INDUS GAS LIMITED

Earnings Release • Dec 29, 2016

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RNS Number : 8745S

Indus Gas Limited

29 December 2016

For Immediate Release

Indus Gas Limited

("Indus" or "the Company")

Interim Results

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 2016.

Consolidated  reported  adjusted  revenues,  operating  profit  and  profit  before tax for  the interim  period  ending  30 September 2016 were US$ 27.39m (US$ 22.63m interim 2015), US$ 22.33m (US$ 16.78m interim 2015) and US$ 22.61m (US$ 14.27m interim 2015) respectively.

The Company has continued to make provision for a notional deferred tax liability of US$ 9.94m (US$ 7.79m interim 2015), in accordance with IFRS requirements.

The integrated Field Development Plan in respect of about 2000 sq. kms. outside of the 176 sq. kms. SGL area is under examination by the Directorate General of Hydrocarbons.  A revised Field Development Plan in respect of the SGL area for the enhancement of production to about 80 mmscfd has recently been submitted to Management Committee for approval.

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 2017. 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:

"Indus has made good progress in the period and continues to see consistent growth in revenue and profits.  The revenues are now expected to increase substantially once the additional gas supplies commence."

For further information please contact:

Indus Gas Limited Peter Cockburn	c/o +44 (0)20 76145900
Arden Partners plc Steve Douglas / Patrick Caulfield	+44 (0)20 7614 5900
Bell Pottinger PR Lorna Cobbett	+44 (0)777 1344 781

Indus Gas Limited and its subsidiaries

Unaudited Condensed Consolidated Interim Financial Statements

30 September 2016

Unaudited Condensed Consolidated Statement of Financial Position

(All amounts inUS$, unless otherwise stated)

	Notes	As at 30 September 2016	As at 30 September 2015	As at 31 March 2016
		(Unaudited)	(Unaudited)	(Audited)
ASSETS
Non-current assets
Intangible assets: exploration and evaluation assets	7	-	-	-
Property, plant and equipment	8	599,706,703	522,510,609	562,441,955
Tax assets		1,962,498	1,483,713	1,735,438
Other assets		885	6,225	885
Total non-current assets		601,670,086	524,000,547	564,178,278
Current assets
Inventories		4,549,391	4,265,838	4,113,607
Trade receivables		2,973,857	4,304,910	3,266,738
Advance for expenditure to related party	11	12,003,316	-	-
Other current assets		7,204,623	186,186	238,879
Cash and cash equivalents		10,316,555	106,023,268	61,081,916
Total current assets		37,042,742	114,780,202	68,701,140
Total assets		638,717,828	638,780,749	632,879,418
LIABILITIES ANDEQUITY
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
Share option reserve		-	324,865	-
Retained earnings		55,923,065	33,702,917	43,256,305
Total  shareholders' equity		116,532,704	94,637,421	103,865,944

Unaudited Condensed Consolidated Statement of Financial Position (Contd.)

(All amounts in US $, unless otherwise stated)

	Notes	As at 30 September 2016	As at 30 September 2015	As at 31 March 2016
		(Unaudited)	(Unaudited)	(Audited)
LIABILITIES
Non-current liabilities
Long term debt , excluding current portion	9	262,221,896	305,040,754	283,779,293
Provision for decommissioning		1,218,750	1,353,405	1,132,726
Deferred tax liabilities (net)		50,387,937	34,234,802	40,445,531
Payable to related parties, excluding current portion	11	132,271,106	124,208,932	128,107,609
Deferred revenue		25,563,995	25,563,995	25,563,995
Total non-current liabilities		471,663,684	490,401,888	479,029,154
Current liabilities
Current portion of long term debt	9	44,923,382	20,864,714	37,556,739
Current portion payable to related parties	11	299,187	27,631,649	7,175,123
Accrued expenses and other liabilities		221,785	167,991	175,372
Deferred revenue		5,077,086	5,077,086	5,077,086
Total current liabilities		50,521,440	53,741,440	49,984,320
Total liabilities		522,185,124	544,143,338	529,013,474
Total liabilities and equity		638,717,828	638,780,749	632,879,418

