REG - Indus Gas Limited - Interim Results and Operational Update <Origin Href="QuoteRef">INDII.L</Origin>

Indus GasAnnouncement

25/11/2014 13:36

RNS Number : 9180X
Indus Gas Limited
25 November 2014
For Immediate Release Tuesday 25 November 2014
Indus Gas Limited
("Indus" or "the Company")
Interim Results and Operational Update
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 2014.
Consolidated reported adjusted revenues, operating profit and profit before tax for the interim period ending 30 September 2014 were US$ 17.48m (US$19.45 mn interim 2013), US$ 13.41mn (US$16.19 mn interim 2013) and US$ 13.39mn (US$ 16.04mn interim 2013) respectively. As outlined in previous financial statements, these numbers are adjusted for "Take or Pay" receipts, which are reported as deferred revenue in the financial statements. The adjustment for the interim period amounts to US$ 0.43mn (US$9.80mn Interim 2013), reflecting a narrowing of the gap between production and end user demand. During the interim period, there were a number of turbine outages creating a knock-on effect to Indus's gas plant. This triggered an enforced delay before the gas plant came back on-line and hence resulted in several short periods of production down-time. These issues have now been fully resolved with production stable at 33.5 mmcf/d.
We have continued to make provision for a notional deferred tax liability of US$ 5.73mn, in accordance with IFRS requirements. 
Since the announcement of the annual results on 24 September 2014, the Company has reached financial close on a new $180mn debt facility and completed its partial drawdown. As of 30 September 2014, Indus had outstanding bank debt of US$ 94.04mn, which has reduced from US$ 110.69mn, in line with the agreed amortisation schedule. This new term debt facility combined with the existing revenue stream will fund the Company's continued operational expansion and enable Indus to meet all of its financial obligations over the next 12 months.
During the period, the Company drilled 4 new successful production wells SGL-15, SGL SB-1, SGL SB-2 and SGL SB-3 in the Pariwar formation to augment current gas production. 
The declaration of commerciality (DOC) in respect of the circa 2000 km2 area, outside of 176 km2 of previously granted SGL Mining Lease area ("Non -SGL Area"), has been recently approved by the Management Committee, as detailed in the Company's Production Sharing Contract (PSC), consisting of representatives from the Government of India (Ministry of Petroleum and Natural Gas), the Director General of Hydrocarbons and ONGC. This will allow the Company to progress with a Field Development Plan for this 2000 km2 area. As part of DOC approval process, the Company has relinquished the remaining 1,850 square kilometres on the Eastern side of the Block. 
The Government of India has recently issued the new Domestic Natural Gas Pricing Guidelines 2014, which sets the standard benchmark gas price at $5.61 per mmBtu, effective from 1 November 2014. The Company is currently realising US$5 per mmBtu in respect of its existing gas sales contract, which is set to be renegotiated in October 2015.
Commenting, Peter Cockburn, Chairman of Indus, said:
"Indus continues to make very significant operational progress. The new US$ 180mn debt facility will provide the necessary funding for the next expansion phase of our operations. Approval of the DOC and recent policy announcements from the Government of India, including gas pricing, are extremely encouraging. The Board looks forward to the next 12 months with confidence."
For further information please contact:
Indus Gas Limited
Peter Cockburn
John Scott  +44 (0)20 7877 0022
Arden Partners plc
Steve Douglas  +44 (0)20 7614 5900
Bell Pottinger PR
Philip Dennis   +44 (0)20 3772 2557


Unaudited Condensed Consolidated Statement of Financial Position 
(All amounts in US$, unless otherwise stated)

Notes
As at
30 September 2014
As at
30 September 2013
As at
31 March 2014


(Unaudited)
(Unaudited)
(Audited)
ASSETS




Non-current assets




Intangible assets: exploration and evaluation assets
7
-
53,164,502
 -
Property, plant and equipment
8
442,971,685
320,038,409
408,582,251
Other assets

