25 September 2024
Indus Gas
Limited
("Indus" or the "Company")
Audited Final Results for
the 12 months ended 31 March 2024
Indus Gas Limited (AIM:INDI), an
oil & gas exploration and development company, announces its
full year audited results for the 12 months to 31 March 2024, which
will be made available on its website and sent to
shareholders.
The Company will shortly publish
its notice of annual general meeting and a further announcement
will be made in due course.
For further information please contact:
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Indus Gas Limited
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Jonathan Keeling
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+44 (0) 20 8133 3375
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Strand Hanson Limited (Nominated & Financial Adviser and
Broker)
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Ritchie Balmer, Rory
Murphy
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+44 (0) 20 7409 3494
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Highlights
§ As per
revised Domestic gas pricing Guidelines, Sales gas price shall be
10 pct of monthly average of Indian crude basket as notified by
PPAC on monthly basis from 8th April, 2023. The Gas sale price in
the year ended March 2024 ranged from highest of US$ 9.20 per MMBTU
to the lowest of US$ 7.48 per MMBTU.
§ New
development wells produced rich Gas with lower CO2
content.
OPERATIONAL
§ Drilling and completion of production wells for the field
development continued
§ Continued testing of previously drilled wells.
FINANCIAL
§ Total
Revenues were US$ 42.93 million (2022-23: US$ 63.03
million).
§ Operating profit decreased to US$ 36.56 million (2022-23: US$
54.76million).
§ Profit
before tax decreased to US$ 36.12 million (2022-23: US$ 54.87
million).
§ Net
Investments made in property, plant and equipment amounting to US$
70.96 million (2022-23: US$ 74.21 million).
§ All
repayments under the existing debt terms were made on a timely
basis.
Chairman's Statements
The Board would like to thank
employees, shareholders, bankers and all other stakeholders for
their loyalty and continued support. The management team will
continue to focus on the execution of the Company's long-term
strategy of achieving both growth in reserves and commercial
production.
Jonathan Keeling
Chairman
Board of Directors' Review
We are pleased to announce the
consolidated total revenues totaling US$ 42.93 million (2022-23:
US$ 63.03 million).
Operations
Operational activities over the
last year have followed the Group's objectives and are summarized
below:
a) drilling and
completion of production wells for the SGL, SSG and SSF field
development continued.
b) testing
various wells previously drilled where gas shows were encountered
to enable the Group to increase its reserve base; and
c) testing the
B&B gas recovery potential in addition to gas discovered in the
Pariwar formation.
Additional testing is an important
element of the operational programme to enhance production and
maximize recovery of gas through efficient asset management.
Activities such as these will continue to increase as we obtain and
act on new data and production history. An important development in
respect of the SGL Field was the discovery of new intervals within
Pariwar. These were located below the existing producing P10 sands.
These reservoirs were successfully exploited for production and
going forward will add to the reserves and production from both
existing and new wells.
Financials
During the financial year, the
Company achieved total revenue of US$ 42.93 million (2022-23: US$
63.03 million), resulting in reported operating profit of US$ 36.56
million (2022-23 US$ 54.76 million). The reported profit after tax
was US$ 20.19 million (2022-23 US$ 30.87 million).
While the Company is not expected
to pay any significant taxes on its income for many years in view
of the 100% deduction allowed on the capital expenses incurred in
the Block, the Company recognized a deferred tax expense of US$
15.75 million (2022-23: US$ 23.99 million) as per IFRS
requirements.
Post this deferred tax liability
provision, the net profit for the year was US$ 20.19 million
(2022-23: US$ 30.87 million).
The net expenditure on the
purchase of property, plant & equipment was US$ 70.96
million (2022-23: US$ 74.21
million). The property plant and
equipment, including development assets and production assets,
increased to US$ 1,291.62 million (2022-23: US$ 1,223.43
million).
The current assets (excluding
cash) as of 31 March 2024 stood at US$ 116.87 million (2022-23: US$
123.92 million), which majorly includes US$ 8.94 million (2022-23:
US$ 9.93 million) of inventories, US$ 107.31 million (2022-23: US$
107.35 million) of receivables from related party and US$ 0.62
million (2022-23: US$ 6.64 million) of trade receivables and
another receivable. The current liabilities of the Company,
excluding the related party liability of US$ 0.01 million
(2022-23
:US$ 0.33 million) and current portion of long-term debt of US$
20.58 million (2022-23: US$ 28.46 million), stood at US$ 1.53
million (2022-23: US$ 2.03 million).
As of 31 March 2024, the
outstanding debt of the Company to banks was US$ 180.26 million
(2022-23: US$ 203.93 million), of which US$ 20.58 million (2022-23:
US$ 28.46 million) was categorized as repayable within a year.
During the year, the Company repaid an amount of US$ 23.65 million
of the outstanding term loan facilities, as per the scheduled
repayment plan. As of 31 March 2024, the outstanding unsecured debt
from bonds was US$ 164.03 million (2022-23: US$ 163.92 million), of
which US$ 4.34 million (2022-23: US$ 4.30 million) was categorized
as repayable within a year and the remaining US$ 159.68 million
(2022-23: US$ 159.61 million) has been categorized as a long-term
liability.
Outlook
The company continues to see
disruption to the quantity of gas supplied to its ultimate
customer's power plant due to ongoing maintenance of the turbine at
the plant. The company will announce the PSC extension when
granted. Due to the ongoing disruption of gas supply the company
will seek further external funding and/or shareholder funding in
near future if required.
Jonathan Keeling
Executive Chairman
Board of Directors
JONATHAN KEELING - EXECUTIVE
CHAIRMAN
Jonathan was a founding partner
and a main board member of Arden Partners plc, a small and mid-cap
institutional stockbroker and Jonathan's career in equity capital
markets spans in excess of 30 years. Prior to Arden, Jonathan
worked at Albert E Sharp, Harris All day and Old Mutual Securities.
Jonathan is a Fellow of the Chartered Institute for Securities and
Investment.
ATIQ ANJARWALLA -
DIRECTOR
During the year, Mr. Atiq
joined the board of director as independent non-executive
director on 3rd October 2022.
Mr. Atiq is an experience Lawyer and is a
Solicitor of the Supreme Court of England and Wales Advocate of the
High Court of Kenya and a Legal Consultant in Dubai. Atiq has a
Master of Law from Jesus College Cambridge, England. Atiq's legal
experience spans Corporate, Private Client, Banking, Project
Finance and Capital Markets.
ELIZABETH POWELL -
DIRECTOR
During the year, Mrs. Elizabeth
Powell joined the board of director as independent non-executive
director on 7th March 2023. Liz's background is
primarily in Human Resources through her work with a major Guernsey
based independent fiduciary. She has a CIPD qualification in
HR and has become skilled in international payroll matters. In
recent years, in addition to her personnel skills, she has taken on
directorships in companies employing staff in the Oil & Gas
sector as well as companies owning assets for international oil
companies.
NICHOLAS SAUL -
DIRECTOR
During the year, Mr. Nicholas Saul
joined the board of director as independent non-executive director
on 7th March 2023. Nick started his career as a Merchant
Navy Officer with Texaco in 1980 and has been working in the Oil
& Gas industry since. Today, he owns successful Guernsey
business that manages the employment of thousands working in the
hydrocarbons industry as well over 10,000 mariners. Nick has a BSc
in Maritime Commerce, is an Associate Fellow of the Nautical
Institute and a Chartered Member of The Chartered Institute of
Logistics and Transport.
Directors' Report
The Directors present their report
and the financial statements of Indus Gas Limited ("the Company")
and its subsidiaries, iServices Investments Ltd and Newbury Oil Co.
Ltd (collectively the "Group"), which covers the year from 1 April
2023 to 31 March 2024.
PRINCIPAL ACTIVITY AND REVIEW OF THE
BUSINESS
The principal activity of the
Company and Group is that of oil and gas exploration, development
and production and other related services.
RESULTS AND DIVIDENDS
The trading results for the year
and the Group's financial position at the end of the year are shown
in the attached financial statements. The Group has earned a profit
before tax of USD 36.12 million (2022-23: US$ 54.87 million) during
the year.
The Directors have not recommended
a dividend for the year (2023-24) : Nil).
REVIEW OF BUSINESS AND FUTURE DEVELOPMENTS
A review of the business and
likely future developments of the Company are contained in the
Chairman's statement and the Board of Director's review, given
above.
BOARD CHANGES
The Company announces the
following changes to its Board:
· Mr.
Clive Gibbons has stepped down from the Board effective from 26th
September 2023.
· Fareed Soreefan* has stepped down from the Board effective
from 04 August 2023.
· Ms
Wendy Ramakrishnan* has been appointed as a Non-Executive Director
with effect from 04 August 2023.
DIRECTORS REMUNERATION
The Directors' remuneration for
the year ended 31 March 2024 was:
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Remuneration
(£)
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Remuneration (US
$)
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Jonathan Keeling
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100,000
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126,962
|
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Clive Gibbons (until 26 September
2023)
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7,000
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8,554
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Atiq Anjarwalla
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14,620
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18,392
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Mr. Nicholas Saul
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5,000
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7,202
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Mrs. Elizabeth Powell
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5,000
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7,202
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Fareed Soreefan (until 04 August
2023)*
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260
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343
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Ms Wendy Ramakrishnan (w.e.f. 04
August 2023)*
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499
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657
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Sangeeta Bissessur*
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759
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1,000
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Angelos Alexandrou*
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745
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981
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Paschalis Magnitis*
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745
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981
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Total Directors' Remuneration
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134,628
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172,274
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*Directors of subsidiary companies (I Services and
Newbury)
The Directors' remuneration
for the year ended 31 March 2023 was:
|
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Remuneration
(£)
|
Remuneration (US
$)
|
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Jonathan Keeling
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100,000
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119,166
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Clive Gibbons
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14,620
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17,323
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Atiq Anjarwalla
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3,655
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4,405
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Fareed Soreefan*
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759
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1,000
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Sangeeta Bissessur*
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759
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1,000
|
|
Angelos Alexandrou*
|
745
|
981
|
|
Paschalis Magnitis*
|
745
|
981
|
|
Total Directors' Remuneration
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121,283
|
144,856
|
*Directors of subsidiary companies (iServices and
Newbury)
The Director remuneration consists
of monthly/quarterly compensation as per the agreed terms. There
are no further cash payments or benefits provided to
Directors.
GAS MARKETS IN INDIA
India has a significant deficit of
hydrocarbons which we believe will result in a long-term, steady
demand for gas produced by our Block. According to the
Petroleum and Natural Gas Regulatory Board ("PNGRB") Report, Vision
2030, India's natural gas demand will grow significantly to 746
MMSCM/d (26.3 BCF/d) by the end of Fiscal 2030. India is
expected to have approximately 32,727 km of natural gas pipeline
with a design capacity of 815 MMSCM/d in place by 2030. In order to
further boost the consumption of natural gas in the country, the
Government established a Gas Trading Hub/ Exchange (GTHE), where
natural gas can be traded and supplied through a market-based
mechanism instead of multiple formula driven prices. Initial
trading has already started on Indian Gas Exchange.
From April 2023 to March 2024 gas
sales were invoiced at prices ranging from the highest of US$ 9.20 per MMBTU to the lowest of US$ 7.48 per
MMBTU.
FINANCIAL INSTRUMENTS
Details of the use of financial
instruments by the Company are contained in note 28 to the attached
financial statements.
RELATED PARTY TRANSACTIONS
Details of significant related
party transactions are contained in note 16 and note 23 to the
attached financial statements.
INTERNAL CONTROL
The Directors acknowledge their
responsibility for the Company's system of internal control and for
reviewing its effectiveness. The system of internal control is
designed to manage the risk of failure to achieve the Company's
strategic objectives. It cannot totally eliminate the risk of
failure but will provide reasonable, although not absolute,
assurance against material misstatement or loss.
GOING CONCERN
Production Sharing Contract (PSC)
of the Group has expired on 20 August 2024. Further, the contract
of the Group with its sole customer will expire on 30 September
2024. At the date of signing the financial statements, considering
expiry of above mentioned two contracts and an obligation of the
Group to pay current portion of borrowings of US$ 20,575,321
(2022-23: US$ 28,458,200), in line with the accounting and auditing
framework, this indicates a material uncertainty that may cast
significant doubt on the group's ability to continue as a going
concern.
The group has considered following
factors relevant to support going concern.