(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 2016		Six month ended 30September 2015
		Unaudited		Unaudited
Revenue		27,393,016		22,631,938
Cost of sales		(4,013,643)		(4,137,020)
Administrative expenses		(1,048,144)		(1,717,973)
Profit from operations		22,331,229		16,776,945
Foreign exchange gain		277,888		42,505
Interest expense		-		(2,553,065)
Interest income		50		75
Profit before tax		22,609,167		14,266,460
Income taxes  -Deferred tax charge		(9,942,407)		(7,789,480)

Profit for the period (attributable 12,666,7606,476,980

to the shareholders of the Group)
Total comprehensive income for the period(attributable to the shareholders of the Group)			12,666,760	6,476,980
Earnings per share		12
Basic			0.07	0.04	0.01	0.01
Diluted			0.07	0.04	0.01	0.01
Par value of each share in GBP			0.02	0.01	0.01

(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)

	Common Stock		Additional paid-in capital	Currency translation reserve		Merger reserve	Share option reserve	Retained earnings	Total stockholders' equity
Number   Amount
---	---	---	---	---	---	---	---	---	---
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

Balance as at 1 April 2015	182,973,924	3,619,443	46,733,689	(9,313,781)	19,570,288	324,865	27,225,937	88,160,441
Profit for the period	-	-	-	-	-	-	6,476,980	6,476,980
Total comprehensive income  for the period	-	-	-	-	-	-	6,476,980	6,476,980
Balance as at 30 September 2015	182,973,924	3,619,443	46,733,689	(9,313,781)	19,570,288	324,865	33,702,917	94,637,421

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

Unaudited Condensed Consolidated Statement of Cash Flows

(All amounts in US $, unless otherwise stated)

				Six months ended 30 September 2016 (Unaudited)			Six months ended 30 September 2015 (Unaudited)
(A) Cash flow from operating activities
Profit before tax				22,609,167			14,266,460
Adjustments
Unrealised exchange (gain)/ loss				(277,888)			3,961
Interest income				(50)			(75)
Interest expense				-			2,553,065
Depreciation				3,747,737			3,866,696
Changes in operating assets and liabilities
Inventories				(435,784)			965,577
Trade receivables				292,881			1,025,573
Trade and other payables				4,405,728			4,233,768
Other current and non-current assets				(6,965,744)			120,178
Other liabilities				(73,386)			50,482
Cash generated from operations				23,302,661			27,085,685
Income taxes paid				(227,060)			(254,926)
Net cash generated from operating activities				23,075,601			26,830,759
(B) Cash flow from investing activities
Purchase of property, plant and equipment A				(50,680,860)			(32,747,077)
Interest received				50			75
Net cash used in investing activities				(51,680,816)			(32,747,002)

Unaudited Condensed Consolidated Statement of Cash Flows

(All amounts in US $, unless otherwise stated) (Cont'd) 

				Six months ended 30 September 2016		Six months ended 30 September 2015
				(Unaudited)		(Unaudited)
(C ) Cash flow from financing activities
Proceeds from long term debt from banks					-			44,400,000
Proceeds from issue of Multicurrency Medium Term Note("MTN")					-			69,548,283
Repayment of long term debt from banks					(14,569,586)			(8,660,000)
Proceeds from related party					218,269			-
Payment of interest					(9,114,813)			(5,629,949)
Net cash (used in)/ generated from financing activities					(23,466,160)			99,658,334
Net change in cash and cash equivalents					(51,071,374)			93,742,091
Cash and cash equivalents at the beginning of the period					61,081,916			12,251,533
Effect of exchange rate change on cash and cash equivalents					306,014			29,644
Cash and cash equivalents at the end of the period					10,316,555			106,023,268
Cash and cash equivalents comprises of
balances with banks					10,316,555			106,023,268

A The purchase of property, plant and equipment above, includes additions to exploration and evaluation assets amounting to US$ 18,009,154 (previous period: US$ 31,337,095) 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 March2008 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") on30 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 field (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 2016 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 2016.

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 2016.

These unaudited condensed consolidated interim financial statements are for the six months ended 30 September 2016 and have been approved for issue by the Board of Directors.----

3.   STANDARDS AND INTERPRETATIONS ISSUED BUT NOT EFFECTIVE AND YET TO BEAPPLIED 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 13Customer 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 2017 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.

