Echo Energy Regulatory News (ECHO)

30 September 2015

Independent Resources PLC

Interim report

Six months ended 30 June 2015

Highlights

· Investment joint venture established with Nostra Terra

· First co-investment in advanced negotiations

· Cost restructuring in Italy now complete

· Equity fundraising successfully completed in May 2015

· Net cash at 30 June 2015: £0.4m (2014: £1.4m)

· Operating loss reduced to £0.63m

· Cash spend from continuing operations reduced to £0.41m since 1 January 2015

Chairman's Statement

Against a difficult backdrop for the industry, we continued to make progress during the first six months of 2015, albeit at a slower pace than we would have liked.

We improved our understanding of the prospectivity of Ksar Hadada while farm-out talks continue and took the necessary steps to rationalise group costs through restructuring our Italian administrative presence. We have an active acquisition pipeline and now have a capable joint venture partner in Nostra Terra Oil & Gas to help balance risk and actively assist with pre and post -investment activities.

Our strategy remains to grow a production led business. We remain confident that this new environment will lead to opportunities to acquire stakes in producing assets at a reasonable price allowing the company to fulfil its strategy. We believe that the decline in the service sector rates in the industry as a result of the falling oil prices should offer opportunity to develop assets acquired in the future at a reasonable cost.

In conjunction with Nostra Terra we are in advanced negotiations on our first co-investment opportunity and are actively reviewing a number of others in Egypt and Tunisia.

Tunisia

We have continued to advance our technical understanding of the Ksar Hadada permit area while our process to attract a farm-in partner continues.

The recent Scotforth satellite survey has increased our understanding of the potential prospectivity of the permit area. In particular the survey results emphasises the importance of the acacus prospects on the licence. We are hopeful that this will increase the attractiveness of the opportunity to potential investors.

We have continued to make preparations for a seismic campaign including completing an environmental impact assessment with a local Tunisian service provider.

We continue to work closely with ETAP and DGE on all matters relating to the permit. In order to fulfil our role as operator we opened a small office in Tunis and we will continue to evaluate opportunities to acquire producing interests in Tunisia.

Italy

In Italy we continue to prepare and seek commencement of the administrative proceedings in relation to the Rivara gas storage project. The Court is expected to hear our case later this year and we continue to monitor all political developments that may affect the outcome of the case. While the outcome of the process cannot be guaranteed we remain confident of the validity of our action.

We took the decision late last year to take all necessary steps to minimise our overhead cost structure in Italy pending a successful resolution of the proceedings in relation to Rivara. This process took a number of months to complete but all employment contracts have now been successfully terminated and the cash cost was met during June 2015. We would like to thank our former Italian employees for their hard work and support during difficult times for the group in Italy since 2012.

The Fiume Bruna and Casoni licenses have now officially been relinquished but all historical investment costs in relation to these projects had already been provided against in previous accounting periods.

Overhead costs

We have continued to work closely as a management team to minimise expenditure and group cash burn. We welcome the continued support from all our business partners during a difficult time for the industry.

As a sign of their commitment to ensuring the successful future of the company, all the directors and key management have agreed to defer or use net salary and consultancy payments in full or in part to subscribe for additional equity in the company. Cash salaries have not been paid to board members since January 2015 and will only resume once the board is satisfied that it has become appropriate to do so. In July 2015, management subscribed for £174,480 of new ordinary shares as part of the fundraising process led by Brandon Hill.

Results for the period

The loss for the period from continuing operations was £0.74m (2013: £5.44m). The underlying loss for the period was £0.63m when fundraising costs of £0.07m and IFRS 2 charges of £0.04m in relation to options and warrants are excluded. As the fundraising was executed at par value it was not possible under UK Company law to offset related costs against the share premium reserve. The loss from continuing operations reflects the accrual of all board and senior management costs but as mentioned above these are not currently being settled in cash.

The reported loss for the period was £1.36m. This included expenditure on now curtailed Italian operations of approximately £0.15m and an exchange revaluation loss of £0.47m on our investment in Rivara due to the decline versus sterling of the euro which weakened by 10 per cent. between 1 January and 30 June 2015.

The prior year period included an impairment charge of £4.65m, in relation to historical investment at Fiume Bruna and Casoni and goodwill in relation to the historical acquisition of Independent Energy Solutions.

The cash spend during the period in relation to continuing operations was £0.46m.

