To the Board of Directors of Great Eastern Energy ... · PDF fileTo the Board of Directors of...

Independent Auditors’ Report on review of condensed interim financial information

To the Board of Directors of

Great Eastern Energy Corporation limited

Introduction

We have reviewed the accompanying condensed statement of financial position of Great Eastern

Energy Corporation Limited as at 30 September 2014, the condensed income statement, the condensed

statement of comprehensive income, changes in equity and cash flows for the six months period then

ended, and notes to the condensed interim financial information (‘the condensed interim financial

statements’). Management is responsible for the preparation and presentation of this condensed interim

financial statements in accordance with IAS 34 Interim Financial Reporting. Our responsibility is to

express a conclusion on this condensed interim financial statements based on our review.

Scope of review

We conducted our review in accordance with the International Standard on Review Engagements 2410

Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review

of interim financial information consists of making inquiries, primarily of persons responsible for

financial and accounting matters, and applying analytical and other review procedures. A review is

substantially less in scope than an audit conducted in accordance with International Standards on

Auditing and consequently does not enable us to obtain assurance that we would become aware of all

significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying

condensed interim financial statements as at 30 September 2014 is not prepared, in all material respects,

in accordance with IAS 34 Interim Financial Reporting.

Emphasis of Matter

Being technical in nature, we have placed reliance on technical/ commercial evaluation by the

management in respect of categorization of wells as exploratory; development; and producing,

allocation of cost incurred on them; internal estimation of proved / proved developed reserves and basis

thereof, depletion of producing properties on the basis of the proved developed reserves and liability for

abandonment costs.

Date: New Delhi

Place: 6 December 2014

Great Eastern Energy Corporation Limited (All amounts in US dollars unless otherwise stated)

Great Eastern Energy Corporation Limited

Condensed interim financial statements

For the six months ended 30 September 2014


1

Condensed statement of financial position

Notes 30 September 2014 31 March 2014

(Unaudited) (Audited)

ASSETS

Non-current assets

Property, plant and equipment 8 122,776,587 125,992,509

Capital work-in-progress 9 73,609,522 72,322,999

Intangible assets 10 232,024 251,795

Intangible under development 11 780,561 709,181

Available for sale-financial assets 162 166

Prepayments 491,209 434,014

Derivative asset 21 - 187,067

Trade and other receivables 50,155 72,708

MAT credit entitlement 5,491,012 4,144,472

Other assets 959,771 900,691

Total non-current assets 204,391,003 205,015,602

Current assets

Trade and other receivables 1,497,394 1,579,516

Prepayments 692,783 689,324

Current tax assets 210,231 215,513

Derivative asset 21 - 97,338

Restricted deposits with banks 899,845 633,498

Deposits with banks 3,381 3,466

Cash and cash equivalents 538,730 504,522

Other current assets 20,063 877,977

Total current assets 3,862,427 4,601,154

Total assets 208,253,430 209,616,756

Equity

Share capital 13,306,007 13,306,007

Share premium 91,006,858 91,006,858

Reserves (19,779,292) (18,644,849)

Retained earnings (587,203) (5,361,689)

83,946,370 80,306,327

Liabilities

Loans and borrowings 14 86,051,538 99,553,547

Employee benefits 595,208 519,005

Deferred tax liability 4,260,228 2,501,922

Derivative liabilities 21 2,571,825 1,487,173

Provisions 17 132,045 133,234

Total non-current liabilities 93,610,844 104,194,881

Loans and borrowings 14 18,050,423 14,191,738

Trade and other payables 5,003,658 5,125,494

Employee benefits 846,147 618,928

Current tax liability 5,419,906 3,908,722

Provisions 17 75,598 75,615

Derivative liabilities 21 716,214 639,918

Other current liabilities 584,270 555,133

Total current liabilities 30,696,216 25,115,548

Total liabilities 124,307,060 129,310,429

Total equity and liabilities 208,253,430 209,616,756

As at

Total equity attributable to owners of the Company

The accompanying notes form an integral part of the condensed interim financial statements

On behalf of Board of Directors

Yogendra Kr. Modi Kashi Nath Memani

Chairman & Managing Director Director

Place: New Delhi

Date: 6 December 2014

Place: New Delhi



2

Condensed income statement

Note 2014 2013

(Unaudited) (Unaudited)

Revenue

- Sale of gas 19,334,239 15,371,953

- Other operating revenue 103,999 24,763

Other income 8,446 634,405

19,446,684 16,031,121

Stores and consumables (814,020) (586,292)

Employee benefit expenses (1,509,612) (1,082,815)

Depletion, depreciation and amortisation (refer note 4) (1,889,912) (1,632,489)

Other operating expenses (4,163,645) (2,969,588)

Results from operating activities 11,069,495 9,759,937

Finance income

- Exchange fluctuation gain and change in

fair value of derivative instruments 21 118,053 2,114,522

- Interest and other finance income 91,146 209,199 157,467 2,271,989

Finance expenses

- Exchange fluctuation loss and change in

fair value of derivative instruments 21 (1,354,556) (8,984,178)

- Other finance expenses (2,110,262) (3,464,818) (2,750,861) (11,735,039)

Net finance costs (3,255,619) (9,463,050)

Profit before tax 7,813,876 296,887

Income tax expense 13 (169,712) (29,601)

Deferred tax expense (1,862,555) -

Profit for the period 5,781,609 267,286

Profit attributable to:

Owners of the Company 5,781,609 267,286

Earnings per share

Basic earnings per share (USD) 22 0.097 0.004

Diluted earnings per share (USD) 0.097 0.004

For the six months ended

30 September





Place: New Delhi


Place: New Delhi



3

Condensed statement of comprehensive income

2014 2013


Profit for the period 5,781,609 267,286

Other comprehensive income

Items that will never be reclassified to profit or loss:

Remeasurements of the defined benefit liability (33,841) (210,489)

Foreign currency translation adjustment (2,100,538) (10,345,619)

Total other comprehensive loss for the period (2,134,379) (10,556,108)

Total comprehensive income/(loss) for the period 3,647,230 (10,288,822)

Total comprehensive income/(loss) attributable to:

Owners of the Company 3,647,230 (10,288,822)

30 September



On behalf of the Board of Directors

Yogendra Kr. Modi

Kashi Nath Memani


Place: New Delhi


Place: New Delhi



4

Condensed statement of changes in equity

For the six months ended 30 September 2013 (Unaudited) Attributable to owners of the Company

Share

capital

Share

premium*

Retained

earnings

Foreign

currency

translation

reserve ##

Fair value

reserve #

Share based

payment

reserve

Total equity

Balance as at l April 2013 13,306,007 91,006,858 (15,390,023) (11,833,106) - 285,063 77,374,799

Total comprehensive income/ (loss) for the period

Profit for the period - - 267,286 - - - 267,286

Total other comprehensive income/(loss) - - (210,489) (10,345,619) - - (10,556,108)

