TIDMNAND
RNS Number : 2201U
Nandan Cleantec plc
24 December 2012
24 December 2012
Nandan Cleantec plc
("Nandan Cleantec," "Nandan" or the "Company")
Financial Results for the Year Ended 30 June 2012
Nandan Cleantec plc (LSE AIM: NAND), a scaled vertically
integrated biofuel producer, announces audited preliminary results
for the year ended 30 June 2012.
The results show good operational progress against the Company's
stated strategy, with several new partnerships signed, new markets
entered and new patents secured. The Company remains confident in
its market position and its plant technology, further supported by
the additions made to its intellectual property and patent
portfolio during the year.
Financial Key Points
-- Total revenue of INR 4,103.53 million (equivalent to GBP48.28
million at current exchange rates of INR85:GBP1)
-- Loss before interest, depreciation and amortization of
INR63.81 million (equivalent to GBP(0.75) million at current
exchange rates)
o Trading results in H2 impacted by regulatory dispute reported
at the end of H1
o Efforts to resolve the dispute are advanced and ongoing
o The Company continues to believe that its position is strong
and that a decision favorable to the Company will be
forthcoming
-- Strong balance sheet with net current assets of INR 1,402.44
million (equivalent to GBP16.50 million at current exchange
rates)
-- Cash balance of INR 47 million (equivalent to GBP0.55 million at current exchange rates)
-- Positive net assets of INR 1,966.27 million (equivalent to
GBP23.13 million at current exchange rates)
Operational Key Points
-- Good progress towards key targets set out at IPO:
-- Significantly expanded India land bank: now at a total of
70,000ha, spread across eight Indian states
-- Average Yield: plantations achieved an average yield of 0
.980 tons/ha for an average age of 2 years
-- International expansion: operations in Rwanda underway, with
Memorandum of Understanding's also signed to establish Jatropha
plantations in Indonesia
-- New land bank opportunities identified: advanced discussions
underway in Botswana and discussions initiated in Ghana to further
expand land bank under ownership
-- Industry collaboration: partnering with India's second
largest oil marketing company, Hindustan Petroleum Corporation
Limited, for the Jatropha plantation project in the state of
Chhattisgarh
-- Innovation and IP development: new patent granted during the
year and several other applications pending
-- Commenced Crude Jatropha Oil (CJO) conversion activity
Commenting on the results Srinivas Prasad Moturi, Chairman and
Managing Director of Nandan Cleantec plc said:
"Our first year as a listed company has presented both its
challenges and its rewards. We have innovated and developed our
position as a pioneer in Jatropha, executing on the strategy we
firmly believe will deliver long term, sustainable returns for
shareholders.
We continue to innovate and develop our position as a pioneer in
Jatropha and by executing to our strategy we remain confident that
the Group is well placed to deliver on the Board's expectations for
the year ahead."
For further information please contact:
Nandan Cleantec plc
Srinivas Prasad Moturi +91 40 6550 7799
Arden Partners plc
Steve Douglas / Jamie
Cameron +44 (0)20 7614 5917
FTI Consulting
Matt Dixon / Emma Appleton +44 (0)20 7831 3113
About Nandan Cleantec plc
Nandan Cleantec plc is a scaled vertically integrated bio fuel
producer. It has developed a number of revenue streams geared
towards the ultimate provision of commercially refined bio fuel
derived from Jatropha plants or other suitable feed stocks.
The Company's current activities are concentrated in India and
include innovative plant breeding and genetic improvement of
Jatropha, a 275,000 MT per annum bio fuel processing plant, which
sells biodiesel to end customers and a Jatropha feedstock
plantation base of approximately 70,000 ha. In addition, the
Company has initiated activities in India, Africa and Southeast
Asia in order to further develop its land bank.
Nandan's strategy is to maximize the potential of its position
as a pioneer in Jatropha bio fuel sciences. This will involve
exploiting the Company's position as a market leader in the Indian
bio fuel industry.
www.ncp.uk.com
Chairman's Statement
Introduction
This year has been one of the most significant years in the
history of our Company, seeing us successfully complete our IPO
process in the second quarter of the year, raising GBP16.1 million
of funds to support our growth strategy.
Over the course of the year we have made good operational
progress against our IPO commitments. We have expanded our land
bank both at home in India and internationally in Africa and South
East Asia; we have identified new opportunities for further
international land bank expansion; and we have continued to
strengthen and secure our biological innovations, adding to our
list of patents granted and pending.
We have also encountered challenges this year as well as
opportunities. The regulatory dispute including one part of our
business, which we highlighted in our interim results earlier in
the year, has continued to evolve. That has, in the short term,
held back our financial progress in the second half. We remain
resolute in our view that our position in relation to the dispute
is strong and that a decision favorable to our Company and our
future plans will be forthcoming in the near term.
Company and Strategy
Nandan occupies a niche space in the Bio fuel market and has
developed a number of revenue streams geared towards the ultimate
provision of commercially refined bio fuel derived from Jatropha
plants and other suitable, sustainable feed stocks.
Nandan has designed a vertically integrated approach with
innovation and improvement at each level from seed to oil and
beyond, that encompasses bio fuel production from research and
development to on field technology transfer leading to procuring,
processing and marketing for multiple industry applications. Nandan
controls the entire value chain throughout the life cycle of the
Jatropha crop, from developing, cultivating and producing hybrids
at the Company's research and development facility to seed oil
extraction, oil refining and subsequent sale.
Nandan's strategy is to:
-- Maximise, over the long-term, the potential of its position
as a pioneer and market leader in Jatropha bio fuel sciences.
-- Expand into new markets outside of India; ensuring
development and continuous yield improvements of the Company's
Jatropha hybrids;
-- To increase Jatropha cultivation more widely.
It is against these operational targets that we have made
encouraging, early progress in our first year as a public
company.
Operational Review
Throughout the year we have made good progress against a number
of our operational goals, as follows:
Land bank expansion within India
This financial year, in line with our business plan the Company
has expanded its plantation land bank by 20,000 ha through contract
farming, taking the total feedstock base of the group to 70,000 ha.
