Turbo Genset Inc.
FRANKFURT : TGN
BERLIN : TGN

Turbo Genset Inc.

May 12, 2005 02:00 ET

Turbo Genset Inc. Announces its Results for the Quarter Ended 31 March 2005

CALGARY, ALBERTA--(CCNMatthews - May 12, 2005) - Turbo Genset Inc. (TSX:TGN) (LSE:TGN):



Quarter Highlights

- Sales up 13 % to Pounds Sterling 0.36 million
- Loss before tax reduced by 13% to Pounds Sterling 1.9 million
- Like for like quarterly cash burn down by 36% to Pounds Sterling
1.3 million (a)
- MoU with Lotus announced today
- Completion of Pounds Sterling 8.0 million financing

(a) Adjusted for Pounds Sterling 225,000 of restructuring cashflow in
Q1 2005, and Pounds Sterling 718,000 of R&D tax credit receipts in
Q1 2004


Commenting on the Results, Michael Hunt-Chief Executive said,

"Quarter 1 revenue was in line with 2004 levels as production against major contracts won in 2004 does not impact on sales until after this period. We have seen a further increase in the volume and value of enquiries and bids in all areas of the business, with activity in the High Speed Electrical Machines, Drives and Motors sector being particularly encouraging. The announcement today of an MoU with Lotus for a hybrid vehicle motor and drive is an example of this activity.

The successful conclusion of the financing round in the period was clearly a key event for the Company and gives us the financial platform to exploit the growth in opportunities we are identifying"

NOTES TO EDITORS

About Turbo Genset

Turbo Genset designs and manufactures innovative power solutions which provide local, high quality, controllable electrical power. The Group's products are focused on three independent market areas but are all based on its core technologies of power electronics and high speed electrical machines.

The Group operates across the following three market sectors:

- Turbine Based and Variable Speed Gensets

- High Speed Motors and Motor Drives

- Power Electronics

Forward Looking statements

This news release contains forward-looking statements. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events, or performance, and underlying assumptions and other statements that are other than statement of historical fact. These statements are subject to uncertainties and risks including, but not limited to, the ability to meet ongoing capital needs, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition, the need to protect proprietary rights to technology, government regulation, and other risks defined in this document and in statements filed from time to time with the applicable securities regulatory authorities.

Operational Review

Turbine Based Gensets

Comprehensive commercial and technical proposals for our Combined Heat and Power ("CHP") and Landfill applications are currently under review by customers in India, China, West Africa, North America and the UK. The nature of such capital programmes, which are typically for multiple units, each of which has an installed cost in excess of $1M, lends itself to an extended decision making process. We are continuing to provide technical and application support to these customers in order to assist their decision making process.

We have completed preliminary discussions with a new agent in Malaysia. Malaysia has a strong natural gas distribution network, a well established and modern commercial and industrial base and a proactive approach to energy conservation. In addition to the home market, the new agent will provide the initial marketing channel into Thailand, Indonesia and Vietnam.

Our expansion into India continues with the upgrading of our sales and service capability in order to provide a cost effective regional support hub for the Asian market sector.

Conversion of the existing 1.2MW Natural Gas Turbine to run on non-conventional fuels such as landfill gas is proceeding well, with engine testing commencing in May.

The pre-production 400kW Genset will conclude its testing programme in Paris during Q2 and will then be transferred to the UK for deployment at one of a number of potential sites. This unit will be retained by TGC and will be used to establish long term endurance and performance data.

The opportunity for two 400kW Gensets to be deployed in a hotel application in Mumbai has been deferred due to unexpected delays in completing new gas pipelines in the region. The hotel successfully concluded all the required technical and financial approvals; however gas is not now expected to be available until 2006.

High Speed Motors and Motor Drives

TGC has announced today that we have signed an MoU with Lotus Engineering for the design and supply of a drive system for a hybrid electrical passenger vehicle programme on behalf of a major motor manufacturer.

