Final Results

29 September 2009 Eurovestech plc ("Eurovestech" or the "Company") Final results for the 15 month period ended 30 June 2009 Eurovestech, the pan-European development capital fund, is pleased to announce its final results for the 15 month period ended 30 June 2009. HIGHLIGHTS * Group after tax profit of Â£6.2 million * Net assets of Eurovestech company rise from Â£60.6 million to Â£72.9 million - from 17.6 pence to 21.2 pence per share * Solid progress by portfolio companies * Strong balance sheet: Â£4.3m net cash, before receipt of Â£7.1 million from part-sale of ToLuna holding * Transformational acquisition for ToLuna * KSS Retail signs strategic alliance with dunnhumby USA * Record first half revenues for LogNet * Focus on delivering value Richard Bernstein, Chief Executive of Eurovestech, commented: "We are greatly encouraged by the way our companies are continuing to deliver value for shareholders. Eurovestech's strong balance sheet and cash resources give us confidence that we can make further progress". FURTHER ENQUIRIES Eurovestech plc Richard Bernstein Tel: 020 7491 0770 Chief Executive www.eurovestech.com John East & Partners Limited David Worlidge/Simon Clements Tel: 020 7628 2200 CHAIRMAN'S STATEMENT At an extraordinary time - a time of great turbulence in the global economy and volatility in financial markets - it is most pleasing to report further significant progress for Eurovestech and its portfolio. This report covers the 15 month period from 31 March 2008 to 30 June 2009. As was announced on 1 April 2009, Eurovestech changed its accounting reference date from 31 March to 30 June to align the Group's reporting pattern with the majority of its subsidiaries. This shortens the period of time for the reporting of Group results and enables that reporting to be completed more quickly, more efficiently and more cost-effectively. The next annual results will be for the year ending 30 June 2010. Let me return to the report. The conditions in which our companies operate have been unpromising for most of the period under review. Economic growth in the UK, the US and other countries turned negative. Credit became and remains tight. Hopeful signs have been seen; it is nevertheless hard to be sure that the worst is over, or that another period of contraction will not occur. We were neither surprised nor caught unprepared by these conditions. Rather, we took swift action to ensure that both the Group and its investee companies were in good shape to meet any challenge. The progress we are able to report is the outcome of this preparation and action. The Eurovestech group reported a profit after tax of Â£6.2 million, compared with an after tax loss of Â£1.5 million for the 12 months to 31 March 2008. Diluted earnings per share were 1.78 pence, compared to a loss per share of 0.46 pence in the prior year. Advances in our portfolio companies are reviewed in more detail below. That the overall picture is a healthy one is testimony to the hard work of their management and the group executive team. In particular, our biggest investee company, ToLuna plc, has concluded a major acquisition which makes it the leading independent provider of online market research services in the global market. At the same time, Eurovestech has realised Â£7.1 million net cash from the sale of part of its ToLuna holding, further strengthening an already solid group balance sheet. One of our key measures of shareholder value is the balance sheet of the Eurovestech company, which includes our listed investment in ToLuna at market value. The company balance sheet (set out in note 8) shows shareholders' funds of Â£72.9 million at 30 June 2009, compared to Â£60.6 million at 31 March 2008. This amounts to net assets per share of 21.2 pence compared to 17.6 pence at 31 March 2008. In managing the Group, the board and the executive team are firmly focused on building net asset value. While we hope that the economic clouds will lift in the coming months, we are determined to ensure that, whatever the background, the group and its companies will continue to deliver value for shareholders. THE YEAR IN DETAIL TOLUNA PLC ("ToLuna") ToLuna provides online panels and technology services to the market research industry, and now operates in 33 countries. Clear technological advantages, as well as a sustained shift of market research services online, have allowed ToLuna to continue its remarkable