The Group has applied for an
extension of the Production Sharing Contract (PSC) which expired on
20 August 2024. The Board is confident that the extension will be
received considering that Clause 2.1 of PSC provides that PSC can
be extended up to 35 years. Further, the
Group is in process of renewing the existing contract with the sole
customer (GAIL) for supply of gas which will expire on 30 September
2024. Moreover, the power plant in this region is the customer of
GAIL and for running that plant, the supply of gas from the block
is essential. The Board is confident that the customer contract
will be renewed soon along with PSC extension considering the
ongoing discussions with the customer and accordingly, the Group
will be able to supply the gas based on a mutually agreed
contract.
Subsequent to the year end, the
Group has repaid an amount of US$ 15,315,827 and accordingly the
amount of US$ 5,259,494 (including interest payable) is due for
repayment within the next 12 months, which the Group expects to
meet from its internal generation of cash from operations (as
evident from the group cash flow forecast and support from largest
shareholder). The Group has sufficient cash flows to repay the
maturing debt as the Group is financially sound. The Group has net
working capital of US$ 96,827,206 (2022-23: US$ 104,859,475) as at
31 March 2024.
Based on business strategies and
operating plans/forecasts of the Group, and based on the above
reasons, the management is confident that the Group will continue
to meet all its obligations as and when they fall due in the normal
course of business. Accordingly, these financial statements have
been prepared on a going concern basis.
DIRECTORS' RESPONSIBILITIES
The Directors are responsible for
preparing the Directors' report and consolidated financial
statements for each financial year which give a true and fair view
of the state of affairs of the Group and of the consolidated statement of comprehensive income
of the Group for that year. In preparing those
financial statements the Directors are required to:
o Select suitable accounting policies and apply them
consistently;
o Make judgements and estimates that are reasonable and
prudent;
o State whether International Financial Reporting Standards as
adopted by EU have been followed subject to any material departures
disclosed and explained in the financial statements; and
o Prepare consolidated financial statements on a going concern
basis unless it is inappropriate to presume that the Group will
continue in business.
The Directors confirm that the financial statements comply
with the above requirements.
The Directors are responsible for
keeping proper accounting records which disclose with reasonable
accuracy at any time the financial position of the Company and of
the Group to enable them to ensure that the financial statements
comply with the requirements of the Companies (Guernsey) Law, 2008.
They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the provision and
detection of fraud and other irregularities.
The Directors are responsible for
maintaining the integrity of the corporate financial information
included on the Group's website. Legislation in Guernsey governing
the preparation and dissemination of financial information may
differ from legislation in other jurisdictions.
To the best of our knowledge and
belief:
· The financial statements have been prepared in accordance
with International Financial Reporting Standards, as adopted by the
European Union;
· Give a true and fair view of the financial position and
results of the Group; and
· The financial statements include an analysis of the principal
financial instruments specific risks and uncertainties faced by the
Group.
AUDITOR
All of the current Directors have
taken all steps that they ought to have taken to make themselves
aware of any information needed by the Group's Auditor for the
purposes of their audit and to establish that the Auditor is aware
of that information. The Directors are not aware of any relevant
audit information of which the Auditor is unaware.
By order of the Board
Jonathan Keeling
Risks and Risk Management
In planning our future activities
and reacting to changes in our ongoing business environment, we
seek to identify, assess, mitigate and monitor the risks that we
face. Considerable effort is made during our planning process to
reduce and mitigate the various risks to the extent that this is
practical and commercially sound. Ideally large decisions taken
early means that any later adaptation or reaction should be
small.
We cannot remove the Company from
all risk and the oil and gas industry brings with it many special
challenges in specific risks. What we can and do strive to achieve
is to understand and manage the risk environment we work
within.
The Company faces the appraisal,
development and production risks of the oil and gas industry. The
business relies on extensive engineering, geological and
geophysical judgements.
As activities on the Block have
grown and generated actual data and experience, we have used this
knowledge to reduce these risks. There has been an increase in the
number of wells to find hydrocarbons through the knowledge gained
from almost complete 3D seismic data and analysis of drilling
results. We shall continue to de-risk this area of our operations
but the risk of a dry hole will never reach zero. The risk of
mechanical issues or well construction failing remains. However,
with greater standardization of well design and repetition of
activities this has reduced.
We currently depend on one
customer for the sale of gas and substantially all of our revenues.
Discussions are on-going to find and develop new customer
relationships.
GAIL has significant financial
resources and maintains a strong credit rating providing comfort in
meeting any obligations under our Agreement. Our gas is purchased
at our field and shipped via a GAIL owned pipeline to the power
plant. The pipeline is purpose built and operating well within its
design specification.
The Company has one bank debt
facility outstanding from its group of lenders. These facilities
were obtained on attractive terms in difficult lending markets.
Debt service for the facility remains strong and contributes to our
sound borrower track record. Additional amounts were raised during
2018 through unsecured bonds, which were further re-financed with
the additional bond offering made by the Company in November 2022.
The Company has benefited from consistent support of the majority
shareholder particularly reducing the risk of any funding gaps due
to the delay in closing external finance. The Production Sharing
Contract that includes cost recovery and sales contract for gas
provide an enhanced cash flow to service debt and give protection
to lenders.
Our business, revenues and profits
may fluctuate with changes in oil and gas prices. Our production is
mainly gas and has been sold on strong "Take or Pay" contracts that
significantly reduce the impact of fluctuations in the wider global
energy market. However, the prevailing prices of oil and gas can
have some bearing on new contracts and price revisions.
As per the revised Domestic gas
pricing Guidelines, Sales gas price shall be 10 pct of monthly
average of Indian crude basket as notified by PPAC on a monthly
basis from 8th April, 2023. The Gas sale
price in the year ended March 2024 ranged from highest of US$ 9.20
per MMBTU to the lowest of US$ 7.48 per MMBTU.
The oil and gas industry are
subject to laws and regulations relating to environmental and
safety matters in exploration for and the development and
production of hydrocarbons. We are bound by the environmental laws
and regulations applicable to India and satisfy and in some areas
exceed these requirements by using good industry practice, trained
staff and quality equipment.
We are committed to upholding
procedures to protect the environment and enforce environmental,
health, safety and security mechanisms through accountability at
all levels, suitable policies, feedback and full compliance by each
employee and contractor to all policies we develop.
The Government has historically
played a key role, and is expected to continue to play a key role
in regulating, reforming and restructuring the Indian oil and
natural gas industry. A major platform for shaping the industry has
been the award of assets by various rounds under the NELP. Our
Block was awarded before the formation of NELP and therefore places
greater emphasis on our Production Sharing Contract (PSC) in our
dealings with Government in various forms. To date the Block
Management Committee created under our PSC and including multiple
Government agencies has assisted the development progress we have
made so far. The Field Development Plan for the area beyond SGL was
approved by Management Committee consisting representatives of DGH
and government created under PSC.
Corporate Governance
The Directors recognize the
importance of sound corporate governance and have chosen to apply
the Quoted Companies Alliance ("QCA") Corporate Governance Code and
Guernsey regulations in so far as they are appropriate given the
Company's size and stage of development. The Company may take
additional Corporate Governance measures beyond QCA guidelines and
Guernsey regulations as may be appropriate considering the
Company's operations from time to time.
The Company has not adopted the UK
Corporate Governance Code ("the Code") and has chosen to apply the
QCA Corporate Governance Code for Small and Mid-Size Quoted
Companies which is in line with most growing AIM companies adopted
practices. The disclosure requirements under the code have been
complied with and the detailed report is available on the official
website (http://www.indusgas.com/)
of the company.
Corporate Governance standards and
procedures adopted by the Company are regularly reviewed by the
Chairman who has maintained dialogue and answered questions of
shareholders throughout the year. The Chairman has consulted the
Nomad on the objectives of Corporate Governance within the
Company.
BOARD OF DIRECTORS
The Board is responsible for the
proper management of the Company. The resumes of the current board members are as
outlined in the section 'Board of Directors' on page no.
6.
Mr. Ajay Kalsi brings knowledge of
the oil and gas industry and a range of general business skills and
continues to be an advisor to the company.
All Directors have access to
independent professional advice, at the Company's expense, when
required.
SUB-COMMITTEES
The Board had constituted the
nomination and remuneration sub-committees, which were then
disbanded in March 2022 as a result of the Board's reduced
size. Given the Board's new directors
appointed recently, nomination and remuneration sub-committees may
reform in future. Further, currently, all the responsibilities of
these sub committees are being carried out directly by the Board in
line with defined policies and processes.
AUDIT COMMITTEE
The committee is responsible for
ensuring that the financial performance of the Company is monitored
and reported on, for meeting with the Auditor and reviewing
findings of the audit with the external auditor. It is authorized
to seek any information it properly requires from any employee and
may ask questions of any employee. It meets the Auditor once per
year without and is responsible for considering and making
recommendations regarding the engagement and remuneration of the
Auditor.
SHARE DEALING
The Company has adopted a share
dealing code (based on the Model Code) and the Company takes all
proper and reasonable steps to ensure compliance by Directors and
relevant employees.
THE CITY CODE ON TAKEOVERS AND MERGERS
Being a Channel Islands
incorporated company, the Company is subject to the UK City Code on
Takeovers and Mergers.
DISCLOSURE AND TRANSPARENCY RULES
As a Company incorporated in
Guernsey, Shareholders are not obliged to disclose their interests
in the Company in the same way as shareholders of certain companies
incorporated in the UK. In particular, the relevant provisions of
chapter 5 of the Disclosure and Transparency Rules (DTR) do not
apply. While the Articles contain provisions requiring disclosure
of voting rights in Ordinary Shares, which are similar to the
provisions of the DTR, this may not always, ensure compliance with
the requirements of Rule 17 of the AIM Rules. Furthermore, the
Articles may be amended in the future by a special resolution of
the Shareholders.
CONTROL BY SIGNIFICANT SHAREHOLDER
Gynia Holdings Limited, along with
its wholly owned subsidiary Focus oil Inc. own a significant
percentage of outstanding shares of the Company. As a significant
shareholder, Gynia could exercise significant influence over
certain corporate governance matters requiring shareholder
approval, including the election of directors and the approval of
significant corporate transactions and other transactions requiring
a majority vote.
The Company, Strand Hanson Limited
(Nomad and Broker), Gynia and Mr. Ajay Kalsi have entered into a
relationship agreement to regulate the arrangements between them.
The relationship agreement applies for as long as Gynia directly or
indirectly holds in excess of thirty per cent of the issued share
capital of the Company and the Company's shares remain admitted to
trading on AIM. The relationship agreement includes provisions to
ensure that:
a) The Board and its
committees are able to carry on their business independently of the
personal interests of Gynia;
b) The constitutional
documents of the Company are not changed in such a way which would
be inconsistent with the relationship agreement.
c) All transactions
between the Group and Gynia (or its affiliates) are on a normal
commercial basis and at arm's length;
d) In the event of a conflict of interest between Gynia and the
Board, no person who is connected with Gynia is appointed as a
Non-Executive Director of the Company and no existing Non-Executive
Director is removed as a director of the Company unless such an
appointment or removal has been previously approved by the
nomination committee of the Board and that to the extent that any
previously approved by the nomination committees concerns the
composition of the Board which has been approved by the Board
requiring the approval of the shareholders of the Company then
Gynia will vote its Ordinary Shares in favour; and
e) The Shareholder puts certain restrictions in place to prevent
interference with the business of the Company.
INDEPENDENT AUDITOR'S REPORT
To the members of Indus Gas Limited
Opinion
We have audited the Consolidated
financial statements of Indus Gas Limited (the "Company") and its
subsidiary (the "Group") for year ended 31 March 2024, which
comprise the Consolidated Statement of Financial Position, the
Consolidated Statement of Comprehensive Income, the Consolidated
Statement of Changes in Equity, the Consolidated Statement of Cash
Flows for the year then ended, and Notes to the Consolidated
financial statements, including material accounting policy
information. The Consolidated financial statements framework that
has been applied in their preparation is applicable law and IFRS
Accounting Standards as adopted by the European Union
(EU).
In our opinion, the
consolidated financial
statements:
· give
a true and fair view of the financial position of the Group as at
31 March 2024, and of its financial performance and its cashflows
for the year then ended;
· are
in accordance with IFRS Accounting Standards as adopted by the
European Union (EU); and
· comply with the Companies (Guernsey) Law, 2008.
