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Velosi Interims Final 22 09 08 by fgYY1y

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									22 September 2008


                  Velosi Limited ("Velosi", “the Company” or “the Group”)

                                       Interim Results
                         For the six month period ended 30 June 2008


Velosi, the AIM listed provider of asset integrity and HSE services to major national and
multinational oil and gas companies, is pleased to announce its interim results for the six months
ended 30 June 2008.


Highlights

       Turnover increased 60% to US$77.3 million (2007: US$48.4 million)

       Operating profit increased by 36% to US$7.02 million (2007: US$5.16million)

       Profit before tax up 31% to US$7.2 million (2007: US$5.5 million)

       Basic earnings per share of 10.4 cents (2007: 9.3 cents)

       Successful Placing in March 2008 raising gross proceeds of £4.42 million (US$8.7
        million)

       Focus on expansion within new regions of operation and consolidation of acquisitions

       Major contract wins since the interim period end


John Hogan, Chairman, commented:

“I am pleased to announce another good set of results for the Group, with strong growth
performance in turnover and profit. We continue to win new contracts, in both geographically and
strategically important areas, from existing and new clients, demonstrating the quality of Velosi’s
services offering. Trading since the period end has continued well and is in line with market
expectations. Looking ahead, I am confident Velosi will continue to provide value and growth for
shareholders.”


For further information, please contact:


    Velosi                   Dr Nabil Abdul Jalil      020 7930 0777
                             Dan Ooi
    Strand Partners          James Harris              020 7409 3494
    Charles Stanley          Mark Taylor               020 7149 6000
    Securities               Freddy Crossley
    Cardew Group             Tim Robertson             020 7930 0777
                             Shan Shan Willenbrock
                             Catherine Maitland
CHAIRMAN’S STATEMENT

I am very pleased to announce another strong set of interim results for the Group for the six
months ended 30 June 2008. The results show substantial increases in both revenues and profits
reflecting the Group’s success in developing its geographic presence so that it can deliver a
“Global Reach, Local Service” to the major national and multinational oil and gas corporations.
New contract wins and the renewal of existing contracts have driven revenue growth, with the
Group benefiting from being able to offer an expanded range of services to meet the diverse
requirements of its clients.

Market conditions remain favourable, with continued high levels of investment in the oil and gas
sector underpinning the growth in demand for Velosi’s services. The issue of safety remains
paramount across the oil and gas sector and as a result the Group has benefited in particular
from strong demand for its asset integrity management and health, safety, and environment
(HSE) services, which covers quality assurance and quality control services.

Also during the period, the Group was focused on the consolidation and integration of recent
acquisitions and the new offices opened over the last 12 months. In part, this involved ensuring
that the expertise and client relationships held regionally are shared across the Group’s
operations, the importance of which has been reflected in the efficient and effective establishment
of recently opened offices.

Financial Performance

The successful execution of the Group’s strategy led to turnover increasing by 60% to US$77.3
million (2007: US$48.4m). Profit from ordinary activities before tax for the period was up 31% to
US$7.2 million (2007: US$5.5m), and profit after tax also increased, from US$4.6 million in 2007
to US$6.0 million. The growth in turnover and profit was driven by the Group’s expansion into
new regions, such as Angola, Ghana, Vietnam and Indonesia, alongside the continued new
contract wins from both new and existing clients.

The effective tax rate for the Group for the half year was 16% (2007: 16%) and the tax charge
was US$1.2 million (2007: US$0.9m). The effective tax rate for the Group reflects the
contributions from the different regions and their varying tax rates.

Profits attributable to minority interests for the period were US$1.6 million (2007: US$1.0m).
Basic earnings per share after minority interests were 10.4 cents and fully diluted earnings per
share after minority interests were 9.4 cents.

Velosi’s cash position is strong. At 30 June 2008, cash and cash equivalents for the Group were
US$10.7 million (2007: US$8.2m) and we had long-term bank borrowings of US$1.5 million
(2007: US$0.8m). There was a small operating cash outflow of US$0.5 million (2007: US$1.1
million) reflecting the strong growth profile as well as the timing of certain receipts around the
period end. Significant payments were also received in relation to operations in the Middle East
in the subsequent months of July and August.