The new 20,000 ha plantations were done in eight different states
in India viz., Orissa (8,000 ha), Rajasthan (4,000 ha), Karnataka
(2,000 ha), Chhattisgarh (2,500 ha), Jharkhand (1,000 ha), Bihar
(1,000 ha), Andhra Pradesh (1,500 ha) and additionally 500 ha
estate farming has been undertaken in Gujarat.
The Company has also procured about 20,000 MT of seeds from the
existing plantation and produced about 2,100 MT of Crude Jatropha
Oil from part of the procurement. Plantations have given average of
0.980 tons/ha with the crop having an average age of 2.3 years.
This compares to 0.75 Tons/ha of wild variety and 1.25 tons/ha for
the Nandan variety for a plant with an age of 2 years, that was
estimated to be achievable in the research report published by the
Royal Agricultural College in the Admission Document.
Furthering our international footprint
During the year we have undertaken significant efforts to expand
our land bank outside of India. Key focus regions for us are Africa
and South East Asia.
To that end Nandan and IBRIS JATRO signed an MOU during the
year, agreeing to create a joint venture to establish and operate
Jatropha Plantations in Indonesia and potentially other South East
Asian territories in due course.
Nandan also expanded its bio-energy business into Africa by
signing a MoU with Government of Rwanda for producing 20,000 Mt of
bio-fuel and generating 35 MW of biomass based green power for
rural electrification through cultivation of over 8000 ha of land
in the country. Since that MoU was signed in H1, a Joint Venture
Company has been established in the name of "Nandan Agro Processing
Industries Limited" with Nandan as a 56% shareholder and the Govt.
of Rwanda as 44% shareholder.
The main objective of this JV is to produce 20,000 Mt of
bio-fuel and generate 35 MW biomass based green power through
bio-energy plantation on 8000 ha land in Rwanda. The process of
establishing a Nursery Production Centre has been initiated and the
first phase of plantation is expected to be completed in 2013,
during the Monsoon season.
Identifying new areas for land bank expansion
In the current financial year, the focus of the Company is to
strengthen its presence in Africa and South East Asia. The Company
is looking to target at least another 40,000 ha of bio-energy
plantation through contract / estate farming in the next couple of
years in these two regions.
The Company has identified a large potential land bank in
Botswana, and discussions are at advanced stage with the Government
of Botswana. Nandan is planning to execute the Botswana project
through the JV Company with Savills, a based UK property services
company. In addition to Botswana the Company is also exploring
potential bio-energy opportunities in West Africa especially in
Ghana. Negotiations with the Government of Ghana have been
initiated, are encouraging, and the Company hopes to secure a
finalized deal within the current financial year.
Exploiting market volatility for value
As previously highlighted, during the period under review the
pricing of bio fuel feedstock has been volatile. The Management
team has strategically leveraged this volatility and fluctuating
demand to its advantage, by increasingly generating revenues from
trading in crude palm oil. Furthermore, the Company expects to
benefit from its CJO processed at its own processing unit, further
helping to mitigate the volatility inherent in raw material
prices.
Nandan has implemented the First Green Field Airport Project at
GMR's Rajiv Gandhi International Airport at Shamshabad, Hyderabad.
We are in the process of replicating this model at New Delhi,
Bangalore and other International Airports. The Company has entered
into a contract with the second largest oil company in India,
Hindustan Petroleum Corporation Ltd.
Securing and Strengthening our IP
We are the only company worldwide with the patents of Jatropha
hybrids and our extensive research with the unique roadmap has
enabled us to double the average global yields with our Jatropha
hybrids.
During the year we have achieved another milestone with the
development of a transformed Jatropha carcass plant designated as
NANDAN-18, having high seed yielding capacity, which has been
published by WIPO. The new variety can give yield up to 8.5
kg/plant under specified conditions. This hybrid will be
particularly suited to addressing the viability and scarcity of bio
fuel feedstock and changes the economics of the farming as well as
the industry. Multi-locational trials with various agriculture
universities are planned for 2013 alongside large-scale
demonstrations throughout the franchisee network.
In addition, Nandan has carried out extended research on Safed
Musli and its cultivation through good agronomical practices.
Nandan was granted a patent on "Safed Musli compositions &
process preparation thereof". The pipeline ahead is solid with five
other patents in the pipeline.
Furthering our nutraceutical developments
During the period, Nandan's Nutraceutical Healthcare Division
has successfully developed safe, effective natural remedy products
and a variety of other Aloe vera based lifestyle products, which
have undergone many scientific studies through reputed institutes
like Indian Institute Of Chemical Technology (IICT; Clinical
Pharmacological Department, Hyderabad), National Institute of
Nutrition (NIN, Hyderabad), Institute of Chemical Technology (ICT,
Mumbai), National Chemical Laboratory (NCL, Pune) apart from the
in-house research.
During the year under review this business segment of the
Company has achieved a steady revenue growth in the form of
increased volumes sold of medicinal plants, standardized herbal
extracts and life style products formulated from nutraceuticals.
NCL has already launched the herbal nutraceutical products in the
domestic market and has also recorded product registration in other
countries such as Myanmar, Ivory Cost, Thailand, amongst other. The
size of the global nutraceutical market in 2011 was US$142.10
billion and it is expected to reach US$204 billion by 2017. While,
Nandan is planning to tap into the domestic and international
markets, by launching a wide range of new products, the Company is
also planning to increase the export volumes by way of product
registrations as well as looking to expand the distribution network
in several other countries.
Strategic Investments and Alliances
The Company through its fully owned subsidiary Nandan Bio Energy
Pte Ltd., Singapore made an investment in the form of subscribing
to 51% shares in its two operating Indian entities viz. Xtraa
Cleancities Limited (XCC) which is into a forward integration
activity of Biofuel value chain & Nandan Cleantec Limited (NCL)
predominantly concentrating on research and plantation activities.
The Company will continue to work towards acquiring the remaining
minorities.