Basis for opinion
We conducted our audit in
accordance with International Standards on Auditing (ISAs) and
applicable law. Our responsibilities under those standards are
further described in the 'Auditor's responsibilities for the audit
of the consolidated financial
statements' section of our report. We are
independent of the Group in accordance with the International
Ethics Standards Board for Accountants' International Code of
Ethics for Professional Accountants (including International
Independence Standards) (IESBA Code), together with the ethical
requirements that are relevant to our audit of the
consolidated financial statements
in Guernsey, and we have fulfilled our other
ethical responsibilities in accordance with these requirements and
the IESBA Code. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
Material Uncertainty related to going
concern
We draw attention to note 6.16 in
the consolidated financial statements, which indicates that the
Production Sharing Contract (PSC) of the Group expired on 20 August
2024, and at the date of approval of the financial statements, had
not yet been extended by the approving authority to ensure
continued operations of business. The Group transfers its complete
production of gas to its sole customer, Gas Authority of India
Limited (GAIL) in accordance with the Gas Sales and Purchase
Agreement (GSPA), and pursuant to the expiry of the PSC contract,
the GSPA will expire on 30 September 2024. These events or
conditions, along with the other matters set forth in note 6.16,
indicate that a material uncertainty exists that may cast a
significant doubt on the Group's ability to continue as a going
concern. Our opinion is not modified in respect of this
matter.
Key audit matters
Key audit matters are those
matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements
of the current period. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on
these matters.
|
The key audit matter
|
How the matter was addressed in our audit
|
|
|
|
|
Impairment of production and development assets ("P&D
assets")
We identified the impairment of
P&D assets as one of the most significant assessed risks of
material misstatement due to error.
At 31 March 2024, the Group held
P&D assets of US$ 1,280,828,308 (31 March 2023: US$
1,212,726,514).
Recoverability of P&D assets
is dependent on the expected future success of exploration and
development activities. Under International Accounting Standard
(IAS) 16 "Property, plant and equipment", an impairment test is
required, using the principles of IAS 36 "Impairment of Assets",
for P&D assets.
Based on our professional
judgement, we determined the recoverability of the carrying amount
of P&D assets amounting to US$1,280,828,309 is dependent upon
the future cashflows of the business. The Group has capitalised
taking into account the IFRS 6 "Exploration for and Evaluation of
Mineral Resources" and IAS 16 "Property, Plant and Equipment"
recognition criteria. In the previous years, the Group obtained
approval on the reserves for the SSG and SSF field from the
Directorate General of Hydrocarbons ('DGH'). Further the Management
Committee has also approved the revised
Field Development Plan ('FDP') in respect of the SGL area for the
enhancement of production. Bearing in mind the generally long-lived
nature of the Group's assets, the most critical assumption in
relation to the management's assessment of future cash flows, which
are used to project the recoverability of P&D assets are
management's views on sales volume and gas price
outlook.
Impairment of P&D assets has
been identified as a key audit matter as the assessment of the
recoverable amount of the Company's cash generating units (CGUs)
and investments involves significant judgements about the future
cash flow forecasts and the discount rate applied.
Relevant disclosures in the Annual
Report and Accounts 2023-24;
· Consolidated Financial statements: Note 6.7, Impairment
testing for exploration and evaluation assets and property, plant
and equipment;
· Consolidated Financial Statements: Note 7, Property, plant
and equipment.
|
In responding to the key audit
matter, we performed the following audit procedures:
· We
have compared the carrying value of assets to management's
assessment of the recoverable amount to assess that the carrying
value is not in excess of recoverable amount.
· We
agreed the recoverable amount to management's future cash flow
model and performed the following detailed procedures over the
model, along with impairment assessment and disclosures in
financial statements:
· We
corroborated, through obtaining supporting documentation and audit
evidence, estimates of future cash flows and challenged whether
these were appropriate in light of the future price, volume
assumptions and the costs budgets.
· We
assessed the sensitivity analysis over inputs to the cash flow
models wherein we have challenged the assumptions taken by
management (including price, discount rate, operating cost
etc);
· We
have assessed the appropriateness of management's defined cash
generating units ("CGUs") and impairment testing methodology under
IFRSs as adopted by the European Union and whether disclosures in
the consolidated financial statements are appropriate, complete and
in accordance with IFRSs as adopted by the European Union;
and
· We
examined the methodology used at the CGU level by the management to
assess the carrying value of P&D assets assigned to the Group's
principal CGU to evaluate its compliance with accounting standards
and consistency of application.
Our result
Based on our procedures we have
not identified any material misstatements in relation to the
impairment of production and development costs.
|
Other information in the Annual Report
The directors are responsible for
the other information. The other information comprises the
information included in the Annual Report, but does not include
the consolidated financial
statements and our auditor's report
thereon.
Our opinion on the
consolidated financial statements
does not cover the other information and, except
to the extent otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon.
In connection with our audit of
the consolidated financial
statements, our responsibility is to read
the other information and, in doing so, consider whether the other
information is materially inconsistent with the consolidated financial statements or
our knowledge obtained in the audit or otherwise appears to be
materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing
to report in this regard.
Responsibilities of the directors for the
consolidated financial
statements
As explained more fully in the
directors' responsibilities, the Directors are responsible for the
preparation of the consolidated financial statements which give a
true and fair view in accordance with IFRS Accounting Standards as
adopted by the European Union (EU), and for such internal control
as the Directors determine is necessary to enable the preparation
of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated
financial statements, the Directors are responsible for assessing
the Company's ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going
concern basis of accounting unless the Directors either intend to
liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's responsibilities for
the audit of the consolidated financial statements
Our objectives are to obtain
reasonable assurance about whether the consolidated
financial statements as
a whole are free from material misstatement, whether due to fraud
or error, and to issue an auditor's report that includes our
opinion. Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with ISAs
will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements.
As part of an audit in accordance
with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
·
Identify and assess the risks of material
misstatement of the consolidated
financial statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
·
Obtain an understanding of internal control
relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the
Company's internal
control.
·
Evaluate the appropriateness of accounting
policies used and the reasonableness of accounting estimates and
related disclosures made by the Directors.
·
Conclude on the appropriateness of the Directors'
use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt
on Company's ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in
our auditor's report to the related disclosures in the
consolidated financial statements
or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor's report. However, future
events or conditions may cause the Company to cease to continue as a
going concern.
·
Obtain sufficient appropriate audit evidence
regarding the financial information of the entities or business
activities within the Group to express an opinion on the
consolidated financial statements. We are responsible for the
direction, supervision and performance of the Group audit. We
remain solely responsible for our audit opinion.
·
Evaluate the overall presentation,
structure and content of the consolidated
financial statements, including the disclosures, and whether the
consolidated financial statements
represent the underlying transactions and events
in a manner that achieves fair presentation.
We communicate with the directors
regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our
audit.
We also provide the directors with
a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, actions taken to
eliminate threats or safeguards applied.
From the matters communicated with
the directors, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current
period and are therefore the key audit matters. We describe these
matters in our auditor's report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
The engagement partner on the
audit resulting in this independent auditor's report is
Michael Carpenter.
Use of our report
This report is made solely to the
Company's members, as a body, in accordance with section 262 of the
Companies (Guernsey) Law, 2008. Our audit work has been undertaken
so that we might state to the Company's members those matters we
are required to state to them in an auditor's report and for no
other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company
and the Company's members as a body, for our audit work, for this
report, or for the opinions we have formed.
Matters on which we are required
to report by exception
We have nothing to report in
respect of the following matters in relation to which the Companies
(Guernsey) Law, 2008 requires us to report to you if, in our
opinion:
· proper accounting records have not been kept by the Company;
or
· the
Group's consolidated financial
statements are not in agreement with the
accounting records; or
· we
have not obtained all the information and explanations, which to
the best of our knowledge and belief, are necessary for the
purposes of our audit.
Grant Thornton Limited
Chartered Accountants
St Peter Port
Guernsey
Date: 23 September 2024
Consolidated Statement of
Financial Position
(All amounts in United States Dollars, unless otherwise
stated)
|
|
Note
|
31 March
2024
|
|
31 March
2023
|
|
|
ASSETS
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
Property, plant and
equipment
|
7
|
1,291,623,066
763,236
9,132
|
|
1,223,434,478
1,140,605
7,891
|
|
|
Tax assets
Other assets
|
|
|
|
|
|
|
|
|
|
Total non-current assets
|
|
1,292,395,434
|
|
1,224,582,974
|
|
|
Current assets
|
|
|
|
|
|
|
Inventories
|
10
|
8,944,689
|
|
9,932,047
|
|
|
Trade and other
receivables
Prepayment and other assets due
from a related party
|
11
16
|
621,664
107,305,566
|
|
6,640,424
107,348,170
|
|
|
Cash and cash
equivalents
|
12
|
2,069,244
|
|
11,765,514
|
|
|
Total current assets
|
|
118,941,163
|
|
135,686,155
|
|
|
Total assets
|
|
|
|
|
|
|
1,411,336,597
|
1,360,269,129
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
|
|
|
|
Share capital
|
13
|
3,619,443
|
|
3,619,443
|
|
|
Additional paid-in
capital
|
13
|
46,733,689
|
|
46,733,689
|
|
|
Currency translation
reserve
|
13
|
(9,313,782)
|
|
(9,313,782)
|
|
|
Merger reserve
|
13
|
19,570,288
|
|
19,570,288
|
|
|
Retained earnings
|
13
|
303,018,938
|
|
282,833,686
|
|
|
Total shareholders' equity
|
|
363,628,576
|
|
343,443,324
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
Long term debt, excluding current
portion
|
14
|
159,689,118
|
|
175,475,431
|
|
|
Provision for
decommissioning
|
15
|
1,881,606
|
|
1,894,795
|
|
|
Deferred tax liabilities
(net)
Payable to related parties,
excluding current portion
|
8
16
|
160,142,858
678,410,347
|
|
144,392,951
633,924,200
|
|
|
Deferred revenue
|
18
|
-
|
|
30,311,748
|
|
|
Total non-current liabilities
|
|
1,000,123,929
|
|
985,999,125
|
|
|
Current liabilities
|
|
|
|
|
|
|
Current portion of long-term
debt
|
14
|
20,575,321
|
|
28,458,200
|
|
|
Current portion payable to related
parties
|
16
|
12,656
|
|
333,611
|
|
|
Trade and other
payables
|
17
|
1,525,980
|
|
2,034,869
|
|
|
Deferred revenue
|
18
|
25,470,135
|
|
-
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
47,584,092
|
|
30,826,680
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
1,047,708,021
|
|
1,016,825,805
|
|
|
|
|
|
|
|
|
|
Total equity and liabilities
|
|
1,411,336,597
|
|
1,360,269,129
|
|
|
|
|
|
|
|
|
|
(The accompanying notes are an integral part of these
consolidated financial statements)
These consolidated financial
statements were approved and authorized for issue by the board on
23 September 2024 and was signed on its
behalf by:
JONATHAN KEELING
Chairman
Consolidated Statement of
Comprehensive
Income
(All amounts in United States Dollars, unless otherwise
stated)
|
|
Note
|
Year
ended
31 March
2024
|
|
Year
ended
31 March
2023
|
|
|
|
|
|
|
|
|
|
Revenues
|
18
|
42,930,441
|
|
63,034,644
|
|
|
Cost of sales
|
|
(5,462,071)
|
|
(7,362,450)
|
|
|
Gross profit
|
|
37,468,370
|
|
55,672,194
|
|
|
|
|
|
|
|
|
|
Cost and expenses
|
|
|
|
|
|
|
Administrative expenses
|
|
(912,835)
|
|
(915,858)
|
|
|
Operating profit
|
|
36,555,535
|
|
54,756,336
|
|
|
Foreign currency exchange gain,
net
|
20
|
(434,837)
|
|
118,066
|
|
|
Profit before tax
|
|
36,120,698
|
|
54,874,402
|
|
|
|
|
|
|
|
|
|
Income taxes
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
- Deferred tax expense
-Tax For Earlier Years
|
|
(15,749,907)
(186,266)
|
|
(23,994,518)
-
|
|
|
Profit for the year (attributable to the shareholders of the Group)
|
|
20,184,525
|
|
30,879,884
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year
(attributable to the shareholders of the
Group)
|
|
20,184,525
|
|
30,879,884
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
21
|
|
|
|
|
|
Basic
|
|
0.11
|
|
0.17
|
|
|
Diluted
|
|
0.11
|
|
0.17
|
|
|
|
|
|
|
|
|
(The accompanying notes are an integral part of these
consolidated financial statements)
Consolidated Statement of Changes in
Equity
(All amounts in United States Dollars, unless otherwise
stated)
|
|
Common
stock
|
Additional paid in
capital
|
Currency translation
reserve
|
Merger
reserve
|
Retained
earnings
|
Total shareholders'
equity
|
|
|
|
No. of
shares
|
Amount
|
|
|
Balance as at 1 April 2022
|
182,973,924
|
3,619,443
|
46,733,689
|
(9,313,782)
|
19,570,288
|
251,953,802
|
312,563,440
|
|
|
Total comprehensive income for the
year
|
-
|
-
|
-
|
-
|
-
|
30,879,884
|
30,879,884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at 31 March 2023
|
182,973,924
|
3,619,443
|
46,733,689
|
(9,313,782)
|
19,570,288
|
282,833,686
|
343,443,324
|
|
|
|
|
-
|
|
Total comprehensive income for the
year
|
-
|
-
|
-
|
-
|
-
|
20,185,252
|
20,185,252
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at 31 March 2024
|
182,973,924
|
3,619,443
|
46,733,689
|
(9,313,782)
|
19,570,288
|
303,018,938
|
363,628,576
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(The accompanying notes are an integral part of these
consolidated financial statements)
Consolidated Statement of Cash
Flow
(All amounts in United States Dollars, unless otherwise
stated)
|
|
|
Year ended
31 March
2024
|
|
Year ended
31 March
2023
|
|
|
|
Cash flow from operating activities
|
|
|
|
|
|
|
|
Profit before tax
|
|
36,120,698
|
|
54,874,402
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
Unrealized exchange
loss/(gain)
|
|
434,837
|
|
(118,066)
|
|
|
|
Depreciation
|
|
4,821,537
|
|
6,443,735
|
|
|
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
Inventories
|
|
987,358
|
|
(472,294)
|
|
|
|
Trade receivables
|
|
6,019,121
|
|
11,736,924
|
|
|
|
Deferred Revenue
|
|
(4,841,613)
|
|
(3,355,936)
|
|
|
|
Payable to related
party-operating activities
|
|
5,551,919
|
|
13,059,954
|
|
|
|
Provisions for
decommissioning
|
|
(13,190)
|
|
(92,528)
|
|
|
|
Accrued expenses and other
liabilities
|
|
(831,032)
|
|
(7,724,358)
|
|
|
|
Cash generated from operations
|
|
48,249,635
|
|
74,351,833
|
|
|
|
Income taxes
(paid)/received
|
|
191,826
|
|
73,384
|
|
|
|
Net cash generated from operating
activities
|
|
48,441,461
|
|
74,425,217
|
|
|
|
Cash flow from investing activities
|
|
|
|
|
|
|
|
Purchase of property, plant
and equipment
|
|
(22,034,131)
|
|
(12,237,220)
|
|
|
Net cash used in investing activities
|
|
(22,034,131)
|
|
(12,237,220)
|
|
|
|
Cash flow from financing activities
|
|
|
|
|
|
|
|
Proceeds from long term
bonds
Repayment of long-term
Bonds
Repayment of long-term debt from
banks
|
|
-
-
(23,652,000)
|
|
159,839,930
(150,000,000)
(18,936,000)
|
|
|
|
Proceeds from loans by related
parties
|
|
9,877,100
|
|
6,000,000
|
|
|
|
Repayment of loans by related
parties
|
|
(6,500,000)
|
|
(37,250,000)
|
|
|
|
Payment of interest
|
|
(15,393,864)
|
|
(14,646,488)
|
|
|
|
Net cash generated from financing
activities
|
|
(35,668,764)
|
|
(54,992,558)
|
|
|
|
Net increase in cash and cash equivalents
|
|
(9,261,434)
|
|
7,195,439
|
|
|
|
Cash and cash equivalents at the beginning of the
year
|
|
11,765,515
|
|
4,452,010
|
|
|
|
Effects of exchange differences on
cash and cash equivalents
|
|
(434,837)
|
|
118,066
|
|
|
|
Cash and cash equivalents at the end of the
year
|
|
2,069,244
|
|
11,765,514
|
|
|
|
|
|
|
|
|
|
|
|
|
(The accompanying notes are an integral part of these
consolidated financial statements)
Notes to Consolidated Financial
Statements
(All amounts in United States Dollars, 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") are 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 of 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 fields (already exercised for all the wells in SGL field as further explained in
note 3).
2. GENERAL
INFORMATION
The consolidated financial
statements of the Group have been prepared in accordance with
International Financial Reporting Standards ('IFRS') as adopted by
the European Union ('EU'). The consolidated financial statements
have been prepared on a going concern basis (refer to note 6.16),
and are presented in United States Dollar (US$). The functional
currency of the Company as well as its subsidiaries is
US$.
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, SSF and SSG.
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 reduced 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 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.
On the basis of the above, gas
production for the year ended 31 March 2024 is 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 and production 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:
|
|
31 March
2024
|
31 March
2023
|
|
|
|
|
|
Non-current
assets
Current
assets
|
1,291,623,477
|
1,223,434,478
111,000,741
|
|
116,250,255
|
|
|
|
|
|
Non-current
liabilities
|
1,881,607
|
1,894,797
|
|
|
|
|
|
Expenses (net of finance
income)
|
5,551,919
|
6,342,915
|
|
|
|
|
|
|
|
|
Further, the SSF and SSG field
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 SSG and SSF in the block.
4. NEW AND AMENDED STANDARDS ADOPTED BY THE
GROUP
There are few Standards,
interpretations or amendments that have been issued prior to the
date of approval of these financial statements and endorsed by
IASB. Following are the amendments that applicable from financial
year beginning 1 January 2023.
a) Deferred Tax
related to Assets and Liabilities arising from a Single Transaction
(Amendments to IAS 12)
b) Disclosure of
Accounting Policies (Amendments to IAS 1 and IFRS Practice
Statement 2)
c) Definition of
Accounting Estimates (Amendments to IAS 8)
d)
International Tax Reform-Pillar Two Model Rules
(Amendments to IAS 12)
These amendments do not have a
significant impact on the Financial Statements and therefore the
disclosures have not been made.
5. STANDARDS AND
INTERPRETATIONS ISSUED BUT NOT EFFECTIVE AND YET TO BE APPLIED BY
THE GROUP
A number of new and amended
accounting standards and interpretations have been published that
are not mandatory for the Group's accounts ended 31 March 2024, nor
have they been early adopted. These standards and interpretations
are not expected to have a material impact on the Group's
consolidated financial statements:
i. Supplier
Finance Arrangements - Amendments to IAS 7
ii. Amendment to IFRS
16 - Leases on sale and leaseback
iii. Amendments to IAS 1: Classification of Liabilities as Current
or Non-current" - effective for annual reporting periods beginning
on or after 1 January 2024.
These amendments will be effective
for annual reporting periods beginning on or after 01 January
2024.
6. SUMMARY OF ACCOUNTING
POLICIES
The consolidated financial
statements have been prepared on a historical basis, except where
specified below. A summary of the material accounting policies
applied in the preparation of the accompanying consolidated
financial statements are detailed below.
6.1. BASIS
OF CONSOLIDATION
The consolidated financial statements include
the financial statements of the parent company and all of its
subsidiary undertakings drawn up to 31 March 2024. The Group
consolidates entities which it controls. Control exists when the
parent has power over the entity, is exposed, or has rights, to
variable returns from its involvement with the entity and has the
ability to affect those returns by using its power over the entity.
Power is demonstrated through existing rights that give the ability
to direct relevant activities, those which significantly affect the
entity's returns.
The Group recognises in relation
to its interest in a joint operation:
a. its
assets, including its share of any assets held jointly;
b. its
liabilities, including its share of any liabilities incurred
jointly;
c. its
revenue from the sale of its share of the output arising from the
joint operation;
d. its share
of the revenue from the sale of the output by the joint operation;
and
e. its
expenses, including its share of any expenses incurred
jointly.
Intra-Group balances and transactions, and any
unrealised gains and losses arising from intra-Group transactions
are eliminated in preparing the consolidated financial statements.
Amounts reported in the financial statements of subsidiaries have
been adjusted where necessary to ensure consistency with the
accounting policies adopted by the Group.
Profit or losses of subsidiaries acquired or
disposed of during the year are recognised from the date of control
of acquisition, or up to the effective date of disposal, as
applicable.
6.2.
SIGNIFICANT ACCOUNTING JUDGEMENTS AND
ESTIMATES
In preparing consolidated
financial statements, the Group's management is required to make
judgments, estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statement and
the reported amounts of revenues and expenses during the reporting
period. Although these estimates are based on management's
best knowledge of current events and actions, actual results may
ultimately differ from those estimates. The management's estimates
for the useful life and residual value of tangible assets,
impairment of tangible assets and recognition of provision for
decommissioning represent certain particularly sensitive estimates.
The estimates and underlying assumptions are reviewed on an
on-going basis. Revisions to accounting estimates are recognized in
the period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future
periods if the revision affects both current and future periods.
Information about significant judgments, estimates and assumptions
that have the most significant effect on recognition and
measurement of assets, liabilities, revenues and expenses is
provided in note 25.
6.3.
FOREIGN CURRENCIES
The consolidated financial
statements have been presented in US$ which is the functional
currency of the Company and the group entities.
Foreign currency transactions are
translated into the functional currency of the respective Group
entities, using the exchange rates prevailing at the dates of the
transactions (spot exchange rate).
Functional currency is the
currency of the primary economic environment in which the entity
operates.
Monetary assets and liabilities
denominated in foreign currencies are translated at the functional
currency spot rates of exchange at the reporting date. Differences
arising on settlement or translation of monetary items and other
foreign currency transactions are recognized in consolidated
statement of comprehensive income.
Non-monetary items measured at
historical cost are recorded in the functional currency of the
entity using the exchange rates at the date of the
transaction.
6.4. REVENUE
RECOGNITION
In accordance with IFRS 15,
Revenue from contracts with customers is recognised when or as the
Company satisfies a performance obligation by transferring control
of a promised goods to a customer at an amount that reflects the
consideration to which the Company expects to be entitled in
exchange for the sale of products, net of taxes on sales, estimated
rebates and other similar allowances.
Sale of gas
The contracts with customers
establish, a single performance obligation in relation to supply of
natural gas. The transfer of control of natural gas coincides with
title passing to the customer and the customer taking physical
possession. The whole of the transaction price of the contract is
allocated to supply of natural gas and the revenue has been
recognised on point in time basis when the quantities of natural
gas are supplied to the customers.
The Group has only one contractual
arrangement for sale of gas to Gas Authority of India Limited
(GAIL), wherein the revenue gets recognised on the basis of
delivery i.e. point in time revenue recognition. Further, there are
no other performance obligations which the company is liable to
perform. As per
the contract signed with customer, entity is eligible to recover
the amount from customer within 15 days of raising
invoice.
Take or pay: Any payment received
on account of lesser gas volume lifted by the customer against the
'annual contracted volume 'for which an obligation exists to
make-up such differential gas in subsequent periods is recognised
as Contract Liabilities in the year of receipt. Revenue in respect
of take or pay obligation is recognised when such gas is actually
supplied or when the customer's right to make up is expired,
whichever is earlier. For other contracts, where the Company does
not have any obligation to make up such gas in subsequent period is
directly recognised as revenue.
6.5.
PROPERTY,
PLANT AND EQUIPMENT
Property, plant and equipment
comprise development assets and other properties, plant and
equipment used in the gas fields and for
administrative purposes. These assets are stated at cost plus decommissioning cost less accumulated depreciation and
any accumulated impairment losses.
Development assets are accumulated
on a field-by-field basis and comprise costs of developing the
commercially feasible reserve, expenditure on the construction,
installation or completion of infrastructure facilities such as
platforms, pipelines and other costs of bringing such reserves into
production. It also includes the exploration and evaluation costs
incurred in discovering the commercially feasible reserve, which
have been transferred from the exploration and evaluation assets as
per the policy mentioned in note 6.6. As consistent with the full
cost method, all exploration and evaluation expenditure incurred up
to the date of the commercial discovery have been classified under
development assets of that field.
The carrying values of property,
plant and equipment are reviewed for impairment when events or
changes in circumstances indicate that the carrying values may not
be recoverable.
An item of property, plant and
equipment is derecognized upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss
arising on de-recognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying
amount of the asset) is included in the consolidated statement of
comprehensive income of the year in which the asset is
derecognized. However, where the asset is being consumed in
developing exploration and evaluation assets, such gain or loss is
recognized as part of the cost of the asset.
The asset's residual values,
useful lives and depreciation methods are reviewed, and adjusted if
appropriate, at each period end. No depreciation is charged on
development assets until production commences.
Depreciation on property, plant
and equipment is provided at rates estimated by the management.
Depreciation is computed using the straight-line method of
depreciation, whereby each asset is written down to its estimated
residual value evenly over its expected useful life. The
useful lives estimated by the management are as follows:
|
Extended well test
equipment
|
20
years
|
|
Bunk houses
|
5
years
|
|
Vehicles
|
5
years
|
|
Other assets
|
|
|
Furniture and fixture
|
5
years
|
|
Buildings
|
10
years
|
|
Computer equipment
|
3
years
|
|
Other equipment
|
5
years
|
Land acquired is recognized at
cost and no depreciation is charged as it has an unlimited useful
life.
Production assets are depreciated
from the date of commencement of production, on a field-by-field
basis with reference to the unit of production method for the
commercially probable and proven reserves in the particular
field.
Advances paid for the acquisition/
construction of property, plant and equipment which are outstanding
as at the end of the reporting period and the cost of property,
plant and equipment under construction before such date are
disclosed as 'Capital work-in-progress'.
6.6. EXPLORATION AND
EVALUATION ASSETS
The Group adopts the full cost
method of accounting for its oil and gas interests, having regard
to the requirements of IFRS 6:
Exploration for and Evaluation of Mineral Resources. Under
the full cost method of accounting, all costs of exploring for and
evaluating oil and gas properties, whether productive or not are
accumulated and capitalized by reference to appropriate cost pools.
Such cost pools are based on geographic areas and are not larger
than a segment. The Group currently has one cost pool being an area
of land located in Rajasthan, India.
Exploration and evaluation costs
may include costs of license acquisition, directly attributable
exploration costs such as technical services and studies, seismic
data acquisition and processing, exploration drilling and testing,
technical feasibility, commercial viability costs, finance costs to
the extent they are directly attributable to financing these
activities and an allocation of administrative and salary costs as
determined by management. All costs incurred prior to the award of
an exploration license are written off as a loss in the year
incurred.
Exploration and evaluation costs
are classified as tangible asset according to the
nature of the assets acquired and the classification is applied
consistently. Tangible exploration and evaluation assets are
recognized and measured in accordance with the accounting policy on
property, plant and equipment. To the extent that such a
tangible asset is consumed in developing exploration and evaluation
asset, the amount reflecting that consumption is recorded as part
of the cost of the asset.
Exploration and evaluation assets
are not amortized prior to the conclusion of appraisal activities.
Where technical feasibility and commercial viability is
demonstrated, the carrying value of the relevant exploration and
evaluation asset is reclassified as a development and production
asset and tested for impairment on the date of reclassification.
Impairment loss, if any, is recognized.
The group has completed
exploration and evaluation phase in 2017 when field development
plan has been approved by Directorate General of Hydrocarbons
('DGH') i.e., technical feasibility and commercial viability were
demonstrable. Therefore, any cost incurred thereafter on
development activities is capitalized directly to development
assets.
6.7. IMPAIRMENT TESTING FOR EXPLORATION AND
EVALUATION ASSETS AND PROPERTY, PLANT AND
EQUIPMENT
An impairment loss is recognized
for the amount by which an asset's cash-generating unit's carrying
amount exceeds its recoverable amount. The recoverable amount is
the higher of fair value, reflecting market conditions less costs
to sell, and value in use based on an internal discounted cash flow
evaluation.
Where there are indicators that an
exploration asset may be impaired, the exploration and evaluation
assets are grouped with all development/producing assets belonging
to the same geographic segment to form the Cash Generating Unit
(CGU) for impairment testing. Where there are indicators that an
item of property, plant and equipment asset is impaired, assets are
grouped at the lowest levels for which there are separately
identifiable cash flows to form the CGU. The combined cost of the
CGU is compared against the CGU's recoverable amount and any
resulting impairment loss is written off in the profit or loss of
the year. No impairment has been recognized during the
year.
An assessment is made at each
reporting date as to whether there is any indication that
previously recognized impairment losses may no longer exist or may
have decreased. If such indication exists, the Group estimates the
asset's or CGU's recoverable amount. A previously recognized
impairment loss is reversed only if there has been a change in the
assumptions used to determine the asset's recoverable amount since
the last impairment loss was recognized. The reversal is limited so
that the carrying amount of the asset does not exceed its
recoverable amount, nor exceed the carrying amount that would have
been determined, net of depreciation, had no impairment loss been
recognized for the asset in prior years. Such reversal is
recognized in profit or loss unless the asset is carried at a
re-valued amount, in which case the reversal is treated as a
revaluation increase.
6.8.
FINANCIAL ASSETS
Financial Instruments
Financial assets and financial
liabilities are recognized when the Group becomes a party to the
contractual provisions of the financial instrument. Financial
assets are derecognized when the contractual rights to the cash
flows from the financial asset expire, or when the financial asset
and all substantial risks and rewards are transferred. A financial
liability is derecognized when it is extinguished, discharged,
cancelled or expires. Financial assets and financial liabilities
are measured initially at fair value plus transactions costs,
except for financial assets and financial liabilities carried
subsequently at fair value through profit or loss, which are
measured initially at fair value. Trade receivables that do not
contain a significant financing component are measured at the
transaction price. The value of interest free financial assets and
financial liabilities with short term maturities are not discounted
at initial recognition if the impact is not material. Financial
assets and financial liabilities are measured subsequently as
described below.
Recognition of Financial Asset
On initial recognition, a
financial asset is classified as measured at
- Amortized cost;
- Fair value through other
comprehensive income (FVOCI) - debt investment;
- Fair value through other
comprehensive income (FVOCI) - equity investment; or
- Fair value through profit
and loss (FVTPL)
Financial assets are not
reclassified subsequent to their initial recognition, except if and
in the period the Group changes its business model for managing
financial assets.
A financial asset is measured at
amortized cost if it meets both of the following conditions and is
not designated as at FVTPL:
·
The asset is held within a business model whose
objective is to hold assets to collect contractual cash flows; and
the contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
·
The category determines subsequent measurement
and whether any resulting income and expense is recognized in
consolidated statement of comprehensive income.
After initial recognition,
financials assets at amortized cost are measured at amortized cost
using the effective interest method.
Impairment of financial assets
IFRS 9's impairment requirements
use more forward-looking information to recognise expected credit
losses - the 'expected credit loss (ECL) model'. The Group
considers a broader range of information when assessing credit risk
and measuring expected credit losses, including past events,
current conditions, reasonable and supportable forecasts that
affect the expected collectability of the future cash flows of the
instrument.
In applying this forward-looking
approach, a distinction is made between:
·
financial instruments that have not deteriorated
significantly in credit quality since initial recognition or that
have low credit risk and
·
financial instruments that have deteriorated
significantly in credit quality since initial recognition and whose
credit risk is not low.
·
financial assets that have objective evidence of
impairment at the reporting date.
'12-month expected credit losses'
are recognised for the first category while 'lifetime expected
credit losses' are recognised for the second category.
The impairment methodology applied
depends on whether there has been a significant increase in credit
risk. For trade receivables only, the Group applies the simplified
approach required by IFRS 9, which requires expected lifetime
losses to be recognised from initial recognition of the
receivables.
6.9. FINANCIAL
LIABILITIES
The Group's financial liabilities
include borrowings, trade payables and other payables which are
classified as financial liabilities recognized at amortized cost.
Financial liabilities are measured subsequently at amortized cost
using the effective interest method except for financial
liabilities at fair value through profit or loss ("FVTPL"), that
are carried subsequently at fair value with gains or losses
recognized in profit or loss in consolidated statement of
comprehensive income.
6.10.
INVENTORIES
Inventories are measured at the
lower of cost and net realizable value. Inventories of drilling stores and spares are accounted at
cost including taxes, duties and freight. The cost of all
inventories other than drilling bits is computed on the basis of
the first in first out method. The cost for drilling bits is
computed based on specific identification method.
6.11.
ACCOUNTING FOR
INCOME TAXES
Income tax assets and/or
liabilities comprise those obligations to, or claims from, fiscal
authorities relating to the current or prior reporting period that
are unrecovered/unpaid at the date of the statement of financial
position. They are calculated according to the tax rates and tax
laws applicable to the fiscal periods to which they relate, based
on the taxable profit for the year. All changes to current tax
assets or liabilities are recognized as a component of tax expense
in consolidated statement of comprehensive income.
Deferred income taxes are
calculated using the balance sheet method on temporary
differences. This involves the comparison of the carrying
amounts of assets and liabilities in the financial statement with
their tax base. The cost incurred on each field is claimed as
deduction from the year of commercial production. Deferred tax is,
however, neither provided on the initial recognition of goodwill,
nor on the initial recognition of an asset or liability unless the
related transaction is a business combination or affects tax or
accounting profit. Tax losses available to be carried forward as
well as other income tax credits to the Group are assessed for
recognition as deferred tax assets.
Deferred tax liabilities are
always provided for in full. Deferred tax assets are recognized to
the extent that it is probable that they will be offset against
future taxable income. Deferred tax assets and liabilities are
calculated, without discounting, at tax rates and laws that are
expected to apply to their respective period of realization,
provided they are enacted or substantively enacted at the date of
the statement of financial position.
Changes in deferred tax assets or
liabilities are recognized as a component of tax expense in profit
or loss of the year, except where they relate to items that are
charged or credited directly to other comprehensive income or
equity in which case the related deferred tax is also charged or
credited directly to other comprehensive income or
equity.
Deferred tax assets and
liabilities are offset when there is a legally enforceable right to
offset current tax assets and liabilities and when the deferred tax
balances relate to the same taxation authority.
6.12. BORROWING
COSTS
Any interest payable on funds
borrowed for the purpose of obtaining qualifying assets, which are
assets that necessarily take a substantial period of time to get
ready for their intended use or sale, is capitalized as a cost of
that asset until such time as the assets are substantially ready
for their intended use or sale. While the Group has not made any
specific borrowings for construction of a qualifying asset, they
have capitalized certain borrowing costs on account of general
borrowings at an average rate of borrowings for the Company in
terms of IAS 23 'Borrowing Costs'.
Any associated interest charge
from funds borrowed principally to address a short-term cash flow
shortfall during the suspension of development activities is
expensed in the period. Transaction costs incurred towards an
unutilized debt facility is treated as prepayments to be adjusted
against the carrying value of debt as and when drawn.
6.13. CASH AND CASH
EQUIVALENTS
Cash and cash equivalents include
cash in hand, at bank in demand deposits and deposit with
maturities of 3 months or less from inception, which are readily
convertible to known amounts of cash. These assets are subject to
an insignificant risk of change in value.
6.14. OTHER PROVISIONS AND
CONTINGENT LIABILITIES
Provisions are recognized when the
Group has a present obligation (legal or constructive) as a result
of a past event. It is probable that an outflow of resources
embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the
obligation.
Where the Group expects some or
all of provision to be reimbursed, for example under an insurance
contract, the reimbursement is recognized as a separate asset but
only when the reimbursement is virtually certain. The expense
relating to any provision net of any reimbursement is recognized in
profit or loss of the year. To the extent such expense is incurred
for construction or development of any asset, it is included in the
cost of that asset. If the effect of the time value of money is
material, provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and, where appropriate, the
risks specific to the liability. Where discounting is used, the
increase in the provision due to the passage of time is recognized
as other finance expenses.
Provisions include decommissioning
provisions representing management's best estimate of the Group's
liability for restoring the sites of drilled wells to their
original status. Provision for decommissioning is recognized at the
present value of the estimated future expenditure when the Group
has an obligation and a reliable estimate can be made, with a
corresponding addition to property, plant and equipment which is
subsequently depreciated as part of the asset.
Commitments and contingent
liabilities are not recognized in the financial statements. They
are disclosed unless the possibility of an outflow of resources
embodying economic benefits is remote.
A contingent asset is not
recognized but disclosed in the financial statements when an inflow
of economic benefits is probable but when it is virtually certain
than the asset is recognized in the financial
statements.
In those cases, where the possible
outflow of economic resource as a result of present obligations is
considered improbable or remote, or the amount to be provided for
cannot be measured reliably, no liability is recognized in the
statement of financial position and no disclosure is
made.
6.15. SEGMENT
REPORTING
Operating segments are identified
on the basis of internal reports about components of the Group that
are regularly reviewed by the Chief Operating Decision Maker in
order to allocate resources to the segments and to assess their
performance. The Company considers that it operates in a single
operating segment being the production and sale of gas.
6.16. BASIS OF GOING CONCERN
ASSUMPTION
Production Sharing Contract (PSC)
of the Group has expired on 20 August 2024. Further, the contract
of the Group with its sole customer will expire on 30 September
2024. At the date of signing the financial statements, considering
expiry of above mentioned two contracts and an obligation of the
Group to pay current portion of borrowings of US$ 20,575,321
(2022-23: US$ 28,458,200), in line with the accounting and auditing
framework, this indicates a material uncertainty that may cast
significant doubt on the group's ability to continue as a going
concern.
