TIDMNAND
RNS Number : 1811W
Nandan Cleantec plc
23 December 2013
Nandan Cleantec PLC
30 June 2013
(All amounts in INR Mil, unless otherwise stated)
23(rd) December 2013
Nandan Cleantec plc
("Nandan Cleantec," "Nandan" or the "Company")
Financial Results for the Year Ended 30 June 2013
Nandan Cleantec plc (LSE AIM: NAND), a scaled vertically
integrated bio fuel producer, announces audited results for the
year ended 30 June 2013.
Financial Key Points
-- Total revenue of INR1,298 million (equivalent to GBP12 million at current exchange rates*)
-- Loss before interest, depreciation and amortization of INR136
million (equivalent to GBP1.33 million at current exchange
rates*)
-- Strong balance sheet with net current assets of INR580
million (equivalent to GBP5.68. million at current exchange
rates*)
-- Cash balance of INR19 million (equivalent to GBP0.18 million at current exchange rates*)
-- Net assets of INR1,918 million (equivalent to GBP18.8 million at current exchange rates*)
-- * INR 102: GBP1
Operational Key Points
-- Secured a significant supply agreement with HK Petroleum
Limited to produce 12,500 metric tonnes of Biodiesel collectively
per month.
-- Re-aligned the plantation business model to focus more on
institutional customers to safeguard the Company's technologies
from infringement. As a part of this shift, Nandan signed contracts
with Hindustan Petroleum Corporation Limited ("HPCL") and the
Rajasthan State Government.
-- Secured a contract with the Rajasthan State Government for
supply of up to 4 million Jatropha plantlets to their Nodal
agencies over the coming 12 months. These sales have commenced
post-period end.
-- Industry collaboration: Partnering with India's second
largest oil marketing company, Hindustan Petroleum Corporation
Limited, for a Jatropha plantation in the state of Chhattisgarh.
The initial planting was successfully completed post-period end
during the 2013 monsoon period which took place between July and
October. The success of the project will enable the Company to
secure additional acreage orders in the next monsoon period.
-- The Company established a marketing alliance with a focused
Nutraceutical trader, which the Board is confident will bring
long-term value to Nandan.
-- Innovation and IP development: At Nandan, R&D is a
fundamental activity which helps to align the Company's activities
with the current requirement of the industry. In line with these
market and regulatory developments Nandan's research road map has
begun to develop new tree borne oil species to expand its portfolio
of renewable energies. These plants are more suited to various
climatic conditions and can be used for the production of renewable
energies. Nandan intends to apply for patents in this area over the
coming years.
Commenting on the results Srinivas Prasad Moturi, Chairman and
Managing Director of Nandan Cleantec plc said:
"This year was a difficult and challenging year. We made steady
progress in our stated business objectives which included agreeing
a long-term toll agreement with HK Petroleum Limited for the
processing and supply of Biodiesel. With assured feedstock
supplies, we envisage robust business growth in this area.
"During the year, the ongoing disagreement with the Indian
government has affected the Group's operations, resulting in these
operational losses. The Group is well on its way to resolving these
issues with the government and it confident that it has a solid
case. The Group is now looking forward to sustainable revenue
generation.
"We have made a strategic move to transition our plantation
business to a controlled institutional client base, which we
believe will help the Group to protect the market leading position
of its high yielding varieties. We continue to innovate and develop
hybrids of other tree borne oil species aside from maintaining our
position as a pioneer in Jatropha. By executing our strategy,
supported by the commencement of recent contract wins, we remain
confident that the Group is poised to deliver shareholder's
expectations in the year ahead."
For further information please contact:
Nandan Cleantec plc
Srinivas Prasad Moturi +91 40 6550 7799
Arden Partners plc
Steve Douglas +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
I am pleased to announce Nandan's financial results for the year
ended 30th June 2013.
In 2013, the Company made the strategic decision to acquire
various operational assets to enhance its installed capacity. The
toll agreement signed with HK Petroleum Limited will have a
materially positive effect on Nandan's operations as it will
utilize a significant amount of capacity at the Company's existing
facility at Vizag. The domestic sale of Jatropha plantlets
witnessed a reduction as the Company realigned its plantation
business model, focusing on Institutional sales and away from wide
spread individual farmers. The Company's Nutraceuticals division
made steady progress and the Board is confident of organic growth
in this division during the next fiscal year.
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.
-- Increase Jatropha cultivation more widely.
Operational Review
Catchment area development with Jatropha and Pongamia.
In the 2013 financial year, the Company sold and supplied 70 mn
Jatropha Plantlets to various farmers, self help groups, traders
and institutions which is equal to plantation land bank of 28,000
ha. As part of the Indian Bio fuel program, during the year the
Company diversified its plantation product portfolio and commenced
supplying Pongamia plantlets as well as Jatropha and Safed Musli
plantlets. The Company has initiated limited planting of Pongamia
in the state of Karnataka.
During the year the Company produced about 2,800 MT of Crude
Jatropha Oil and supplied the material to various customers. This
year, with the early monsoon, post period end, the Company
witnessed brisk activity in plantlet sales of both Jatropha and
Pongamia to its customers. Rainfall was higher than normal in many
parts of India and planting activities were successful.
Despite these developments, the Directors were not satisfied
with the performance of the Jatropha business during the year. We
have taken decisive action by removing and replacing the senior
management team and we have conducted a comprehensive strategic
review of this business.
As part of the strategic review process, the Company reviewed
its accounts receivable position and took the decision to write off
INR552.5 million (equivalent to GBP5.41 million at current exchange
rates*) as they were deemed to be non-recoverable. The Company will
continue to do everything in its power to recover these monies.