Financial Performance
The Board considers the key performance indicators of the
Company to be as follows:
-- Total revenue of INR 4,103.53 million (equivalent to GBP48.28
million at current exchange rates at the current exchange rate of
INR85:GBP1)
-- Loss before interest, depreciation and amortization of
INR(63.81) million (equivalent to GBP(0.75) million at current
exchange rates)
-- Strong balance sheet with net current assets of INR 1,402.44
million (equivalent to GBP16.50 million at current exchange
rates)
-- Cash balance of INR 47 million (equivalent to GBP0.55 million at current exchange rates)
-- Positive net assets of INR 1,966.27 million (equivalent to
GBP23.13 million at current exchange rates)
As a result of the regulatory issue noted above and in the
section below entitled 'Potential Liability', in the period under
review the Group has incurred a Loss after tax for the year of INR
241 million (equivalent to GBP2.84 million at current exchange
rates). The Group has net current assets of INR 1,402.44 (current
assets less current liabilities) (equivalent to GBP16.50 million at
current exchange rates).
The Group has sufficient accumulated Net Reserves to absorb the
one-off exceptional losses, which were incurred during this
reporting period. Even after absorbing the current losses the
Company has positive net assets of INR 1,966.27 million (equivalent
to GBP23.13 million at current exchange rates).
Financial results can be broken down as follows (INR in
million): Since November 2011, the Company has applied the net IPO
proceeds into the areas set out at the time of the IPO.
Specifically these have been invested into increasing the
plantation acreage available to the Group, investing in Nursery
Production Centers and Expelling units, discharging the high cost
working capital debt facilities and investing into the working
capital requirements of the Group.
Bio fuels Jatropha Nutraceuticals Total
-------------- ----------------- ----------------- --------------- -----------------
Revenue 2,966.14 763.56 373.83 4,103.53
-------------- ----------------- ----------------- --------------- -----------------
Gross Profit (199) 102 86 (11)
-------------- ----------------- ----------------- --------------- -----------------
EBIDTA (63.81)
-------------- ----------------- ----------------- --------------- -----------------
Potential Liability
As highlighted at the time of the Interim Results, the Company
has had a set back with respect to one of Nandan's group companies,
being Xtraa Cleancities Limited. This company is having a
regulatory dispute with the Special Economic Zone (SEZ),
Visakhapatnam, India. The result of this was that a consignment was
blocked for six months although eventually delivered. Also the
production unit was not able to function and as yet not returned to
production. The group company filed various complaints before
various courts and finally the Honorable Supreme Court of India
granted interim relief.
With the favorable interim relief from the Supreme Court of
India, the material was sold after being exported and the company
was advised by the legal counsel that the penalties imposed by the
Development Commissioner, VSEZ will not stand in a court of law,
since the matter was remanded back to the original authority i.e.
Development Commissioner, VSEZ the earlier penalties imposed by the
said authority are deemed to have been set aside. The company is
pursuing the matter in the Apex court through Senior Legal
luminaries at present. The legal counsel and management is
confident that the issue will be fully resolved shortly and that
the Company will return to the normal course of activity. The unit
is all set to restart the commercial operations from the processing
unit and recoup the losses which were incurred by the Group in the
second half of the financial year. The Company has positive demand
from the market for the sale of Biodiesel and Glycerin. The Company
has also made alternative contingency plans to meet the orders and
get back into profitability. Nevertheless the Company also plans to
recover the entire loss from the Government Agencies through legal
means.
As a result of this set back, in the period under review, the
Group has incurred a Loss after tax for the year of INR 241 Million
(equivalent to GBP2.84 million at current exchange rates). The
Group has net current assets of INR 1,402.44 (current assets less
current liabilities) and the Company also has positive net assets
of INR 1966.27 Mil. It's important to note that the Group has
sufficient accumulated Net Reserves to absorb the one off
exceptional losses which were incurred during the reporting period.
Even after absorbing the current losses the Company has positive
net assets of INR 1966.27 Mil and INR. 1187.75 Mil attributable to
Minorities to cover this.
Cash flow
As at 30 June 2012 the Company had net cash balances of INR 47
million (equivalent to GBP0.55 million at current exchange
rates).
The Company has applied the net IPO proceeds into the areas set
out at the time of IPO. Specifically these have been invested into
increasing the plantation acreage available to the Group, investing
in Nursery Production Centers and Expelling units, discharging the
high cost working capital debt facilities and investing into the
working capital requirements of the Group.
The Directors believe that, on the date of this report, the
Group has sufficient financial resources to meet the committed
financial liabilities. Consequently, the financial statements are
prepared on a going concern basis, which has been assessed on cash
flow forecasts extending out 12 months from the date of the
financial report.
Prospects and Outlook
The Company remains focused on maximizing long-term shareholder
value by expanding its business operations in select locations and
venturing into new areas of related businesses. Nandan is currently
exploring options to support growth including the possibility of
producing aviation bio fuel in a joint venture with a major oil
marketing company in India which, if converted into a reality,
could benefit the Company in future years. The Company is also in
discussions with various technology providers across the globe with
a view to expanding the Company's partnerships and the number of
markets its technologies can address.
In terms of current trends, a recent Bio fuel policy in India
has led to the creation of a dedicated ministry to encourage bio
fuel plantations and to provide support to state agencies. Under
various national employment schemes and forestation programmes,
states have been given additional authority to encourage more than
a million hectares of marginal lands to be allocated to bio fuel
plantation. We believe this initiative to be a supportive
advancement and with the proposals being made to various agencies,
Nandan wishes to capture a significant share of this
opportunity.
We have made operational progress during our first year as a
listed company. During the monsoon of 2012, we cultivated 8,200 ha
of plantation through contract farming in India and currently
expect to cultivate another 500 ha of estate farming in Rwanda in
the coming months. We continue to assess the business's achievement
against its objectives, act accordingly and look for strategic
opportunities to generate shareholder value. We continue to
innovate and develop our position as a pioneer in Jatropha and by
executing to our strategy we remain confident that the Group is
well placed to deliver on the Board's expectations for the year
ahead.
Employees
I would like to thank all of our employees, management and
fellow directors for their hard work, encouragement and dedication
throughout this year.
