Half-yearly Report

CERES MEDIA INTERNATIONAL PLC ("Ceres" or the "Company" or the "Group") Chairman's Statement Ceres is a supplier of environmentally friendly and sustainable materials for the 'Out of Home' and 'In-store' print industry and has made progress in developing suitable materials and expanding its distribution chains for the delivery of these into the United Kingdom; USA and European markets during the past six months. The Board presents its results for the 6 months to 31 January 2012. As notified in recent announcements the Company's trading has been below directors' expectations. Revenues for the 6 months to January 2012 were £ 53,000. Performance has been impacted by the poor general economic conditions and specific structural issues impacting the print material distribution sector, especially in the United Kingdom. The directors have reacted to these changes by refocusing the Company's sales strategy by directly targeting potential end users of the product, simplifying the distribution process and optimising price competitiveness. The Company has started to see positive results from this strategy, both in terms of revenues as well as potential pipeline opportunities. The Company is in discussions and advanced product testing with a number of premium branded entities as well as directly with 'Out of Home' media organisations with the intention to supply product directly to these users. Additionally, the Company has recently received its first orders for Nature Netting, the Company's new event screening product designed specifically to support high profile events taking place in the UK during the summer. In relation to the sales of Chorus and Gossyp ranges, these remain below the board's expectations, although there have been recent indications of improvements in off-take for Chorus in the USA and Europe. After extensive testing Chorus and Gossyp were approved in March 2012 by Hewlett Packard ("HP") for use on its digital print machines - this will build significant confidence with printers who use HP's printers as well as provide manufacturer approved settings for optimal use on both products. Awareness of the NatureWovenTM range of products continues to increase and the Company is pleased to have been nominated as a finalist at the recent Sustainable Business Council of Los Angeles Awards. TierraFilmTM window cling product was launched in January 2012, however, technical issues surrounding the physical fixing process have led to slower than anticipated off-take - the directors anticipate that a newly formulated and improved TierraFilmTM window cling product will be available in the UK market in June 2012. TierraFilmTM 'Backlit 100 product has tested well and it is anticipated will be listed by two major 'Out of Home' media owners shortly. Working capital In the light of continued lower than expected sales, the directors have significantly reduced overhead and continue to carefully manage working capital. The directors are also actively managing the current stock levels to bring them more into line with current trading. The Company will need to have access to further working capital in the short term to allow it to finance anticipated sales growth. The board are considering a number of options. Board change Norman Fetterman, who has recently celebrated his 70th birthday has today announced he has resigned as a director of the Company. The Board would like to thank Mr. Fetterman for leading the business through the AIM flotation process in 2011 and beyond. The board is seeking to appoint an additional director to the board; a further announcement will be made in due course. The Company has experienced tough trading conditions since admission of its shares to AIM in September 2011, the directors albeit cautions about the future are optimistic that the Company's products can be successfully exploited in new and developing markets. The board would like to thank shareholders for their continued support of the Company. Leslie Barber, Chairman said "Whilst sales during the first six months of the year were very disappointing, marketing campaigns in both US and Europe are beginning to show results with a gradual turnover build so far in 2012. Market interest in our products is encouraging and we are in discussions with numerous major parties. We are focussed on ensuring that this continued customer interest is converted into orders as quickly as possible and that all our products meet the environmental requirements we have set out to satisfy. TierraFilmBacklit has now been developed and tested with three major 'Out of Home' media owners and approvals are expected shortly. TierraFilm's image reproduction qualities above all other benefits are proving to be the over-riding USP and the key reason for advertiser interest. The recent success of the new to market Jute based Nature Netting product has been welcomed, initial orders are encouraging and we are continuing to market this, as well as our other product lines, aggressively, albeit within the current constraints of our working capital position." Contact details:- Ceres Media International PLC Tel: 020 3178 5622 Alex Dowdeswell / Leslie Barber Nominated Adviser - Cairn Financial Advisers LLP Tel: 020 7148 7900 Jo Turner / Liam Murray Broker - First Columbus LLP Tel: 020 3002 2070 Chris Crawford / Kelly Gardiner Financial PR - De Facto Financial Tel: 020 7556 1063 Mike Wort / Anna Dunphy CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the six months ended 31 January 2012 six months Period 1 March 2011 Notes to 31 January 2012 to 31 July 2011 (unaudited) (Audited) £ £ CONTINUING OPERATIONS Revenue 2 52,832 30,054 Cost of Sales (32,563) (37,688) Administrative Expenses (472,807) (472,532) OPERATING LOSS (452,538) (480,166) Interest