record of successful and profitable growth. In the year to 31 December 2008, ToLuna's revenues grew 74 per cent to Â£21.7 million, and pre-tax profits, before share based payment costs, rose 43 per cent to Â£5 million. ToLuna's annual report for 2008 stated that it had laid the foundations for the next stage of its growth through strategic expansion in North America and Asia Pacific. This proved to be the case, for on 26 June 2009, ToLuna announced a major strategic acquisition - the purchase of the trade and assets of the Internet Survey Solutions (ISS) division of Greenfield Online from Microsoft Corporation for $40 million (Â£24.4 million). This acquisition, which was completed on 15 July 2009, significantly increased ToLuna's US presence and the strength of its global offering, which now includes approximately 3.7 million panellists in 33 countries. It has become the largest independent provider of online market research services globally, with a market share of approximately 11.9 per cent. An important element of this transaction was the participation of Verlinvest S.A., a private Belgian family owned investment company. Verlinvest became a significant shareholder in ToLuna, acquiring 3.55 million shares in ToLuna from Eurovestech at 210p per share. Eurovestech received Â£7.1 million net of disposal costs. As a result of this and a share placing by ToLuna in connection with the ISS acquisition, Eurovestech's holding in ToLuna has reduced from 50.6 per cent to 29.9 per cent. The Â£7.1 million net proceeds from this share sale brought Eurovestech's realisations from ToLuna to date to Â£14.5 million. Our remaining holding in ToLuna is valued, at the 30 June 2009 ToLuna share price, at Â£35.0 million. When dividends received from ToLuna are taken into account, the realised and unrealised gains at 30 June 2009 amounted to approximately Â£50 million. This compares to an investment cost of Â£2 million. ToLuna's growth has continued in 2009. On 18 September 2009 it reported that revenues for the six months to 30 June 2009 rose from Â£8.2 million to Â£13.7 million, operating profits from Â£1.3 million to Â£1.6 million, cash generated from operations from Â£2.2 million to Â£3.3 million, basic earnings per share from 2.69p to 3.25p, and dividends from 0.5p to 0.6p. KSS LTD ("KSS Ltd") KSS Ltd provides pricing and revenue management systems for petrol retailers and refiners. The company is 100 per cent owned by Eurovestech. In the six months to December 2008, KSS Ltd achieved a double digit increase in revenues compared to the previous period. The global economic crisis had its effects, however; the closing of deals slowed in the early months of 2009 as the crisis intensified. KSS Ltd made several important and immediate adjustments, including a significant reduction in costs. This trend - the delay in deals - continued in the quarter to June 2009. In the 15 months to June 2009, KSS Ltd revenue was Â£7.6 million, with a pre-tax profit of Â£0.9 million. The management of KSS Ltd is confident that several of the delayed transactions will be signed in the coming months, and consequently expects a substantial increase in revenues and operating profits for the year to June 2010. The partnership with SAP as the exclusive endorsed business solution for fuels pricing continues to be strategically important for KSS Ltd. KSS RETAIL LTD ("KSS Retail") KSS Retail provides price optimisation solutions for the retail industry. It is 100 per cent owned by Eurovestech. KSS Retail has made excellent progress in market conditions that have been extremely challenging. On 25 June 2009 it reported the winning of a major, multi-million dollar contract from a large US retailer and the signing of a long-term strategic alliance with dunnhumby USA LLC, a joint venture between The Kroger Company of the US and dunnhumby, a subsidiary of Tesco plc. Under the alliance, dunnhumby USA, a leader in building sales and brand value for retailers and consumer goods companies, will use KSS Retail's PriceStrat solution for price modelling and optimisation. In the 15 months to 30 June 2009 KSS Retail more than doubled its turnover and recorded a profit after tax of Â£1.6 million. As a result of the growth of KSS Retail, Eurovestech's Directors have reassessed its carrying value within the Eurovestech accounts, and revised the value upward to Â£10 million. MAGENTA CORPORATION ("Magenta") Magenta is a vendor of