Financial Report & Accounts June 2012

Financial Report & Accounts for the 18 month period ended 30 June 2012

The audited accounts of NEOS Resources plc for the 18 month period ended 30 June 2012 are herby released to the market.

Executive Chairman's statement

Introduction

This is the first Annual report and accounts to be issued by NEOS Resources plc (the "Company") and its subsidiaries (the "Group") since I was appointed as Executive Chairman in June 2011 and the first in relation to the changed year reporting to 30th June.

There have been a number of significant changes to both the Board and operational structure of the Group over the last sixteen months. As announced in the Interim report in December 2011, the Board has refocused the Group on non-edible oils seeds found in India. This strategy was initiated in order to develop a pathway for scalability and with a view to future financial stability for the Group. In order to reflect these changes the Company's name was changed from D1 Oils plc to NEOS Resources plc in March 2012.

The Board has also changed the focus of the Group from research and development towards commodity trading. Over the past sixteen months, the management team has developed its knowledge regarding the complexities of the Indian markets including the commodity market spread pressures and the operational activities. The Board`s principal objective is for the Group to achieve profitability and cashflow sustainability within a manageable time horizon.

Ravi Jose was appointed as an executive director in July 2012, to join Nicholas Myerson and myself who had joined in June 2011. The executive team conducted a business review which resulted in the closing down of the Group's operations in Indonesia and Zambia and the disposal of the remaining Science & Technology research unit with the sale of the Animal Feed project, as a result of which the Group now focuses on trading operations in India.

I am pleased to report that the Group has made progress in developing the business in the core region of India during the period with relatively significant amounts of non-edible vegetable oils being produced and sold there.

The Group has now produced initial volumes of crude oil from Castor, Pongamia and Neem, as well as Jatropha, and has sold its products into a number of industrial applications. This is the first step in the implementation of a diversification strategy away from over reliance on future biofuel legislation.

During the period since June 2011, the Group running costs have been reduced by 66% from a rate of over £220,000 to under £75,000 per month. These reductions have been achieved through the closure of non-scalable Jatropha plantations in Malawi, Zambia and Indonesia, the sale of the Animal Feed programme, and overhead efficiencies achieved within the UK and India.

The Group revenue, whilst still relatively small scale, has trebled from a monthly average in the first half of 2011 of £30,000 to a current average of circa £90,000 per month which has been generated from approximately £450,000 of committed working capital in India.

Indian operations

Since the commencement of the season in July 2011, the Group has purchased approximately 3,700 tonnes of a combination of non-edible seeds, expelled approximately 1,200 tonnes of oil, and produced over 2,600 tonnes of seedcake. 825 tonnes of oil and 2,600 tonnes of seedcake were sold for £863,000. 400 tonnes of oil and 300 tonnes of seedcake were held in inventory at the period end.

The overhead costs for India have been reduced since June 2011 from a monthly average of £35,000 per month to £17,000 per month.

Management is planning to commit increased working capital for larger storage facilities for the seed, oil and seedcake, as well as to enter into variable tolling contracts thereby enabling the Group to withdraw from fixed leased crushing plants. These measures should assist in opportunities to buy seed and to sell the requisite oil and seedcake at the lowest and highest points, respectively, of the seasonal market cycles.

The Group is currently in the process of trial sampling with two large European based companies for the export of its crude Jatropha oil for applications in the leather tanning and biofuel markets. The Group is additionally in discussions with a multinational trader for the export of the Group's crude castor oil.

In order to drive the scalability of the business, management is currently in the process of exploring other domestic or export opportunities for non-edible seed and oil products.

Quinvita sale

In April 2010, the Group sold substantially all of the Jatropha plant science and technology activities, excluding its animal feed programme, to Quinvita Limited ("Quinvita"), a company formed by three previous members of management.

In April 2012, the Group concluded the sale of the remainder of the Animal Feed intellectual property assets to Quinvita for cash consideration of £300,000 and converted its holding of preference shares in the capital of Quinvita to a senior loan of £372,000. The loan attracts interest and is repayable by Quinvita at any time before April 2017.

Principal risks and uncertainties

The attention of shareholders is drawn to the Directors' Report which sets out the principal risks and uncertainties faced by the Group.

Going concern

The financial statements have been prepared on a going concern basis which assumes that the Company and the Group will continue in operating existence for the foreseeable future and meet its liabilities as they fall due. There are material uncertainties that the Directors have had to consider in deciding to prepare the financial statements on the going concern basis, which are summarised below.

Business planning uncertainty

Following the appointment of Steven Rudofsky and Nicholas Myerson on 24 June 2011, the Board commenced a fundamental review of the business. The review concluded that a strategy of producing, procuring and trading oils from multiple non-edible oilseed types offered the most viable long term prospects for the Group. Whilst the Board is confident it can deliver a non-edible oilseeds based strategy that is viable and cash generative over the longer term, until the business plan is finalised and executed over a number of harvest cycles, the Board cannot assess with certainty the implications of pursuing the revised strategy.

Funding uncertainty

The Group concluded a successful fundraising exercise in November 2011. The Directors informed the market at the time that they expected an additional fundraising would need to be initiated during the latter half of 2012. The Directors now believe that trading in line with the business plan and forecasts show that the Group will require additional cash funding during the second quarter of 2013. The Board believes that it retains the support of major shareholders for its plans. However, if the Directors are unable to secure the appropriate level of support for the strategy and associated future fundraising, the Company and the Group will be unable to continue as a going concern.

Directors' view

After making enquiries and considering these uncertainties, the Directors conclude that the implications of the business plan review and whether funding can be secured before cash resources are depleted are material uncertainties which may cast significant doubt about the Group and Company's ability to continue as a going concern in their current form. The Directors believe that these uncertainties can be managed and mitigated and the Directors have a reasonable expectation that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future. Consequently the Directors believe that it is appropriate to prepare the financial statements on a going concern basis.

Should the business strategy not fulfil expectations and not generate cash for the Group, then the resultant restrictive ability to implement or fund the Group's business plan would mean the going concern basis would be invalid and adjustments may have to be made to reduce the value of the assets to their recoverable amount, to provide for any further liabilities which might arise and to reclassify fixed assets and long term liabilities to current assets and current liabilities.