Fundraising

In May of this year, we completed a fundraising process which raised gross proceeds of approximately £0.8m through Brandon Hill. Total fees of approximately £0.07m were incurred in relation to the fundraising and have been expensed in the period.

As shareholders ourselves, management are acutely aware of the effect of dilution on all shareholders and we will seek ways to minimise this through use of debt and development finance in the future where possible.

Board changes

In January 2015 we announced that Roberto Bencini was leaving the board reflecting our reduced focus on Italy and we welcomed Martin Miller to the board. We would like to thank Roberto again for all past efforts and we have retained his services in a consultancy capacity.

Following the recent Annual General Meeting, Alan Thomas stepped down as a non-executive director of the company. Following a period of 10 years in this role Alan no longer fulfilled the criteria for independence for corporate governance purposes.

On behalf of all his former colleagues in Independent Resources, I would like this opportunity to thank Alan profoundly for his immense contribution and valuable advice over the last ten years. We wish him well in all his other pursuits. We will continue to advance our search to appoint an appropriate replacement in due course.

Going concern

In order to execute our strategy, the Directors acknowledge that further funding will be required within the next 12 months in order for the Group to continue operating.

Our acquisition strategy remains focused on acquiring producing assets to create a group which is self-sustaining from production cash flows.

We remain confident that additional external funding should be available, if and when required, and we continue to actively progress opportunities in this regard.

The Directors have considered the Group's current trading activities, its current funding position and the projected funding requirements for a period of at least twelve months from the date of approval of these interim financial statements. Taking this into account, the board consider it appropriate to adopt the Going Concern basis in preparing results for the six months ended 30 June 2015.

Business development

We have continued to work hard to secure an investment in a producing asset. The collapse of oil prices and the resultant challenge in forecasting future oil prices for investment appraisal purposes has necessitated a degree of caution on our part as we consider new opportunities.

We continue to adopt a rigorous approach to diligence and valuation, leveraging the operational and transactional experience of the management team to ensure we are content that value can be delivered for shareholders.

Earlier this month we were pleased to announce the establishment of a joint-venture with Nostra Terra Oil and Gas PLC to pursue investment opportunities in partnership. We are in advanced negotiations on our first opportunity and third-party debt finance arrangements are being finalised to fund the acquisition by the joint venture.

We continue to evaluate a number of low cost onshore opportunities in Egypt and Tunisia. Typically we are looking at opportunities to acquire a meaningful interest in a field where there is gross production of 300 to 2,000 barrels per day and where the acquisition price is likely to be less than $5 million.

Our priority is on assets that continue to be near or cash flow positive even at current pricing levels whilst offering opportunity for low cost organic production growth. Such opportunities will provide scope to increase production significantly through low-cost drilling including horizontal wells and the application of international practices to field management, well workovers, technical evaluation, procurement and cost management.

Outlook

We continue to be optimistic that despite generally difficult and uncertain industry conditions, we can successfully execute a production led strategy and that there are attractive opportunities to be pursued. Management remain committed and we look forward to making long-awaited announcements regarding our investment pipeline and joint venture with Nostra Terra.

For more information, please visit www.ir-plc.com or contact:

Greg Coleman

Independent Resources plc

020 3367 1134

Mark Taylor

Charles Stanley Securities

020 7149 6000

(Nominated Adviser & Joint Broker)

Oliver Stansfield

Brandon Hill Capital

020 3463 5000

Jonathan Evans

(Joint Broker)

Simon Hudson

Tavistock Communications

020 7920 3150

Independent Resources PLC

Consolidated statement of comprehensive income

Six months ended 30 June 2015

Unaudited

Unaudited

Audited

1 January 2015

1 January 2014

1 January 2014

 to 30 June

 to 30 June

to 31 December

2015

2014

2014

£

£

£

Notes

Continuing operations

Revenue

2

-

-

-

Cost of sales

-

-

-

Gross profit

-

-

-

Administrative expenses

(741,558)

(661,545)

(1,613,026)

Other operating income

-

-

42,509

Operating loss

(741,558)

(661,545)

(1,570,517)

Financial income

198

116

2,183

Financial expense

-

(1)

(4,394)

Loss before tax from continuing operations

(741,360)

(661,430)

(1,572,728)

Taxation

4

-

-

-

Loss for the period from continuing operations

(741,360)

