Half-year Report

Source: RNS
RNS Number : 8953W
Indus Gas Limited
15 December 2023
 

 

Indus Gas Limited and its subsidiaries

("Indus" or the "Company")

 

Unaudited Condensed Consolidated Interim Financial

Statements for the six-month period ended 30 September 2023

 

Indus Gas Limited (AIM: INDI), an oil & gas exploration and development company, is pleased to report its interim results for the six-month period ending 30 September 2023.

 

Consolidated reported adjusted revenues, operating profit and profit before tax for the interim period ending 30 September 2023 were US$ 26.18m (US$ 27.42m interim 2022), US$ 22.61m (US$ 22.72m interim 2022) and US$ 22.63m (US$ 22.68m interim 2022) respectively.

 

The Company has continued to make provision for a notional deferred tax liability of US$ 9.88m (US$ 9.95m interim 2022), in accordance with IFRS requirements.

 

The Company is currently producing from the SGL field as well as the SSF & SSG fields. All gas production from the three fields is currently being sold to GAIL. The Petroleum & Natural Gas Regulatory Board ("PNGRB") is undertaking consultations for deciding on the pipeline route for evacuation of the gas from the SSG and SSF fields.

 

The gas price for RJ-ON/6 block effective from 1 April 2023 has been agreed to be as per the domestic gas price on Gross Calorific Value ("GCV") basis as notified by petroleum planning and analysis cell of the Government of India. The floor price will continue at US$ 4.5146 per MMBTU on GCV being the existing price of US$ 5 per MMBTU on Net Calorific Value ("NCV") basis.

 

Jonathan Keeling, Chairman of Indus Gas, commented:

 

"The Company is well positioned given the strong demand for gas in India and the positive pricing environment.

 

"The Company welcomed the Gas Price formula revision of domestic gas as announced by Government of India, which was effective from April 2023."

 

For further information, please contact:

 

Indus Gas Limited

Jonathan Keeling +44 (0) 20 81333375

Executive Chairman

 

Strand Hanson Limited (Nominated & Financial Adviser and Broker)

Ritchie Balmer, Rory Murphy +44 (0) 20 7409 3494

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes

As at

30 September 2023

As at

30 September 2022

As at

31 March 2023

 

 

(Unaudited)

(Unaudited)

(Audited)

 

 

 

 

 

ASSETS

 

 

 

 

Non-current assets





Property, plant and equipment

6

1,257,875,924

1,189,884,758

1,223,434,478

Tax assets

 

1,427,667

1,431,777

1,140,605

Other assets

 

7,886

549

7,891

Total non-current assets

 

1,259,311,477

1,191,317,084

1,224,582,974

Current assets

 




Inventories

 

7,841,685

6,516,961

9,932,047 

Prepayments

 

-

3,715,982

-

Trade and other receivables

 

5,689,457

7,081,049

6,640,424

Receivable from related party

 

106,832,686

108,775,152

107,348,170

Cash and cash equivalents

 

4,796,883

4,122,096

11,765,514

Total current assets

 

125,160,711

130,211,240

135,686,155

Total assets

 

1,384,472,188

1,321,528,324

1,360,269,129

 

 




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

 

(9,313,782)

(9,313,782)

(9,313,782)

Merger reserve

 

19,570,288

19,570,288

19,570,288

Retained earnings

 

295,579,974

264,787,793

282,833,686

Total shareholders' equity

 

356,189,612

325,397,431

343,443,324

     (All amounts in US$, unless otherwise stated)

a    Unaudited Condensed Consolidated Statement of Financial Position

 

LIABILITIES

 

 

 

 

Non-current liabilities

 

 

 

 

Long term debt, excluding current portion

7

163,715,686

27,200,889

175,475,431

Payable to related parties, excluding current portion

9

647,962,891

627,488,125

633,924,200

Deferred tax liabilities (net)

 

154,280,157

130,350,919

144,392,951

Provision for decommissioning

 

1,881,607

1,920,701

1,894,795

Deferred revenue

 

30,311,748

25,563,995

30,311,748

Total non-current liabilities

 

998,152,089

812,524,629

985,999,125

 

Current liabilities

 

 

 

 

Current portion of long-term debt

7

28,253,210

176,433,130

28,458,200

Current portion payable to related parties

9

338,019

9225

333,611

Trade and other payables

 

1,539,258

2,086,823

2,034,869

Deferred revenue

 

-

5,077,086

-

Total current liabilities

 

30,130,487

183,606,264

30,826,680

Total liabilities

 

1,028,282,576

996,130,893

1,016,825,805

Total liabilities and equity


1,384,472,188

1,321,528,324

1,360,269,129

(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 2023

 

     Six months ended

30 September 2022

 

 

 

Unaudited

 

Unaudited

 

Revenue                                


26,180,911


27,416,956

 