As announced on 21 April 2008, Velosi successfully raised £4.42 million (US$8.7 million) through
the issue of 3,842,000 new ordinary shares at a placing price of 115 pence (215 cents) per share
to institutional investors, to augment existing working capital facilities and for the development of
the Group’s business.

Dividend

As previously stated the Board does not propose to pay an interim dividend. The Board does
however intend, subject to the availability of distributable reserves and a satisfactory performance
in the second half of the year, to recommend a final dividend to shareholders in respect of the
financial year ending 31 December 2008.
Operational Review

2008 has seen a continuation in demand for Velosi’s services from the major oil and gas and
petrochemical companies driven by the ongoing high levels of investment in infrastructure
projects combined with a heightened focus on safety issues across the industry. The Group also
benefited from its expansion into new regions such as Angola, Ghana, Vietnam, The Netherlands,
Russia and Indonesia together with the expansion of its diverse range of services to include Asset
Integrity Management Services.

A key focus during the period was developing and expanding Velosi’s position within the new
regions of operation, as well as consolidating the acquisitions of K2 Specialist Services Pte Ltd
(“K2”) and Intec UK Limited (“Intec”) announced in 2007. The growing synergies and cross
referrals across the Group’s strategic business units (“SBUs”), is enhancing the performance of
the Group’s 47 companies, 3 branches and 7 representative offices. SBUs are the Group’s
subsidiaries, providing specialised services within our core activities.

Asia & Australasia

Turnover: US$13.9 million (2007: US$4.5 million), Contribution to Group Sales: 18% (2007: 9%)

Asia and Australasia again saw a substantial increase in revenues driven by strong contributions
from its new offices in Vietnam and Indonesia together with further progress from the recent
acquisition of K2 in Singapore and QAM, the quality assurance and inspection company based in
Australia.

Vietnam continued to benefit from its manpower contract with Truong Son JOC awarded in June
last year worth US$1.3million per annum, together with a new inspection services contract in
March awarded this year with Technip worth at least US$1.5 million which was extended to the
end of October 2008). Indonesia benefited from winning an important new vendor and expediting
contract with Conoco Indonesia worth US$7.8 million over three years beginning from May 2008.

K2, acquired by the Group in October 2007, continued to make excellent progress providing
inspection, testing and engineering support services in remote and extreme environments to the
oil and gas industry. Recently K2 announced it had been awarded two new contracts - the first
with PPL Shipyard, Singapore, worth $2.75 million for the assembly and installation of five new
build jackup derricks which is expected to be completed in June 2009. The second contract was
with COSCO shipyard, Nantong, China, for the supply of specialist equipment, manpower and
technical know-how to carry out the assembly and installation of the drilling package on the semi-
submersible Sevan 650 drilling rig. The contract is worth $1.22 million and is expected to be
completed in the current financial year.

Europe

Turnover: US$19.6 million (2007: US$3.6 million), Contribution to Group Sales: 25% (2007: 7%)

Europe delivered the Group’s largest rise in revenues for the period. This substantial increase
came primarily from the successful integration of Intec, acquired in October 2007, through which
the Group is running a number of European contracts, the continuation of the Shell EP Europe
contract awarded in January 2007 which runs to December 2009, and the recent landmark
contract with BP Norway.

Intec is becoming increasingly involved in new contracts brought in from different European
countries providing additional expertise and acting as a key European centre.

The Group made a significant step forward in establishing a strong presence in Scandinavia with
its first contract with BP Norge AS which commenced in March 2008. Under this contract Velosi
will provide Quality Assurance and Control for BP, including verification, certification and
enhancement services at fabrication sites in Norway and the rest of Europe.
Middle East

Turnover: US$26.8 million (2007: US$14.3 million), Contribution to Group Sales: 35% (2007:
29%)

Building on a good result in 2007, the Middle Eastern region demonstrated another strong
performance during the period, with revenues almost doubling against the comparative period last
year. Demand was strong across the region, with the Qatari and Kuwaiti operations performing
particularly well, benefiting from an increase in maintenance contracts with clients such as
RasGas and Qatar Gas.