(661,430)

(1,572,728)

Discontinued operations

Loss after taxation for the year from

discontinued operations

3

(148,915)

(4,780,358)

(4,907,737)

Loss for the period

(890,275)

(5,441,788)

(6,480,465)

Other comprehensive income:

Other comprehensive income to be reclassified to profit

or loss in subsequent periods (net of tax)

Exchange difference on translating foreign operations

(467,588)

(396,219)

(650,799)

Total comprehensive loss for the period

(1,357,863)

(5,838,007)

(7,131,264)

Loss attributable to:

Owners of the parent

(890,275)

(5,441,788)

(6,480,465)

Non-controlling interests

-

-

-

(890,275)

(5,441,788)

(6,480,465)

Total comprehensive loss attributable to:

Owners of the parent

(1,357,863)

(5,838,007)

(7,131,264)

Non-controlling interests

-

-

-

(1,357,863)

(5,838,007)

(7,131,264)

Loss per share (pence)

5

Basic

(0.7)

(11.8)

(8.3)

Diluted

(0.7)

(11.8)

(8.3)

Loss per share (pence) from continuing operations

5

Basic

(0.6)

(1.4)

(2.0)

Diluted

(0.6)

(1.4)

(2.0)

Independent Resources PLC

Consolidated statement of financial position

As at 30 June 2015

Unaudited

Unaudited

Audited

30 June

30 June

31 December

2015

2014

2014

£

£

£

Notes

Non-current assets

Property, plant and equipment

10,822

21,490

13,016

Goodwill

6

-

-

-

Other intangible assets

7

5,167,240

5,619,413

5,603,152

5,178,062

5,640,903

5,616,168

Current assets

Other receivables

183,634

569,704

206,027

Cash and cash equivalents

370,640

1,388,835

425,909

554,274

1,958,539

631,936

Assets held for distribution

3

112,434

-

47,683

666,708

1,958,539

679,619

Current liabilities

Trade and other payables

(830,291)

(904,599)

(609,010)

Liabilities directly associated with the

assets held for distribution

3

(127,224)

-

(279,989)

(957,515)

(904,599)

(888,999)

Net current assets

(290,807)

1,053,940

(209,380)

Net assets

4,887,255

6,694,843

5,406,788

Equity attributable to equity holders of the parent

Share capital

8

1,851,434

1,051,434

1,051,434

Share premium

9

16,302,050

16,302,050

16,302,050

Share option reserve

50,568

20,574

25,776

Share warrant reserve

13,538

-

-

Foreign currency translation reserve

(507,152)

215,016

(39,564)

Retained earnings

(12,823,183)

(10,894,231)

(11,932,908)

Total equity

4,887,255

6,694,843

5,406,788

Independent Resources PLC

Consolidated statement of changes in equity

Six months ended 30 June 2015

Foreign

Share

Share

currency

Retained

Share

Share

option

warrant

translation

earnings

capital

premium

reserve

reserve

reserve

Total

£

£

£

£

£

£

£

Six months to 30 June 2015

1 January 2015

(11,932,908)

1,051,434

16,302,050

25,776

-

(39,564)

5,406,788

Loss for the period

(890,275)

-

-

-

-

-

(890,275)

Exchange differences

-

-

-

-

(467,588)

(467,588)

Total comprehensive loss

for the period

(890,275)

-

-

-

-

(467,588)

 (1,357,863)

New shares issued

-

800,000

-

-

-

-

800,000

Share issue costs

-

-

-

-

-

-

-

New share warrants issued

-

-

-

-

13,538

-

13,538

Share options lapsed

in the period

-

-

-

-

-

-

-

Share-based payments

-

-

-

24,792

-

-

24,792

30 June 2015

(12,823,183)

1,851,434

16,302,050

50,568

13,538

(507,152)

4,887,255

Six months to 30 June 2014

1 January 2014

(5,856,399)

458,369

15,287,351

418,919

-

611,235

10,919,475

Loss for the period

(5,441,788)

-

-

-

-

-

 (5,441,788)

Exchange differences

-

-

-

-

-

(396,219)

(396,219)

Total comprehensive loss

for the period

(5,441,788)

-

-

-

-

(396,219)

 (5,838,007)

New shares issued

-

593,065

1,186,129

-

-

-

1,779,194

Share issue costs

-

-

(171,430)

-

-

-

(171,430)

