had capital commitments of US$ Nil (30 September 2016: US$ Nil; 31 March 2017: US$ Nil) in relation to property, plant & equipment - development/producing assets, in the Block.

The Group has no contingencies as at 30 September 2017 (30 September 2016: Nil; 31 March 2017: Nil).

14.  FINANCIAL RISK MANAGEMENT

The Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the year ended 31 March 2017.

15.  INCOME TAX CREDIT

Indus Gas profits are taxable as per the tax laws applicable in Guernsey where zero per cent tax rate has been prescribed for corporates. Accordingly, there is no tax liability for the Group in Guernsey. iServices and Newbury being participants in the PSC are covered under the Indian Income tax laws as well as tax laws for their respective countries. However, considering the existence of double tax avoidance arrangement between Cyprus and India, and Mauritius and India, profits in Newbury and iServices are not likely to attract any additional tax in their local jurisdiction. Under Indian tax laws, Newbury and iServices are allowed to claim the entire expenditure in respect of the Oil Block incurred until the start of commercial production (whether included in the exploration and evaluation assets or development assets) as deductible expense in the first year of commercial production or over a period of 10 years. The Company has opted to claim the expenditure in the first year of commercial production. As the Group has commenced commercial production in 2011 and has generated profits in Newbury and iServices, the management believes there is reasonable certainty of utilisation of such losses in the future years and thus a deferred tax asset has been created in respect of these.

16.  BASIS OF GOING CONCERN ASSUMPTION

As at 30 September 2017 The Group has current liabilities amounting to US$ 144,871,346 the majority of which is towards SGD 100 million bond repayment due in April 2018, current portion of borrowings from banks and related parties, primarily to Focus. As at 31 March 2017, the amounts due for repayment (including interest payable) within the next 12 months for long term borrowings are US$ 116,535,739 which the Group expects to meet from its internal generation of cash from operations and by raising additional funds through debt/bond.

17.  FINANCIAL INSTRUMENTS

A summary of the Group's financial assets and liabilities by category is mentioned in the table below.

The carrying amounts of the Group's financial assets and liabilities as recognised at the end of the reporting periods under review may also be categorised as follows:

	30 September 2017	30 September 2016	31 March 2017
Non-current assets
-Security Deposit	885	885	885
Current assets
-Trade receivables	11,879,600	2,973,857	2,045,252
-Cash and cash equivalents	1,674,929	10,316,555	11,401,788
Total financial assets under loans and receivables	13,555,414	13,291,297	13,447,925
Financial liabilities measured at amortised cost:
Non-current liabilities
-  Long term debt	151,559,044	262,221,896	239,647,360
-  Payable to related parties	171,354,704	132,271,106	149,071,994
Current liabilities
-  Current portion of Long term           debt	116,535,739	44,923,382	46,614,354
-  Payable to related parties	23,137,203	299,187	5,570,622
-  Accrued expenses and other liabilities	121,318	221,785	131,885
Total financial liability measured at amortised cost	462,708,008	439,937,356	441,036,215

The fair value of the financial assets and liabilities described above closely approximates their carrying value on the statement of financial position dates.

This information is provided by RNS

The company news service from the London Stock Exchange

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