Total comprehensive income/(loss) for the period - - 56,797 (10,345,619) - - (10,288,822)

Transactions with owners, recognised directly in equity

Contributions by and distrubutions to owners of the Company

Share-based payment transactions - - - - - 31,312 31,312

Options forfeited during the period - - 22,238 - - (22,238) -

Balance as at 30 September 2013 13,306,007 91,006,858 (15,310,988) (22,178,725) - 294,137 67,117,289


5

Condensed statement of changes in equity

For the six months ended 30 September 2014 (Unaudited) Attributable to owners of the Company

Share

capital

Share

premium*

Retained

Earnings

Foreign

currency

translation

reserve ##

Fair value

reserve #

Debenture

redemption

reserve**

Share based

payment

reserve

Total equity

Balance as at l April 2014 13,306,007 91,006,858 (5,361,689) (19,116,372) - 168,494 303,029 80,306,327

Total comprehensive income/ (loss) for the period

Profit for the period - - 5,781,609 - - - - 5,781,609

Total other comprehensive (loss) - - (33,841) (2,100,538) - - - (2,134,379)

Total comprehensive income/(loss) for the period - - 5,747,768 (2,100,538) - - - 3,647,230

Transactions with owners, recognised directly in equity

Contributions by and distrubutions to owners of the Company

Transfer to debenture redemption reserve - - (1,024,144) - - 1,024,144 - -

Share-based payment transactions - - - - - - (7,186) (7,186)

Options forfeited during the period - - 50,862 - - - (50,862) -

Balance as at 30 September 2014 13,306,007 91,006,858 (587,203) (21,216,910) - 1,192,638 244,981 83,946,371

*Share premium represents the premium paid by the shareholders on issue of shares and is net of equity transaction costs. Under the Indian Companies Act, such a reserve has a

restricted usage.

**Debenture redemption reserve represents the reserve created for the redemption of debentures issued during the previous year. Under the Indian Companies Act, such a reserve has a

restricted usage until the redemption of debentures.

# Fair value reserve represents net changes in the fair value of available-for-sale financial assets.

## The translation reserve comprises all foreign exchange differences arising from the translation of these financial statements from functional currency to presentation currency.



Yogendra Kr. Modi

Kashi Nath Memani


Place: New Delhi Place: New Delhi

Date: 6 December 2014 Date: 6 December 2014


6

Condensed statement of cash flows

2014 2013


A. Cash flow from operating activities

Profit after tax 5,781,610 267,286

Adjustments for:-

Provisions/liabilities written back - (475,260)

Net finance cost 3,436,807 9,230,023

Profit on disposal of property, plant and equipment 735 (139,639)

Depreciation/amortisation/depletion 1,889,912 1,632,489

Share based payment expense (7,186) 31,312

Tax expense 2,032,267 29,601

Changes in:

Trade and other receivables (66,352) (153,446)

Other current assets 856,129 (15,776)

Prepayments (51,840) (570,208)

Trade and other payables 133,812 (145,715)

Employee benefit 305,286 110,003

Cash generated from operating activities 14,311,180 9,800,670

Income tax paid - (550,727)

Net cash from operating activities 14,311,180 9,249,943

B. Cash flow from investing activities

Purchase of property, plant and equipment/capital work in

progress/intangible assets (3,217,202) (11,215,601)

Proceeds from sale of property, plant and equipment 121 325,425

Fixed deposits purchased during the period (288,523) (417,198)

Interest received 130,083 148,670

Income tax paid (7,099) (11,810)

Net cash used in investing activities (3,382,620) (11,170,514)

C. Cash flow from financing activities

Inter corporate deposits taken 847,317 -

Repayment of inter corporate deposits (290,746) -

Proceeds from borrowings - 10,644,324

Repayment of long term borrowings (5,892,227) (7,030,295)

Interest paid (5,545,231) (4,954,843)

Net cash used in financing activities (10,880,887) (1,340,814)

Net increase/ (decrease) in cash and cash equivalents (A+B+C) 47,673 (3,261,385)

Cash and cash equivalents at 1 April 504,522 4,227,491

Effect of exchange rate fluctuations on cash and cash equivalents (13,465) (374,315)

Cash and cash equivalents at 30 September 538,730 591,791


30 September


On behalf of the Board of Directors

Yogendra Kr. Modi

Kashi Nath Memani


Place: New Delhi Place: New Delhi

Date: 6 December 2014 Date: 6 December 2014


7

Notes to condensed interim financial statements

1. Organisation and nature of operations

Great Eastern Energy Corporation Limited ('GEECL' or 'the Company') is a public limited company incorporated in India.

GEECL's shares were listed as Global Depository Receipts in the Alternate Investment Market, London, upto 27 May 2010.

The Company made a publication of its prospectus in relation to the introduction of its Global Depositary Receipts ('GDRs') to

the standard list on the official list of the UK Listing Authority (the 'Official List') and admission to trading on the London

Stock Exchange Plc's Main Market for listed securities (the 'Main Market'). Pursuant to the admission of its GDRs to the

standard list on the official list and commencement of trading in the GDRs on the main market on 28 May 2010, trading of the

Company's GDRs on AIM has been cancelled.

The Company was incorporated in 1992 to explore, develop, distribute and market Coal Bed Methane gas or CBM gas in

India. GEECL originally entered into a license agreement in December 1993 with Coal India Limited (CIL) for exploration and

development of CBM over an area of approximately 210 Sq. km (approximately 52,000 acres) in the state of West Bengal (the

block).

The PSC has been effective from 9 November 2001 as a result of the granting by Government of West Bengal of the Petroleum

Exploration License on the same date and provides for a five year initial assessment and market development phase, followed

by a five year development phase and then a twenty-five year production phase, extendable with the approval of the

Government of India (GOI). Besides this, the Company was awarded with Mannargudi block located in Tamil Nadu under

CBM IV round for which the Production Sharing Contract was signed with the Government of India on 29 July 2010. In this

regard, the Company has applied for issuing two Petroleum Exploration License (PEL) on 16 September 2010 to the Hon'ble

Chief Secretary, Government of Tamil Nadu. One of the PEL has been granted on 13 September 2011.

The Company does not have any subsidiary and accordingly, does not require any consolidated financial statements. Since the

Company does not have any investments in associates and joint ventures also, hence these financial statements are individual

financial statements.

These condensed interim financial statements have been prepared as at and for the six month ended 30 September 2014.

The financial statements of the Company as at and for the year ended 31 March 2014 are available upon request from the

Company’s registered office at M-10, ADDA Industrial Area, Asansol-713305, West Bengal, India, or at www.geecl.com.