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

-           IFRS 16Leases

On January 13, 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 isof 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 January 1, 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, 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 2016 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 2016 (Unaudited)	Period ended 30 September 2015 (Unaudited)	Year ended 31 March 2016 (Audited)
Non-current assets		599,706,703	522,510,609	562,441,955
Current assets		16,552,707	4,265,838	4,113,607
Non-current liabilities		1,218,750	1,353,405	1,132,726
Current liabilities		299,187	27,631,649	7,175,123
Expenses (net of finance income)		4,405,728	4,233,768	10,187,655
Commitments	-		-	-

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 2016.

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 production and sale of gas.

7.  INTANGIBLE ASSETS: EXPLORATION AND EVALUATION ASSETS

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

	Intangible assets: exploration and evaluation assets
Balance as at 31 March 2015	-
Additions A	31,337,095
Transfer to development assets B	(31,337,095)
Balance at  30September  2015	-
Additions A	29,780,558
Transfer to development assets B	(29,780,558)
Balance as at 31 March 2016	-
Additions A	18,009,154
Transfer to development assets B	(18,009,154)
Balance as at  30 September 2016	-

AThe above includes borrowing costs of US$ 133,303for the period ended 30 September 2016(30 September 2015: US$439,064 and 31 March 2016: US$2,034,442). The weighted average capitalisation rate on funds borrowed generally is 5.89 per cent per annum (30 September 2015: 5.68 per cent per annum and 31 March 2016: 5.84 per cent per annum).

BOn 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.

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 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

Cost	Land		Extended well test equipment	Development/ Production assets	Bunk Houses		Vehicles		Other assets		Capital work-in-progress		Total
Balance as at 1 April 2015	167,248		3,737,654	491,344,442	5,917,523		4.576,803		1,492,748		1,189,853		508,426,271
Additions	-		-	43,297,264	-		-		8,981		32,400		43,338,645
Balance as at  30 September  2015	167,248		3,737,654	534,641,706	5,917,523		4,576,803		1,501,729		1,222,253		551,764,916
Accumulated depreciation
Balance as at 1 April 2015	-		1,369,651	14,506,669	4,516,785		2,878,730		1,359,963		-		24,631,798
Depreciation for the period	-		134,720	3,866,696	259,762		311,831		49,500		-		4,622,509
Balance as at  30 September 2015	-		1,504,371	18,373,365	4,776,547		3,190,561		1,409,463		-		29,254,307
Carrying value
As at 30 September 2015	167,248		2,233,283	516,268,341	1,140,9750		1,386,242		92,266		1,222,253		522,510,609

Cost	Land	Extended well test equipment	Development/Production assets		Bunk houses	Vehicles	Other assets	Capital work-in-progress	Total
Balance as at  1 April 2015	167,248	3,737,654		491,344,442	5,917,523	4,576,803	1,492,748	1,189,853	508,426,271
Additions	-	-		89,444,612	-	-	13,541	38,116	89,496,269
Balance as at 31 March 2016	167,248	3,737,654		580,789,054	5,917,523	4,576,803	1,506,289	1,227,969	597,922,540
Accumulated Depreciation
Balance as at  1 April  2015	-	1,369,651		14,506,669	4,516,785	2,878,730	1,359,963	-	24,631,798
Depreciation for the year	-	260,108		9,374,247	498,262	623,283	92,887	-	10,848,787
Balance as at  31 March 2016	-	1,629,759		23,880,916	5,015,047	3,502,013	1,452,850	-	35,480,585
Carrying value as at 31 March 2016	167,248	2,107,895		556,908,138	902,476	1,074,790	53,439	1,227,969	562,441,955

Borrowing costs capitalised for the period ended 30 September 2016 amounted to US$ 13,657,072(30 September 2015: US$ 9,530,722 and 31 March 2016: US$ 23,304,470).

9.  LONG TERM DEBT

From Banks

	Maturity	30 September 2016 (Unaudited)	30 September 2015 (Unaudited)	31 March 2016 (Audited)
Non-current portion of long term debt	2018/2021	189,051,995	235,431,533	210,454,996
Current portion of long term debt from banks		42,301,806	18,396,553	34,932,179
Total		231,353,801	253,828,086	245,387,175

Current interest rates are variable and weighted average interest for the period was5.89per cent per annum (30 September 2015: 5.68 per cent per annum and 31 March 2016:5.84 per cent per annum). The fair value of the above variable rate borrowings are 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 Bond

	Maturity	30 September 2016 (Unaudited)	30 September 2015 (Unaudited)	31 March 2016 (Audited)
Non-current portion of long term debt	2018	73,169,901	69,609,221	73,324,297
Current portion of long term debt		2,621,576	2,468,161	2,624,560
Total		75,791,477	72,077,382	75,948,857

