Interim Results

Kenetics Group Limited
26 September 2006


For Immediate Release                                         26 September 2006


                             Kenetics Group Limited

                                Interim Results


Kenetics Group Limited (Kenetics or the Company), the Radio Frequency
Identification (RFID) company focused on Security and RFID systems and products,
released its interim report for the 6 months ended June 2006.


Key Points

   •Total turnover versus the comparable period reduced by 52.5% to £207,000
    (2005: £436,000) due to delay in key projects.

   •Loss on ordinary activities after tax and expenses was £103,000 (2005:
    £158,000 profit)

   •Kenetics was admitted to AIM on 18 August 2006 and pre-IPO financing of
    £827,000 was successfully raised.

   •The Company will continue to enlarge its sales and distribution network
    in Europe to explore new avenues.

   •The Company is developing a newer generation of products to be offered
    early next year. This is expected to provide a more stable and regular
    source of income.


Commenting on the results Ken Wong, President and CEO said:

'We continue to remain confident about the outlook for the Company as we have
numerous projects being developed and outstanding revenue expected for early
next year.

We are excited about the expansion into Europe and in particular the progression
into the UK market, especially now we have been admitted to AIM.'


For more information, please contact:

Kenetics Group Limited - 0207 466 5000 (on the day)
Ken Wong, CEO
Hin Yuen Yeong

Buchanan Communications - 0207 466 5000
Tim Thompson / James Strong


CHAIRMAN'S STATEMENT


Dear Shareholder


It is my pleasure to report our interim results for the period ended 30 June
2006.


Financial Summary

Kenetics Group Limited (Kenetics or the Company), the Radio Frequency
Identification (RFID) company focused on Security and RFID systems and products,
announces its interim report for the 6 months ended June 2006. The financial
information reported upon relates to the Company's trading subsidiary Kenetics
Innovations Pte. Limited ('Kenetics Innovations') which was acquired by way of a
share exchange on 24 July 2006. The acquisition of Kenetics Innovations has been
treated as a merger for accounting purposes and full year accounts of the
Company to 31 December 2006 will be presented on this basis.

Turnover for the period was £207,000 (SGD 607,000) (2005: £436,000; SGD
1,319,000) which after expenses, resulted in a post-tax loss of £103,000 (SGD
(302,931) (2005: £158,000 profit; SGD 477,146).


Post Period Events

Pre-IPO financing amounting to £827,000 (before expenses) was raised on 11
August 2006 and the Company was admitted to AIM on 18 August 2006.

Effective from the date of admission, Mr Lynton Jones was appointed as
non-executive director of the Company.


Operational Review

Although trading for the first half of the year has been in line with previous
years, the Group has been affected by recent slower development than expected in
several key ODM projects, which consequently have had to be delayed. Development
work has started on the projects and revenue is projected to come in during the
second half of the year with the balance of the contracted revenue continuing to
come in during the first half of 2007. Several exploratory projects have also
not yet materialised, particularly the implementation of security projects in
China. Additionally, a major customer in Singapore has delayed the call for
tender on a project that had earlier been expected to come in the middle of the
year. This is now expected to occur in 2007.

The Company is taking steps to get some of the delayed projects back on track. A
China business support office has been established in Beijing to renew business
contacts with Chinese government agencies as well as to establish a network of
distributors to expand product sales. The new business support office is now
fully functional.

In Europe, the Company will continue to enlarge its sales and distribution
network to explore new business avenues either generically or through
acquisitions.

To lessen the timing uncertainty of ODM projects, the Company is in the process
of developing a newer generation of products to offer to the market beginning
early next year. This is expected to provide a more stable and regular source of
income for the Company.


Prospects

The board believes that changing the emphasis from being a systems developer to
product developer will be more cash generative in the medium term. The company
is well placed to do this using its intellectual property and core technologies.


