Near Term Revenue, page-39

Key variables in Environmental Clean Technologies’ revenue estimations.

"We have based our valuation for ECT based on Coldry and Matmor plants to be installed in its Indian Integrated Project. The company would generate revenue through fees from licensing its technologies..." Licensing is different and separate to royalties. A licensing fee is normally a one off payment for the legal use of the technology plus any associated logo / trademarks etc. This statement indicates both NLC and NMDC will be paying an upfront fee (in one form or another), possibly by shouldering a higher % of inital CAPEX. Royalties should follow at a price per ton or % of sale price. IMO

"...as well as margins from installation and maintenance of the plants..." Thermax has a dedicated O&M (operation and maintenance) division with some 1000 professionals covering 35 power projects and expanding. Is our deal to employ Thermax to O&M our plants?

"Further, we assume that the company would retain its ownership in the Indian Integrated Project, and thus, would get a share of profits based on its stake in the plants..." This is the game changer IMO. Historical talk of royalties was IMO within a build-and-run scenario. How these 'profits' will pan out, I don't know. But I assume the TPA will shed some light. A future % of revenue from Coldry-electricity-generation sales would be nice.

As for Thermax being able to build enough plants... "Thermax’s South East Asia operations will be powered by a new manufacturing facility in Indonesia, expected to be ready by 2017. A new Thermax subsidiary, PT Thermax International, incorporated in Singapore will finance the plant, envisaged to be the manufacturing hub for the ASEAN region. Thermax will invest $25 million in the facility which will cover markets of Indonesia, Malaysia, Thailand, Vietnam, Laos and Cambodia."

IMO this is why Arrowhead have forecast (based upon supplied corporate info and a degree of classified info) ECT margins as...

Coldry: 30-35 $US/pt
Matmor: 100-125 $US/pt

All in my unsubstantiated and uneducated opinion.


http://abid.co/pdf/n/4872
http://www.thermaxglobal.com/therma...ermax-power-plants/operation-and-maintenance/
http://www.thermaxglobal.com/home-archives/new-manufacturing-facility-in-indonesia/