New Economy Development Fund S.A. (“TANEO”) Interim...which has been prepared in accordance with IAS/IFRS, gives a true and fair view of the assets, liabilities, financial position

New Economy Development Fund S.A.

(“TANEO”)

Summary Interim Financial Statements for the period 01/01/2011 – 30/06/2011

Summary Interim Financial Statements for the period 1/1/2011 – 30/06/2011 2

It is hereby certified that the attached herein Summary Interim Financial Statements for 01/01 – 30/06/2011 period are the financial statements approved by TANEO’s S.A Board of Directors on 01/08/2011, uploaded on the Web on www.taneo.gr TANEO hereby declares that to the best of his knowledge the attached financial statements, which has been prepared in accordance with IAS/IFRS, gives a true and fair view of the assets, liabilities, financial position and profit or loss of the company as required by Regulation 7(2) of Transparency Directive 2004/109/EC. Moreover TANEO declares that to the best of his knowledge the interim management report includes a fair review of the information required by Regulation 8(2) of the same Directive.

Athens, August 1, 2011

The President of the Board.

The Vice-President & Managing Director

The Finance Manager

Ioannis Papaioannou I.D. ΑΒ049161

Nikolas Haritakis I.D. Ρ093479

George Saperas I.D. N0 AI100140.

License. 28154 Α΄Class

http://www.taneo.gr


Table of Contents…………………………………………………………………….…..Page INTERIM MANAGEMENT REPORT ..................................................................... 4 Α. Interim Income Statement for the period 1/1/2011 – 30/06/2011 .........................10 Β. Interim Balance Sheet for the period 1/1/2011 – 30/06/2011 ................................11 1. General Information ..........................................................................................12 2. Significant Accounting Policies .........................................................................12

2.1. Basis of Preparation of Financial Statements .........................................12 3. Risk Management ..............................................................................................13

3.1. Market risk ............................................................................................13 3.2. Liquidity risk ........................................................................................14 3.3. Credit Risk ............................................................................................14

4. Notes on the Summary Interim Financial Statements .........................................15 4.1. Credit Interests and related expenses .....................................................15 4.2. Gains from FVTPL Investments ............................................................15 4.3. Increase / (Decrease) in Fair Value Investments ....................................16 4.4. Debit Interest and related expenses ........................................................17 4.5. Other Operating expenses ......................................................................17 4.6. Investments carried at fair value through the income statement .............18 4.7. Investments available for sale ................................................................20 4.8. Other receivables...................................................................................20 4.9. Cash and cash equivalents .....................................................................21 4.10. Preferred Stock......................................................................................21 4.11. Bond issue.............................................................................................23 4.12. Other Liabilities ....................................................................................24 4.13. Contingent Liabilities ............................................................................24 4.14. Commitments ........................................................................................24

5. Events occurring after the 30/06/2011 ...............................................................25


INTERIM MANAGEMENT REPORT

This Report includes an analysis of the company’s Summary Interim Financial Statements for the period 1/1/2011 – 30/06/2011. Moreover it includes a description of important events that have occurred during the first 6 months of the financial year, their impact on the interim financial statements and an indication of significant events and perspectives for the remaining 6 months of the financial year.

1. Significant Events Review 1/1/2011-30/6/2011

A light in the tunnel of the greek economic downturn, came up, following the July 21 EU Council decisions about the Euro area / Greece debt crisis. Highlights of the main points in the Council statement are a) full coverage of government’s borrowing requirement until 2014, b) lower interest rates & longer maturities for EFSF loans to help improve debt dynamics, c) Continuity of Greek banking sector’s access to ECB funding secured, d) a “comprehensive” strategy to boost domestic growth and investment. Moreover the implementation of further fiscal adjustments and structural reform plans which have been approved in June from the greek parliament are expected to positively affect Greece’s fiscal situation.

Under this negative economic environment, TANEO’s Funds has faced several delays in the development of a number of projects. Moreover, projects related to the energy sector are facing difficulties in their completion due to bureaucratic obstacles in the licensing procedures. Whatsoever, TANEO’s Funds proceeded with 4 follow-on investments and 4 approvals for new investments after screening out several proposals (see investment review section). The total commitments to Venture Capital Funds on 30 June 2011 amounted to €140,2 m. The amount of Invested Capital on 30 June 2011 reached the amount of €44 versus €34,8 on 30 June 2010.

Responding to the current economic crisis TANEO is also undertaking a significant reduction in operational expenses and is reviewing all salaries relative to the current rules and conditions.

During AGM of the company that took place in the June 2011, the shareholder approved the extension of CEO’s employment contract for 1 year.

TANEO became one of the initial members of EVFIN. The European Venture Fund Investors Network (EVFIN) is a platform for dialogue launched in March 2011 by major national investors in venture capital in response to the continuing funding crisis in this sector across the EU. This initiative has developed from the conclusions of the European Council meeting of February 4, 2011 which called on the European Commission to “present proposals by the end of 2011 for putting in place an EU-wide venture capital scheme building on the EIF and other relevant financial institutions and in cooperation with national operators”. EVFIN initiative is complementary to the general activity of the European Private Equity and Venture Capital Association (EVCA). In May 2011 the investors of Oxygen-TANEO Neoventures Fund decided to replace the management team mainly due to slow investment activity. Moreover TANEO has set strict performance targets for the new team that need to be achieved until year end. TANEO expects this settlement to boost the fund’s performance.


