BETHESDA, MD
-- (MARKET WIRE)
-- 07/14/11
India Globalization Capital, Inc. (NYSE Amex: IGC), a company competing in the rapidly growing materials and
infrastructure industry in India, announced its financial results for the
fiscal year ended March 31, 2011.
Ram Mukunda, CEO of India Globalization Capital, said: "As we realigned our
business from construction to materials and mining, we have deemphasized
the construction portion of our business. This year we have written down
three components of our balance sheet: The first is a write down of our
assets in Sricon. While the write down totals $6 million, we expect to
pursue a settlement with them, in court if necessary. The second is a
write down of the goodwill in TBL. As we have shifted from construction to
mining and quarrying, this resulted in a $5.7 million impairment of the
good will attributed to TBL. The third is a provision of $4.1 million
against the deferred tax assets (primarily related net operating loss carry
forwards and acquisition costs) recorded on our balance sheet. As this is a
provision on our balance sheet, the tax assets continue to be available to
IGC as and when it generates profits."
Today, through agreements with local partners, we have two rock quarries
profitably operational, which we are in the process of expanding, and our
iron business, while in great demand, is currently curtailed because of the
temporary ban on mining in the state of Karnataka. We have taken steps to
mitigate some of the effects by shifting our operations to states and ports
that are not closed. The expectation is that Karnataka will reopen this
year. We continue to see robust demand from China for iron ore. Also, our
steps to mitigate the effects of the Karnataka ban include diversifying our
sources for iron ore including a strategy to shift operations to other
states in India and acquire mines and mining assets in and outside India.
Reflecting the write downs and provisions in the FYE March 31, 2011, the
Company reported GAAP EPS loss of ($1.34) versus a GAAP EPS loss of ($0.42)
for FYE 2010.
Total revenue was $4.07 million for the FYE March 31, 2011, compared to
$17.89 million for the FYE March 31, 2010. Our overall revenue for FYE
2011 was lower than FYE 2010 for two reasons: (1) none of the construction
revenue from Sricon is included in FYE 2011, and (2) the temporary ban on
mining in Karnataka constrained our iron ore business. However, moving
forward when the ban is lifted, we expect to resume exports as we continue
to see robust demand for ore and we have over $200 million of orders.
Selling, general and administrative (SG&A) expenses for FYE 2011, including
one-time charges, were about $7.2 million, which includes certain
write-offs. Since the global financial crisis the Company has taken strong
steps to reduce its SG&A and align skill, management and resources to its
business plan.
For FYE 2011, the operating loss including some of the write-offs was $7.9
million compared to an operating loss including deconsolidation charges of
$3.99 million for FYE 2010.
As of FYE 2011, the Company's stockholders' equity was about $6.7 million.
The Company reported total assets of $18.16 million on March 31, 2011
versus $35.37 million on March 31, 2010. The decrease in total assets is
mostly due to the write-offs described above. The Company reported cash,
cash equivalents, and restricted cash used as deposits of about $3.5
million. The Company reported short-term and long-term borrowings of about
$4.82 million.
Our plan for the next 12 months are to focus on: (1) increasing production
from the rock quarries, (2) establishing a crusher for the iron ore on the
East Coast of India to begin fulfilling the back log, (3) aggressively
pursuing the collection of delayed construction claims, associated with
previously completed construction, (4) aggressively pursuing a settlement
with Sricon, and (5) acquiring mines or mining rights.
The recently filed 10-K for FYE March 31, 2011 also contains a restatement
of the financial statements for FYE March 31, 2010, previously disclosed on
a Form 8-K filed on June 15, 2011. The restatements reflect two errors in
the financial statements for FYE 2010. The first was an inadvertent error
in the calculation of the fully diluted EPS. It was previously reported as
(0.40) per share and has now been corrected to (0.42) per share. The second
error was in the classification of the Sricon depreciation post
deconsolidation, within the cash flow statement.
As the deconsolidation of Sricon took place on October 1, 2009, the
reclassification affected both the quarter ended December 31, 2009 and the
financial statements for the FYE March 31, 2010. Both statements have been
corrected and the amended statements are included in the Form 10-K for the
current year.
The Company has already taken concrete steps to increase the quality of our
reporting and help eliminate errors in reporting. "We have hired the Indian
branch of a global network of professional firms providing audit, tax and
advisory services. Their role in helping us with the preparation of our
filings includes a quality check using reporting software to ensure
completeness, as well as advice on important accounting matters. We believe
that their U.S. GAAP and SEC reporting expertise will enhance our overall
reporting and help eliminate errors," said Ram Mukunda.