advanced software solutions. It sells these in the UK; its development centres are in Russia. Eurovestech owns 46.9 per cent of Magenta's fully diluted share capital. Magenta's scheduling solution, Maxoptra, has been sold for use by a region of the UK National Health Service, supporting the attempt to improve the efficiency of patient transport. Further deliveries of Maxoptra are expected in the UK and overseas. Magenta's "Maxifier" brand represents its advance into online marketing. Initial reactions have been highly encouraging. Contracts have been signed with several large media groups, including Channel 4, BSkyB, Eyeconomy and the Bauer Media group. The current downturn has made it more difficult to finalise major new outsourcing projects. However, Magenta sees encouraging signs that business conditions are improving and its pipeline of new projects is stronger than ever. Magenta continues to develop its Software-as-a-Service model, with recurring long-term revenues, for both Maxoptra and Maxifier. The transition from "lumpy" projects to recurring revenues may have some impact on short-term financial performance, but should add considerably to long-term value. LOGNET INFORMATION SYSTEMS ("LogNet") LogNet provides billing and e-billing solutions for telecoms and other companies and organisations. Eurovestech owns 25.4 per cent of LogNet's fully diluted share capital. During calendar year 2008, LogNet's revenues rose by more than 50 per cent and its pipeline of potential orders grew substantially. Then, in early 2009, its management took action to protect the company from an expected slowdown in economic activity. For example, salary costs were reduced by more than 40 per cent. Yet the first half of 2009 was a record six months for revenue. Because costs had been reduced, profitability increased dramatically. A new momentum for the business was established. Revenues rose in excess of 200 per cent, profitability was achieved and LogNet won two substantial orders from new customers. As a result of this, and of its strong pipeline, LogNet's management expects profitability in 2009. MIST TECHNOLOGIES ("Mist") Mist has developed a sound separation technology that enables music and film files to be remastered into high definition surround sound. Following a fundraising in November 2008, Eurovestech owns 37.8 per cent of Mist at an increased valuation of Â£3.7 million. Mist now markets its products under the brand name "Audionamix". Audionamix recently completed a first, strategic product development; the release of a remastered music recording for a major record label. After extensive research and development work, it launched, in the first quarter of 2009, "UnMixing Station" which offers sound separation for film studios and record companies through proprietary technology. UnMixing Station is patent-protected, and is being tested by 171 post production studios in 26 countries. Lastly, a new product offering dedicated to Radio Archiving will be launched in the fourth quarter of 2009. ARKeX LIMITED ("ARKeX") ARKeX conducts geophysical surveys for oil, gas and mineral explorers using airborne gravity gradiometry. Eurovestech owns 2.4 per cent of ARKeX. ARKeX is continuing to develop its proprietary technology and to expand the operational capabilities of its imaging. On 5 May 2009 ARKeX announced a long term agreement with Sonatrach, the state oil company of Algeria, which awarded ARKeX a three year contract for a series of airborne surveys across the country. The contract includes data acquisition, processing and interpretation. Following the successful Â£15.4 million fundraising by ARKeX in June 2008, the carrying value of Eurovestech's investment in ARKeX has been raised from Â£0.6 million to Â£0.9 million. CONSOLIDATED ACCOUNTS AND REPORTING BASIS Our statutory accounts are reported on a consolidated basis, which means that the trading activities and assets of our subsidiaries are consolidated in the Eurovestech group accounts. This reflects our ability to exercise control over these companies. In the period under review, Eurovestech held three subsidiaries; ToLuna, KSS Ltd and KSS Retail. As a result of ToLuna's recent acquisition of ISS and the associated share placing completed on 15 July 2009, Eurovestech's holding in ToLuna has fallen from 50.6 per cent to 29.9 per cent. In consequence, our 2010 accounts will record our investment in ToLuna at its market value. For