Interim Results

Crescent Hydropolis Resorts PLC 29 September 2006 29 September 2006 Crescent Hydropolis Resorts plc ('CHR' or 'the Company') INTERIM REPORT FOR THE PERIOD ENDED 30 JUNE 2006 Chairman's Statement Crescent Hydropolis Resorts PLC (CHR), the world's leading developer of ultra- luxury underwater resort hotels under the Hydropolis design concept, announces its interim results for the period ended 30 June 2006. The Company had €2.395.998 in cash as at 30 June 2006. The main items of expenditure relate to development costs associated with furthering CHR's proposed Hydropolis project at Qingdao, China, including legal, engineering, technical feasibility and travel costs. CHR has formed a local project management company in Qingdao, Crescent Hydropolis Qingdao Limited (CHQ), and CHQ received its operating license from the governmental authorities of the Laoshan District in Qingdao City, China on 23 August 2006. This license to do business in China has enabled your Company's local project development subsidiary, CHQ, to apply for full permits and licensing authorities for the project's HydroTower(R) landstation and HydroPalace(R) construction phases. Construction of the HydroTower is expected to start during the fourth quarter, subject to these licensing approvals and financing being granted. The HydroTower's superstructure (defined as the outer shell of the building, including all facilities - water, electricity, sanitation systems and common areas) is planned for completion prior to the start of the 2008 Beijing Olympic Games, with residential interiors customized for each potential apartment unit owner being completed on a schedule determined by each purchaser. Construction on the underwater HydroPalace(R) is still planned for completion in late 2009/early 2010. Detailed marine studies, surveys of steel manufacturing and shipbuilding yards and site surveys of the land on the Yellow Sea Coast have been concluded by your Company's engineering advisers and a suitable proposal to construct the hull of the HydroPalace has been agreed in principle with local construction groups in Qingdao as well as at shipyards in northern China. These agreements will be detailed further in a forthcoming announcement when contracts have been agreed. The Dubai project remains a priority for the Company. Land allocation rights, location and project financing are presently being negotiated and discussed with Dubai governmental authorities. Additionally, CHR is undertaking several management changes in its second year of operations to prepare for the commencement of the construction phase for the first Hydropolis underwater hotel project. Alfred Wuttke, formerly deputy chief of UBS Stuttgart, will assume the role of chief executive effective 9 October 2006. Mr Wuttke brings over 20 years of banking and finance experience to CHR at a critical time when arranging financing for the Qingdao project is the paramount matter of interest for our shareholders. Mansoor Ijaz, presently chief executive, will assume the role of deputy chairman of the Board of Directors, remaining as an executive director. These changes will add depth to the management team and strengthen prospects for completing the Qingdao project's early phases. The Company maintains its strong relationships with project manager, SIBC Industrial Building Consultants, and Siemens AG, for engineering and technology support. ............................................................ Joachim Hauser, Executive Chairman Munich, 29 September 2006 INDEPENDENT REVIEW REPORT TO CRESCENT HYDROPOLIS RESORTS PLC Introduction The Board of Directors of Crescent Hydropolis Resorts PLC (the Company) have instructed us to review the financial information set out on pages 3 to 5 and we have read the other information contained in the Interim Report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. This report is made solely to the Company in accordance with Bulletin 1999/4 issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the Company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have performed. Directors' Responsibilities The Interim Report, including the financial information contained therein, is the responsibility of, and has been approved by the Company's Directors. The AIM Rules require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review Work Performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed. Review conclusion On the basis of our review, we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 June 2006. CHANTREY VELLACOTT DFK LLP Chartered Accountants London 28 September 2006 CRESCENT HYDROPOLIS RESORTS PLC INCOME STATEMENT FOR THE PERIOD ENDED 30 JUNE 2006 Note Period ended Period ended 30 June 31 December 2006 2005 € € Management and Project Development Costs 9 125,103 2,294,282 Administrative Expenses 157,731 410,907 Loss on ordinary activities before interest (282,834) (2,705,189) Interest receivable 5 30,056 13,339 Taxation - - RETAINED LOSS (252,778) (2,691,850) Loss per share Basic and diluted 2 0.6c 6.2c All of the above amounts relate to continuing activities. There were no recognised gains and losses other than the results shown above. CRESCENT HYDROPOLIS RESORTS PLC UNAUDITED BALANCE SHEET AS