REH.L Regulatory News (REH)

28 September 2012

Renewable Energy Holdings plc

("REH")

Interim Report

For the six months to 30 June 2012

Chairman's Statement

Since announcing our results for the year ended 31 December 2011, we have been pursuing the strategy of disposing of our assets, in an orderly fashion, for the reasons then given. At the same time, we have taken steps to reduce our overhead expenditure and have laid out plans to cut costs further in the future, most notably in head office costs (including directors' salaries), which will be commensurate with the significantly reduced levels of activity in the business.

We have had enquiries on our permitted wind project in Kobylany and a number of interested parties have conducted due diligence. However, the Polish wind energy market had, until July this year, faced considerable uncertainty in relation to government policy on the Polish tariff regime. This was addressed in a recent government announcement indicating the creation of a stable tariff regime, and this appears to be having a positive impact on the market. We are engaged in active discussions with a number of potential acquirers and, whilst there can be no guarantee of concluding a deal, we remain confident that we will be able to realise shareholder value.

We have now completed our planning application for the 81MW wind farm development in Wales and are currently in the final consultation stage. We will need to incorporate the consultees' responses into our application and will then hope to file the application with the Major Infrastructure Planning Unit by the end of this calendar year.

As previously announced we have reduced our shareholding in Carnegie Wave Energy ("CWE") to approximately 10 per cent. Due to a lack of capital to develop the CETO wave energy device, to prove commercial viability, there have been delays in the development of Carnegie's Garden Island site, but the Board of CWE has indicated that it remains confident that the project will be completed. The REH Board shares this view and is considering the distribution of our remaining holding of CWE shares in-specie to REH shareholders or such return of assets to shareholders that is deemed appropriate.

The Board remains committed to realising the best value for shareholders from our assets, and reducing to the practical minimum the time and expense of completing the disposal programme.

Sir John Baker

Chairman

For further information please contact:

1. Basis of preparation

This unaudited consolidated interim financial information has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively IFRSs).

In considering the appropriate basis on which to prepare the financial statements, the Directors are required to consider whether the Group can continue in operational existence for the foreseeable future. At 30 June 2012, the Group had cash and cash equivalents of £1,010,000 which included restricted cash of £524,000. This restriction expired on 23 September 2012 and no claims against it have been made. The Directors have prepared detailed cash flow forecasts for the period to 31 December 2013, which shows that the Group has sufficient working capital for the forecast period. The cash flow forecast includes reductions in overhead expenditure and other costs, most notably in head office costs including Directors' salaries, in line with the Group's operations.

The Directors have a reasonable expectation that the Group will be able to achieve the cost reductions set out in its forecast and therefore that the Group will have sufficient adequate financial resources to continue in operation for a period of no less than twelve months from the date of this report. Accordingly, the Group continues to adopt the going concern basis in preparing its interim financial information.

The principal accounting policies used in preparing the interim results are those the Company expects to apply in its Financial Statements for the year ended 31 December 2012 and are unchanged from those disclosed in the Company's audited Annual Report and Financial Statements for the year ended 31 December 2011 which are available at www.reh-plc.com.

While the financial information included in this consolidated interim financial information has been prepared in accordance with the AIM Rules for Companies and with IFRSs, this interim consolidated financial information does not itself contain sufficient information to comply fully with IFRSs. As permitted, the Company has chosen not to adopt IAS 34 'Interim Financial Statements' in preparing these interim financial statements.

The financial information for the six months ended 30 June 2012 and 30 June 2011 is unaudited and does not constitute the Company's statutory financial statements for those periods. The comparative financial information for the full year ended 31 December 2011 has, however, been derived from the statutory financial statements for that period. The auditors' report on those accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 15.4 of the Isle of Man Companies Act 1982.

2. Segment Information

The Group had four main reportable segments during the periods ended 30 June 2012, 30 June 2011 and during the year ended 31 December 2011. The four segments were:

·; Head office - this segment represents the operation of the Group's head office facility in the Isle of Man.

·; CETO development - this segment represents the Group's investment in CETO technology development operations in Perth, Western Australia. This technology was sold in 2009 and the amounts in this segment relate to costs associated with the Group's Australian subsidiary and its shareholding in Carnegie Wave Energy Limited.

·; Polish windfarms - this segment represents the windfarm under construction at Kobylany, Poland.

·; Welsh windfarms - this segment represents the windfarm development project at Sweetlamb, Wales.

3. Impairment of associate

Carnegie Wave Energy Limited

At 30 June 2012 the Group owned 214,970,000 shares, which represented a 21% stake in Carnegie Wave Energy Limited, ("CWE"). The Group's investment in CWE meets the definition of an associate and is accounted for using the equity method. Despite the Board's confidence in CWE's CETO technology, the fact that CWE's market value has declined significantly over a prolonged period has been considered by the Board to be an indicator that its investment in CWE continues to be impaired in accordance with IAS 36 "Impairment of assets".

In accordance with IAS 36, and in addition to the Group's share of losses in associate of £259,000 the Group's investment in associate has been impaired to £3,777,000, the fair value of the shares at 30 June 2012. The impairment expense of £4,542,000 has been recognised in the Consolidated Income Statement as "Impairment of associate".

On the 12 July 2012 the Group disposed of 113,639,808 shares for £750,000 in an off market sale.

4. Discontinued operations

On the 30 April 2012 Renewable Energy Holdings plc announced its intention to dispose of the Group's windfarm investments in Poland and Wales. At 30 June 2012 the board have reviewed the criteria set out in IFRS 5 "Non-current assets held for sale and discontinued operations" and have concluded that the Group's Polish asset meets that criteria. Accordingly, Gamar GHL s.p. Z.o.o. has been classified and presented as a discontinued operation.

5. Cash & cash equivalents

Included in cash and cash equivalents is €650,000 of restricted cash. The cash was secured as part of a Bond upon the sale of the Group's German wind farms in 2009. The bond expired on 28 September 2012 and no claims against it have been made.

Independent review report to Renewable Energy Holdings plc

Introduction

We have been engaged by the Group to review the consolidated interim financial information in the half-yearly financial report for the six months ended 30 June 2012, which comprises the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in Equity, the Consolidated Balance Sheet, the Consolidated Cash Flow Statement and related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial information.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly report in accordance with the AIM Rules for Companies which require that the financial information must be presented and prepared in a form consistent with that which will be adopted in the Group's annual financial statements.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The interim financial information included in this half-yearly financial report has been prepared in accordance with the basis of preparation set out in note 1.

Our responsibility

Our responsibility is to express to the company a conclusion on the interim financial information in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of the AIM Rules for Companies and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the International Auditing and Assurance Standards Board. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim financial information in the half-yearly financial report for the six months ended 30 June 2012 is not prepared, in all material respects, in accordance with the basis set out in note 1 and the AIM Rules for Companies.

PricewaterhouseCoopers LLC

Chartered Accountants

Douglas, Isle of Man

27 September 2012

(a) The maintenance and integrity of the Renewable Energy Holdings plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.(b) Legislation in the Isle of Man governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.