These debts arose as a result of the Jatropha business model and
the then senior management not implementing sufficiently tight
financial controls over debt collection. Historically, Nandan
encouraged wide spread individual farmers to cultivate the Jatropha
crops and the Company was liberal with its credit policies. Due to
the gestation period of the crop being longer than a normal crop,
the working capital cycle was stretched significantly beyond that
experienced with normal crops. This effect was further accentuated
by both the high inflationary pressures experienced across all
commodities and erratic monsoon seasons in the last two years and
this has resulted in farmers being affected very badly.
Consequently, the Company has suffered abnormally high default
rates from farmers who had received business advances for the
procurement of material.
The Company has again reacted decisively to the change in the
dynamics of its revenue model and has shifted its revenues to
institutional sales as these sales are more secure and robust.
During the financial year, the Company transitioned its business
from being a niche player, operating in an environment of promoting
the plantation with farmers spread across the country, to an
institutional model with strong controls of the feed stock,
contractually bound customers and protected IP rights. In line with
this shift towards institutional sales and corporate farming,
Nandan entered into a contract with HPCL for the supply of one-year
old Jatropha plantlets through a Jatropha Care Centre designed
specifically for large institutions such as HPCL, wherein Nandan
will nurture the growth of the plantlet at its resource centres and
organize supplies to the main fields. During the period, the
Company also entered into a contractual agreement with the
Rajasthan State Government for the supply of high yielding
varieties of Nandan's plantlets to the Nodal state agencies. The
Company has also moved to ensure proper financial controls are in
place over future debt
collection.
The Company is currently executing the contract signed with
HPCL, with about 80% of the targeted dispatch delivered to date.
The Board believes that the innovative Jatropha Care Centre ("JCC")
concept, adopted in collaboration with HPCL, is likely to be
attractive going forward, and the Company is in discussions with
another oil marketing company as this model can be replicated
across other corporate, markets and countries.
In 2012, Nandan initiated its expansion in East Africa,
initially in Botswana. Botswana and Rajasthan are similar in nature
as its conditions in terms of climate rainfalls have similar
patterns. The Company's model in Rajasthan, with respect to the
Jatropha plantation, was a success and the same can be replicated
in Botswana. The promotion team in Rajasthan initiated an intensive
farmer contact programme by organizing "Field Days" to create grass
root level awareness on the use of improved genetics. In Rwanda the
company has established a 100 ha plantlets nursery and the
transplantation of these plantlets to the land will be carried out
in the forthcoming monsoon period, anticipated to be between July
and October 2014.
In Botswana, the specialist team sent by our joint venture
partner, Savills, visited our facilities in India and made a
comprehensive study of farming practices in Rajasthan. Further
activities will continue under this agreement in the coming monsoon
period.
The Pongamia programme which the Company initiated in 2013 with
one district of Karnataka was spread to two additional districts
this year and is likely to expand to all six districts of North
Karnataka during the next financial year.
Refining Facility
During the financial year the operations at the Company's
processing facility have again been disrupted due to the ongoing
dispute with the SEZ authorities. However, post period end, the
Company has recommenced operations from its Vizag facility and
started processing the material available at the premises after
obtaining the necessary permissions from the SEZ authorities.
During the financial year the Company signed a significant supply
agreement with HK Petroleum Limited to produce 12,500 metric tonnes
of Methyl Esters and/or Biodiesel collectively per month. This
contract is expected to utilize more than 50% of the installed
capacity of the process facility. The Board is also pleased to
announce that the processing facility has obtained Environmental
Protection Agency certification. Certification with the EPA will
benefit US importers as the Biodiesel produced at the Indian
facility will be eligible for "Renewable Identification Number"
(RINS) generation and other tax incentives as per US laws.
It was anticipated that the sales of Biodiesel would recommence
in April 2013, however this was delayed as EPA certification for
the facility has taken longer than expected due to administrative
delays. Post-period end, Nandan is in a position to commence
production from its facility in India to service orders from its US
client. The Group is expecting to receive the contracted material
from HK Petroleum shortly.
Nutraceuticals
To widen Nandan's market presence in India, the Company's
Nutraceutical division signed a contract with a distributing
company with the aim of creating awareness and generating
business.
As a part of new product development, the Nutraceutical division
conducted clinical trials for anti stress and anti obesity
products. The Company has successfully developed various new
innovations and is in the process of taking these to market.
Product registrations across 14 countries including a number in
Africa are underway and these are expected to complete during
2014.
Strategic Investments and Alliances
As outlined in the financial results published in December 2012,
Nandan Cleantec Plc has increased its holdings during the period in
Nandan Cleantec Limited from 51% to 88.53% and in Nandan Cleantec
Industries Limited (formerly known as Xtraa Cleancities Limited
(NCIL)) from 51% to 95.47%. The Company will continue to work
towards acquiring the remaining minorities of NCL and NCIL.
Financial Performance
The Board considers the key performance indicators of the
Company to be as follows:
-- Total revenue of INR1,298 million (equivalent to GBP12 million at current exchange rates*)
-- Loss before interest, depreciation and amortization of INR136
million (equivalent to GBP1.33 million at current exchange
rates*)
-- Strong balance sheet with net current assets of INR580
million (equivalent to GBP5.68. million at current exchange
rates*)
-- Cash balance of INR19 million (equivalent to GBP0.18 million at current exchange rates*)
-- Net assets of INR1,918 million (equivalent to GBP18.8 million at current exchange rates*)
-- * INR 102: GBP1
Potential Liability
Further to the information provided in the previous year's
annual report regarding the ongoing disagreement with the SEZ
authorities, the Company has made considerable progress in
resolving these issues. The Appellate committee of the Ministry of
Commerce convened a meeting on 2nd April 2013 to hear the case upon
the directions of the Supreme Court of India. The Appellate
committee passed an order on 22nd April 2013 reducing the penalty
amount from INR 663 Million (equivalent to GBP6.5 million at
current exchange rates*)to INR 226 Million (equivalent to GBP2.2
million at current exchange rates*) on the company and waived the
penalties levied on Mr. M. Srinivas Prasad for INR 33 Million and
another Director for INR 5 Million in their personal capacities.