885
885
 885
Total non-current assets 

442,972,570
373,203,796
408,583,136
Current assets




Inventories

7,905,776
4,330,567
9,326,267
Trade receivables

3,645,798
6,863,677
7,847,404
Current tax assets

966,453
468,316
726,511
Other current assets

628,502
96,028
408,645
Cash and cash equivalents

5,038,024
1,312,701
977,028
Total current assets

18,184,553
13,071,289
19,285,855
Total assets

461,157,123 
386,275,085
427,868,991





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
Share option reserve

324,865
324,865
324,865
Retained earnings

18,213,174
2,633,055
10,981,346
Total shareholders' equity

79,147,678
63,567,559
71,915,850
Unaudited Condensed Consolidated Statement of Financial Position (Contd.)
(All amounts in US $, unless otherwise stated)

Notes
As at 
30 September 2014
As at 
30 September 2013
As at 
31 March 2014


(Unaudited)
(Unaudited)
(Audited)





LIABILITIES




Non-current liabilities




Long term debt from banks, excluding current portion 
9
76,453,890
93,375,203
85,266,117
Provision for decommissioning

1,191,579
972,552
1,079,946
Deferred tax liabilities (net)

18,413,620 
6,271,662
12,687,726
Payable to related parties, excluding current portion
10
116,628,106
109,500,515
112,947,262
Deferred revenue 

25,049,173 
18,815,921
24,618,832
Total non-current liabilities

237,736,368
228,935,853
236,599,883
Current liabilities




Current portion of long term debt from banks
9
17,582,006
17,366,180
17,301,889
Current portion payable to related parties
10
121,473,453
71,321,089
96,847,805
Finance lease obligation

-
480
-
Accrued expenses and other liabilities

140,532
6,838
126,478
Deferred revenue

5,077,086
5,077,086
5,077,086
Total current liabilities

144,273,077
93,771,673
119,353,258
Total liabilities

382,009,445 
322,707,526
355,953,141
Total liabilities and equity 

461,157,123 
386,275,085 
427,868,991
(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 2014

Six month ended
30 September 2013


Unaudited

Unaudited





Revenue 

17,048,656 

9,647,267
Cost of sales

(3,007,340) 

(2,507,513)
Administrative expenses

(1,061,280)

(753,561)





Profit from operations

12,980,036

6,386,193
Foreign exchange gain/(loss), net

(22,361)

79,795
Interest expense

-

(225,174)
Interest income

50

8
Profit before tax

12,957,725

6,240,822





Income taxes
-Deferred tax charge

(5,725,894)

 
(2,817,180)
Profit for the period (attributable

7,231,831

3,423,642
to the shareholder of the Group)




Total comprehensive income for the period (attributable to the shareholders of the Group)

7,231,831

3,423,642
Earnings per share
11



Basic

0.04

0.02
Diluted

0.04

0.02
Par value of each share in GBP

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)

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 2014
182,973,924
3,619,443
46,733,689
(9,313,781)
19,570,288
324,865
10,981,346
 71,915,850
Profit for the period
-
-
-
-
-
-
7,231,831
7,231,831
Total comprehensive income for the period
-
-
-
-
-
-
7,231,831
7,231,831
Balance as at 30 September 2014
182,973,924
3,619,443
46,733,689
(9,313,781)
19,570,288
324,865
18,213,174
79,147,678
Balance as at 1 April 2013
182,973,924
3,619,443
46,733,689
(9,313,781)
19,570,288
324,865
(790,587)
60,143,917
Profit for the period
-
-
-
-
-
-
3,423,642
3,423,642
Total comprehensive income for the period
-
-
-
-
-
-
3,423,642
3,423,642
Balance as at 30 September 2013
182,973,924
3,619,443
46,733,689
(9,313,781)
19,570,288
324,865
2,633,055
63,567,559
(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 2014

Six months ended
30 September 2013


Unaudited

Unaudited
(A) Cash flow from operating activities




Profit before tax

12,957,725 

6,240,822
Adjustments




Unrealised exchange loss/ (gain)

(737) 

2,521
Interest income

(50)

(8)
Interest expense

-

283,139
Provision for decommissioning cost

111,633

63,037
Depreciation

2,538,780 

2,157,254
Changes in operating assets and liabilities




Inventories

1,420,491

1,644,049
Trade receivables

4,201,605

3,062,352
Trade and other payables

3,229,667

1,948,579
Other current and non-current assets

(219,858)

(52,903)
Deferred revenue

430,341

9,797,311
Other liabilities

133,795

(56,710)
Cash generated from operations

24,803,392

25,089,443
Income taxes paid

(239,942)