Ken Wong Kai En
Chairman

26 September 2006



INCOME STATEMENTS
                                                                        Restated
                                             6 months     6 months     12 months
                                                ended        ended         ended
                                              30 June      30 June   31 December
                                                 2006         2005          2005
                                          (Unaudited)  (Unaudited)     (Audited)
                                                £'000        £'000         £'000
                                 Notes
Continuing operations
Revenue                                           207          436           919
Other operating income                              -           19            52
Changes in inventories of
finished goods and
work-in-progress                                   31          (7)           (7)
Raw materials and consumables                    (80)         (86)         (262)
used
Staff costs                                     (167)        (111)         (269)
Depreciation and amortisation                    (21)         (18)          (45)
expenses
Other operating expenses                         (73)         (34)          (84)

Profit/(loss) before tax                        (103)          199           304
Income tax expense                 3                -         (41)          (56)

Profit/(loss) after tax                         (103)          158           248

Earnings/(loss) per share          4          (0.43)p        0.67p         1.05p


The Company had no recognised gains or losses other than the profit for the
period.

All of the amounts above relate to continuing activities.



BALANCE SHEETS

                                               30 June     30 June     Restated
                                                  2006        2005  31 December
                                           (Unaudited) (Unaudited)         2005
                                                 £'000       £'000    (Audited)
                                                                          £'000

Non-current assets
Plant and equipment                                136         129          137

Total non-current assets                           136         129          137

Current assets
Available for sale assets                          142           -            -
Excess of contract work-in-progress over            35           -            -
progress billings
Contract work-in-progress                            -          11           20
Stocks and work-in-progress                        134          27           39
Trade receivables                                   60          57          182
Other receivables                                  117          59           94
Bank balances                                      206         321          256

Total current assets                               694         475          591

Total assets                                       830         604          728

Equity attributable to equity holders
Share capital                                      606         149          157
Share premium                                        3           1            4
Retained profits                                   138         231          248

Total Equity                                       747         381          409

Non-current liabilities
Obligations under finance leases                     5           5           12

Total non-current liabilities                        5           5           12

Current liabilities
Excess of progress billings over contract            -           -           24
work in progress
Trade payables                                      18          20           96
Other payables                                      36          76           77
Amount owing to directors                            -          60           53
Obligations under finance leases                     9          13            5
Provision for taxation                              15          49           52

Total current liabilities                           78         218          307

Total liabilities                                   83         223          319

Total equity and liabilities                       830         604          728



STATEMENT OF CASH FLOWS
                                                                      Restated
                                           6 months     6 months     12 months
                                              ended        ended         ended
                                            30 June     30 June    31 December
                                               2006        2005           2005
                                         (Unaudited) (Unaudited)     (Audited)
                                              £'000        £'000         £'000
Operating activities
(Loss)/profit before taxation                 (103)          199           303

Adjustments for:
Depreciation and amortisation                    20           18            45
Unrealised foreign exchange loss                  -            -             1
Interest received                                 -            -           (1)
Interest paid                                     -            -             -

Operating (loss)/profit before working
capital changes                                (83)          217           348
(Decrease)/Increase in contract
work-in-progress
Excess of progress billings over
contract work-in-progress
Excess of contract work-in-progress
over progress billings                         (39)         (15)             -
Decrease/(Increase) in trade and other          93          107           (40)
receivables
(Increase) in inventories                      (95)          (1)          (11)
(Decrease) in trade and other payables        (115)        (156)          (94)

Cash generated from operations                (239)          152           203
Income tax paid                                (36)            -          (12)
Interest paid                                     -            -             -
Interest received                                 1            -             1

Net cash flows from operating                 (274)          152           192
activities

Cash flows from investing activities
Purchase of plant and equipment                (24)         (25)          (37)
Investment in quoted shares                   (142)            -             -

Net cash flows used in investing              (166)         (25)          (37)
activities



STATEMENT OF CASH FLOWS (continued)
                                                                        Restated
                                              6 months    6 months     12 months
                                                 ended       ended         ended
                                               30 June    30 June    31 December
                                                  2006       2005           2005
                                           (Unaudited) (Unaudited)     (Audited)
                                                £'000        £'000        £'000
                                                 
Cash flows from financing activities
Repayment of loan from director                   (52)         (4)         (14)
Trust receipts                                       -        (74)         (79)
Increase/(Decrease) in share application           (2)         (1)            1
Increase in share capital                          452           -            -
Repayment of loan                                  (2)          17            -
Dividends paid                                       -           -         (77)
Difference of fixed deposit balance due to
accumulation of interest                           (1)         (1)          (1)

Net cash flows from/(used in) financing            395        (63)        (170)
activities

Net (decrease)/increase in cash in hand
and at bank                                       (45)          64         (15)
Effect of exchange rate changes                      -           -          (1)
Cash in hand and at bank at beginning of           152         168          168
period