However, despite reducing the penalty on the company to INR 226
million, Nandan continues to contest and has again appealed the
whole penalty to the High Court of Delhi. The legal counsel and
management are confident that the issue will be fully resolved
shortly given the merits of its case. Post period end, the Company
has re commenced its operations from its Vizag facility and started
processing the material available at the premises after obtaining
the necessary permissions from the SEZ authorities. The Group is
expected to receive the contracted material from HK Petroleum
shortly.
As a result of this prolonged legal battle with the SEZ
authorities in the period under review, the Group has incurred a
Loss after tax for the year of INR258 million (equivalent to
GBP2.52 million at current exchange rates*).
Cash flow
As at 30 June 2013 the Company had net cash balances of INR19
million (equivalent to GBP0.18 million at current exchange
rates*).
Auditors qualification of financial statements
The auditors have qualified the accounts on the basis of
uncertainty surrounding the going concern basis. The Directors
believe that, on the date of this report, the Group has sufficient
financial resources to meet its committed financial liabilities.
However, the Group requires additional debt finance to be able to
resume operations on a normal trading and production level. The
Directors are in negotiations with various parties to secure such
funding. The Directors are confident that they will secure the
requisite funds for future operations to resume the normal
activities. 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 its objective of enhancing value
for shareholders. With refining activity restored at Vizag and good
capacity utilization made possible from the existing contract, the
Company is confident of creating a stable earnings platform that
fuels further business growth. The EPA certification is a further
asset that should allow the Company to increase biodiesel sales
into the US. Moving forward the group is focusing its energies on
the US market for additional contracts.
With a clear bio fuel mandate in place and deregulation of
diesel prices expected, the Ministry for New and Renewable Energy
("MNRE") is likely to implement a significant bio fuel programme in
India. Nandan is well placed to benefit from the first mover
advantage, with great strides of research already showcased and
vast plantation activity already undertaken. The Board is confident
of meeting the Company's plantation targets.
The Nutraceutical business is poised for organic growth this
year. Two more new products have successfully passed through the
clinical trials and are planned for launch during this financial
year.
The Company's mission is to retain its pioneering and market
leading position it enjoys in the Indian biofuel space and to
develop a strong product portfolio in the Nutraceuticals
division.
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 and Managing Director Date: 21(st) December 2013
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 2013.
Consolidated Statement of financial position
in INR Mn
30th June
30 June 2013 2012
---------------------------------------- ------------- ----------
Assets
Non-current
Intangible assets 178 171
Property, plant and equipment 1,563 1,524
Other long term financial assets 70 52
Goodwill - 363
1,811 2,110
------------- ----------
Current
Biological assets 63 173
Inventories 301 1,140
Trade and other receivables 288 471
Other short term financial assets 608 660
Current tax assets 22 7
Cash and cash equivalents 19 47
1,301 2,498
------------- ----------
Total assets 3,112 4,608
============= ==========
Equity and liabilities
Equity
Equity attributable to owners
of the parent:
Share capital 4 4
Share premium 1,214 1,211
Capital reserve - 3
Revaluation reserve - 11
Translation reserve 206 3
Retained earnings 288 735
------------- ----------
1,712 1,967
Non controlling interest 206 1,188
Total equity 1,918 3,155
------------- ----------
Liabilities
Non-current
Pension and other employee obligations - 3
Borrowings 170 231
Other Payables 165 5
Deferred tax liabilities 138 118
473 357
Current
Trade and other payables 238 998
Borrowings 460 91
Current tax liabilities - -
Other liabilities 23 7
721 1,096
------------- ----------
Total liabilities 1,194 1,453
------------- ----------
Total equity and liabilities 3,112 4,608
============= ==========
These Financial Statements were approved and authorized for
issue by the Board and were signed on its behalf by
M. Srinivas Prasad
Chairman and Managing Director
Company Registration No: 07650655 Date : 21(st) December
2013
Consolidated statement of comprehensive income
in INR Mn.
