SOURCE: India Globalization Capital, Inc.

India Globalization Capital, Inc.

July 14, 2011 18:17 ET

India Globalization Capital Announces Financial Results for End of Fiscal Year 2011

BETHESDA, MD--(Marketwire - Jul 14, 2011) - 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.

Contact Information

  • Contact:
    John Selvaraj
    301-983-0998