2. Investment Review

A summary of TANEO’s Venture Capital Funds performance is provided below (Amounts are in thous. Euros and refer to the Fund as a whole).

Capital Connect

TANEO's % participation: 49,99% in thou. € 1H 2011 Untill 30/6/2011

Capital committed 10.698Capital contributed - 8.548Capital distributed - 3.807Total invested to portfolio companies - 5.563Total Additional committed to portfolio companies 0

Company Name Industry Business Description Date Realization

Advice Software Developing and marketing software solutions

Dec-03 Total

Micrel Medical Devices S.A.

Medical/ Life Sciences

Designing & manufacturing ambulatory infusion devices.

Jan-04 Total

Tyres Herco Environment Tyres Recycling Feb-06 Partial

Mavin EnvironmentRecycling organic wastes &

producing animal feed Mar-06 No

Krokos Kozanis Food/ Beverages Producing food products based on Krokos (Saffron)

Mar-07 Total

Zaitech Fund

TANEO's % participation: 49,99% in thou. € 1H 2011 Untill 30/6/2011

Capital committed - 40.000Capital contributed 5.314 32.086Capital distributed - 3.173Total invested to portfolio companies 2.500 23.709Total Additional committed to portfolio companies - 6.500


E- Global IT Internet stations focusing on

on-line gaming services Jan-05 No

Mediterra Agriculture Operating the Mastiha Shops Jun-05 Partial

Doppler Industrial Prod./ Serv.

Lift manufacturing Jun-05 Partial

Performance Technologies

ITData Storage, Business Continuity and Disaster

RecoveryJun-05 No

Advanced Network Technologies

IT Wireless Communication Services

Jun-06 No

Craft Food & Beverages Production/ Distribution of Beer

Feb-08 No

Foodlink Transportation 3rd party logistics Jul-08 No

Eurydamantos Real EstateLofts and Service

Appartments construction and sale

Sep-08 No

Erasineio Hospital Health Services Hospital Aug-09 NoSolar Datum S.A. Energy Renewable Energy Sep-10 Partial

Aioliko Parko Tsemperou

Energy Renewable Energy Feb-10 No

Sum

mar

yPo

rfol

io I

nves

tmen

tsSu

mm

ary

Port

folio

Inv

estm

ents


IBG Hellenic Fund II

TANEO's % participation : 39,99%in thou. € 1H 2011 Untill

30/6/2011Capital committed - 17.060Capital contributed - 10.113Capital distributed 98 16.938Total invested to portfolio companies - 8.031Total Additional committed to portfolio companies - -

Company Name Industry Business Description Date RealizationIonia Energiaki Energy Renewable Energy Projects Dec-06 Total

Mobile Technology IT Develops Enterprise Mobility Solutions

May-06 Total

Aigaias Anaptyksiaki Energy Renewable Energy Projects May-06 Total

Solar Cells Hellas EnergySolar Wafers & Solar Cells

ManufacturingSep-06 Total

Ensol Anaptyksiaki Energy Renewable Energy Projects Aug-07 Total

Autostop Industrial Prod./

Serv. Automobile Accessories Apr-08 Partial

AIMS - TANEO Fund


30/6/2011Capital committed - 40.000

Capital contributed - 6.000Capital distributed - 0Total invested to portfolio companies - 958Total Additional committed to portfolio companies - 0

Company Name Industry Business Description Date RealizationPanagopoulou & Sia A.E

Food & BeveragesSmall- scale Dairy Production Unit

Dec-10 No

P/V Parks (name not available yet)

EnergyP/V Parks of a total capacity of 3,5MW

Dec-10 No

Thermi - Taneo VCF


30/6/2011Capital committed - 24.000Capital contributed 2.045 4.617Capital distributed - 0Total invested to portfolio companies 1.896 2.693Total Additional committed to portfolio companies 435 435

Sum

mar

yPo

rfol

io I

nves

tmen

tsPo

rfol

io

Inve

stm

ents

Sum

mar

ySu

mm

ary


Alpha - TA.NE.O Fund


30/6/2011Capital committed - 30.000Capital contributed 1.663 8.970

Capital distributed - 0Total invested to portfolio companies 1.193 6.223Total Additional committed to portfolio companies - 1.080


Upstream Communications Mobile Marketing Company Dec-08 No

Piraiki Microbrewery Food & BeveragesProduction/ Distribution of

Beer Apr-09 No

Kritis Gi Food & BeveragesProduction of traditional Cretan Bread Products

Jun-09 No

Dipyrites Handakos Food & BeveragesTrade of tradional Cretan

Bread Products Apr-10 No

BioKid Food & Beverages Organic Baby Milk Jun-10 No

Oxygen - TANEO Neoventures


30/6/2011Capital committed - 30.000Capital contributed 239 1.954Capital distributed - 0Total invested to portfolio companies - 501Total Additional committed to portfolio companies - 250


