Kendrick Resources Regulatory News (KEN)

For release: 0700, 13 September 2010

KENETICS GROUP LIMITED

INTERIM FINANCIAL INFORMATION

FOR THE SIX MONTHS ENDED 30 JUNE 2010

Kenetics Group Limited

("Kenetics" or "the Company" or "the Group")

Interim Results

Kenetics Group Limited (AIM: KEN) the Radio Frequency Identification (RFID) company focused on Security and RFID systems and products, announces its interim results for the six month period ended 30 June 2010.

Key Points

·; Consolidated turnover fell 17% to £472,000 (H1 2009: £570,000).

·; Consolidated loss on ordinary activities after tax and expenses was up 6.4% £217,000 (H1 2009: £204,000).

·; Increase in materials cost due to the manufacturing of the production units of On-Board Bus Equipment ("OBE") in fulfillment of the Singapore Land Transport Authority ("LTA") contracts, which was offset by reduction in employee benefits expenses and other operating expenses.

·; In-house testing of the OBE systems for the LTA contracts has been completed.

·; Delivery of the production systems will begin in September 2010 for deployment in October 2010.

Commenting on the results, Ken Wong, Chairman and CEO said: "We feel confident that the LTA trials will be successfully completed by the end of the year and the Company will continue to seize the opportunities not only in Singapore but also in the region to grow the business"

CHAIRMAN'S STATEMENT

The first half year performance has been affected by the delay in the start of the deployment and trials for the OBE systems for the LTA contracts. This delay was mainly due to operational issues which arose during the testing of the OBE systems and the integration of the systems with the fare collection software developed for the Singapore public transport operations, which include both the bus and rail systems.

The testing of the OBE system has now been completed and the certification of the system is expected to be completed by end September 2010 before the actual installation begins.

I am pleased to announce that the deployment and trials will start on 1 October 2010 with 10 buses and all 170 buses to be commissioned by end Nov 2010. The trial period will be shortened to two months, from Oct 2010 to Dec 2010, as many issues were resolved during the in-house testing phases. It is expected by LTA that the two month trial period will be sufficient to detect and resolve any further issues that may arise. Delivery of the first 40 systems is scheduled for the 17 September 2010 and the balance of 130 system by the end of October 2010.

The Contactless Smart Card (CSC) Reader developed for the LTA rail (subway) systems has been successfully completed. The readers have been deployed in eleven stations and are currently undergoing a three month trial. I am pleased to mention that the reader has now been adopted for the bus systems as well. It will be deployed together with the OBE system trials in October 2010. 880 readers are manufactured and awaiting loading of the fare collection software by LTA. 631 reader units had been programmed as at 30 Aug 2010.

In my statement with the full year results for 2009, the directors stated that the Group would be seeking additional funds in the form of equity financing in two phases during 2010. On 21 June 2010, we announced that we had raised £300,000 (gross) by way of a Placing of 7,500,000 new shares at 4.0p per share, to provide continued working capital to fulfill the LTA contracts. The second phase will focus in raising £2 million to provide the necessary financial resources to bid for the subsequent commercial roll-out contracts for both the rail and bus systems.

Despite the delay in the deployment of the OBE systems for the bus trials, the Company is leveraging on the completion of the development and testing of the OBE hardware and systems. Working with its partners, Kenetics has been involved in marketing the OBE systems to other countries, particularly in South East Asia. A trial system with two buses is expected to begin in Vietnam by the end of 2010. The Board feels confident that the LTA trials will be successfully completed by the end of the year and the Company will continue to seize the opportunities not only in Singapore but also in the region to grow the business

Ken Wong, Chairman and CEO

Kenetics Group Limited

10 September 2010

Kenetics Group Limited - Interim financial information

Kenetics Group Limited - Interim financial information

Kenetics Group Limited - Interim financial information

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Kenetics Group Limited - Interim financial information

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (continued)

KENETICS GROUP LIMITED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR 6 MONTHS ENDED 30 JUNE 2010

Kenetics Group Limited - Interim financial information

Kenetics Group Limited - Interim financial information

Kenetics Group Limited - Interim financial information

1. Business of Kenetics Group Limited

The Company was incorporated in Jersey on 22 June 2006. The condensed consolidated financial information of the Company for the six months ended 30 June 2010 comprise the Company and its subsidiaries, Kenetics Innovations Pte Ltd and Kenetics Innovations (Beijing) Co., Ltd.

