RNS Number : 3174Y
Indus Gas Limited
31 December 2019
Indus Gas Limited and its subsidiaries
("Indus" or the "Company")
Unaudited Condensed Consolidated Interim Financial
Statements for the six month period ended 30 September 2019
Indus Gas Limited (AIM:INDI.L), an oil & gas exploration and development company, is pleased to report its interim results for the six month period ending 30 September 2019.
Consolidated reported adjusted revenues, operating profit and profit before tax for the interim period ending 30 September 2019 were US$ 27.69m (US$ 27.78 interim 2018), US$ 26.30m (US$ 23.42m interim 2018) and US$ 26.11m (US$ 23.57m interim 2018) respectively.
The Company has continued to make provision for a notional deferred tax liability of US$ 1.68m (US$ 5.85m interim 2018), in accordance with IFRS requirements.
The Petroleum & Natural Gas Regulatory Board ("PNGRB") have invited bids for the laying of a gas pipeline from RJ-ON/6 Block for a new pipeline route so that the pipeline tariff is minimized. Approvals from the Directorate General of Hydrocarbons ('DGH') and Government had already been received for the development and enhanced production covering a total field area of 2176 sq. km with approved gas reserves of 1.8 tcf.
Commenting, Peter Cockburn, Chairman of Indus, said:
"While the approval of an integrated Field Development Plan ('FDP') for SSG and SSF and a revised FDP for SGL is already in place, the evacuation of gas through a new pipeline at an appropriate tariff will accelerate the monetization of our gas reserves."
For further information, please contact:
Indus Gas Limited
Peter Cockburn
Jonathan Keeling +44 (0) 20 7877 0022
Arden Partners plc
Ciaran Walsh / Steve Douglas / Dan Gee-Summons (Corporate Finance) +44 (0) 20 7614 5900
James Reed-Daunter (Equity Sales)
Unaudited Condensed Consolidated Statement of Financial Position
Notes
As at 30 September 2019
As at 30 September 2018
As at 31 March 2019
(Unaudited)
(Unaudited)
(Audited)
ASSETS
Non-current assets
Intangible assets: exploration and evaluation assets
6
-
-
-
Property, plant and equipment
7
909,083,224
796,677,681
851,277,557
Tax assets
2,099,982
2,608,056
2,695,055
Other assets
590
774
605
Total non-current assets
911,183,796
799,286,511
853,973,217
Current assets
Inventories
6,309,798
8,607,174
9,327,984
Trade receivables
25,865,383
15,642,575
27,617,626
Recoverable from related party
74,920,236
62,071,616
57,098,640
Other current assets
49,807
54,056
10,957
Cash and cash equivalents
6,296,967
864,273
129,152
Total current assets
113,442,191
87,239,694
94,184,359
Total assets
1,024,625,987
886,526,205
948,157,576
LIABILITIES AND EQUITY
Shareholders' equity
Share capital
36,19,443
36,19,443
3,619,443
Additional paid-in capital
46,733,689
46,733,689
46,733,689
Currency translation reserve
(9,313,782)
(9,313,781)
(9,313,782)
Merger reserve
19,570,288
19,570,288
19,570,288
Retained earnings
164,183,991
119,981,026
139,755,664
Totalshareholders' equity
224,793,629
180,590,665
200,365,302
(All amounts in US$, unless otherwise stated)
LIABILITIES
Non-current liabilities
Long term debt , excluding current portion
8
232,246,203
268,180,256
249,722,044
Provision for decommissioning
1,707,761
1,520,200
1,606,825
Deferred tax liabilities (net)
91,125,648
78,885,614
89,442,675
Payable to related parties, excluding current portion
10
400,835,351
297,040,487
331,088,491
Deferred revenue
25,563,995
25,563,995
25,563,995
Total non-current liabilities
751,478,958
661,190,554
697,424,030
Current liabilities
Current portion of long-term debt
8
40,909,823
37,640,707
42,869,400
Current portion payable to related parties
10
352,534
352,985
352,909
Accrued expenses and other liabilities
2,013,957
1,674,208
2,068,849
Deferred revenue
5,077,086
5,077,086
5,077,086
Total current liabilities
48,353,400
44,744,986
50,368,244
Total liabilities
799,832,358
705,935,540
747,792,274
Total liabilities and equity
1,024,625,987
886,526,205
948,157,576
(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 2019
Six months ended 30 September 2018
Unaudited
Unaudited
Revenue
27,690,196