New share warrants issued

-

-

-

-

-

-

-

Share options lapsed

in the period

403,956

-

-

(403,956)

-

-

-

Share-based payments

-

-

-

5,611

-

-

5,611

30 June 2014

(10,894,231)

1,051,434

16,302,050

20,574

-

215,016

6,694,843

Year to 31 December 2014

1 January 2014

(5,856,399)

458,369

15,287,351

418,919

-

611,235

10,919,475

Loss for the period

(6,480,465)

-

-

-

-

-

 (6,480,465)

Exchange differences

-

-

-

-

-

(650,799)

(650,799)

Total comprehensive loss

for the period

(6,480,465)

-

-

-

-

(650,799)

 (7,131,264)

New shares issued

-

593,065

1,186,129

-

-

-

1,779,194

Share issue costs

-

-

(171,430)

-

-

-

(171,430)

New share warrants issued

-

-

-

-

-

-

-

Share options lapsed

in the period

403,956

-

-

(403,956)

-

-

-

Share-based payments

-

-

-

10,813

-

-

10,813

31 December 2014

(11,932,908)

1,051,434

16,302,050

25,776

-

(39,564)

5,406,788

Independent Resources PLC

Consolidated statement of cash flows

Six months ended 30 June 2015

Unaudited

Unaudited

Audited

1 January 2015

1 January 2014

1 January 2014

 to 30 June

to 30 June

to 31 December

2015

2014

2014

£

£

£

Cash flows from operating activities

Loss before taxation from continuing operations

(741,360)

(661,430)

(1,572,728)

Loss before taxation from discontinued operations

(148,915)

(4,780,358)

(4,907,737)

Adjustments for:

Depreciation of property, plant and equipment

2,630

3,250

10,724

Impairment of intangible assets and goodwill

-

4,650,862

4,547,705

Share issue costs expensed

71,765

-

-

Share-based payments

24,792

5,611

10,813

Share warrant costs

13,538

-

-

Financial income

(198)

(116)

(2,183)

Financial expense

-

1

4,394

(777,748)

(782,180)

(1,909,012)

(Increase)/decrease in other receivables

12,834

(111,900)

218,331

(Increase)/decrease in assets held for distribution

(64,751)

-

-

Increase/(decrease) in trade and other payables

201,616

97,093

81,494

Increase/(decrease) in liabilities directly associated with assets

held for distribution

(152,765)

-

-

Cash used in operations

(780,814)

(796,987)

(1,609,187)

Income taxes received

-

-

-

Net cash used in operating activities

(780,814)

(796,987)

(1,609,187)

Cash flows used in investing activities

Interest received

198

116

2,183

Interest paid

-

(1)

(4,394)

Proceeds on disposal of property, plant and equipment

-

-

-

Purchase of intangible assets

(22,113)

(79,609)

(219,512)

Purchase of property, plant and equipment

(440)

(5,565)

(14,062)

Net cash used in investing activities

(22,355)

(85,059)

(235,785)

Cash flows from financing activities

Issue of share capital

800,000

1,779,194

1,779,194

Share issue costs

(52,100)

(171,430)

(171,430)

Net cash from financing activities

747,900

1,607,764

1,607,764

Net increase/(decrease) in cash and cash equivalents

(55,269)

725,718

(237,208)

Cash and cash equivalents at beginning of the period

425,909

663,117

663,117

Cash and cash equivalents at end of the period

370,640

1,388,835

425,909

Independent Resources PLC

Notes to the interim financial information

Six months ended 30 June 2015

1.

Accounting policies

General information

The interim financial information is for Independent Resources plc ("the company") and subsidiary undertakings (together, the "Group"). The company is registered in England and Wales and incorporated under the Companies Act 2006. The consolidated financial information is presented in GBP ("£") unless otherwise stated.

Basis of preparation

The interim financial information, for the period from 1 January 2015 to 30 June 2015, has been prepared under the historical cost convention and in accordance with International Financial Reporting Standards and International Accounting Standards as adopted by the European Union, and on the going concern basis. They are in accordance with the accounting policies set out in the statutory accounts for the year ended 31 December 2014.

The Interim Report is unaudited and does not constitute statutory financial statements. The financial information for the period ended 30 June 2014 does not constitute statutory accounts, as defined in section 435 of the Companies Act 2006 but is based on the statutory financial statements for the year ended 31 December 2014. Those accounts, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies.