the 15 months to 30 June 2009, ToLuna's results have been consolidated into the Eurovestech group accounts, in which it is reported as a discontinuing operation and its assets as a disposal group. The after tax results of ToLuna are disclosed in the income statement as a discontinuing operation. The consolidated results of Eurovestech and its two remaining subsidiaries, KSS Ltd and KSS Retail, are reported as continuing operations, and show an after tax profit of Â£2.0 million, compared to an after tax loss of Â£3.9 million for the 12 months to 31 March 2008. For the 15 months to 30 June 2009, the pre-tax profit of the Group is split between continuing operations (Â£1.9 million) and discontinuing operations (Â£5.6 million) giving a total pre-tax profit of Â£7.5 million. At the pre-tax level, the Group reported a loss of Â£1.1 million for the 12 months to 31 March 2008, divided between continuing operations (loss of Â£4.0 million) and discontinuing operations (profit of Â£2.9 million). SHAREHOLDER VALUE The board is aware of the gap between Eurovestech's current market capitalisation and the carrying value of its assets. Following the receipt of Â£ 7.1 million from the sale of part of our ToLuna holding, the Company now has sufficient distributable reserves to allow it to make shareholder distributions. The board is currently evaluating a number of options with its advisers and will make a further announcement in due course. CHARITABLE DONATIONS During the period Eurovestech issued 700,000 shares to seven charitable organisations. Including these, since its flotation in 2000 Eurovestech has created and gifted 9.2 million shares to approximately 80 charitable organisations. At 30 June 2009, these shares had a market value of Â£1.3 million. We hope this will encourage other companies to support charities in a similar way. The Company has today issued a total of 200,000 new ordinary shares divided equally between the following charitable organisations: International Childcare Trust and Friends of Schneider Children's Hospital. Application has been made for these shares to be admitted to AIM and it is expected that dealings will commence on 6 October 2009. Richard Bernstein, Chief Executive of the Company, has paid the Â£2,000 nominal value to facilitate their issue. PROSPECTS We welcome the growing indications that confidence in our markets is recovering somewhat from the traumas of the global credit crunch. If confidence returns, that will have a major impact. Yet we doubt that the problems of the banking and financial system have been fully resolved. Therefore, we continue to proceed with caution and vigilance. Our focus remains on developing and delivering the value inherent in our portfolio. There is no doubt that this value is increasingly recognised, as our companies win important contracts and secure valuable strategic alliances. Their proprietary technology and management expertise has stood them in good stead in recent months. This was bound to be a testing period for our companies. We are greatly encouraged by the way they have risen to the challenge and are continuing to deliver value for our shareholders. Eurovestech's strong balance sheet and cash resources give us confidence that we can make further progress. Richard Grogan Chairman 29 September 2009 CONSOLIDATED INCOME STATEMENT FOR THE PERIOD ENDED 30 JUNE 2009 15 month Year to period to 31 March 30 June (restated) 2009 2008 Continuing operations Notes Â£'000 Â£'000 Revenue 4 14,539 6,541 Investment income 35 160 Net gains / (losses) on financial assets at 2,458 (422) fair value Operating expenses (15,168) (10,230) Operating profit / (loss) 1,864 (3,951) Finance income 84 79 Finance costs (38) (163) Profit / (Loss) before tax 1,910 (4,035) Income tax credit 65 88 Profit / (Loss) for the period from continuing 1,975 (3,947) operations Discontinued operations Profit for the period from discontinued 7 4,214 2,478 operations Profit / (Loss) for the period 6,189 (1,469) Attributable to: Equity holders of the company 4,112 (2,561) Minority interest 2,077 1,092 6,189 (1,469) Earnings per share Basic earnings / (loss) per share (pence) 3 1.80 (0.46) Diluted earnings / (loss) per share (pence) 3 1.78 (0.46) Prior period figures have been restated to reflect reclassification of ToLuna plc as a discontinued operation. CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE FOR THE PERIOD ENDED 30 JUNE 2009 15 