30 June 30th June
2013 2012
------------------------------------- -------- ------------
Revenue 1,298 4,104
Other income 35 14
Change in inventories (842) 100
Costs of material (538) (4,115)
Employee expense (33) (45)
Depreciation and amortisation
of non-financial assets (16) (102)
Other expenses (41) (276)
Bad debts written off (553) -
Bargain Purchase gain 901 154
Impairment of goodwill (363) -
Operating loss (152) (166)
Finance costs (87) (61)
Finance income 1 16
Loss before tax (238) (211)
Income tax expense (20) (31)
Loss for the year (258) (242)
======== ============
Loss for the year attributable
to:
Non-controlling interest (78) (58)
Owners of the parent (180) (184)
(258) (242)
-------- ------------
Other comprehensive income
Revaluation of land - 9
Deferred tax (expense)/benefit
on the revaluation of land - (2)
Exchange differences on translating
foreign operations (17) (3)
Other comprehensive income for
the year, net of tax (17) 4
Total comprehensive income for
the year (275) (238)
Total comprehensive income for
the year attributable to:
Non-controlling interest (78) (55)
Owners of the parent (197) (181)
(275) (236)
======== ============
Earnings per share
Basic and diluted earnings per
share - in INR (0.65) (0.66)
-------- ------------
Consolidated cash flow statement
inINR Mn
30 June 30th June
2013 2012
------------------------------------------------ -------- ----------
Cash flows from operating activities
Profit before income tax (238) (210)
Adjustments for:
Depreciation 12 98
Amortisation of Intangible Assets 4 4
Debtors write off 553 -
Change in fair value of the Biological
assets (32) -
Changes in fair valuation of Loans 22 -
Changes in deferred storage charges 12 -
Impairment of Goodwill 363 -
Gain on acquisition (901) -
Share-based payment and increase in retirement
benefit obligations (3) 3
Interest income (1) (16)
Interest expense 87 61
Changes in working capital
Inventories including Biological Assets 981 (1,313)
Trade and other receivables 195 (471)
Other Current assets 360 (667)
Other Current Liabilities & other payables 163 98
Trade and other payables (1,018) 953
Cash generated from operations 559 (1,460)
-------- ----------
Taxes paid (15) (7)
Net cash generated from operating activities 544 (1,467)
-------- ----------
Cash flows from investing activities
Purchase of property, plant and equipment
(PPE) (6) (1,797)
Internal Intangible Development (11) -
Acquisition of subsidiary net of cash (77) (363)
Sale of Assets 3 -
Long term financial assets acquired (18) -
Interest received 1 16
Net cash used in investing activities (108) (2,144)
-------- ----------
Cash flows from financing activities
Contribution towards ordinary shares - 1,633
Non controlling interest (904) 1,188
Increase in borrowings 307 354
Opening Reserves on Acquisition - 540
Interest Paid (87) (61)
Net cash used in financing activities (684) 3,654
-------- ----------
Net (increase)/decrease in cash and cash
equivalents (248) 43
Effect of exchange rate changes on cash
and cash equivalents 220 -
Cash and cash equivalents at the beginning
of the period 47 4
Cash and cash equivalents at the end
of the period 19 47
================================================ ======== ==========
Statement of changes in
equity
30 June 2013
-----------------------------------------------------------------------------------------------------------------------------
Total
attributable
Share Share Capital Revaluation Translation Retained to owners of Non-controlling
capital premium reserve reserve reserve earnings parent interest Total equity
--------------------------- ---------- ------------- ---------- ------------ ------------ --------- ------------- ---------------- --------------
Balance as at 1 July 2011 4 - - - - - 4 - 4
Issue of Ordinary Equity
Shares - 1,211 - - - 1,211 1,211
Acquisition of the
subsidiaries - - 3 7 - 860 870 1,184 2,054
4 1,211 3 7 - 860 2,085 1,184 3,269
---------- ------------- ---------- ------------ ------------ --------- ------------- ---------------- --------------
Profit for the year - - - - - (125) (125) - (125)
Other comprehensive
income:
Revaluation of land - - - 9 - - 9 - 9
Deferred tax liability on
revaluation of land - - - (2) - - (2) - (2)
Minority interest on
revaluation of land - - - (4) - - (4) 4 -
Exchange differences on
translating foreign
operations - - - - 3 - 3 - 3
Total comprehensive income
for the year - - - 4 3 (125) (119) 4 (115)
---------- ------------- ---------- ------------ ------------ --------- ------------- ---------------- --------------
Balance as at 1 July 2012 4 1,211 3 11 3 735 1,967 1,188 3,155
Issue of Ordinary Equity
Shares - - - - - - - - -
Increase in stake of the
subsidiaries - 3 (3) (11) 220 (267) (58) (904) (962)
4 1,214 - - 223 468 1,909 284 2,193
---------- ------------- ---------- ------------ ------------ --------- ------------- ---------------- --------------
Profit for the year - - - - (180) (180) (78) (258)
Other comprehensive
income:
Exchange differences on
translating foreign
operations - - - - (17) - (17) - (17)
Total comprehensive income
for the year - - - - (17) (180) (197) (78) (275)
---------- ------------- ---------- ------------ ------------ --------- ------------- ---------------- --------------
Balance as at 30 June 2013 4 1,214 - - 206 288 1,712 206 1,918
--------------------------- ---------- ------------- ---------- ------------ ------------ --------- ------------- ---------------- --------------
The acquisition of the subsidiaries during 2012 shown above incorrectly allocated INR 405
M to Share Premium rather than Retained earnings. This has now been corrected at the comparatives
shown in the consolidated statement of financial position altered accordingly.
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 and its principal place of business is
Ground Floor, 5 Welbeck Street, London W1G 9YQ, United Kingdom.
Listed on the London Stock Exchange's Alternative Investment
Market (AIM) with its operations in India, Singapore, Malaysia,
Indonesia and Africa;
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.