About IGC:
Based in Bethesda, Maryland, India Globalization Capital (IGC) is an
infrastructure and materials company operating in India that builds roads,
bridges and highways, and provides materials to the infrastructure industry
in India and China. The company has three core competencies: Highway and
Heavy Construction, Mining & Quarrying, and Civil Construction and
Engineering. For more information about IGC, please visit the company's web
site at www.indiaglobalcap.com.
Forward-Looking Statements:
Some of the statements contained in this press release that are not
historical facts constitute forward-looking statements under the federal
securities laws. Forward-looking statements can be identified by the use of
the words "may," "will," "should," "could," "expects," "plans,"
"anticipates," "believes," "estimates," "predicts," "intends," "potential,"
"proposed," or "continue" or the negative of those terms. These statements
reflect management's current views and are subject to risks and
uncertainties that could cause actual results to differ materially from
those projected, expressed or implied in these statements. Factors that
could cause actual results to differ, relate to: (i) ability of the parties
to successfully execute on contracts and business plans, (ii) ability to
raise capital and the structure of such capital including the exercise of
warrants, (iii) exchange rate changes between the U.S. dollar and the
Indian rupee, and (iv) weather conditions in India. Readers are cautioned
not to place undue reliance on these forward-looking statements. The
Company undertakes no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events, or
otherwise. Other factors and risks that could cause or contribute to actual
results differing materially from such forward looking statements have been
discussed in greater detail in the Company's Annual Report on Form 10-K for
the year ended March 31, 2011 filed with the Securities and Exchange
Commission.
INDIA GLOBALIZATION CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of March 31,
--------------------------
2010 (as
2011 restated)
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 1,583,284 $ 842,923
Accounts receivable, net of allowances 3,312,051 4,783,327
Inventories 133,539 162,418
Advance taxes 41,452 119,834
Deferred income taxes - 25,345
Dues from related parties - 3,114,572
Prepaid expenses and other current assets 1,474,838 2,054,462
------------ ------------
Total current assets $ 6,545,164 $ 11,102,881
Property, plant and equipment, net 1,231,761 1,748,436
Investments in affiliates 6,428,800 8,443,181
Investments-others 877,863 810,890
Deferred income taxes - 4,075,461
Goodwill 410,454 6,146,720
Restricted cash 1,919,404 2,169,939
Other non-current assets 748,623 872,184
------------ ------------
Total assets $ 18,162,069 $ 35,369,692
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short term borrowings and current portion of
long term debt $ 901,343 $ 1,389,041
Trade payables 1,311,963 1,839,405
Accrued expenses 349,149 461,259
Notes payable 3,920,000 4,120,000
Dues to related parties - 149,087
Other current liabilities 94,892 149,942
------------ ------------
Total current liabilities $ 6,577,347 $ 8,108,734
Other non-current liabilities 1,209,479 1,107,498
------------ ------------
Total liabilities $ 7,786,826 $ 9,216,232
Shares potentially subject to rescission rights
(4,868,590 shares issued and outstanding) 3,082,384 -
Stockholders' equity:
Common stock -- $0001 par value; 75,000,000
shares authorized; 14,890,181 issued and
outstanding at March 31, 2011 and 12,989,207
issued and outstanding at March 31, 2010 $ 1,490 $ 1,300
Additional paid-in capital 38,860,319 36,805,724
Accumulated other comprehensive income (2,502,596) (2,578,405)
Retained earnings (Deficit) (29,692,907) (9,452,000)
------------ ------------
Total stockholders' equity $ 6,666,306 $ 24,776,619
Non-controlling interest $ 626,553 $ 1,376,841
------------ ------------
Total liabilities and stockholders'
equity $ 18,162,069 $ 35,369,692
============ ============
The accompanying notes should be read in connection with the financial
statements.
