ann: june q report out

not as bad as feared:

Highlights of the June 2013 Quarter
? Consolidated cash position was $1.23M as at 30 June 2013.
? Capital raised (net of costs) during the quarter - $0.48M.
? Net Operating Cash (Out) Flow for the June 2013 quarter was $0.35M compared to $0.31M for the March 2013 quarter.
? FY2013 Net Operating Cash (Out) Flow reduced by 66% to $1.37M compared to $3.99M for FY2012.
? Revenues for the June 2013 quarter increased to $1.78M compared to $1.13M for the March 2013 quarter and
$0.91M for the June 2012 quarter.
? FY2013 Revenues up 17% to $5.03M versus $4.30M for FY2012.
? Resignation of Dr John Scheirs as Director of Cardia Bioplastics Limited.

Sales Segment Summary Carrier Bags
? Carrier bag sales commenced in Brazil on a small scale and are expected to accelerate.
? Regulatory changes in Australia at State Government and Local Council level triggered compostable bag sales in the June 2013 quarter, particularly in Western Australia, Queensland and Tasmania. This business is also expected to grow over the next two quarters.
Films & Packaging
? Cardia delivered initial sales from new BiohybridTM packaging films developed for the water distribution industry to customers in Canada, Norway and Australia.
Waste Management Products
? Sales of organic waste management products business in China in line with expectations.
? New opportunities being developed in Australia and Europe with expected sales from new customers by 31
December 2013.
? Malaysia organic waste management trials awaiting official approval from Government Authorities.

Cash at Bank on 30 June 2013
? Consolidated cash position was $1.23M as at 30 June 2013. This cash balance included funds of $0.48M raised from share issues in the quarter.
? Net Operating Cash (Out) Flow for the June 2013 quarter was $0.35M compared to $0.31M for the March 2013 quarter.
R&D Tax Concession of $0.39M for FY12 was received during the quarter.
Other than the above, Collections from customers were as per the payment terms negotiated and cash outflows on other working capital were commensurate with sales, manufacturing and trading activities during the quarter.
? Net Operating Cash (Out) Flow for the financial year FY2013 was $1.37M compared to $3.99M for FY2012. The improved Net Operating Cash Flow can be attributed to the cost reduction program that was implemented in June 2012; a reduction in inventory levels and close management of the Company’s working capital.
Capital Raising.
? Cardia was successful in raising $0.48M (net of costs) in the quarter to be used for working capital purposes.
? The funds were raised via a share placement offered to sophisticated investors pursuant to the Company’s
placement capability under ASX Listing Rules 7.1 and 7.1A.
? The terms of offer included issue of 200 million fully paid ordinary shares at an issue price of $0.0025 per share with one free new option for every two new shares subscribed.
? 200 million fully paid ordinary shares were issued during the quarter ulitising the Company’s available placement capacity. 100 million free attaching new options were issued in July 2013, following shareholders’ approval in the General Meeting that was held on 10th July 2013. New Options have an exercise price of $0.0035 and an expiry date of 12 months from date of issue. New Options issued are unlisted securities.
Revenues and sales in June 2013 quarter
? Revenues for the June 2013 quarter were $1.78M compared to $1.13M for the March 2013 quarter and $0.91M for the June 2012 quarter. Revenues were made up of sales of $0.99M from Cardia Bioplastics resins and finished products and $0.79M from wholesale raw material trading.
? Revenues for the financial year FY2013 were $5.03M versus $4.30M for FY2012.
General review of sales and sales developments by business segment
Carrier Bags
? The previously announced South Australian Government ban on certain plastic bags has been followed recently by similar bans in the Northern Territory, Tasmania, Canberra and Fremantle. During the quarter Cardia Bioplastics delivered sales of its compostable bags to customers in Western Australia, Queensland and Tasmania and received additional bag orders that are currently being manufactured for sales in the next quarter.
? Several Brazilian States have implemented bans of standard plastic carrier bags and are currently formalising legislation. Cardia has commenced small sales of carrier bags to Brazilian retailers. These bag sales are expected to accelerate.

Films & Packaging
? Cardia delivered sales of both its Cardia BiohybridTM and Cardia Compostable resins and films to its broad range of customers during the June 2013 quarter.
New sales developments during the quarter included:
? Global Packaging Company entered market with new protective packaging product made from Cardia Compostable technology.
? Cardia BiohybridTM tablet container product has passed stability testing as required by FDA regulation. Product launch is worked on by Cardia’s customer and is expected for the next quarter. Cardia delivered sales from new BiohybridTM packaging films developed for the water distribution industry to customers in Canada, Norway
and Australia.
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A new collapsible water bag has been developed by a Canadian company that is using Cardia’s patented sustainable film technology. That company is now selling its form fill seal process for the production of bagged water. The water bags offer an alternative to the bulky plastic water bottles commonly used in the 10 to 20 litre bottled water market segment.
A product marketing launch is planned in several countries around the world during the next quarter.
Cardia is currently negotiating a Manufacturing Licence Agreement with a film manufacturer to produce the new BiohybridTM packaging films for Cardia in the USA and Canada, in anticipation of film sales to the purchasers of the Canadian company’s form fill seal process.
The Canadian company is recommending Cardia BiohybridTM films for the manufacture of the collapsible water bags.
Waste Management Products
? Cardia Bioplastics has established itself as a provider of organic waste management products and solutions to the government and council sector, commercial and industrial, as well as the retail market. Diversion of organic waste from landfill to composting is promoting the use of certified compostable waste bags. Reducing the carbon footprint of waste management products encourages the use of BiohybridTM technology.
? Expansion of organic waste management products business in China. Cardia delivered consistent sales in the June 2013 quarter to Shanghai Pudong District Council, China under its annualized $1.2M p.a. sales contract supplying initially 20% of households with kitchen waste bags.
? City Councils of Nanjing, Hangzhou and Yuhang, China continued to be supplied under their trial regime with decision for larger roll out expected in 2013.
? Regular sales to Brisbane City Council and Breville Group amongst other customers of Cardia Compostable waste management products.
? Sales expansion of compostable waste management products to Europe.
? Malaysian pilot study is ready to commence just awaiting official approval from Government Authorities.
? Cardia’s Brazilian team has set up supply infrastructure to provide Cardia waste management products to Brazilian waste management companies and government organisations.
Wholesale materials trading business
? Cardia delivered $0.79M sales revenues from its wholesale raw material trading business during the June 2013 quarter.

Resignation of Dr John Scheirs
Dr John Scheirs resigned as a Director of Cardia during the quarter to focus on his personal business interests. Dr Scheirs was a long-standing Director of the Company and was instrumental in the development of the Company’s patent portfolio amongst other valuable contributions to the Company. He will remain involved as a Director of the Company’s 100% owned subsidiary CO2Starch Pty Ltd.
Other Activities
CO2Starch Pty Ltd
Cardia Bioplastics Limited’s wholly owned subsidiary, CO2Starch Pty Ltd (CO2S) is collaborating with the University of Sydney to expand its patented PPC+starch blending technology into applications within the packaging industry before addressing potential applications in other industries including but not limited to the medical industry.
Appendix 4C follows.