The interim consolidated financial statements for the six months ended 30 June 2015 have been prepared in accordance with IAS 34, Interim Financial Reporting.

The operations of Independent Resources Plc are not affected by seasonal variations.

The directors do not propose a dividend for the period (2014: nil).

The Interim Report for the six months ended 30 June 2015 was approved by the Directors on 30 September 2015.

Copies of the Interim Report are available from the Company's website www.ir-plc.com.

Going concern

The financial information has been prepared assuming the Group will continue as a going concern. Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors pursuant to laws or regulations.

The Directors acknowledge that further funding will be required within the next 12 months in order for the Group to continue operating. The Directors are confident that additional external funding should be available if and when required and they have considered the Group's current trading activities, its current funding position and the projected funding requirements for a period at least twelve months from the date of approval of these interim financial statements.

Taking all of that into account, they consider it appropriate to adopt the Going Concern basis in preparing results for the six months ended 30 June 2015. However, the need to raise new funds represents a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern. The assessment has been made based on the Group's anticipated activities which have been included in the financial forecast for the years 2015-2016.

Based on the above, the directors have formed a judgment that the going concern basis should be adopted in preparing the interim financial information. The interim financial information does not include any adjustments that may be required should the Group be unable to continue as a going concern. If the Group were unable to continue as a going concern, then adjustments would be necessary to write assets down to their recoverable amounts, non-current assets and liabilities would be reclassified as current assets and liabilities and provisions would be required for any costs associated with closure.

Independent Resources PLC

Notes to the interim financial information

Six months ended 30 June 2015

2.

Business segments

The Group has adopted IFRS 8 Operating segments from 1 October 2009. Per IFRS 8, operating segments are based on internal reports about components of the Group, which are regularly reviewed and used by the Board of Directors being the Chief Operating Decision Maker ("CODM") for strategic decision making and resource allocation, in order to allocate resources to the segment and to assess its performance. The Group's reportable operating segments are as follows:

a.

Parent company

b.

Rivara

c.

Ksar Hadada

The previously reported segment of Ribolla Basin CBM assets has been classified as a discontinued operation and has been excluded form the analysis below.

The CODM monitors the operating results of each segment for the purpose of performance assessments and making decisions on resource allocation. Performance is based on assessing progress made on projects and the management of resources used. Segment assets and liabilities are presented inclusive of inter-segment balances.

The Group did not generate any revenue during the six month period to 30 June 2015, or in the six month period to 30 June 2014, or the year to 31 December 2014.

Parent

company

Rivara

Ksar Hadada

Consolidation

Total

£

£

£

£

£

Six months to 30 June 2015

Interest revenue

197

1

-

-

198

Interest expense

-

-

-

-

-

Depreciation

2,630

-

-

-

2,630

Impairment of

intangible assets

-

-

-

-

-

Income tax

-

-

-

-

-

Loss for the period

before taxation

(1,251,035)

(14,366)

(38,735)

562,776

(741,360)

Assets

4,204,937

4,879,872

405,838

(3,758,311)

5,732,336

Liabilities

(783,211)

(2,249,442)

(960,871)

3,163,233

(830,291)

Six months to 30 June 2014

Interest revenue

56,072

7,127

-

(63,083)

116

Interest expense

-

(29,830)

-

29,829

(1)

Depreciation

-

-

-

-

-

Impairment of

intangible assets

-

-

-

-

-

Income tax

-

-

-

-

-

Loss for the period

before taxation

(8,455,090)

(78,270)

(65,805)

7,937,735

(661,430)

Assets

5,346,366

5,722,985

276,194

(3,746,103)

7,599,442

Liabilities

(574,155)

(2,598,221)

(728,621)

2,996,398

(904,599)

Year to 31 December 2014

Interest revenue

139,184

12,633

-

(149,634)

2,183

Interest expense

-

(68,168)

-

63,774

(4,394)

Depreciation

2,816

40

-

-

2,856

Impairment of

intangible assets

-

-

-

-

-

Income tax

-

-

-

-

-

Loss for the period

before taxation

(9,398,072)

(198,236)

(129,676)

8,153,256

(1,572,728)

Assets

4,378,459

6,955,152

374,451

(5,459,958)

6,248,104

Liabilities

(544,028)

(3,003,712)

(890,749)

3,829,479

(609,010)

Independent Resources PLC

Notes to the interim financial information

Six months ended 30 June 2015

2.