month Year to period to 31 March 30 June 2008 2009 Â£'000 Â£'000 Profit / (Loss) for the period 6,189 (1,469) Foreign exchange movements (277) 764 Total income and expense recognised in the 5,912 (705) period Attributable to: Equity holders of the company 3,821 (2,602) Minority interest 2,091 1,897 5,912 (705) CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2009 Notes 30 June 31 March 2009 2008 Â£'000 Â£'000 Assets Non-current assets Property, plant and equipment 240 729 Goodwill - 2,076 Other intangible assets 54 3,386 Financial assets at fair value through profit 5 9,913 6,991 or loss Deferred tax asset 1,372 1,372 11,579 14,554 Current assets Trade and other receivables 3,921 7,946 Financial assets at fair value through profit 1,200 3,840 and loss Cash and cash equivalents 2 4,299 6,995 Held-for-sale assets 7 22,992 - 32,412 18,781 Liabilities Current liabilities Trade and other payables 4,087 7,817 Income tax liabilities - 469 Borrowings 17 260 Held-for-sale liabilities 7 8,018 - 12,122 8,546 Net current assets 20,290 10,235 Non-current liabilities Borrowings 30 115 Deferred tax liability - 309 Provisions 3,375 1,945 3,405 2,369 Net assets 28,464 22,420 Equity Capital and reserves attributable to the equity holders of the Company Issued capital 3,443 3,436 Share premium 18,771 18,680 Other reserves 34 291 Retained earnings (1,184) (5,296) 21,064 17,111 Minority interest 7,400 5,309 Total equity 28,464 22,420 CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD ENDED 30 JUNE 2009 Notes 15 month Year to period to 31 March 30 June 2009 2008 Â£'000 Â£'000 Cash flows from operating activities Profit / (Loss) for the period before taxation 7,474 (1,121) Adjustments for: Net finance cost (46) (41) Depreciation of property, plant and equipment 1,005 347 Amortisation of intangible assets 2,979 1,142 Gains on financial assets (2,598) (94) Impairment of financial assets 140 516 Loss on disposal of property, plant and - (51) equipment Movement on provision 1,430 648 Investment income (35) (160) Share based payments 585 224 Increase in trade and other receivables (2,405) (2,989) Decrease in trade and other payables (1,296) (381) Net cash generated from / (used in) operations 7,233 (1,960) Finance costs (195) (70) Income tax paid (581) (623) Net cash generated by / (used in) operating 6,457 (2,653) activities Cash flows from investing activities Finance income 157 207 Purchase of subsidiary undertakings (net of (5,097) - cash acquired) Purchase of property, plant and equipment (1,066) (588) Purchase of intangible assets (4,082) (3,143) Dividends received 475 160 Disposal of financial assets 52,619 68,339 Purchase of financial assets (50,685) (65,843) Net cash used in investing activities (7,679) (868) Cash flows from financing activities Finance lease capital repayments (279) (65) Finance lease loan drawn down 243 305 Dividends paid to minority interest (432) (155) Proceeds from issue of equity shares 7 5,011 Net cash (used in) / generated by financing (461) 5,096 activities Net (decrease) / increase in cash and cash (1,683) 1,575 equivalents Exchange movements 186 168 Cash and cash equivalents at the start of the 2 6,860 5,117 period Cash and cash equivalents at the end of the 2 5,363 6,860 period NOTES TO THE PRELIMINARY RESULTS FOR THE PERIOD ENDED 30 JUNE 2009 1. BASIS OF PREPARATION The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 March 2008 and period ended 30 June 2009, but is derived from those accounts. Statutory accounts for 2008 have been delivered to the Registrar of Companies and those for 2009 will be delivered following the Company's Annual General Meeting. The Auditors have reported on those accounts; their reports were unqualified and did not contain statements under the Companies Act 1985, sections 237(2) or (3). The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU), IFRIC Interpretations and the Companies Act 1985 applicable to companies reporting under IFRS. The consolidated financial statements have been prepared under the historical cost convention as modified by the revaluation of certain financial instruments and share based payments. The Group has also elected to designate all associate sized investments as at fair value through profit or loss, thereby adopting the exemption in IAS 28 `Investments in associates' for venture capital organisations. The amendment to IFRS 5 `Non-current assets held-for-sale and discontinued operations' has been early adopted by Eurovestech. The amendment to this standard clarifies that all of a subsidiary's assets and liabilities are classified as held for sale if a partial disposal sale plan results in loss of overall control. This has impacted the Eurovestech financial statements following the partial disposal of Eurovestech's shareholding ToLuna plc (see notes 6 and 7). 2. CASH AND CASH EQUIVALENTS 30 June 31 March 2009 2008 Â£'000 Â£'000 Cash at bank and in hand 4,299 1,576 Money market deposit - 5,229 Short term bank deposits - 190 Cash and cash equivalents 4,299 6,995 Overdrafts - (135) Net cash and cash equivalents from held-for-sale 1,064 - disposal group Cash and cash equivalents per cashflow 5,363 6,860 3. EARNINGS PER SHARE 15 month Year ended period to 31 March 30 June 2008 2009 (restated) Â£'000 Â£'000 Profit /(Loss) for the period attributable to 1,975 (3,947) continuing operations Profit for the period attributable to discontinuing 4,214 2,478 operations Profit /(Loss) for the period attributable to equity 6,189 (1,469) shareholders Basic earnings per share (pence) from continuing operations 0.57 (1.24) from discontinuing operations 1.23 0.78 1.80 (0.46) Diluted earnings per share (pence) from continuing operations 0.57 (1.24) from discontinuing operations 1.21 0.78 1.78 (0.46) Shares Shares Issued ordinary shares at start of the period 343,622,801 315,622,801 Ordinary shares issued in the year 700,000 28,000,000 Issued ordinary shares at end of the period 344,322,801 343,622,801 Weighted average number of shares in issue for the 343,825,912 318,952,036 period Dilutive effect of options 3,864,801 - Weighted average shares for diluted earnings per 347,690,713 318,952,036 share The prior period's diluted loss per share did not differ from the basic loss per share as the exercise of share options would have reduced the loss per share and was therefore not dilutive under IAS 33. 4. Segmental analysis a. Primary reporting format - business segments The segment results for the 15 month period ended 30 June 2009 are as follows: Venture Software Total development capital Â£'000 Â£'000 Â£'000 Total segment revenue 145 14,690 14,835 Inter segment revenue (86) (210) (296) Revenue 59 14,480 14,539 Investment income 35 - 35 Net gains on financial assets at fair value 2,458 - 2,458 Other operating expenses (3,170) (11,998) (15,168) Operating (loss) / profit (618) 2,482 1,864 Net finance income 46 Profit before tax 1,910 Income tax credit 65 Profit for the period 1,975 The segment results for the year ended 31 March 2008 are as follows: Venture Software Total capital development (restated) Â£'000 Â£'000 Â£'000 Total segment revenue 17 6,602 6,619 Inter segment revenue (17) (61) (78) Revenue - 6,541 6,541 Investment income 160 - 160 Net losses on financial assets at fair (422) - (422) value Other operating expenses (2,424) (7,806) (10,230) Operating loss (2,686) (1,265) (3,951) Net finance costs (84) Loss before tax (4,035) Income tax expense 88 Loss for the year (3,947) Unallocated assets and liabilities comprise certain deferred taxation assets and liabilities and current taxation liabilities. The segment assets and liabilities at 30 June 2009 are as follows: Venture Software Unallocated Total capital development items Â£'000 Â£'000 Â£'000 Â£'000 Assets 12,467 7,160 1,372 20,999 Liabilities (4,017) (3,492) - (7,509) 8,450 3,668 1,372 13,490 Held-for-sale disposal group 14,974 (note 35) Net assets 28,464 Capital expenditure 2 211 - 213 Depreciation and amortisation 6 254 - 260 Impairment of financial assets 460 - - 460 The segment assets and liabilities at 31 March 2008 are as follows: On-line Venture Software Unallocated Total market capital development items research Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Assets 14,232 14,111 3,620 1,372 33,335 Liabilities (3,625) (3,917) (2,595) (778) (10,915) 10,607 10,194 1,025 594 22,420 Capital expenditure 155 - 3,516 - 3,671 Depreciation and 187 7 1,272 - 1,466 amortisation Impairment of financial - 516 - - 516 assets b. Secondary reporting format - geographical segments The Group's main business segments are based in the following locations: * Venture capital - UK * Software development - UK, Europe and North America The geographical segments are based on an analysis of revenue by the location of the group's customers: Revenue 15 month Year period to ended 30 June 31 March 2009 2008 (restated) Â£'000 Â£'000 UK 3,061 698 Rest of Europe 3,837 2,013 North America 7,641 3,830 14,539 6,541 5. Financial assets at fair value through profit and loss Subsidiary companies consolidated Country of % interest Principal activity in these accounts incorporation in ordinary shares at 30 June 2009 Knowledge Support Systems Limited UK 100.0 Price optimisation software Knowledge Support Systems Inc. US 100.0 Price optimisation software KSS Retail Limited UK 100.0 Price optimisation software KSS Retail Inc. US 100.0 Price optimisation software ToLuna Plc* UK 50.6 Online market research *AIM quoted investment. ToLuna Plc has additional wholly owned subsidiaries undertaking the same principal activity as disclosed in the ToLuna Plc 2008 Annual Report. The accounting reference date for ToLuna Plc is 31 December. Non-current Â£'000 Equity investments At 1 April 2007 4,104 Additions 3,269 Amounts written off investments (382) At 31 March 2008 6,991 Additions 470 Net gain on investments at fair value 2,622 Impairment of investments (140) Disposals (30) At 30 June 2009 9,913 Fair value At 30 June 2009 9,913 At 31 March 2008 6,991 Portfolio company name Country of % interest in Fair value incorporation ordinary at shares at 30 June 30 June 2009 2009 Â£'000 Magenta Corporation Limited UK 46.9 3,337 MIST Technologies SA France 37.8 3,690 LogNet Information Systems Ltd UK 25.4 2,000 ARKeX Limited UK 2.4 855 D-Pharm Limited Israel 0.2 31 Group investments carrying value 9,913 The additions derive from additional investment in Magenta Corporation and MIST Technologies SA. 6. Events after the balance sheet date On 26 June 2009, ToLuna Plc, a Eurovestech subsidiary, announced the conditional acquisition of the business and assets of the ISS Division of Greenfield Online, which was subsequently completed on 15 July 2009. The total consideration, paid in full on 15 July 2009, was US$40 million (approximately Â£ 24.4 million). The acquisition was financed through an equity placing of Â£28m to which the Company did not contribute. Â£1.4 million of costs related to the acquisition have been incurred. Additionally, in conjunction with the above transaction, the Company agreed to sell 3,552,383 ToLuna shares at 210p per share, equivalent to the placing price, which realised Â£7.1 million after disposal costs. As a result of this share sale and ToLuna's share placing, the Company's shareholding in ToLuna reduced from 50.6 per cent to 29.9 per cent. The fair values of the assets and liabilities acquired are summarised below. The values have been assessed on a provisional basis at this stage and are subject to subsequent revision pending finalisation of this fair value assessment. Book Value Fair value Fair adjustment Â£'000 value Â£'000 Â£'000 Non-Current assets Other intangible assets 2,842 7,000 9,842 Property, plant and equipment 1,875 - 1,875 Other non-current assets 157 - 157 Deferred tax asset 45 - 45 4,919 7,000 11,919 Current assets Trade and other receivables 7,934 - 7,934 Cash 2,104 - 2,104 10,038 - 10,038 Current liabilities Trade and other payables (6,903) - (6,903) (6,903) - (6,903) Net current assets 3,135 - 3,135 Non-current liabilities Deferred tax liability (97) (200) (297) Other non-current liabilities (415) - (415) (512) (200) (712) Net assets 7,542 6,800 14,342 Goodwill 10,071 Total 24,413 Consideration 24,413 Total 24,413 The provisional fair value adjustments uplift intangible assets, reflecting recognition of acquired customer relationships, panel members, an enhanced valuation of the acquiree's internally generated software, the existing short term order book and trademarks. A significant amount of the value of the acquired business is attributable to its workforce (including operational facilities in India and Romania) and sales knowhow. Also, the Group anticipates significant operational and geographical synergies to be achieved from the integration of the existing and acquired businesses. As no assets can be recognised in respect of these factors, they contribute to the goodwill recognised on acquisition. No proforma disclosures have been provided as this acquisition forms part of the disposal group. 7. Assets held-for-sale and discontinuing operations As described in Note 6, the partial disposal of Eurovestech's shareholding in ToLuna as announced on 26 June 2009 and completed on 15 July 2009, has now reduced Eurovestech's share in ToLuna from 50.6 per cent to 29.9 per cent. The Directors therefore consider it appropriate to disclose the operations of ToLuna as discontinued operations and present the assets and liabilities of ToLuna as held-for-sale as disclosed in the primary statements and analysed below: a. Analysis of the result of discontinued operations: 15 month Year period to ended 30 June 2009 31 March 2008 Â£'000 Â£'000 Revenue 31,964 13,101 Expenses (26,400) (10,187) Profit before tax for discontinued operations 5,564 2,914 Income tax expense (1,350) (436) Profit for the period for discontinued operations 4,214 2,478 b. The assets of the disposal group classified as held-for-sale are analysed as follows: 30 June 31 March 2009 2008 Â£'000 Â£'000 Property, plant and equipment 744 - Goodwill 5,382 - Other intangible assets 6,244 - Trade and other receivables 7,811 - Cash and cash equivalents 2,811 - 22,992 - The liabilities of the disposal group classified as held-for-sale are analysed as follows: 30 June 31 March 2009 2008 Â£'000 Â£'000 Trade and other payables 4,751 - Income tax liabilities 284 - Borrowings 2,048 - Deferred tax liabilities 935 - 8,018 - c. Cumulative income or expense recognised directly in equity relating to disposal group classified as held-for-sale 30 June 31 March 2009 2008 Â£'000 Â£'000 Exchange translation differences 28 - 28 - d. Cash flows of the disposal group The cash flows of the disposal group classified as held-for-sale are analysed as follows: 30 June 31 March 2009 2008 Â£'000 Â£'000 Operating cash flows 7,417 3,870 Investing cash flows (10,240) (3,375) Financing cash flows 78 (158) (2,745) 337 8. EUROVESTECH COMPANY BALANCE SHEET At 30 June At 31 March Note 2009 2008 Â£'000 Â£'000 Fixed assets Tangible assets 2 6 Investments 9 71,842 53,533 71,844 53,539 Current assets Debtors 1,681 2,435 Investments 1,200 3,840 Cash at bank and in hand 1,196 3,010 4,077 9,285 Creditors: amounts falling due within one year (2,983) (2,262) Net current assets 1,094 7,023 Net assets 72,938 60,562 Capital and reserves Called up share capital 3,443 3,436 Share premium account 18,771 18,680 Other reserve 100 100 Profit and loss account 50,624 38,346 Shareholders' funds 72,938 60,562 Accounting convention The parent company financial statements have been prepared under United Kingdom Generally Accepted Accounting Practice using the historical cost convention as modified by the revaluation of certain financial instruments and share based payments and in accordance with the Companies Act 1985 and applicable accounting standards. 9. EUROVESTECH COMPANY FIXED ASSET INVESTMENTS Â£'000 Valuation At 1 April 2007 47,348 Additions 3,325 Net gains on revaluation at fair value through profit 3,242 and loss Impairment (382) At 31 March 2008 53,533 Additions 3,600 Net gains on revaluation at fair value through profit 14,879 and loss Impairments (140) Disposals (30) At 30 June 2009 71,842 The additions derive from investment in ToLuna Plc, Magenta Corporation, KSS Retail and MIST. Revaluation gains and losses result from ToLuna Plc, KSS Retail, MIST and ARKeX. The impairments arise from D-Pharm and Tevet Process Control Technologies Limited. Included within fixed asset investments are the following companies: Portfolio company name Country of % interest in Value at incorporation ordinary shares at 30 June 2009 30 June 2009 Â£'000 Principal subsidiaries ToLuna Plc* UK 50.6 42,429 Knowledge Support Systems Limited UK 100.0 9,500 KSS Retail Limited UK 100.0 10,000 Other investments Magenta Corporation Limited UK 46.9 3,337 MIST Technologies SA France 37.8 3,690 LogNet Information Systems plc UK 25.4 2,000 ARKeX Limited UK 2.4 855 D-Pharm Limited Israel 0.2 31 Investments carrying value 71,842 *AIM quoted investment 10. DIVIDEND No dividends were paid or proposed in respect of the period ended 30 June 2009. 11. NOTICE OF MEETING Notice of the Annual General Meeting of the Company, to be held at the offices of the Company at 29 Curzon Street, London W1J 7TL on Wednesday 11 November 2009 at 10 a.m., will be posted to shareholders accompanying copies of the Report and Accounts and will be available on the Company's website at www.eurovestech.co.uk 12 COPIES OF THE REPORT & ACCOUNTS Copies of the Report and Accounts will be posted to shareholders shortly and will be available from the Company's registered office 29 Curzon Street, London W1J 7TL, and on the Company's website www.eurovestech.co.uk.

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