M. Srinivas Prasad
Chairman
Nandan Cleantec PLC, UK
Consolidated audited financial statements of Nandan Cleantec
PLC, UK and its subsidiaries as per International Financial
Reporting Standards as at 30 June 2012
Consolidated statement of financial position
All Figures in INR's Notes 30 June 2012 30 June 2011
---------------------------------------------- ------ -------------- -------------
Assets
Non-current
Intangible assets 4 171,296,714 -
Property, plant and equipment 5 1,524,343,623 -
Other long term financial assets 51,164,649 -
Goodwill 362,561,257
2,109,366,243 -
-------------- -------------
Current
Biological assets 6 173,327,864 -
Inventories 7 1,139,700,698 -
Trade and other receivables 8 470,947,030 -
Other short term financial assets 9 660,215,586 3,630,848
Current tax assets 7,435,804 -
Cash and cash equivalents 10 47,068,168 -
2,498,695,150 3,630,848
-------------- -------------
Total assets 4,608,061,393 3,630,848
============== =============
Equity and liabilities
Equity
Equity attributable to owners of the parent:
Share capital 11 4,133,100 3,701,639
Share premium 11 1,616,036,636 -
Capital reserve 2,550,000 -
Revaluation reserve 10,877,564 -
Translation reserve 2,600,539 (70,791)
Retained earnings 330,082,053 (37,252)
-------------- -------------
1,966,279,892 3,593,596
Non controlling interest 1,187,749,722 -
Total equity 3,154,029,614 3,593,596
-------------- -------------
Liabilities
Non-current
Pension and other employee obligations 12 3,332,607 -
Borrowings 13 231,251,808 -
Other Payables 17 5,011,821 -
Deferred tax liabilities 14 118,182,388 -
357,778,624 -
-------------- -------------
Current
Trade and other payables 15 997,771,948 37,252
Borrowings 13 91,082,604 -
Current tax liabilities - -
Other liabilities 16 7,398,603 -
1,096,253,155 37,252
-------------- -------------
Total liabilities 1,454,031,779 37,252
-------------- -------------
Total equity and liabilities 4,608,061,393 3,630,848
============== =============
Consolidated statement of comprehensive income
All Figures in INR's Notes 30 June 2012 30 June 2011
----------------------------------------------------------------- ------ ---------------- -------------
Revenue 18 4,103,536,537 -
Other income 14,298,343 -
Change in inventories 100,120,002 -
Bargain Purchase gain 154,057,778
Costs of material 19 (4,115,077,054) -
Employee benefit expense 20 (44,568,190) -
Depreciation and amortisation of non-financial assets (101,792,129) -
Other expenses 21 (276,185,243) (37,252)
Operating Loss (165,609,956) (37,252)
Finance costs 23 (60,976,448) -
Finance income 22 16,368,656 -
Loss before tax (210,217,748) (37,252)
Income tax expense 24 (31,121,557) -
Loss for the year (241,339,305) (37,252)
================ =============
Loss for the year attributable to:
Non-controlling interest (57,628,347) -
Owners of the parent (183,710,958) (37,252)
(241,339,305) (37,252)
---------------- -------------
Other comprehensive income
Revaluation of land 9,174,000 -
Deferred tax (expense)/benefit on the revaluation of land (1,984,336) (70,791)
Exchange differences on translating foreign operations (2,600,539) -
Income tax relating to components of other comprehensive income
Other comprehensive income for the year, net of tax 4,589,125 (70,791)
Total comprehensive income for the year (236,750,180) (108,043)
Total comprehensive income for the year attributable to:
Non-controlling interest (55,379,676) -
Owners of the parent (181,370,504) (108,043)
(236,750,180) (108,043)
Earnings per share
Basic and diluted earnings per share -0.886 0.000
Consolidated cash flow statement
-------------
All Figures in INR's 30 June 2012 30 June 2011
-------------------------------------------------------------------- ---------------- -------------
Cash flows from operating activities
Profit before income tax (210,217,748) (37,252)
Adjustments for:
Depreciation 101,792,129 -
Loss on sale of assets
Profit on sale of investments / assets
Foreign exchange losses on operating activities
Share-based payment and increase in retirement benefit obligations 3,332,607 -
Share of loss of Associates
Interest income 16,368,656 -
Income from available-for-sale assets
Interest expense (60,976,448) -
Changes in working capital
Inventories (1,313,028,562) -
Trade and other receivables (470,947,030) 37,252
Other Current assets (667,084,780) (3,701,639)
Other Current Liabilities 98,481,207 -
Trade and other payables 953,439,241
Cash generated from operations (1,548,840,728) (3,701,639)
---------------- -------------
Taxes paid (7,435,804) -
Net cash generated from operating activities (1,556,276,532) (3,701,639)-
---------------- -------------
Cash flows from investing activities
Purchase of property, plant and equipment (PPE) (1,797,432,466) -
Proceeds from sale of PPE
Purchase of investments - -
Acquisition of business (362,561,257)
Interest received (16,368,656) -
Net cash used in investing activities (2,176,362,379) -
---------------- -------------
Cash flows from financing activities
Contribution from promoters towards ordinary shares 1,632,566,991 3,701,639
Non controlling interest 1,187,749,722 -
Proceeds from borrowings and Other payables 354,446,017 -
Opening Reserves on Acquisition 540,337,053
Proceeds from share warrants
Interest Paid 60,976,448 -
Net cash used in financing activities 3,776,076,231 3,701,639
---------------- -------------
Net (increase)/decrease in cash and cash equivalents 43,437,320 -
Effect of exchange rate changes on cash and cash equivalents -
Cash and cash equivalents at the beginning of the period 3,630,848
Cash and cash equivalents at the end of the period 47,068,168 -
==================================================================== ================ =============
Consolidated
statement of
changes in
equity
30 June 2012
------------------------------------------------------------------------------------------------------------------------------------
Total
attributable
All Figures Share Capital Revaluation Translation Retained to owners of Non-controlling
in INR's Notes capital Share premium reserve reserve reserve earnings parent interest Total equity
--------------- ------- ---------- -------------- ---------- ------------ ------------ -------------- -------------- ---------------- --------------
Balance as at 1 July
2011 3,701,639 - - - - (37,072) 3,664,567 - 3,664,567
Issue of Ordinary
Equity Shares 431,460 1,210,952,073 - 1,211,383,533 1,211,383,533
Acquisition of the
Subsidary - 405,084,563 2,550,000 7,210,835 - 454,796,351 869,641,751 1,184,226,787 2,053,868,538
Transactions with
owners 4,133,100 1,616,036,636 2,550,000 7,210,835 - 454,759,279 2,084,689,851 1,184,226,787 3,268,916,638
---------- -------------- ---------- ------------ ------------ -------------- -------------- ---------------- --------------
Profit for the year - - - - - (124,677,227) (124,677,227) - (124,677,227)
- -
Other
comprehensive
income: - -
Revaluation of land - - - 9,174,000 - - 9,174,000 9,174,000