Business segments

The geographical split of non-current assets arises as follows:

 United

 Kingdom

 Overseas

 Total

£

£

£

30 June 2015

Intangible assets

-

5,167,240

5,167,240

Goodwill

-

-

-

Property, plant and equipment

10,778

44

10,822

30 June 2014

Intangible assets

-

5,619,413

5,619,413

Goodwill

-

-

-

Property, plant and equipment

7,417

14,073

21,490

31 December 2014

Intangible assets

-

5,603,152

5,603,152

Goodwill

-

-

-

Property, plant and equipment

12,968

48

13,016

3.

Discontinued operations

The group was unable to find an investment partner for the coal bed methane opportunities at Fiume Bruna and Casoni, in Italy, therefore, these opportunities will no longer be pursued. As a result the directors decided, prior to 31 December 2014, to significantly reduce its activities in Italy and to discontinue the activities within Independent Energy Solutions srl which dealt solely with these opportunities. With Independent Energy Solutions srl classified as discontinued operations, the Ribolla Basin CBM assets segment is no longer presented in the segment note. The results of Independent Energy Solutions srl, incorporating consolidation adjustments, are presented below:

Unaudited

Unaudited

Audited

1 January 2015

1 January 2014

1 January 2014

 to 30 June

 to 30 June

to 31 December

2015

2014

2014

£

£

£

Revenue

-

-

-

Administrative expenses

(148,916)

(129,504)

(360,916)

Operating loss before impairment

(148,916)

(129,504)

(360,916)

Impairment of the historic cost and carrying value of intangible

assets

-

(4,200,096)

(4,096,939)

Impairment of goodwill arising on acquisition of Independent Energy

Solutions srl - consolidation adjustment

-

(450,766)

(450,766)

Operating loss after impairment

(148,916)

(4,780,366)

(4,908,621)

Financial income

1

8

884

Financial expense

-

-

-

Loss on ordinary activities before taxation

(148,915)

(4,780,358)

(4,907,737)

Taxation

-

-

-

Loss for the year from discontinued operations

(148,915)

(4,780,358)

(4,907,737)

The major classes of assets and liabilities of Independent Energy Solutions srl classified as held for distribution to equity

holders of the parent as at 30 June 2015 and 31 December 2014 are as follows:

Unaudited

Unaudited

Audited

30 June

30 June

31 December

2015

2014

2014

£

£

£

Assets

Intangible assets - fully impaired

-

-

-

Property, plant and equipment

6,397

-

9,026

Other receivables

18,598

-

22,008

Cash and cash equivalents

87,439

-

16,649

Assets held for distribution

112,434

-

47,683

Liabilities

Trade and other payables

(127,224)

-

(279,989)

Liabilities directly associated with the assets held for distribution

(127,224)

-

(279,989)

Net assets directly associated with disposal group

(14,790)

-

(232,306)

The net cash flows incurred by Independent Energy Solutions srl are as follows:

Unaudited

Unaudited

Audited

1 January 2015

1 January 2014

1 January 2014

 to 30 June

 to 30 June

to 31 December

2015

2014

2014

£

£

£

Operating

70,789

48,259

25,297

Investing

1

(52,586)

(61,737)

Financing

-

-

-

Net cash (outflow)/inflow

70,790

(4,327)

(36,440)

Loss per share (pence)

Unaudited

Unaudited

Audited

1 January 2015

1 January 2014

1 January 2014

 to 30 June

 to 30 June

to 31 December

2015

2014

2014

£

£

£

Basic, loss for the year from discontinued operations

(0.1)

(10.4)

(6.3)

Diluted, loss for the year from discontinued operations

(0.1)

(10.4)

(6.3)

Immediately before the classification of Independent Energy Solutions srl as discontinued operations, the recoverable amount was estimated for certain items of property, plant and equipment and no impairment was identified. No adjustment has been made to reduce the carrying amount of the assets in the disposal group to their fair value less costs to distribute.

Immediately before the classification of Independent Energy Solutions srl as discontinued operations, the recoverable amount was estimated for the company's intangible assets and these were impaired in full.

4.

Taxation

The Group has tax losses available to be carried forward in certain subsidiaries and the parent. With anticipated substantial lead times for the Group's projects, and the possibility that these may therefore expire before their use, it is not considered appropriate to anticipate an asset value for them.