(237,460)
Net cash generated from operating activities

24,563,450

24,851,983
(B) Cash flow from investing activities




Investment in exploration and evaluation assets 

-

(32,899,514)
Purchase of property, plant and equipment 

(9,295,829)

13,433,241
Interest received

50

8
Net cash used in investing activities

(9,295,779)

(19,466,265)




Unaudited Condensed Consolidated Statement of Cash Flows
(All amounts in US $, unless otherwise stated) (Cont'd)


Six months ended
30 September 2014

Six months ended
30 September 2013


Unaudited

Unaudited
(C ) Cash flow from financing activities




Repayment of long term debt from banks

(8,660,000)

(8,660,000)
Payment of Interest

(2,547,412)

(2,957,929)
Repayment of finance lease obligations

-

(2,210)
Net cash used in financing activities

(11,207,412)

(11,620,139)
Net change in cash and cash equivalents

4,060,259

(6,234,421)





Cash and cash equivalents at the beginning of the period

977,028

7,546,024
Effect of exchange rate change on cash and cash equivalents

737

1,098
Cash and cash equivalents at the end of the period

5,038,024

1,312,701





Cash and cash equivalents comprises of 




Balances with banks

5,038,024

1,312,701





(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 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 Company Limited ("Newbury"). iServices and Newbury are companies incorporated in Mauritius and Cyprus respectively. iServices was incorporated in the year 2003 and Newbury was incorporated in the year 2005. Subsequently, the Company was listed on the Alternative Investment Market (AIM) of the London Stock Exchange on 6 June 2008.
Indus Gas, through its subsidiaries iServices and Newbury (hereinafter collectively referred to as "the Group"), is engaged in the business of oil and gas exploration, development and production. The Group owns an aggregate of 90 per cent participating interest in a petroleum exploration and development concession in India known as RJ-ON/06 ("the Block"). The remaining 10 per cent participating interest is owned by Focus Energy Limited ("Focus"). Focus 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 in respect of the Block. The participating interest is subject to any option exercised by ONGC in respect of individual discoveries (already exercised for the SGL Field as further explained in Note 3).
Details of the Company's subsidiaries as at the end of the reporting periods are as follows:
Name of Subsidiary
Principal activity
Place of incorporation
Proportion of ownership interest and voting power held by the Group





iServices Investments Limited
Oil and gas extraction, development and production
Mauritius
100%






Newbury Oil Company Limited
Oil and gas extraction, development and production
Cyprus
100%






2. BASIS OF PREPARATION
The unaudited condensed consolidated interim financial statements are for the six months ended 30 September 2014 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 2014.
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 2014.
These unaudited condensed consolidated interim financial statements are for the six months ended 30 September 2014 and have been approved for issue by the Board of Directors on 24 November 2014
The accounting policies applied are consistent with the policies that were applied for the preparation of the consolidated financial statements for the year ended 31 March31, 2014, except for the adoption of new standards and amendments effective for the Group with effect from 1 January, 2014.
Effective 1 January, the Group has adopted the following standards:
- IFRS 10 'Consolidated Financial Statements'; (effective 1 January 2014)
- IFRS 11 'Joint arrangements'; (effective 1 January 2014)
- IFRS 12 'Disclosure of interests in Other Entities'; (effective 1 January 2014)
- IAS 27 (amendment) 'Separate Financial Statements; (effective 1 January 2014)
- IAS 28 (amendment) 'Investments in associates and Joint Ventures'; (effective 1 January 2014)
These changes to IFRS effective 1 January 2014 have no impact on the Group's accounting policies or financial statements.
3. JOINTLY CONTROLLED ASSETS
The Group is jointly engaged in oil and gas exploration, development and production activities along with Focus. This venture is a jointly controlled asset as defined under IAS 31: Interest in Joint Ventures. 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 on had exercised the option to acquire a 30 per cent participating interest in the discovered fields on 6 June 2008. 
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 such participant's cumulative unrecovered contract costs as at the end of the previous year or where there are no unrecovered contract costs at the end of previous year, on the basis of participating interest of each participant in the field.
On the basis of above, gas production for the period ended 30 September 2014 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:

Period ended
30 September 2014
(Unaudited)
Period ended 
30 September 2013
(Unaudited)
Year ended 
31 March 2014
(Audited)




