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Greenchip Investment (XEN)

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Tuesday 30 September, 2003

Greenchip Investment

Interim Results

Greenchip Investments  PLC
30 September 2003


GREENCHIP INVESTMENTS PLC

INTERIM REPORT - SIX MONTHS ENDED 30 JUNE 2003

CHAIRMAN'S STATEMENT

Current operations

This reporting period has proved no less challenging than its predecessor where,
as more fully set out in the full year Report and Financial Statements, the
Company had to deal with many technical, and, latterly, significant financial
challenges in its quest to commercialise its developing technology. I believe
that it is worthwhile to reiterate two important points from the last full
year's Statement:


"In the interim statement published on 27th September 2002, the Board also
mentioned that it had identified, and was pursuing, a number of potential merger
/acquisition transactions. One such potential acquisition was, in fact, at an
advanced stage of discussions and, subject to financing and final due diligence,
was expected to close no later than February of this year. I regret to inform
shareholders that, despite the potential benefits of the acquisition, the Group
was not able to complete the transaction due to its inability to secure the
necessary finance.  Accordingly, negotiations in respect of this transaction
have been abandoned."

"Regrettably, I have to report that, in common with many early stage development
projects, it has proved more difficult, time consuming and expensive than
originally envisaged to bring this technology to commercial fruition."

That situation has continued in the six months under review and, regrettably, I
am unable to report that any meaningful commercial breakthrough was made prior
to 30th June, or, indeed, up to the date of writing.  A downscaled development
team in the United States has continued with the technical effort concomitant
with the directors seeking new funding opportunities to enable the Company to
move the technology into what one would hope would be its final stages.  That
said, I am unable to report tangible progress and the Company's position remains
perilous - especially for the US subsidiaries where the deficit on Shareholders
Funds per the attached Consolidated Balance Sheet is vested.

This is the position in which the Company finds itself, and although new funding
efforts will continue to be made, the prevailing circumstances are unhelpful to
that process.

Financial Statements

The attached Financial Statements (which are both unaudited and unreviewed)
indicate a somewhat bleak position. In the absence of either the raising of
fresh capital or achieving the required level of technological breakthrough to
see the way clear to profitable operations, I can make little comment upon them.
There is very limited trade and the US operations continue to be loss-making,
leading to a potentially serious deficit on net assets in the US subsidiaries, a
deficit which will not be able to be met from the parent company without a new
injection of funds.


s.142 Extraordinary General Meeting

On 20th August 2003 the Company held an Extraordinary General Meeting (EGM)
pursuant to the provisions of s.142 (Companies Act 1985). For ease of reference,
I set out below the "Additional Information" included in the EGM Notice which
background information remains highly pertinent to the present state of affairs:

"The Directors have closely considered the implications of the disappointing
lack of progress which has been made in the period as to finalising the product
development and testing of new degradable plastics technologies being at the
heart of the Company's business plan pursuant to its acquisition of Programmable
Life Inc in January 2002. While considerable efforts have certainly been made
and substantial funds expended in pursuit of these goals, the Company has not
yet been able to bring its plans to fruition such that any commercially
licensable system(s) or product(s) can be profitably marketed. These efforts
have largely exhausted the Company's resources and, consequently, its ability to
continue with the product development and marketing effort.

The acquisition of Programmable Life Inc resulted in an increase in the
Company's issued share capital from circa 35m to 135m Ordinary Shares. Upon
preparation of the statutory accounts of the Company for the 12 months to 31
December 2002, this gave rise to Goodwill upon Consolidation of approximately
£4.1m.  While the Company can sustain itself with the technology of its US
subsidiaries 'on hold' while new funding arrangements might be able to be made
for the continuation of the development effort, the Directors believe that the
aforementioned Goodwill must be considered seriously impaired.  They have
therefore made a full provision against it, as shown in the Company's current
Report and Accounts, and as a result of which, the provisions of s.142 have
become applicable.


The purpose of the EGM is to provide shareholders, inter alia, with the
opportunity:


  • to make further enquiries of the Directors;

  • to consider such proposals that the Directors may be able to put to the
    meeting;

  • to consider what measures should be taken going forward.