The registered office of the Company is located at Walker House, PO Box 498, 28-34 Hill Street, St Helier, Jersey JE4 5TF.

The Group is in the business of electronics design and manufacturing and producing of electrical and electronic goods.

2. Basis of preparation of interim condensed consolidated financial information

These interim consolidated financial statements are for the six months ended 30 June 2010 and have been prepared in accordance with International Accounting Standard 34 "Interim Financial Statements". The accounting policies applied are consistent with International Financial Reporting Standards (IFRS) adopted for use by the European Union. The accounting policies and methods of computation used in the interim consolidated financial statements are consistent with those used in the Annual Report for 2009 and are expected to be applied for the year ended 31 December 2010.

The interim results for the six months ended 30 June 2010 are not necessarily indicative of the results to be expected for the full year 2010

3. Share Capital

On 16 June 2010, 7.5 million new ordinary shares for a total consideration of £300,000 were issued to provide for additional working capital for the LTA projects. The share premium for the issue amounts to £225,000.

For details of the above, please refer to the announcement made by the Company on 21 June 2010.

4. Loss per share

Basic loss per share has been calculated on the basis of the losses attributable to ordinary shareholders divided by 26,915,219 (30/06/09: 26,349,466, 31/12/09: 27,480,973), being the weighted average number of ordinary shares issued by the Company.

In accordance with IAS 33 and as the Group has reported a loss for the period, the potential ordinary shares are not dilutive.

Kenetics Group Limited - Interim financial information

5. Exchange rates

The reporting currency of the Company is deemed to be Sterling Pounds. The functional currencies of Kenetics Innovations Pte Ltd and Kenetics Innovations (Beijing) Co Ltd are in Singapore dollars and Chinese Renminbi respectively. The following exchange rates have been used in preparing this financial information:

6. Income tax

There was no income tax expense for the 6 months ended 30 June 2010, as the Group has been loss making during this period. The income tax expense for the 6 months ended 30 June 2010 amounted to £662 was an under-provision of tax in prior year.

7. Segment reporting

The Group has adopted IFRS 8 which is required for all annual reports and interim financial statements starting 1 January 2009 or later.

For management purposes, the Group is currently organised around differences in regulatory environment and geographical areas; and has three reportable segments as follows:

I. The Singapore segment designs, manufactures and produce all kinds of electrical and electronic goods.

II. The China segment imports and exports goods and services, and to act as an agent.

III. The UK segment provides management services to entities in the group.

Except as indicated above, no operating segments have been aggregated to form the above reportable operating segments.

Group financing (including finance costs) is managed on a group basis and is not allocated to operating segments. Transfer prices between operating segments are on an arm's length basis in a manner similar to transactions with third parties.

KENETICS GROUP LIMITED

FOR 6 MONTHS ENDED 30 JUNE 2010

Kenetics Group Limited - Interim financial information

7. Segment reporting (cont'd)

8. Nature of financial information

The interim financial information set out above is neither audited nor reviewed and does not represent the statutory financial statements for Kenetics Group Limited or for any of the entities comprising the Kenetics Group for the period ended 30 June 2010. The figures for the year ended 31 December 2009 were extracted from the consolidated financial statements which have been presented to the shareholders. The auditors' report on those financial statements was unqualified.

The Board approved the interim financial information for the period ended 30 June 2010 on 10 September 2010.

These interim results are available on the Company's website www.kenetics-group.com.

9. Subsequent event

On 1 July 2010, the Company entered into an interest-bearing redeemable convertible loan agreement with an external party, to obtain a principal loan of £300,000. The principal loan will be due for repayment on 30 June 2012 and the interest will be payable monthly at the rate of 12% per annum. The loan may be converted on written notification at any time after the expiry of the loan in whole or in part provided the always that the total number of shares shall not at any time exceed 1% of the Borrower's total shareholding.

The Company has received the loan amount of £300,000 in cash.