The initial development project phase will take approximately 12-18 months and involves the design and supply of the motor and motor drive system to be incorporated into two prototype vehicles.

End customer internal testing of the SKF 15kW to 35kW size range of motors and drives is proceeding well, and we have begun detailed discussions on the launch of production deliveries following field trials.

The prototype traction controller and drive system for the National Railway Equipment Company ("NRE") in the USA has been delivered and will be installed in a rail-yard shunting locomotive for trials during the summer.

Power Electronics

Our IPower division is continuing to submit substantial proposals in support of major rolling stock programmes in North America and Europe. End customer decisions are currently outstanding for projects in the Netherlands, USA and the UK.

In addition to the rail sector, power electronics opportunities in both civil and military aircraft programmes have been identified and bids have recently been submitted.

Financial review

Revenue

Revenue in the quarter was Pounds Sterling 0.36 million compared with Pounds Sterling 0.32 million in 2004 and comprised;



2005 2004
Pounds Pounds
Sterling Sterling
'000 '000

Power electronics 360 315
Generator systems - 4
--------- ---------
360 319
--------- ---------
--------- ---------


Power electronics revenues for the quarter included rail hardware sales to Bombardier for London Underground District Line systems and for "At Seat" power supplies for GNER. The other major component of revenue was scheduled deliveries of laser power supply units to PRC Inc. as part of an existing rolling supply contract.

Cost of product revenues

The cost of product revenue in the period amounted to Pounds Sterling 0.37 million, resulting in a gross loss on sales of Pounds Sterling 0.12 million.



2005 2004
Pounds Pounds
Sterling Sterling
'000 '000

Power electronics 110 49
Generator systems (122) (136)
--------- ---------
(12) (87)
--------- ---------
--------- ---------


Research and product development costs

Research and product development costs in the quarter were Pounds Sterling 0.95 million compared with Pounds Sterling 1.18 million in 2004, and comprised;



2005 2004
Pounds Pounds
Sterling Sterling
'000 '000

Research and product development expenditure 864 1,090
Accrued tax credits (20) (78)
Sales of prototypes and development
contributions (59) (30)
Amortisation 161 194
--------- ---------
Total expenditure 946 1,176
--------- ---------
--------- ---------


Research and product development expenditure decreased from Pounds Sterling 1.09 million in 2004 to Pounds Sterling 0.86 million in 2005 due to lower charges across all categories of costs.

General and administrative

General and administrative costs in the quarter of Pounds Sterling 0.67 million were lower than Pounds Sterling 0.75 million in 2004 reflecting lower headcount.

Amortisation

Amortisation on research and development assets was Pounds Sterling 0.16 million compared with Pounds Sterling 0.19 million in 2004. Non research and development amortisation was Pounds Sterling 0.18 million compared with Pounds Sterling 0.19 million in 2004.

Interest income

Interest income in the quarter reduced to Pounds Sterling 0.04 million from Pounds Sterling 0.08 million in 2004, due to a lower average cash balance held during the period.

Interest expense and finance charges

Interest expense and finance charges arise from the issue of convertible bonds in July 2003 and March 2005 and comprise;



2005 2004
Pounds Pounds
Sterling Sterling
'000 '000

Interest payable 74 45
Amortisation of deferred finance charges 35 16
Debt accretion 64 46
--------- ---------
173 107
--------- ---------
--------- ---------


Convertible bonds are considered to be compound financial instruments, and the liability component and the equity component must be presented separately, as determined at initial recognition. The Company has valued the equity component of these bonds using the residual value of equity component method, whereby the liability component is valued first using current market rate for comparable instruments, at the time of issuance. The difference between the proceeds of the bonds issued and the fair value of the liability is assigned to the equity component. The equity element of the March 2005 bond issue was estimated at Pounds Sterling 1.11 million. The equity element of the 2003 bond issue was estimated at Pounds Sterling 0.91 million. The carrying value of the debt element is increased over the term of the debt and this accretion expense is charged to the profit and loss account. During the quarter this charge amounted to Pounds Sterling 0.06million (2004:Pounds Sterling 0.05 million).

Cash flows

Cash outflow from operating activities

Cash outflow from operating activities in the quarter was Pounds Sterling 1.44 million, compared with Pounds Sterling 1.27 million in 2004. In 2004 the Company recorded an operating loss of Pounds Sterling 2.2 million and had a decrease in working capital of Pounds Sterling 0.58 million. The 2005 operating loss was Pounds Sterling 1.80 million and working capital decreased by Pounds Sterling 0.26 million during the period.

The decrease in working capital in 2004 was mainly due to a decrease in operating debtors of Pounds Sterling 0.70 million following the receipt of Pounds Sterling 0.59 million in UK R&D tax credits.

Restructuring payments of Pounds Sterling 0.23 million paid during the first quarter of 2005 relate to redundancy and property disposal costs charged to the profit and loss account in prior periods.

Interest paid of Pounds Sterling 0.07 million during the period represents payments made on the convertible bonds issued in 2003.

Capital investment activities

Cash outflows from capital investments in the quarter were Pounds Sterling 0.01 million compared with inflows of Pounds Sterling 0.03 million in 2004 as shown below;



2005 2004
Pounds Pounds
Sterling Sterling
'000 '000

Purchase of capital assets 12 101
Capitalised R&D tax credits cash receipts - (128)
--------- ---------
12 (27)
--------- ---------
--------- ---------


The reduction in expenditure on capital assets reflects reduced expenditure on tangible assets following the completion of the Company's investment programme at its London site.

Cash flow from financing activities

Cash inflow from financing of Pounds Sterling 7.72 million in the quarter relates to net funds received from the issue of convertible notes.

On 11 March 2005 the Company completed an Pounds Sterling 8,000,000 (gross) financing agreement with institutional investors. The financing comprised unsecured Convertible Notes and Warrants. The Convertible Notes have a term of five years plus one day and bear interest at a rate of 6.5% per annum. They are convertible into an aggregate of 66,666,667 Common Shares in Turbo Genset Inc. at a conversion price of Pounds Sterling 0.12 per share. The Warrants have a term of five years and are convertible into an aggregate of 7,000,000 Common Shares in Turbo Genset Inc. at an exercise price of Pounds Sterling 0.15 per share.

Overall Cash outflow for the period

Overall the cash inflow during the quarter was Pounds Sterling 6.23 million, including proceeds of the debt issue of Pounds Sterling 7.72 million. This compares with an overall cash outflow of Pounds Sterling 1.23 million in 2004.

Balance sheet as at 31 March 2005

The Company ended the quarter with a cash balance of Pounds Sterling 8.30 million compared with Pounds Sterling 2.07 million at 31 December 2004. Substantially all of the Company's cash balances are denominated in Sterling.

The increase in cash funds relates to the Pounds Sterling 8,000,000 (gross) financing agreement with institutional investors referred to above.

In addition the Company had restricted cash amounts of Pounds Sterling 1.88 million relating to performance bonds entered into as part of a contract with the Toronto Transit Commission.

Long-term assets have increased from Pounds Sterling 6.01 million at 31 December 2004 to Pounds Sterling 6.16 million at 31 March 2005, due to additions to deferred finance charges of Pounds Sterling 0.49 million and after amortisation charges of Pounds Sterling 0.40 million.

Deferred finance charges relate to the fair value of the warrants issued and the expenses in connection with the convertible bond issue that occurred in the period. These costs are amortised over the term of the convertible bonds and the warrants. The related amortisation charges are included in interest expense and finance charges.

Long term liabilities have increased to Pounds Sterling 10.33 million at 31 March 2005 compared to Pounds Sterling 4.64 million at 31 December 2004, reflecting the increase in debt attributable to the convertible bond issue.

Net working capital at 31 March 2005, excluding cash balances, was Pounds Sterling 0.27 million, compared with Pounds Sterling 0.31 million as at 31 December 2004.



Shareholders' equity

The movement in shareholders' funds comprised;

2005 2004
Pounds Pounds
Sterling Sterling
'000 '000

As at 1 January 5,616 15,057
Loss for the period (1,939) (2,241)
Exchange adjustments arising on consolidation (7) (22)
Equity element of convertible bond 1,114 -
Fair value of warrants issued 231 -
Conversion of bonds to equity 1,266
Stock compensation expense 2 2
--------- ---------
As at 31 March 6,283 12,796
--------- ---------
--------- ---------


During March 2005 investors who had subscribed for the convertible bond issue converted bonds into 10,549,997 ordinary shares. As at 31 March 2005, the Company had 186,176,927 common shares issued and outstanding. As at that date there were 32,895,426 outstanding share options and 10,500,000 outstanding warrants.



TURBO GENSET INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND DEFICIT
UNAUDITED

Notes Three months ended 31 March
2005 2004
Pounds Pounds
Sterling Sterling
'000 C$'000 '000 C$'000

Revenue 360 842 319 772

Expenses
Production costs 372 871 406 982
Research and product
development 5 946 2,214 1,176 2,844
General and
administrative 666 1,559 748 1,811
Amortisation 176 411 201 486
------ ------ ------ ------
2,160 5,055 2,531 6,123
------ ------ ------ ------

Operating loss (1,800) (4,213) (2,212) (5,351)

Other income and expenses
Interest income 41 96 80 193
Interest expense and
finance charges 6 (173) (405) (107) (258)
Foreign exchange
gains/(losses) (7) (16) (2) (5)
------ ------ ------ ------
(139) (325) (29) (70)
------ ------ ------ ------

Loss before taxation (1,939) (4,538) (2,241) (5,421)
Taxation - - - -
------ ------ ------ ------

Loss for the period (1,939) (4,538) (2,241) (5,421)

Deficit, beginning of year (38,265) (87,390) (28,809) (68,724)
------ ------ ------ ------
Deficit, end of period (40,204) (91,928) (31,050) (74,145)
------ ------ ------ ------
------ ------ ------ ------
Loss per share (1.1)p (2.6)c (1.3)p (3.1)c


TURBO GENSET INC.
CONSOLIDATED BALANCE SHEETS
UNAUDITED


Notes As at 31 March As at 31 December
2005 2004
Pounds Pounds
Sterling Sterling
'000 C$'000 '000 C$'000

Assets:
Current assets:
Cash and cash
equivalents 8,300 18,978 2,067 4,797
Debtors 1,508 3,448 1,711 3,970
Stock and work in
progress 476 1,088 482 1,119
------ ------ ------ ------
10,284 23,514 4,260 9,886
------ ------ ------ ------

Restricted cash 8 1,876 4,289 1,876 4,353
------ ------ ------ ------

Long term assets:
Investments 9 180 412 180 418
Intangible assets 9 2,297 5,252 1,895 4,397
Tangible assets 9 3,683 8,421 3,932 9,124
------ ------ ------ ------
6,160 14,085 6,007 13,939
------ ------ ------ ------
18,320 41,888 12,143 28,178
------ ------ ------ ------
------ ------ ------ ------


Liabilities and
shareholders' equity:

Creditors: amounts falling
due within one year 1,710 3,910 1,884 4,372
------ ------ ------ ------

Creditors: amounts falling
due after more
than one year 13 10,327 23,613 4,643 10,774
------ ------ ------ ------

Capital and reserves
Share capital and other
equity instruments 2,10 46,572 106,485 43,959 102,007
Exchange adjustments 2 (85) (192) (78) (181)
Profit and loss account
deficit 2 (40,204) (91,928) (38,265) (88,794)
------ ------ ------ ------
Shareholders' funds 6,283 14,365 5,616 13,032
------ ------ ------ ------
18,320 41,888 12,143 28,178
------ ------ ------ ------
------ ------ ------ ------



TURBO GENSET INC.
CONSOLIDATED CASH FLOW STATEMENTS
UNAUDITED


Notes Three months ended 31 March
2005 2004
Pounds Pounds
Sterling Sterling
'000 C$'000 '000 C$'000

Cash outflow from
operating activities 3 (1,435) (3,358) (1,272) (3,077)

Interest received 35 82 80 194
Interest paid (70) (164) (67) (162)
------ ------ ------ ------
Net cash outflow from
operating Activities (1,470) (3,440) (1,259) (3,045)

Capital investment
activities
Purchase of long term
assets (12) (28) 27 65
------ ------ ------ ------
Cash inflow/(outflow) from
capital investment
activities (12) (28) 27 65
------ ------ ------ ------
Net cash outflow before
financing activities (1,482) (3,468) (1,232) (2,980)

Financing activities
Proceeds from debt issue 7,715 18,052 - -
------ ------ ------ ------

Cash inflow/(outflow) from
financing activities 7,715 18,052 - -
------ ------ ------ ------
Increase/(Decrease) in cash
in the period 6,233 14,584 (1,232) (2,980)
------ ------ ------ ------
------ ------ ------ ------

Cash and cash equivalents:
Beginning of year 2,067 9,819
------ ------
End of period 8,300 8,587
------ ------
------ ------



TURBO GENSET INC.
THREE MONTHS ENDED 31 MARCH 2005
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


1 Basis of preparation

The financial statements of the Company have been prepared by management in accordance with International Accounting Standards and generally accepted accounting principles in Canada for interim financial statements. The financial statements have, in management's opinion, been properly prepared using judgement within reasonable limits of materiality. These financial statements do not include all the note disclosures required for annual financial statements and therefore they should be read in conjunction with the Company's audited consolidated financial statements for the year ended 31 December 2004. The significant accounting policies are consistent with prior years'.



2 Movements in shareholders' funds

Share Other Exchange Profit
capital equity adjustments and loss Total
Pounds Pounds Pounds Pounds Pounds
Sterling Sterling Sterling Sterling Sterling
'000 '000 '000 '000 '000

Balance at 1
January 2004 42,922 1,027 (83) (28,809) 15,057
Loss for the period (9,456) (9,456)
Exchange (loss) /gain 5 5
Stock compensation 10 10
--------- -------- ----------- -------- ---------
Balance at 31
December 2004 42,932 1,027 (78) (38,265) 5,616
Loss for the period (1,939) (1,939)
Exchange (loss)/gain (7) (7)
Stock compensation 2 2
Equity component of
financial instrument 1,114 1,114
Warrants issued 231 231
Conversion of bonds
to equity 1,266 1,266
--------- -------- ----------- -------- ---------
Balance at 31
March 2005 44,200 2,372 (85) (40,204) 6,283
--------- -------- ----------- -------- ---------
--------- -------- ----------- -------- ---------

3 Reconciliation of operating loss to cash outflow from operating
activities

Three months ended
31 March
2005 2004
Pounds Pounds
Sterling Sterling
'000 '000

Operating loss for the period (1,800) (2,212)

Movements in working capital balances
Decrease / (increase) in debtors 208 701
Decrease / (increase) in stocks and work in progress 6 (16)
(Decrease) / increase in creditors 47 (109)
Restructuring payments (225) (23)
Adjustment for amortisation (a) 338 396
Stock compensation expense 2 2
Foreign exchange (losses)/gains (11) (11)
---------- --------
Cash outflow from operating activities (1,435) (1,272)
---------- --------
---------- --------


4 Segmental analysis

The Group's three reportable segments are the power electronics segment, which is involved in the development and manufacture of electrical power supply and control systems, the generator systems segment, which is involved in the development and commercialisation of gensets and high speed electrical machines, and the corporate segment which is responsible for the financing of the group and other related corporate activities. The power electronics and generator system segment operate in United Kingdom. The corporate segment operates in Canada.



All amounts in Pounds Sterling '000

Power Generator
electronics systems Corporate Total
2005 2004 2005 2004 2005 2004 2005 2004
Three months
ended 31 March
Revenue 360 315 - 4 - - 360 319
Net interest
income/(expense) - - (167) (40) 35 13 (132) (27)
Amortisation 31 53 148 145 - - 176 201

Loss for the
period (397) (569)(1,247)(1,448) (295) (224)(1,939)(2,241)
Capital
Expenditure 10 20 2 95 - - 12 115

As at March Dec March Dec March Dec March Dec
2005 2004 2005 2004 2005 2004 2005 2004

Total Assets 3,672 3,948 14,006 7,198 642 997 18,320 12,143
Total Liabilities 642 643 11,311 5,839 84 45 12,037 6,527

5 Research and product development expenditure

Research and product development expenditures incurred during the
period comprised:

Three months ended
31 March
2005 2004
Pounds Pounds
Sterling Sterling
'000 '000

Research and product development expenditure 864 1,090
Accrued tax credits (20) (78)
Sales of prototypes and development contributions (59) (30)
--------- ---------
Total expenditure 785 982
Amortisation 161 194
--------- ---------
Net expenditure charged to profit and loss account 946 1,176
--------- ---------
--------- ---------


Deferred development expenditure, net of accrued tax credits, amortisation and provisions for impairment, at 31 March 2005 amounted to Pounds Sterling 614,000 (2004 - Pounds Sterling 1,586,000). Total accrued tax credits receivable at 31 March 2005, including those credited against deferred development expenditure, amounted to Pounds Sterling 477,000 (2004 - Pounds Sterling 207,000). Capitalised development costs comprise materials, labour and allocated overheads.



6 Interest expense and finance charges

Three months ended
31 March
2005 2004
Pounds Pounds
Sterling Sterling
'000 '000

Interest payable 74 45
Debt accretion 64 46
Amortisation of deferred finance charges 35 16
--------- ---------
Cash outflow from operating activities 173 107
--------- ---------
--------- ---------


7 Loss per share

Loss per common share has been calculated using the weighted average number of shares in issue during the relevant financial periods. The treasury stock method was used in determining the weighted average number of shares outstanding for each period and for diluted earnings per share, if applicable.

The weighted average number of shares outstanding in the quarter was 175,837,930 (2004 - 175,626,874). No diluted earnings per share have been reported as the Company has losses in both years and the effect would be anti-dilutive. The loss for the three months ended 31 March 2005 was Pounds Sterling 1,939,000 (2004 - Pounds Sterling 2,241,000).

8 Restricted cash

In 2004 the Company committed cash bonds in support of contracts placed by the Toronto Transit Commission. The associated contracts require the bonds to remain in place until two years after all equipment is delivered. According to the current contract schedule that would result in the cash being under the performance bond restriction until 2012. At 31 March 2005 cash subject to restrictions totalled Pounds Sterling 1,875,742 (2004 - Nil) and is secured over an equivalent cash balance.



9 Long - term assets

Cost Impairment Amortisation Net book value
Pounds Pounds Pounds Pounds
Sterling Sterling Sterling Sterling
'000 '000 '000 '000
At 31 March 2005
Investments (a) 431 251 - 180
Intangible assets 5,768 1706 1,765 2,297
Tangible assets 8,121 - 4,438 3,683
--------- ---------- ------------ ---------------
Total long term assets 14,320 1,957 6,203 6,160
--------- ---------- ------------ ---------------
--------- ---------- ------------ ---------------
At 31 December 2004
Investments (a) 431 251 - 180
Intangible assets 5,250 1,706 1,649 1,895
Tangible assets 8,111 - 4,179 3,932
--------- ---------- ------------ ---------------
Total long term assets 13,792 1,957 5,828 6,007
--------- ---------- ------------ ---------------
--------- ---------- ------------ ---------------

(a) In October 2003, the Group invested C$1,000,000 (Pounds Sterling
431,000) in a 6% Convertible Debenture issued by Altek Power
Corporation ("Altek"). On 9 March 2005 the Company restructured its
investment in Altek to release both Altek and the Company from the
Memorandum of Understanding (MOU) entered into. Along with the
release, the Company converted CDN $500,000 of the loan receivable
from Altek into 892,857 shares of Altek. The term of the remaining
CDN $500,000 has been extended to become due on October 9, 2008.