2. Statement of compliance

These condensed interim financial statements have been prepared in accordance with International Accounting Standard (IAS)

34, Interim Financial Reporting. These condensed interim financial statements do not include all the information required for

complete set of IFRS financial statements and should be read in conjunction with the financial statements of the Company as at

and for the year ended 31 March 2014. These condensed interim financial statements have been authorised for issue by the

Board of Directors in its meeting held on 6 December 2014. Selected explanatory notes are included to explain events and

transactions that are significant to an understanding of the changes in the Company’s financial position and performance since the last

annual financial statements as at the end and for the year ended 31 March 2014.

3. Significant accounting policies

The accounting policies applied by the Company in these condensed interim financial statements are the same as those applied

by the Company in its last annual financial statements as at and for the year ended 31 March 2014.

4. Estimates

The preparation of condensed interim financial statements requires management to make judgements, estimates and

assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and

expense. Actual results may differ from these estimates.

In preparing these condensed interim financial statements, the significant judgements made by the management in applying the

Company’s accounting policies and the key sources of estimation uncertainty were the same as those applied to the last annual

financial statements as at and for the year ended 31 March 2014, except the following:


8

During the six-months period ended 30 September 2014, pursuant to change in the regulatory requirements in India, the

management undertaken a detailed technical evaluation to assess the estimated useful lives of the assets of the Company and

accordingly the useful lives of the following assets has been changed from the previous estimates with effect from

1 April 2014.

The existing and revised useful lives are as below.

Category of assets Existing useful

life (Years)

Revised useful

life (Years)

Plant and machinery 5-20 3-25

Furniture, fixture and office equipment 15-20 5-10

Vehicles 10 8-10

Pipeline 18 30

Had the Company continued with the previously assessed useful lives, charge for depreciation for the six months ended

30 September 2014 would have been higher by USD 137,280 for assets held at 1 April 2014. The revision of the useful lives

will result in the following changes in the depreciation expense as compared to the original useful life of the assets:

Particulars For the period

1 October 2014

to 31 March

2015

Financial

year ending

31 March

2016

Financial

year ending

31 March

2017

Financial

year ending

31 March

2018

Financial

year ending

31 March

2019

Decrease in depreciation expense 182,875 335,176 266,183 303,766 361,061

5. Financial risk management

The Company’s financial risk management objectives and policies are consistent with those disclosed in the financial

statements as at and for the year ended 31 March 2014.

6. Financial instruments

Fair value estimation

The fair values of financial assets and liabilities, together with carrying amounts shown in the statement of financial position,

are as follow:


9

Particulars

Carrying

amountFair value

Carrying

amountFair value

Financial assets carried at fair value

Available for sale-financial assets 162 162 166 166

Derivative assets - - 284,405 284,405

162 162 284,571 284,571

Financial assets carried at amortised cost

Trade and other receivables 1,547,549 1,547,549 1,652,224 1,652,224

Deposits with banks( including restricted deposits) 903,226 903,226 636,964 636,964

Cash and cash equivalents 538,730 538,730 504,522 504,522

2,989,505 2,989,505 2,793,710 2,793,710

Financial liabilities carried at fair value

Derivative Liabilities 3,288,039 3,288,039 2,127,091 2,127,091

3,288,039 3,288,039 2,127,091 2,127,091

Financial liabilities carried at amortized cost

14% non-convertible redeemable debentures 23,733,229 23,733,229 24,237,815 24,237,815

Indian currency loan 38,112,860 38,112,860 38,979,871 38,979,871

Vehicle loan - - 12,212 12,212

Foreign currency loan - - 3,000,000 3,000,000

External Commercial Borrowing 41,712,129 41,712,129 47,515,387 47,515,387

Inter corporate deposits 543,743 543,743 - -

Trades and other payables 5,003,658 5,003,658 5,125,494 5,125,494

109,105,619 109,105,619 118,870,779 118,870,779

As at 30 September 2014 As at 31 March 2014

Fair value hierarchy

The table below analyses recurring fair value measurements for financial assets and financial liabilities. These fair value

measurements are categorised into different levels in the fair value hierarchy based on the inputs to valuation techniques used.

The different levels are defined as follows.

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2 - Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that

is, as prices) or indirectly (that is, derived from prices).

Level 3 - Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)

Level 1 Level 2 Level 3

As at 30 September 2014

Financial Assets

Available for sale-financial assets - 162 -

Derivative financial asset - - -

Financial liability

Derivative instrument liability - 3,288,039 -

As at 31 March 2014

Financial Assets

Available for sale-financial assets - 166 -

Derivative financial asset - 284,405 -

Financial Liabilities

Derivative instrument liability - 2,127,091 -


10

Derivative financial instruments

The Company uses derivative instruments to mitigate its risks associated with foreign currency fluctuation relating to

underlying transactions, firm commitments, highly probable forecast transactions and certain other permissible derivative

instruments. The counterparty for these contracts is generally a bank. These derivative financial instruments are valued based on

quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the

marketplace.

7. Segment reporting

Chief Operating Decision Maker (CODM) reviews the business as one operating segment being the extraction and sale of

CBM/CNG gas. Hence, no separate segment information has been furnished herewith.

8. a) Property, plant and equipment

During the six-month period ended 30 September 2014, the Company has acquired assets with cost [including capitalized

borrowing cost (refer note 12)] of USD 1,855,820 (30 September 2013 : USD 10,511,829)

Movements in property, plant and equipment are as follows:

2014 2013

Opening balance as at 1 April 125,992,509 109,721,525

Additions 1,855,820 10,511,829

Disposals/adjustments (1,337) (231,773)

Depreciation/amortisation for the period (1,985,979) (1,786,663)

Depreciation on retirement 481 45,987

Effect of movements in foreign exchange rates (3,084,907) (15,162,547)

Closing balance as at 30 September 122,776,587 103,098,358

For the six months ended 30

September

Depreciation amounting to USD 114,325 (30 September 2013: USD 174,889) has been transferred to capital work-in-progress.

Well capitalisation

During the six months period ended 30 September 2014, the Company has not capitalized any well (30 September 2013:

8 wells). All costs involved in drilling, cementing, fracturing and drilling of exploratory core holes are initially considered as

Capital work-in-progress till the time these are ready for commercial use when they are transferred to producing properties.

Depletion: Commercially producing wells are depleted using unit of production method, based on related proved developed

reserves. Proved developed reserves of gas per well are technically re-assessed, ‘in house’, normally at the end of each

reporting period, based on technical data available.

b) Capital commitments

30 September 2014 31 March 2014

Estimated amount of contracts remaining to be executed on

capital account and not provided for:

- For land* 1,020,292 1,037,401

- For others 1,070,546 1,205,151

2,090,838 2,242,552

As at


11

*Includes estimated amount of USD 945,362 (30 September 2013: USD Nil) payable in relation to an exemption received

from the Government of West Bengal vide its order dated 9 January 2014 to hold 252.27 acres of land in the Phase 1 out of

the total requirement of 571 acres of land in Phase 1 in the manner as stipulated in order. (Refer note 23).