The group has considered following
factors relevant to support going concern.
The Group has applied for an
extension of the Production Sharing Contract (PSC) which expired on
20 August 2024. The Board is confident that the extension will be
received considering that Clause 2.1 of PSC provides that PSC can
be extended up to 35 years. Further, the
Group is in process of renewing the existing contract with the sole
customer (GAIL) for supply of gas which will expire on 30 September
2024. Moreover, the power plant in this region is the customer of
GAIL and for running that plant, the supply of gas from the block
is essential. The Board is confident that the customer contract
will be renewed soon along with PSC extension considering the
ongoing discussions with the customer and accordingly, the Group
will be able to supply the gas based on a mutually agreed
contract.
Subsequent to the year end, the
Group has repaid an amount of US$ 15,315,827 and accordingly the
amount of US$ 5,259,494 (including interest payable) is due for
repayment within the next 12 months, which the Group expects to
meet from its internal generation of cash from operations (as
evident from the group cash flow forecast and support from largest
shareholder). The Group has sufficient cash flows to repay the
maturing debt as the Group is financially sound. The Group has net
working capital of US$ 96,827,206 (2022-23: US$ 104,859,475) as at
31 March 2024.
Based on business strategies and
operating plans/forecasts of the Group, and based on the above
reasons, the management is confident that the Group will continue
to meet all its obligations as and when they fall due in the normal
course of business. Accordingly, these financial statements have
been prepared on a going concern basis.
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 31 March
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
|
-
|
3,958,473
|
77,050,148
|
-
|
-
|
46,888
|
-
|
45,876
|
81,101,385
|
|
Transfers
|
-
|
-
|
(63,779,513)
|
63,779,513
|
-
|
-
|
-
|
-
|
-
|
|
Disposals
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
|
|
Balance as at 31 March 2023
|
167,248
|
9,131,202
|
878,686,885
|
393,696,456
|
7,869,575
|
4,963,923
|
1,695,265
|
3,024,746
|
1,299,235,299
|
|
Additions
|
-
|
82,242
|
71,726,970
|
1,196,361
|
-
|
-
|
-
|
674,741
|
73,680,314
|
|
Transfers
|
-
|
-
|
(14,609,388)
|
14,609,388
|
-
|
-
|
-
|
-
|
-
|
|
Disposals
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
|
|
Balance as at 31 March 2024
|
167,248
|
9,213,444
|
935,804,466
|
409,502,205
|
7,869,575
|
4,963,923
|
1,695,265
|
3,699,487
|
1,372,915,613
|
|
Accumulated Depreciation
|
|
|
|
|
|
|
|
|
|
|
Balance as at 1 April 2022
|
-
|
2,898,821
|
-
|
53,213,091
|
6,217,175
|
4,897,781
|
1,683,377
|
-
|
68,910,245
|
|
Depreciation for the
year
|
-
|
230,847
|
-
|
6,443,735
|
195,53
|
18,543
|
1,917
|
-
|
6,890,576
|
|
Balance as at 31 March 2023
|
-
|
3,129,668
|
-
|
59,656,825
|
6,412,709
|
4,916,324
|
1,685,294
|
-
|
75,800,820
|
|
Depreciation for the
year
|
-
|
426,124
|
-
|
4,821,537
|
196,072
|
47,551
|
442
|
-
|
5,491,726
|
|
Balance as at 31 March 2024
|
-
|
3,555,792
|
-
|
64,478,363
|
6,608,781
|
4,963,875
|
1,685,736
|
-
|
81,292,547
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying values
|
|
|
|
|
|
|
|
|
|
|
At 31 March 2022
|
167,248
|
2,273,908
|
865,416,249
|
276,703,852
|
1,652,400
|
19,254
|
11,888
|
2,978,870
|
1,149,223,669
|
|
At 31 March 2023
|
167,248
|
6,001,534
|
878,686,884
|
334,039,630
|
1,456,864
|
47,599
|
9,971
|
3,024,746
|
1,223,434,478
|
|
At 31 March 2024
|
167,248
|
5,657,652
|
935,804,466
|
345,023,842
|
1,260,794
|
48
|
9,529
|
3,699,487
|
1,291,623,066
|
The balances above represent the
Group's share in property, plant and equipment as per note
3. Tangible assets comprise development
/production assets in respect of SGL, SSG and SSF
fields.
Development assets of SGL, SSG and
SSF fields includes the amount of exploration and evaluation
expenditure transferred to development cost on the date of the
first commercial discovery declared by the Group and also includes
expenditure incurred for the drilling of further wells in these
fields to enhance the production activity.
Production assets in respect of
SGL field includes completed production facilities. The Group
commenced the production facility in October 2012, and accordingly
such production assets have been depreciated since this
date.
The additions in development
assets also include borrowing costs US$ 56,485,719 (previous year:
US$ 55,091,974). The weighted average capitalization rate on funds
borrowed generally is 6.80 per cent per
annum (previous year 6.76 per
cent).
The depreciation has been included
in the following headings-
|
|
|
31 March
2024
|
31 March
2023
|
|
Depreciation included in assets
other than production assets
|
670,189
|
446,843
|
|
Depreciation included in statement
of comprehensive income under the head cost of sales for production
assets
|
4,821,537
|
6,443,735
|
|
Total
|
5,491,726
|
6,890,578
|
8. DEFERRED TAX ASSETS/ LIABILITIES
(NET)
Deferred taxes arising from
temporary differences are summarized as follows:
|
|
|
|
31 March 2024
|
31 March
2023
|
|
Deferred tax assets
Unabsorbed
losses/credits
Total
Deferred tax liability
|
404,038,277 404,038,277
|
385,508,089 385,508,089
|
|
Development assets/ property,
plant and equipment
|
564,181,135
|
529,901,040
|
|
Total
|
564,181,135
|
529,901,040
|
|
Net deferred tax liabilities
|
160,142,858
|
144,392,951
|
a) The Group has
recognized deferred tax assets on all of its unused tax
losses/unabsorbed depreciation considering there is convincing
evidence of availability of sufficient taxable profit in the Group
in the future as summarized in note 9.
b) The deferred
tax movements during the current year have been recognized in the
consolidated statement of comprehensive income.
9. INCOME TAXES
Income tax is based on the tax
rates applicable on profit or loss in various jurisdictions in
which the Group operates. The effective tax at the domestic rates
applicable to profits in the country concerned as shown in the
reconciliation below have been computed by multiplying the
accounting profit by the effective tax rate in each jurisdiction in
which the Group operates. The individual entity amounts have then
been aggregated for the consolidated financial statements. The
effective tax rate applied in each individual entity has not been
disclosed in the tax reconciliation below as the amounts aggregated
for individual Group entities would not be a meaningful
number.
Income tax charge is arising on account of the
following:
|
|
31 March
2024
|
31 March 2023
|
|
Deferred tax charge
|
(15,749,906)
|
(23,994,518)
|
|
Total
|
(15,749,906)
|
(23,994,518)
|
|
|
|
|
|
The relationship between the
expected tax expense based on the domestic tax rates for each of
the legal entities within the Group and the reported tax expense in
consolidated statement of comprehensive income is reconciled as
follows:
|
|
31 March
2024
|
31 March
2023
|
|
Accounting profit for the year before tax
|
36,120,698
|
54,873,961
|
|
Effective tax at the domestic
rates applicable to profits in the country concerned
|
15,696,477
|
23,968,946
|
|
|
|
Tax impact of bought forward
losses lapsed during the year
|
-
|
-
|
|
Non-taxable income
|
53,429
|
25,572
|
|
Other
|
-
|
-
|
|
Tax expense
|
15,749,907
|
23,994,518
|
The reconciliation shown above has
been based on the rate 43.68 per cent (previous year: 43.68 per
cent) as applicable under Indian tax laws.
The Company's profits are taxable
as per the tax laws applicable in Guernsey where zero per cent tax
rate has been prescribed for corporate. 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
incurred in respect of the respective fields in the Oil Block 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, SSG and SSF
field and has generated profits in Newbury and iServices, the
management believes there is reasonable certainty of utilization of
such losses in the future years and thus a deferred tax asset has
been created in respect of these.
10. INVENTORIES
Inventories comprise the
following:
|
|
31 March 2024
|
31 March
2023
|
|
Drilling and production stores and
spares
|
8,862,398
|
9,778,466
|
|
Fuel
|
36,024
|
109,357
|
|
Goods in transit
|
46,267
|
44,224
|
|
Total
|
8,944,689
|
9,932,047
|
The above inventories are held for
use in the exploration, development and production activities.
These are valued at cost determined based on policy explained in
paragraph 6.10. Inventories of US$ 275,190 (previous year: US$
552,413) were recorded as an expense under the heading 'cost of
sales' in the consolidated statement of comprehensive income during
the year ended 31 March 2024. Inventories of US$ 8,623,730
(previous year: US$ 9,248,791) were capitalized as part of
development assets.
11. TRADE AND OTHER
RECEIVABLES
|
|
31 March 2024
|
31 March
2023
|
|
Trade receivable
|
579,028
|
6,598,149
|
|
Other Current Asset
|
42,636
|
42,275
|
|
Total
|
621,664
|
6,640,424
|
The carrying amount of trade
receivables approximates their fair values. Refer "Credit risk" in
note 28 for further information.
12. CASH AND
CASH
EQUIVALENTS
|
|
31 March
2024
|
31 March
2023
|
|
Cash at banks in current
accounts
|
2,069,244
|
11,765,514
|
|
Total
|
2,069,244
|
11,765,514
|
The Group only deposits cash
surpluses with major banks of high-quality credit
standing.
13. EQUITY
Authorized share capital
The total authorized share capital
of the Company is GBP 5,000,000 divided into 500,000,000 shares of
GBP 0.01 each.
Issued share capital
The total issued share capital of
the Company is USD 3,619,443 (previous year: 3,619,443) divided
into 182,973,924 shares (previous year: 182,973,924).
--For all
matters submitted to vote in the shareholders meeting of the
Company, every holder of ordinary shares, as reflected in the
records of the Company on the date of the shareholders' meeting has
one vote in respect of each share held.
All shareholders are equally
eligible to receive dividends and the repayment of capital in the
event of liquidation of the individual entities of the
Group.
Additional paid in capital
Additional paid-in capital
represents excess over the par value of share capital paid in by
shareholders in return for the shares issued to them, recorded net
of expenses incurred on issue of shares.
Currency translation reserve
Currency translation reserve
represents the balance of translation of the entity's financial
statements into US$ until 30 November 2010 when its functional
currency was assessed as GBP. Subsequent to 1 December 2010, the
functional currency of Indus Gas was reassessed as US$.
Merger reserve
The balance on the merger reserve
represents the fair value of the consideration given in excess of
the nominal value of the ordinary shares issued in an acquisition
made by the issue of shares of subsidiaries from other entities
under common control.
Retained earnings
Retained earnings include current
and prior period retained profits.
14. LONG TERM DEBT
From Banks
|
|
Maturity
|
31 March 2024
|
31 March
2023
|
|
Non-current portion of long-term
debt
|
November 2024 (PY: November 2024)
|
-
|
15,859,060
|
|
Current portion of long-term
debt
|
|
16,237,543
|
24,155,800
|
|
Total
|
|
16,237,543
|
40,014,860
|
Current interest rates are
variable and weighted average interest for the year was 5.80 per
cent per annum (previous year: 6.76 per cent per annum). The fair
value of the above variable rate borrowings is considered to
approximate their carrying amounts. The maturity profile
(undiscounted) is explained in note 27.
Interest capitalised on loans
above have been disclosed in notes 7.
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
|
31 March 2024
|
31 March
2023
|
|
Non-current portion of long-term
debt
|
2027
|
159,689,118
|
159,616,371
|
|
Current portion of long-term
debt
|
|
4,337,778
|
4,302,400
|
|
Total
|
|
164,026,896
|
163,918,771
|
The Group had 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.
15. PROVISION
FOR
DECOMMISSIONING
|
|
Amount
|
|
Balance at 1 April 2022
|
1,987,325
|
|
(Decrease) in provision
|
(92,529)
|
|
Balance as at 31 March 2023
|
1,894,796
|
|
(Decrease) in provision
|
(13,190)
|
|
Balance as at 31 March 2024
|
1,881,606
|
As per the Production Sharing
Contract ("PSC"), the Group is required to carry out certain
decommissioning activities on gas wells. The provision for
decommissioning relates to the estimation of future disbursements
related to the abandonment and decommissioning of gas wells. The
provision has been estimated by the Group's engineers, based on
individual well filling and coverage. This provision will be
utilized when the related wells are fully depleted. The majority of
the cost is expected to be incurred within a period of next 10
years.
