Nandan Cleantec PLC : Maiden Interim Results for the Period Ended 31 December 2011

29 March 2012

Nandan Cleantec plc

("Nandan Cleantec," "Nandan" or the "Company")

Maiden Interim Results for the period ended 31 December 2011

Nandan Cleantec plc (LSE AIM: NAND), a scaled vertically integrated biofuel producer, announces maiden unaudited results for the period ended 31 December 2011.

The Company began trading as a public limited company on 9 November 2011 and as a consequence, the trading results of the Group should only be included in the results of the Company for this seven week period. The Company believes reporting this seven week period would not give an accurate picture of the trading activities of the Group. Therefore the Company has decided to report on the Group's trading over the six months to 31 December 2011 to allow users of the financial information to gain a better understanding of the underlying performance of the business. The figures are consolidated on the basis that Nandan Cleantec Ltd and Xtraa Cleancities Ltd are wholly owned subsidiaries. Nandan Cleantec plc currently owns 51 per cent. of these companies and is taking the necessary steps to acquire the remaining 49% stake of both Nandan Cleantec Limited and Xtraa Cleancities Limited, India from existing shareholders. This is consistent with the presentation made in the admission document.

Key Highlights

·      Successful AIM IPO in November 2011, raising £16.1 million before expenses

·      Strong trading performance since flotation

o  Total revenue of INR 2,663 million (equivalent to £33.15 million at current exchange rates)

o  EBITDA of INR. 119.16 million (equivalent to £1.483 million at current exchange rates)

o  Strong balance sheet with net cash of INR 311.26 million (equivalent to £3.87 million at current exchange rates)

·      Good initial progress toward key operational targets

o  Integration of businesses on track with benefits starting to come through

o  Operations opened in Rwanda to establish planned Nursery Production Centers (NPC)

o  Seven LoI's signed to explore collaboration opportunities in Africa

·      Demand continues to grow for alternative energy sources

o  Solid trends and outlook evidenced for Global energy

o  Current trading remains in line with the vision of the company

o  Good organic growth supported by encouraging new business pipeline

Commenting on the results Srinivas Prasad Moturi, Executive Chairman of Nandan Cleantec plc said:

"We are pleased to announce Nandan's maiden interim results following the Company's successful flotation on AIM in November last year.  As the world looks to diversify its energy supply, we have a strategic plan to build a new leading player in the biofuel market. The capital secured at the time of our flotation supports our growth plans and we have clear expansion criteria to deliver on our strategy.

Whilst it is still early days, I believe that the our strong, profitable and proven business model, coupled with our planned geographic expansion will create a solid base on which we can continue to extend the scope and capabilities of our business in the months and years ahead.  Our current trading indications are in line with the vision of the Company and our new business pipeline remains encouraging."

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About Nandan Cleantec plc

Nandan Cleantec plc is a scaled vertically integrated biofuel producer. It has developed a number of revenue streams geared towards the ultimate provision of commercially refined biofuel derived from Jatropha plants or other suitable feedstocks.

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 biofuel 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 maximise the potential of its position as a pioneer in Jatropha biofuel sciences. This will involve exploiting the Company's position as a market leader in the Indian biofuel industry.

www.ncp.uk.com

Chairman's Statement

Introduction

I am very pleased to announce our maiden interim results following the Company's successful admission to AIM in November 2011. In the few short months since our flotation, we have not only delivered a strong financial performance, but also made good early progress towards some of the key operational objectives we set for Nandan as a public company.

Company and aims

Nandan is a scaled vertically integrated biofuel producer. It has developed a number of revenue streams geared towards the ultimate provision of commercially refined biofuel derived from Jatropha plants or other suitable feedstocks.

Jatropha is an oilseed plant which can be used for a variety of non-edible purposes and is regarded as a sustainable crop as it grows on marginal, scrub land which is unsuitable for arable purposes. The plant has several attractive properties including its hardiness, rapid growth, easy propagation. Nandan has control of the value chain throughout the life cycle of the Jatropha crop, from developing hybrids and cultivating hybrids to seed oil extraction, oil refining and subsequent sale.

Nandan's strategy, simply put, is to maximise the potential of its position as a pioneer in Jatropha biofuel sciences.  This involves exploiting the Group's position as a market leader in the Indian biofuel industry to ensure that it continues to lead the industry and deliver good returns.  Expansion into new markets outside of India; the development and continuous yield improvements of the Company's Jatropha hybrids; and the development of Jatropha cultivation more broadly are each key elements of that strategy.  I am pleased that we have made some good, early progress in these areas in our first months as a public company.

Progress against strategy

Our flotation on the London Stock Exchange's Alternative Investment Market (AIM) on 9 November 2011 allowed us to secure £16.1 million of funds to support our growth strategy.  During the period we have begun to work toward that strategy, successfully expanding into new markets, in particular, Southeast Asia and Africa; increasing our market share in existing markets; and expanding our capabilities through further joint ventures and associations. 

Nandan has signed seven Letters of Intent to explore potential collaboration for development of Bio-energy plantations in African countries (Malawi, Angola, Nigeria, Ivory Coast, DR Congo) in the 2nd India-Africa Economic Mission organised by the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) and the Brussels-based EMRC International.