Further, the Company has continuing commitments towards minimum work programme in terms of production sharing

contract for Mannargudi block. Such commitments aggregate USD 17,630,108 as at 30 September 2014 (31 March 2014:

USD 18,073,060).

9. Capital work-in-progress

During the six-month period ended 30 September 2014, the Company has made additions to Capital work-in-progress,

(including borrowing cost) of USD 3,131,258 (30 September 2013: USD 14,116,534).

Movement in Capital work-in-progress is as follows:

For the six months ended 30 September

2014 2013

Opening balance 72,322,999 84,559,173

Additions during the period 3,131,258 14,116,534

Capitalization - (7,555,419)

Effect of movement in foreign exchange rates (1,844,735) (11,684,146)

Closing balance 73,609,522 79,436,142

10. Intangible assets

Intangible assets represent gas exploration right, computer software and other intangibles. During the six months period ended

30 September 2014, the Company has acquired intangible assets of USD 4,338 (30 September 2013: USD Nil).

2014 2013

Opening balance 251,795 295,629

Additions 4,338 -

Amortisation for the period (18,258) (20,715)

Effect of movements in foreign exchange rates (5,851) (38,299)

Closing balance 232,024 236,615


11. Intangible under development

During the six months period ended 30 September 2014, the Company has made additions to intangible under development of

USD 90,855 (30 September 2013: USD 133,681)

2014 2013


Additions 90,855 133,681

Effect of movements in foreign exchange rates (19,475) (81,982)



September


12

12. Borrowing cost

For the six months period ended 30 September 2014, the capitalization rate used to determine the borrowing cost eligible for

capitalization in respect of general purpose borrowings is 11.82% p.a. (30 September 2013: 14.65% p.a). Further, the effective

rate used to determine the borrowing cost eligible for capitalization in respect of specific purpose borrowing is Nil

(30 September 2013: 15.29%) for secured foreign currency loan and 13.48% p.a. (30 September 2013: 12.46%) for secured

rupee loan.

During the six months period ended 30 September 2014, the Company has allocated borrowing cost of USD 2,536,994

(30 September 2013: USD 5,115,926) to property, plant and equipment/capital work in progress, being directly attributable to

the acquisition or construction of qualifying assets. The balance borrowing cost amounting to USD 2,110,262 (30 September

2013: USD 2,750,861) has been charged to income statement. Borrowing cost is reduced by USD 28,335 (30 September 2013:

USD 63,049) in respect of income on temporary deployment of borrowings by the Company.

13. Income tax

Income tax expense is recognised on based on management’s best estimate of the weightage average annual income tax rate

expected for the full financial year applied to the pre-tax income of the interim period.

Income tax expense 2014 2013

Current tax expense 1,651,993 1,685,908

MAT credit entitlement (1,482,281) (1,656,307)

Deferred tax expenses 1,862,555 -

2,032,267 29,601

2014 2013

Profit before tax: 7,813,876 296,887

Tax expense at domestic tax rate 2,655,936 100,912

Tax effects of:

- Set off of current period profit from the losses of earlier years (72,430) (185,887)

- Non-deductible expenses 19,547 84,975

- Reassessment of tax positions of earlier periods (740,499) -

- Others 169,712 29,601

Tax charge 2,032,267 29,601


September

As at 30 September

For the six months period ended 30 September 2013, deferred tax asset was not recognized in respect of carried forward tax

losses and unabsorbed depreciation because sufficient taxable temporary differences and probable taxable profits were not

available against which the benefits can be utilized.


13

14. Loans and borrowings

Currency Interest rate Carrying amount

Balance as at 1 April 2014 113,745,285

New issues

Unsecured inter corporate deposits [refer foot note (f)] INR 14.00% 681,176 2014

Unsecured inter corporate deposits [refer foot note (g)] INR 16.00% 166,141 2014

Repayments

Secured rupee loans [refer foot note (b)] INRPLR +/- 0.25% and

base rate + 3.5% (1,093,865)

Secured foreign currency loans [refer foot note (b)] USD6 months Libor +

650-1000 bps (2,159,827)

External commercial borrowings [refer foot note (c)] EURMargin 3.90% + 6

Months Euribor (2,626,340)

Car loan [refer foot note (e)] INR 9.72% (12,195)

Unsecured inter corporate deposits [refer foot note (f)] INR 14.00% (290,746)

Other movements

Interest accrued INR 5,014

Amortisation of loan origination cost INR 317,749

Conversion of USD loan to INR loan INR (1,008,582)

Increase in INR loan due to maturity of USD loan

outstanding as at 31 March 14 1,093,865

Effect of movements in foreign exchange rates (4,715,714)

Balance as at 30 September 2014 104,101,961

Current 18,050,423

Non-current 86,051,538

Total 104,101,961

USD

Year of

maturity


14

Currency Interest rate Carrying amount

Balance as at 1 April 2013 108,793,202

New issues

Secured rupee loan* [refer foot note (d)] INR Base + 3% 10,344,212 2020

Repayments

Car loan [refer foot note (e)] INR 9.72% (22,820)

Secured rupee loans [refer foot note (b)] INRPLR +/- 0.25% and

base rate + 3.5% (5,705,308)

Secured foreign currency loans[refer foot note (b)] USD6 months Libor +

650-1000 bps (1,302,167)

Other movements

Interest accrued INR 336,066

Amortisation of loan origination cost INR 151,455

Conversion of INR loan to USD loan USD 7,054,378

Conversion of USD loan to INR loan INR (10,054,378)

Increase in INR loan due to maturity of USD loan

outstanding as at 31 March 2013 2,681,855

Effect of movements in foreign exchange rates (4,362,979)

Balance as at 30 September 2013 107,913,516

Current 20,036,437

Non-current 87,877,079

Total 107,913,516

* Secured rupee loan disbursed during the period

Proceeds from secured rupee loan 10,644,324

Less: transaction cost (300,112)

Net proceeds 10,344,212

USD

Year of

maturity

a) 14% non-convertible redeemable debentures of Rs. 1,000,000 each, redeemable at face value, were allotted during the year

ended 31 March 2014 and are secured by way of charge created as under:

i) First ranking mortgage and charge over all the immovable and movable properties of the Company, both present and

future, including without limitation, the land pertaining to the CBM Project save all immoveable properties of the

Company situated at Mouza Ishwarpura, Taluka Kadi, District Mehsana, Gujarat;

ii) First charge by way of hypothecation over all movable assets in relation to the CBM Project including, without limitation

plant and machinery, machinery spares, tools and accessories, both present and future related to the CBM Project;

iii) First ranking charge over the Participating Interest of the Company under the Product Sharing Contract (“PSC”);

iv) Assignment of (a) all the Project Documents in relation to the Contract Area or the intended CBM Project at Raniganj