Financial statements for 18 month period ended 30 June 2012

In December 2011, the Board changed the accounting reference date from 31 December to 30 June to align the accounting year end of the Group to the Indian Jatropha harvest season.

The financial results for the 18 month period ended 30 June 2012 reflect the activities prior to, during, and following the business review conducted by the new Board. As part of the review, operations in Indonesia and Zambia were closed down, and the Animal Feed business within the remaining Science and Technology sector was disposed of. All Science and Technology activity was reclassified as discontinued.

Group revenue was £0.9m (2010: £0.1m) for the period. The increase was due to an increased tonnage of vegetable oils sold, to 825 tonnes in the 18 month period.

The business achieved a positive throughput margin on all varieties of oil. Average processing costs were, however, in excess of throughput margin. This was due to two onerous fixed lease mills contracts which will have been terminated by the end of 2012, historical committed costs from previous management, and an adverse movement in castor prices, resulting in an impairment charge to cost of sales from inventory during the period. The knowledge gained from this season's expelling has resulted in improved practices amongst staff and the sourcing of favourable tolling contracts on a per kilogram of grain basis. The Directors are confident that concepts learned and changes applied to the business will generate gross profits.

Administration expenses were £3.0m for the 18 month period compared with £3.4m for the 12 month period in 2010 as a result primarily of withdrawing from the Indonesian and Zambian operations, and reducing the numbers of staff in the UK and India.

Interest received of £26,000 (2010: £35,000) relates to cash held on deposit in the UK (£13,400) and India (£6,000) plus £6,200 of accrued interest from the Quinvita receivable.

Group policy is to charge foreign exchange fluctuations on long term loans and equity in foreign subsidiaries with continuing operations to a foreign exchange equity reserve. Once an overseas subsidiary becomes discontinued, the foreign exchange reserve is released to the income statement. As a result of withdrawing from Indonesia and Zambia, finance costs include £0.3m in foreign exchange costs from impairment of loans in local currency and in foreign exchange equity reserves being charged to the income statement.

The loss on continuing activities before taxation was £3.7m (2010: £3.3m) and the loss per ordinary share was 2.3p (2010: 4.8p).

The Board

Barclay Forrest and Martin Jarvis left the Board on 14 July 2011 and 22 December 2011, respectively. The Board would like to thank them for their contribution to the business.

Nicholas Myerson and I joined the board as Executive Directors on 24 June 2011.

Ravi Jose joined the Board as an Executive Director on 26 July 2012. Graham Woolfman and Michael Moquette joined the Board as Non-Executive Directors on 14 July 2011 and 4 May 2012, respectively.

Staff

The period since June 2011 has been a time of very significant change for the Group. Operationally things remain challenging as the Group finalises the business model which the Board expects will enable profitability to be achieved. The Board would like to thank all of the staff for the capability, commitment and hard work that they have shown in what has been a challenging and fast-moving corporate environment.

Conclusion

The Board believes the Group is progressing towards achieving financial stability. This is dependent on developing and implementing a business plan that can result in scalability of the Group`s operations and a pathway to profitability.

There has been a significant shift in the focus of the Group and it is no longer dependent on biofuel legislation and the successful planting of one oilseed crop.

However, the business plan will require further funding in order for the Group to ultimately achieve profitability. The Board remains confident regarding procuring future funding based in part on the progress achieved by the Group over the last sixteen months.

I would like to thank our shareholders for their interest and support through a difficult, challenging and exciting time for the business.

Steven Rudofsky

Executive Chairman

25 October 2012

Directors and advisors

Steven Rudofsky

Executive Director, 50

Steven began his career working for Marc Rich & Co. AG and Glencore AG where he traded both soft commodities and Ferro Alloys in Rotterdam and Zug. Thereafter he held senior management positions in London at Aletri Limited (Motor Oil Hellas), TransCanada Pipeline Ltd, Credit Agricole CIB and Crown Resources (Alfa Group of Russia). Since 2003, Steven has been focused on property development in Poland through Huntington Polska whilst also consulting on various commodity projects in Europe, North America, Middle East and Asia. Steven holds a BA cum laude in History and International Relations from Clark University and a JD from Emory University. He has been a member of the New York Bar since 1988.

Nicholas Myerson

Executive Director, 27

Nicholas began his career as part of the corporate finance team at Dubai World, focusing on real estate and infrastructure investments in the Chinese, Indian, and Polish markets. Nicholas was until recently head analyst for Salamanca Capital, a London based private equity group, where he was responsible for the firm's infrastructure, commodity and mining investment portfolios. Nicholas holds a MA in Law from Cambridge University. Nicholas is the son of former NEOS Resources plc Chairman, Brian Myerson, who is Executive Chairman of Principle Capital Group whose managed funds hold 25.4% of NEOS's ordinary shares. However, Nicholas confirms he is not a representative of the Principle Capital Group or its managed funds.

Ravi Jose

Executive Director, 32

Ravi was engaged by NEOS as a consultant in September 2011 with a mandate to assist the Board of Directors in assessing the strategic options of its Indian operations. He is a Swiss national of Indian origin and is fluent in several languages including Hindi and Malayalm. Prior to joining NEOS, he worked in Corporate Treasury at McCain Foods and Specsavers, and in various Corporate Strategy roles at SICPA and Siegwerk. He is a Chartered Financial Analyst (CFA) charter holder.

Graham Woolfman

Non-executive Director, 55

Graham is a Fellow of the Institute of Chartered Accountants in England and Wales, and previously a partner and head of Corporate Finance at a major medium size UK firm. His investment management and Board activities have included companies across a range of sectors, including technology related, clean tech recycling and renewables, general service based, and financial services sectors. He is a director of a number of unquoted companies, and has served as a director of publicly quoted and listed companies. Graham is currently Managing Director of Intrust Corporate Finance Limited, a corporate finance advisory and consulting company.

Michael Moquette

Non-executive Director, 60

Michael Moquette has over 20 years experience in commercial and investment banking in Europe and North America, including, most recently, CIBC. He is currently Trustee and Chairman of the Investment Committee of two major family trusts and Managing Partner for Equinoxe Investments SA, a family office active in private wealth management and real-estate development. He is a director of Equinoxe Real Estate Partners SA, Trois Perles S.A., CSTS Sarl, GC Chart Ltd and Domaine d'Orsay S.A. In addition, he has acted as a specialist investment advisor to IRR Capital, Universal Management Services and Dombes S.A.