Lead Generation S.A. CommunicationsReal Estate Classifieds

WebsiteJul-09 No

GIVE - TANEO Fund


30/6/2011Capital committed - 20.000Capital contributed - 1.000Capital distributed - 0Total invested to portfolio companies - 0Total Additional committed to portfolio companies - 0


Porf

olio

Inv

estm

ents

Sum

mar

ySu

mm

ary

Porf

olio

In

vest

men

tsSu

mm

ary

Port

folio

In

vest

men

ts

The fund has not completed any investments


Piraeus - TA.NE.O Fund


30/6/2011Capital committed - 30.000

Capital contributed 2.375 11.171Capital distributed - 0

Total invested to portfolio companies 2.000 8.921Total Additional committed to portfolio companies

Company Name Industry Business Description Date RealizationAdvanced Energy

Technologies Energy Developing High Proton

Exchange MembranesJun-09 No

ESS ITDeveloping an Electronic

Document Software Platform

Jun-09 No

VoiceWeb IT Voice Recognition Technology

Dec-09 No

New Mellon - TANEO Fund


30/6/2011Capital committed - 15.000Capital contributed 201 3.501Capital distributed - 0Total invested to portfolio companies 2.470Total Additional committed to portfolio companies - 0


Pharos Energy EnergyDevelops Alternative Energy

ProjectsDec-09 No

Nea Anakyklosi Environment Recycling Company Mar-10 NoBiocompost Environment Recycling Company Sep-10 No

TANEO - FG RES Fund

TANEO's % participation : 49,99% in thou. € 1H 2011 Untill 30/6/2011

Capital committed - 24.000

Capital contributed - 720

Capital distributed - 0

Total invested to portfolio companies - 0

Total Additional committed to portfolio companies - 0


Sum

mar

yPo

rfol

io I

nves

tmen

tsSu

mm

ary

Porf

olio

In

vest

men

ts

No Investments have been completed yet

Sum

mar

yPo

rfol

io

Inve

stm

ents


3. Financial Review

The company prepares half-year Interim Financial Statements following the Transparency Directive 2004/109/EC, as its bonds are listed on the regulated market of the Irish Stock Exchange. The Interim Financial Statements are prepared in accordance with IAS/IFRS.

In the 1st half of 2011 the pre tax loss reached €2.852 Thous. versus pre tax losses of €2.934 Thous. in the 1st half of 2010.

Regarding the income from operating activities the rise of interest rates in Eurozone had a positive effect in the credit interests deriving from the invested money in Money Market Funds. These credit interests went up in the1st half of 2011 amounting to €440 Thous. The average return from these investments during the 1st half of 2011 was 0,8% versus 0,4% during the 1st half of 2010. There were not any realizations from TANEO’s underlying funds resulting to gains from FVTPL investments. Moreover as there was not any reason for VC Funds to rise the fair market valuation of their portfolio companies, this class of income had zero contribution to the results. It must be noted that the company’s main source of income shall be the returns that are expected to derive from its participation in Venture Capital Funds. These returns will be given to the company over time, due to the nature of the investments.

Regarding the expenses, debit interests on the bond loan increased versus last year due to the abovementioned rise of interest rates. More specifically debit interests amounted to €693 Thous.for the period 1/1/2011-30/06/2011 versus €515Thous.for the period 1/1/2010-30/06/2010. The interest rate (6m Euribor) on the loan notes was 1,26% versus 1,0% for the same period last year. The expenses from the issuing and the restructuring of the bond loan are amortized on a 10-year period which is the duration of the bond. The amortization charge for the 1st half of 2011 was €313 Thous. Payroll costs for the period amounted to €173 Thous. The “decrease in FVTPL Investments” refers to the decrease of the Net Asset Value of TANEO’s Venture Capital Funds due to a) the management fees for the period b) the decrease in FV of one of Zaitech’s portfolio company operating in the health industry c) the fall in stock market prices of two of the listed portfolio companies of Zaitech Fund. Other operating expenses without including any extraordinary or non-recurring item, amounted to €303Thous. versus €318Thous. for the period 1/1/20010-30/06/2010.

3. Significant Events and perspectives in 2nd Half of 2011

According to the offering circular of TANEO’s bond loan (chapter Monitoring and Reporting, p.56), should the balance of the accumulation account falls below 50% of the target level for two consecutive payments dates anytime within two years of the final maturity date, there is a trigger event. Taking into consideration the current balance of TANEO’s accounts there is a growing speculation from Deutsche Trustee Company Limited , that a trigger event might take place on December 3rd 2011.

Regarding GIVE – TANEO fund, TANEO explored the possibility of replacing the management and received four preliminary expressions of interest. The board of TANEO initially rejected the two of them and asked the management to further examine the other two alternatives. TANEO expects to receive the complete Private Placement Memorandum from an investment group in order to review and finalize the transition.

Regarding Capital Connect the fund's original term has reached its end and there were no realization of the two portfolio companies Tyres Herco and Mavin. Consequently the transfer of shares of the two companies to TANEO is expected during the second half of 2011.