Block, (b) all rights, titles, interests, benefits, claims, whatsoever of the Company, in all Project Documents, Insurances,

Clearances and all interests of the Company relating to the CBM Project including without limitation any letter of credit,

guarantee or performance bond provided by any party under the Project Documents and all rights, titles, interests, benefits,

claims, whatsoever of the Issuer on the PSC;

v) First charge on all book debts, operating cash flows, commissions, all revenues, receivables and other current assets of the

Company from or in relation to the CBM Project of whatsoever nature and whenever arising, both present and future,

tangible and intangible assets, including, without limitation any know how rights, patents and the goodwill, related to the

CBM Project, both present and future; and

vi) First charge on all the Company’s bank accounts including, without limitation, project capex account, Trust and Retention

Account and the Accounts to be established by the Company in consultation with the lenders and the Debenture Trustee


15

and each of the other accounts required to be created by the Company in accordance with the Finance Documents and

under any project document or contract and all moneys lying therein and/or to be credited therein.

b) Secured term loans (Indian rupee loan and Foreign currency loan), are secured by:

i) First mortgage and charge over all the immovable properties and assets of the Company and property situated at Mouza

Ishwarpura, Taluka Kadi, District Mehsana, in the state of Gujarat, both present and future;

ii) First charge by way of hypothecation on all the movables (including movable plant and machinery, machineries spares,

tools and accessories and other current assets) of the Company, both present and future;

iii) First ranking charge on the Participating Interest of the Company under Raniganj Coalfields Production Sharing Contract;

iv) Assignment of (a) all the project documents in relation to the contract area; (b) all the rights, title, interest, benefits, claims

and demands, whatsoever, of the Company in the project documents, any letter of credit, guarantee or performance bond

that may be provided by any party to any project document in favour of the Company, all as amended, varied or

supplemented from time to time; and (c) all the rights, title, interest, benefits, claims and demands, whatsoever, of the

Company in or under the authorization;

v) First charge on all receivables and the bank accounts including, without limitation, the Project Capex Account, Trust and

Retention Account and each of the other accounts required to be created by the Company in accordance with the Financing

Documents; and

vi) First charge on the intangible (including but not limited to any know how rights, patents and goodwill) and rights thereto of

the Company, both present and future.

During the six months period ended 30 September 2014, the Company has converted Indian currency loan amounting to

USD Nil (30 September 2013: USD 7,054,378) taken from banks to foreign currency non-resident borrowing. The loans

would be again convertible to rupee loan at the end of contracted period if the loan agreement is not renewed. The other

terms and conditions of the loan including security and repayments terms for the foreign currency loan remain the same as

secured rupee loan.

The aforesaid mortgage and charge shall rank pari passu with mortgages and charges created in favour of the participating

institutions/ banks to the project.

c) During the year ended 31 March 2011, the Company had been sanctioned External Commercial Borrowings (‘ECB’) facility

of EUR 36.50 million from ICICI Bank Ltd., Bahrain. Out of the sanctioned facility, the Company had drawn EUR 22.10

million on 29 December 2010, EUR 10 million on 7 July 2011 and Euro 4.40 million on 19 April 2012.

During the year ended 31 March 2012, the Company and the lender agreed to make certain changes in the terms and

conditions of the original deed of hypothecation. As per the amended and restated deed of hypothecation, the Company has

primarily hypothecated the following assets as security, as and by way of first charge in favour of the lender:

i) All rights, titles, interests, benefits, claims, and demands, whatsoever of the Company, into, under and/or in respect of the

Project Documents and the Clearances (both of the above hereinafter referred to as the "Contracts"), (collectively, the "First

Hypothecated Properties");

ii) All and singular the moveable properties, accounts, plant and machinery, all other tangible moveable assets (both present

and future) together with all benefits, rights and incidentals attached thereto which are now or shall at anytime hereafter be

owned by the Company and the uncalled capital, intellectual property/ intellectual property rights, goodwill, permitted

investments and all the other investments, rights, title and interest in the undertakings of the Company and all rights, titles,

interest, property, claims and demands, whatsoever of the Company, unto and upon the same, whether presently in

existence, constructed or acquired hereafter (collectively, the "Second Hypothecated Properties");

iii) All amounts, revenues, receipts and other receivables owing to, and received by, the Company from whosoever person, all

rights, titles, interest, benefits, claims and demands whatsoever of the Company in, to or in respect of all amounts owing to

and received by, the Company from whomsoever person, including any amounts received by the Company under contract

guarantees, performance bonds, letter of credit or receivables from the shareholders of the Company or otherwise, which

description shall include all properties of the above description, including the accounts in which such amounts are held

(including the Project Accounts), whether presently in existence or acquired hereafter, but excluding the Distribution

Account (collectively the "Third Hypothecated Properties");


16

iv) All amounts, revenues, receipts owing to/receivable and/or received by, the Company in relation to the Project or otherwise

and all rights, titles, interest, benefits, claims and demands whatsoever of the Company in to or in respect of all amounts

owing to/receivable and/or received by, the Company, both present and future, which description shall include all

properties of the above description whether presently in existence or acquired hereafter (collectively, the "Fourth

Hypothecated Properties"); and

v) By way of a first charge, all the other moveable assets of the Company both present and future including the Distribution

Account [other than the property effectively charged pursuant to the provisions of Sub-clause (i) through (iv) above],

(collectively the “General Assets") provided that the charge created over the General Assets shall rank as a floating charge

and shall not hinder the Company from dealing with the same or any part thereof in the ordinary course of its business in

accordance with the terms of the Financing Documents and free of liens in each case unless the dealings have been

restricted in accordance with the terms or its Deed or otherwise or the charge gets converted into a fixed charge and subject

to and only as expressly permitted by the Financing Documents. The Company shall not, without the prior written consent

of the lender, create or attempt to create any mortgage, charge, lien, pledge or hypothecation upon the General Assets.

The Security Interest created by the Company in favour of the lender on the hypothecated property by the deed rank pari

passu with the security interest created/ to be created in favour of existing lenders and parallel lenders.

d) During the year ended 31 March 2012, the Company had been sanctioned Rupee Term Loan Facility of USD 39,766,272 from

consortium of banks. Till 30 September 2014, the Company has drawn USD 38,730,110. The above term loan is repayable in

22 quarterly installments commencing from 31 December 2014. As per the credit arrangement letter, the facility shall be

secured by first ranking charge/ hypothecation/ mortgage/ assignment/ pledge/ security/ interest on the following, related to

the project:

i) All the immovable properties (including leasehold rights in case of leasehold land) and assets of the borrower, present and

future, in relation to the CBM project and all immoveable properties of the borrower situated at Mouza Ishwarpura,

Talukda Kadi, District Mehsana, Gujarat;

ii) All the borrower's movable properties and assets (including intangible assets) in relation to the CBM project, present and

future, including but not limited to plant and machinery, machinery spares, tools, spares, accessories and current assets;

iii) All book debts, operating cash flows, receivables, commissions, revenues of whatsoever nature and wherever arising of the

borrower and all intangibles, goodwill, uncalled capital of the borrower, present and future, relating to the CBM project;

iv) All accounts of the borrower wherever maintained, present and future, including but not limited to the Trust and Retention

Account together with all accounts/ sub-accounts thereof, including Debt Service Reserve Account; and

v) All rights, title, interest, benefits, claims and demands whatsoever of the borrower, present and future, in, to and in respect

of the project documents including (but not limited to) all insurance contracts, clearances and CBM contract(s), and any

letters of credit, guarantees or performance bonds provided by any party to any project documents in favour of the

Borrower and all benefits incidental thereto.