This Notice has had to be issued very soon after the production of the statutory
accounts for the Company. Consequently, your Board, is unable to say at the time
of writing what measures may be available for consideration at the meeting.
However, shareholders can be assured that every effort is being, and will
continue to be made to investigate any relevant proposal that may come forward.
In circumstances where the Board is able to do so, further information will be
sent to shareholders prior to the meeting."


In the absence of any firm proposal, the meeting provided a forum at which
shareholders could ask questions of a general nature to which the directors (in
the context of this being a public company) could only respond in equally
general terms; no resolutions were placed before shareholders and, consequently,
there was nothing to announce to the market following it.


Future Prospects


Your Board is, of course, continuing to pursue any reasonable opportunity to
either raise new capital to continue with the development effort in the USA or
to introduce a totally new opportunity to take advantage of the Company's listed
status. I hope to be able to report further on one or more of these matters at
the Company's next Annual General Meeting which is being convened on 31st
October 2003.


It may be some comfort to shareholders that, as previously reported, your
Directors are working on a totally unpaid basis, as indeed they have done since
November of last year, sacrifices which, together with those made by former
directors and advisers, allow the Company to maintain operations both here and
in the United States, albeit on highly restricted bases.


On behalf of my co-directors, I wish to thank all those who have remained
steadfast in their support of the Board through such turbulent times and I look
forward to the Company making tangible progress in the upcoming weeks and
months.


Colin Hill

Non-Executive Chairman

30th September 2003

CONSOLIDATED PROFIT AND LOSS ACCOUNT

Unaudited Interim Results for the six months to 30th June 2003


                                                                         Six months       Six months        Year to
                                                                        to 30/06/03      to 30/06/02       31/12/02
                                                                          Unaudited        Unaudited        Audited
                                                                                  £                £              £

TURNOVER                                                                     44,473           70,899         80,861

COST OF SALES                                                                13,572           30,187         82,326
                                                                          _________      ___________  _____________
GROSS PROFIT/(LOSS)                                                          30,901           40,712        (1,465)

Administrative expenses                                                     107,273          524,905      4,985,539
Other operating income                                                            -                -          7,565
                                                                          _________      ___________  _____________
OPERATING LOSS                                                             (76,372)        (484,193)    (4,979,439)


Loss on disposal of investments                                               (920)                -              -
Interest receivable                                                              16           10,710         12,757
Waiver of secured loans                                                           -                -        155,247
Provisions against investments                                                    -                -      (315,567)
Interest payable                                                            (3,167)                -       (12,777)
                                                                          _________      ___________  _____________
LOSS ON ORDINARY ACTIVITIES
BEFORE TAXATION                                                            (80,443)        (473,483)    (5,139,779)

Tax on loss on ordinary activities                                                -                -              -
                                                                          _________      ___________  _____________
LOSS FOR FINANCIAL PERIOD
AFTER TAXATION                                                             (80,443)        (473,483)    (5,139,779)
                                                                              =====           ======        =======

Loss per ordinary share - basic and diluted                                 (0.05)p          (0.36)p        (3.68)p
                                                                              =====           ======        =======

Loss per ordinary share before impairment
of goodwill- basic and diluted                                              (0.05)p          (0.36)p        (0.74)p
                                                                              =====           ======        =======


CONSOLIDATED BALANCE SHEET AS AT 30TH JUNE 2003

Unaudited Interim Results for the six months to 30th June 2003


                                                                              As at            As at          As at
                                                                           30/06/03         30/06/02       31/12/02
                                                                          Unaudited        Unaudited        Audited
                                                                                  £                £              £

FIXED ASSETS
Goodwill on consolidation                                                         -        4,101,234              -
Other intangible assets                                                     146,570          133,466        157,233
Tangible assets                                                                   1            8,435              1
Investments                                                                       -           32,442         91,875
                                                                        ___________    _____________    ___________
                                                                            146,571        4,275,577        249,109
                                                                        ___________    _____________    ___________

CURRENT ASSETS
Stocks                                                                          976           35,568          1,000
Debtors                                                                       1,999           34,036         12,518
Cash at bank and in hand                                                     30,544          407,585         64,376
                                                                        ___________    _____________    ___________
                                                                             33,519          477,189         77,894
CREDITORS: Amounts falling
due within one year                                                        (75,349)        (274,619)      (131,180)
                                                                        ___________    _____________    ___________
NET CURRENT (LIABILITIES)/ASSETS                                           (41,830)          202,570       (53,286)
                                                                        ___________    _____________    ___________