Non-current assets 
442,971,685
373,202,911
408,582,251
Current assets
7,905,776
4,330,567
9,326,267




Non-current liabilities
1,191,579
972,552
1,079,946
Current liabilities 
121,289,798
71,321,089
96,847,805
Expenses (net of finance income)
3,229,667
1,948,578
5,684,190




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.
4. 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 2014. 
5. SEGMENT REPORTING
The Chief Operating Decision Maker reviews the business as one operating segment being the extraction and production of oil and gas. Hence, no separate segment information has been furnished herewith.
During the six month period ended 30 September 2014, there have been no changes from prior periods in the measurement methods used to determine operating segments and reported segment profit or loss.
All of the non-current assets other than financial instruments and deferred tax assets (there are no employment benefit assets, and rights arising under insurance contracts) are located in India and amounted US$ 442,971,685 as at 30 September 2014(30 September 2013: US$ 373,202,911, 31 March 2014: US$ 408,582,251).
The Group has a single product, i.e. the sale of natural gas, which is supplied to a single customer, GAIL (India) Limited in a single geographical segment, being India.
6. BASIS OF GOING CONCERN ASSUMPTION
As at 30 September 2014, the Group had current liabilities amounting to US$ 143,770,933 majority 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 2015) obligation towards existing bank loans from internal generation of cash from operations.
The Group has obtained a sanction of additional debt of US$ 180 million subsequent to the period end. Part of this debt is to be used for the repayment of payable towards Focus and balance will be utilised towards further appraisal and development expenditure in the Block. Furthermore, during the period ended 30 September 2014, Gynia has also assured the Group to provide support for any cash requirement to meet its obligations towards banks not met through internal generation of cash. Based on this, the unaudited consolidated interim financial statements have been prepared on going concern basis.
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 2013
 18,427,390
Additions
34,737,112
Balance at 30 September 2013
53,164,502
Additions
24,643,692
Transfer to development assets
(77,808,194)
Balance as at 31 March 2014
 -
Additions
15,787,912
Transfer to development assets
(15,787,912)
Balance as at 30 September 2014
 -


The Operator (Focus) has filled integrated Declaration of commerciality (DoC) in November 2013. Based on the policy framework for relaxations, extensions and clarifications at the development and production stage under the PSC regime for early monetization of Hydrocarbon discoveries issued by Government of India, Ministry of Petroleum & Natural Gas on 10 November, 2014, the Operator has submitted a request with Directorate General of Hydrocarbons, for continuing appraisal activities till submission of Field Development Plan in October 2015.
The above also includes borrowing costs capitalised of US$ 227,546 for the period ended 30 September 2014 (30 September 2013: US$ 1,029,641, 31 March 2014: US$ 2,810,610).
 
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 2014
167,248
3,731,437
407,065,250
5,384,531
4,804,502
1,478,568
1,406,329
424,037,865
Additions
-
583
37,794,322
-
-
7,605
144,151
37,946,661
Balance as at 30 September 2014
167,248
3,732,020
444,859,572
5,384,531
4,804,502
1,486,173
1,550,480
461,984,526









Accumulated depreciation







Balance as at 1 April 2014
 - 
1,043,944
6,922,627
3,775,601
2,519,738
1,193,704
-
15,455,614
Depreciation for the period 
 - 
167,671
2,538,780
409,413
346,672
94,691
-
3,557,227
Balance as at 30 September 2014
 - 
1,211,615
9,461,407
4,185,014
2,866,410
1,288,395
-
19,012,841
Carrying value








As at 30 September 2014
167,248
2,520,405
435,398,165
1,199,5172
1,938,092
197,778
1,550,480
 442,971,685
Cost
Land
Extended well test equipment
Development/Production assets
Bunk houses
Vehicles
Other assets
Capital work-in-progress
Total
Balance as at 1 April 2013
 
36,437
3,577,517
309,075,831
5,233,802
4,780,493
1,423,900
2,004,272
326,132,252
Additions 
130,811
153,920
97,989,419
150,729
24,009
54,668
426,576
98,930,132
Disposals

-
-
-
-
-
(1,024,519)
(1,024,519)
Balance as at 31 March 2014
167,248
3,731,437
407,065,250
5,384,531
4,804,502
1,478,568
1,406,329
424,037,865
Accumulated Depreciation