The aforesaid security will rank pari passu with the security interest to be created in favour of participating lenders.

e) Vehicle loan is secured by way of hypothecation of vehicle.

Inter Corporate Deposits

f) During the six months period ended 30 September 2014, the Company entered into a loan agreement with Rensan Drugs

Private Limited for an unsecured loan of USD 681,176 (equivalent to Rs. 41,000,000). This loan would be repayable after a

period of 2-4 months at an interest rate of 14% per annum, payable at maturity. As of 30 September 2014, the outstanding

balance is USD 381,432 (equivalent to Rs. 23,500,000) (31 March 2014: Nil) from Rensan Drugs Private Limited after

repayment of USD 290,746 (equivalent to Rs. 17,500,000).

g) During the six months period ended 30 September 2014, the Company entered into a loan agreement with Ritman

Commodities Private Limited for an unsecured loan of USD 166,141 (equivalent to Rs. 10,000,000). This loan is repayable

after a period of 90 days at an interest rate of 16% per annum, payable on maturity. As of 30 September 2014, the Company

has drawn down USD 162,311 (equivalent to Rs. 10,000,000) (31 March 2013: Nil) from Ritman Commodities Private

Limited.

Borrowings Indian rupee loan from banks and non convertible redeemable debentures mature until 2020, the external

commercial borrowings mature until 2018 and the inter corporate deposits mature until 2014.


17

15. Share based payment

Share options are granted to non-executive directors and eligible employees under the stock option plan established and

operated by the Company. Originally the plan was an equity settled plan. The plan was established by the Company on

27 May 2008 and provides for allotment of up to 500,000 equity shares of Rs. 10 (before consolidation of shares 5,000,000

equity shares of Re 1).

These options are fair valued using the Black-Scholes model. The share based payment charge on these options granted are

amortized over the vesting period in accordance with the vesting schedule, provided that the holders of the options continue to

be an employee on the vesting date. The options are to be exercised within a maximum period of 10 years from the date of

grant. All the options would vest in five equal installments on an annual basis over a five year period.

During the current period, the stock options issued in earlier years to independent non-executive directors have been forfeited

in compliance with the Indian Companies Act 2013.

A. Charge to the condensed income statement towards share based payments and the movement in share based

compensation reserve is as given below.

Share based payments reserve: 2014 2013


Share-based compensation charge for the period towards Share options granted

to non-executive directors and employees

(7,186) 31,312

Transfer to retained earnings towards share options forfeited during the period (50,862) (22,238)



30 September

The total charge/(credit) for the six months period ended 30 September 2014 relating to employee share-based payment plans

is USD (7,186) [30 September 2013: USD 31,312].

The fair value of each option award is estimated by using the Black-Scholes Option Pricing employee share-based payment

model.

B. Movement in the share options outstanding:

Number of

equity shares

Number of

equity

shares

Weighted average

exercise price (in

USD per share)

Options outstanding at the beginning of the year 97,553 107,410 7.69

Options granted during the period - 3,107 6.45

Options forfeited during the period (18,477) (8,054) 6.87

Options exercised during the period - - -

(share price at the date of exercise was USD 10.21)

Options outstanding at the end of the period 79,076 102,463 7.72

Options exercisable at the end of the period 59,237 57,305 7.63


2013

Weighted average

exercise price (in

USD per share)

2014

7.90

7.87

-

7.58

-

7.94

The remaining weighted average contractual life of options outstanding as at 30 September 2014 is 5.59 years (31 March 2014:

6.14 years).


18

16. Retirement benefits

The state administered provident fund and superannuation are defined contribution plan. The Company's gratuity scheme is a

defined benefit plan. Gratuity is paid as a lump sum amount to employees at retirement or termination of employment at an

amount based on the respective employee’s eligible salary and the years of employment with the Company. The Company has

made provision for gratuity on the basis of actuarial valuation.

17. Provisions

Provision for

demobilisation

Provision for

site restorationTotal

Provision for

demobilisation

Provision for

site restorationTotal

Opening balance 75,615 133,234 208,849 130,419 100,761 231,180

Addition during the period* 1,880 - 1,880 - 81,592 81,592

Adjusted/reversed during

the period*- - - (39,725) - (39,725)

Effect of discounting - 2,125 2,125 - (43,211) (43,211)

Effect of movement in

foreign exchange rates(1,897) (3,314) (5,211) (15,108) (15,710) (30,817)

Closing balance 75,598 132,045 207,643 75,586 123,432 199,018

Less: Non current portion - 132,045 132,045 - 123,432 123,432

Current portion 75,598 - 75,598 75,586 - 75,586

For the six-months ended 30 September

2014 2013

*The provisions created/adjusted/reversed during the year ended 30 September 2014 and 30 September 2013 have been capitalised and

no amount has been charged to the income statement.

Site restoration costs

A provision for restoring the land back to its originality is created by way of site restoration costs, on a well by well basis.

Such expenses are provided when the wells have been drilled substantially. These are expected to be incurred when the

Company has commercially exploited the proved reserves of the well or when a well which has been drilled, has been declared

as dead.

Provision for demobilisation

Provision for demobilisation represent the amount which would be required to be paid when the relevant equipment is

demobilised.


19

18. Contingencies

Claims made against the Company not acknowledged as debts (including interest wherever applicable) are as follows:-

As at 30 September As at 31 March

2014 2014

M/s Adkins Services Inc. 10,503,150 10,464,340

M/s M.R Associates 26,980 22,888

M/s D.S Steels 261,686 257,985

M/s Goel Construction 491,199 503,540

M/s Sail ISP (refer footnote a) - 44,705,491

Claims by Government of India (Ministry of Petroleum and

Natural Gas)186,384 183,885

Claims by Petroleum and Natural Gas Regulatory Board 81,156 83,195

Claims by Excise Department 641,972 658,102

Claims by Sales Tax Authorities 67,903 69,609

Claims by Income Tax Authorities (refer footnote b) - 341,369

Production level payment 268,994 275,752

M/s Sopan Projects 425,488 436,178

Other claims, to the extent quantified 88,509 90,733

Future cash outflows in respect of the above would be determinable on finalisation of judgments/ decisions pending with

various forums/ authorities.