TOTAL ASSETS LESS CURRENT
LIABILITIES                                                                 104,741        4,478,147        195,823

CREDITORS: Amounts falling
due after more than one year                                              (174,213)        (213,873)      (180,119)
                                                                        ___________    _____________    ___________
TOTAL NET (LIABILITIES)/ASSETS                                             (69,472)        4,264,274         15,704
                                                                             ======          =======         ======


CAPITAL AND RESERVES

Called up share capital                                                   1,602,816        1,352,816      1,602,816
Share premium account                                                     7,136,165        7,011,165      7,136,165
Profit and loss account                                                 (8,808,453)      (4,099,707)    (8,723,277)
                                                                      _____________    _____________  _____________
SHAREHOLDERS' FUNDS                                                        (69,472)        4,264,274         15,704
                                                                            =======          =======        =======



COMPANY BALANCE SHEET AS AT 30TH JUNE 2003

Unaudited Interim Results for the six months to 30th June 2003


                                                                              As at            As at          As at
                                                                           30/06/03         30/06/02       31/12/02
                                                                          Unaudited        Unaudited        Audited
                                                                                  £                £              £

FIXED ASSETS
Tangible assets                                                                   -            1,426              -
Investments                                                                       -        3,820,761         91,875
                                                                        ___________    _____________    ___________
                                                                                  -        3,822,187         91,875
                                                                        ___________    _____________    ___________

CURRENT ASSETS
Debtors                                                                       1,822          434,155         12,334
Cash at bank and in hand                                                     29,959          354,621         32,787
                                                                        ___________    _____________    ___________
                                                                             31,781          788,776         45,121
CREDITORS: Amounts falling
due within one year                                                        (15,648)         (32,196)       (70,376)
                                                                        ___________    _____________    ___________
NET CURRENT ASSETS/(LIABILITIES)                                             16,133          756,580       (25,255)
                                                                        ___________    _____________    ___________

TOTAL ASSETS LESS CURRENT
LIABILITIES                                                                  16,133        4,578,767         66,620

CREDITORS: Amounts falling
due after more than one year                                                      -          (1,185)        (1,185)
                                                                        ___________    _____________    ___________
TOTAL NET ASSETS                                                             16,133        4,577,582         65,435
                                                                             ======          =======         ======


CAPITAL AND RESERVES

Called up share capital                                                   1,602,816        1,352,816      1,602,816
Share premium account                                                     7,136,165        7,011,165      7,136,165
Profit and loss account                                                 (8,722,848)      (3,786,399)    (8,673,546)
                                                                      _____________    _____________  _____________
SHAREHOLDERS' FUNDS                                                          16,133        4,577,582         65,435
                                                                            =======          =======        =======




CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS TO 30TH JUNE 2003



Unaudited Interim Results for the six months 30th June 2003


                                                                          Six months     Six months        Year to
                                                                         to 30/06/03    to 30/06/02       31/12/02
                                                                           Unaudited      Unaudited        Audited
                                                                                   £              £              £


Net cash outflow from operating activities                                  (85,124)      (508,265)      (902,514)
                                                                          __________     __________      _________


Returns on investments and servicing

of finance
Bank interest received                                                            16         10,710         12,757
Bank and other loan interest paid                                            (1,102)              -       (12,777)
                                                                          __________     __________      _________

Net cash (outflow)/inflow from returns on
investments

and servicing of finance                                                     (1,086)         10,710           (20)
                                                                          __________     __________      _________

Capital expenditure

Proceeds from disposal of investments                                         90,955              -              -
Proceeds from disposal of tangible fixed                                           -              -            285
assets
                                                                         ___________    ___________      _________

Net cash inflow from capital expenditure                                      90,955              -            285
                                                                          __________     __________      _________


Acquisitions and disposals

Acquisition of a subsidiary                                                        -      (288,318)      (288,318)
Net cash acquired with subsidiary                                                  -          4,323          4,323
                                                                        ____________   ____________    ___________
Net cash outflow from acquisitions and