Cash in hand and at bank at end of period          107         232          152
Fixed deposit                                       88          83           88
Exchange differences                                11           6           16

Per balance sheet                                  206         321          256



STATEMENT OF CHANGES IN COMBINED SHAREHOLDERS' EQUITY


                                           6 months     6 months     12 months
                                              ended        ended         ended
                                            30 June      30 June   31 December
                                               2006         2005          2005
                                        (Unaudited)  (Unaudited)     (Audited)
                                              £'000        £'000         £'000

(Loss)/Profit for the period                  (103)          158           248
New shares issued                               452            -             -
Increase/(Reduction) in share                   (2)          (2)             1
applications
Dividends paid                                    -            -          (77)
Opening shareholders funds                      409          217           217
Exchange differences                            (9)            8            20

Closing shareholders funds                      747          381           409



1. Business of Kenetics Group Limited


The Company was incorporated in Jersey on 22 June 2006 and on 24 July 2006
acquired the entire issued share capital of Kenetics Innovations.

Kenetics Innovations is incorporated and domiciled in Singapore. Its principal
office is at 2 Tannery Road #05-01 Cencon Building, Singapore 347720.

The principal activities are that of business of electronics design and of
manufacturing and producing all kinds of electrical and electronic goods.


2. Basis of preparation and significant accounting policies


The financial statements are prepared in accordance with International Financial
Reporting Standards ('IFRS') adopted in the presentation of the financial
information in the Company's AIM admission document.

The financial statements are presented in Sterling. They are prepared on the
historical cost basis.

For the purpose of these interim financial statements represents the results and
financial position of the Company's subsidiary company, Kenetics Innovations
that was acquired by way of an exchange of shares on 24 July 2006. The
acquisition of Kenetics Innovations has been treated as a merger for accounting
purpose and the full year accounts for the Company will be presented on this
basis.

The preparation of financial statements in conformity with IFRSs requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets, liabilities, income and
expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis of making the judgements
about carrying amounts of assets and liabilities that are not readily apparent
from other sources.

The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised, if the revision affects only that period, or in the period
of the revision and future periods, if the revision affects both current and
future periods.

Judgments made by management in the application of IFRSs that have a significant
effect on the financial statements an in arriving at estimates with a
significant risk or material adjustments in the following year.


3. Taxation
                                        6 months      6 months         Year
                                           ended         ended        ended
                                         30 June       30 June  31 December
                                            2006          2005         2005
                                     (unaudited)   (unaudited)     (audited)
                                          £'000         £'000         £'000

Provision for deferred taxation               -             -             -
Current taxation                              -            41            56

Corporate taxation credit                     -            41            56


4. Earnings/(loss) per share

Earnings/(loss) per share has been calculated on the basis of the profits or
losses attributable to ordinary shareholders divided by 23,592,880, being the
number of ordinary shares issued by the Company for the acquisition of Kenetics
Innovations on 24 July 2006.


5. Exchange rates

The reporting currency of the Company is deemed to be £ sterling. The functional
currency of Kenetics Innovations is Singaporean dollars. The following exchange
rates have been used in preparing this financial information:

£1 = S$

31 December 2004     3.127
30 June 2005         3.024
31 December 2005      2.86
30 June 2006         2.927


6. Post balance sheet events

On 24 July 2006, the Company issued 23,592,880 new Ordinary Shares of £0.01 each
in consideration for the acquisition of the entire issued share capital of
Kenetics Innovations.

On 11 August 2006 the Company issued 2,756,666 new Ordinary Shares of 1p each to
investors for a total cash consideration of £827,000.

On 11 August 2006 the Company's issued share capital was admitted to AIM.


7. Nature of financial information

The interim financial information set out above is not audited and does not
represent statutory financial statements for Kenetics Group Limited or for any
of the entities comprising the Kenetics Group for the period ended 30 June 2006.
Neither the Company nor Kenetics Innovations are required to prepare or file
statutory financial statements in the UK and have not done so. The first
statutory financial statements of Kenetics Group Limited will in respect of the
period ending 31 December 2006.

The Board approved the interim financial information for the period ended 30
June 2006 on 25 September 2006.

These interim results will be available on the Company's website
www.kenetics-group.com. Further copies can be obtained from the registered
office at 44 Esplanade, St Helier, Jersey, JE4 8PM.


                                      Ends



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