Income 0 250 Finance Costs (2,407) (4,859) LOSS BEFORE TAX (454,945) (484,775) Taxation 0 0 TOTAL COMPREHENSIVE (454,945) (484,775) EXPENSE FOR THE YEAR LOSS PER SHARE LOSS PER SHARE 4 0.015 0.021 BALANCE SHEET As at 31 January 2012 At 31 January 2012 At 31 July 2011 (unaudited) (Audited) £ £ ASSETS NON-CURRENT ASSETS Goodwill 868,088 868,088 Intangible Assets 255,213 223,306 Property, plant and equipment 15,384 9,057 1,138,685 1,100,451 CURRENT ASSETS Inventories 403,975 162,663 Trade and other receivables 49,790 98,313 Cash and cash equivalents 79,970 55,911 533,735 316,887 TOTAL ASSETS 1,672,420 1,417,338 EQUITY SHAREHOLDERS' EQUITY Called up share capital 5,260,069 5,200,348 Share premium 831,887 0 Other reserves (3,444,553) (3,444,552) Retained earnings (1,330,117) (875,172) TOTAL EQUITY 1,317,286 880,624 LIABILITIES CURRENT LIABILITIES Trade and other payables 304,731 536,714 Financial liabilities: borrowings Interest bearing loans and borrowings 50,403 0 TOTAL LIABILITIES 355,134 536,714 TOTAL EQUITY AND LIABILITIES 1,672,420 1,417,338 CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY As at 31 January 2012 Called up Share Merger Reverse Profit and Total Share capital Premium reserve acquisition loss account Equity reserve £ £ £ £ £ £ At 1 August 2011 5,200,348 1,157,850 (4,602,402) (875,172) 880,624 Issue of Equity 59,721 831,887 891,607 Loss for the period (454,945) (454,945) At 31 January 2012 5,260,069 831,887 1,157,850 (4,602,402) (1,330,117) 1,317,286 Called up Share Merger Reverse Profit and Total Share capital Premium reserve acquisition loss account Equity reserve £ £ £ £ £ £ At 1 March 2011 150,539 419,249 (390,397) 179,391 Issue of Equity: Consideration shares 4,042,498 4,042,498 Other shares issued 272,850 272,850 Reverse acquisition reserve 734,461 (419,249) 1,157,850 (4,602,402) (3,129,340) conversion Loss for the period (484,775) (484,775) At 31 July 2012 5,200,348 1,157,850 (4,602,402) (875,172) 880,624 CONSOLIDATED STATEMENT OF CASH FLOWS For the six months ended 31st January 2012 Six months Period to 31 January 2011 to 31 July 2011 (Audited) £ £ Cash flows from operating activities Loss before tax (454,945) (484,775) Depreciation charges 2,405 1,304 Investment income 0 (250) Increase in inventories (241,312) (114,470) (Increase)/decrease in trade and other receivables 48,523 50,144 Increase/(decrease) in trade and other payables (231,983) 229,629 Net cash from operating activities (877,312) (314,418) Cash flows from investing activities Purchase of intangible fixed assets (31,907) (28,006) Purchase of tangible fixed assets (6,327) (6,921) Acquisition of subsidiaries, net of cash 0 385,144 Finance income received 0 250 Net cash from investing activities (38,234) 350,467 Cash flows from financing activities New loans in the year 109,005 Issue of equity net of costs 891,609 10,334 Repayment of loan (58,602) Finance interest paid (2,407) Net cash from financing activities 939,605 10,334 Increase/(decrease) in cash and cash equivalents 24,059 42,383 Cash and cash equivalents at the beginning of period 55,911 13,528 Cash and cash equivalents at end of period 79,970 55,911 NOTES TO THE HALF YEARLY REPORT 1 GENERAL INFORMATION Ceres Media International plc is a public limited company incorporated and domiciled in the United Kingdom with its shares listed on the AIM market of the London Stock Exchange. The principal activity of the Group is the development, production and provision of 100% natural and compostable printing materials to the advertising and point of sale markets. The Ultimate parent company of the Group is Ceres Media International plc whose principle place of business is 81 Rivington Street, London, EC2A 3AY and registered office is Acre House, 11-15 William Road, London NW1 3ER. The interim financial statements for the period ended 31 January 2012 (including the comparatives for the period ended 31 July 2011) were approved by the Board of Directors on 30 April, 2012. Under the Security Regulations Act of the European Union ("EU"), amendments to the financial statements are not permitted after they have been approved. The financial information set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 July 2011, prepared under International Financial Reporting Standards ("IFRS"), have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain statements under Sections 498(2) and 498(3) of the Companies Act 2006. The interim financial information has been prepared using the accounting policies set out in the Group's 2011 statutory accounts. Copies of the annual statutory accounts and the interim report may be obtained by writing to Ceres Media International plc, 81 Rivington Street, London EC2A 3AY and can be found on the Company's website at www.ceresmediaplc.com 2 SEGMENTAL REPORTING Six months Period to 31 January 2012 to 31 July 2011 EU 36,443 16,817 Rest of the world 16,389 13,237 52,832 30,054 3 EXCEPTIONAL ITEMS The Group incurred exceptional items of £300,281 in relation to costs incurred to list the company on AIM and the share issue during the period. 4 EARNINGS / (LOSS) PER SHARE The calculation of earnings per share is based on the net result and ordinary shares in issue during the period as follows: £ £ Loss for the financial period 454,945 484,775 Weighted average shares in issue in the period 30,978,591 23,373,726 Loss per share 0.015 0.021 5 SHARE CAPITAL During the period Ceres Media International plc issued the following shares Ordinary shares of 20p/1p each In issue at 1 August 2011 26,001,739 Issued during the period 5,972,222 In issue at 31 January 2012 31,973,961 On 26th August 2011 the company converted each Ordinary Share of 20p into one new Ordinary Share of 1p and a Deferred Share of 19p

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