Demonstrating the demand for Velosi’s newly established asset integrity services, Al Khafji Joint
Operations (”KJO”), a joint venture between Aramco Gulf Operations and Kuwait Gulf Oil
Company, awarded a $2.2 million, two year contract to Velosi effective from April 2008.

Most recently, and after the period end, the newly established Saudi Arabian unit won a major five
year General Inspection Services Contract with Saudi Aramco effective from July 2008 until the
second quarter of 2013. This is an important breakthrough win for a new region and one which
also represents a significant increase in the scope of work with Aramco, one of the world’s leading
producers of oil and gas. There is also an option for the contract to be extended for a further three
years.

Africa

Turnover: US$8.7 million (2007: US$18.1 million), Contribution to Group Sales: 11% (2007: 37%)

Turnover in the first half has been impacted by the ongoing negotiations with Richard
Ogunmakin’s estate regarding the future ownership and operation of Velosi Nigeria. While there is
no certainty that the outcome of these negotiations will be favourable to the Group, the trading
performance from other regions in the division, particularly from Angola and Ghana, is expected
to produce a significant increase in revenues for the second half of the financial year. Looking
further ahead, the Group expects Africa will again be one of the largest contributors to Group
revenues.

Velosi won one of its largest contracts to date with Chevron Angola to provide Construction
Management and Inspection Services personnel to Chevron’s oil and gas operations in Cabinda,
Angola.

Ghana has had a successful beginning to 2008, winning a contract with BOST which began in
February 2008 and is worth approximately US$2.5 million over the next two years.


Americas and Former Soviet Union (FSU)

Turnover: US$8.1 million (2007: US$7.9 million), Contribution to Group Sales: 10% (2007 16%)

Americas and FSU generated a satisfactory performance for the first half of 2008 and is expected
to benefit in the second half from the 5 year contract with Exxon Neftegas worth up to US$6
million which commenced in May 2008. Won by the new office in Sakhalin, it is a significant step
in establishing Velosi’s presence in this region which continues to trade in line with expectations.

Employees

On behalf of the Board, I would like to take this opportunity to thank all of our employees
worldwide for their dedication and continued hard work. Due to the scarcity of high quality
candidates recruitment remains an industry wide issue. As a result, the Group has implemented a
‘localisation policy’ whereby each office is encouraged to recruit local employees. This policy has
been successful, substantially increasing the number of employees recruited locally which in turn
has reduced the costs of recruitment, increased the effectiveness of internal training programmes
and developed an expanding pool of future local and regional managers.
Outlook

Since the IPO in 2006, the Group has expanded rapidly through a selective mix of acquisitions
and the opening of new offices. These actions mean that Velosi is now able to service its clients
from a much broader geographic base and provide a wider range of complementary services.
This has enabled the Group to meet the strong demand for its services stemming from the
continued investment in infrastructure projects and consequent increase in demand for
maintenance services to ensure the continuity of the operations over the long-term.

Although some way off the all time highs of earlier in the year oil and gas prices still remain
relatively high - a key factor in the recent growth of the oil and gas sector. The Group is also
working to diversify its activities into other areas which require similar services and technical
expertise such as nuclear power and mining industries.

Velosi has delivered an excellent performance for the first 6 months which has created a strong
platform on which to deliver a positive outcome for the full year. The Board confirms that trading is
in line with expectations and looks forward to the business continuing to expand both organically
and through acquisition.



JOHN HOGAN
CHAIRMAN
22 September 2008
VELOSI LIMITED

Consolidated Income Statement
For the six months ended 30 June 2008

                                                    Six months    Six months ended     Year ended
                                                         ended        30 June 2007    31 December
                                                  30 June 2008             US$’000            2007
                                                       US$’000          (unaudited)       US$’000
                                           Note     (unaudited)                           (audited)

Revenue                                     7           77,306              48,427         116,997

Cost of sales                                         (58,232)            (36,295)        (89,152)
                                                     ________            ________        ________
Gross profit                                            19,074              12,132          27,845

Other operating income                                      28                 257           1,435