No tax charge has arisen during the six month period to 30 June 2015, or in the six month period to 30 June 2014, or the year to 31 December 2014.

5.

Loss per share

The calculation of basic and diluted loss per share at 30 June 2015 was based on the loss attributable to ordinary shareholders of £890,275 (six month period to 30 June 2014: £5,441,788, year to 31 December 2014: £6,480,465). The weighted average number of ordinary shares outstanding during the period ending 30 June 2015 and the effect of dilutive ordinary shares to be issued are shown below.

Contingently issuable shares such as included within the share option scheme have not been treated as dilutive as either the market conditions have not been met at 30 June 2015 or the affect on loss per share would be to reduce the amount due per share.

30 June 2015

30 June 2014

31 December 2014

£

£

£

Net loss for the period

(890,275)

(5,441,788)

(6,480,465)

Basic weighted average ordinary shares

in issue during the period

122,544,435

46,164,527

77,683,625

Diluted weighted average ordinary shares

in issue during the period

122,544,435

46,164,527

77,683,625

Loss per share (pence)

Basic

(0.7)

(11.8)

(8.3)

Diluted

(0.7)

(11.8)

(8.3)

Independent Resources PLC

Notes to the interim financial information

Six months ended 30 June 2015

6.

Goodwill

Goodwill

£

Six months to 30 June 2015

Cost

1 January 2015 and 30 June 2015

450,766

Amortisation

1 January 2015

450,766

Impairment charge for period

-

30 June 2015

450,766

Carrying value

30 June 2015

-

31 December 2014

-

Six months to 30 June 2014

Cost

1 January 2014 and 30 June 2014

450,766

Amortisation

1 January 2014

-

Impairment charge for period

450,766

30 June 2014

450,766

Carrying value

30 June 2014

-

Year to 31 December 2014

Cost

1 January 2014 and 31 December 2014

450,766

Amortisation

1 January 2014

-

Impairment charge for period

450,766

31 December 2014

450,766

Carrying value

31 December 2014

-

31 December 2013

450,766

The goodwill arises as a result of the acquisition of Independent Energy Solutions srl which contains the Ribolla project.

The Group's attempts to farm the Ribolla assets out have been unsuccessful, and in light of the uncertainty over the future renewal of the permit, it has been decided to impair a substantial part of the carrying value of the historical investment in Fiume Bruna and Casoni and the goodwill associated with the historical acquisition of Independent Energy Solutions srl.

Independent Resources PLC

Notes to the interim financial information

Six months ended 30 June 2015

7.

Other intangible assets

Development and exploration

Rivara gas

Ksar Hadada

storage

Ribolla Basin

exploration

facility

CBM assets

acreage

Total

£

£

£

£

Six month period 30 June 2015

Cost

1 January 2015

5,239,353

4,096,939

1,444,628

10,780,920

Exchange differences

(458,025)

(358,156)

-

(816,181)

Additions (net of credits received)

-

-

22,113

22,113

30 June 2015

4,781,328

3,738,783

1,466,741

9,986,852

Amortisation

1 January 2015

-

4,096,939

1,080,829

5,177,768

Exchange differences

-

(358,156)

-

(358,156)

Impairment charge for period

-

-

-

-

30 June 2015

-

3,738,783

1,080,829

4,819,612

Carrying value

30 June 2015

4,781,328

-

385,912

5,167,240

31 December 2014

5,239,353

-

363,799

5,603,152

Six month period to 30 June 2014

Cost

1 January 2014

5,584,997

4,316,859

1,307,337

11,209,193

Exchange differences

(219,107)

(169,357)

-

(388,464)

Additions

(13,735)

52,594

40,750

79,609

30 June 2014

5,352,155

4,200,096

1,348,087

10,900,338

Amortisation

1 January 2014

-

-

1,080,829

1,080,829

Impairment charge for period

-

4,200,096

-

4,200,096

30 June 2014

-

4,200,096

1,080,829

5,280,925

Carrying value

30 June 2014

5,352,155

-

267,258

5,619,413

Year to 31 December 2014

Cost

1 January 2014

5,584,997

4,316,859

1,307,337

11,209,193

Exchange differences

(365,374)

(282,411)

-

(647,785)

Additions

19,730

62,491

137,291

219,512

31 December 2014

5,239,353

4,096,939

1,444,628

10,780,920

Amortisation

1 January 2014

-

-

1,080,829

1,080,829

Impairment charge for year

-

4,096,939

-

4,096,939

31 December 2014

-

4,096,939

1,080,829

5,177,768

Carrying value

31 December 2014

5,239,353

-

363,799

5,603,152

The primary intangible assets are all internally generated.