Α. Interim Income Statement for the period 1/1/2011 – 30/06/2011

Notes 1/1 - 30/06/2011 1/1 - 30/06/2010Amounts in thousands Euro

Credit interests & other finance income 4.1 440 242

Gains from FVTPL Investments 4.2 0 0Increase in fair value investments carried at fair value through the income statement 4.3 0 9Other operating income 0 23

Income from operating activities 440 274

Debit interests & other finance expenses 4.4 (1.007) (829)

Payroll expenses (173) (197)

Depreciation (3) (3) Decrease in fair value investments carried at fair value through the income statement 4.3 (1.806) (1.863)

Other operating expenses 4.5 (303) (318)

Total Operating expenses (3.291) (3.209)

Profit / (Loss) before taxes (2.852) (2.934)

Income tax (Deffered tax) 63 65

Profit / (Loss) after taxes (2.789) (2.869)


Β. Interim Balance Sheet for the period 1/1/2011 – 30/06/2011 Notes 30.06.2011 30.06.2010

Amounts in thousands Euro

Assets

Non-Current AssetsTangible Assets 23 28Intangible Assets 0 0

Investments carried at fair value through the income statement 4.6 27.530 21.141Long term receivables 8 12

27.560 21.181

Current AssetsInvestments available for sale 4.7 96.129 105.270Other receivables 4.8 147 54Cash and cash equivalents 4.9 7.079 7.098

103.355 112.421

Total Assets 130.916 133.602

Equity and liabilities

EquityShare capital 1.000 1.000Profit / (Loss) for the period -2.789 -2.869Profit / (Loss) for previous periods -17.099 -13.649Retained Earnings / (Accumulated losses) -19.888 -16.518

Total Equity -18.888 -15.518

Long term liabilitiesPreferred stock 4.10 45.000 45.000

Bond loan 4.11 103.448 102.822

Deferred taxes 310 433

Provisions 751 728149.510 148.983

Short term liabilities

Other liabilities 4.12 294 137294 137

Total liabilities 149.804 149.120

Total Equity and Liabilities 130.916 133.602


1. General Information

The Company was incorporated on the 18th of May 2001 under the name “New Economy Development Fund SA” (Tameio Anaptyxis Neas Economias AE) and the registered title TANEO SA. The Company is based in Greece, 12 Amerikis Str., 10672 Athens and the web address is www.taneo.gr The purpose of the company is the minority participation in closed-end venture capital funds (AKES), venture capital companies (EKES) and similar venture capital organizations (hereafter referred to as "investment organizations"), which will be established specifically for this purpose and will operate in accordance with the laws of any Member State of the European Union. These investment organizations must be managed by private entities in conformity with private sector financial criteria and must invest exclusively in innovative small and medium-size enterprises in Greece. 2. Significant Accounting Policies Estimates and judgments by the management are being constantly scrutinized and are based on historical data and expectations for future events. These expectations are deemed reasonable based on the current data, they have not changed compared to 31.12.2010, while not including unusual events which would call for further notifications in relation to the annual Financial Statements

2.1. Basis of Preparation of Financial Statements The Company’s Summary Interim Financial Statements for the first semester of 2011 covering the period January 1st – June 30th 2011, have been drawn up on the basis of the historical cost principle, as modified by assets and liabilities readjustment to current values, the going concern principle being in accordance with the International Financial Reporting Standards (IFRS), as issued by the International Accounting Standard Board (IASB), and the interpretations thereof, as issued by the International Financial Reporting Interpretations Committee (I.F.R.I.C.) of IASB. Drawing up Interim Financial Statements in accordance with the International Financial Reporting Standards (IFRS) requires significant accounting estimates and scrutiny on behalf of the management in the accounting principles application process. Important assumptions by the management on the Company’s accounting methods application are highlighted when deemed necessary. Estimates and judgments by the management are being constantly evaluated and are underpinned on empirical data and other factors including reasonable expectations for future events. The Summary Interim Financial Statements do not include all the information and notes required in the Annual financial statements of December 31st 2010 and must be read in correlation with the Company’s financial statements of December 31st 2010. The Summary Interim Financial Statements are based on accounting principles and calculations which are consistent with the ones used to prepare the annual financial statements of the financial year which ended on 31/12/2010 and have been consistently applied in all periods under investigation.

.

http://www.taneo.gr


3. Risk Management The Company is exposed to various financial risks, the most important being market risk, in other words the risk of changes in exchange rates, interest rates and market prices, liquidity risk and credit risk. The general risk management policy of the Company focuses on liquidity risk and market risk management. Risk management is performed through the various business operations of the Company. The approval of the executives that bind the company is required prior to carrying out transactions

3.1. Market risk Market Risk Market risk defined as the risk of loss in the fair value of TANEO’s funds arising from the valuation of its portfolio investments (unrealized losses) and management fees paid and accrued which decreases the Net Asset Value of the Fund. TANEO monitors the portfolio investments of its funds by applying a hands-on management approach and by participating in the Funds investment committees. Foreign Currency Risk Exchange rate risk means the investment risk assumed, which arises from unfavourable changes in currency prices, when there is exposure to a specific currency. It does not affect Company’s operations significantly as foreign currency transactions do not exist. Interest Rate Risk Interest rate risk means the investment risk assumed, which arises from changes in the market in money interest rates. Such interest rate changes can affect the Company’s financial position since the following can also change: - The net interest rate result - The value of income and expenses sensitive to interest rate changes - The value of assets and liabilities since the present value of future cash flows (and

frequently the cash flows themselves) change as interest rates change. This kind of risk is related with the bond that the Company issued. The bond issue is guaranteed by the Greek State and may be traded in the Dublin Stock Exchange. The guaranteed interest rate is floating and, thus, the company is exposed to cash flow interest rate risk. The table below presents the income statement and equity sensitivity at a normal rate volatility by +0,5% or -0,5%. Changes in interest rats are set to be on a rational footing in relation to recent market conditions.