Administrative expenses                               (12,083)             (7,234)        (18,121)
                                                     ________            ________        ________
Operating profit                                         7,019               5,155          11,159

Finance costs                                            (269)                 (26)          (253)

Share of profit of associated companies                    418                 333             520
                                                     ________            ________        ________
Profit on ordinary activities before tax                 7,168               5,462          11,426

Income tax expense                          3          (1,160)               (888)         (1,670)
                                                     ________            ________        ________
Profit on ordinary activities after tax                  6,008               4,574           9,756

Minority interests                                     (1,598)             (1,014)         (2,301)
                                                     ________            ________        ________
Profit from continuing operations and
attributable to equity holders                           4,410               3,560           7,455
                                                     ________            ________        ________


Earnings per ordinary share
 Basic earnings per share                   5        10.4 cents           9.3 cents     19.4 cents
 Diluted earnings per share                 5         9.4 cents           8.7 cents     18.2 cents
VELOSI LIMITED

Consolidated Balance Sheet
As at 30 June 2008

                                                     30 June 2008    30 June 2007   31 December
                                                                                            2007
                                                         US$’000         US$’000        US$’000
                                              Note    (unaudited)     (unaudited)       (audited)

Assets

Non-Current Assets

  Goodwill on acquisition                                   7,341           3,729          7,341
  Intangible assets                            8            1,549               -          1,662
  Property, plant and equipment               11            7,325           5,284          6,920
  Investment in associated companies          12            1,247           1,033            869
  Other investments                                             9               -              9
  Deferred tax assets                                          42              76             88
                                                        ________        ________       ________
                                                           17,513          10,122         16,889
                                                        ________        ________       ________
Current Assets

  Cash and cash equivalents                                15,881           8,200          7,967
  Inventories                                               4,610           2,755          1,056
  Trade and other receivables                              54,626          33,523         48,737
  Tax recoverable                                             450              50             90
                                                        ________        ________       ________
                                                           75,567          44,528         57,850
                                                        ________        ________        _______

Non-current asset held for sale                               900               -            900
                                                        ________        ________        _______
Total Assets                                               93,980          54,650         75,639
                                                        ________        ________       ________

Equity and Liabilities

Capital and Reserves

  Share capital                                4              869             767            787
  Share premium                                4           30,226          18,499         21,310
  Share based payment reserves                                590             260            425
  Revaluation reserve                                         287             287            287
  Translation reserve                                         (63)             11            (63)
  Retained profit                                          18,414          10,108         14,004
                                                        ________        ________       ________
Total equity attributable to equity holders                50,323          29,932        36,750
Minority Interests                                          7,241           3,723          5,729
                                                        ________        ________       ________
Total Equity                                               57,564          33,655         42,479
                                                        ________        ________       ________
VELOSI LIMITED

Consolidated Balance Sheet
As at 30 June 2008

                                         30 June 2008   30 June 2007   31 December
                                                                               2007
                                             US$’000        US$’000        US$’000
                                  Note    (unaudited)    (unaudited)       (audited)

Current Liabilities

  Trade and other payables                     22,359         18,172         21,091
  Bank and other borrowings       14            5,577            148          4,075
  Current tax liabilities                       2,592          1,673          1,761
  Deferred consideration           9            3,984              -          4,477
                                            ________       ________       ________
                                               34,512         19,993         31,404
                                            ________       ________        _______
Non-Current Liabilities

  Deferred tax liabilities                         20             11             24
  Bank and other borrowings       14            1,549            804          1,499
  Other non-current liabilities                   335            187            233
                                            ________       ________       ________
                                                1,904          1,002          1,756
                                            ________       ________        _______
                                            ________       ________       ________
Total Liabilities                              36,416         20,995         33,160
                                            ________       ________        _______
Total Equity and Liabilities                   93,980         54,650         75,639
                                            ________       ________       ________
VELOSI LIMITED

Consolidated Cash Flow Statement
For the six months ended 30 June 2008

                                                            Six months   Six months     Year ended
                                                                 ended        ended    31 December
                                                          30 June 2008 30 June 2007            2007
                                                               US$’000      US$’000        US$’000
                                                            (unaudited)  (unaudited)       (audited)


 Net cash used in operating activities                          (513)        (1,058)          (740)


 Cash flows from investing activities
 Acquisition of property, plant and equipment                 (1,310)        (1,835)        (3,376)
 Receipts from sale of property, plant and equipment             128             13            172
 Acquisition of new subsidiary companies, net of cash               -         (943)         (6,415)
 Incorporation of new subsidiary companies                          -            (1)              -
 Purchase of unquoted shares                                        -              -            (9)
 Repayment from / (advance to) associated company                228            (93)          (598)
 Dividend income from associated company                            -             -            324
 Interest received                                                140          116             210
                                                             ________      ________       ________
 Net cash used in investing activities                          (814)       (2,743)        (9,692)
                                                             ________      ________       ________


 Cash flows from financing activities
 Proceeds from issue of shares                                  8,660           499           3,275
 Share issue costs                                              (391)              -           (69)
 Net borrowings                                                  216            297           (381)
 Repayment to related parties                                   (402)         (643)           (245)
 (Repayment to) / advance from directors                         (54)           313            722
 Dividend paid to shareholders                                      -         (383)           (383)
 Dividend paid to minority shareholders of subsidiary
 companies                                                        (86)            -            (60)
                                                             ________      ________       ________
 Net cash from financing activities                             7,943           83           2,859
                                                             ________      ________       ________


 Net increase / (decrease) in cash and cash equivalents         6,616        (3,718)        (7,573)
 Foreign exchange translation differences                           -              -          (234)
 Cash and cash equivalents at the beginning of the
 period                                                         4,111        11,918         11,918
                                                             ________      ________       ________
 Cash and cash equivalents at the end of the period            10,727         8,200          4,111
                                                             ________      ________       ________
        VELOSI LIMITED

        Consolidated Cash Flow Statement
        For the six months ended 30 June 2008

                                                                       Six months       Six months           Year ended
                                                                            ended            ended          31 December
                                                                     30 June 2008     30 June 2007                  2007
                                                                          US$’000          US$’000              US$’000
                                                                       (unaudited)      (unaudited)             (audited)

         Cash and cash equivalents comprise:
         Current assets – Cash and cash equivalents                        15,881               8,200             7,967
         Current liabilities – Bank overdraft                             (5,154)                   -           (3,856)
                                                                         ________            ________          ________
                                                                           10,727               8,200             4,111
                                                                         ________            ________          ________



        VELOSI LIMITED

        Consolidated Statement of Changes in Equity
        For the six months ended 30 June 2008


                                     Share       Share       Other   Retained                  Minority          Total
                                    capital   premium     reserves   earnings     Total         interest        equity
                                   US$’000    US$’000     US$’000    US$’000    US$’000        US$’000        US$’000
Balance as at 1 January 2007           763     18,128         434       6,932    26,257           2,507         28,764
Net proceeds from shares issued          4        371            -          -         375               -          375
Profit for the period                     -           -          -      3,560        3,560        1,014          4,574
Acquisition of subsidiaries               -           -          -          -            -          202            202
Issue of share options                    -           -       123           -         123               -          123
Dividend paid                             -           -          -      (383)        (383)              -        (383)
                                  ________    _______     _______    _______    _______        _______       ________

Balance as at 30 June 2007             767     18,499         557     10,109     29,932           3,723         33,655
                                  ________    _______     _______    _______    _______        _______       ________

                                  ________    _______     _______    _______    _______        _______       ________
            VELOSI LIMITED

            Consolidated Statement of Changes in Equity
            For the six months ended 30 June 2008

                                      Share       Share      Other   Retained              Minority        Total
                                     capital   premium    reserves   earnings     Total     interest      equity
                                    US$’000    US$’000    US$’000    US$’000    US$’000    US$’000      US$’000
Balance at 1 July 2007                  767     18,499        557     10,109     29,932       3,723      33,655
Net proceeds from shares issued          20      2,811           -          -     2,831            -      2,831
Exchange reserve on translation
of financial statements of
overseas subsidiaries                      -          -       (74)          -       (74)        183         109
Profit for the period                      -          -          -      3,895     3,895       1,287       5,182
Acquisition of subsidiaries                -          -          -          -          -        578         578
Disposal of shares in subsidiary           -          -          -          -          -         18          18
Issue of share options                     -          -       166           -       166            -        166

