Interim Results

30 May 2008 07:00



For Immediate Release 30 May 2008 

ALTERNATIVE ENERGY LIMITED ("AEL" or the "Company")

UNAUDITED HALF YEAR REPORT

Alternative Energy Limited is pleased to present its Half Year Report for the six months ended 29th February 2008. The interim results are reported on a basis consistent with International Financial Reporting Standards and are the Company's first interim results.

AEL was incorporated in Singapore on 26 December 2006 and effectively commenced business as an investment company upon its admission to trading on the Alternative Investment Market (AIM) in London in October 2007, at which time the Company raised approximately US$7,800,000 for the purposes of, inter alia, the development and acquisition of technologies and businesses in the alternative energy sector.

Since the Company's inception, the need for technologies and business solutions to supplement or replace traditional fossil fuels have become even more apparent and urgent, with the price of oil rising to in excess of US$130 per barrel and the environmental impact of traditional methods continuing to cause alarm. Bio-fuels, once considered a potential replacement for fossil fuels, have also given rise to concerns because of competing land use and their potential impact on food prices.

Against this background Alternative Energy Limited has been quietly and efficiently working for a commercially viable alternative technology. Our admission to AIM was carried out competently and within budget by our team of professionals in London, led by our NOMAD Beaumont Cornish. We were then fortunate enough to identify and acquire a first class research and development team led by Dr Eric Goh in the form of Renewable Power Pte Ltd.

Since their acquisition by AEL in October 2007, Dr Eric Goh, Dr Tay Boon Hou and their team have been evaluating a number of different technologies for potential acquisition by the Company, primarily in the field of solar and wind generated energy, and have themselves developed, in the course of their research, further technologies which may lead to the Company obtaining its own proprietary technology.

In the light of what has been achieved the expenditure of US$493,730 by the Company, as stated in the interim statements, reflects value for money. As this is the Company's initial year, the Group comprising AEL and its subsidiary, Renewable Power Pte Ltd, incurred a group net loss of US$369,049.

The Company's research and development team are continuing to evaluate potential technologies and I feel confident that the Company will achieve its goal of obtaining a significant and commercially attractive business or technology in the alternative energy sector in the forthcoming months.

Contacts:

Christopher Nightingale, Chairman Tel: +65 6532 2122

Richard Lascelles, Director Tel: +44 207 408 1067

Roland Cornish, Beaumont Cornish Limited  Tel: +44 207 628 3396

ALTERNATIVE ENERGY LIMITED AND ITS SUBSIDIARY

UNAUDITED CONSOLIDATED BALANCE SHEET AS AT 29 FEBRUARY 2008

* The comparative information as at 31 August 2007 relates to when the Group was a shell company with no subsidiary. 

  ALTERNATIVE ENERGY LIMITED AND ITS SUBSIDIARY 

UNAUDITED CONSOLIDATED INCOME STATEMENT 

* The comparative information for the period 26 December 2006 (date of incorporation) to 31 August 2007 relates to when the Group was a shell company with no subsidiary. 

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

ALTERNATIVE ENERGY LIMITED AND ITS SUBSIDIARY

UNAUDITED STATEMENT OF CHANGES IN EQUITY 

* The comparative information for the period 26 December 2006 (date of incorporation) to 31 August 2007 relates to when the Group was a shell company with no subsidiary.

  ALTERNATIVE ENERGY LIMITED AND ITS SUBSIDIARY

UNAUDITED CONSOLIDATED CASH FLOW STATEMENT 

* The comparative information for the period 26 December 2006 (date of incorporation) to 31 August 2007 relates to when the Group was a shell company with no subsidiary.

ALTERNATIVE ENERGY LIMITED AND ITS SUBSIDIARY 

NOTES TO THE UNAUDITED FINANCIAL INFORMATION 

FOR THE FINANCIAL PERIOD FROM 1 SEPTEMBER 2007 TO 29 FEBRUARY 2008

ALTERNATIVE ENERGY LIMITED AND ITS SUBSIDIARY 

NOTES TO THE UNAUDITED FINANCIAL INFORMATION 

FOR THE FINANCIAL PERIOD FROM 1 SEPTEMBER 2007 TO 29 FEBRUARY 2008 (continued)

3.  Accounting policies

The unaudited interim financial information for the six months ended 29 February 2008 do not constitute statutory accounts. The accounting policies adopted for the unaudited interim financial information period from 1 September 2007 to 29 February 2008 are the same, in all material respects, as those that will be adopted by the Group in the financial statements for the year ended 31 August 2008.

4. Property, plant and equipment

5. Goodwill

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 costs 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.

ALTERNATIVE ENERGY LIMITED AND ITS SUBSIDIARY 

NOTES TO THE UNAUDITED FINANCIAL INFORMATION 

FOR THE FINANCIAL PERIOD FROM 1 SEPTEMBER 2007 TO 29 FEBRUARY 2008 (continued)

5. Goodwill (continued)

As at 29 February 2008, the directors have assessed and determined that the goodwill is not impaired. Such assessment and determination require the directors to make judgments, 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 that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

6. Other receivables

Other receivables include US$7,206 due from Global Voice Group Limited; Christopher Nightingale is a director of Global Voice Group Limited.

Other receivables are denominated in the following currencies:

7. Cash and cash equivalents

Fixed deposits are placed with the bank, with original maturing periods of not more than 90 days. Interest rate ranges from 1.5% to 4.4% per annum.