27,775,085
Cost of sales
(1,089,176)
(3,218,897)
Administrative expenses
(303,970)
(1,132,978)
Profit from operations
26,297,050
23,423,210
Foreign exchange gain/(loss), net
(245,732)
142,884
Interest income
59,984
22
Profit before tax
26,111,302
23,566,116
Income taxes -Deferred tax charge
(1,682,975)
(5,854,083)
Profit for the period(attributableto the shareholder of the Group)
24,428,327
17,712,033
Total comprehensive income for the period(attributable to the shareholders of the Group)
24,428,327
17,712,033
Earnings per share
Basic
0.13
0.10
Diluted
0.13
0.10
(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
Share option reserve
(Accumulated losses)/ Retained earnings
Total stockholders' equity
Balance as at 1 April 2019
182,973,924
3,619,443
46,733,689
(9,313,782)
19,570,288
-
139,755,664
200,365,302
Profit for the period
-
-
-
-
-
-
24,428,327
24,428,327
Total comprehensive income for the period
-
-
-
-
-
-
24,428,327
24,428,327
Balance as at 30 September 2019
182,973,924
3,619,443
46,733,689
(9,313,782)
19,570,288
-
164,183,991
224,793,629
Balance as at 1 April 2018
182,973,924
3,619,443
46,733,689
(9,313,781)
19,570,288
-
102,268,993
162,878,632
Profit for the period
-
-
-
-
-
-
17,712,033
17,712,033
Total comprehensive income for the period
-
-
-
-
-
-
17,712,033
17,712,033
Balance as at 30 September 2018
182,973,924
3,619,443
46,733,689
(9,313,781)
19,570,288
-
119,981,026
180,590,665
(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 $, unless otherwise stated)
Six months ended 30 September 2019 (Unaudited)
Six months ended 30 September 2018 (Unaudited)
(A) Cash flow from operating activities
Profit before tax
26,111,302
23,566,116
Adjustments
Unrealised exchange loss/ (gain)
245,732
(142,884)
Interest income
(59,984)
(22)
Depreciation
858,756
2,520,327
Changes in operating assets and liabilities
Inventories
3,018,186
(266,090)
Trade receivables
1,752,243
2,543,379
Trade and other payables
1,136,238
3,171,638
Other current and non-current assets
(38,850)
(19,825)
Provisions for decommissioning
100,936
(60,896)
Other liabilities
(55,267)
602,026
Cash generated from operations
33,069,292
31,913,769
Income taxes paid/refund
595,083
(183,529)
Net cash generated from operating activities
33,664,375
31,730,240
(B) Cash flow from investing activities
Purchase of property, plant and equipmentA
(54,313,241)
(92,694,415)
Interest received
59,984
22
Net cash used in investing activities
(54,253,257)
(92,694,393)
(C) Cash flow from financing activities
Repayment of long-term debt from banks
(20,034,000)
(18,642,570)
Proceed from Related Party
57,600,000
78,449,952
Payment of interest
(10,563,571)
(11,464,739)
Net cash generated from/(used in) financing activities
27,002,429
48,342,643
Net change in cash and cash equivalents
6,413,547
(12,621,510)
Cash and cash equivalents at the beginning of the period
129,152
13,342,498
Effect of exchange rate change on cash and cash equivalents
(245,732)
143,285
Cash and cash equivalents at the end of the period
6,296,967
864,273
A The purchase of property, plant and equipment above, includes additions to exploration and evaluation assets amounting to US$ 3,613,943 (previous period: Nil) 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 $, unless otherwise stated)
1. INTRODUCTION
Indus Gas Limited ("Indus Gas" or "the Company") was incorporated in the Island of Guernsey on 4 March 2008 pursuant to an Act of the Royal Court of the Island of Guernsey. The Company was set up to act as the holding company of iServices Investments Limited. ("iServices") and Newbury Oil Co. Limited ("Newbury"). iServices and Newbury are companies incorporated in Mauritius and Cyprus, respectively. iServices was incorporated on 18 June 2003 and Newbury was incorporated on 17 February 2005. The Company was listed on the Alternative Investment Market (AIM) of the London Stock Exchange on 6 June 2008. Indus Gas through its wholly owned subsidiaries iServices and Newbury (hereinafter collectively referred to as "the Group") is engaged in the business of oil and gas exploration, development and production.