Company Secretary

Marie Edwards

Registered office

16 Great Queen Street

London WC2B 5DG

Registered number

5212852

Broker and nominated advisor

WH Ireland Limited

24 Martin Lane

London EC4R 0DR

Bankers

Barclays Bank plc

PO Box 378

71 Grey Street

Newcastle upon Tyne NE99 1JP

Auditors

Grant Thornton UK LLP

1020 Eskdale Road

IQ Winnersh

Wokingham

Berkshire RG41 5TS

Solicitors

Fladgate LLP

16 Great Queen Street

London WC2B 5DG

Registrars

Capita IRG plc

The Registry

34 Beckenham Road

Kent BR3 4TU

Directors' report

The Directors present their report and the audited financial statements for NEOS Resources plc for the 18 month period ended 30 June 2012.

Principal activity

The Company's principal activity is that of a holding company. The Company is the parent company of a group of companies engaged in the procurement, production and trading of non-edible oilseed grains and oils.

Review of business

A review of the year's activities, financial performance and future prospects are contained in the Executive Chairman's Statement which forms part of this Directors' Report

During the period, the ongoing business consisted principally of one business group - Operations. During the period, the remaining Science & Technology Animal Feed project was sold.

In the 18 months ending 30 June 2012, the Group made significant progress towards establishing itself as a producer, supplier and trader of non-edible oilseed oils and the seedcake by-product. The Group, now concentrating in India, collected 3,706 tonnes of grain, produced 1,198 tonnes of non-edible vegetable oil and 2,666 tonnes of seedcake.

The remaining Animal Feed section of the Science & Technology business group was sold in April 2012 to Quinvita Limited. Quinvita Limited had bought the original Science & Technology business, the approval given by shareholders at a general meeting held in December 2010.

The decision to focus solely on production of oil and its co-products means the business still retains the primary activities to deliver shareholder value. Further details of the ongoing business and the disposal are in the Chairman's Statement and the Report of the Chief Executive Officer.

Principal risks and uncertainties

The principal risks and uncertainties facing the Group are assessed as funding risk, commercial risk, biological risk, contractual risk, lease reversion risk, political and legislative risk, and financial risk.

Funding risk

The Group will continue to have a cash requirement until it becomes cash generating. The Group has restructured its activities to concentrate on non-edible oilseed operations that are likely to generate short to medium term revenue. The Group anticipates that this activity will position the business more attractively for investors to raise new funds during 2012-13. However, there is a risk that future funding will not materialise, in which case the activities of the Group may no longer be sustainable. The directors are currently working on fundraising plans, and communicating with shareholders and investors. This process is ongoing and under review.

Commercial risk 

Business volumes are anticipated to increase as a result of increasing working capital turnover. New technical, operational and commercial challenges may arise as a result of this increase in scale. There is a substantial challenge to put in place or access further the infrastructure needed to collect, process, ship and distribute the products in viable quantities. The Group manages these risks by employing staff and engaging third parties with relevant skills to address these issues when they arise.

The Group has seen large fluctuations in market prices for its feedstock products (non-edible oilseed grains) and for its output products (non-edible oils and the by-product seedcake). The Group is developing strategies to mitigate the risk of excessive price movements and to take advantage of price movements which work in favour of the Group.

Biological risk

There are inherent biological risks associated with any agricultural dependant activity, including pests, disease, drought, excessive rainfall and other stress factors. The Group continues to learn from experience and apply the lessons to manage biological risk.

Contractual risk

There are inherent uncertainties and risks associated with entering into contracts with suppliers, customers, financial institutions, landowners and employees. It is possible that such contracts may become unenforceable and financial commitments may become onerous if circumstances change. The Group attempts to manage this risk through establishing good working relationships and dialogue with contracted parties.

Lease reversion risk

The Group has disclosed a contingent liability related to the Bromborough refining site sold in July 2010. Specifically, the group will be liable for lease costs on two sites adjacent to the Bromborough property if the purchaser of the Bromborough sites defaults on the leases. If lease reversion occurs, any liability could be mitigated by sub-letting the leased sites.

Political and legislative risk

The Group operates on a global basis and must comply with a range of local legislative requirements and regulations that include: legal, regulatory and taxation requirements; trade standards; trade and transportation restrictions; and tariffs. Furthermore, the Group depends on the position and continued support of various third parties, including national governments. Any of these factors may be subject to changes which could adversely affect the Group's ability to do business, or the performance of its business.

A significant number of the world's key economies either have or are in the process of implementing mandatory biodiesel blends and other policies to encourage the use of greener road transport fuel. In addition, many countries have incentives for renewable electricity generation, including generation using vegetable oil as a feedstock. However, these policies continue to be opposed by environmental pressure groups concerned about the sustainability of biofuels. The policies that encourage the adoption of vegetable oil-based biofuels in national markets may be subject to policy change. The Group has expanded its outlet portfolio to encompass different uses of non-edible oilseed products to mitigate against the over reliance of sales into the biofuel industry.

Financial risk

The Group's results from its operations overseas could be adversely affected by currency fluctuations and dividend and exchange controls. The Group looks to limit undue counterparty exposure, ensure sufficient working capital exists and monitor the management of risk at a country level. This is achieved by negotiating contracts in our regions of operation using local currencies and regulations.

Operation key performance indicators (KPI's)

The Group manage the business by monitoring key performance indicators. The key performance indicators are quantity of grain collected, percentage oil yield from the grain, quantity of oil produced, grain price achieved, oil price achieved, and unit cost of production of oil.

Safety, health and environment (SHE)

The Board considers managing the safety and health of our people and protecting the environment as a corporate governance priority.

Nicholas Myerson, Chief Operating Officer, is ultimately responsible for SHE performance in the Group and also has functional responsibility. Fundamental to our management of SHE is the recognition that it is a line management responsibility and should not be delegated to a function. It is a responsibility of all managers and employees and this is regularly communicated and reinforced. We aim to continually test and improve SHE performance across our business.

During 2011-12 there were two incidents. Communications and instructions were forwarded to staff to ensure repeat incidents do not occur.

The key features of SHE include: a formal regime for reporting all incidents, including "near hits"; local investigation and measurement of performance to international standards; and assessment of key risks for each locality, in particular travel issues, field work and wildlife.

Corporate and social responsibility

The Group is committed to acting ethically and to contributing to the economic development of the regions where we operate. We believe strongly in the need to improve the quality of life of farmers and farming communities in the developing world.

Disabled employees

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled every effort is made to ensure that their employment with the Group continues and that appropriate training is arranged. It is the policy of the Group that the training, career development and promotion of disabled persons should, as far as possible, be identical with that of other employees.

Directors

The current Directors are listed in the Directors and Advisors section of this report. Barclay Forrest and Martin Jarvis left the Board on 14 July 2011 and 22 December 2011, respectively. Steven Rudofsky and Nicholas Myerson joined the board as Executive Directors on 24 June 2011 with Steven Rudofsky replacing Barclay Forrest as Chairman on 14 July 2011. Ravi Jose joined the Board as Executive Director on 26 July 2012. Graham Woolfman and Michael Moquette joined the Board as Non-Executive Directors on 14 July 2011 and 4 May 2012 respectively.

Dividends and transfers to reserves

No dividend has been paid or proposed for the period (2010 - £nil).

Corporate governance

As an AIM-listed company, there is no requirement to comply with the revised UK Corporate Governance Code, issued by the Financial Reporting Council in 2010 (the "Code"). However, the Directors recognise the value of the provisions set out in the Code and have decided to provide limited corporate governance disclosures based on certain of the disclosures required of a fully listed company.

The Board has established an Audit Committee, a Remuneration Committee, and a Nominations Committee, each with formally delegated duties and responsibilities. Each committee comprises Graham Woolfman (Chairman), Steven Rudofsky and Michael Moquette. Barclay Forrest and Martin Jarvis stepped down from the three committees when they left the Board. Nicholas Myerson stepped down from the three committees upon the appointment of Michael Moquette in May 2012.

The Audit Committee receives and reviews reports from management and the Group's auditors relating to the interim and annual financial statements and the accounting and internal control systems in use throughout the Group. The Audit Committee has unrestricted access to the Group's auditors.

The Remuneration Committee reviews the scale and structure of the Executive Directors' remuneration and the terms of their service contracts. The remuneration and terms and conditions of appointment of the Non-Executive Directors are set by the Board. The Remuneration Committee also administers the Group's share option scheme.

Supplier payment policy

It is Group policy to agree and clearly communicate the terms of payment as part of the commercial arrangements negotiated with suppliers and then to pay in accordance with those terms based upon the timely receipt of an accurate invoice. The holding company does not trade. The trade creditors' days of the Group for the 18 month period ended 30 June 2012 were 7 days calculated in accordance with the requirements set down in the Companies Act 2006.

Political and charitable donations

During the period the Group has made no political or charitable donations (2010: £nil)

Serious loss of capital requirement

Under the Companies Act 2006, where the Group's net assets are half or less of its called-up share capital, the Directors are required to convene a general meeting to consider whether any, and if so what, steps should be taken to deal with the situation. Accordingly, a general meeting was held on 29 June 2010 to discuss this matter. The Board presented its ongoing plans for the business. No resolutions were proposed at the meeting.

Auditors

Grant Thornton UK LLP was appointed during the year to fill a casual vacancy and will be proposed for reappointment at the forthcoming Annual General Meeting in accordance with Section 489(4) of the Companies Act 2006.

Approved by the Board of Directors and signed on behalf of the Board.

Steven Rudofsky

Executive Chairman

25 October 2012

Company number 5212852

Statement of Directors' responsibilities

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the company and group for that period. In preparing these financial statements, the directors are required to:

·; select suitable accounting policies and then apply them consistently;

·; make judgments and accounting estimates that are reasonable and prudent;

·; state whether applicable IFRSs have been followed, subject to any material departures disclosed and explained in the financial statements;

·; prepare the financial statements on the going concern basis unless it is inappropriate to presume the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors confirm that:

·; so far as each director is aware, there is no relevant audit information of which the company's auditor is unaware; and

·; the directors have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 

Cautionary statement regarding forward-looking statements

This Annual Report has been prepared for the members of the Company and no one else. The Company, its Directors, employees or agents do not accept or assume responsibility to any other person in connection with this document and any such responsibility or liability is expressly disclaimed.

This Annual Report contains certain forward-looking statements with respect to the principal risks and uncertainties facing NEOS Resources plc. By their nature, these statements and forecasts involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. The forward-looking statements reflect the knowledge and information available at the date of preparation of this Annual Report, and will not be updated during the year. Nothing in this Annual Report should be construed as a profit forecast.

Independent auditor's report

to the members of NEOS Resources plc

We have audited the financial statements of NEOS Resources plc for the period ended 30 June 2012 which comprise the consolidated income statement, the consolidated statement of comprehensive income, the consolidated and parent company balance sheets, the consolidated and parent company statements of changes in equity, the consolidated and parent company statements of cash flow and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditor

As explained more fully in the Statement of Directors' Responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the APB's website at www.frc.org.uk/apb/scope/private.cfm.

Opinion on financial statements

In our opinion:

·; the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 30 June 2012 and of the group's and the parent company's loss for the period then ended;

·; the financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union; and

·; the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Emphasis of matter - Going concern

In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure made in note 1 to the financial statements concerning the group and parent company's ability to continue as a going concern. The group and parent company incurred net losses of £3.7m and £5.6m respectively, during the period ended 30 June 2012. As explained in note 1, the company intends to initiate additional fund raising before the second quarter of 2013 in pursuance of, among other matters, a revised strategy of producing, procuring and trading oils from non-edible oilseed types. These conditions, along with the other matters explained in note 1 to the financial statements, indicate the existence of a material uncertainty which may cast significant doubt about the group's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the company was unable to continue as a going concern.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

·; adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

·; the parent company financial statements are not in agreement with the accounting records and returns; or

·; certain disclosures of directors' remuneration specified by law are not made; or

·; we have not received all the information and explanations we require for our audit.

Paul Creasey

Senior Statutory Auditor

for and on behalf of Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants

Reading

25 October 2012

Consolidated income statement

for the 18 month period ended 30 June 2012

No profit and loss account is presented by the Company as permitted by Section 408 of the Companies Act 2006. The Company's loss for the period was £5,580,400 (2010: £9,070,800).

The accompanying notes from an integral part of these financial statements.

Consolidated statement of comprehensive income

for the 18 month period ended 30 June 2012

The accompanying notes from an integral part of these financial statements.

Consolidated balance sheet

at 30 June 2012

These financial statements were approved by the Board of Directors on 25 October 2012.

Steven Rudofsky

Executive Chairman

The accompanying notes from an integral part of these financial statements.

Consolidated statement of changes in equity

for the 18 month period ended 30 June 2012

The accompanying notes from an integral part of these financial statements.

Consolidated cash flow statement

for the 18 month period ended 30 June 2012

The accompanying notes from an integral part of these financial statements.

Company balance sheet

as at 30 June 2012

These financial statements were approved by the Board of Directors on 25 October 2012.

Steven Rudofsky

Executive Chairman

The accompanying notes from an integral part of these financial statements.

Company statement of changes in equity

for the 18 month period ended 30 June 2012

The accompanying notes from an integral part of these financial statements.

Company cash flow statement

for the 18 month period ended 30 June 2012

The accompanying notes from an integral part of these financial statements.

Notes to the financial statements

for the 18 month period ended 30 June 2012

1. Authorisation of financial statements

Fundamental accounting concept

The financial statements have been prepared on a going concern basis which assumes that the Company and the Group will continue in operating existence for the foreseeable future and meet its liabilities as they fall due. There are material uncertainties that the Directors have had to consider in deciding to prepare the financial statements on the going concern basis, which are summarised below.

Business planning uncertainty

The Executive Chairman's Report sets out the strategy of the business and what it is seeking to achieve. Following the appointment of Steven Rudofsky and Nicholas Myerson on 24 June 2011, the Board commenced a fundamental review of the business. The review concluded that a strategy of producing, procuring and trading oils from multiple non-edible oilseed types offered the most viable long term prospects for the Group. Whilst the Board is confident it can deliver a non-edible oilseeds based strategy that is viable and cash generative over the longer term, until the business plan is finalised and executed over number of harvest cycles, the Board cannot assess with certainty the implications of pursuing the revised strategy.

Funding uncertainty

The Group concluded a successful fund-raising exercise in November 2011. The Directors informed the market at the time that an additional fund raising would need to be initiated during the latter half of 2012. Whilst the Directors believe there are sufficient funds to cover overheads until the end of 2013, in order to expand the business, final follow on funding for capital investment ahead of the business becoming cash generative will need to be concluded prior to then. The Board is encouraged by the feedback it has received to date on the willingness of some existing shareholders to participate in a future fund raising. However, if the Directors are unable to secure the appropriate level of shareholder support for the strategy and associated future fund raising, the Company and the Group will be unable to continue as a going concern.

Directors' view

After making enquiries and considering these uncertainties, the Directors conclude that the implications of the business plan review and whether funding can be secured before cash resources are depleted are material uncertainties which may cast significant doubt about the Group and Company's ability to continue as a going concern in its current form. The Directors believe that these uncertainties can be managed and mitigated and the Directors have a reasonable expectation that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future. Consequently the Directors believe that it is appropriate to prepare the financial statements on a going concern basis.

Should the business strategy not fulfil expectations and not generate cash for the Group, then the resultant restrictive ability to implement or fund the Groups business plan would mean the going concern basis be invalid and adjustments may have to be made to reduce the value of the assets to their recoverable amount, to provide for any further liabilities which might arise and to reclassify fixed assets and long term liabilities to current assets and current liabilities.

Prior year restatement

The prior period balance sheet has been restated to reflect assets and liabilities held for sale. The Directors do not consider it appropriate to include a third balance sheet as the numbers stated would not alter from those previously reported.

Authorisation of financial statements

The financial statements of the Company and its subsidiaries for the 18 month period ending 30 June 2012 were authorised by the Board of Directors on 25 October 2012 and the balance sheet was signed on the Board's behalf by Steven Rudofsky, Executive Chairman. The Company is a public limited company registered in England and Wales. The Company's ordinary shares are traded on AIM.

2. Summary of significant accounting policies

Basis of preparation

The Group's financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union as they apply to the financial statements of the Group for the 18 month period ended 30 June 2012 and applied in accordance with the Companies Act 2006.

The Group financial statements are presented in Sterling and all values are rounded to the nearest thousand pounds (£000) except where otherwise indicated.

Key sources of estimation uncertainty

The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. The nature of estimation means that actual outcomes could differ from those estimates. The key sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Impairment of non-financial assets

The Group assesses whether there are any indicators of impairment for all non-financial assets at each reporting date. Goodwill and other indefinite life tangible and intangible assets are tested for impairment annually and at other times when there are indicators that the carrying amounts may not be recoverable. When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows. Where realisable value is used as the basis of valuation, management must estimate the net income realisable from the sale of the asset and apply an appropriate discount rate to the cash flows arising.

Basis of consolidation

The Group financial statements consolidate the financial statements the Company and the entities it controls drawn up to 30 June each year. Prior to December 2011, the accounting reference date was 31 December.

Subsidiaries are consolidated from the date of their acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. Control comprises the power to govern the financial and operating polices of the investee so as to obtain benefit from its activities and is achieved through direct or indirect ownership of voting rights, currently exercisable or convertible voting rights, or by way of contractual agreement.

The financial statements of subsidiaries are prepared for the same reporting date as the parent company and are based on consistent accounting policies. All inter-company balances and transactions, including unrealised profits arising from intra-group transactions, are eliminated. Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries that is not held by the Group and is presented within equity in the consolidated balance sheet, separately from the parent company's shareholders' equity. When a subsidiary is not wholly owned by the Group and it incurs losses, amounts allocated to the minority are recognised even if this results in the non-controlling interests having a deficit balance.

Interests in joint ventures

A joint venture is defined in IAS 31 as a 'contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control'.

Where the joint venture is established through an interest in a company, partnership or other entity (a jointly controlled entity), the Group recognises its interest in the entity's assets and liabilities using the equity method of accounting. Under the equity method, the interest in the joint venture is carried in the balance sheet at cost plus post-acquisition changes in the Group's share of its net assets, less distributions received and less any impairment in value of individual investments. The Group income statement reflects the share of the jointly controlled entity's results after tax. The Group statement of recognised income and expense reflects the Group's share of any income and expense recognised by the jointly controlled entity outside profit and loss.