  ALTERNATIVE ENERGY LIMITED AND ITS SUBSIDIARY 

NOTES TO THE UNAUDITED FINANCIAL INFORMATION 

FOR THE FINANCIAL PERIOD FROM 1 SEPTEMBER 2007 TO 29 FEBRUARY 2008 (continued)

7. Cash and cash equivalents (continued)

Cash and cash equivalents are denominated in the following currencies:

8. Issued capital

9. Other payables and accruals

Share application monies relate to cash received in advance in respect of shares issued subsequent to 31 August 2007.

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

  ALTERNATIVE ENERGY LIMITED AND ITS SUBSIDIARY 

NOTES TO THE UNAUDITED FINANCIAL INFORMATION 

FOR THE FINANCIAL PERIOD FROM 1 SEPTEMBER 2007 TO 29 FEBRUARY 2008 (continued)

9. Other payables and accruals (continued)

Other payables and accruals are denominated in the following currencies:

10. Income tax

There is no income or deferred tax expense as the Group has no chargeable income for the financial period.

11. Basic and diluted loss per share

Basic loss per share for the six months to 29 February 2008 has been calculated on the basis of net loss after income tax of US$369,049 (2007: US$29,949) and the average number of shares in issue of 1,053,184,580 (2007: 71,019,263).

There are no potentially dilutive shares in issue.

12. Acquisition of a subsidiary

On 30 October 2007, the Company entered into a sale and purchase agreement with Dr Goh Swee Ming (the "vendor") pursuant to which the vendor sold his shareholding interest of 100% in Renewable Power Pte Ltd, a company incorporated in Singapore, to the Company for a consideration of US$400,000 which was fully paid or satisfied by way of the issuance of 9,411,764 new ordinary shares in the Company at the issue price of US$0.0425 per ordinary share (the "consideration shares").

The allotted and issued consideration shares rank pari passu in all respects with the then existing ordinary shares of the Company save that they will not rank for any dividends, rights, allotments or any distribution, the record date of which falls before the date of issue of the consideration shares. The consideration shares represented approximately 0.79% of the enlarged issued share capital of the Company upon the completion of this acquisition.

Subsequent to the above transactions, Dr Goh Swee Ming became a director of the Company on 14 March 2008.

  ALTERNATIVE ENERGY LIMITED AND ITS SUBSIDIARY 

NOTES TO THE UNAUDITED FINANCIAL INFORMATION 

FOR THE FINANCIAL PERIOD FROM 1 SEPTEMBER 2007 TO 29 FEBRUARY 2008 (continued)

12. Acquisition of a subsidiary (continued)

The carrying amount and fair value of identifiable assets and liabilities of Renewable Power Pte Ltd as at the date of acquisition and the net cash inflow on acquisition were as follows:

The purchase consideration is fully settled by the issuance of 9,411,764 ordinary shares of the Company.

Goodwill is attributable to the acquisition of subsidiary which is expected to provide future economic benefits in excess of the normal return generated from the acquired net identifiable assets.

Future economic benefits are expected to arise from the acquisition of this subsidiary as its presents several strategic advantages to the Group as follows:

(a) In house research capacity - rapid expansion

The availability of its own in house research team will both enable the Group to quickly analyse the

technical viability of investment proposals and will also enable the Group to develop its own technical

competence - a very important element in an area with many developing technologies and where the

cost of external consultancy could be very high.

(b) Confidentiality

The availability of an in house technical team will also enable the Group to ensure stricter confidentiality in technologies and investments which it analyses and reviews which would be vital in a technologically developing and sensitive market.

(c) Savings in infrastructure set-up

The subsidiary has acquired an office cum laboratory facility. This facility has already been fitted with renovations worth about S$500,000. Upon acquisition, the Group enjoys a saving in terms of sunk cost and renovation time, compared to the option of acquiring a new research facility on its own.

  ALTERNATIVE ENERGY LIMITED AND ITS SUBSIDIARY 

NOTES TO THE UNAUDITED FINANCIAL INFORMATION 

FOR THE FINANCIAL PERIOD FROM 1 SEPTEMBER 2007 TO 29 FEBRUARY 2008 (continued)

12. Acquisition of a subsidiary (continued)

(d) Singaporean team

All staff from the subsidiary are all Singapore citizens or permanent residents. Singapore is a recognised financial centre which is also a well known supporter of the development of technology. Singapore's proximity to the booming manufacturing and technology centres of Asia, coupled with the Singapore government's expressed desire to delevop alternative energy technologies means that basing a research and development team in Singapore may bring additional benefits in the way of opportunities, economic efficiencies and grants. 

13. Major non-cash transactions during the period

During the period, the Company issued ordinary shares worth US$400,000 in respect of the acquisition of Renewable Power Pte Ltd (see Note 12). 

In addition, as disclosed in Note 9, US$2,624,999 was received in the prior period in respect of shares issued during the current period.

Proceeds from issue of shares, net of issue costs of US$1,286,897 is stated after the effects of these transactions.

14. Subsequent event

On 18 April 2008, the Company fully subscribed to all ordinary shares of Alternative Energy Technology Pte Ltd ("AETPL"), a company incorporated in Singapore, for a consideration of S$2. Consequently, AETPL became a wholly-owned subsidiary of the Company.