16. PAYABLE TO / RECEIVABLE FROM
TO RELATED PARTIES
Related parties payable comprise
the following:
|
|
Maturity
|
31 March
2024
|
31March
2023
|
|
|
Current
|
|
|
|
|
|
Payable to directors
|
|
12,656
|
333,611
|
|
|
|
|
12,656
|
333,611
|
|
|
Other than current
|
|
|
|
|
|
Borrowings from Gynia Holdings
Ltd.*
|
|
678,410,347
|
633,924,200
|
|
|
|
|
678,410,347
|
633,924,200
|
|
|
Total
|
|
678,423,003
|
634,257,811
|
|
|
|
|
|
|
|
* Borrowings from Gynia Holdings
Ltd. carries interest rate of 6.5 per cent per annum compounded
annually. The entire outstanding balance (including interest) is
subordinate to the loans taken from the banks (detailed in note 14)
and therefore, is payable along with related interest subsequent to
repayment of bank loan.
Interest capitalised on loans
above have been disclosed in note 7.
Related parties' receivable
comprises the following:
|
|
Maturity
|
31 March
2024
|
31 March
2023
|
|
Current
|
|
|
|
|
Prepayments and other assets due
from Focus
|
On demand
|
107,305,566
|
107,348,170
|
|
Total
|
|
107,305,566
|
107,348,170
|
Prepayments and other assets due from Focus
Prepayments to 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
pursuant to the terms of Agreement for Assignment dated
13 January 2006 and its subsequent amendments from time to
time.
17. TRADE AND OTHER PAYABLES
|
|
31 March
2024
|
31 March
2023
|
|
Trade payables
|
1,129,705
|
1,139,946
|
|
VAT payables
|
52,974
|
483,957
|
|
Other liabilities
|
343,301
|
410,966
|
|
|
1,525,980
|
2,034,869
|
The carrying amount of trade and
other payable approximates their fair values and are non-interest
bearing.
18. REVENUE
The Group's revenue disaggregated
by primary geographical markets is as follows:
|
|
31 March
2024
|
31 March
2023
|
|
Asia
|
42,930,441
|
63,034,644
|
|
|
|
|
|
|
42,930,441
|
63,034,644
|
The Group's revenue disaggregated by
the portion of revenue recognition is as follows:
|
|
31 March
2024
|
31 March
2023
|
|
Goods transferred at a point in
time
|
42,930,441
|
63,034,644
|
|
|
|
|
|
|
42,930,441
|
63,034644
|
Sale of Goods (Gas)
The revenue majorly pertains to
the sale of natural gas and condensate production (by-product). The
Group sells its natural gas to GAIL at a price fixed under the
agreement. The condensate is sold in the open market through
bidding. Further, the Company has entered
into a gas sale agreement wherein the customer is to be liable to
pay 41 % (Previous year: 41%) of the annual contracted quantity if
the customer does not purchase gas during the financial
year.
Contractual assets and Contractual
Liabilities
|
|
31 March
2024
|
31 March
2023
|
|
Current
|
Non-current
|
Current
|
Non-current
|
|
Opening balance of Contract
liabilities - Deferred revenue
|
-
|
30,311,748
|
5,077,086
|
25,563,995
|
|
Less: Amount adjusted against trade
receivables
|
-
|
(4,841,613)
|
-
|
-
|
|
Add: Transfer from non-current to
current liabilities
|
25,470,135
|
(25,470,135)
|
(4,474,753)
|
4,747,753
|
|
Less: Amount written off during the
year
|
-
|
-
|
(602,333)
|
-
|
|
Closing balance of Contract liabilities - Deferred
revenue
|
25,470,135
|
-
|
-
|
30,311,748
|
19. EMPLOYEE COST
Per the PSC, Focus is the Operator
of the Block. For SGL field, ONGC has a participative interest of
30% in the development cost. Hence, the share of iServices and
Newbury are proportionately reduced (i.e., 45.5% and 17.5%
respectively). For the Non-SGL field, the share of iServices,
Newbury and Focus are in the ratio of 65%, 25% and 10%
respectively. The Employee cost attributable to Indus Gas Limited
has been allocated in the agreed ratio (refer note 3) by Focus and
recorded as cost of sales and administrative expenses in the
consolidated statement of comprehensive income amounting to US$
197,976 (previous year US$ 212,270) and US$ 317,758 (previous year
US$ 201,627) respectively. Cost pertaining to the employees of the
Group have been included under administrative expense is US$
172,274 (previous year US$ 144,856).
19.1. AUDITOR'S REMUNERATION
The Group has obtained statutory
audit services from the statutory auditor during FY 2023-24.
Further, there are no other services rendered by the statutory
auditor during the financial year.
20. FOREIGN CURRENCY EXCHANGE
(LOSS)/ GAIN, NET
The Group has recognized the
following in the consolidated statement of
comprehensive income on account of foreign currency
fluctuations:
|
|
31 March
2024
|
31 March
2023
|
|
(Loss) on restatement of
foreign currency monetary receivables and payables
|
(22,284)
|
(31,336)
|
|
Gain arising on settlement
of foreign currency transactions and restatement
of foreign currency balances arising out of Oil block
operations.
|
(412,553)
|
149,402
|
|
Total
|
(434,837)
|
118,066
|
21. EARNINGS
PER
SHARE
The calculation of the basic
earnings per share is based on the earnings attributable to
ordinary shareholders divided by the weighted average number of
shares in issue during the year. Calculation of basic and diluted earnings per share is as
follows:
|
|
31 March
2024
|
31 March
2023
|
|
Profits attributable to
shareholders of Indus Gas Limited, for basic and
dilutive
|
20,185,252
|
30,879,884
|
|
Weighted average number of shares
(used for basic earnings per share)
|
182,973,924
|
182,973,924
|
|
Diluted weighted average number of
shares (used for diluted earnings per share)
|
182,973,924
|
182,973,924
|
|
Basic earnings per
share
|
0.11
|
0.17
|
|
Diluted earnings per
share
|
0.11
|
0.17
|
|
|
|
|
22. 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. Enterprises 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 at 31
March 2024 and 31 March 2023 is as under:
Transactions with Holding Company
|
Particulars
|
31 March
2024
|
31 March
2023
|
|
Transactions during the year with the holding
Company
|
|
|
|
Amount Received
|
9,877,100
|
6,000,000
|
|
Amount Paid
|
(6,500,000)
|
37,250,000
|
|
Interest
|
41,109,047
|
39,731,697
|
|
Balances at the end of the year
|
|
|
|
Total payable*
|
678,410,347
|
633,924,200
|
|
*Including interest
|
Transactions with KMP and entity over which KMP exercise
control
|
Particulars
|
31 March
2024
|
31 March
2023
|
|
Transactions during the year
|
|
|
|
Remuneration to KMP
|
|
|
|
Short term employee
benefits
|
172,274
|
144,856
|
|
Total
|
172,274
|
144,856
|
|
Entity over which KMP exercise
control
|
|
|
|
Cost incurred by Focus on behalf
of the Group in respect of the Block
|
17,320,604
|
26,812,100
|
|
Remittances to Focus
|
17,278,000
|
7,472,670
|
|
Balances at the end of the year
Total receivables
|
107,305,566
|
107,348,170
|
|
Total payable
|
(12,656)
|
(333,611)
|
Directors' remuneration
Directors' remuneration is
included under administrative expenses, evaluation and exploration
assets or development assets in the consolidated financial
statements allocated on a systematic and rational manner.
Remuneration by director is separately disclosed in the directors'
report on page 7.
23. SEGMENT
REPORTING
The Chief Operating Decision Maker
being the Chief Executive Officer of the Group, reviews the
business as one operating segment being the extraction and
production of gas. The operating segments have been aggregated due to similar
economic characters and allied nature of product and services.
Hence, no separate segment information has been furnished
herewith.
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 to US$ 1,291,623,477
(previous year: US$ 1,223,434,478).
Revenue from customers have been
identified on the basis of the customer's geographical location and
are disclosed in note 18. The total revenue from the Group is from
the sale of natural gas, its by-products (i.e., condensate) to Oil
and gas exploration companies. The revenue from the top three
customer comprises 95.10% (Previous year: 99.93%) of the Group's
total revenue.
24. COMMITMENTS AND
CONTINGENCIES
The Group has no contingent
liabilities as at 31 March 2024 (previous year Nil).
The Group has no commitments as at
31 March 2024 (previous year Nil).
25. ACCOUNTING ESTIMATES AND
JUDGEMENTS
In preparing consolidated
financial statements, the Group's management is required to make
judgments and estimates that affect the reported amounts of assets
and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. The judgments and estimates are based on management's
best knowledge of current events and actions and actual results
from those estimates may ultimately differ.
Significant judgments applied in the preparation of the
consolidated financial statements are as under:
Determination of functional currency of individual
entities
Following the guidance in IAS 21
"The effects of changes in foreign exchange rates", the functional
currency of each individual entity is determined to be the currency
of the primary economic environment in which the entity operates.
In the management's view each of the individual entity's functional
currency reflects the transactions, events and conditions under
which the entity conducts its business. The management believes that US$ has been taken as the
functional currency for each of the entities within the Group. US$
is the currency in which each of these entities primarily generate
and expend cash and also generate funds for financing
activities.
Full cost accounting for exploration and evaluation
expenditure
The Group has followed 'full cost'
approach for accounting for exploration and evaluation expenditure
against the 'successful efforts' method. As further explained in
note 6.6,
exploration and evaluation assets recorded using 'full cost'
approach are tested for impairment prior to reclassification into
development assets on successful discovery of gas
reserves.
Impairment of tangible assets
The Group follows the guidance of
IAS 36 and IFRS 6 to determine when a tangible asset is impaired.
This determination requires significant judgment to evaluate
indicators triggering impairment. The Group monitors internal and
external indicators of impairment relating to its tangible assets.
For the purpose of impairment assessment, judgements are involved
in estimating the expected gas extraction from production assets,
based on which, indicators are identified necessary for determining
that an impairment assessment is necessary. Based on management
assessment, the management has carried out impairment testing for
impairment of property, plant and equipment considering different
assumptions and projections as at 31 March 2024.
Estimates used in the preparation of the consolidated
financial statements:
Useful life and residual value of tangible
assets
The Group reviews the estimated
useful lives of property, plant and equipment at the end of each
annual reporting period. Specifically, production assets are
depreciated on a basis of unit of production (UOP) method which
involves significant estimates in respect of the total future
production and estimate of reserves. The calculation of UOP rate of
depreciation could be impacted to the extent that the actual
production in future is different from the forecasted production.
During the financial year, the directors determined that no change
to the useful lives of any of the property, plant and equipment is
required. The carrying amounts of property, plant and equipment
have been summarized in note 7.
Recognition of provision for decommissioning
cost
As per the PSC, the Group is
required to carry out certain decommissioning activities on gas
wells. The ultimate decommissioning costs are uncertain and cost
estimates can vary in response to many factors including changes to
relevant legal requirements, the emergence of new restoration
techniques or experience at other production sites. The expected
timing and amount of expenditure can also change, for example, in
response to changes in reserves or changes in laws and regulations
or their interpretation. As a result, there could be adjustments to
the provisions established which would affect future financial
results. The liabilities estimated in respect of decommissioning
provisions have been summarized in note 15.
Impairment testing
As explained above, management
carried out impairment testing of property, plant and equipment as
on 31 March 2024. An impairment loss is recognized for the amount
by which the asset's or cash generating unit's carrying amount
exceeds its recoverable amount.
To determine the recoverable
amount, management estimates expected future cash flows from the
Block and determines a suitable interest rate in order to calculate
the present value of those cash flows. In the process of measuring
expected future cash flows management makes assumptions about
future gross profits. These assumptions relate to future events and
circumstances. In most cases, determining the applicable discount
rate involves estimating the appropriate adjustment to market risk
and the appropriate adjustment to asset-specific risk
factors.
The recoverable amount was
determined based on value-in-use calculations; basis gas reserves
confirmed by an independent competent person. The gas price has
been revised to US$ 8.38 per Metric Million British Thermal Unit
(MMBTU) on Gross Calorific Value (GCV) basis from 1 April 2024 to
30 April 2024 resulting in price increase of 6.88% on the existing
price. The discount rate calculation is based on the Company's
weighted average cost of capital adjusted to reflect pre-tax
discount rate and amounts to 7% p.a.