0,5% -0,5% 0,5% -0,5%

Income Statement 7 -7 21 -21Equity 7 -7 21 -21

1/1-30/06/2011 1/1-30/06/2010Amounts in thousands Euro Amounts in thousands Euro

3.2. Liquidity risk Liquidity risk means the possible inability of the Company to fully repay in due time its current or future financial obligations –when they become due- due to a lack of necessary liquidity. This risk includes the possibility of a need to refinance amounts at a higher interest rate and the need to sell off assets. This kind of risk is also related with the bond that the Company issued . More specifically it is related to the 6-month payment of the guaranteed interest and the repayment of the principal balance of the note at June 2013. Liquidity is also related to the timing and the amount of returns from the investments in venture capital funds (AKES). The Company carefully monitors its long term financial liabilities and liquidity needs. BoD considers that the extension of TANEO’s investment period without the relevant extension of the bond maturity, includes a risk of partial call of the principal balance of the notes due to the mismatch of relevant cash flows. The financial liabilities maturity on June 30th 2011 and June 30th 2010 for the Company was the following:

Within 6 mothns 6-12 months 1-5 years Later than 5 years Within 6 mothns

6-12 months 1-5 years Later than 5 years

Preferred stock 45.000 45.000Bond loan 105.000 105.000Other liabilities 291 137

291 0 150.000 0 137 0 150.000 0

Long term

1/1-30/06/2011Amounts in thousands Euro

1/1-30/06/2010Amounts in thousands Euro

Short term Long termShort term

3.3. Credit Risk Credit risk derives from breach of obligations by debtors to repay all or part of their debt within contractual deadlines The main financial assets of the company refer to bank balances and receivables from non-Greek mutual funds (money market funds). The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies of mutual funds traded in stock exchange markets. Consequently, the company has no significant concentration of credit risk.


4. Notes on the Summary Interim Financial Statements

4.1. Credit Interests and related expenses

30.06.2011 30.06.2010


Interest from securities (Money market funds) 327 234Other Income 12 8

340 242

The aforementioned interest revenue amounting to Euro 234 thous. originates from investments in non-Greek mutual funds. More information is provided in note 4.7.

4.2. Gains from FVTPL Investments There were no realized gains from TANEO’s funds during 1H 2011.


4.3. Increase / (Decrease) in Fair Value Investments

30.06.2011 30.06.2010

AIMS- TANEO 0 9Increase in Fair Value 0 9

Capital Connect 0 0

Zaitech Fund (1.162) (382)

IBG Hellenic Fund II 0 0

AIMS- TANEO (146) 0

Thermi - TANEO (75) (148)

Alpha - TANEO (161) (668)

Oxygen - TANEO 0 (187)

Give - TANEO 0 (62)

Piraeus - TANEO (204) (204)

New Mellon - TANEO (58) (90)

FG RES - TANEO 0 (120)

Decrease in Fair Value (1.806) (1.863)

Net Result from Valuation of Investments

(1.806) (1.854)


The increase / (decrease) in Fair Value Investments for 1H 2011 is analyzed as follows:

Realized Unrealized Realized Unrealized TotalAIMS - TANEO 0Increase in Fair Value - - - 0

Realized Unrealized Realized Unrealized Total

Capital Connect - - Zaitech Fund (155) (1.007) (1.162)

IBG Hellenic Fund II - -

AIMS - TANEO (146) (146)

Thermi - TANEO (75) (75)

Alpha - TANEO (161) (161)

Oxygen - TANEO - - -

Give - TANEO - -

Piraeus - TANEO (204) (204)

New Mellon - TANEO (58) (58) FGRES-TANEO - - Decrease in Fair Value (799) - - (1.007) (1.806)

Operating Expenses / Income Portfolio losses

Operating Expenses / Income Portfolio losses


4.4. Debit Interest and related expenses The “Debit Interest and related expenses” amount is analyzed as follows:

30.06.2011 30.06.2010Amounts in thousands Euro

Interest expenses on the bond issue 693 515Additional Return on the bond issueAmortization on the issue and restructuring expenses of the bond 313 313Other expenses

1.007 829

4.5. Other Operating expenses The “Other operating expenses” amount is analyzed as follows:

30.06.2011 30.06.2010Amounts in thousands Euro

Investment advisor fees 37 41Trustee fees 29 24Cash management fees 11 11BOD fees 54 62Lawyers fees 46 47Auditors fees 16 16Accountants fees 12 18Other fees 15 0Communication expenses 6 8Leasing expenses 38 45Travel expenses 7 5Advertising and promotion expenses 7 9Insurance fees 5 8Other Overheads 19 27

