ALR.L Regulatory News (ALR)

For immediate release 28 May 2010

ALTERNATIVE ENERGY LIMITED

Interim Results for period to 28th February 2010

CHAIRMAN'S STATEMENT

I am delighted to present to you the financial statements for the 6 month period ended 28 February 2010.

As these accounts show, during the period, the Company continued to concentrate on analysing alternative energy technologies with Dr Goh, Dr Tay and the team making great progress within a steady and conservative budget. In addition, the Company has also been developing its own range of energy saving products, including LED light bulbs, street lights and housing, which will be complemented by the energy generating technology of the eRoof. The Net Loss Attributable to Shareholders of US$1,059,977 represents a small increase in the Net Loss for the February 2009 interim period. The Company also, during the period, completed the placing of 34,950,000 shares to raise US$1,048,500 and hence as at 28 February 2010 the Company has cash of US$1,791,674.

The continued research and efforts of the entire team has put the Company in a position to move forward with plans to commence an operational business and make a significant acquisition. To this end the Company announced, on 14 May 2010, the acquisition of the intellectual property, including patents and patent applications, surrounding the eRoof technology and to commence the production and marketing of its eRoof. The eRoof is a fully integrated method of micro energy generation designed to use the sun, wind and water to generate power. The Company will initially focus on the eSolar product which is a roofing system designed to generate electricity through photovoltaic cells incorporated into eSlates.

Christopher Nightingale

Chairman

28 May 2010

CONSOLIDATED CONDENSED STATEMENT OF COMPREHENSIVE INCOME

 # denotes a figure which is less than US$0.01 cents

1. General

The Company was incorporated in Singapore on 26 December 2006 under the name of Alternative Energy Pte. Ltd. On 11 July 2007 the Company was converted into a public limited company and changed its name to Alternative Energy Limited (the "Company"). The Company is domiciled in Singapore.

On 12 October 2007, the Company was successfully admitted to trading on AIM, a market operated by the London Stock Exchange.

The principal activity of the Company is the holding of investments. The registered office of the Company is at 1 Science Park Road, #02-09, The Capricorn, Singapore Science Park II, Singapore 117528.

The principal activity of the Company's active wholly-owned subsidiaries, Renewable Power Pte Ltd and Alternative Energy Technology Pte Ltd, company incorporated in Singapore, are that of research and development of renewable energy for household consumers and holding of trademarks and intellectual properties respectively.

The interim unaudited financial statements of the Company and its subsidiary (the "Group") for the period ended 28 February 2010 were authorised for issue by the Board of Directors on 26 May 2010.

2. Basis of preparation

The unaudited interim consolidated condensed financial information for the 6 months ended 28 February 2010 has been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting.

The unaudited interim consolidated condensed financial information does not include all the information and disclosures required in the annual financial statements. Accordingly, this report is to be read in conjunction with the Annual Report for the year ended 31 August 2009 and any public announcements made by the Group during the interim reporting period.

The unaudited interim condensed consolidated financial information for the six months period ended 28 February 2010 do not constitute statutory accounts and have been drawn up using accounting policies and presentation expected to be adopted in the Group's full financial statements for the financial year ending 31 August 2010, which are not expected to be significantly different to those set out in note 2 to the Group's audited financial statements for the year ended 31 August 2009.

The financial information for the year ended 31 August 2009 has been extracted from the statutory accounts for that period. The auditors' report for the year ended 31 August 2009 was unqualified with an emphasis of matter paragraph referring to the Group's abilities to continue as a going concern.

The financial information for the 6 months ended 28 February 2009 has been extracted from the unaudited interim results released to 28 February 2009. The presentation applied to the interim report is in line with the new IAS 1 ('Presentation of Financial Statements') in respect of the primary statements presentation.

Going concern

In preparing the unaudited consolidated condensed financial information, the directors have carefully considered the future liquidity of the Group and the Company in the light of the current financial position of the Group as at 28 February 2010 and the recurring losses from operations in the current and past years/periods.

The directors are currently in negotiations to strengthen the financial position of the Group and the Company.

The directors are in the process of bringing in new investors that they expect will enable them to raise sufficient funds as working capital for the Company. These proceeds will also be used to finance the next phase of growth for the Group. 

In addition, the Group is in an advanced stage of talks to supply solar powered products to a key customer. This transaction is expected to generate further cash flow for the Group, as well as to gain a secure foothold in the renewable energy industry for the Group.

While the directors continue to keep administrative and operating costs to a minimum, they continue to actively seek new business opportunities that will generate cash inflow and profitability for the Group.