2. Intangible assets
The Group's intangible asset comprises of capitalization of
development cost on the internally conducted development activity,
intangible costs under development and the amount expensed on the
patents acquired. The carrying amounts for the reporting periods
under review can be analyzed as follows:
30th June 2013
--------------------------------------------------------- ---------------------------------------
Intangible Intangibles Patents Total
under development put to
use
--------------------------------- ---------------------- ------------ --------------- --------
Gross carrying amount- balance
as at 1(st) July 2012 166 17 2 185
Intangibles acquired during the - - - -
year
Additions, internally developed 11 - - 11
Disposals - - - -
Net exchange differences - - -
Balance 30 June 2013 177 17 2 196
------------- ------------ --------------- --------
Amortisation:
Accumulated Amortizations - balance
as at 1(st) July 2012 - (13) (1) (14)
Amortization for the year - (4) - (4)
Disposals - - - -
Balance 30 June 2013 - (17) (1) (18)
------------- ------------ --------------- --------
Net Book Value as on 30 June 2013 177 - 1 178
Net Book Value as on 30 June 2012 166 4 1 171
3. Property, plant and equipment
The Group's property, plant and equipment comprises of land,
buildings, plant and machinery, vehicles, furniture and fixtures
and assets under construction. The figures include the amount of
Borrowing cost capitalized of INR 42667076. The carrying amount can
be analyzed as follows:
Land Buildings Plant and Furniture, Live Stock Assets under Total
machinery fixtures and construction
other equipment
------------------- ----- ---------- ------------------ ----------------- ----------- ------------------ ------
Gross carrying
amount
Balance as at 1
July 2012 352 83 1,292 116 - 43 1,886
Additions 5 - - - - - 5
Additions on
Business
combination 3 - - - - 52 55
Reclassifications 5 64 45 (71) - (43) -
Revaluation
rise/(decrease) (8) - - - - - (8)
Disposals (1) - - (2) - - (3)
Net exchange
differences - - - - - - -
Balance as at 30
June 2013 356 147 1,337 43 - 52 1,935
----- ---------- ------------------ ----------------- ----------- ------------------ ------
Accumulated
Depreciation
Balance as at 1
July 2012 - (17) (315) (30) - - (362)
Depreciation - (3) (5) (4) - - (12)
Disposal - - - 2 - - 2
Net exchange -
differences - - - - - -
Balance as at 30
June 2013 - (20) (320) (32) - - (372)
----- ---------- ------------------ ----------------- ----------- ------------------ ------
Carrying amount 30
June 2013 356 127 1,017 11 - 52 1,563
------------------- ----- ---------- ------------------ ----------------- ----------- ------------------ ------
Carrying amount 30
June 2012 352 66 977 86 - 43 1,524
------------------- ----- ---------- ------------------ ----------------- ----------- ------------------ ------
The Directors have undertaken an impairment review of the
Property, Plant and Equipment of the group as at the year end date
and are satisfied that there are no indicators of impairment.
4. Goodwill
30th June 2013
----------------------------------------------------------
Amount
------------------------------------------------- -------
Gross carrying amount- balance as at 1(st)
July 2012 363
Cost of acquisition during the year -
Additions, internally developed -
Disposals -
Impairment (363)
Net exchange differences
-------
Balance 30 June 2013 -
-------
Amortization:
Accumulated Amortizations - balance as at 1(st) -
July 2012
Amortization for the year -
Disposals -
-------
Balance as at 30 June 2013 -
Net Book Value as on 30 June 2013 -
------------------------------------------------- -------
Net Book Value as on 30 June 2012 363
The Goodwill which was recorded by the group on acquiring Nandan
Cleantec Industries Limited during the previous year has been
offset by the additional assets value acquired as part of the
Bargain Gain generated by acquiring the extra stake in that company
this year, refer Note 26 .
5. Biological assets
30-Jun-13 30-Jun-12
--------------------------------------------------- ---------------------- ----------
Biological assets 63 173
Total 63 173
--------------------------------------------------- ---------------------- ----------
Change in the fair value of biological assets:
30-Jun-13 30-Jun-12
--------------------------------------------------- ---------------------- ----------
Beginning of the period 173 -
Produced 106 715
Sales (216) (542)
End of the period 63 173
--------------------------------------------------- ---------------------- ----------
Gain/(loss) of Biological Assets as on 30.6.2013
---------------------------------------------------
30-Jun-13
--------------------------------------------------- ----------------------
Biological Assets as on 30 June 2013 63
Such assets as valued at 1(st) July 2012 31
Gain of Biological Asset as on Financial position
date 32
----------------------
6. Inventories
Inventories recognized in the statement of financial position
can be analyzed as follows:
30-Jun-13 30-Jun-12
-------------------------------------- ---------- ----------
Raw materials and Consumables 12 12
Finished goods 280 1,119
By Products 8 8
Work In Progress 1 1
Total 301 1,140
-------------------------------------- ---------- ----------
Change in inventories
30-Jun-13 30-Jun-12
-------------------------------------- ---------- ----------
Inventory of finished stock: and WIP
Opening Balance 1,128 1,028
Currency Translation difference (3) -
End of the period 289 1,128
---------- ----------
Change in inventories (842) 100
-------------------------------------- ---------- ----------
7. Trade receivables
30-Jun-13 30-June-12
------------------- ---------- -----------
Trade receivables 288 471
Trade receivables 288 471
------------------- ---------- -----------
All amounts are short-term and non-interest bearing and are
generally due within 90 days. The net carrying value of trade
receivables is considered a reasonable approximation of fair value.
All of the Group's trade and other receivables have been reviewed
for indicators of impairment.
8. Other short term financial assets
30-Jun-13 30-Jun-12
------------------- ---------- ----------
Other receivables 530 613
Sundry deposits 13 11
Sundry Loans 65 36
---------- ----------
Total 608 660
------------------- ---------- ----------
The net carrying value of trade receivables is considered a
reasonable approximation of fair value
9. Cash and cash equivalents
Cash and cash equivalents include the following components:
30-Jun-13 30-Jun-12
------------------------------------------------ ---------- ----------
Cash at bank and in hand 18 35
Short term liquid investments in bank deposits 1 12
---------- ----------
Total 19 47
------------------------------------------------ ---------- ----------
10. Equity
10.1. Share capital
30-Jun-13 30-Jun-12
------------------------------------------------ ---------- ----------
Authorized capital
- 500,010,000 ordinary shares of GBP 0.0002
each (2012:500,010,000) 100,002 100,002
Issued and fully paid up
- 276,839,222 ordinary shares of GBP 0.0002
each (2012:276,839,222) (Refer table below) 55,368 55,368
------------------------------------------------ ---------- ----------
- Equal INR Mil 4 4
------------------------------------------------ ---------- ----------
The share capital of the Group comprises only of fully paid
ordinary shares of GBP 0.0002 each. All shares are equally eligible
to receive dividends and the repayment of capital and represent one
vote at the shareholders' meeting of Nandan Cleantec PLC, UK.
Reconciliation of the paid up share capital:
30-Jun-13 30-Jun-12
---------------------------------- ---------- ----------
Shares issued and fully paid up:
Beginning of the year(GBP) 55,368 50,001
Issue of shares(GBP) 5,367
---------- ----------
Shares issued and fully paid up 55,368 55,368
---------------------------------- ---------- ----------
10.2. Share premium
Proceeds received in addition to the nominal value of the shares
issued during the year have been included in the share premium,
less registration and other issue related expenses and net of
related tax benefits.
30-Jun-13 30-Jun-12
------------------------------------ ---------- ----------
Opening Balance 1,211 -
Issue of the shares at the premium 1,294
Less : Cost of Issue Expenses - (83)
Add:- Prior Period VAT Adjustments 3 -
Total Share premium 1,214 1,211
------------------------------------ ---------- ----------
11. Pension and other employee obligations
30-Jun-13 30-Jun-12
--------------------------------------------------------- ------------- -------------
Obligation in the statement of financial
position
Gratuity 3 2
Compensated absences 1 1
------------- -------------
4 3
------------- -------------
Expense recognized in the statement
of comprehensive income
Gratuity - -
Compensated absences - 1
------------- -------------
- 1
--------------------------------------------------------- ------------- -------------
Gratuity
The amounts recognized in the statement of financial position
have been determined as follows:
30-Jun-13 30-Jun-12
--------------------------------------------------------- ------------- -------------
Present value of funded obligations 3 2
Present value of Unfunded obligations - -
Fair value of plan assets 1 -
Un-recognized actuarial gain/loss - -
--------------------------------------------------------- ------------- -------------
Liability in the statement of financial
position 3 2
--------------------------------------------------------- ------------- -------------
Pension & Employee Obligations - 2
Other Liabilities - Current 3 -
Total Gratuity Amount 3 2
--------------------------------------------------------- ------------- -------------
The movement in the defined benefit obligation over the year
is as follows:
30-Jun-13 30-Jun-12
--------------------------------------------------------- ------------- -------------
Beginning of the period 3 2
Current service cost - 1
Interest cost - -
Actuarial losses/(gain) - -
Benefits Paid - -
Crystallized Benefit transferred to -3 -
Current liabilities
End of the period 0 3
--------------------------------------------------------- ------------- -------------
The fair value of plan assets as at 30 June 2013 is INR1,028,988
(2012: INR1,052,502)
The principal actuarial assumptions used were as follows:
30-Jun-13 30-Jun-12
--------------------------------------------------------- ------------- -------------
Discount rate 7.70% 8.35%
Expected return on plan assets 7.50% 7.50%
Salary escalation rate 7% 7%
Retirement age (years) 58 58
--------------------------------------------------------- ------------- -------------
Retirement Benefits accrued above includes the benefits to Mr.
Bhaskar Rao Vollam , Director of the company.
There are additional disclosures required as per IAS 19 but the
above amounts are deemed immaterial for full disclosure in these
accounts.
12. Borrowings
The borrowings comprise of the following:
Interest Final maturity 30-Jun-13 30-Jun-12
rate range
------------------------------- ------------ --------------- ---------- ----------
Term loan 12%-13% Mar-14 161 322
Over Draft 10.95%-15% 299 -
Unsecured Loans 0% 170 -
Total 630 322
------------------------------- ------------ --------------- ---------- ----------
The borrowings mature as follows:
30-Jun-13 30-Jun-12
------------------------------- ----------------------------------------- ----------
Current liabilities:
Amounts falling due within
one year 460 91
Non-current liabilities
Amounts falling due after
one year but not more than
5 years 170 231
Total 630 322
------------------------------- ----------------------------------------- ----------
The borrowings comprise of the following:
The borrowings mature as follows:
1. The term loan outstanding as at 30 June 2013 of INR 161.32
Mil 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 vide collateral
securities of the promoters / whole time directors created / to be
created against out of the said loan.
13. Deferred tax liabilities
Operating Defined benefit Property, Total
Expenses plans plant
and equipment
----------------------------- ---------- ---------------- --------------- ------
Opening Balance 118
---------- ---------------- ---------------
Charged/(credited) to the
statement of comprehensive
income -10 - 30 20
Revaluation of land - - - -
Balance as at 30 June 2013 -10 - 30 138
----------------------------- ---------- ---------------- --------------- ------
14. Trade and other payables
30-Jun-13 30-Jun-12
----------------------------- ---------- ----------
Trade and other payables 230 149
Creditors for Capital Works - -
Other liabilities 8 849
---------- ----------
Total 238 998
----------------------------- ---------- ----------
The carrying amount of trade and other payables is considered a
reasonable approximation of fair value and is non-interest bearing
and are generally due within 30 days.