INDIA GLOBALIZATION CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Year ended March 31,
----------------------------
2010 (as
2011 restated)
------------- -------------
Revenues $ 4,073,919 $ 17,897,826
Cost of revenues (3,914,655) (15,671,840)
------------- -------------
Revenues less cost of revenues (excluding
depreciation) 159,264 2,225,986
Selling, General and Administrative
expenses (7,283,089) (5,614,673)
Depreciation (785,066) (603,153)
------------- -------------
Operating income (loss) (7,908,891) (3,991,840)
Interest expense (1,395,433) (1,221,466)
Amortization of debt discount/Loss on
extinguishment of debt (191,804) (356,436)
Interest Income 262,826 210,097
-------------
Other Income 301,182 281,782
Loss on dilution of stake in Sricon - (2,856,088)
Impairment loss - goodwill (5,792,849) -
Impairment loss - investments (2,184,599) -
Equity in earnings of affiliates - 16,446
------------- -------------
Income before income taxes and minority
interest attributable to non-controlling
interest $ (16,909,568) (7,917,505)
Income taxes benefit/(expense) (4,100,385) 3,109,704
------------- -------------
Net income $ (21,009,953) (4,807,801)
Non-controlling interests in earnings
of subsidiaries 769,046 18,490
Net income / (loss) attributable to common
stockholders $ (20,240,907) $ (4,789,311)
============= =============
Earnings per share attributable to common
stockholders:
Basic $ (1.34) $ (0.42)
Diluted $ (1.34) $ (0.42)
Weighted-average number of shares used in
computing earnings per share amounts:
Basic 15,108,920 11,537,857
Diluted 15,108,920 11,537,857
The accompanying notes should be read in connection with the financial
statements.
INDIA GLOBALIZATION CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year ended March 31, 2011
-------------------------------------
Non-controlling
Particulars IGC interest Total
----------- ----------- -----------
Net income / (loss) (20,240,907) (769,046) (21,009,953)
Foreign currency translation
adjustments 75,809 18,758 94,567
Deconsolidation of Sricon - - -
----------- ----------- -----------
Comprehensive income (loss) (20,165,098) (750,288) (20,915,385)
=========== =========== ===========
Year ended March 31, 2010 (As
restated)
-------------------------------------
Non-controlling
Particulars IGC interest Total
----------- ----------- -----------
Net income / (loss) (4,789,311) (18,490) (4,807,801)
Foreign currency translation
adjustments 3,499,767 (2,230,182) 1,269,585
Deconsolidation of Sricon (1,148,591) - (1,148,591)
----------- ----------- -----------
Comprehensive income (loss) (2,438,135) (2,248,672) (4,686,807)
=========== =========== ===========
The accompanying notes should be read in connection with the financial
statements.
INDIA GLOBALIZATION CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
Additional Accumulated
Number of paid in income/
shares Amount capital (deficit)
------------- ------------- ------------ ------------
Balance at March
31, 2009 10,091,171 $ 1,009 $ 33,186,530 $ (4,662,689)
Stock Option for
1,413,000 grants - - 90,996 -
Issue of 78,820
common stock to
officers and
directors 78,820 8 39,402 -
Issuance of Common
Stock to Red Chip
Companies 15,000 2 13,198 -
Issuance of
1,599,000 common
stock to
institutional
investors 1,599,000 160 1,638,690 -
Issue of 530,000
common stock to
Bricoleur Capital 530,000 53 712,822 -
Issue of 530,000
common stock to
Oliveira 530,000 53 586,732 -
Interest exp.
towards of 530,000
shares towards
Bricoleur Capital
loan - - 197,412 -
Interest exp.
towards of 530,000
shares towards
Oliveira loan - - 162,408 -
Issue of 145,216
common stock under
ATM agency
agreement 145,216 15 179,874 -
Dividend Option - - (2,340) -
Loss on Translation - - - -
Impact of
de-consolidation
of Sricon - - - -
Elimination of
non-controlling
interest
pertaining to
Sricon - - - -
Net income for
non-controlling
interest - - - -
Net income / (loss) - - - (4,789,311)
------------- ------------- ------------ ------------
Balance at March
31, 2010 12,989,207 $ 1,300 $ 36,805,724 $ (9,452,000)
Issue of equity
shares 1,900,974 190 1,761,452 -
Interest expense - - 359,820 -
Dividend Option
Reversed - - 2,340 -
Loss for the
quarter - - - (20,240,907)
Net Income for
non-controlling
interest - - - -
Loss on Translation - - - -
Road show expense
incurred towards
raising
capital-issue of
shares - - (69,017) -
------------- ------------- ------------ ------------
Balance at March
31, 2011 14,890,181 1,490 38,860,319 (29,692,907)
============= ============= ============ ============
Other Non-
comprehensive controlling
income interest Total
------------- ------------- ------------
Balance at March
31, 2009 $ (4,929,581) $ 14,262,606 $ 37,857,875
Stock Option for
1,413,000 grants - - 90,996
Issue of 78,820
common stock to
officers and
directors - - 39,410
Issuance of Common
Stock to Red Chip
Companies - - 13,200
Issuance of
1,599,000 common
stock to
institutional
investors - - 1,638,850
Issue of 530,000
common stock to
Bricoleur Capital - - 712,875
Issue of 530,000
common stock to
Oliveira - - 586,785
Interest exp.