303 318


4.6. Investments carried at fair value through the income statement

30.06.2011 30.06.2010

Investments in venture capital funds (AKES) 27.530 21.141


An analysis of the participations in venture capital funds (AKES) is provided below:

Fund Name 1H 2011Untill

30.06.2011 1H 2011Untill

30.06.2011 1H 2011Untill

30.06.2011(1) (2) (3) 4=(1)-(2)+(3)

Capital Connect 4.274 0 1.250 0 -2.033 991

Zaitech Fund 2.657 16.043 0 629 -1.162 -2.029 13.385

IBG Hellenic Fund II 5.056 41 4.432 0 106 731

AIMS - TANEO 3.000 0 0 -146 -459 2.541

Thermi - TANEO 1.020 2.304 0 0 -75 -943 1.361

Alpha - TANEO 815 4.395 0 0 -161 -1.657 2.738

Oxygen - TANEO 732 0 0 0 -529 203

Give - TANEO 500 0 0 0 -483 17

Piraeus - TANEO 1.187 5.584 0 0 -204 -1.034 4.551

New Mellon - TANEO 100 1.750 0 0 -58 -474 1.276

TANEO FG RES 360 0 0 0 -529 -169

5.780 43.999 41 6.311 -1.806 -10.065 27.623

Investments Carried at

Fair Value at 30.06.2011

Distributions from realized investments (Capital part)

Increase / (decrease) in Fair ValueContributions to Funds

(1) (2) 3=(1)-(2)

Capital Connect 49,99% May-03 5.349 4.274 1.904 1.075

Zaitech Fund 49,99% Sep-08 (2nd Closing)

20.000 16.043 1.587 3.957

IBG Hellenic Fund II

39,99% Nov-04 8.530 5.056 8.451 3.474

AIMS - TANEO 49,99%Jun-08 (3rd

Closing)20.000 3.000 0 17.000

Thermi - TANEO 49,90% Mar-08 11.976 2.304 0 9.672

Alpha - TANEO 49,00% Jun-08 14.700 4.395 0 10.305

Oxygen - TANEO

49,99% Nov-08 (2nd Closing)

14.998 732 0 14.266

Give - TANEO 49,99% Sep-08 10.000 500 0 9.500

Piraeus - TANEO 49,99% Dec-08 14.997 5.584 0 9.413

New Mellon - TANEO

49,99% Dec-08 7.499 1.750 0 5.749

TANEO FG RES 49,99% Dec-08 11.998 360 0 11.638

140.046 43.999 11.941 96.047

Commitments as 30.06.2011

Remain to be invested as 30.06.2011

Total Contributions

untill 30.06.2011

Total Distributions

untill 30.06.2011

% Particip. Closing DateFund Name


The aforementioned participations amounting to Euro 21.141 thous. refer to participations in AKES of limited duration as provided by article 7 of L.2992/2002. The purpose of the A.K.E.S. is to invest in innovative companies, which are registered and based in Greece and which are, preferably, active in sectors of the new economy, and in companies whose competitive advantage arises from technology applications of the new economy. Investments will be made exclusively in small or medium sized enterprises and preferably, but not exclusively in their start up or early stage of operations. No investment is allowed in enterprises that have issued securities traded in an organized market as dictated by article 1 of the Directive 93/22/EEC. The investment in enterprises whose securities are traded in an organized market, as above, is allowed only if the participation has preceded the approval of the listing by the relevant authorities and the A.K.E.S. transfers its investment within five (5) years, at the most, from the commencement of the trading of the securities of the enterprise. The investment policy of the A.K.E.S. aims to achieve profits for the unit holders, in particular by enjoying a stable income on the invested capital, in the form of interest income, by appropriating part of the profits of the investees for the benefit of the unit holders and by realizing capital gains from the liquidation of the investments. The net assets of A.K.E.S are allocated to equal shares. The payment for the participation in an A.K.E.S is made in cash instalments deposited with the Custodian of the mutual fund. The unit holders undertake the commitment to fulfill the payment obligation in cash, of any outstanding installments of their participation within ten (10) working days from the date the Manager requests so in writing. TANEO will deposit the amount corresponding to its contribution only after the rest of the unit holders have deposited the amount corresponding to their contribution, as requested by the Manager, and a written confirmation is obtained from the Custodian thereon, that will be handed over to TANEO by the Manager. TANEO has undertaken the commitment to participate in every capital increase of the A.K.E.S. that takes place by existing or new unit holders. The amount of its participation will be equal to the amount raised through the participation increase of the existing or new unit holders minus one euro (€1). The shares of the A.K.E.S. are transferable under certain conditions. In the form of a penal clause, it is provided that in the case of delinquency of a unit holder to effect the contribution of the whole or part of his outstanding commitment towards the A.K.E.S. for a period longer than thirty (30) days after receiving notification by the Custodian his units are passed on, with no remuneration, to the other unit holders proportionally to their participation in the A.K.E.S. The aforementioned investments are classified as investments at fair value through the profit or loss at their initial recognition and subsequently are also measured at fair value. In view of the fact that the aforementioned investments are not quoted in an organised market, the


company, for determining the fair value, implements valuation techniques that are commonly used in the marketplace for the valuation of such financial instruments.