Any goodwill arising on the acquisition of a jointly controlled entity, representing the excess of the cost of the investment compared to the Group's share of the net fair value of the entity's identifiable assets, liabilities and contingent liabilities, is included in the carrying amount of the jointly controlled entity and is not amortised. To the extent that the net fair value of the entity's identifiable assets, liabilities and contingent liabilities is greater than the cost of the investment, a gain is recognised and added to the Group's share of the entity's profit or loss in the period in which the investment is acquired.

Financial statements of jointly controlled entities are prepared for the same reporting period as the Group. Where necessary, adjustments are made to bring the accounting policies into line with those of the Group to take into account fair values assigned at the date of acquisition and to reflect impairment losses where appropriate. Adjustments are also made in the Group's financial statements to eliminate the Group's share of unrealised gains and losses on transactions between the Group and its jointly controlled entities.

The Group ceases to use the equity method on the date from which it no longer has joint control over, or significant influence in, the joint venture.

Where the financial statements of a jointly controlled entity used in the preparation of the financial statements are prepared as of a reporting date that is different from that of the Group, interim accounts are drawn up as at the Group reporting date and adjustments are made for the effects of significant transactions or events falling within the Group reporting period.

Financial assets

Financial assets are recognised when the Group becomes party to the contracts that give rise to them and are classified as loans and receivables, held-to-maturity investments or fair value through the income statement as appropriate. Financial assets also include cash and cash equivalents, trade and other receivables, other investments and derivative financial instruments. The Group determines the classification of its financial assets at initial recognition. When financial assets are recognised initially, they are measured at fair value, being the transaction price plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.

The subsequent measurement of financial assets classified as fair value financial assets is as follows:

The fair value of quoted investments is determined by reference to bid prices at the close of business on the balance sheet date. When there is no active market, fair value is determined using valuation techniques. These include using recent arm's length market transactions, reference to the current market value of another instrument which is substantially the same discounted cash flow analysis and pricing models. Where fair value cannot be reliably estimated, assets are carried at cost.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, do not qualify as trading assets and have not been designated as either fair value through profit and loss or available for sale. Such assets are carried at amortised cost using the effective interest method if the time value of money is significant. Gains and losses are recognised in income when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

Derecognition of financial assets and liabilities

A financial asset or liability is generally derecognised when the contract that gives rise to it is settled, sold, cancelled or expires.

Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, such that the difference in the respective carrying amounts together with any costs or fees incurred are recognised in profit or loss.

Impairment of financial assets

The Group assesses at each balance sheet date whether a financial asset or group of assets is impaired.

Assets carried at amortised cost

If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced with the amount of the loss recognised in administration costs.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal of an impairment loss is recognised in the income statement, to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date.

Intangible assets

Research and development expenditure

The animal feed programme investigates alternative uses for and the removal of anti-nutritional substances from the seedcake (meal) co-product created when oil is extracted from the Jatropha kernel. Any costs incurred in the design and construction of prototype processes and equipment are capitalised as intangible assets and charged against income over the useful economic life of the process. Otherwise costs are expensed to the income statement as incurred.

Software

Software is initially carried at cost and thereafter stated at cost less accumulated amortisation and accumulated impairment losses. Intangible assets with a finite life have no residual value and are amortised on a straight-line basis over their expected useful economic lives of 3-5 years.

The carrying value of intangible assets is reviewed for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. In addition, the carrying value of capitalised development expenditure is reviewed for impairment annually before being brought into use.

Leases

Assets held under finance leases, which transfer to the Group substantially all of the risks and benefits incidental of ownership of the leased item, are capitalised at the inception of the lease, with a corresponding liability being recognised for the lower of the fair value of the leased asset and the present value of minimum lease payments. Lease payments are apportioned between reduction of the lease liability and finance charges in the income statement so as to achieve a constant rate of interest on the remaining balance of the liability. Assets held under finance leases are depreciated over the shorter of the estimated useful life of the asset and the lease term.

Leases where the lessor retains a significant portion of the risks and benefits of ownership of the asset are classified as operating leases and rentals payable are charged in the income statement on a straight-line basis over the lease term.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less. Restricted deposits held as security are classified as financial assets rather than cash where the terms of the deposit mean that the balance cannot be readily converted to finance the day-to-day operations of the Group.

For the purpose of the consolidated cash flow statement, cash and cash equivalents are as defined above, net of outstanding bank overdrafts.

The Group endeavours to maintain sufficient cash at bank and in hand to fund operations in the short-term and invests surplus funds in term deposits to maximise interest revenue.

Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation and impairment losses. Cost comprises the aggregate amount paid and the fair value of any other consideration given to acquire the asset and includes costs directly attributable to making the asset capable of operating as intended. Borrowing costs attributable to assets under construction are recognised as an expense as incurred.

Depreciation is provided on all property, plant and equipment, other than land, on a straight-line basis over the expected useful life as follows:

The carrying value of property, plant and equipment is reviewed for impairment and are written down immediately to their recoverable amount if events or changes in circumstance indicate the carrying value may not be recoverable. Useful lives and residual values are reviewed annually and where adjustments are required these are made prospectively.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the derecognition of the asset is included in the income statement in the period of derecognition.

Where assets are held under finance leases and there is reasonable certainty that the Group will obtain ownership of the asset by the end of the lease term (based on best estimates as at the balance sheet date), the asset is depreciated over its expected useful economic life. Otherwise, assets held under finance lease are depreciated over the shorter of the lease term and its useful economic life.

Employee benefits

Defined contribution plans

The Group's funding of the defined contribution plans is charged to the income statement in the same year as the related service is provided.

Leave benefits

Annual leave is provided for over the period that the leave accrues.

Foreign currency translation

The individual financial statements of each Group company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each Group company are expressed in Pounds Sterling, which is the functional currency of the Company, and the presentation currency for the Group consolidated financial statements.

In preparing the financial statements of the individual companies, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences are recognised in profit or loss in the period in which they arise except for:

·; exchange differences on transactions entered into to hedge certain foreign currency risks; and

·; exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on discontinuation of activities in the foreign operation or partial disposal of the net investment.

For the purposes of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the date of transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity.