Cost of sales


(3,184,107)


(4,282,747)

 

Administrative expenses


(385,179)


                             (405,865)

 

 





 

Profit from operations

 

22,611,625

 

22,728,344


 

Foreign exchange gain/(loss), net

 

21,869


58,132


 

Interest income


                                     -


                                     -

 

Profit before tax

 

22,633,494

 

22,786,476

 

 





 

Income taxes

Provision for Deferred tax charge


 

(9,887,206)


 

(9,952,486)


 

                             

Profit for the period (attributable                                                                                                                         12,746,288                              12,833,990

to the shareholder of the Group)


 

 

 

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

 

 

12,746,288

12,833,990

Earnings per share

 

10

 

 

Basic

 

 

0.07

0.07

Diluted

 

 

0.07

0.07

(The (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 Number   Amount

Additional paid-in capital

Currency translation reserve

Merger reserve

(Accumulated Profits)/ Retained earnings

Total stockholders' equity

 

 

 

Balance as at 1 April 2023

 

182,973,924

3,619,443

46,733,689

(9,313,782)

19,570,288

282,833,686

343,443,324

Profit for the period

 

-

-

-

-

-

12,746,288

12,746,288

 

Total comprehensive income for the period

 

-

-

-

-

-

12,746,288

12,746,288

Balance as at 30 September 2023

182,973,924

3,619,443

46,733,689

(9,313,782)

19,570,288

295,579,974

356,189,612

               

 

Balance as at 1 April 2022

 

182,973,924

3,619,443

46,733,689

(9,313,782)

19,570,288

251,953,803

312,563,441

Profit for the period

 

-

-

-

-

-

12,833,990

12,833,990

Total comprehensive income for the period

 

-

-

-

-

-

12,833,990

12,833,990

Balance as at 30 September 2022

 

182,973,924

3,619,443

46,733,689

(9,313,782)

19,570,288

264,787,793

325,397,431

 

(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 2023

(Unaudited)


Six months ended

30 September 2022

(Unaudited)

 

(A) Cash flow from operating activities





 

Profit before tax

 

22,633,494

 

22,786,476

 

Adjustments





 

Unrealised exchange loss/ (gain)


(21,869)


(58,132)

 

Depreciation

 

2,832,274


3,697,287

 

Changes in operating assets and liabilities





 

Inventories


                 2,090,362


2,942,792

 

Trade receivables


                    980,864


11,254,024

 

Trade and other payables


                 2,845,043


3,996,329

 

Other current and non-current assets


(29,924)


(1,945,215)

 

Provisions for decommissioning


(13,190)


(66,625)

 

Other liabilities


(491,168)


251,975

 

Cash generated from operations

 

30,825,886

 

42,858,911

 

Income taxes paid/refund


(287,062)


(217,791)

 

Net cash generated from operating activities

 

30,538,824

 

 42,641,120

 

 

(B) Cash flow from investing activities

 

 

 

 

 

Purchase of property, plant and equipment A

 

(10,988,404)


(8,647,153)

 

Interest received


                                 -


                -

 

Net cash used in investing activities

 

(10,988,404)

 

(8,647,153)

 

 

(C) Cash flow from financing activities

 

 

 

 

 

Repayment of long-term debt from banks

 

(12,168,000)

(8,568,000)

Proceeds from Related Party

 

(6,500,000)

(18,250,000)

Payment of interest

 

(7,872,920)

(7,564,013)

Net cash used in financing activities

 

(26,540,920)

(34,382,013)

Net change in cash and cash equivalents

 

(6,990,500)

(388,046)

Cash and cash equivalents at the beginning of the period


 

11,765,514

 

4,452,010

Effect of exchange rate change on cash and cash equivalents


21,869

58,132

Cash and cash equivalents at the end of the period

 

4,796,883

4,122,096

 

 

 

 

 

               

 

 (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 admitted to trading on the AIM of the London Stock Exchange on 6 June 2008. Indus Gas, through its wholly owned subsidiaries iServices and Newbury (together 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. The balance 10 per cent of participating interest is owned by Focus. The participating interest explained above is subject to any option to acquire 30 per cent Participating Interest exercised by ONGC in respect of discoveries. ONGC has already exercised 30 per cent PI option 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 2023 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 2023.

 

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 2023.

 

These unaudited condensed consolidated interim financial statements are for the six months ended 30 September 2023 and have been approved for issue by the Board of Directors.-

 

3 JOINTLY CONTROLLED ASSETS

 

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

Under the PSC, the GOI, through ONGC has 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, SSG and SSF.

 

The SGL field received its declaration of commercial discovery on 21 January 2008. Subsequent to the declaration of commercial discovery in SGL field, ONGC 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.

 

However, 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 in order to be entitled to their 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.