There are no new contingencies/ significant updates happened in the current period other than those disclosed in the financial

statements as at and for the year ended 31 March 2014 except as mentioned below:

a) On 12 December 2009, The Company and the SAIL entered into an agreement for supply of CBM Gas to SAIL.

Subsequently, SAIL discontinued the intake of gas in breach of the terms of the agreement. The Company issued letter dated

12 November 2010 calling upon SAIL to release payments to the tune of USD 449,829 against the debit notes raised dated

12 November 2010 for insufficient notice period. SAIL, vide letter dated 1 December 2010, refused to release payments to the

Company with regard to the debit notes issued by the Company. The Company is of the view that conduct of SAIL is illegal

and in violation of Clause 15 of the Agreement, as no sufficient notice period was given before stoppage of supply. Further, the

Company has raised debit notes/ invoices for the period from 26 November 2010 to 31 October 2012 for insufficient notice

period.

The Company has filed a claim petition for an amount of USD 599,911 (inclusive of interest @ 15% from November 2010 till

the time of filing of the petition). SAIL has also raised counter claim for USD 44,705,491.

During the pendency of the Arbitration proceedings, the matter was mutually settled between the parties and a memorandum of

settlement dated 13 September 2014 was entered into between the Company and SAIL. Both the parties have unconditionally

withdrawn their respective claims against each other as full and final settlement between the parties.

The matter was thereafter listed before the Arbitral Tribunal on 25 September 2014 on which the memorandum of settlement

had been placed on record and the same was taken on record by the Tribunal. In view of the settlement arrived between the

parties, the arbitration proceedings stand terminated and the Tribunal has passed an award in terms of the settlement and

memorandum of settlement has been made part of the award. Since the claim has been withdrawn by SAIL, therefore it is no

longer contingent.

b) The Company has received notice u/s 148 of the Income tax Act, 1961 for the assessment year 2006-07 against which the

Company has filed a writ petition in High Court. During the current period, the writ petition has been allowed by the High

Count vide order dated 30 July 2014 and proceedings initialed by AO for reopening the assessment for the assessment year

2006-07 is declared void and without authority of law.


20

c) During the current period one of the customer SRMB Srijan Limited (‘SRMB’) has filed a civil suit against the Company in

regards to the bank guarantee issued by SRMB to the Company against the payment of gas supplied by the Company to

SRMB. In the suit several applications have been filed by both parties. Pursuant to order passed by the Hon’ble Court bank

guarantee has been invoked and encashed by the Company.

The claim against SRMB arises due to their breach of the terms of the Gas Supply and Purchase Agreement executed on

11 May 2011 and their illegal attempt to terminate the Agreement. The Company has already initiated arbitration proceedings

and would soon be submitting its claim before the Arbitral Tribunal. Based on the legal opinion taken by the Company, the

Company is of the strong view that the Company would able to recover their claim towards MGO (minimum guarantee

offtake), other charges and expenses under the Gas Sale and Purchase Agreement.

d) During the current period, based on a legal opinion, the Company has decided to refrain from the deposit of entry tax. In

view of the opinion, based on a judgment passed by the Hon’ble Calcutta High Court, the Company can file a writ petition in

High Court for non-applicability of entry tax on its operations and is not required to pay any amount of entry tax until the

disposal of that writ petition.

19. Related party disclosures

a) Relationship with the related parties

Related parties where control exists: The Company is controlled by Mr. Yogendra Kr. Modi, who is also the Company’s

ultimate controlling party.

Other related parties with whom transactions have taken place during the period and the nature of related party relationship:

Relationships Name of related parties

YKM Holdings Private Limited

YKM Holding International Limited

Shareholders having significant influence

Key managerial personnel Mr. Yogendra Kr. Modi

Mr. Pejavar Murari

Mr. Kashi Nath Memani

Mr. Haigreve Khaitan

Mr. Paul Sebastian Zuckerman

Mr. Ashok Jha

Mr. G.S. Talwar

Relative of key managerial personnel Mr. Prashant Modi

Entities that are controlled, jointly controlled or significantly

influenced by, or for which significant voting power in such

entity resides with, directly or indirectly, any individual or

close family member of such individual referred above.

YKM Holding International Limited

Khaitan and Co.

Khaitan and Co. LLP

b) Related party transactions

The following tables provide the total amount of transactions which have been entered into with related parties during the period ended

30 September 2014 and 30 September 2013.

Related Party Nature of transaction 2014 2013

YKM Holdings Private Limited Lease rentals 69,472 67,373

Khaitan & Co. - 55,850

Khaitan & Co. LLP 107,684 34,708

For six months ended 30 September

Payment for services rendered

(including reimbursement of expenses)


21

c) Compensation paid to key management personnel and their relatives

2014 2013

Short term employee benefits 526,270 524,668

Provision for gratuity and superannuation 140,666 123,226

Compensated absences 163,585 170,881

Defined contribution plan 35,029 37,104

865,550 855,879


In addition to above payments, the Company during the six months period ended 30 September 2014, paid USD 6,347

(30 September 2013: USD 3,422) as sitting fees to the non-executive directors for attending various meetings and the same are

included in ‘other operative expenses’ in the income statement. These non-executive directors have also been issued stock

options by the Company under the stock options plan and the expenses for the same, recognized in the income statement

during the six months period ended 30 September 2014, amounts to USD Nil (30 September 2013 : USD 675). During the

current period, the stock options issued in earlier years to independent non-executive directors have been forfeited in

compliance with the Indian Companies Act 2013.

d) The following tables provide the total amount outstanding with related parties as at the period end.

Receivable Payable Receivable Payable

YKM Holdings Private Limited* 54,788 10,305 56,166 10,062

Mr. Yogendra Kr. Modi - 98,242 - 50,469

Mr. Prashant Modi - 17,152 - 28,635

Mr. Paul Zebastian Zuckerman - 14,675 - 11,423

Khaitan & Co. LLP - 72,195 - 53,617

54,788 212,569 56,166 154,206

As at 30 September 2014 As at 31 March 2014

*Amounts recoverable from YKM Holdings Private Limited consist of USD 27,394 (31 March 2014: USD 28,083) on

account of security deposits paid for property taken on lease, recoverable on expiry of lease agreement and USD 27,394

(31 March 2014: USD 28,083) on account of advance rent paid, adjustable against future occupation of property taken on

lease.

e) Terms and conditions of transactions with related parties

Outstanding balances at the period-end are unsecured, interest free and settlement occurs in cash. For the period ended

30 September 2014, the Company has not recorded any impairment of receivables relating to amounts owed by related parties

(30 September 2013: Nil). This assessment is undertaken at each reporting period end through examining the financial position

of the related party and the market in which the related party operates.