Focus Energy Limited ("Focus"), an entity incorporated in India, entered into a Production Sharing Contract ("PSC") with the Government of India ("GOI") and Oil and Natural Gas Corporation Limited ("ONGC") on 30 June 1998 for petroleum exploration and development concession in India known as RJ-ON/06 ("the Block"). Focus is the Operator of the Block. On 13 January 2006, iServices and Newbury entered into an interest sharing agreement with Focus and obtained a 65 per cent and 25 per cent share respectively in the Block. Consequent to this, the Group acquired an aggregate of 90 per cent participating interest in the Block and the balance 10 per cent of participating interest is owned by Focus. The participating interest explained above is subject to any option exercised by ONGC in respect of individual wells (already exercised for SGL field as further explained in Note 3).
2. BASIS OF PREPARATION
The unaudited condensed consolidated interim financial statements are for the six months ended 30 September 2019 and are presented in United States Dollar (US$), 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 2019.
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 2019.
These unaudited condensed consolidated interim financial statements are for the six months ended 30 September 2019 and have been approved for issue by the Board of Directors.
3. JOINTLY CONTROLLED ASSETS
The Group participates in an unincorporated joint arrangement with Focus wherein the Group's interest in this arrangement was classified as jointly controlled assets. Following implementation of IFRS 11: Joint Arrangements, the Group's interest in this arrangement is now classified as 'Joint operation'. All rights and obligations in respect of exploration, development and production of oil and gas resources under the 'Participating 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.
The block is divided into 3 fields- SGL, SSF and SSG. 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 is 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 2019 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 2019 (Unaudited)
Period ended 30 September 2018 (Unaudited)
Year ended 31 March 2019 (Audited)
Non-current assets
909,083,224
796,677,681
851,277,557
Current assets
81,230,034
70,678,790
66,426,624
Non-current liabilities
1,707,761
1,520,200
1,606,825
Current liabilities
-
-
-
Expenses (net of finance income)
1,136,238
3,171,638
4,697,750
Commitments
-
-
-
Further, the SSF and SSG field has also received its declaration of commerciality on 24th November ,2014. Subsequent to the declaration of commerciality for SSF and SSG discovery, ONGC did not exercise the option to acquire 30 percent in respect of SSF and SSG field. The participating interest in SSF and SSG field between Focus, Iservices and Newbury will remain in ratio of 10 percent, 65 percent and 25 percent respectively for exploration and evaluation cost and production revenue for SSF and SSG in the block.
4. 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 2019.
5. SEGMENT REPORTING
Operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed by the management 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.
6. 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
Balanceat 01 April 2019
-
AdditionsA
3,793,633
Transfer to development assetsB
(3,793,633)
Balance as at 30 September 2019
-
Balance at 01 April 2018
-
AdditionsA
-
Transfer to development assetsB
-
Balance as at 30 September 2018 Balance as at 01 April 2018
- -
AdditionsA
9,569,925
Transfer to development assetsB
(9,569,925)
Balance as at 31 March 2019
-
A The above includes borrowing costs of US$ 93,383 for the period ended 30 September 2019 (30 September 2018: Nil and 31 March 2019: US$ 314,083). The weighted average capitalisation rate on funds borrowed generally is 6.73 per cent per annum (30 September 2018: 6.86 per cent per annum and 31 March 2019: 6.70 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.
Further, field development plan has been approved by DGH as on 23 June 2017. Accordingly, the cost incurred on the aforesaid fields from 23 June 2017 are capitalised directly to development cost.
7. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment comprise of the following:
Cost
Land
Extended well test equipment
Development Assets
Production Assets
Bunk Houses
Vehicles
Other assets
Capital work-in-progress
Total
Balance as at 1 April 2019
167,248
4,587,730
678,038,141
212,011,941
5,926,920
4,773,327
1,690,100
1,636,932
908,832,339
Additions Disposals/Transfers
- -
805 -
58,639,020 (16,994,002)
16,994,002
- -
- -
5,140 -
279,706 -
75,918,673 (16,994,002)
Balance as at 30 September 2019
167,248
4,588,535
719,683,159
229,005,943
5,926,920
4,773,327
1,695,240
1,916,638
967,757,010
Accumulated depreciation
Balance as at 1 April 2019
-
2,282,425
-
43,641,189
5,782,117
4,243,213
1,605,838
-
57,554,782
Depreciation for the period
-
91,698
-
858,756
55,121
91,608
21,821
-
1,119,004
Balance as at 30 September 2019
-
2,374,123
-
44,499,945
5,837,238
4,334,821
1,627,659
-
58,673,786
Carrying value
As at 30 September 2019
167,248
2,214,412
719,683,159
184,505,998
89,682
438,506
67,581
1,916,638
909,083,224
Cost
Land
Extended well test equipment
Development Assets
Production assets
Bunk houses
Vehicles
Other assets
Capital work-in-progress
Total
Balance as at 1 April 2018
167,248
4,324,033
587,114,867
190,449,112
5,926,920
4,767,563
1,620,590
1,371,441
795,741,774
Additions Disposals/Transfers
- -
99,143 -
46,668,030 -
9,844,031
- -
- -
50,952 -
88,709 -
56,750,865 -
Balance as at 30 September 2018
167,248
4,423,176
638,140,443
200,293,143
5,926,920
4,764,563
1,671,542
1,460,150
852,492,639
Accumulated depreciation
Balance as at 1 April 2018
-
2,105,807
-
39,645,716
5,652,284
4,059,330
1,573,350
-
53,036,487
Depreciation for the period
-
86,608
-
2,520,327
64,916
91,942
14,678
-
2,778,471
Balance as at 30 September 2018
-
2,192,415
-
42,166,043
5,717,200
4,151,272
1,588,028
-
55,814,958
Carrying value
As at 30 September 2018
167,248
2,230,761
638,140,443
158,127,100
209,720
616,291
83,514
1,460,150
796,677,681
Cost
Land
Extended well test equipment
Development
Production assets
Bunk houses
Vehicles
Other assets
Capital work-in-progress
Total
Balance as at 1 April 2018
167,248
4,324,033
587,114,867
190,449,112
5,926,920
4,767,563
1,620,590
1,371,441
795,741,774
Additions Disposals/Transfers
- -
263,697 -
90,923,274 -
21,562,829
- -
5,764 -
69,510 -
265,491 -
113,090,565 -
Balance as at 31 March 2019
167,248
4,587,730
678,038,141
212,011,941
5,926,920
4,773,327
1,690,100
1,636,932
908,832,339
Accumulated depreciation
Balance as at 1 April 2018
-
2,105,807
-
39,645,716
5,652,284
4,059,330
1,573,350
-
53,036,487
Depreciation for the period
-
176,618
-
3,995,473
129,833
183,883
32,488
-
4,518,295
Balance as at 31 March 2019
-
2,282,425
-
43,641,189
5,782,117
4,243,213
1,605,838
-
57,554,782
Carrying value
As at 31 March 2019
167,248
2,305,305
678,038,141
168,370,752
144,803
530,114
84,262
1,636,932
851,277,557
Borrowing costs capitalised for the period ended 30 September 2019 amounted to US$ 23,309,017 (30 September 2018: US$ 15,126,753 and 31 March 2019: US$ 41,500,334).
8. LONG TERM DEBT FROM BANKS
Maturity
30 September 2019 (Unaudited)
30 September 2018 (Unaudited)
31 March 2019 (Audited)
Non-current portion of long term debt
2021/2024
82,061,620
118,303,124
100,003,278
Current portion of long term debt from banks
37,276,490
34,140,022
39,171,055
Total
119,338,110
152,443,146
139,174,333
Current interest rates are variable and weighted average interest for the period was 6.73 per cent per annum (30 September 2018: 6.63 per cent per annum and 31 March 2019: 6.70 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 September 2019 (Unaudited)
30 September 2018 (Unaudited)
31 March 2019 (Audited)
Non-current portion of long term debt
2022
150,184,583
149,877,132
149,718,766
Current portion of long term debt from banks
3,633,333
3,500,685
3,698,345
Total
153,817,916
153,377,817
153,417,111
During the period ended 31 March 2018, the Group has issued USD 150 million notes under the US$ 300 million MTN programme carries interest rate of 8.1 per cent per annum. These notes are unsecured notes and are fully repayable at the end of 5 years i.e. December 2022 further interest on these notes will be paid semi-annually.