Deferred tax liability
on revaluation of land (1,984,336) (1,984,336) (1,984,336)
Minority interest on
revaluation of land (3,522,935) (3,522,935) 3,522,935 -
Exchange differences on
translating foreign
operations - - - - 2,600,539 - 2,600,539 - 2,600,539
-
Total comprehensive
income for the year - - - 3,666,729 2,600,539 (124,677,227) (118,409,959) 3,522,935 (114,887,024)
---------- -------------- ---------- ------------ ------------ -------------- -------------- ---------------- --------------
Balance as at 30 June
2012 4,133,100 1,616,036,636 2,550,000 10,877,564 2,600,539 330,082,052 1,966,279,892 1,187,749,722 3,154,029,614
---------- -------------- ---------- ------------ ------------ -------------- -------------- ---------------- --------------
All Figures in INR's 30(th) June 2011
-------------------- ------------------ -------------
Share capital Translation reserve Retained earnings Total equity
------------------------------------------- -------------- -------------------- ------------------ -------------
Balance as at 1 April 2010 - - - -
Issue of shares 3,701,639 - - 3,701,639
-------------- -------------------- ------------------
Transactions with owners 3,701,639 - - 3,701,639
-------------- -------------------- ------------------ -------------
Loss for the period - - (37,252) (37,252)
Other comprehensive income:
Currency translation reserve - (70,791) - (70,791)
-------------- -------------
Total comprehensive income for the period - (70,791) (37,252) (108,043)
-------------- -------------------- ------------------ -------------
Balance as at 30 June 2011 3,701,639 (70,791) (37,252) 3,593,596
============== ==================== ================== =============
1. Corporate information
General information
Nandan Cleantec Plc. is the Group's ultimate parent Company and
is domiciled in UK. Established on 27(th) May, 2011, Nandan
Cleantec Plc (NCL Plc.) (here-in referred to as the 'Company' or
'NCL Plc') is a Company, headquartered in London. The address of
Nandan's registered office is 4th Floor, Heron House, 4 Bentinck
Street, London United Kingdom - W1U 2EF.
Nandan Cleantec plc is listed on the London Stock Exchange's
Alternative Investment Market (AIM) and has operations in India,
Singapore, Malaysia, Indonesia and Africa;
Nature of operations
With a focus on 'Sustainability', NCL Plc. has developed
cutting-edge technologies that benefit the entire bio-diesel
spectrum from Seed to Oil and medicinal herb panorama from Farm to
Pharma and beyond. To gain leadership in these emerging market
segments, NCL Plc. has adopted a unique vertically integrated
approach whereby the company endeavor to improve and innovate in
every phase of product formulation starting from research &
development to on-field technology transfer; raising to procuring,
processing and marketing for multiple industry applications.
The Company plans to raise about 1,000,000 hectares of Jatropha
plantation, by 2017, so as to produce 2.8 million tons of
biodiesel/yr. In order to achieve this gargantuan target, the
Company has adopted state-specific implementation methodologies
based on differing socio-economic and geo-political scenario and
thus, match supply with the rapidly increasing demand from the
off-takers.
Listing
Nandan Plc's flotation on the London Stock Exchange's
Alternative Investment Market (AIM) on 9 November 2011 secured
GBP16.1 million of funds to support the growth strategy.
1.1. Statement of compliance with IFRS
The consolidated financial statements of NCL Plc, its
subsidiaries and joint ventures (herein referred to as the "Group")
have been prepared in accordance with International Financial
Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB).
Basis of Measurement.
The Financial statement has been prepared on an accruals basis
and is based on historical costs modified by the revaluation of
selected non-current assets, financial assets and financial
liabilities for which the fair value basis of accounting has been
applied. All amounts shown are in Indian Rupees unless otherwise
stated.
The financial statements have been prepared on a going concern
basis.
Going Concern
The Group has incurred a Loss after tax for the year of INR 241
Million during the financial year. The Group has a Net Current
Assets surplus of Indian Rupees 1,402 Million (Current assets less
current liabilities) and the group also has Net Assets of INR 1,966
Million after eliminating the minority interest. The management
made a review of the going concern assessment and considered the
following parameters for the same.
This financial year for the Group is to be considered as an
exceptional year, as the Group has incurred losses on account of a
particular consignment which was held by SEZ authorities for the
recovery of the penalty imposed on the company by arbitrary and
ultra virus decision of the SEZ authorities. Development
Commissioner of the Visakhapatnam Special Economic Zone had issued
a penalty order for INR 663 Million against Nandan Cleantec
Industries Limited (formerly Xtraa Cleancities Limited). This
company had net assets of INR 1408 million at 30(th) June 2012.
They also suspended the Import Export code for one year vide his
order dated 21st December' 2011. This relates to an export of
25,000 metric tons of Fatty Acid Methyl Ester (FAME) in March 2010.
Generalized System of Procedures (GSP) forms were issued to the
company certifying that the product is manufactured within India
and preferential treatment may be availed by the importer of the
goods in the importing countries accepting these GSP forms. The
export was legitimate. However the Development Commissioner took a
view that the company's application then for issue of these forms
did not pass the eligibility criteria for the issue of the GSP
forms. The decision of the authorities was questioned by the Group
entity at various Appellate Forums and finally the Group entity got
the interim relief with the intervention of Hon'ble Supreme Court
of India. Now the penalty order has been remanded back to the
adjudicating authority to reassess the case. The legal counsel of
the company are confident that the final order will be in favor of
the company as the Authorities does not have the locus standi to
pass such orders.
The arbitrary and ultra virus decision of the authorities has
resulted in stalling the production activity of one of the Group's
entity, deterioration of the finished stock which is available at
the warehouse and also forced the Group entities to pay huge
amounts to the tune of $ 3.5 Million as the demurrage and detention
charges. The dollar fluctuation in the international market and
also its movement against the rupee has resulted in huge foreign
exchange loss to the Group. The above mentioned factors are the
major contributories for incurring the huge losses by the Group
during the reporting period which are only confined and relevant to
the reporting period and can be considered as a one off situation.