For the purpose of impairment testing of intangible assets, recoverable amounts have been determined based upon the value in use of the Group's three projects.

Independent Resources PLC

Notes to the interim financial information

Six months ended 30 June 2015

Ksar Hadada exploration permit

Through a wholly owned subsidiary, the Group owns a 86.345% working interest in the Ksar Hadada exploration permit onshore Tunisia. The Group and its partners in the licence expect drilling activity in the licence in 2016. The Group is actively searching for a farm-in partner to fund seismic appraisal and drilling. If a commercial discovery is made through drilling then a production licence with a 30 year duration can be obtained. Management's evaluation of the commercial terms of the related production sharing contract confirm that the project remains economic at current oil prices and at a substantial discount thereto and indicate a net present value significantly in excess of the value of the related intangible assets.

Ribolla Basin CBM assets

The Group's attempts to farm-out an interest in the Ribolla assets were unsuccessful, and in light of the uncertainty over the future renewal of the permit, it was decided to impair the carrying value of the historical investment in Fiume Bruna and Casoni and the goodwill associated with the historical acquisition of Independent Energy Solutions srl during 2014. The permits were ultimately relinquished during the first six months of 2015.

Rivara gas storage facility

Despite the expected delay, a review of the latest management information and projections shows a net present value significantly in excess of assets and liabilities relating to the project. The main assumptions, which the Directors have assessed as unchanged from the previous period end, indicate that no significant change has arisen on these calculations which would materially impact on the Group.

The continuing analysis and testing of technical data continues to indicate that the project is feasible.

The Group continues to work towards, and is confident of, obtaining all the necessary approvals from regulatory authorities. The Group anticipates being able to raise the necessary finance to continue to develop the project.

Value in use

Value in use has been calculated separately for the Group's Rivara gas storage facility. Cash flows are projected for the periods up to the date that the project is expected to become commercially operational and from then until operations are expected to cease, based upon management's expectations. These dates depend on a number of variables, including the project's technical feasibility, regulatory approval, forecast revenue prices and the associated development and operational costs.

The project is expected to generate revenue after five to nine years and to continue doing so for a further 35 years. The Directors consider that projections calculated for a period greater than five years are justified as the projects are still in a development stage.

Potential impairment of the Rivara project

The Group holds a 100% interest in Rivara Gas Storage srl. Intangible assets include an amount of £4,781,000 with respect to project expenditure. The regional council, Regione Emilia Romagna, where the project is located is currently denying authorisation for project development. However authorisation has been granted by the national government. As a result Rivara Gas Storage srl has appealed against this decision to the Emilia Romogna Bologna Administrative Court and this appeal is due to be heard in the second half of 2015.

In the event that Rivara Gas Storage srl's appeal was to be unsuccessful, there may be an indication of impairment of the capitalised expenditure which could significantly reduce the carrying value of this asset.

8.

Share capital

30 June 2015

30 June 2014

31 December 2014

£

£

£

Issued, called up and fully paid

1,851,434 (2014: 1,051,434)

ordinary shares of 1p

1 January 2015

1,051,434

458,369

458,369

Equity shares issued

800,000

593,065

593,065

30 June 2015

1,851,434

1,051,434

1,051,434

9.

Share premium account

30 June 2015

30 June 2014

31 December 2014

£

£

£

1 January 2015

16,302,050

15,287,351

15,287,351

Premium arising on the issue of equity shares

-

1,186,129

1,186,129

Transaction costs

-

(171,430)

(171,430)

30 June 2015

16,302,050

16,302,050

16,302,050

Registered office

Independent Resources plc

Tower Bridge House, St. Katharine's Way, London E1W 1DD

Email: mailbox@ir-plc.com

Commercial office

1st Floor, 12 Melcombe Place London NW1 6JJ, United Kingdom

Telephone: +44 (0) 203 367 1134

Fax: +44 (0) 203 170 7551

Email: mailbox@ir-plc.com