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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Nandan Cleantec | LSE:NAND | London | Ordinary Share | GB00B713ZZ63 | ORD 0.02P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 4.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
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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