towards of 530,000
shares towards
Bricoleur Capital
loan - - 197,412
Interest exp.
towards of 530,000
shares towards
Oliveira loan - - 162,408
Issue of 145,216
common stock under
ATM agency
agreement - (10,484) 169,405
Dividend Option - - (2,340)
Loss on Translation 3,499,767 (2,219,698) 1,280,069
Impact of
de-consolidation
of Sricon (1,148,591) - (1,148,591)
Elimination of
non-controlling
interest
pertaining to
Sricon - (10,637,093) (10,637,093)
Net income for
non-controlling
interest - (18,490) (18,490)
Net income / (loss) - - (4,789,311)
------------- ------------- ------------
Balance at March
31, 2010 $ (2,578,405) $ 1,376,841 $ 26,153,460
Issue of equity
shares - 1,761,642
Interest expense - 359,820
Dividend Option
Reversed - 2,340
Loss for the
quarter - - (20,240,907)
Net Income for
non-controlling
interest - (769,046) (769,046)
Loss on Translation 75,809 18,758 94,567
Road show expense
incurred towards
raising
capital-issue of
shares - - (69,017)
------------- ------------- ------------
Balance at March
31, 2011 (2,502,596) 626,553 7,292,859
============ ============ ============
The accompanying notes should be read in connection with the financial
statements.
INDIA GLOBALIZATION CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended March 31,
----------------------------
2010 (as
2011 restated)
------------- -------------
Cash flows from operating activities:
Net income (loss) $ (21,009,953) $ (4,807,801)
Adjustment to reconcile net income (loss) to
net cash:
Non-cash compensation expense - 130,399
Non-cash expense for investor relation
related services 24,239 -
Deferred taxes 4,100,385 (3,254,786)
Depreciation 785,066 603,153
Profits relating to de-consolidated
subsidiary - (34,744)
Write back of liability (269,124)
Provision for doubtful receivables and
bad debts written off 4,644,028
Loss / (gain) on sale of property, plant
and equipment - (3,715)
Amortization of debt discount - 356,437
Interest expense (including non-cash) 917,401 1,130,377
Loss on extinguishment of debt 191,804 586,785
Loss on dilution of stake in Sricon - 2,856,088
Impairment loss - goodwill 5,792,849 -
Impairment loss - Sricon investment 2,184,599 -
Deferred acquisition cost written off - 1,854,750
Equity in earnings of affiliates - (16,446)
Changes in:
Accounts receivable (6,822) (3,056,548)
Unbilled receivable - -
Inventories 30,235 1,775,101
Prepaid expenses and other current assets 1,348,513 (307,538)
Trade payables (1,499,804) 1,504,339
Advance from customers - -
Other current liabilities (89,898) (1,013,403)
Other non-current liabilities 91,364 (461,709)
Interest receivable - convertible
debenture - -
Non-current assets 130,382 231,571
------------- -------------
Net cash used in operating activities $ (2,634,736) $ (1,927,690)
Cash flow from investing activities:
Purchase of property and equipment (285,441) (1,264,245)
Proceeds from sale of property and equipment 30,705 463,825
Proceeds from sale of short term investments - -
Redemption of convertible debentures - -
Proceeds from/ (Investment in) non-current
investments (joint ventures etc.) (59,235) (698,174)
Deposits towards acquisitions (net of cash
acquired) - -
Restricted cash 269,270 (582,081)
Net cash movement relating to
de-consolidation of subsidiary - (102,045)
------------- -------------
Net cash provided/(used) in investing
activities $ (44,701) $ (2,182,720)
Cash flows from financing activities:
Proceeds from/ (Repayment of) short term
borrowings (229,068) 61,585
Proceeds from long-term borrowings - -
Repayment of long term borrowings - (687,956)
Expenses for issuance of stock (66,677)
Issuance of equity shares 3,910,575 1,833,780
Due to related parties - -
Proceeds from/notes payable - 2,000,000
Repayment of notes payable (200,000) -
Interest paid - (287,883)
------------- -------------
Net cash provided/(used) by financing
activities $ 3,414,830 $ 2,919,526
Effects of exchange rate changes on cash and
cash equivalents 4,968 (95,558)
Net increase/(decrease) in cash and cash
equivalents 740,361 (1,286,442)
Cash and cash equivalent at the beginning of
the period 842,923 2,129,365
------------- -------------
Cash and cash equivalent at the end of the
period $ 1,583,284 $ 842,923
============= =============
The accompanying notes should be read in connection with the financial
statements.
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