During the year ended 31 March 2016, the Group has issued Singapore Dollar ("SGD") 100 million (USD74.18 million) notes under the US$ 300 million MTN programme which carries interest at the rate of 8 percent per annum. These notes are unsecured notes and are fully repayable at the end of 3 years i.e. April2018.Further, 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.)
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 2016, 30 September 2015 and 31 March 2016are as follows:

Transactions during the period

Particulars		Period ended 30 September 2016	Period ended 30 September 2015
Transactions with the Holding Company
Interest paid		4,163,497		3,920,098
Transactions with KMP
Short term employee benefits		94,587		233,216
Entity over which KMP exercise control
Share of cost incurred by the Focus in respect of the Block		28,451,839		32,193,085
Remittances		48,013,950		28,852,000
Expenses reimbursed		452,637		445,315

Amount outstanding towards related parties

Particulars	As at 30 September 2016		As at  30 September 2015		As at 31 March 2016
Entity over which KMP exercise control
Payable to Focus Energy Limited	-	27,502,572		6,916,510
Advance for expenditure to related party	12,003,316	-		-
Payable with the Holding Company
Payables to Gynia Holding Limited*	132,271,106	124,208,932		128,107,609
Payable to KMP
Employee obligation	299,187	129,077		258,613

*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.

11.ADVANCE FOR EXPENSES/PAYABLE TO RELATED PARTIES

Particulars	As at 30 September 2016	As at  30 September 2015	As at 31 March 2016
PAYABLE
Current
Payable to Focus Energy Limited	-	27,502,572	6,916,510
Payable to directors	299,187	129,077	258,613
Other than current
Payables to Gynia Holding Limited*	132,271,106	124,208,932	128,107,609
RECEIVABLE
Current
Advance for expenditure to related party	12,003,316	-	-

Advance for expenditure/payable to Focus

Receivable from/payable to Focus represents advance for expenditure given to related party 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 dated13 January 2006 and its subsequent amendments from time to time. Advance for expenditure to Focus for meeting company's share of expenses in the block RJ-ON-6/SGL Field.

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. carry 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 (detailed in note 13) 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. EARNINGSPER 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 2016	Period ended 30September2015
Profit attributable to shareholders of Indus Gas Limited, for basic and dilutive		12,666,760		6,476,980
Weighted average number of shares (used for basic profit per share)		182,973,924		182,973,924
No. of equivalent shares in respect of outstanding options		-		311,260
Diluted weighted average number of shares (used for diluted profit per share		182,973,924		183,285,184
Basic earnings per share (US$)		0.07*		0.04*
Diluted earnings per share (US$)		0.07*		0.04*

*Rounded off to the nearest two decimal places.

13.  COMMITMENTS AND CONTINGENCIES

At 30 September 2016, the Group had capital commitments of US$ Nil (30 September 2015: US$ Nil; 31 March 2016: US$ Nil) in relation to property, plant & equipment - development/producing assets, in the Block.

The Group has no contingencies as at 30 September 2016(30 September 2015: Nil; 31 March 2016: 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 2016.

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 CONCERNASSUMPTION

As at 30 September 2016, the Group had current liabilities amounting to US$ 50,521,440majority of which is towards current portion of borrowings from banks and related party, Focus. The Group expects to meet its next year (year ended 30 September 2016) obligation towards existing bank loans from internal generation of cash from operations.

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 2016	30 September 2015		31 March 2016
Non-current assets
Loans and receivables
-Security deposits	885	6,225		885
Current assets
Loans and receivables
-Trade receivables	2,973,857	4,304,910		3,266,738
-Cash and cash equivalents	10,316,555	106,023,268		61,081,916
Total financial assets under loans and receivables	13,291,297	110,334,403		64,349,539
Financial liabilities measured at amortised cost: Non-current liabilities
-  Long term debt	262,221,896		305,040,754	283,799,293
-  Payable to related parties	132,271,106		124,208,932	128,107,609
Current liabilities
-  Current portion long term debt	44,923,382		20,864,714	37,556,739
-  Current portion of payable to related parties	299,187		27,631,649	7,175,123
-  Accrued expenses and other liabilities	221,785		167,991	175,372
Total financial liability measured at amortised cost	439,937,356		477,914,040	456,794,136

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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