Nandan Cleantec PLC : Preliminary Results

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(All amounts in INR Mil, unless otherwise stated)

23rd 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 £12 million at current exchange rates*)

·     Loss before interest, depreciation and amortization of INR136 million (equivalent to £1.33 million at current exchange rates*)

·     Strong balance sheet with net current assets of INR580 million (equivalent to £5.68. million at current exchange rates*)

·     Cash balance of INR19 million (equivalent to £0.18 million at current exchange rates*)

·     Net assets of INR1,918 million (equivalent to £18.8 million at current exchange rates*)

·     * INR 102: £1

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	[phone]
Arden Partners plc
Steve Douglas	[phone]
FTI Consulting
Matt Dixon / Emma Appleton	[phone]

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.

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 £5.41 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 £12 million at current exchange rates*)

·     Loss before interest, depreciation and amortization of INR136 million (equivalent to £1.33 million at current exchange rates*)

·     Strong balance sheet with net current assets of INR580 million (equivalent to £5.68. million at current exchange rates*)

·     Cash balance of INR19 million (equivalent to £0.18 million at current exchange rates*)

·     Net assets of INR1,918 million (equivalent to £18.8 million at current exchange rates*)

·     * INR 102: £1

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 £6.5 million at current exchange rates*)to INR 226 Million (equivalent to £2.2 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 £2.52 million at current exchange rates*).

Cash flow

As at 30 June 2013 the Company had net cash balances of INR19 million (equivalent to £0.18 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: 21st 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
		30 June 2013		30th June 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 : 21st December 2013

Consolidated statement of comprehensive income

				in INR Mn.
		30 June 2013		30th June 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 2013	30th June 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
	Share capital	Share premium	Capital reserve	Revaluation reserve	Translation reserve		Retained earnings	Total attributable to owners of parent	Non-controlling 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 27th 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 under development		Intangibles put to use	Patents	Total
Gross carrying amount- balance as at 1st 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 1st 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 machinery	Furniture, fixtures and other equipment	Live Stock	Assets under construction	Total
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 1st 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 1st 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 1st 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 Current liabilities	-3	-
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 rate range	Final maturity	30-Jun-13	30-Jun-12
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 Milis 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 Expenses	Defined benefit plans	Property, plant and equipment	Total
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 absence	4	-
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 30th 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 Industries Limited	Nandan Renewable Energies Limted	Total
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 assets acquired for additional stake of 37.53%	395	-	-
Fair value of the net assets acquired for additional stake of 44.47%	-	585	-
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 £ 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 offexceptional 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

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