The fact that considering the past historical performance will
reinforce the fact that this one off case is exceptional covering
the reporting period.
With the favorable interim relief from Apex Court of India, the
legal counsel and management is confident that the issue will be
resolved very soon and company will get into normal course of
activity. The unit is all set to restart the commercial operations
from the processing unit and recoup the losses which are incurred
by the Group in the second half of the current financial year. The
company has positive demand from the market for the sale of
Biodiesel and Glycerin. The Company has also made alternative
contingent plans to meet the orders and get into a profitable mode.
It is pertinent to mention that the company as per its business
plan is on the right track in so far as the other segments are
concerned and it is confident that the group will perform better
with value addition as its primary focus.
It may be noted that the Group has sufficient accumulated
reserves to absorb the exceptional losses which were incurred
during the reporting period. The company even after absorbing the
current losses has net assets of INR 1,966 million after
elimination of the Minority Interest.
The Directors believe that, on the date of this report Group has
sufficient financial resources as on 30th June' 2012 to meet the
committed financial liabilities. The financial statements are
prepared on a going concern basis which has been assessed on cash
flow forecast extending out 12 months from the date of financial
report.
2. Business Combination:
Acquisition of business during the year ended 30(th) June'
2012:
Nandan Cleantec Plc has acquired 51% of the following companies
through it's wholly Owned Subsidiary Nandan Bio Energy Pte. Ltd.
The two companies mentioned below are the operational companies
which are located in India. On aquisition of the two operational
companies in India, the Group attained full spectrum of the Bio
Fuel value chain by integration backward and forward integration of
the value chain and provides the end to end solution in the Bio
fuel sector. Nandan Cleantec Limited a feedstock development
company which is into a backward integration of the Biofuel value
chain. Xtraa Cleancities Limited is a Biofuel manufacturing company
which is into forward integration of the wholly Biofuel value
chain. The critical mass of the group either in terms of revenues
or assets base is derived from these two companies.
Nandan Cleantec Limited and Xtraa Cleancities Limited held talks
to discuss a merger of the two companies. Permission was sought for
conducting the General Body meeting for the merger and granted by
the courts for this to take place on 1(st) July 2011. It was then
decided to achieve this combination via the formation of Nandan
Cleantec plc in the United Kingdom, to seek admission to the
Alternative Investment Market and to raise additional funds by
placing. This eventually took place by 9(th) November 2011 but in
anticipation the Directors of each were appointed to other, placing
both the companies under common control. Accordingly, these
financial statements reflect the transactions in arriving at the
business combination on 1(st) July 2011 and transactions
thereafter.
Particulars Date Acquisition Percentage Acquired
-------------------- ------------------ --------------------
Nandan Cleantec
Limited 31.10.2011 51%
-------------------- ------------------ --------------------
Xtraa Clean cities
Limited 31.10.2011 51%
-------------------- ------------------ --------------------
Results of the acquired entities have been consolidated in the
statement of comprehensive income from the date
of acquisition. Details of net assets acquired as follows:
Particulars Nandan Cleantec Xtraa Cleancities
All Figures in INR's Limited Limited
---------------------------- ---------------- ------------------
Purchase Consideration
---------------------------- ---------------- ------------------
Cash Paid 481,184,200 717,593,210
---------------------------- ---------------- ------------------
Fair value of the net
assets acquired 635,241,978 355,031,953
---------------------------- ---------------- ------------------
Excess of Group interest
over the fair of acquires
of asset and liabilities-
Bargain Purchase 154,057,778
---------------------------- ---------------- ------------------
Goodwill 362,561,257
---------------------------- ---------------- ------------------
The group acquired 51% of Nandan Cleantec Limited a company
located in India which has established land bank for feedstock
development to the extent of 70,000 hectares through contract
farming model and own land bank of 669 acres for its research and
nursery production activity. The company has an operational history
of more than 11 year with strong research and development base with
6 patents on Jatropha high yielding varieties and other medicinal
herbs. The group has acquired 51% of the shares by way of
subscription to the additional shares issued by the company. The
Group in substance controls 80.04% of the Nandan Cleantec Limited
directly and indirectly. However, legally the Group holds 51% of
the company and the procedural formalities are being carried out to
acquire the remaining percentage of shares of the company.
Fair Value recognized on acquisition
All Figures in INR's
Particulars Amount Amount
------------------------------------------------- -------------------- ------------------
Amount settled in Cash 481,184,200
Recognized amount of identifiable net assets
PPE 497,327,594
Intangible Assets 212,441,315
Investments in Subsidiaries (132)
Inventories 48,024,780
Biological Assets 143,523,362
Trade Receivables 1,120,491,242
Cash and cash equivalents 24,965,957
Other Current Assets 194,181,208
Sundry Deposits 3,957,953
Deferred tax liabilities (34,059,140)
Provisions (81,664)
Other liabilities (3,020,184)
Trade and other payables (869,816,024)
Borrowings (92,363,762)
Identifiable net assets 1,245,572,506
-------------------- ------------------
Share of Minority interest holder in net assets 49% 610,330,528
Share of acquirer 51% 635,241,978
Negative goodwill/ Profit on Acquisition (154,057,778)
-------------------- ------------------
Consideration settled in cash 481,184,200
Cash acquired (24,965,957)
Net inflow on acquisition 456,218,243
------------------------------------------------- -------------------- ------------------
The group acquired 51% of shares of Xtraa Cleancities Limited
during the year a company located in India which is having Bio fuel
processing facility with 275,000 MT per Annum capacity along with
Glycerin processing facility of 32,000 MT capacity. The company is
successfully producing and exporting the Bio diesel to various
countries with operational history of more than 5 years. The
company is located in a Special Economic Zone eligible for the
special treatment with respect to the duties and taxes and also
other procedural exemptions. The company has a history of more than
6 years of successfully producing and marketing the Biodiesel and
exporting to various countries. The group has acquired 51% of the
shares by way of subscription to the additional shares issued by
the company. The Group in substance controls 100 % of the Xtraa
Cleancities Limited directly and indirectly. However, legally the
Group holds 51% of the company and the procedural formalities are
being carried out to acquire the remaining percentage of shares of
the company.
