Half-yearly report

Elderstreet VCT plc
Half-Yearly Report for the six months ended 30 June 2010

FINANCIAL HIGHLIGHTS
                                           30 Jun       31 Dec       30 Jun
                                             2010         2009         2009
                                            pence        Pence        pence



 Net asset value per share                   69.5         76.7         70.2

 Cumulative distributions paid per share     48.0         46.0         44.0
                                         ----------   ----------   ---------
 Total return per share                     117.5        122.7        114.2


FORTHCOMING DIVIDEND
                Amount Date of payment       Ex-div date       Record date

Ordinary shares   2.0p  8 October 2010 15 September 2010 17 September 2010


CHAIRMAN'S STATEMENT
I  present  the  Half-Yearly  Report  for  Elderstreet VCT plc for the six-month
period ended 30 June 2010.

Net Asset Value

At  30 June  2010, the  Company's  Net  Asset  Value  ("NAV") per share stood at
69.5p, a  decrease of  5.2p or 6.8% since  31 December 2009 (after adjusting for
the  dividend of 2.0p per share  paid during the period).   As noted below, this
fall was mostly attributable to the Company's AIM-quoted investments.

Top-up share issue
The Company undertook a small top-up issue during the period, issuing 1,807,957
ordinary  shares at an  average price of  80.4p per share.  Net  proceeds of the
offer  were  £1.4  million.   The  additional  funds  will  allow the Company to
participate  in more new investment opportunities as well as providing a greater
asset base over which the fixed running costs will be borne.

Venture capital investments

The  Company made two follow-on investments and one new investment in the period
under  review, at  a total  cost of  £910,000.  £500,000  was invested through a
share placing in AIM-quoted Access Intelligence plc and £200,000 was invested in
a  loan note in  AngloINFO Limited. A  non-qualifying investment of £210,000 was
also made in Aconite Technology Limited with a view to converting the investment
into a qualifying holding in the future.

A  small number of disposals  were made during the  period, the most significant
being Melorio plc, which was the subject of a takeover at the end of June 2010,
producing proceeds of £428,000.

The  Board has reviewed the valuations of the unquoted investments at the period
end  and made one adjustment  from the previous carrying  values, giving a total
unrealised loss on these investments over the period of £135,000.

Within  the Company's  AIM-Quoted investments,  there have  been two significant
price movements.  The valuation of the investment in Snacktime plc has fallen by
£934,000 and that in Access Intelligence plc by £360,000.  These price movements
are  not seen as being indicative of  weaknesses in the respective companies but
more  a symptom of current market conditions. This is supported by the fact that
the share prices of both companies have seen some increase since the period end.

The  total net unrealised  losses arising on  the whole investment portfolio for
the  period were £1.5  million and the  total net realised  gains for the period
were £206,000.

Listed fixed income securities
The  Company continues to  hold a small  portfolio of fixed interest investments
which  are managed by  Smith & Williamson  Investment Management Limited. During
the  period this portfolio  produced unrealised gains  of £34,000 and negligible
realised gains.

Results
The loss on activities after taxation for the period was £1,310,000 (2009:
£334,000), comprising a revenue return of £109,000 and a capital loss of
£1,419,000.

Dividend
The  Company will pay an  interim dividend to Shareholders  of 2.0p per share on
8 October 2010 to Shareholders on the register at 17 September 2010.

Share buybacks
In June 2010, the Company spent approximately £158,000 purchasing 250,000 shares
for  cancellation at a price of 63.0p per share at a 15% to the latest published
NAV.

The  Board  has  agreed  to  make  funds  of  up to £250,000 available for share
buybacks following the release of these results. The Board will buy in shares at
approximately  a 15% discount to  the latest published  NAV and expects the next
buyback to take place at the end of October. Shareholders who wish to sell their
shares should contact Downing Management Services Limited.

Risks and uncertainties
Under  the Disclosure and  Transparency Directive, the  Board is required in the
Company's  half-yearly results  to report  on principal  risks and uncertainties
facing the Company over the remainder of the financial year.

The Board has concluded that the key risks facing the Company over the remainder
of the financial period are as follows:

(i) investment risk associated with investing in small and immature businesses;
(ii) liquidity risk arising from investing mainly in unquoted businesses; and
(iii) failure to maintain approval as a VCT.

In  all cases the Board is satisfied with the Company's approach to these risks.
As  a VCT,  the Company  is forced  to have  significant exposure  to relatively
immature  businesses.  This  risk  is  mitigated  to  some  extent  by holding a
well-diversified portfolio.

With  a  reasonably  illiquid  venture  capital  investment portfolio, the Board
ensures  that it maintains an  appropriate proportion of its  assets in cash and
liquid instruments.

The  Company's compliance with  the VCT regulations  is continually monitored by
the  Administration Manager, who  regularly reports to  the Board on the current
position.  The Company  also retains  PricewaterhouseCoopers to  provide regular
reviews and advice in this area.  The Board considers that this approach reduces
the risk of a breach of the VCT regulations to a minimal level.

Outlook
Although it is disappointing to see a fall in the Company's net asset value over
the period, the Board remains reasonably satisfied with the Company's investment
portfolio.

Prospects for the economy remain uncertain and the investee companies are likely
to  continue to face significant challenges as a result. However, for a VCT, the
Company  has  a  relatively  mature  investment  portfolio and also has adequate
levels  of  cash  and  near  cash  resources  to be able to support the existing
investments  and also  take advantage  of new  opportunities that may arise. The
Board  feels comfortable  that the  Company is  well-positioned to deal with the
uncertainty ahead.

David Brock
Chairman

UNAUDITED SUMMARISED BALANCE SHEET
as at 30 June 2010
                                                    As at         As at    As at
                                              30 Jun 2010   30 Jun 2009   31 Dec
                                                                            2009


                                                    Total         Total    Total

                                                    £'000         £'000    £'000

Fixed assets

Investments                                        16,036        15,302   17,059
                                             ------------- ------------- -------


Current assets

Investments                                             -         5,110        -

Debtors                                               502           108       91

Cash at bank and in hand                              942         1,291      899
                                             ------------- ------------- -------
                                                    1,444         6,509      990

Creditors:  amounts  falling  due  within one       (210)       (5,283)    (184)
year
                                             ------------- ------------- -------


Net current assets                                  1,234         1,226      806


                                             ------------- ------------- -------
Net assets                                         17,270        16,528   17,865





Capital and reserves

Called up share capital                             1,242         1,178    1,164

Capital redemption reserve                            183           157      170

Merger reserve                                      2,211         3,475    2,211

Share premium                                       5,625         4,341    4,341

Special reserve                                     2,319         3,652    2,895

Unrealised holding gains/(losses)                   1,240         (558)    2,481

Capital reserve - realised                          4,321         4,011    4,395

Revenue reserve                                       129           272      208


                                             ------------- ------------- -------
Equity shareholders' funds                         17,270        16,528   17,865



Net Asset Value per share:                          69.5p         70.2p    76.7p



UNAUDITED INCOME STATEMENT
for the six months ended 30 June 2010
                                                         Six months ended


                                                    Revenue   Capital     Total

                                                      £'000     £'000     £'000



Income                                                  264         -       264

Distribution in Specie                                    -         -         -

(Losses)/gains on investments   - realised                -       206       206

                                - unrealised              -   (1,463)   (1,463)

 Loss on subsidiary undertaking                           -         -         -
                                                   --------- --------- --------
                                                        264   (1,257)     (993)



Investment management fees                             (45)     (134)     (179)

Performance incentive fee                                 -      (23)      (23)

Other expenses                                        (106)       (9)     (115)
                                                   --------- --------- --------


Return/(loss)   on   ordinary   activities   before     113   (1,423)   (1,310)
taxation



Taxation                                                (4)         4         -
                                                   --------- --------- --------


Return/(loss) attributable to equity shareholders       109   (1,419)   (1,310)



Basic and diluted return per share                     0.5p    (6.1p)    (5.6p)



                                            Six months ended          Year ended
                                                                     31 December
                                              30 June 2009                  2009

                                       Revenue   Capital    Total          Total

                                         £'000     £'000    £'000          £'000



Income                                     186         -      186            571

Distribution in Specie                       -         -        -          5,110

(Losses)/gains    on - realised              -      (26)     (26)           (30)
investments

                     - unrealised            -     (261)    (261)          1,599

Loss on subsidiary undertaking               -         -        -        (5,110)
                                      --------- --------- -------- -------------
                                           186     (287)    (101)          2,140



Investment management fees                (33)      (99)    (132)          (312)

Performance incentive fee                    -         -        -              -

Other expenses                           (100)       (1)    (101)          (200)
                                      --------- --------- -------- -------------


Return/(loss)  on  ordinary activities      53     (387)    (334)          1,628
before taxation



Taxation                                     -         -        -              -
                                      --------- --------- -------- -------------


Return/(loss)  attributable  to equity      53     (387)    (334)          1,628
shareholders



Basic    and   diluted                    0.1p    (1.7p)   (1.6p)           7.1p
return per share

RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the six months ended 30 June 2010
                                               30 Jun   30 Jun   31 Dec 2009
                                                 2010     2009

                                                £'000    £'000         £'000



Opening shareholders' funds                    17,865   15,698        15,698

Issue of shares                                 1,455    1,479         1,478

Share issue costs                                (80)     (81)          (81)

Purchase of own shares                          (158)        -         (153)

Total recognised (losses)/gains in the period (1,310)    (334)         1,628

Distributions                                   (502)    (234)         (705)
                                             --------- -------- ------------


Closing shareholders' funds                    17,270   16,528        17,865




UNAUDITED CASHFLOW STATEMENT

for the six months ended 30 June 2010
                                                         Six       Six      Year
                                                      months    months     ended
                                                       ended     ended    31 Dec
                                                      30 Jun    30 Jun      2009
                                                        2010      2009

                                              Note     £'000     £'000     £'000

Net cash (outflow)/inflow from operating
activities and returns on investments          1         (9)       187       307
                                                    --------- --------- --------


Capital expenditure

Purchase of investments                                (910)   (2,266)   (3,166)

Sale of investments                                      248     1,851     2,850
                                                    --------- --------- --------
Net   cash   (outflow)/inflow   from  capital          (662)     (415)     (316)
expenditure
                                                    --------- --------- --------


Equity dividends paid                                  (502)     (257)     (735)
                                                    --------- --------- --------


Net cash (outflow)/inflow before financing           (1,173)     (485)     (744)



Financing

Proceeds from share issue                              1,454     1,479     1,478

Share issue costs                                       (80)      (51)      (30)

Purchase of own shares                                 (158)         -     (153)
                                                    --------- --------- --------
Net cash inflow from financing                         1,216     1,428     1,295
                                                    --------- --------- --------

Increase/(decrease) in cash                    2          43       943       551



Notes to the cash flow statement:

1 Net cash inflow from operating activities
and returns on investments

(Loss)/return  on ordinary  activities before        (1,310)     (334)     1,628
taxation

Losses/(gains) on investments                          1,257       287   (1,569)

Decrease in other debtors                                 16       253       250

Increase/ (decrease) in other creditors                   28      (19)       (2)
                                                    --------- --------- --------
Net cash (outflow)/inflow from operating
activities and returns on investments                    (9)       187       307



2 Analysis of net funds

Beginning of period                                      899       348       348

Net cash inflow                                           43       943       551
                                                    --------- --------- --------
End of period                                            942     1,291       899


SUMMARY OF INVESTMENT PORTFOLIO
as at 30 June 2010
                                                       Unrealised
                                                      gain/(loss)
                                      Cost Valuation    in period % of portfolio

                                     £'000     £'000        £'000       by value



Top ten venture capital investments

Wessex Advanced Switching Products      60     2,673            -          15.7%
Limited

Snacktime plc *                      1,725     2,519        (934)          14.8%

Access Intelligence plc *            1,633     1,966        (360)          11.6%

Fords Packaging Systems Limited      1,047     1,152            -           6.8%

Lyalvale Express Limited               915     1,027            -           6.1%

Smart Education Limited              1,473     1,003            -           5.9%

Baldwin    &   Francis   (Holdings)    690       770            -           4.5%
Limited

AngloINFO Limited                      528       528            -           3.1%

The Engine Group Limited               600       526            -           3.1%

Wecomm Limited                         850       472            -           2.8%

                                     9,521    12,636      (1,294)          74.4%



Other venture capital investments    3,828     1,246        (203)           7.4%



Listed fixed income securities       2,114     2,154           34          12.7%


                                   ---------------------------------------------
Subtotal                            15,463    16,036      (1,463)          94.5%



Cash at bank and in hand                         942                        5.5%


                                          -----------            ---------------
Total investments                             16,978                      100.0%


All venture capital investments are unquoted unless otherwise stated.
* Quoted on AIM

SUMMARY OF INVESTMENT MOVEMENTS
for the six months ended 30 June 2010
Additions


                               £'000

 Venture capital investments

 Access Intelligence plc         500

 Aconite Technology Limited      210

 AngloINFO Limited               200
                             --------
                                 910


Disposals
                        Market value
                                  at                        Gain/ Total realised
                           1 January       Disposal        (loss)          gain/
                  Cost          2010       Proceeds  against cost         (loss)

                 £'000         £'000          £'000         £'000          £'000

Full disposals

Business
Meetings ASP
Limited             12             -              -          (12)              -

Component Source
Inc.               250             8              8         (242)              -

Melorio plc        190           222            428           238            206



Fixed interest
securities

Nucleus Cash
Trust               95            93             93           (2)              -

Treasury 8%
Stock 2013         145           147            147             2              -


                ----------------------------------------------------------------
                   692           470            676          (16)            206



NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. The  unaudited half yearly financial results  cover the six months to 30 June
2010 and  have been prepared in accordance  with the accounting policies set out
in  the  statutory  accounts  for  the  year  ended 31 December 2009, which were
prepared  under UK Generally Accepted Accounting Practice and in accordance with
the  Statement of Recommended Practice "Financial Statements of Investment Trust
Companies and Venture Capital Trusts" revised January 2009.

2. All  revenue and capital items in the Income Statement derive from continuing
operations.

3. The  Company  has  only  one  class  of  business and derives its income from
investments made in shares, securities and bank deposits.

4. The  comparative figures are in respect of the six months ended 30 June 2009
and the year ended 31 December 2009 respectively.

5. Basic  and  diluted  NAV  per  share  for  the  period has been calculated on
24,845,844 shares, being the number of shares in issue at the period end.

6. Basic  and diluted  return per  share for  the period  has been calculated on
23,287,887 shares,  being the weighted average number  of shares in issue during
the period.

7. Distributions
                                   30 Jun 2010           31 Dec
                                                           2009



                        Per Revenue   Capital   Total     Total
                      share

                      Pence   £'000     £'000   £'000     £'000

Paid in the period

2008 Final dividend     1.0       -         -       -       234

2009 Interim dividend   2.0       -         -       -       471

2009 Final dividend     2.0     188       314     502         -
                           --------- --------- ------- --------
                                188       314     502       705


8. Capital and Reserves
   Capital Redemption                             Investment    Capital
              Reserve   Merger    Share  Special     Holding    Reserve  Revenue
                       Reserve  Premium  Reserve       Gains  -Realised  Reserve

                £'000    £'000    £'000    £'000       £'000      £'000    £'000

At 1 January 2010 170    2,211    4,341    2,895       2,481      4,395      208

Issue of new        -        -    1,364        -           -          -        -
shares

Share issue costs   -        -     (80)        -           -          -        -

Purchase of own    13        -        -    (158)           -          -        -
shares

Expenses            -        -        -        -           -      (166)        -
capitalised

Tax on capital      -        -        -        -           -          4        -
expenses

(Losses)/gains on
investments         -        -        -        -     (1,463)        206        -

Transfer between
reserves            -        -        -    (418)         222        196        -

Retained net
revenue for the     -        -        -        -           -          -      109
period

Distributions paid  -        -        -        -           -      (314)    (188)
in period
      --------------------------------------------------------------------------
At 30             183    2,211    5,625    2,319       1,240      4,321      129
June
2009

Distributable reserves comprise the Special Reserve, Capital Reserve - realised,
Revenue  Reserve, and  are reduced  by investment  holding losses  of £2,336,000
(2009: £1,329,000). £477,000 of the Merger Reserve is also partly distributable.
At  the period  end there  were £4,910,000  (31/12/2009: £6,790,000) of reserves
available for distribution.

9. The  Directors confirm that, to the  best of their knowledge, the half-yearly
financial  statements  have  been  prepared  in  accordance with the "Statement:
Half-Yearly  Financial Reports" issued by the  UK Accounting Standards Board and
the  half-yearly  financial  report  includes  a  fair review of the information
required by:

a.  DTR 4.2.7R of the Disclosure and  Transparency Rules, being an indication of
important events that have occurred during the first six months of the financial
year  and  their  impact  on  the  condensed  set of financial statements, and a
description  of  the  principal  risks  and  uncertainties for the remaining six
months of the year; and

b.  DTR 4.2.8R of  the Disclosure  and Transparency  Rules, being  related party
transactions  that  have  taken  place  in  the  first six months of the current
financial  year  and  that  have  materially  affected the financial position or
performance  of the entity  during that period,  and any changes  in the related
party transactions described in the last annual report that could do so.

10. The  unaudited  financial  statements  set  out  herein  do  not  constitute
statutory  accounts within the meaning of Section 434 of the Companies Act 2006
and  have not been delivered to the  Registrar of Companies. The figures for the
year  ended 31 December 2009 have  been extracted from  the financial statements
for  that year,  which have  been delivered  to the  Registrar of Companies; the
auditors' report on those financial statements was unqualified.

11. Copies  of the  unaudited half-yearly  results will  be sent to Shareholders
shortly. Further copies can be obtained from the Company's Registered Office.



[HUG#1441671]








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Source: Elderstreet VCT plc via Thomson Reuters ONE