 

On the basis of the above, gas production for the period ended 30th September 2023 continues to be shared between Focus, iServices and Newbury in the ratio of 10 percent, 65 percent, and 25 percent, respectively. ONGC will not be entitled to any participating interest in the production until the full exploration and development cost is recovered by other participants. 

 

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 2023

(Unaudited)

 

Period ended

30 September 2022

(Unaudited)

Year ended

31 March 2023

(Audited)

Non-current assets

1,257,875,924

1,189,884,758

1,223,434,478

Current assets

114,674,371

115,292,113

111,000,741

Non-current liabilities

1,881,607

1,920,700

1,894,797

Expenses (net of finance income)

2,845,043

3,996,329

6,342,915

 

 

 

 

 

 

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 SSG and SSF field. The participating interest in SSG and SSF field between Focus, iServices and Newbury will remain in ratio of 10 percent, 65 percent and 25 percent respectively for exploration, evaluation and development 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 2023.

 

 

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.  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 2023

167,248

9,131,202

878,686,884

393,696,456

7,869,575

4,963,923

1,695,265

3,024,746

1,299,235,299

Additions

Disposals/Transfers

-

-

44,140

-

      37,568,922      (12,688,624)

3,639

12,688,624

-

-

-

-

-

-

1,243

-

37,617,944

-

Balance as at 30

September 2023

167,248

9,175,342

903,567,182

406,388,719

7,869,575

4,963,923

1,695,265

3,025,989

1,336,853,243

Accumulated depreciation








 

Balance as at 1 April 2023

-

   3,129,668

 -  

59,656,825

    6,412,709

  4,916,324

1,685,294

-

   75,800,820

Depreciation for the period

-

211,426

-  

2,832,274

97,768

34,625

406

-

3,176,499

Balance as at 30 September 2023

-

   3,341,094

 -  

62,489,099

6,510,477

4,950,949

1,685,700

-

   78,977,319

Carrying value









 

As at 30 September 2023

167,248

5,834,248

903,567,182

343,899,621

1,359,0984

12,974

9,565

3,025,989

1,257,875,924

 

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 2022

167,248

5,172,729

865,416,249

329,916,943

7,869,575

4,917,035

1,695,265

2,978,870

1,218,133,914

Additions

Disposals/Transfers

-

-

162,004

44,341,029

(66,383,013)

66,383,013

 

-

-

46,888

-

-

-

26,293

110,959,227

(66,383,013)

Balance as at 30

September 2022

167,248

5,334,733

843,374,265

396,299,956

7,869,575

4,963,923

    1,695,265

3,005,163

1,262,710,128

Accumulated depreciation








 

Balance as at 1 April 2022

    -  

2,898,821

-

53,213,090

6,217,173

4,897,781

1,683,377

-

68,910,242

Depreciation for the period

  - 

108,295

-

3,697,139

97,770

10,007

1,917

-

3,915,128

Balance as at 30 September 2022

    -  

3,007,116

-

56,910,229

6,314,943

4,907,788

1,685,294

-

72,825,370

Carrying value









 

As at 30 September 2022

167,248

2,327,617

843,374,265

339,389,727

1,554,632

56,135

9,971

3,005,163

1,189,884,758

 

 

 

 

Cost

 

 

Land

Extended well test equipment

Development

Production assets

Bunk houses

Vehicles

Other assets

Total

 

Balance as at 1 April 2022

167,248

5,172,729

865,416,249

329,916,943

7,869,575

4,917,035

1,695,265

2,978,870

 1,218,133,914

 

Additions

Disposals/Transfers

-

-

3,958,473

-

      77,050,148      (63,779,513)

-

63,779,513

-

-

46,888

-

-

-

45,876

-

81,101,385

-

 

Balance as at 31 March 2023

167,248

9,131,202

878,686,884

393,696,456

7,869,575

4,963,923

1,695,265

3,024,746

  1,299,235,299

 

Accumulated depreciation








 

 

Balance as at 1 April 2022

 -

   2,898,821

 -  

53,213,090

   6,217,173

4,897,781

1,683,377

-

      68,910,242

 

Depreciation for the period

-

230,847

-  

6,443,735

195,536

18,543

1,917

-

6,890,578

Balance as at 31 March 2023

-

   3,129,668

 -  

59,656,825

6,412,709

4,916,324

1,685,294

-

     75,800,820

 

Carrying value









 

 

As at 31 March 2023

167,248

6,001,534

878,686,885

334,039,630

1,456,864

47,599

9,971

3,024,749

1,223,434,478

 

 

Borrowing costs capitalised for the period ended 30 September 2023 amounted to US$ 28,614,875 (30 September 2022: US$ 28,074,577 and 31 March 2023: US$ 55,091,974).