Particulars Amount Amount
All Figures in INR's
--------------------------------- --------------- -------------------
Amount settled in Cash 717,593,210
Property, plant and equipment 1,065,131,897
Sundry Deposits 11,975,009
Other Assets 3,024,991
Inventories 990,784,626
Trade Receivables 1,021,173,130
Other Assets 269,174,679
Sundry Deposits 29,653,468
Current tax assets 1,692,328
Cash and cash equivalents 81,008,675
Borrowings -1,060,446,522
Deferred income tax liabilities -81,666,498
Retirement benefit obligations -940,509
Other liabilities -3,185,859
Trade and other payables -1,630,839,200
Provision for other liabilities
and charges -399,130
Identifiable net assets 696,141,085
--------------- -------------------
Share of Minority interest
holder in net assets 49% 341,109,132
Share of acquirer 51% 355,031,953
Goodwill 362,561,257
--------------- -------------------
Consideration settled in
cash 717,593,210
Cash acquired (81,008,675)
Net inflow on acquisition 636,584,535
--------------------------------- --------------- -------------------
3. Operating segments
The Group has adopted the "management approach" in identifying
the operating segments as outlined in IFRS 8. IFRS 8 establishes
standards for the way that public business enterprises report
information about operating segments and related disclosures about
products and services, geographic areas, and major customers. The
Group operations predominantly relate to sale of Biodiesel,
Jatropha plantlets and Nutraceutical products.
The chief operating decision maker evaluates the Group
performance and allocates resources based on an analysis of various
performance indicators at operational unit level. Accordingly the
Group is organized into business units based on the nature of
operations and has three reportable segments as follows:
-- Sale of Biodiesel
-- Sale of Jatropha Products
-- Sale of Nutraceutical products.
Management monitors the gross profit of its business units
separately for the purpose of making decisions about resource
allocation and performance assessment. Segment performance is
evaluated based on revenues and gross profit earned which in
certain respects, as explained in the table below, is measured
differently from the operating statement of comprehensive income in
the consolidated financial statements. The segment asset comprises
predominantly of land which can interchanged between the business
units. Group financing (including finance costs and finance income)
and income taxes are managed on a individual company basis and are
not allocated to operating segments.
All Figures in INR's 30 June 2012
Particulars Biodiesel Jatropha Nutraceuticals Total
------------------------------- -------------- ------------- ------------------- --------------
Sales 2,966,140,902 763,562,976 373,832,659 4,103,536,537
Direct Expenses 3,165,976,656 661,978,054 287,122,344 4,115,077,054
Allocated Expenditure
Employee benefit expense 11,074,839 22,507,226 10,986,125 44,568,190
Depreciation of Non-Financial
Assets 85,030,431 11,263,708 5,497,990 101,792,129
Other Expenses 96,824,264 120,528,939 58,832,040 276,185,243
Change in Inventory -17,592,536 -55,457,703 -27,069,763 -100,120,002
Other operating income -7,988,753 -4,239,987 -2,069,603 -14,298,343
Operating Profits -367,183,999 6,982,739 40,533,526 -319,667,734
Allocated Segment Assets
Accounts Receivable 93,279,314 245,632,309 132,035,408 470,947,031
Inventories 1,021,182,169 79,564,540 38,953,989 1,139,700,698
Biological Assets 74,429,864 98,898,000 173,327,864
Cash and Cash Equivalent 15,043,511 21,453,544 10,566,671 47,063,726
Property, Plant and Equipment 1,008,608,150 381,703,004 134,032,469 1,524,343,623
Allocated Segment Liabilities
Accounts Payable 226,237,836 771,534,112 997,771,948
Borrowings 322,334,412 322,334,412
4. Investments in Subsidiaries and Consolidated Financial Statements:
During the current financial year the company has invested in
Xtraa Cleancities Limited and Nandan Cleantec Limited and acquired
controlling stake of 51% by way of subscription in the above
mentioned companies through its fully owned subsidiary company
Nandan Bio Energy Pte Ltd. Nandan Cleantec Limited and Xtraa
Cleancities Limited held talks to discuss a merger of the two
companies. Permission was sought to conduct the general body
meeting of the company for approving the merger and granted by the
courts for this to take place on 1(st) July 2011. It was then
decided to achieve this combination via the formation of Nandan
Cleantec plc in the United Kingdom, to seek admission to the
Alternative Investment Market and to raise additional funds by
placing. This eventually took place by 9(th) November 2011 but in
anticipation the Directors of each were appointed to other, placing
both the companies under common control.
5. Cash and cash equivalents
Cash and cash equivalents include the following components:
All Figures in INR's 30 June 30 June
2012 2011
------------------------------ ----------- --------
Cash at bank and in hand 35,117,996 -
Short term liquid investments 11,950,172 -
in bank deposits
----------- --------
Total 47,068,168 -
------------------------------ ----------- --------
6. Borrowings
The borrowings comprise of the following:
All Figures Interest Final 30 June 2012 30 June
in INR's rate maturity 2011
range
------------- --------- ---------- ------------- --------
March
Term loan 12%-13% 2014 322,334,412 -
-
------------- --------- ---------- ------------- --------
Total 322,334,412 -
------------- --------- ---------- ------------- --------
The borrowings mature as follows:
All Figures in INR's 30 June 30 June
2012 2011
---------------------------- ------------ --------
Current liabilities:
Amounts falling due within 91,082,604 -
one year
Non-current liabilities
Amounts falling due after 231,251,808 -
one year but not more than
5 years
Total 322,334,412 -
---------------------------- ------------ --------
1. The term loan outstanding as at 30 June 2012 of INR
322,334,412 is fully secured by way of a first charge on the
property, plant and equipment of the Company.
2. All the above facilities are secured via collateral
securities of the promoters / whole time directors created / to be
created against out of the said loan.