15. Other liabilities
All other liabilities are considered current. The carrying
amounts may be analyzed as follows:
30-Jun-13 30-Jun-12
---------------------------------------------- ---------- ----------
Beginning of the year 7 -
Additional provisions 12 7
Current liability for Gratuity & compensated 4 -
absence
Reversals - -
---------- ----------
End of the year 23 7
---------------------------------------------- ---------- ----------
16. Other Non-Current liabilities
All other liabilities are considered current. The carrying
amounts may be analyzed as follows:
30-Jun-13 30-Jun-12
------------------------------------ ------------ ------------
Deferred Storage costs 12 1
Site Restoration Liability 2 2
Lease Rental Charges 2 2
Long term Customer Advances 149 -
Total 165 5
------------------------------------ ------------ ------------
All other liabilities are considered current. The carrying
amounts may be analyzed as follows:
The group's entities have secured a warehouse for the storage of
biodiesel from the lesser for a lease term of five years. The
annual lease charges payable to the lesser contain an escalation
clause of 5 percent. Hence, the storage costs payable to the lesser
has been amortized on a straight line basis over the term of the
lease as detailed in note 2.11. A provision has been recognized for
the restoration costs associated with the construction of the
production plant. The unwinding of the discount on the restoration
provision has been included in other finance cost.
17. Revenue
30-Jun-13 30-Jun-12
---------------------------------- ---------- ----------
Sale of Biodiesel/ fuels-Trading 854 2,966
Sale of Jatropha Saplings 340 764
Sale of Nutraceuticals 104 374
---------- ----------
Total 1,298 4,104
---------------------------------- ---------- ----------
Details of the Trading Sales
Trading Turnover Processed
Activity
------------------------------ ----------------- ----------
Sale of the Bio - Fuels 748 0
Total 748 0
----------------- ----------
18. Costs of material
30-Jun-13 30-Jun-12
------------------------------ ---------- ----------
Consumption of Raw materials 330 3,708
Direct expenses 208 407
Total 538 4,115
------------------------------ ---------- ----------
19. Employee expenses
19.1. Employee expenses comprises of the following:
30-Jun-13 30-Jun-12
---------------------------------- ---------- ----------
Wages, salaries 32 41
Pensions - defined benefit plans 1 1
Pensions - defined contribution
plans - 3
---------- ----------
Total 33 45
---------------------------------- ---------- ----------
19.2. 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
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 of the same. The exercise price of the option shall be
determined by the ESOP committee as at the date of grant of the
same. 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, besides creating long
term wealth in their hands. The Company has allotted 612,972 shares
as at June 2013 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 2013.
19.3. The Details of the Employees of the Group
in Nos
30-Jun-13 30-Jun-12
---------------- ---------- ----------
Farming 15 30
Production 24 29
Administration 20 59
Total 59 118
---------------- ---------- ----------
20. Other operating expenses
Other operating expenses 30-Jun-13 30-Jun-12
Advertisement and Business promotion 1 5
Communication charges - -
Rent 6 9
Insurance 2 -
Electricity 3 3
Travel and conveyance 6 7
Consultancy 15 2
Printing & Stationery 1 1
Other Misc Expenses 19 217
Research and development expenses 5 22
Telephone charges 1 1
Repairs & Maintenance 1 1
Boarding Expenses - 1
Rates & Taxes 2 1
Auditors Remuneration 5 6
Foreign Exchange fluctuation (26) -
Total 41 276
-------------------------------------- ---------- ----------
Details of Debtors Written off
30-Jun-13 30-Jun-12
------------------------------- ---------- ----------
Bad debts written off 509 -
Advances written off 44 -
Total 553 -
------------------------------- ---------- ----------
The group suffered abnormally high bad debts in relation to the
sale of plantlets and advances to farmer in connection with its
Jatropha business as explained in the Operational Review in the
Chairman's Statement.
Details of the Auditors remuneration
30-Jun-13 30-Jun-12
---------------------------------------------- ---------- ----------
Fees payable to the company's auditor
for the audit of the company's annual
accounts 4 3
Fees payable to the component auditors
for the audit of the company's subsidiaries 1 3
Total 5 6
---------------------------------------------- ---------- ----------
21. Finance income
30-Jun-13 30-Jun-12
---------------------------- ---------- ----------
Interest on fixed deposits 1 16
Total 1 16
---------------------------- ---------- ----------
22. Finance costs
30-Jun-13 30-Jun-12
-------------------------------------- ---------- ----------
Interest expenses on bank borrowings 84 52
Bank and other finance charges 3 9
---------- ----------
Total 87 61
-------------------------------------- ---------- ----------
23. 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.
30-Jun-13 30-Jun-12
-------------------------------------------- ------------ ------------
Profit attributable to equity holders
of the Company (180.00) (184.00)
Weighted average number of ordinary shares
in issue 276,839,222 276,839,222
Basic earnings per share in INR (0.65) (0.66)
-------------------------------------------- ------------ ------------
24. Business Combination:
Acquisition of business during the year ended 30(th) June'
2013:
In line with the strategy to acquire the whole of the share
capital of both operating companies of the group located in India,
Nandan Cleantec Plc has acquired 51% of the Nandan Cleantec Limited
and Nandan Cleantec Industries Limited ( Formerly known as Xtraa
Cleancities Limited) through its wholly Owned Subsidiary Nandan Bio
Energy Pte. Ltd in the previous year ended on 30th June 2012. To
progress this objective Nandan Cleantec Plc has increased its
holdings during the period in Nandan Cleantec Limited from 51% to
88.53% through its subsidiary Nandan Renewable Energies Limited on
31st December 2012. Similarly Nandan Cleantec Plc has increased its
holdings during the period in Nandan Cleantec Industries Limited
(formerly known as Xtraa Cleancities Limited (NCIL)) from 51% to
95.47% through its subsidiaries Nandan Renewable Energies Limited.