AT 30 JUNE 2006 30 June 30 December 2006 2005 Note € € ASSETS Intangible assets 6 40,750,000 40,750,000 Current assets Trade and other receivables 2,600 1,711 Cash and cash equivalents 2,395,998 2,639,566 TOTAL ASSETS 43,148,598 43,391,267 Equity and Liabilities Shareholders' equity Share capital 3 810,286 810,286 Capital reserves 34,368,282 34,368,282 Accumulated losses (2,944,628) (2,691,850) 32,233,940 32,486,718 Non-current liabilities Long term liabilities 7 10,750,000 10,750,000 Total non current liabilities 10,750,000 10,750,000 Current liabilities Trade and other payables 164,658 154,549 Total current liabilities 164,658 154,549 Total liabilities 10,914,658 10,904,549 TOTAL EQUITY & LIABILITIES 43,148,598 43,391,267 CRESCENT HYDROPOLIS RESORTS PLC STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30 JUNE 2006 Share Capital Accumulated capital reserves losses Total € € € € Balance at 31 December 2005 810,826 34,368,282 (2,691,850) 32,486,718 Loss for the period - - (252,778) (252,778) Balance at 30 810,826 34,368,282 (2,944,628) 32,233,940 June 2006 CRESCENT HYDROPOLIS RESORTS PLC UNAUDITED CASH FLOW STATEMENT FOR THE PERIOD ENDED 30 JUNE 2006 Period Ended Period Ended 30 June 31 December 2006 2005 € € Cash Flows from Operating Activities Loss from Operations (282,834) (2,705,189) Operating Cash Flows before movement in Working Capital (282,834) (2,705,189) Increase in trade receivables (889) (1,711) Increase in trade payables 10,099 154,549 Returns on investments and servicing of finance Interest received 30,056 13,339 Net cash inflow from returns on investments and servicing of finance 30,056 13,339 Cash flows from financing activities Share capital issued (net of costs) - 5,178,568 Net Cash Flows from Financing Activities - 5,178,568 (Decrease)/increase in Cash (243,568) 2,639,556 Cash and cash equivalents brought forward 2,639,556 - Cash and cash equivalents carried forward 2,395,998 2,639,556 NOTES TO INTERIM REPORT FOR THE PERIOD ENDED 30 JUNE 2006 1. Basis of Preparation The Interim Accounts have been prepared in accordance with applicable international accounting standards and the Company's established accounting policies. The Interim Accounts do not constitute statutory accounts within the meaning of S.240 of the Companies Act 1985. 2. Loss per Share Six months Period ended ended 30 June 31 December 2006 2005 € € Loss for the period from continuing operations (252,778) (2,906,733) Weighted average number of ordinary shares in issue during the period 40,181,321 43,585,444 Loss per share Basic 0.6c 6.2c There are no dilutive instruments over the period. 3. Share Capital 30 June 31 December 2006 2005 € € Authorised 1,000,000,298 ordinary shares of €0.01 each 10,000,000 10,000,000 Called up, allotted and fully paid: Ordinary shares of €0.01 each 810,286 810,286 4. Directors' emoluments Directors' were paid a total of €26,526 in remuneration during the period. 5. Interest receivable Period ended Period ended 30 June 31 December 2006 2005 € € Bank interest 30,056 13,339 6. Intangible fixed assets 30 June 2006 € Cost At 31 December 2005 and at 30 June 2006 40,750,000 The directors believe that the know-how has an indefinite useful economic life. 7. Non-current liabilities 30 June 31 December 2006 2005 € € Deferred consideration 10,750,000 10,750,000 On 15 June 2005, CHR acquired the Hydropolis Project concept and all the associated know how from Crescent Hydropolis Holdings LLC for a consideration of 60,000,000 ordinary shares issued as fully paid at €0.50 per share (such shares being issued on 17 June 2005) and payment of €10,750,000 in cash in instalments with the final payment due in December 2009. The payments fall due as follows: €2,750,000 to be paid upon completion of financing for the first Hydropolis Project. €2,000,000 to be paid 60 days following publication of the annual accounts for the period to 31 December 2006. €2,000,000 to be paid 60 days following publication of the annual accounts for the period to 31 December 2007. €2,000,000 to be paid 60 days following publication of the annual accounts for the period to 31 December 2008. €2,000,000 to be paid 60 days following publication of the annual accounts for the period to 31 December 2009. In the event that on any instalment payment date CHR has insufficient working capital then the instalment is accrued until the following year without interest. Any unpaid consideration following the publication of the annual accounts for the period to 31 December 2009 will become due 60 days following publication of the annual accounts for each successive year until CHR is able to make payment and does so in full. 8. Related party transactions There were no related party transactions during the period. 9. Management & Project Development Costs €100,000 Hydropolis Qingdao project development costs (including travel, engineering, design, telecommunications and local legal expenses) € 17,500 Contract liquidation fee & legal fee paid for promotional television advertising material € 7,603 Website development costs, telecommunications expenses & conference meeting fee This information is provided by RNS The company news service from the London Stock Exchange

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