The directors are confident that the ongoing negotiations and their expected results will yield the Group and the Company sufficient working capital to finance its operations and remain a going concern for the foreseeable future. Hence, notwithstanding that the Group has incurred an operating loss of US$1,059,977 for the six months period ended 28 February 2010, the directors are of the opinion that it is appropriate to prepare the unaudited consolidated condensed financial information of the Group on a going concern basis.

The unaudited consolidated condensed financial information of the Group does not include the adjustments that would result if the Group was not able to continue as a going concern.

3. Plant and equipment

4. Intangible assets

Goodwill represents the excess of the cost of a business combination over the interest in the fair value of identifiable assets, liabilities and contingent liabilities acquired. Cost comprises the fair values of assets given, liabilities assumed and equity instruments issued plus any direct cost of acquisition.

Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash generating units and is not amortised but is tested annually for impairment or more frequently if events or changes in circumstances indicate that it might be impaired.

As at 28 February 2010, the management has assessed and determined that the goodwill is not impaired. Such assessment and determination require the management to make judgements, estimates and assumptions. These estimates and associated assumptions are continually evaluated and are based on historical experience and other factors including expectations of future events or changes in circumstances. Actual results may differ from theses estimates.

Included in the patents is an amount of approximately US$1 being the cost of the option to purchase certain patents from a related party (the "vendor"). In October 2008, the Company has engaged an independent professional valuer to value certain patents to be purchased from the vendor. Based on the discounted cash flow method of valuation, the independent professional valuer has valued these patents to be at approximately US$33 million. Having considered the valuation performed by the professional valuer, the Company and the vendor have agreed to fix the purchase consideration for the purchase of these patents at US$20 million. This purchase consideration shall be fully settled by the issue of new ordinary shares of the Company on formula agreed between the Company and the vendor. As at 28 February 2010, the proposed purchase has not been completed.

5. Cash and cash equivalents

Cash and cash equivalents are denominated in the following currencies:

Fixed deposits are pledged with the bank, with original maturing periods of not more than 365 (28.2.2009: 90 and 31.8.2009: 183) days. Interest rate ranges from 0.45% to 0.55% (28.2.2009: 0.875% to 3.27% and 31.8.2009: 0.06% to 1.5%).

The Group's fixed deposits of US$96,062 (28.2.2009: US$84,894 and 31.8.2009: US$97,025) are pledged to bank for credit card facility granted to a subsidiary company.

6. Other receivables

Other receivables are denominated in the following currencies:

All other receivables are not past due and are not impaired as at the end of the financial period.

7. Issued capital and treasury shares

(a) Issued capital

The Company has one class of ordinary shares. All issued ordinary shares are fully paid and carry one vote per ordinary share and also carry a right to dividends. There is no par value for these ordinary shares.

All newly issued shares of the Company shall rank pari-passu in all respects with the then existing issued shares.

In February 2010, the Company issued 15,580,000 new shares at US$0.03 per share. The Company received US$467,400 for these shares.

(b) Treasury shares

In September 2008, the Company acquired 40,042,966 of its own shares from its shareholders through off-market purchases at an average price of US$0.03 per share. The Company paid US$1,200,000 in cash to acquire the said shares. This amount was deducted from issued share capital within the shareholders' equity. The shares bought back are held as treasury shares.

In November 2009, the Company re-issued 19,370,000 of its treasury shares at US$0.03 per share. The Company received US$581,100 for these shares.

The Company has one class of ordinary shares. All re-issued treasury shares of the Company shall rank pari-passu in all respects with the then existing issued shares.

8. Other payables and accruals

Amount due to a director is due to Christopher Nightingale and is interest-free, unsecured and repayable on demand.

Other payables and accruals are denominated in the following currencies:

9. Provisions

Provision for unutilised leave represents employee entitlements to annual leave as a result of services rendered by employees up to the balance sheet date.

Provision for reinstatement cost is relation to the obligation for dismantlement, removal or restoration of office premises.

Movements in the provisions are as follows:

10. Loss before income tax

In addition to the information disclosed elsewhere in the unaudited financial information, the Group's loss before income tax is arrived at after charging the following:

11. Income tax

The income tax expense has been determined by applying the Singapore income tax rate of 17% to loss before income tax and total charge for the financial period can be reconciled to accounting loss as follows:

Deferred tax assets have not been recognised because it is not certain whether future taxable profits will be available against which the Group can utilise the benefits.

As at the reporting date, the Group had unutilised tax losses amounting to US$1,686,210 (2009: US$1,196,401), which are available for set-off against future taxable profits subject to the provisions of the Singapore Income Tax Act and agreement by the Singapore tax authority.

12. Basic and diluted loss per share

(a) Basic loss per share

Basic loss per share is calculated by dividing the Group's loss attributable to equity holders by the weighted average number of ordinary shares in issue during the financial period.

The loss per share is calculated as follows: