Half-yearly Report

31 March 2011 Eurovestech plc ("Eurovestech", "the Group" or "the Company") Interim report for the six months ended 31 December 2010 ("the period" or "the six months") Highlights * ToLuna, the Company's largest investment, has received an offer valuing it at £161 million * Eurovestech's investment in ToLuna is valued at £47.7 million by the offer; adding prior share sales brings the return to more than 30 times the cost of investment * Group after-tax profit £0.6 million (six months to 31 December 2009: £39.3 million including disposal gains) * Company net assets of £62.4 million, 18.9p per share at 31 December 2010* * Record revenues at KSS Fuels * Further progress and recognition for Audionamix * Maxifier has won contracts after its demerger *Net assets are expected to exceed £68 million (20.5p per share) if the acquisition of ToLuna is approved by the Court. Net assets at 31 December 2009 were £68.6 million (20p per share), before the cash return of 2.18 pence per share in March 2010. Richard Bernstein, Chief Executive, comments: "The offer for ToLuna, our largest investment, values Eurovestech's holding at £47.7 million, after previous share sales of £14.5 million, bringing the total to £62.2 million. On an investment which cost £2 million, this is an excellent outcome and is an example of our successful efforts to identify, drive, realise and release value within our portfolio". Further Enquiries Eurovestech plc Richard Bernstein (Chief Executive Officer) 020 7491 0770 Merchant Securities Limited David Worlidge / Simon Clements 020 7628 2200 Cenkos Securities Ivonne Cantu 020 7397 8900 Chairman's Statement I am pleased to report our results for the six months ended 31 December 2010; this has been another period of exceptional progress for Eurovestech and its investee companies. The clearest evidence of this progress is the proposed acquisition of ToLuna by ITWP Acquisitions ("ITWP") announced on 14 February 2011. Further details of this are set out in Note 8 (Post Balance Sheet Events) and in the Portfolio Review section which follows. The proposed acquisition is to be implemented by a scheme of arrangement. If the acquisition is approved by the Court in the coming month, Eurovestech expects to receive, in return for its shareholding in ToLuna, a 9.8 per cent shareholding in ITWP plus £37.2 million in convertible loan notes, from which it is guaranteed to receive £25 million cash by 30 June 2010. The terms of the offer value our ToLuna shareholding at £47.7 million, following previous share sales which realised £14.5 million. Results for Eurovestech for the six months ended 31 December 2010 show a profit after tax on continuing operations of £0.6 million. The figure for the six months to 31 December 2009 (the previous period) was a profit after tax of £ 39.3 million, because this figure included disposal profits and gains on the re-recognition of Eurovestech's ToLuna holding under accounting rules. Basic earnings per share were 0.18 pence, compared to 11.41 pence in the previous period. As we have always said, our focus is on building value for shareholders. The net asset value of our investments is a critical benchmark. You will see in our report the company balance sheet of Eurovestech, which shows shareholders' funds of £62.4 million (equivalent to 18.9 pence per share). This compares to £ 61.1 million (18.5 pence per share) at 30 June 2010. It compares to £68.6 million (20p per share) at 31 December 2009, before the cash return of 2.18p per share to investors in March 2010. If the ToLuna acquisition is completed, shareholders' funds should exceed £68 million (20.5p per share). We are pleased with what we consider to be an extraordinary ToLuna result. However, we have not stopped, and will not stop there; for we are encouraged by the progress of our other investee companies. News on this is set out in more detail below. Portfolio Review TOLUNA ToLuna is the world's leading independent online panel and survey technology provider. One measure of this: an average of more than one million votes was cast per day on the Toluna.com social voting website. ToLuna made further financial progress during the period. In March 2011 it reported its unaudited results for the year ended 31 December 2010. Its revenues were £73.6 million, up from £49.5 million in 2009, with market share gains in Europe and it grew strongly in the Asia Pacific region. Underlying pretax profit was £12.6 million, up from £7.6 million. Net cash was in excess of £13 million, up from £ 11 million. At 31 December 2010 Eurovestech owned 29.6 per cent of ToLuna and the market value was £37.5 million. On 14 February 2011 ToLuna announced its proposed acquisition by ITWP Acquisitions Limited ("ITWP") through a Scheme of Arrangement. The proposed consideration is a mix of cash, ITWP shares, and Loan Notes (see Note 8 for details). Should the Scheme become effective, Eurovestech expects to hold approximately 9.8 per cent of the issued share capital of ITWP, plus ITWP Loan Notes with a nominal value of £37.2 million, of which it is guaranteed to receive at least £ 25 million in cash by 30 June 2011. In conjunction with the proposed acquisition, Eurovestech provided an indemnity up to a maximum liability of £2.6 million, payable in certain circumstances. We are pleased to report that the obligations under this indemnity have now fallen away. To describe the ToLuna story more fully: Eurovestech initially provided seed capital of £512,000 to ToLuna at its foundation in 2000. Further investment between 2000 and 2005 brought the total cost of the investment to £2 million. We supported the flotation of ToLuna on AIM in 2005, we helped guide its expansion into 34 countries and its transformational purchase of Greenfield ISS Online in 2009. The proposed acquisition is not yet complete. However, ITWP is supported by Verlinvest SA, which is already a significant shareholder in ToLuna. ITWP has stated that it aims to accelerate ToLuna's growth and to invest significantly in the business. Eurovestech, which co-founded ToLuna and supported its development from the outset, intends to continue its support as a shareholder under the proposed new ownership structure. KSS Ltd. ("KSS Fuels") KSS Fuels is the leading global provider of software, analytics and consulting to fuel retailers and wholesalers in the oil and gas, convenience store and retail industries. KSS Fuels generated record revenues for the period, and they were 15 per cent ahead of the comparative period. Growth in revenue was driven by contract success, including the signing of Hess Corporation, a large US fuels retailer, and Galp Energia, a large network of fuel retailing sites in Spain, as well as two US independent refiners who signed for KSS's RackPrice wholesale pricing solution. Revenue expansion was further driven by Consulting and Analytics, which support and enhance the core fuels pricing software solutions. Investment in further new growth strategies has been made. These are expected to begin generating revenue in the current six month period, and KSS Fuels is targeting increased profits for the year to June 2011. Looking further forward, KSS continues its efforts to expand beyond its key markets in North America and Europe. It has active sales prospects in Brazil, Australia, South Africa and India. As KSS seeks to provide pro-active pricing solutions at all times, greater interest in its fuel price solutions should result from the current volatility in fuel costs that is the consequence of unrest in the Middle East. At 31 December 2010 Eurovestech owned 100 per cent of KSS Fuels. MAGENTA CORPORATION ("MAGENTA") Magenta is a leading supplier of dynamic real time software scheduling for key businesses in the transport industry. Magenta's products allow these enterprises to do more business, with the same resources, at a lower operational cost. During the period Magenta moved into operating profitability, delivered one major project successfully, and also won two important new deals. It delivered an advanced system to Corporate Solutions Logistics, which allows collaboration through the transport network and an intelligent supplier selection. Magenta won a contract from Avis UK for a system enabling complex scheduling and control of the Avis UK fleet. Magenta also agreed a new deal with Gist, one of the UK's largest supply chain logistics specialists, to enhance its scheduling system and support future growth. During the period Magenta appointed a new chief executive officer, Richard Puddephatt. Magenta is forecasting a full year profit in the year to December 2011. At 31 December 2010 Eurovestech owned 49.6 per cent of Magenta. MAXIFIER Maxifier provides campaign optimisation and advertising intelligence software which enables customers to optimise their online advertising operations and revenues. Its clients include Channel 4, The Guardian, IPC Media, Pittsburgh Post-Gazette, Bauer Media and Eyeconomy. Maxifier was demerged from Magenta on 1 December 2010. This was to enable it to leverage a significant market opportunity emerging from its early success contracting for leading media groups. In January 2011, for example, The Guardian analysed an online campaign that was targeted at UK customers, through Maxifier. As a result of Maxifier's optimisation work, changes were made to key metrics during the campaign. The Guardian's analysis found that these changes delivered a 27 per cent increase in engagement and outperformed the inventory not optimised by 64 per cent. In February 2011 Maxifier announced that the Pittsburgh Post-Gazette in Pennsylvania, USA and BlogHer in New York, USA have implemented Maxifier's campaign optimisation and advertising intelligence platform for their websites. Maxifier expects to grow its customer base from ten customers under contract by 31 March 2011 to more than 30 under contract by the end of the calendar year. Once all these contracts are implemented, Maxifier expects to be profitable and that its pace of growth will accelerate throughout 2012. In January 2011 Maxifier appointed Jonathon Shaevitz as chief executive officer and completed a £1 million funding to accelerate its growth. The funding was shared equally by Eurovestech and its co-investor. At 31 December 2010 Eurovestech owned 49.6 per cent of Maxifier. LOGNET SYSTEMS ("LOGNET") LogNet provides billing and e-billing solutions, which help telecoms and utility companies to cut operating costs and achieve greater profitability. In November 2010 LogNet announced it had deployed its MaxBill product suite for TelZar 019, an international carrier based in Israel. MaxBill enabled TelZar to provide both pre-paid and post-paid telecom services efficiently. Toward the end of the period, however, LogNet experienced some delays in finalising contracts. Consequently, Eurovestech reduced the carrying value of its investment by £0.5 million. We believe that LogNet is making vigorous efforts to conclude these contracts. In early 2011 LogNet was selected by V.R.M Voizplus to deliver a multiple customer management and billing solution. Voizplus, based in Thailand, provides voice and data services over IP networks for carriers and resellers and specialises in internet telephone solutions. More recently LogNet has won a contract from First Utility, a UK smart utility company. At 31 December 2010 Eurovestech owned 26.5 per cent of LogNet. AUDIONAMIX Audionamix's sound separation technology allows dramatic enhancement of the audio content of music, film and television. Audionamix has secured contracts from CBS, Warner Bros Animation, Warner Bros Pictures, Warner Music Group and other smaller labels. This is recognition of the strength of its technology and the quality of its service and raises the potential for multiple repeat orders. Audionamix is now focusing most of its commercial efforts on music replacement. This gives content owners the ability not only to remove unwanted licensed music but also the full service of replacing it with alternative, cost effective variations, all at a "one stop" service provider. Audionamix is beginning to win a steady flow of business in providing music labels such as Warner Music Group and BMG Publishing with synchronisation opportunities, and video games companies such as Voxler with automated solutions for their platforms. In March 2011, Universal Studios released a special 50th anniversary edition of the classic Alfred Hitchcock film "Psycho" with an entirely new audio mix using Audionamix stem separation technology. This process also enabled foreign territories to re-integrate the new music mix into the old foreign language mix using Dialogue Extraction technology. Audionamix technology is once again being used in Hollywood blockbuster films with instrument and voice separation in Warner Bros. "Inception" and the soon to be released "Sucker Punch" as well as previously unreleased Mel Blanc recordings of Daffy Duck, Tweety and Sylvester and the Looney Tunes family. We are delighted to report that Audionamix has recently won the first stage of what we hope will become an extremely important contract with CBS for music "disassociation". Using this service allows the customer to release TV series abroad where the licensing cost would otherwise have been prohibitive. Audionamix has also pioneered a "green sound" concept - the removal of unwanted or annoying sounds. This has stirred interest following its success during the 2010 FIFA World Cup in providing a "Vuvuzela remover" for the Canal Plus TV network. In the first quarter of 2011, Audionamix's commercial revenues have grown at an encouraging rate. It is targeting further growth during 2011. At 31 December 2010 Eurovestech owned 46.3 per cent of Audionamix. ARKeX Ltd ("ARKeX") ARKeX continues to win orders for its gravity gradiometry surveys, which help energy and mineral explorers to build an enhanced picture of sub-surface geology. Early in the period, it won contracts from Tower Resources in Uganda and Ophir in Madagascar to assist in onshore exploration and from Svenska Petroleum Exploration for a BlueQube marine survey off the shores of Guinea Bissau. In October 2010 ARKeX appointed a new CEO and formed a new Services division to enhance its delivery. Entering 2011, the order book was at a record high and ARKeX is well positioned to benefit from an upturn in the oil and gas services sector. Subsequent to the period end, ARKeX announced that its survey for Tower Resources confirmed the presence of previously undefined structures and provided new insight into the area. In February 2011 Forent Energy reported that a high resolution geophysical imaging programme completed by ARKeX had identified anomalies that will allow efficient placement of 2D seismic lines, greatly minimising cost and landowner impact. In March 2011 ARKeX was awarded a contract by Saudi Aramco for a BlueQube marine survey in the Red Sea. Eurovestech owns 2.5 per cent of ARKeX. CHARITABLE DONATIONS In 2000, from the beginning of its life as a quoted company, Eurovestech set out a commitment to support charities by issuing and gifting shares. The Company has today issued 600,000 new ordinary shares of Eurovestech divided equally between the following six charitable organisations: Alabare Christian Support, One to One Children's Fund, Diabetes UK, Hadassah UK, United Nations Foundation for Global Impact and Care for Casualties. Richard Bernstein, Chief Executive of Eurovestech, has paid the £6,000 to facilitate their issue, representing the nominal value of these shares of one penny per share. Application has been made for these shares to be admitted to AIM and it is expected that dealings will commence on 7 April 2011. Including these shares, since its flotation in 2000 Eurovestech has created and gifted 10,600,000 shares to 94 separate charitable organisations. Including the cash returned to shareholders in March 2010, charities will have received cash and shares currently valued at £1.9 million. We are proud that so many worthy causes have benefited from our success. PROSPECTS Of course, the economic outlook remains challenging, with uncertainty about the strength of recovery, the rise of inflation here in the UK, shocks to the infrastructure and social and economic well-being in Japan, and political instability in the Middle East and North Africa. However, the portfolio of businesses we have built has proved its resilience in challenging conditions, and we are confident that it will continue to do so. We have proved the success of our model through the growth of these companies, and through the realisation of value, most recently at KSS Retail and ToLuna. Following last year's disposals, we returned £10 million to shareholders. Our balance sheet remains strong with net cash of £3.3 million at the period end - prior to the expected cash proceeds from ToLuna. This gives us added strength and flexibility to maximise the value of our investee companies. The potential to add further value remains very promising. We intend to continue the strategy of nurturing our companies and realising value for our shareholders. We are confident in our ability to continue to deliver exceptional returns. Richard Grogan Chairman 31 March 2011 Consolidated Income Statement Six month Six month period to 31 period to 31 December Year ended December 2009 30 June 2010 (unaudited) 2010 (unaudited) (restated) (audited) Notes £'000 £'000 £'000 Continuing operations Revenue 3 3,742 3,328 6,806 Investment income 178 14 330 Net gains on financial assets 1,737 (2,320) 26 at fair value Operating expenses (4,911) (5,725) (10,710) Operating profit/(loss) 3 746 (4,703) (3,548) Finance income 1 34 40 Finance costs (163) (1) (156) Profit before tax 584 (4,670) (3,664) Income tax credit 1 - (101) Profit/(loss) for the period 585 (4,670) (3,765) from continuing operations Discontinued operations Profit for the period from - 43,969 44,194 discontinued operations Profit for the period 585 39,299 40,429 Attributable to: Equity holders of the Company 585 39,299 40,429 Earnings per share Basic earnings per share (pence) 4 0.18 11.41 11.83 Diluted earnings per share 4 0.18 11.29 11.74 (pence) Prior period figures are restated for reclassification of the gains on disposal of KSS Retail and partial disposal of ToLuna plc within discontinued operations. Consolidated Statement of Comprehensive Income Six month Six month period to 31 period to 31 Year ended December December 30 June 2010 2009 2010 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Profit for the period 585 39,299 40,429 Foreign exchange movements (69) (45) 143 Total income and expense 516 39,254 40,572 recognised in the period Attributable to: Equity holders of the Company 516 39,254 40,572 Consolidated Statement of Financial Position 31 December 31 December 30 June 2010 2009 2010 Notes (unaudited) (unaudited) (audited) £'000 £'000 £'000 Assets Non-current assets Property, plant and equipment 128 100 93 Other intangible assets 17 32 24 Financial assets at fair value 5 48,187 45,048 47,813 through profit or loss Deferred tax asset 1,288 1,372 1,288 49,620 46,552 49,218 Current assets Trade and other receivables 3,511 15,713 2,264 Financial assets at fair value 3,784 3,755 5,810 through profit or loss Cash and cash equivalents 3,346 2,082 4,313 10,641 21,550 12,387 Liabilities Current liabilities Trade and other payables 3,106 2,148 6,120 Income tax liabilities 86 - 65 Borrowings 17 20 17 3,209 2,168 6,202 Net current assets 7,432 19,382 6,185 Non-current liabilities Borrowings 9 26 17 Provisions 4,980 5,418 3,889 4,989 5,444 3,906 Net assets 52,063 60,490 51,497 Equity Capital and reserves attributable to the equity holders of the Company Issued capital 3,308 3,445 3,304 Share premium 45 18,798 - Capital redemption reserve 4,432 - 4,432 Other reserves (187) 132 (119) Retained earnings 44,465 38,115 43,880 Total equity 52,063 60,490 51,497 Consolidated Statement of Cashflows Six month Six month period to 31 period to 31 Year ended December December 30 June 2010 2009 2010 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Cash flows from operating activities Profit for the period before taxation 584 39,299 40,530 Adjustments for: Net finance costs 162 (33) 116 Depreciation of property, 40 86 125 plant and equipment Amortisation of intangible assets 9 11 29 Gains on financial assets (2,237) (28,173) (31,519) Impairment of financial assets 500 - 1,000 Profit on disposal of non-current - (13,180) (13,405) investments Movement on provision 941 2,043 514 Investment income (178) (14) (330) Share based payments 1 11 145 Increase in trade and other receivables (1,247) (3,245) (791) (Decrease)/increase in trade (3,014) (987) 3,104 and other payables Net cash used in operations (4,439) (4,182) (482) Finance costs (163) (1) (156) Income tax received 4 - 146 Net cash used in operating activities (4,598) (4,183) (492) Cash flows from investing activities Finance income 1 34 40 Disposal of subsidiary undertakings - 16,779 Purchase of property, plant and (75) (67) (56) equipment Purchase of intangible assets (2) (21) (25) Dividends received 178 75 330 Disposal of financial assets 10,317 13,086 19,556 Purchase of financial assets (6,801) (12,271) (27,271) Net cash generated by investing 3,618 836 9,353 activities Cash flows from financing activities Finance lease capital repayments (6) (1) (13) B Share dividend paid - - (3,343) Redemption of C shares - - (4,257) Purchase of own shares - - (2,423) Proceeds from issue of equity shares 4 2 76 Net cash (used in)/generated (2) 1 (9,960) by financing activities Net decrease in cash and (982) (3,346) (1,099) cash equivalents Exchange movements 15 65 59 Cash and cash equivalents 4,313 5,363 5,363 at the start of the period Cash and cash equivalents 3,346 2,082 4,313 at the end of the period Consolidated Statement of Changes in Equity Capital Share Share redemption Other Retained Minority Total capital premium reserve reserves earnings interest equity £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 1 July 2010 3,304 - 4,432 (119) 43,880 - 51,497 Charity shares 4 45 - - - - 49 Share based - - - - - payment charge 1 1 Transactions 4 45 - - - with 1 50 owners Foreign - - - - - exchange (69) (69) movements Profit for the - - - - - period 585 585 Total - - - - comprehensive income (69) 585 516 At 31 December - 2010 3,308 45 4,432 (187) 44,465 52,063 At 1 July 2009 3,443 18,771 - 34 (1,184) 7,400 28,464 Charity shares 2 27 - - - - 29 Share based - - - - - payment charge 11 11 Transactions - - - with owners 2 27 11 40 Foreign - - - (45) - - (45) exchange movements Profit for the - - - - 39,299 - 39,299 period Disposal of - - - - subsidiary 132 (7,400) (7,268) Total - - - comprehensive income 87 39,299 (7,400) 31,986 At 31 December - - 2009 3,445 18,798 132 38,115 60,490 Notes to the interim report 1. Legal status and activities Eurovestech Plc ("the Company") and its subsidiaries (together "the Group") make investments in technology businesses. The principal trading subsidiary during the period was Knowledge Support Systems Limited ("KSS Fuels"). KSS Fuels is the leading global provider of price management and optimisation solutions to the fuel retail and oil and gas wholesale industries. The Company is a public limited company which is quoted on the Alternative Investment Market of the London Stock Exchange and is incorporated and domiciled in the UK. The address of the registered office is 29 Curzon Street, London, W1J 7TL. 2. Basis of preparation This interim report for the six month period ended 31 December 2010 has been prepared in compliance with IAS 34 `Interim financial reporting'. It does not include all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 June 2010, which were prepared under International Financial Reporting Standards ("IFRS") as adopted by the European Union. The interim financial information has been prepared on a basis which is consistent with the accounting policies adopted by the Group for the last financial statements and in compliance with IAS 34. The financial information presented does not constitute statutory accounts as defined by section 434 of the Companies Act 2006. The Group's statutory accounts for the year ended 30 June 2010 have been filed with the Registrar of Companies. The auditors, PricewaterhouseCoopers LLP, reported on these accounts and their report was unqualified and did not contain a statement under section 498 of the Companies Act 2006. Comparative figures are given for the six months to 31 December 2009 and the year ended 30 June 2010. The income statement for the six month period to 30 June 2009 has been restated to reclassify the profit on disposal of KSS Retail (£9m), the partial disposal of ToLuna plc (£4m) and the reinstatement of ToLuna plc as an investment at market value on the balance sheet (£31m) within discontinued operations. 3. Segmental analysis a. Primary reporting format - business segments The segment results for the six month period ended 31 December 2010 are as follows: Venture Software Total capital development £'000 £'000 £'000 Revenue 74 3,668 3,742 Investment income 178 - 178 Net gains on financial assets at fair 1,737 - 1,737 value Other operating expenses (1,685) (3,226) (4,911) Operating profit 304 442 746 Net finance cost (162) Profit before tax 584 Income tax credit 1 Profit for the period 585 The segment results for the six month period ended 31 December 2009 are as follows: Venture Software Total capital development £'000 £'000 £'000 Revenue 133 3,195 3,328 Investment income 14 14 Net loss on financial assets at fair (2,320) - (2,320) value Other operating expenses (3,192) (2,533) (5,725) Operating (loss)/profit (5,365) 662 (4,703) Net finance income 33 Loss before tax (4,670) Income tax credit - Loss for the period (4,670) The segment results for the year ended 30 June 2010 are as follows: Venture Software Total capital development £'000 £'000 £'000 Revenue 208 6,598 6,806 Investment income 330 - 330 Net gains on financial assets at fair 26 - 26 value Other operating expenses (5,077) (5,633) (10,710) Operating (loss)/profit (4,513) 965 (3,548) Net finance cost (116) Loss before tax (3,664) Income tax charge (101) Loss for the year (3,765) 4. Earnings per share Six months Six months to 31 to 31 Year ended December December 30 June 2010 2009 2010 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Profit/(loss) for the period attributable 585 (4,670) (3,765) to continuing operations Profit for the period attributable to - 43,969 44,194 discontinued operations Profit for the period attributable to 585 39,299 40,429 equity shareholders Basic earnings/(loss) per share (pence) from continuing operations 0.18 (1.37) (1.10) from discontinued operations - 12.78 12.93 0.18 11.41 11.83 Diluted earnings/(loss) per share (pence) from continuing operations 0.18 (1.35) (1.09) from discontinued operations - 12.64 12.83 0.18 11.29 11.74 Shares Shares Shares Issued ordinary shares at 330,250,000 344,322,801 344,322,801 start of the period Net movement in ordinary 400,000 200,000 (14,072,801) shares in the period Issued ordinary shares at 330,650,000 344,522,801 330,250,000 end of the period Weighted average number 330,450,000 344,422,801 341,668,818 of shares in issue Dilutive effect of options 2,074,559 3,657,024 2,792,407 Diluted weighted average shares 332,524,559 348,079,825 344,461,225 5. Non-current financial assets at fair value through profit or loss Equity investments £'000 At 1 July 2009 9,913 Additions 36,593 Net gain on investments at fair 2,338 value Impairment of investments (1,000) Disposals (31) At 1 July 2010 47,813 Additions 725 Net gain on investments at fair 149 value Impairment of investments (500) At 31 December 2010 48,187 Additions are primarily investment in Maxifier Limited, which demerged from Magenta Corporation Limited during the period. The impairment relates to LogNet Systems which has underperformed. The prior period additions derive from recognition of ToLuna plc as an investment and additional investment in all other investments. 6. Company Balance Sheet At 31 At 31 At 30 December December June 2010 2009 2010 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Fixed assets Tangible assets 12 4 13 Investments 57,687 54,548 57,313 57,699 54,552 57,326 Current assets Debtors 235 13,068 170 Investments 3,784 3,755 5,810 Cash at bank and in hand 731 784 1,726 4,750 17,607 7,706 Creditors: amounts falling due (99) (3,542) (3,965) within one year Net current assets 4,651 14,065 3,741 Net assets 62,350 68,617 61,067 Capital and reserves Called up share capital 3,308 3,445 3,304 Share premium account 45 18,798 - Capital redemption reserve 4,432 - 4,432 Other reserve 100 100 100 Profit and loss account 54,465 46,274 53,231 Shareholders' funds 62,350 68,617 61,067 7. Dividends No interim dividend has been paid during the period. On 1 April 2010, the company returned 2.18 pence per share to its shareholders as part of its Return of Cash scheme via B share dividend or C share redemption. 8. Post balance sheet events On 14 February 2011, ToLuna plc ("ToLuna"), Eurovestech's largest investee company, announced the terms of an acquisition of ToLuna by ITWP Acquisitions Limited ("ITWP") to be implemented by way of a scheme of arrangement under Part 26 of the Companies Act 2006 ("Scheme"). ITWP is a newly incorporated company formed for the purpose of implementing the acquisition. ITWP is supported by Verlinvest SA, a significant shareholder in ToLuna. The Company has provided an irrevocable undertaking to vote in favour of the Scheme (including the required resolutions) in respect of its entire beneficial holdings of ToLuna shares amounting to 14,907,917 ToLuna shares. In addition, Eurovestech has also given ITWP an irrevocable undertaking to elect to receive all of its consideration under the Scheme in the form of: 1,051,828,838 ordinary shares of £0.01 each in the capital of ITWP ("ITWP Shares"); £35,000,000 in nominal value of B loan notes; and £2,187,046.02 in nominal value of C loan notes to be issued by ITWP. To the extent that any other ToLuna shareholders elect to receive ITWP Shares, B loan notes or C loan notes, then the consideration payable to Eurovestech will be adjusted with cash at the rate of £1 for every £1 of nominal value of ITWP Shares, B loan notes or C loan notes. Under the terms of the Scheme ITWP has committed to redeem by 30 June 2011 B loan notes totalling £25 million. Verlinvest SA has procured an irrevocable bank guarantee for £25 million in favour of ITWP to guarantee ITWP's payment obligations under the B loan notes. After 30 June 2012, any loan notes which remain outstanding will be compulsorily convertible into ITWP Shares, subject to certain conditions, at a rate of one ITWP Share for each 1 penny in nominal value of loan notes. Neither the B loan notes nor the C loan notes will bear any interest. In conjunction with the proposed acquisition of ToLuna, Eurovestech provided an indemnity up to a maximum liability of £2.6 million which is payable in certain circumstances. We are pleased to report that the obligations under this indemnity have now fallen away. Eurovestech expects that it will hold approximately 9.8 per cent. of the issued share capital of ITWP following the Scheme becoming effective. Immediately following the issue of its ITWP Shares, Eurovestech will enter into a shareholders' agreement with certain other shareholders of ITWP, as holders of more than five per cent. of the ITWP Shares. 9. Further information Copies of the interim results for the six months ended 31 December 2010 will shortly available from the Company's website www.eurovestech.com. The directors are responsible for the maintenance and integrity of the group's website on the internet. However information is accessible in many different countries where legislation governing the preparation and dissemination of financial information may differ to that applicable to the United Kingdom. 10. Forward-looking statements Certain statements in these interim results are forward-looking. Although the group believes that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by those forward-looking statements. We undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

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