9. 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 ofGyniaHoldings 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 2019 and 30 September 2018 are as follows:
Transactions during the period
Particulars
Period ended 30 September 2019
Period ended 30 September 2018
Transactions with the Holding Company
Amount Received Interest paid
57,600,000 12,146,860
78,449,950 3,949,913
Transactions with KMP
Short term employee benefits
97,900
78,815
Entity over which KMP exercise control
Share of cost incurred by the Focus in respect of the Block
32,180,404
42,383,977
Remittances
50,002,000
90,780,000
10. PAYABLE TO RELATED PARTIES
Particulars
As at 30 September 2019
As at 30 September 2018
As at 31 March 2019
Entity over which KMP exercise control
Payable to Focus Energy Limited
(74,920,236)
(62,071,616)
(57,098,640)
Payable with the Holding Company
Payables to Gynia Holding Limited*
400,835,351
287,040,487
331,088,491
Payable to KMP
Employee obligation
352,534
352,985
352,909
*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.
Amount receivable from Focus
Amount receivable from Focus represents excess amounts paid to them in respect of the Group's share of contract costs, for its participating interest in Block RJ-ON/6 .
Liability payable to Gynia
* Borrowings from Gynia Holdings Ltd. carries interest rate of 6.5 per cent per annum compounded annually. Some part of the outstanding balance (including interest) was made subordinate to the loans taken from the banks as per the sanction terms of the banks and, 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 6 and 7.
11. 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 2019
Period ended 30 September 2018
Profit attributable to shareholders of Indus Gas Limited, for basic and dilutive
24,428,327
17,712,033
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
-
-
Diluted weighted average number of shares (used for dilutedprofitper share
182,973,924
182,973,924
Basic earnings per share (US$)
0.13*
0.10*
Diluted earnings per share (US$)
0.13*
0.10*
*Rounded off to the nearest two decimal places.
12. COMMITMENTS AND CONTINGENCIES
At 30 September 2019, the Group had capital commitments of US$ Nil (30 September 2018: US$ Nil; 31 March 2019: US$ Nil) in relation to property, plant & equipment - development/producing assets, in the Block. The Group has no contingencies as at 30 September 2019 (30 September 2018: Nil; 31 March 2019: Nil).
13. 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 2019.
14. 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 incurred in respect to the SGL field. 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.
15. BASIS OF GOING CONCERN ASSUMPTION
As at 30 September 2019, the Group had current liabilities amounting to US$ 48,353,400 majorities of which is towards current portion of borrowings from banks and related parties. As at 30 September 2019, the amounts due for repayment (including interest payable) within the next 12 months for long term borrowings are US$ 40,909,823 which the Group expects to meet from its internal generation of cash from operations.
Further the group is contemplating to raise funds which will be used for planned capital expenditures.
16. 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 2019
30 September 2018
31 March 2019
Non-current assets
-Other assets
590
774
605
Current assets
-Trade receivables -Receivables from related party
25,865,383 74,920,236
15,642,575 62,071,616
27,617,626 57,098,640
-Cash and cash equivalents
6,296,967
864,273
129,152
Total financial assets
107,083,176
78,579,238
84,846,023
Financial liabilities measured at amortised cost Non-current liabilities
- Long term debt from banks
232,246,203
268,180,256
249,722,044
- Payable to related parties
400,835,351
297,040,487
331,088,491
Current liabilities
- Long term debt from banks
40,909,823
37,640,707
42,869,400
- Payable to related parties
352,534
352,985
352,909
- Accrued expenses and other liabilities
2,013,957
1,674,208
2,068,849
Total financial liability measured at amortized cost
676,357,868
604,888,643
626,101,693
The fair value of the financial assets and liabilities described above closely approximates their carrying value on the statement of financial position dates.
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