22

20. Leases and arrangements containing lease

The Company enters into equipment lease and other arrangements with various contractors for development of its wells,

whereby the specific assets leased by the contractors are used only at the Company's well development site and such

arrangements convey the right to use the assets.

These arrangements also include non-lease elements and are being treated as well development costs along with other costs.

The segregation of the lease and non-lease elements under the arrangements is not possible. The details of total expenses in this

regard are as follows:

Nature

2014 2013

Cementing and fracturing and perforation charges - 4,732,873

Logging and wireline charges - 246,134

Work over expenses 561,825 498,354

Directional drilling charges - 786,253

For the period ended 30

September

a) The Company’s leasing arrangements are in respect of operating leases for premises and equipments. These leasing

arrangements range normally from 12 month to 3 years and are renewable on mutual consent of parties as per mutually

agreeable terms. All the lease agreements are cancellable in nature.

Lease rentals accrued during the period for the premises, equipment and site office/store yard amounting to USD 88,496 (30

September 2013: USD 86,110) have been charged to the income statement and the balance of USD 436 (30 September 2013:

USD 957) has been recognized in capital work in progress.

b) The Company has taken different pieces of land on lease on which the wells are being developed. The lease period for these

pieces of land generally ranges from 30 to 99 years. The Company is required to pay the entire amount of consideration as

lease premium upfront upon entering into agreement for acquisition of these pieces of land and no further periodic lease rentals

are payable for use of these pieces of land. The leasehold land have been classified as finance or operating lease on the basis of

principles given in IAS 17.

21. The Company uses derivative instruments to mitigate its risks associated with foreign currency fluctuation relating to

underlying transactions, firm commitments, highly probable forecast transactions and certain other permissible derivative

instruments.

The Company has carried out fair value of derivative instruments and recognised derivative instruments loss/ (gain) amounting

to USD 1,294,020 [30 September 2013: USD (2,114,522)] primarily due to significant fluctuation in exchange rate during the

six months period ended 30 September 2014. The Company has also recognized loss on winding up of derivative instruments

amounting to USD 60,536 (30 September 2013: USD Nil) during the six months period ended 30 September 2014. Further, the

Company has also recognised foreign exchange loss/ (gain) amounting to USD (118,053) (30 September 2013: USD 8,984,178)

primarily due to exchange fluctuations in foreign currency denominated borrowings.

The details of derivative liabilities and assets instruments outstanding are as below:-

As at 30 September 2014

Particulars Number of

contracts

Underlying

Exposure

Amount of

derivative

liability

i) Coupon only swap - from the base 6 months Euribor to 6

months USD Libor1 EUR 19,890,000 1,377,164

ii) Principal and coupon swap

- range forward transactions from the loan currency of Euro

to USD1 EUR 9,000,000

- from the base 6 months Euribor to 6 months USD Libor

3,288,039Total derivative liability

1,910,875


23

As at 31 March 2014


contracts

Underlying

Exposure

Amount of

derivative

liability

i) Principal -range forward transactions from the loan

currency of EURO to USD1 EUR 20,995,000 940,513



to USD1 EUR 9,500,000


iii) Forward contract to hedge semi annually loan repayment

from USD to INR1 USD 2,423,069 130,533

iv) Forward contract to hedge the foreign currency USD loan

taken from bank1 USD 3,000,000 233,670

2,074,693Total derivative liability

769,977

As at 31 March 2014


contracts

Underlying

Exposure

Amount of

derivative

asset

1 EUR 20,995,000 134,669



to USD1 EUR 4,180,000 97,338


232,007Total derivative assets

i) Coupon only swap - from the base 6 months Euribor to 6

months USD Libor

22. Potential equity shares are anti-dilutive, hence basic earnings/(loss) per share and diluted earnings/(loss) per share are the same.

23. Under the West Bengal Land Reforms Act, 1955 (“WBLRA”), the Company can own approx. 24.2 acres of land. Since the

Company currently owns land in excess of the limit, it has applied for an exemption from this ceiling limit which is pending

before the Land & Land Reforms Department, Government of West Bengal. In accordance with the WBLRA, any land owned

in excess of the ceiling limit may vests in the government. In 2008, the Company applied for an exemption under WBLRA and

further in 2012 the Company has again applied for the same. Pursuant to the notification of West Bengal Government, the

Company has filed application for claiming the exemption.

Further during the year ended 31 March 2014, the Additional Secretary to the Government of West Bengal (Commerce &

Industries Department) had approved the application of the Company and forwarded the application to the Secretary to the

Government of West Bengal (Land & Land Reforms Department) with the request to allow the Company to hold land in

excess of the ceiling limit specified under section 14Y of the West Bengal Land Reforms Act, 1955, as recommended for

implementation of the C.B.M. Project. The Company believes that the West Bengal Government would either give the

exemption to the Company or allow the Company to use the land on lease basis and, therefore, it will not have any significant

negative financial impact. Vide its order dated 9 January 2014, the Company had received an exemption from the Government

of West Bengal to hold 252.27 acres of land in the Phase I out of the total requirement of 571 acres of land in Phase I pursuant

to payment of amount in the manner as stipulated in the order. The final amount is under determination. The Company’s

request for seeking exemption for the rest of the land required for CBM project is under process. The Company believes that

the West Bengal Government would give the exemption to the Company for remaining land also and therefore it will not have

any significant negative impact.


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24. Mining Lease

The Company has received Grant of Petroleum mining Lease under 5(1)(ii) of the PNG Rules and Oil Fields (Regulation and

Development) Act, 1948 for mining of CBM in the Raniganj block on 4 September 2008 from the Government of West Bengal.

The Company has entered into the mining lease agreement with the West Bengal Government. The agreement got signed on 5

June 2014 and is valid for a period of 20 years with effect from 4 September 2008.

The Governor of Tamil Nadu (“State Government”) in accordance with the Petroleum and Natural Gas Rules, 1959 made under

Oil Field (Regulation and Development) Act, 1948 has awarded a license to the Company, on 13 September 2011 for the term

of 4 years, to prospect for Petroleum and Natural Gas for carrying out CBM activities in the land situated in Thanjavur District,

Tamil Nadu, subject to the condition as specified in the contract entered.

25. Foreign currency translation

The Company has converted Indian Rupees (‘INR’) balances to ‘USD’ equivalent balances on the following basis:

For conversion of all assets and liabilities, other than equity, as at the reporting dates, the exchange rates prevailing as at

the reporting date have been used, which are as follows:

as at 30 September 2014: USD 1 = INR 61.61

as at 31 March 2014: USD 1 = INR 60.10

For conversion of all expenses and income on income statement and the cash flow statement, for the respective periods,

periodic average exchange rates have been used, which are as follows:

For the six months ended 30 September 2014: USD 1 = INR 60.19

For the six months ended 30 September 2013: USD 1 = INR 59.11





Place: New Delhi


Place: New Delhi


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