7. Revenue
All Figures in INR's 30-Jun-12 30-Jun-11
--------------------------------- -------------- ----------
Sale of Biodiesel/ fuels-Trading 2,966,140,904 -
Sale of Jatropha Saplings 763,562,974 -
Sale of Nutraceuticals 373,832,659 -
-------------- ----------
Total 4,103,536,537 -
--------------------------------- -------------- ----------
Details of the Trading
Sales
Trading Turnover Processed Activity
------------------------ ----------------- -------------------
Sale of the Bio - Fuels 2,966,140,904 -
Total 2,966,140,904 -
----------------- -------------------
8. Costs of material
All Figures in INR's 30 June 30 June
2012 2011
----------------------------- -------------- --------
Consumption of Raw materials 3,708,061,058 -
Direct expenses 407,015,996 -
Stores and consumables - -
-------------- --------
Total 4,115,077,054 -
----------------------------- -------------- --------
9. Employee benefit expenses
9.1. Employee benefit expenses comprises of the following:
All Figures in INR's 30 June 30 June
2012 2011
-------------------------------- ----------- --------
Wages, salaries 41,356,636 -
Pensions - defined benefit 780,646 -
plans
Pensions - defined contribution 2,430,908 -
plans
----------- --------
Total 44,568,190 -
-------------------------------- ----------- --------
9.2. Share based remuneration
In a meeting held on 30 September 2009, the Board of Directors
of Nandan Cleantec Limited one of the group companies, approved the
Employee Stock Option Scheme 2007, for certain employees of the
Group. The scheme is administered by the ESOP committee of the
Company. The options shall vest within twelve months from the date
of grant. The exercise price of the option shall be determined by
the ESOP committee as at the date of grant. The Shares issued
pursuant to any Option shall rank pari passu with all the other
equity shares of the Company for the time being issued and
outstanding, including payment of full dividend. Stock Options
represent a reward system based on performance. They help companies
attract, retain and motivate the best available talent. As the
global business environment is becoming increasingly competitive,
it is important to attract and retain qualified, talented and
competent personnel in the Company. Stock Options also provide a
Company with an opportunity to optimize its personnel costs. This
also provides an opportunity to employees to participate in the
growth of the Company. The Company has allotted 612,972 shares as
at June 2012 to the Employees Stock Option Scheme 2007 to Nandan
Biomatrix Stock Option Trust. However, the shares were yet to be
granted as at 30 June 2012.
10. Other operating expenses
Other operating expenses 30 June 2012 30 June 2011
All Figures in INR's
----------------------------------- ---------------------------- ---------------------
Advertisement and Business
promotion 5,482,105 -
Communication charges 307,547 -
Rent 8,748,656 -
Insurance 247,598 -
Electricity 2,690,325 -
Travel and conveyance 7,466,595 -
Consultancy 2,176,216 -
Printing & Stationery 737,288 -
Other Misc Expenses 222,433,921 37,252
Research and development expenses 21,537,270 -
Telephone charges 1,005,732 -
Vehicle Maintenance 1,477,633 -
Boarding Expenses 1,352,306 -
Roc Charges 522,050 -
Total 276,185,243 37,252
----------------------------------- ---------------------------- ---------------------
Details of the Auditors remuneration
30-Jun-12
-------------------------------------- --------------------------------
Fees payable to the company's
auditor for the audit of the
company's annual accounts 3,114,407
Fees payable to the component
auditors for the audit of
the company's subsidiaries 2,512,000
Total 5,626,407
--------------------------------
11. Finance income
All Figures in INR's 30 June 2012 30 June
2011
--------------------------- ------------- -----------
Interest on fixed deposits 16,381,675 -
Total 16,381,675 -
--------------------------- ------------- -----------
12. Finance costs
All Figures in INR's 30 June 30 June
2012 2011
------------------------------- ----------- ----------
Interest expenses on bank 52,006,913 -
borrowings
Bank and other finance charges 8,969,535 -
----------- ----------
Total 60,976,448 -
------------------------------- ----------- ----------
13. Income tax expense
The relationship between the expected tax expense based on the
domestic effective tax rate of the Group at 5% (2011:5%) and the
reported expense in statement of comprehensive income can be
reconciled as follows:
Tax expense comprises:
All Figures in INR's 30-Jun-12 30-Jun-11
-------------------------------- ----------- ----------
Current tax expense 419,912
Deferred tax expense/(benefit) 30,701,645
----------- ----------
Tax expense 31,121,557
-------------------------------- ----------- ----------
One of the Group Companies M/s Nandan Cleantec Limited has been
engaged in cultivation of plantlets. The Group is subject to the
Indian corporate tax at the standard rate prescribed in the Indian
Income Tax Act. However, considering that the Group has been
engaged in performance of agricultural activities, a substantial
portion of the profits of the Group are exempt from Income Tax.
One of the group Company M/s Xtraa Cleancities Limited has its
production facility located in Vishakhapatnam Special Economic Zone
(VSEZ).The company is subject to the Indian Corporate tax at the
standard rate prescribed in the Indian Income Tax Act. However,
considering that the company's operations are entirely based in the
VSEZ, the effective tax rate of the group has been computed based
on the current tax rates prevailing in India. Further, a
substantial portion of the profits of the company are exempt from
Indian income taxes being profits attributable to the unit located
in VSEZ. Under the tax holiday period, the tax payer can utilise
the exemption from payment of income taxes for ten years.
Xtraa Cleancities Limited is also not subject to payment of
Minimum Alternative Tax (MAT) under the Indian Income Tax Act until
the financial year commencing 1 April 2012. Furthermore one of the
Group company units is located in an SEZ area and the profits are
eligible for exemption under the relevant provisions of the Indian
Income Tax Act.
14. Earnings per share
Basic earnings per share, is calculated by dividing the profit
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the year.
All Figures in INR's 30-Jun-12 30-Jun-11
------------------------------- ------------------ ----------------
Profit attributable to equity
holders of the Company -236,750,180 -37,252
Weighted average number of
ordinary shares in issue 267,208,309 250,001,000
Basic earnings per share (0.89) (0.00)
------------------------------- ------------------ ----------------
15. Report & Accounts
Copies of the Annual Report and Accounts are available from the
Company's website - www.ncp.uk.com and have been posted to
shareholders today. Copies will also be available from the
registered office of Nandan Cleantec plc, 4th Floor, Heron House, 4
Bentinck Street, London, W1U 2EF.
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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