Sensitivity analysis has been performed by the
management with respect to the assumptions as mentioned
below:
|
Particulars
|
Carrying value of Property, Plant &
Equipment
|
|
Reduction in projected revenue by
1% and increasing discount rate by 1%
|
1,520
|
|
Increase in projected revenue by
1% and decreasing discount rate by 1%
|
1,702
|
Deferred tax assets
The assessment of the probability
of future taxable income in which deferred tax assets can be
utilized is based on the management's assessment, which is adjusted
for specific limits to the use of any unused tax loss or credit.
The tax rules in the jurisdictions in which the Group operates are
also carefully taken into consideration. If a positive forecast of
taxable income indicates the probable use of a deferred tax asset,
then deferred tax asset is usually recognized in full. The
recoverability of deferred tax assets is monitored as an ongoing
basis based on the expected taxable income from the sale of
gas.
26. CAPITAL MANAGEMENT
POLICIES
The Group's objectives when
managing capital are to safeguard the Group's ability to continue
as a going concern in order to provide returns for shareholders and
benefits for other stakeholders and to maintain an optimal capital
structure to reduce the cost of capital.
The Group manages the capital
structure and adjusts it in the light of changes in economic
conditions and the risk characteristics of the underlying assets.
The Group monitors capital on the basis of the gearing ratio. This
ratio is calculated as net debt divided by total capital. Debt is
calculated as total liabilities (including 'current and non-current
liabilities' as shown in the consolidated Statement of Financial
Position). Total capital employed is calculated as 'equity' as
shown in the consolidated statement of financial position plus
total debt.
|
|
31 March
2024
|
31 March
2023
|
|
|
Total debt (A)
|
1,047,708,021
|
1,016,825,804
|
|
Total equity (B)
|
363,628,576
|
343,443,324
|
|
Total capital employed
(A+B)
|
1,411,336,597
|
1,360,269,128
|
|
Gearing ratio
|
74.26
%
|
74.75
%
|
|
|
|
|
|
|
The gearing ratio has marginally
decreased in the current year due to proportionately lesser
increase in the draw-down of loans from related party to fund
additional exploration, evaluation and development activities for
the Group as compared to increase in equity.
The Group is not subject to any
externally imposed capital requirements. There were no changes in the Group's approach to capital
management during the year.
27. FINANCIAL INSTRUMENTS AND
RISK MANAGEMENT
A summary of the Group's financial
assets and liabilities by category are mentioned in the table
below. The carrying amounts of the Group's financial assets and
liabilities recognized at the end of the reporting period are as
follows:
|
|
31 March
2024
|
31 March
2023
|
|
Non-current assets
|
|
|
|
Loans
|
|
|
|
- Security
deposits
|
8,722
|
7,891
|
|
Current assets
|
|
|
|
- Trade
receivables
|
621,664
|
6,598,149
|
|
- Cash and cash
equivalents
|
2,069,244
|
11,765,514
|
|
- Prepayment and other assets due
from a related party
|
107,305,566
|
107,348,170
|
|
Total financial assets under loans and
receivables
|
110,005,196
|
125,719,724
|
|
Non-current liabilities
|
|
|
|
Financial liabilities measured at amortized
cost:
|
|
|
|
- Long term
debt
|
159,689,118
|
175,475,431
|
|
- Payable to
related parties
|
678,410,347
|
633,924,200
|
|
Current liabilities
|
|
|
|
Financial liabilities measured at amortized
cost:
|
|
|
|
- Current portion of long-term
debt
|
20,575,321
|
28,458,200
|
|
- Current portion of payable to
related parties
|
12,656
|
333,611
|
|
- Trade and other payables (other
than VAT payable)
|
1,473,006
|
1,550,911
|
|
Total financial liabilities measured at amortized
cost
|
860,160,448
|
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
date.
Risk management objectives and policies
The Group finances its operations
through a mixture of loans from banks and related parties and
equity. Finance requirements such as equity, debt and project
finance are reviewed by the Board when funds are required for
acquisition, exploration and development of projects.
The Group treasury functions are
responsible for managing funding requirements and investments which
includes banking and cash flow management. Interest and foreign
exchange exposure are key functions of treasury management to
ensure adequate liquidity at all times to meet cash
requirements.
The Group's principal financial
instruments are cash held with banks and financial liabilities to
banks and related parties and these instruments are for the purpose
of meeting its requirements for operations. The Group's main risks
arising from financial instruments are foreign currency risk,
liquidity risk, commodity price risk and credit risks. Set out
below are policies that are used to manage such risks.
Foreign currency risk
The functional currency of each
entity within the Group is US$ and the majority of its business is
conducted in US$. All revenues from gas sales are received in US$
and substantial costs are incurred in US$. No forward exchange
contracts were entered into during the year.
Entities within the Group conduct
the majority of their transactions in their functional currency
other than amounts of cash held in GBP, SGD and INR. All other
monetary assets and liabilities are denominated in functional
currencies of the respective entities. The currency exposure on
account of assets and liabilities which are denominated in a
currency other than the functional currency of the entities of the
Group as at 31 March 2024 and 31 March 2023 is as
follows:
|
Particulars
|
Functional currency
|
Foreign currency
|
31 March
2024
|
31 March
2023
|
|
(Amount in
US$)
|
(Amount in
US$)
|
|
Short term exposure-
Cash and cash
equivalents
|
US$
US$
US$
|
Great Britain Pound
Singapore Dollar
Indian Rupee
|
36,730
10,647
147,906
|
87,781
7,968
27,756
|
|
Total exposure
|
|
|
195,283
|
123,505
|
As at March 31, 2024 every 1%
(increase)/decrease of the respective foreign currencies compared
to the functional currency of the Group entities would impact
profit before tax by approximately US$ (1,952) and US$ 1,952
respectively.
Liquidity risk
Ultimate responsibility for
liquidity risk management rests with the Board of Directors, which
has established an appropriate liquidity risk management framework
for the management of the Group's short, medium and long-term
funding and liquidity management requirements. The Group manages
liquidity risk by maintaining adequate reserves, banking facilities
and reserve borrowing facilities, by continuously monitoring
forecast and actual cash flows, and by matching the maturity
profiles of financial assets and liabilities.
The table below summaries the
maturity profile of the Group's financial liabilities based on
contractual undiscounted payments for the liquidity
analysis.
|
|
0-3 months
|
3 months to 1
year
|
1-2 years
|
2-5 years
|
5+ years
|
Total
|
|
31 March 2024
|
|
|
|
|
|
|
|
Non-interest bearing
|
1,485,662
|
-
|
-
|
-
|
-
|
1,485,662
|
|
Variable interest rate
liabilities
|
5,588,323
|
10,649,222
|
-
|
-
|
-
|
16,237,545
|
|
Fixed interest rate
liabilities
|
4,337,778
|
-
|
-
|
838,099,463
|
-
|
842,437,241
|
|
|
|
|
|
|
|
|
|
|
11,411,763
|
10,649,222
|
-
|
838,099,463
|
-
|
860,160,448
|
|
|
|
|
|
|
|
|
|
|
|
|
0-3 months
|
3 months to 1
year
|
1-2 years
|
2-5 years
|
5+ years
|
Total
|
|
31 March 2023
|
|
|
|
|
|
|
|
Non-interest bearing
|
1,884,522
|
-
|
-
|
-
|
-
|
1,884,522
|
|
Variable interest rate
liabilities
|
6,587,800
|
17,568,000
|
15,866,697
|
-
|
-
|
40,022,497
|
|
Fixed interest rate
liabilities
|
4,302,400
|
-
|
-
|
793,532,935
|
-
|
797,835,335
|
|
|
|
|
|
|
|
|
|
|
12,774,722
|
17,568,000
|
15,866,697
|
793,532,935
|
-
|
839,742,354
|
|
|
|
|
|
|
|
|
|
|
Interest rate risk
The Group's policy is to minimize
interest rate risk exposures on the borrowing from the banks and
the sum payable to Focus Energy Limited. Borrowing from the Gynia
Holdings Ltd. is at fixed interest rate and therefore, does not
expose the Group to risk from changes in interest rate. The
interest rate on bond is fixed at 8% per annum. The Group is
exposed to changes in market interest rates through bank borrowings
at variable interest rates.
The Group's interest rate
exposures are concentrated in US$.
The analysis below illustrates the
sensitivity of profit and equity to a reasonably possible change in
interest rates. Based on volatility in interest rates in the
previous 12 months, the management estimates a range of 50 basis
points to be approximate basis for the reasonably possible change
in interest rates. All other variables are held
constant.
|
|
|
Interest
rate
|
|
|
|
+ 0.50
per cent
|
- 0.50
per cent
|
|
31 March 2024
|
|
81,188
|
81,188
|
|
31 March 2023
|
|
278,772
|
(278,772)
|
Since the loans are taken for the
general corporate purpose and according to the Group's policy the
certain borrowing costs related to development activities are
capitalized on account of general borrowings at an average rate of
borrowings to the cost of the development asset.
Commodity price risks
The Group's share of production of
gas from the Block is sold to GAIL. Group currently get gas price
as per the domestic gas price amount over month by PTAC based on
10% of the monthly average of Indian crude basket. No commodity
price hedging contracts have been entered into.
Credit risk
The Group has concentration of
credit risk against the receivable balance from customers with
reputable credit standing and hence the Group does not consider
credit risk in respect of these to be significant. The management
has evaluated the impact of expected credit loss on the receivable
balance. While evaluating the same, macroeconomic factors affecting
the customer's ability to settle the amount outstanding have been
considered. The Group has identified gross domestic product (GDP)
and unemployment rates of the countries in which the customers are
domiciled to be the most relevant factors. The impact was
insignificant and accordingly no adjustment has been recorded in
the financial statements.
Other receivables such as security
deposits and cash and cash equivalents do not comprise of a
significant balance and thus do not expose the Group to a
significant credit risk.
The tables below detail the credit
quality of the Group's financial assets and other items, as well as
the Group's maximum exposure to credit risk by credit risk rating
grades.
|
|
Internal credit
rating
|
12M or Lifetime
ECL
|
Gross carrying
amount
|
Loss
allowance
|
Net carrying
amount
|
|
31 March 2024
|
|
|
|
|
|
|
Security
deposits
|
Performing
|
12
Month ECL
|
8,722
|
-
|
8,722
|
|
Trade receivables
|
Performing
|
Lifetime ECL (simplified approach)
|
621,664
|
-
|
621,664
|
|
Cash and cash
equivalents
|
Performing
|
12
Month ECL
|
2,069,244
|
-
|
2,069,244
|
|
Prepayment and other assets due
from a related party
|
Performing
|
12
Month ECL
|
107,305,566
|
-
|
107,305,566
|
|
|
|
|
110,005,196
|
-
|
110,005,196
|
|
|
|
|
|
|
|
|
|
|
|
Internal credit
rating
|
12M or Lifetime
ECL
|
Gross carrying
amount
|
Loss
allowance
|
Net carrying
amount
|
|
31 March 2023
|
|
|
|
|
|
|
Security deposits
|
Performing
|
12
Month ECL
|
7,891
|
-
|
7,891
|
|
Trade receivables
|
Performing
|
Lifetime ECL
(Simplified approach)
|
6,598,149
|
-
|
6,598,149
|
|
Cash and cash
equivalents
|
Performing
|
12
Month ECL
|
11,765,514
|
-
|
11,765,514
|
|
Prepayment and other assets due
from a related party
|
Performing
|
Lifetime ECL
|
107,348,170
|
-
|
107,348,170
|
|
|
|
|
125,719,724
|
-
|
125,719,724
|
|
|
|
|
|
|
|
|
|
An asset is performing when the counterparty has a low risk
of default.
28. RECONCILIATION OF LIABILITIES FROM FINANCING
ACTIVITIES
|
|
Borrowings
|
|
As at April 01, 2022
|
837,429,581
|
|
Cash Movement:
|
|
|
Net utilisation
|
(54,992,558)
|
|
Other non- cash movements
|
|
|
Impact of effective interest rate
adjustment
|
662,445
|
|
Impact of exchange
fluctuations
|
-
|
|
Interest accruals
|
55,091,974
|
|
Net debts as at March 31, 2023
|
838,191,442
|
|
|
Borrowings
|
|
As at April 01, 2023
Cash Movement:
|
838,191,442
|
|
Net proceeds
|
9,877,100
|
|
Net utilisation
|
(34,454,400)
|
|
Other non- cash movements
|
|
|
Impact of effective interest rate
adjustment
|
(694,512)
|
|
Impact of exchange
fluctuations
|
-
|
|
Interest accruals
|
45,767,811
|
|
Net debts as at March 31, 2024
|
858,687,441
|
29. POST REPORTING DATE
EVENT
No adjusting or significant
non-adjusting event have occurred between 31 March 2024 and the
date of authorization.