The company has acquired the additional shareholdings in both the
operating companies from the existing shareholders of those
companies at a consideration which has resulted in the gain from
the purchase of additional stake in the business which has been
routed through the statement of the comprehensive Income. The
Goodwill which was recorded by the group on acquiring Nandan
Cleantec Industries Limited during the previous year has been
offset by the additional assets value acquired as part of the
Bargain Gain generated by acquiring the extra stake in that company
this year.
Details of the Percentage acquired by the group.
Particulars 30-Jun-13 30-Jun-13
------------------------------------ ---------- ----------
Nandan Cleantec Limited 88.53% 51.00%
Nandan Cleantec Industries Limited 95.47% 51.00%
Nandan Renewable Energies Limited 93.07% -
Results of the acquired entities have been consolidated in the
statement of comprehensive income from the date
of combination. Details of net assets acquired as follows:
Particulars Nandan Cleantec Limited Nandan Cleantec Nandan Renewable Energies Total
Industries Limited Limted
-------------------------- ------------------------ -------------------------- -------------------------- --------
Fair value of the net
assets 1,106 1,315 89 2,510
Less: Attributable to
Parent (564) (671) - (1,235)
Less: Attributable to
Minorities (147) (59) (6) (212)
------------------------ -------------------------- -------------------------- --------
Fair value of the net 395 - -
assets acquired for
additional stake of
37.53%
Fair value of the net - 585 -
assets acquired for
additional stake of
44.47%
Fair value of the net
assets acquired for
additional stake of
93.07% - - 83 1063
Less: Cash Consideration
paid for additional
stake (83) - (79) (162)
------------------------ -------------------------- -------------------------- --------
Excess of Group interest
over the fair of
acquires of asset and
liabilities- Bargain
Purchase 312 585 4 901
-------------------------- ------------------------ -------------------------- -------------------------- --------
Nandan Renewable Energies Limited
Fair Value recognized on acquisition
INR Mil
Particulars Amount Amount
------------------------------------------ ------- --------
Amount settled in Cash 79
Recognized amount of identifiable
net assets
PPE 55
Intangible Assets -
Investments in Subsidiaries 88
Inventories -
Biological Assets -
Trade Receivables 12
Cash and cash equivalents 2
Other Current Assets 204
Sundry Deposits -
Deferred tax liabilities -
Provisions -
Other liabilities (13)
Trade and other payables (258)
Borrowings (1)
Identifiable net assets 89
------- --------
Share of Minority interest holder
in net assets 0 6
Share of acquirer 1 83
Negative goodwill/ Profit on Acquisition (4)
------- --------
Consideration settled in cash 79
Cash acquired (2)
Net inflow on acquisition 77
------------------------------------------ ------- --------
25. 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 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.
Segment Revenue and results
Segment revenue Segment profit
30-Jun-13 30-Jun-12 30-Jun-13 30-Jun-12
---------------------- ---------- ---------- ---------- ----------
Biodiesel 854 2966 179 (368)
Jatropha 340 763 (193) 110
Nutraceuticals 104 374 (137) 92
---------- ---------- ---------- ----------
Total for continuing
operations 1298 4104 (152) (166)
---------- ---------- ---------- ----------
Finance costs (87) (61)
Finance income 1 16
Loss before tax (238) (211)
---------------------- ---------- ---------- ---------- ----------
Segment assets and liabilities
Segment Assets Segment Liabilities
30-Jun-13 30-Jun-12 30-Jun-13 30-Jun-12
---------------- ---------- ---------- ---------- ----------
Biodiesel 1,884 2138 1,059 629
Jatropha 997 382 95 808
Nutraceuticals 231 134 40 16
3,112 4608 1,194 1453
---------------- ---------- ---------- ---------- ----------
The revenues from external customers for each product and
service, and on a geographical basis is not available, and the cost
to develop it would be excessive.
26. Going Concern
As a result of prolonged legal battle with the SEZ authorities ,
in the period under review, the Group has incurred operational Loss
after tax for the year of INR 258 million (equivalent to GBP 2.52
million at current exchange rates). The Group has net current
assets of INR 580 million(current assets less current liabilities)
and the Company also has positive net assets of INR1918 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 1918 Mil
and INR. 206 Mil attributable to Minorities to cover this.
The group is of the firm belief that the company has not
incurred operational losses on account of business reasons , it has
incurred losses due to external factors , especially the litigation
with the SEZ authorities which is not under the control of the
group. This set back is to be viewed as a purely temporary
phenomena considering the fact that the Appellate Tribunal,
Ministry of Commerce has reduced the penalty from INR 663 Million
to INR 223 Million and the company has filed the writ petition to
waive off the penalty of INR 223 Million based on the merits of the
case and also the fact that the group has recommenced the
operations from the facility. The operations have commenced post
reporting period and the company is now rebooted and refreshed and
ready to execute the commercial order from HK Petroleum in the
first Half of the Financial Year 2013-14
The Directors believe that, on the date of this report Group has
sufficient financial resources to meet the committed financial
liabilities.
However, the Group requires additional debt finance to be able
to resume operations on a normal trading and production level. The
Directors are in negotiations with various parties to secure such
funding. At present, the Group's resources are not adequate and
unless this funding is obtained the Group cannot formally
demonstrate that it has the resources required over the next 12
months. In the opinion of the Directors, the company is able to
meet its obligations as and when they fall due but require further
working capital to resume its normal level of activity.
Accordingly, the Going Concern basis has been used for the
preparation of these financial statements but should that basis not
apply then assets may not be worth their current value and further
liabilities might arise. The extent of such adjustments cannot be
predicted.
27. 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, Ground Floor, 5 Welbeck
Street, London W1G 9YQ.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR PGGRCPUPWPGP
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