 


7.  LONG TERM DEBT FROM BANKS

 

 

Maturity

30 September 2023

(Unaudited)

30 September 2022

(Unaudited)

31 March 2023

(Audited)

 

Non-current portion of long-term debt

2024

4,063,925

27,200,889

15,859,060

Current portion of long-term debt from banks


23,915,432

22,665,893

24,155,800

Total

 

27,979,357

49,866,782

40,014,860

 

 

Current interest rates are variable and weighted average interest for the period was 6.80per cent per annum (30 September 2022:6.75 per cent per annum and 31 March 2023: 6.76 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 2023

(Unaudited)

30 September 2022

(Unaudited)

31 March 2023

(Audited)

 

Non-current portion of long-term debt

2023

-

-

-

Current portion of long-term debt

 


-

153,767,237

-

Non-current portion of long-term debt

2027

159,651,761

-

159,608,734

Current portion of long-term debt


4,337,778

-

4,302,400

Total

 

163,989,539

153,767,237

163,911,134

 

 

The Group has issued US Dollar 160.00 million bonds which carries interest at the rate of 8 per cent per annum, for the purpose of re-financing the bonds which were repayable in December 2022. These bonds are unsecured bonds and are fully repayable at the end of 5 years i.e., November 2027, further interest on these notes is paid semi-annually.

 

 

 

 

 

 

 

 

 

 

 

8.  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 2023 and 30 September 2022are as follows:

 

Transactions during the period

 

Particulars

 

Period ended

30 September 2023

Period ended

30 September 2022

Transactions with the Holding Company




Amount Received

Interest


(6,500,000)

20,538,691

(18,250,000)

-





Transactions with KMP




Short term employee benefits


90,382

69,055

 




Entity over which KMP exercise control




Cost incurred by the Focus on behalf of the group in respect of the Block


7,815,484

12,952,972

Remittances


7,300,000

1,320,000

 

09.PAYABLE/RECEIVABLE TO RELATED PARTIES

 

Particulars

As at

30 September 2023

As at

30 September 2022

As at

31 March 2023

Entity over which KMP exercise control

 



Receivable to Focus Energy Limited

 

106,832,686

108,775,152

107,348,170

Payable with the Holding Company

 

 


Payables to Gynia Holding Limited*

647,962,891

627,488,125

633,924,200

 

Payable to KMP

 

 


Employee obligation

338,019

9,225

333,611


 

 


*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 amounts paid in advance to them in respect of contract costs 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. The outstanding balance was made subordinate to the loans taken from the banks and therefore, is payable subsequent to repayment of bank loan in year 2024.

 

 

10. 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 2023

Period ended

30 September 2022

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


12,746,288

12,833,991

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 diluted profit per share


182,973,924

 

182,973,924

 

Basic earnings per share (US$)

 

0.07*

0.07*

Diluted earnings per share (US$)

 

0.07*

0.07*

*Rounded off to the nearest two decimal places.

 

11.  COMMITMENTS AND CONTINGENCIES

 

At 30 September 2023, the Group had capital commitments of US$ Nil (30 September 2022: US$ Nil;31 March 2023: US$ Nil) in relation to property, plant & equipment - development/producing assets, in the Block. The Group has no contingencies as at 30 September 2023 (30 September 2022: Nil;31 March 2023: Nil).

 

12.  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 2023.

 

13.  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 Group has opted to claim the expenditure in the first year of commercial production. As the Group has commenced commercial production for SGL field 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.

 

14.  BASIS OF GOING CONCERN ASSUMPTION

 

As at 30 September 2023, the Group had current liabilities amounting to US$ 30,130,487 the majority of which is towards current portion of borrowings from banks and bonds. As at 30 September 2023, the amounts due for repayment (including interest payable) within the next 12 months for long term borrowings were US$ 28,253,210 which the Group expects to meet from its internal generation of cash from operations.

 

Further, there is no significant impact of Covid-19 on the Company's ability to continue as going concern considering that the entity is in the business of essential services

 

15.  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 recognized at the end of the reporting periods under review may also be categorized as follows:

 

 

30 September 2023

30 September 2022

 31 March 2023

 

Non-current assets




Loans

- Security deposits

7,886

549

7,891

 

Current assets




-Trade receivables

5,689,457

7,081,049

6,598,149

-Cash and cash equivalents

4,796,883

4,122,096

11,765,514

Total financial assets

10,494,226

11,203,694

18,371,554

 

Financial liabilities measured at amortized cost

Non-current liabilities




-  Long term debt from banks

163,715,686

27,200,889

175,475,431

-  Payable to related parties

647,962,891

627,488,125

633,924,200

 

Current liabilities




-  Current portion of long-term debt

28,253,210

176,433,130

28,458,200

-  Current portion of payable to related parties

338,019

9,225

333,611

-  Accrued expenses and other liabilities

1,539,258

2,086,824

1,550,911

Total financial liability measured at amortized cost

841,809,064

833,218,193

839,742,353

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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