Disposals                                                                          -      (283,995)      (283,995)



                                                                        ____________   ____________  _____________

Increase/(decrease) in cash in the period                                      4,745      (781,550)    (1,186,244)

                                                                              ======         ======        =======



CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

Unaudited Interim Results for the six months 30th June 2003


                                                                          Six months     Six months        Year to
                                                                         to 30/06/03    to 30/06/02       31/12/02
                                                                           Unaudited      Unaudited        Audited
                                                                                   £              £              £


Loss for the financial period                                               (80,443)      (473,483)    (5,139,779)

Exchange differences on translation of
net assets of subsidiary undertaking                                         (4,733)         19,467         62,193
                                                                           _________    ___________  _____________

Total recognised losses relating to the period                              (85,176)      (454,016)    (5,077,586)
                                                                               =====         ======        =======



NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS TO 30TH JUNE 2003


1.   The interim financial statements for the six months ended 30th June 2003
are unaudited and were approved by the directors on 30th September 2003. The
financial information set out above does not constitute statutory accounts
within the meaning of Section 240 of the Companies Act 1985. The information
given as comparative figures for the year ended 31st December 2002 was extracted
from the Company's audited statutory accounts for that financial year.

2.   ACCOUNTING POLICIES


The principal accounting policies of the Company have remained unchanged from
those set out in the Company's 2002 accounts. It is apposite to update the going
concern note as follows:

The substantial product development and marketing effort expended during 2002,
which absorbed most of the group's available cash resources, has continued
albeit at a much reduced level. The directors are of the opinion that new
funding is required to bring the product development and marketing programme to
fruition and accordingly the directors intend to raise additional finance during
the course of the next twelve months.

Whilst the directors are hopeful that the Group will be able to secure
additional funding to enable it to continue to meet its debts as they fall due
and to undertake the programme described above for at least twelve months from
the date of approval of these financial statements, there can be no guarantee
that this will be the case.

The financial statements have been prepared on the going concern basis, the
validity of which is dependent upon the directors securing additional finance as
described above.

The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or to amounts and
classification of liabilities that may be necessary should the entity be unable
to continue as a going concern.


3. The results of Programmable Life Inc have been consolidated using the
   acquisition method.


4.   RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING
     ACTIVITIES


                                                                          Six months     Six months        Year to
                                                                         to 30/06/03    to 30/06/02       31/12/02
                                                                           Unaudited      Unaudited        Audited
                                                                                   £              £              £

Operating loss                                                              (76,372)      (484,193)    (4,979,439)
Amortisation of intangible fixed assets                                        6,852         24,068      4,115,125
Depreciation                                                                       -          1,899         10,676
Loss on disposal of tangible fixed assets                                          -              -          (285)
Decrease in stocks                                                                24         35,933         70,501
Decrease in debtors                                                           12,518        307,180        328,698
Decrease in creditors                                                       (28,146)      (393,152)      (447,790)
                                                                         ___________    ___________    ___________
Net cash outflow from operating activities                                  (85,124)      (508,265)      (902,514)
                                                                              ======         ======         ======


5.   RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT

                                                                         Six months       Six months      Year to
                                                                        to 30/06/03      to 30/06/02     31/12/02
                                                                          Unaudited        Unaudited      Audited
                                                                                  £                £            £

Opening net (debt)/ funds                                                 (124,794)        1,168,011    1,168,011

Increase/(decrease) in cash in period                                         4,745        (781,550)  (1,186,244)

Acquisition of subsidiary                                                         -                -    (342,431)

Other                                                                         (922)           21,124      235,870
                                                                     ______________      ___________  ___________
Closing net (debt)/ funds                                                 (120,971)          407,585    (124,794)
                                                                            =======           ======       ======

6.   EARNINGS PER SHARE

The calculation of earnings per ordinary share is based on losses of
£80,443 and on the weighted average number of shares in issue during the period
of 160,281,597 ordinary 1p shares. The diluted earnings per share has been
presented on the same basis as the basic earnings per share as all potential
ordinary shares would be anti-dilutive.

7.   Copies of the interim report are available to the public free of charge
from the Company at 18 Pall Mall, London SW1Y 5LU during normal office hours,
Saturdays and Sundays excepted, for 14 days from today.


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