Business combinations and goodwill

Business combinations on or after 1 January 2006 are accounted for under IFRS 3 using the purchase method. Any excess of the cost of the business combination over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities is recognised in the balance sheet as goodwill and is not amortised. To the extent that the net fair value of the acquired entity's identifiable assets, liabilities and contingent liabilities is greater than the cost of the investment, a gain is recognised immediately in the income statement. Any goodwill asset arising on the acquisition of equity accounted entities is included within the cost of those entities. The Group elected to adopt the revised IFRS 3 issued in January 2008 for the 2009 financial statements. The only material impact of the adoption on the Group's 2009 acquisition was that the revised IFRS 3 required the costs of acquisition to be recognised as an expense. Other changes include altering the treatment of non-controlling interests (formerly minority interests) with an option to recognise these at full fair value as at the acquisition date and a requirement for previously held non-controlling interests to be fair valued as at the date control is obtained, with gains and losses recognised in the income statement.

After initial recognition, goodwill is stated at cost less any accumulated impairment losses, with the carrying value being reviewed for impairment, at least annually and whenever events or changes in circumstances indicate that the carrying value may be impaired.

For the purpose of impairment testing, goodwill is allocated to the related cash-generating units expected to benefit from the combination's synergies and monitored by management. Where the recoverable amount of the cash-generating unit is less than its carrying amount, including goodwill, an impairment loss is recognised in the income statement. On disposal of a cash-generating unit, the allocated goodwill is taken into account when determining the gain or loss on disposal to be recognised in the income statement.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost includes all costs incurred in bringing each product to its present location and condition, as follows:

Raw materials, consumables and goods held for resale - purchase cost on a first-in, first-out basis

Work in progress and finished goods - cost of direct materials and labour plus attributable overheads based on a normal level of activity, excluding borrowing costs

Net realisable value is based on estimated selling price less any further costs expected to be incurred to completion and disposal.

Trade and other receivables

Trade receivables, which generally have 30 day terms, are recognised and carried at the lower of their original invoiced value and recoverable amount. Provision is made where there is objective evidence that the Group will not be able to recover balances in full. Balances are written off when the probability of recovery is assessed as being remote.

Interest bearing loans and borrowings

Loans and borrowings are recognised when the Group becomes party to the related contracts and are measured initially at fair value, being the proceeds received less directly attributable transaction costs.

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method and taking into account any issue costs and any discount or premium on settlement.

Gains and losses arising on the repurchase, settlement or other cancellation of liabilities are recognised respectively in finance revenue and finance cost.

Provisions

Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. Provisions are discounted to their present values, where the time value of money is material.Any reimbursement that the Group can be virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision.In those cases where the possible outflow of economic resources as a result of present obligations is considered improbable or remote, no liability is recognised.

Income taxes

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted by the balance sheet date.

Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements, with the following exceptions:

·; where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination that at the time of the transaction affects neither the accounting nor taxable profit or loss;

·; in respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future; and

·; deferred income tax assets are recognised only to the extent that it is probable that taxable profits will be available against which the deductible temporary differences, carried forward tax credits or tax losses can be utilised.

Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the related asset is realised or liability is settled, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

Tax is charged or credited directly to equity if it relates to items that are credited or charged to equity. Otherwise tax is recognised in the income statement.

Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates, VAT and other sales taxes or duty. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on dispatch of the goods.

Interest income

Finance revenue is recognised as interest accrued using the effective interest method, that is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instruments to its net carrying amount.

Borrowing costs

Borrowing costs on eligible capital projects are capitalised. Other borrowing costs are recognised as an expense when incurred.

Share-based payments

Equity-settled transactions

The cost of equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted and is recognised as an expense over the vesting period, which ends on the date on which the relevant employees become entitled to the award. Fair value is determined by an external valuer using the Black-Scholes Option Pricing model. In valuing equity-settled transactions, no account is taken of any vesting conditions, other than conditions linked to the price of the shares of the Company (market conditions).

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance conditions are satisfied.

At each balance sheet date before vesting, the cumulative expense is calculated, representing the extent to which the vesting period has expired and management's best estimate of the achievement or otherwise of non-market conditions and of the number of equity instruments that will ultimately vest or, in the case of an instrument subject to a market condition, be treated as vesting as described above. The movement in cumulative expense since the previous balance sheet date is recognised in the income statement, with a corresponding entry in equity.

Where the terms of an equity-settled award are modified or a new award is designated as replacing a cancelled or settled award, the cost based on the original award terms continues to be recognised over the original vesting period. In addition, an expense is recognised over the remainder of the new vesting period for the incremental fair value of any modification, based on the difference between the fair value of the original award and the fair value of the modified award, both as measured on the date of the modification. No reduction is recognised if this difference is negative.

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any cost not yet recognised in the income statement for the award is expensed immediately. Any compensation paid up to the fair value of the award at the cancellation is deducted from equity, with any excess over fair value being treated as an expense in the income statement.

Assets held for sale

When an asset or disposal group's carrying value will be recovered principally through a sale transaction rather than through continuing use, it is classified as held for sale and stated at the lower of carrying value and fair value less costs to sell. No depreciation is charged in respect of non-current assets classified as held for sale.

New standards and interpretations

The accounting policies adopted in the preparation of the Group's annual financial statements are consistent with those followed in the preparation of the annual financial statements for the year ended 31 December 2010.

The amendments to the following standards did not have any impact on the accounting policies, financial position or performance of the Group:

·; Various - Annual improvements to IFRS - effective various dates but most 1 January 2011.

·; IFRS 1 - Amendment - First time adoption of IFRS - effective 1 July 2010.

·; IAS 24 - Amendment - Related party disclosures - effective 1 January 2011.

·; IAS 32 - Amendment - Financial instruments: presentation - effective 1 February 2010.

·; IFRIC 14 - Amendment - IAS 19 limit on a defined benefit asset - effective 1 January 2011.

·; IFRIC 19 - Extinguishing financial liabilities with equity instruments - effective 1 July 2010.

The Directors do not anticipate that the adoption of these standards will have a material impact on the Group's financial statements in the period of initial application.