Of particular note, and to allow the Group to honor its commitment to expand its activities outside of India, the Group established operations during the period in Rwanda.  This important new outpost enables us to further expand our land-bank and offers another opportunity for us to break in to new markets. Also in Indonesia, the Group is establishing a Nursery Production Centre (NPC), Seed Garden, Jatropha Information Centre (JIC) and 1,000 ha Captive cultivation in joint venture with PT Waterland International.

The Company also continues to focus on its R&D capabilities, further developing its existing strong portfolio of Intellectual Property Rights in the Jatropha field.  During the period, the Company has filed three new patent applications, both in India and internationally in Geneva, each of which has helped to further entrench Nandan's position and reputation as an international innovator in this sector.

The Group has continued to expand rapidly by strengthening its feedstock base. In the 2011 monsoon season the Group planted approximately 20,000 hectares of Jatropha through contract farming in India. Furthermore, in the 2011 harvest season, 50,000 MT of Jatropha seeds have been harvested from existing plantations of which the Company has procured approximately 20,000 MT to date and has made arrangements for the procurement of the balance of the seed material from the franchisees and farmers for conversion into crude Jatropha oil (CJO).

During the period under review the pricing of bio fuel feedstock has been volatile. Management has strategically leveraged this volatility and the fluctuating demand for bio fuels to its advantage, by generating revenues from trading in crude palm oil. Going further, the Company expects to recognise the benefit of its own CJO processed at its own Processing unit, further helping to mitigate the volatility risks inherent in raw material prices.

Financial Performance

·      Total revenue of INR 2,663 million (equivalent to £33.15 million at current exchange rates)

·      EBITDA of INR. 119.16 million  (equivalent to £1.483 million at current exchange rates)

·      The Company also continues to generate good levels of cash and, as at 31st December 2011, had net cash of  INR 311.26 million (equivalent to £3.87 million at current exchange rates)

Since November 2011, the Company has applied the net IPO proceeds into the areas set out at the time of IPO. Specifically these have been invested into increasing the plantation acreage available to the Group, investing in Nursery Production Centers and Expelling units, discharging the high cost working capital debt facilities and investing into the working capital requirements of the Group.

Group Structure

Nandan Cleantec plc controls the trading businesses of the Group; being Nandan Cleantec Limited and Xtraa Cleancities Limited. After the date of the Company's admission to AIM on 9th November 2011, the Company had acquired a 51% stake each both Nandan Cleantec Limtied and Xtraa Cleancities Limited, India.

In line with the structure plan set out in the Admission Document, the Company is taking the necessary steps to acquire the remaining 49% stake of both Nandan Cleantec Limited and Xtraa Cleancities Limited, India from existing shareholders. The Group expects to complete this procedure and the necessary approval formalities by the end of this fiscal year (30 June 2012).

Potential Liability

In March 2010, Xtraa Cleancities Limited, a producer, importer and exporter of Biodiesel, located in a Special Economic Zone (SEZ) exported out of India 25,000 MT of material after obtaining the Generalised System of Preferences (GSP) Forms from the SEZ authorities. The Indian authorities are currently claiming that these GSP forms were obtained without meeting the eligibility criteria and the concerned jurisdictional authority has subsequently levied a penalty of INR 663m (approximately £8.25 million at current exchange rates) on the Company on the grounds that the said GSP forms did not meet the eligibility criteria.

The Company has filed an appeal to the Appellate Committee, Ministry of Commerce and subsequently the Company has filed a Writ petition with the Honorable High Court of Delhi for Justice on the orders issued by the Appellate Committee. On the 15th March 2011, the Honorable High Court set aside the orders issued by the Appellate Committee and recommended that the Appellate Committee re-hear the matter. The matter was re-heard by the Appellate Committee on 21st March 2011 and the outcome of the order is awaited. The Company's legal counsel is confident that the resulting legal decisions will be favorable to the Company and an update will be given to Shareholders in due course.

Dividend

The Board does not intend to declare a dividend at this stage as it seeks to invest and deliver on its growth strategy.

Outlook

Nandan operates in attractive markets. With the global market size of biofuels continuing to increase, the outlook for the use of Jatropha as a sustainable solution looks promising. In 2011 the Global market size of Biofuels reached $83 billion, up from $56.4 billion the prior year, and is projected to grow to $139 billion by 20211. To capitalise on this, Nandan intends to build and further develop relationships with its commercial and Joint Venture Partners in order to expand its footprint in the biofuels market.  In order to achieve its short and medium term objectives, the Company will need to raise further capital to develop further plantations and processing capacity.

We are pleased with the progress we have made since our IPO.  Current trading indications are in line with the vision of the Company and our new business pipeline remains encouraging.  The Board therefore remains confident about the prospects for developing Nandan Cleantec business as a pioneer in Jatropha and looks forward to the next stage of its development in 2012 and beyond.

1http://www.cleanedge.com/reports/clean-energy-trends-2012

Nandan Cleantec Plc

Consolidated Statement of Financial as at 31 December 2011

Nandan Cleantec Plc 

Consolidated Statement of Comprehensive Income for the six months period ended on 31 December 2011

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This press release was issued by Nandan Cleantec plc and was initially posted at http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId= 11160610 . It was distributed, unedited and unaltered, by noodls on 2012-03-29 09:31:37 AM. The issuer is solely responsible for the accuracy of the information contained therein.