Balance as at 1 April 2013
-
709,656
2,149,500
2,943,680
1,778,168
958,165
-
8,539,169
Depreciation for the year 
-
334,288
4,773,127
831,921
741,570
235,539
-
6,916,445
Balance as at 31 March 2014 
-
1,043,944
6,922,627
3,775,601
2,519,738
1,193,704
-
15,455,614








Carrying value
167,248
2,687,493
400,142,623
1,608,930
2,284,764
284,864
1,406,329
408,582,251
As at 31 March 2014








As at 30 September 2014
167,248
2,520,405
435,398,165
1,199,517
1,938,092
197,778
1,550,480
442,971,685
Cost
Land
Extended well test equipment
Development/Production assets
Bunk Houses
Vehicles
Other assets
Capital work-in-progress
Total
Balance as at 1 April 2013
36,437
3,577,517
309,075,831
5,233,802
4,780,493
1,423,900
2,004,276
326,132,256
Additions
-
20,295
5,420,517
-
-
43,580
212,982
5,697,374
Balance as at 30 September 2013
36,437
3,597,812
314,496,348
5,233,802
4,780,493
1,467,480
2,217,258
331,829,630









Accumulated depreciation







Balance as at 1 April 2013
 - 
709,656
2,149,504
2,943,680
1,778,168
958,165
-
8,539,173
Depreciation for the period
 - 
163,908
2,157,254
420,800
386,533
123,553
-
3,252,048
Balance as at 30 September 2013
 - 
873,564
4,306,758
3,364,480
2,164,701
1,081,718
-
11,791,221









Carrying value








As at 30 September 2013
36,437
2,724,248
310,189,590
1,869,3222
2,615,792
385,762
2,217,258
320,038,409
Borrowing costs capitalised for the period ended 30 September 2014 amounted to US$ 6,126,502 (30 September 2013: US$ 5,420,529 and 31 March 2014: US$ 10,281,753).
Depreciation of development and production assets has been charged in accordance with the Group's accounting policy upon commencement of production.
9. LONG TERM DEBT FROM BANKS

Maturity
30 September 2014
30 September 2013
31 March 2014
Non-current portion of long term debt
2018/2021
76,453,890
93,375,203
85,266,117
Current portion of long term debt from banks

17,582,006
17,366,180
17,301,889
Total 

94,035,896
110,741,383
102,568,006
The Group obtained two term loan facilities from a consortium of banks in the amount of US$110,000,000 and US$40,000,000. Against the loan of US$110,000,000, Indus Gas has drawn US$109,904,073 as at 30 September 2014 (30 September 2013: US$109,904,073, 31 March 2014: US$109,904,073) and the balance has lapsed and can no longer be utilised. The other loan facility of US$40,000,000 has been fully utilised as at 30 September 2014 (30 September 2013: US$ 40,000,000) 
The outstanding debts as of 30 September 2014 include a balance of US$ 58,632,708 (30 September 2013: US$ 74,536,801; 31 March 2014: US$ 66,676,801) repayable in quarterly instalments of US$ 3,930,000 (out of which, as on 30 September 2014; US$ 15,982,006 related to sum payable within 12 months including interest payable of US$ 262,006) with the last instalment falling due in May 2018. This loan bears interest of LIBOR plus 500 basis points payable along with each quarterly instalment. 
Balance of US$ 35,403,188 (30 September 2013: US$ 37,600,000; 31 March 2014: US$ 36,800,000) is repayable through quarterly instalments of US$ 400,000 (out of which, US$ 1,600,000 relates to sum payable within 12 months period ended 30 September 2015 including interest payable US$ Nil) until March 2019 and thereafter US$3,600,000 until maturity of term with the last instalment falling due in May 2021. This loan bears interest of LIBOR plus 400 basis points payable along with each quarterly instalment. 
Interest capitalised on loans above have been disclosed in notes 7 and 8.
The fair value of the above variable rate borrowings are considered to approximate their carrying amounts.
The term loans are secured by all the existing assets of subsidiaries of Indus Gas i.e. iServices and Newbury along with the Group's participating interest in the Block RJ-ON/6 to the extent of SGL field and all future receivables from gas sales. 
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 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 2014 and 31 March 2014 are as follow:
Transactions during the period
Particulars