The IASB and IFRIC have issued the following standards and interpretations with an effective date after the date of these financial statements that have not yet been endorsed by the European Union:

·; IFRS 9 Financial Instruments (effective 1 January 2015)

·; IFRS 10 Consolidated Financial Statements (effective 1 January 2013)

·; IFRS 11 Joint Arrangements (effective 1 January 2013)

·; IFRS 12 Disclosure of Interests in Other Entities (effective 1 January 2013)

·; IFRS 13 Fair Value Measurement (effective 1 January 2013)

·; IAS 19 Employee Benefits (Revised June 2011) (effective 1 January 2013)

·; IAS 27 (Revised), Separate Financial Statements (effective 1 January 2013)

·; IAS 28 (Revised), Investments in Associates and Joint Ventures (effective 1 January 2013)

·; Deferred Tax: Recovery of Underlying Assets - Amendments to IAS 12 Income Taxes (IASB effective date 1 January 2012, not yet adopted by the EU)

·; Disclosures - Offsetting Financial Assets and Financial Liabilities - Amendments to IFRS 7 (effective 1 January 2013)

·; Offsetting Financial Assets and Financial Liabilities - Amendments to IAS 32 (effective 1 January 2014)

·; Mandatory Effective Date and Transition Disclosures - Amendments to IFRS 9 and IFRS 7 (effective 1 January 2015)

·; Government Loans - Amendments to IFRS 1 (effective 1 January 2013)

·; IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine (effective 1 January 2013)

·; Annual Improvements 2009-2011 Cycle (effective 1 January 2013)

·; Transition Guidance - Amendments to IFRS 10, IFRS 11 and IFRS 12 (effective 1 January 2013)

The Directors do not anticipate that the adoption of amendments or revisions to the above standards will have a material impact on the Group's financial statements in the period of initial application.

3. Segmental information

For management purposes, the Group is organised into business units according to the nature of the products and services and has the following operating segments:

·; The Operations segment is managing the outgrower network, collecting grain and selling crude castor, Jatropha and other non-edible oilseeds.

·; The Science & Technology segment provided Jatropha plant science and associated technical consulting services to third-parties, breeds seeds and seedlings for commercial planting and undertook research and development activities on Jatropha and its co-products. In December 2010, the disposal of a substantial portion of this segment was effected, with the exception of the animal feed activity. The effective financial date of disposal was 1 November 2010. For the purposes of segmental reporting, the agronomy and breeding activities that were disposed of in 2010 are classified as discontinued. As a result of a business review conducted during the period, the Board took the view to place the Animal Feed programme on hold. In April 2012, the Animal Feed programme was sold to Quinvita, the purchaser of the original Science & Technology segment. The Animal Feed activity has been reclassified as discontinuing and the comparative has been restated on that basis.

·; The Refining & Trading segment is an operation that was discontinued in 2008. In 2011-12, activity in this segment related to remaining refining and trading sites situated in the UK.

No operating segments have been aggregated to form the above reportable operating segments.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss which in certain respects, as explained in the table below, is measured differently from profit or loss in the consolidated financial statements. Group financing (including finance costs and finance revenue), taxation and central administration are managed on a group basis and are not allocated to operating segments.

The following tables present revenue and profit and certain asset and liability information regarding the Group's business segments for the 18 month period ended 30 June 2012 and the year ended 31 December 2010.

Segment revenue and results

The accounting policies of the reportable segments are the same as the Group's accounting policies described in note 2. Segment profit represents the profit earned by each segment without allocation of central administration costs, investment gains or losses, unallocated finance revenue, unallocated finance costs and taxation. This is the measure used for reporting to the Group's chief operating decision makers for the purpose of allocation and assessment of segment performance.

Loss before tax on continuing operations

Segment assets

For the purposes of monitoring segment performance and allocating resources between segments, the Group's chief operating decision makers monitor the tangible, intangible and financial assets attributable to each segment. All assets are allocated to reportable segments except assets relating to central administration.

Segment liabilities

For the purposes of monitoring segment performance and allocating resources between segments, the Group's chief operating decision makers monitor the operating and financial liabilities attributable to each segment. All liabilities are allocated to reportable segments except liabilities relating to central administration.

Capital expenditure

Geographical information

The Group's revenue from external customers and information (including discontinued operations) about its segment assets (non-current assets excluding financial instruments, deferred tax assets, post-employment benefit assets, and rights arising under insurance contracts) by geographical location are detailed below:

4. Revenue and administrative costs

Revenue recognised in the income statement is analysed as follows:

Group operating loss is stated after charging / (crediting):

As part of the Business Review, the Board withdrew from Indonesia and Zambia. The contribution to the Group's loss from these regions for the period was a loss of £900,600. The Board did not consider either Indonesia or Zambia to represent major geographical business locations.

5. Staff numbers and costs

The average number of persons employed by the Group (including Directors) during the year, analysed by category was as follows:

The costs incurred in respect of these employees (including Directors) were:

Other pension costs consist of contributions to defined contribution pension plans.

6. Key management remuneration

(a) In 2010, post employment benefits for Martin Jarvis consisted of £12,600 in contributions to the defined contribution pension scheme operated by the Group.

(b) In 2010, in addition to remuneration of £139,500, Ben Good received £158,800 in termination benefits. In 2010, post employment benefits for Ben Good consisted of £10,300 in contributions to the defined contribution pension scheme operated by the Group.

(c) Fees paid to third parties in respect of the non-executive directorship in 2010 of Brian Myerson.

The people identified as key management in the table above were also the directors of the Company.

a) Options in issue at 1 January 2011 or the date of appointment if later.

b) These options have been granted as one third exercisable on the first anniversary of their date of grant. Thereafter a further 1/36 vests each month over the next 24 months so that the full amount is capable of being exercised after three years.

c) These options have been granted as one third exercisable on the first anniversary of their date of grant. Thereafter a further 1/36 vests each month over the next 24 months so that the full amount is capable of being exercised after three years. A performance criteria is attached to the exercise of the options. No part of the option shall become exercisable until the Company's reported consolidated results for a six-month period demonstrate that a pre-tax profit in excess of £250,000 for such six months has been achieved, excluding the effects to the profit and loss account relating to the grant vesting or exercise of any options granted to the company.

d) The aggregate amounts of gains made by former Directors on the exercise of share options during the year amounted to £nil (2010: £nil). This represents the market price of the shares in excess of the exercise price on the date the options were exercised.

e) The Share option for John Barclay Forrest lapsed upon cessation of employment or engagement with the Group.

7. Finance revenue and costs

8. Taxation

Tax recognised in the income statement