10 Share capital - issued common shares

Number of
shares

At 1 January 2004 and 31 December 2004 175,626,930
Shares issued on conversion of Convertible Notes 10,549,997
-------------
186,176,927
-------------
-------------

No options were exercised during the three months ended 31 March 2005.


11 Financing

On 11 March 2005 the Company completed an Pounds Sterling 8,000,000 (gross) financing agreement with institutional investors. The financing comprised unsecured Convertible Notes and Warrants. The Convertible Notes have a term of five years plus one day and bear interest at a rate of 6.5% per annum. They are convertible into an aggregate of 66,666,667 Common Shares in Turbo Genset Inc. at a conversion price of Pounds Sterling 0.12 per share. The Warrants have a term of five years and are convertible into an aggregate of 7,000,000 Common Shares in Turbo Genset Inc. at an exercise price of Pounds Sterling 0.15 per share.



12 Stock options, warrants and compensation expense

The number of options and warrants outstanding as at 31 March 2005, and
the movement during the three months then ended, are as follows:

Options Warrants
Number Number

Outstanding at 1 January 2005 26,263,641 3,500,000
Cancelled (868,215) -
Issued 7,500,000 7,000,000
----------- -----------
Outstanding at 30 September 2004 32,895,426 10,500,000
----------- -----------
----------- -----------

The compensation expense in the three month period ended 31 March 2005
was Pounds Sterling 2,400 (2004 - Pounds Sterling 2,400).

13 Creditors due after more than one year

Convertible bond 2005 2004
Pounds Pounds
Sterling Sterling
'000 '000
Balance at 1 January included in creditors due
after more than one year 4,364 4,181
Issued during the period 8,000 -
Conversion of Convertible Notes during the period (1,266) -
Less equity component (1,114) -
--------- ---------
9,984 4,181
Add: accretion of debt component during the period 64 46
--------- ---------
Balance at 31 March 2005 included in creditors due
after more than one year 10,048 4,227
--------- ---------
--------- ---------

Convertible bond 10,048 4,227
Provisions for warranty claims 279 343
--------- ---------
Balance at 31 March 10,327 4,570
--------- ---------
--------- ---------

14 Selected quarterly information

The following table sets forth selected consolidated financial
information of the Company for the eight most recent quarters.

Revenue Net loss
Pounds Pounds (Loss)
Sterling Sterling per share
'000 '000 UK pence

June 2003 277 (2,224) (1.3)
September 2003 584 (1,974) (1.1)
December 2003 474 (3,612) (2.0)
March 2004 319 (2,241) (1.3)
June 2004 249 (2,326) (1.3)
September 2004 389 (2,609) (1.5)
December 2004 507 (2,280) (1.3)
March 2005 360 (1,939) (1.1)

15 Exchange rates

The Sterling amounts have been converted into Canadian Dollar for
convenience purposes using either the average or the period end exchange
rates shown below:

Three months ended 31 March 2005 2.339
Three months ended 31 March 2004 2.419
As at 31 March 2005 2.286
As at 31 December 2004 2.321


Contact Information

  • Turbo Genset Inc. - UK
    Michael Hunt
    Chief Executive Officer
    +44 (0)20 8564 4460
    or
    Turbo Genset Inc. - UK
    Stephen Sadler
    Chief Financial Officer
    +44 (0)20 8564 4460
    or
    Turbo Genset Inc. - Canada
    Richard Kapuscinski
    +1 (905) 690 1722
    or
    Gavin Anderson (PR)
    Ken Cronin
    +44 (0)20 7554 1400
    or
    Gavin Anderson (PR)
    Michael Turner
    +44 (0)20 7554 1400
    Website: http://www.turbogenset.com