Period ended 
30 September 2014
Period ended 
30 September 2013
Transactions with the Holding Company



Interest paid

3,680,844
3,446,748




Transactions with KMP



Short term employee benefits

394,499
168,253




Entity over which KMP exercise control



Share of cost incurred by the Focus in respect of the Block

29,801,417
37,846,720
Remittances

4,890,000
33,366,128
Expenses reimbursed 

405,510
215,684
Amount outstanding towards related parties
Particulars
Period ended 
30 September 2014
Period ended 
30 September 2013
Period ended 
31 March 2014

Entity over which KMP exercise control




Payable to Focus Energy Limited
121,289,798
71,321,089
96,783,891

Payable with the Holding Company




Payables to Gynia Holding Limited*
116,628,106
109,500,515
112,947,262

Payable to KMP




Employee obligation 
183,655
-
63,914






*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. PAYABLE TO RELATED PARTIES 
Related parties payable comprise of the following:

30 September 2014
30 September 2013
31 March 2014
- Current liabilities 



Liability payable to Focus
121,289,798
71,321,089
96,783,891 
- Non-current liabilities 



Liability payable to Gynia*
116,628,106
109,500,515
112,947,262
Other payables
183,655
-
63,914

238,101,559
238,101,559
209,795,067
Liability payable to Focus
Liability payable to Focus represents unpaid amount of the cost share of the Group in respect of its participating interest in Block RJ-ON/6 pursuant to the terms of Agreement for Assignment dated 13January 2006 and its subsequent amendments from time to time.
Liability payable to Gynia
Liability payable to Gynia represents loans from the parent company for financing the oil and gas operations and meeting other obligations.
Other payables to related parties comprise of outstanding balances to associated entities and directors. All the amounts are short term. The carrying value of the borrowings and other payables are considered to be a reasonable approximation of fair value.
* Borrowings from Gynia Holdings Ltd. carry an interest rate of 6.5 per cent per annum compounded annually. Out of this loan from Gynia Holdings Ltd., US$ 52 million is subordinated to loans taken from the banks and therefore, is repayable along with related interest subsequent to repayment of bank loans in March 2021. Balance of US$ 54 million is repayable along with related interest in the year ending 31 March 2019. Balance appearing in above table is inclusive of interest payable till reporting date.
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 2014
Period ended 
30 September 2013

Profit attributable to shareholders of Indus Gas Limited, for basic and dilutive

7,231,831
3,423,642
Weighted average number of shares (used for basic loss per share)

182,973,924 
182,961,102
No. of equivalent shares in respect of outstanding options

96,882
45,965
Diluted weighted average number of shares (used for diluted loss per share

183,070,806 
183,007,067




Basic Profit per share (US$)

0.04*
0.02*
Diluted Profit per share (US$)

0.04*
0.02*
*Rounded off to the nearest two decimal places.
13. COMMITMENTS AND CONTINGENCIES
At 30 September 2014, the Group had capital commitments of US$ NIL (30 September 2013: US$ Nil; 31 March 2014: US$ NIL) in relation to property, plant & equipment - development/producing assets, in the Block.
The Group has no contingencies as at 30 September 2014 (30 September 2013: Nil; 31 March 2014: 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 2014.
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 have opted to claim the expenditure in the first year of commercial production. During the year ended 31 March 2011, as the Group has commenced commercial production 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. 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 2014
30 September 2013
31 March 2014
Non-current assets 
-Other assets 
885
885 
885
Current assets 



-Trade receivables 
3,645,798
6,863,677 
7,847,404 
-Cash and cash equivalents 
5,038,024 
1,312,701 
977,028 
Total financial assets 
8,684,707 
8,177,263
8,825,317 




Financial liabilities measured at amortised 



cost: 



Non-current liabilities 



- Long term debt from banks 
76,453,890 
93,375,203 
85,266,117 
- Payable to related parties 
116,628,106 
109,500,515 
112,947,262 
Current liabilities 



- Long term debt from banks
 17,582,006
17,366,180
17,301,889 
- Payable to related parties 
121,473,453 
71,321,089 
96,847,805 
- Accrued expenses and other 



 liabilities 
140,532
6,838 
126,478 
Total financial liability measured at amortised cost
322,277,987
291,569,825
312,489,551
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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