4.7. Investments available for sale Investments available for sale refer to:

30.06.2011 30.06.2010

Investments in mutual funds (Money market funds) 96.129 105.270


The Money Market Funds are investments which are listed but not traded in a non-Greek stock market. The mutual fund invests in fixed return securities and, consequently, the return for the company is not subject to significant fluctuations. The participation is effected by using cash funds deposited with the company’s bank account. The remainder of such cash funds is restricted with the purpose to cover the payments of the company associated to the bond issue of Euro 105 million issued on the 3rd of June 2003. The aforementioned investments provide the company with the opportunity to derive interest income. Such investments have fixed maturity and eligibility to interest collection. The fair value of these mutual funds is based on market prices in an organized market. The valuation of the aforementioned mutual funds is made at cost that approximates their fair value. The accrued interests of these investments are included in the “Other Receivables” account.

4.8. Other receivables

30.06.2011 30.06.2010

Accrued interest (income) 88 29Prepaid expenses 52 16Other debtors 8 9

147 54


The Board is of the opinion that the carrying value of the aforementioned items approximates their fair value of such items.


4.9. Cash and cash equivalents

30.06.2011 30.06.2010

Short-term Bank deposits (Demand Deposits)

83 108

Short-term Bank deposits (1-month repos)

1.150 950

Portfolio Income Account 5.846 6.0407.079 7.098


The Portfolio Income Account consists of a Bank deposit maintained by Deutsche Bank. This account receives all the amounts payable to TANEO in respect of its participation in Venture Capital Funds plus the interest income for Money Market Funds Accounts (see par 4.7) . Its balance is available to TANEO to meet payments in accordance with condition 3 of the Bond Issue. The carrying value of these assets approximates their fair value.

4.10. Preferred Stock 1. The nine hundred thousand (900,000) preferred shares without voting rights which were issued with the decision of the Extraordinary General Meeting of Shareholders dated 3 June 2003 (hereafter referred to as “Preferred Shares”) was determined to be issued at par and be paid in installments, pursuant to the provisions of article 12 of L.2190/1920 as follows:

(a)An amount of Euro two million six hundred thousand (2,600,000) on the date of the issuance. (b)The remaining amount of forty two million and four hundred thousand 42,400,000 Euro was determined to be paid as follows:

(i) an amount of nineteen million and four hundred thousand (19,400,000) Euro until the 30th of June 2003,

(ii) an amount of eight million (8,000,000) Euro until the 30th of June 2004 and (iii) an amount of fifteen million (15,000,000) Euro until the 30th of June 2005.

The total amount of the par value of the Preferred Shares has been paid by the Greek State. 2. The preference rights of the Preferred Shares are as follows:

(a) The Preferred Shares are entitled to receive interest calculated per annum at a percentage of the paid up par value of each preferred share (i.e. of the sum which is, from time to time, paid up in accordance with the terms of payment of the value of each Preferred Share in installments pursuant to paragraph 1 hereof). The above percentage shall consist of the aggregate of:

(i) a rate of interest equal to the Guaranteed Interest Rate (ii) a rate of interest equal to the Additional Return Rate


The said amount of interest shall be payable cumulatively on the Final Maturity Date or Early Redemption Date, subject to sufficient funds being available under Condition 3 of the Bond Issue. (b)In addition, the Preferred Shares shall be entitled to receive part of the net income, as described in Condition 3 of the Bond Issue, of any nature whatsoever, resulting from the Company’s participation in investment organizations (as defined in article 3 of the Articles of Association and article 28 paragraph 2 of Law 2843/2000), which includes the income from the liquidation of the relevant investments. The said income shall be payable on each Payment Date.

3. During such time as the Preferred Shares will be entitled to receive the income set out in the preceding sub-paragraph 2(b), the Preferred Shares will not be entitled to participate in the Company’s profits other than the income set out in the preceding sub-paragraph 2(b). 4. On the Final Maturity Date or Early Redemption Date, the Company shall proceed to a reduction of its capital by the sum of euro forty five million (45,000,000) by way of acquisition of the entire nine hundred thousand (900,000) Preferred Shares and payment of their par value subject to available funds being sufficient under Condition 3 of the Bond Issue. 5. The following definitions apply for the application of the above

(a)“Bond Issue”: The bond issue in the sum of euro one hundred and five million (105,000,000) issued by the Company pursuant to a resolution of a general meeting of its shareholders made on the 3rd June 2003, and executed in London by virtue of aTrust Deed dated the 3rd June 2003 between the Company, Deutsche Trustee Company Limited, a company registered in London (as trustee), and the Hellenic Republic (as guarantor). (b)“Guaranteed Interest Rate”: The rate referred to under that term (in English: “Guaranteed Interest Rate”) in Condition 5 of the Bond Issue, and which today equals to the aggregate of (i) EURIBOR for six month deposits minus (ii) 0.02% per annum, as will be defined in particular by the bank designated as Agent Bank (in English: “Agent Bank”) under Condition 5 of the Bond Issue. (c)“Additional Return Rate”: The rate referred to under that term (in English: “Additional Return Rate”) in Condition 3 of the Bond Issue, and which today equals to 0.2%. (d)“Payment Date”: Each date referred to under that term (in English: “Payment Date”) in the conditions of the Bond Issue and which are defined as the 3rd June and the 3rd December in each year up to and until the Final Maturity Date or, if Residual Certificates are issued, up to and until the Residual Certificates Final Maturity Date. (e)“Final Maturity Date”: The 3rd June 2013 or, if such day is not a Business Day, on the next Business Day after such date. (f)“Early Redemption Date”: The date which under the conditions of the Bond Issue, wherein it is referred to as the “Early Redemption Date”, precedes the Final Maturity Date subject to the occurrence of certain extraordinary events.


(g)“Residual Certificates”: The securities referred to by the English term “Residual Certificates” in Condition 8 of the Bond Issue and which may be issued by the Company in accordance with the said Condition 8 of the Bond Issue. (h)“Residual Certificates Final Maturity Date”: The date referred to under that term (in English: “Residual Certificates Final Maturity Date”) in Condition 8 of the Bond Issue and is today defined at the 3rd June, 2020.

A derivative is embedded in preferred stock, since the payment of the additional return depends on the return of investments in venture capital mutual funds in which part of the issue has been invested to. Consequently this financial instrument (i.e. the nominal value of the preferred stock including the derivative) can not be reliably valuated because a) the embedded derivative is related with returns of financial organizations not listed in an organized financial market, b) the investments in venture capital funds (AKES) as 30/06/2011 comprise only31% of the available funds, c) the biggest part of these investments has been realized the last three years. The whole financial instrument is reflected in the financial statements at historic cost as this method is considered to be the most reliable one.

4.11. Bond issue On the 30th of June 2003, the company issued a Bond Issue of par value Euro 105 million, of ten years duration that is represented by 10,500 bonds of par value Euro 10,000 each. The bond issue is guaranteed by the Greek State and may be traded in the Dublin Stock Exchange. The guaranteed interest rate is floating and, thus, the company is exposed to cash flow interest rate risk. The return which the bond holders are eligible to is determined by (i) the guaranteed by the Greek State interest rate equal to the six-month EURIBOR reduced by 0.02% (ii) the additional return that is based on the 0.02% of the par value, providing that there are adequate funds, according to Term 3 of the contract for the bond issue and (iii) the payment to be effected by the company on the maturity date or the early redemption date, providing that there are adequate funds, according to Term 3 of the contract for the bond issue. Term 3 of the contract for the bond issue refers to the priority in the company’s payments. A derivative is embedded in the bond, since the payment of the additional return depends on the return of investments in venture capital mutual funds in which part of the issue has been invested to. Consequently this financial instrument (i.e. the nominal value of the bond including the derivative) can not be reliably valuated because a) the embedded derivative is related with returns of financial organizations not listed in an organized financial market, b) the investments in venture capital funds (AKES) as 30/06/2011 comprise only31% of the available funds, c) the biggest part of these investments has been realized the last three years. The whole financial instrument is reflected in the financial statements at historic cost net of accumulated amortization of issue and restructuring expenses as this method is considered to be the most reliable one. The amount of interest expense on the bond issue for the 1st Half 2011, is Euro 693 thous. The nominal value of the bond issue and the expenses associated to the issue and restructuring reduced by the charges to the income statement, on the basis of the duration of the loan, as at 30 June 2011 and 2010 are as follows:


30.06.2011 30.06.2010

Nominal value 105.000 105.000Issue and restructuring costs -1.552 -2.178Carrying amount 103.448 102.822


4.12. Other Liabilities 30.06.2011 30.06.2010

Accrued interest (expense) 135 75Other Accrued expenses 75 14Other liabilities 84 49

294 137


Other liabilities comprise of liabilities to social security funds and withholding taxes payable to the Greek State and liabilities from trading activities. According to the Board, the carrying amount of liabilities from trading activities and other liabilities approximate their fair value.

4.13. Contingent Liabilities As more fully described in the relevant Notes to the financial statements, liabilities may arise in connection with the embedded derivatives in the preferred stock and the bond issue. Furthermore some of the employees and the Investment Advisor are entitled to incentive fee which is related to the performance of the company, in accordance with the “priority of payments”, as described in the documentation for the private placement of the employer through the issue of € 105 m. of Bonds and € 45 m. of Preferred shares. The contingent liability will be recognized when the benefits from the company’s participations in venture capital funds (AKES) will be realized.

4.14. Commitments 30.06.2011 30.06.2010

Remain to be invested in venture capital funds (AKES) investments 96.141 105.240


The analysis of the company’s commitments is provided in Note 4.6. of the financial statements.


5. Events occurring after the 30/06/2011 No significant event that should be disclosed, occurred after the Interim Balance sheet date.

Documents

New Economy Development Fund S.A. (“TANEO”) Interim...which has been prepared in accordance with IAS/IFRS, gives a true and fair view of the assets, liabilities, financial position