Dividend paid                              -          -          -          -          -       (60)         (60)

                                   ________    _______    _______    _______    _______    _______     ________
Balance as at 31 December
2007                                    787     21,310        649     14,004     36,750       5,729      42,479

                                   ________    _______    _______    _______    _______    _______     ________



Balance as at 1 January 2008            787     21,310        649     14,004     36,750       5,729      42,479

Net proceeds from shares issued          82      8,916           -          -     8,998            -      8,998

Profit for the period                      -          -          -      4,410     4,410       1,598       6,008

Issue of share options                     -          -       165           -       165            -        165

Dividend paid                              -          -          -          -          -       (86)         (86)

                                   ________    _______    _______    _______    _______    _______     ________

Balance as at 30 June 2008              869     30,226        814     18,414     50,323       7,241      57,564

                                   ________    _______    _______    _______    _______    _______     ________
VELOSI LIMITED

INTERIM ANNOUNCEMENT - NOTES


 1.   Business of Velosi Limited

      Velosi Limited was incorporated in Jersey on 28 March 2006. The principal activity of
      the Company is investment holding. The principal activities of the Group are provision
      of asset integrity management and health, safety, and environment (HSE) services,
      which cover quality assurance and quality control services. This includes certification,
      project verification, quality enhancement and engineering support services.


 2.   Basis of preparation and significant accounting policies

      The Group's interim financial statements comprise of the consolidated balance sheet
      as of 30 June 2008 and related income statement, consolidated cash flow statement
      and related notes for the six months then ended of Velosi Limited. These have been
      prepared in accordance with IAS 34 ‘Interim Financial Statements’. The accounting
      policies are consistent with those adopted in the Company's annual financial
      statements for the year ended 31 December 2007.

      The interim statements are unaudited and do not constitute statutory financial
      statements. The results for the year ended 31 December 2007 do not constitute
      statutory accounts and have been extracted from the group's published accounts for
      that year, which contain an unqualified Audit Report.


      The consolidated financial statements are presented in US Dollars (“US$”) and all
      values are rounded to the nearest US$ '000 except where otherwise indicated.

      The Interim Report for the six months ended 30 June 2008 was approved by the
      Directors on 16 September 2008.


 3.   Income tax expense

                                      Six months ended       Six months ended        Year ended
                                          30 June 2008           30 June 2007       31 December
                                                                                           2007
                                               US$’000                US$’000           US$’000

Foreign tax
Overseas tax payable                              1,163                    938              1,740
Total current tax                                 1,163                    938              1,740

Deferred tax
Movement in deferred tax position                   (42)                  (82)               (133)
Taxation on profit from ordinary
activities                                        1,121                    856              1,607
Add: Share of taxation of
associated companies                                 39                     32                 63
                                                  1,160                    888              1,670


      Interim period income tax is accrued based on the estimated average annual effective
      income tax rate of 16% (Interim period 2007: 16%).
4.   Increase in paid up capital

     On 11 February 2008, 83,438 new ordinary shares were issued in lieu of payment for
     the acquisition of 14 per cent of Kurtec Inspection Services Sdn Bhd.

     On 6 March 2008, 214,836 new ordinary shares were issued to shareholders of K2
     Specialist Services Pte Ltd (“K2”), pursuant to an agreement dated 19 October 2007
     between K2 and Velosi Industries Sdn Bhd, and based on achievement of
     performance targets by K2 for the financial year ending December 31, 2007.

     On 27 March 2008, Charles Stanley Securities on behalf of the Company, completed
     an institutional placing (“the Placing”) of 3,842,000 new Ordinary Shares which
     represent 8.8% of the enlarged issued share capital of the Company.




5. Earnings per share

     The basic and diluted earnings per share is calculated by reference to the earnings
     attributable to ordinary shareholders divided by the number of shares in issue as at 30
     June 2008, as follows:

                                                        Six months       Six months      Year ended
                                                             ended            ended     31 December
                                                      30 June 2008     30 June 2007            2007
                                                           US$’000          US$’000         US$’000

      Profit after taxation and minority interest             4,410            3,560              7,455

                                                            Number           Number          Number

      Weighted average number of shares for the
      purpose of calculating basic earnings per
      share                                              42,419,424      38,235,053       38,389,734

      Effect of dilutive potential ordinary shares:
      Share Options                                       2,067,708        2,067,708       1,858,702
      Warrants                                              476,749          476,749         476,749
      Deferred consideration                              1,853,193                -         332,773
      Weighted average number of shares for the
      purpose of calculating diluted earnings per
      share                                              46,817,074      40,779,510       41,057,958

      Earnings per ordinary share
        Basic earnings per share                         10.4 cents        9.3 cents       19.4 cents
        Diluted earnings per share                        9.4 cents        8.7 cents       18.2 cents


6.   Dividends

     A final dividend of US$383,000 (representing 1 cent per share) in respect of the financial
     year ended 31 December 2007 was paid on 25 July 2008.

     The Directors do not propose to pay an interim dividend. The Directors do intend, subject
     to the availability of distributable reserves, to recommend a final dividend to shareholders
     in respect of the financial year ending 31 December 2008.
7.     Segmental Reporting

       A geographical analysis of the turnover and profit before tax in the period is given below:

                                       Six months ended       Six months ended          Year ended
                                           30 June 2008           30 June 2007         31 December
                                                                                              2007
                                                 US$’000                US$’000            US$’000

Turnover
    Europe                                         19,619                  3,596             15,174
    Middle East                                    26,788                 14,283             34,172
    Americas                                        8,061                  7,874             17,464
    Africa                                          8,710                 18,130             36,608
    Asia                                           12,224                  3,904             12,115
    Others                                          1,904                    640              1,464
                                                   77,306                 48,427            116,997
Gross Profit
   Europe                                           3,327                  1,041              2,921
   Middle East                                      6,607                  3,799              8,315
   Americas                                         1,918                  1,942              4,707
   Africa                                           1,908                  3,107              5,804
   Asia                                             4,375                  1,994              5,511
   Others                                             939                    244                587
                                                   19,074                 12,127             27,845
Carrying amount of assets
   Europe                                          16,474                  9,591             16,106
    Middle East                                    27,178                 16,697             19,472
    Americas                                        7,425                  5,431              6,897
    Africa                                         16,052                 14,048             14,830
   Asia                                            20,088                  8,034             17,198
   Others                                           6,763                    849              1,136
                                                   93,980                 54,650             75,639
Liabilities
    Europe                                         12,805                  3,134             10,862
    Middle East                                     5,776                  4,769              5,403
    Americas                                        2,693                  2,213              2,708
    Africa                                          8,024                  8,392              8,073
    Asia                                            5,828                  2,159              5,762
    Others                                          1,290                    328                352
                                                   36,416                 20,995             33,160
Additions to plant, property and
equipment
   Europe                                              46                    868                 908
    Middle East                                       217                    547               1,349
    Americas                                           21                      5                   5
    Africa                                            429                    519               1,352
   Asia                                               561                    261                 751
   Others                                              75                      5                  11
                                                    1,349                  2,205               4,376
Depreciation
   Europe                                              80                     15                  86
   Middle East                                        220                    123                 292
   Americas                                             -                      -                   4
   Africa                                             243                    113                 327
   Asia                                               265                    113                 330
   Others                                               8                      6                  17
                                                      816                    370               1,056
 8.     Intangible assets

                                            30 June 2008          30 June 2007        31 December
                                                                                             2007
                                                 US$’000               US$’000            US$’000

 At 1 January                                       1,662                      -                     -
 Acquisition of subsidiary
 companies                                              -                      -              1,737
 Amortisation                                       (113)                      -                (75)
                                                    1,549                      -              1,662


        Acquired intangible assets which consist of customer lists acquired are valued at cost
        less accumulated amortisation. Amortisation is calculated using the straight line method
        over the expected useful life of 5 and 10 years.



 9.     Deferred consideration


                                            30 June 2008          30 June 2007        31 December
                                                                                             2007
                                                 US$’000               US$’000            US$’000

 At 1 January                                       4,477                      -                     -
 Acquisition of subsidiary
 companies                                              -                      -              6,603
 Cash consideration paid                                -                      -            (2,126)
 Issuance of new Velosi shares                      (493)                      -                  -
                                                    3,984                      -              4,477


        These interim results will be available on the Company’s website www.velosi.com.
        Further copies can be obtained from the registered office at Walker House, PO Box 72,
        28–34 Hill Street, St Helier, Jersey JE4 8PN Channel Islands.

10.     Seasonality
        The Group’s business operations are not seasonal.

11.     Property, plant and equipment

        During the period, the Group acquired new plant and machinery at a cost of
        US$1,350,000. The Group also disposed of plant and machinery with net book value of
        US$128,000.

12.     Investment in associated companies

        Investment in associated companies has increased as a result of the share of net profit of
        associated companies.
13.    Related party transactions

       The following table provides the total amount of transactions, which have been entered into
       with related parties for the relevant financial year:


                                                                                     Rental received
                                                        Sales to      Purchases       and receivable
                                                         related    from related        from related
       Related parties                                   parties         parties              parties
                                                        US$’000         US$’000             US$’000

       Velosi (M) SdnBhd                     2008          1,477              101                   31
                                             2007            984              270                    -


       Associated companies

       Velosi LLC                            2008             407              17                    -
                                             2007             123              15                    -


       During the financial year, there were no transactions entered into with key management other
       than Directors’ remuneration as disclosed in note 5.

       Term and conditions of transactions with related parties

       The above transactions were entered into in the normal course of business and were carried
       out on an arms-length basis.

       Amount due from/ to related parties

       The amount due from / to related parties included under current assets / liabilities represents
       unsecured interest free advances repayable on demand. The related party is Velosi (M) Sdn
       Bhd. Included in trade and other receivables is an amount of US$0.391 million (2007:
       US$1.089 million) pledged as security for bank guarantee facilities.

14.    Bank and other borrowings

                                              30 June 2008          30 June 2007         31 December
                                                                                                2007
                                                    USD’000              USD’000             USD’000

 Current
 Bank overdrafts                                      5,154                      -               3,856
 Bank loan                                              128                      -                   -
 Hire purchase                                          295                    148                 219
                                                      5,577                    148               4,075
 Non-current
 Bank loan                                            1,069                    479                 548
 Hire purchase                                          480                    325                 951
                                                      1,549                    804               1,499

                                                      7,126                    952               5,574
Independent review report to Velosi Limited


We have been engaged by Velosi Limited to review the condensed financial information for the six months
ended 30 June 2008 which comprises the unaudited consolidated income statement, the unaudited consolidated
balance sheet, the unaudited consolidated cash flow statement, the unaudited consolidated statement of changes
in shareholders’ equity and related notes 1 to 14. We have read the other information contained in the interim
half-year report and considered whether it contains any apparent misstatements or material inconsistencies with
the condensed information.
This report is made solely to the Company in accordance with International Standard on Review Engagements
(UK and Ireland) 2410 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 formed.


Respective responsibilities of directors and auditors
The interim report, including the condensed financial information contained therein, is the responsibility of, and
has been approved by, the directors. The directors are responsible for preparing the interim report in accordance
with the AIM Rules issued by the London Stock Exchange, which requires that the interim report must be
prepared and presented in a form consistent with that which will be adopted in the Company’s annual accounts
having regard to the accounting standards applicable to such annual accounts.
Our responsibility is to express to the Company a conclusion on the condensed consolidated financial
information in the interim report based on our review.


Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland)
2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by
the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists
of making enquiries, primarily of persons responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.


Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed
consolidated financial information in the interim half-yearly report for the six month period ended 30 June 2008
is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by
European Union and the AIM Rules issued by the London Stock Exchange.




Mazars LLP
Chartered Accountants
London


22 September 2008

								
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