new economy development fund s.a. (“taneo”) interim financial...association), taneo (new economy...

New Economy Development Fund S.A.

(“TANEO”)

Summary Interim Financial Statements for the period 01/01/2009 – 30/06/2009

Summary Interim Financial Statements for the period 1/1/2009 – 30/06/2009 2

It is hereby certified that the attached herein Summary Interim Financial Statements for 01/01 – 30/06/2009 period are the financial statements approved by TANEO’s S.A Board of Directors on 30/07/2009, 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, July 30, 2009

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. N031359.

License. 28154 Α΄Class

http://www.taneo.gr


Table of Contents…………………………………………………………………….…..Page INTERIM MANAGEMENT REPORT ..................................................................... 4 Α. Interim Income Statement for the period 1/1/2009 – 30/06/2009 .......................... 8 Β. Interim Balance Sheet for the period 1/1/2009 – 30/06/2009 ................................. 9 1. General Information......................................................................................... 10 2. Significant Accounting Policies ....................................................................... 10

2.1. Basis of Preparation of Financial Statements ........................................ 10 3. Risk Management ............................................................................................ 11

3.1. Market risk........................................................................................... 11 3.2. Liquidity risk ....................................................................................... 12 3.3. Credit Risk ........................................................................................... 12

4. Notes on the Summary Interim Financial Statements ...................................... 13 4.1. Credit Interests and related expenses .................................................... 13 4.2. Gains from FVTPL Investments ........................................................... 13 4.3. Increase / (Decrease) in Fair Value Investments ................................... 14 4.4. Debit Interest and related expenses....................................................... 14 4.5. Other Operating expenses..................................................................... 15 4.6. Investments carried at fair value through the income statement ............ 15 4.7. Investments available for sale............................................................... 17 4.8. Other receivables.................................................................................. 18 4.9. Cash and cash equivalents .................................................................... 18 4.10. Preferred Stock..................................................................................... 19 4.11. Bond issue............................................................................................ 21 4.12. Other Liabilities ................................................................................... 22 4.13. Contingent Liabilities ........................................................................... 22 4.14. Commitments....................................................................................... 22

5. Events occurring after the 30/06/2009.............................................................. 22


INTERIM MANAGEMENT REPORT

This Report includes an analysis of the company’s Summary Interim Financial Statements for the period 1/1/2009 – 30/06/2009. 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 1/1/2009-30/6/2009 The downturn in the economy that started at 2008. continued during the 1st half of 2009 without any signs of sorting out. Whatsoever TANEO’s Funds proceeded with 2 new investments, 2 follow-on invetsments and 7 approvals for investments after screening out several proposals (see investment review section)

The total commitments to Venture Capital Funds on 30 June 2009 amounted to €140,2 m. versus €82,2 m. on 30 June 2008.

The amount of Invested Capital on 30 June 2009 reached the amount of €26,9m. versus €20,2m.on 30 June 2008. However realizations from Venture Capital Funds and distributions to TANEO where not very fruitful as they amounted to €23 Thous versus 994 for the same period last year. The total Gains from Investments posted in the Income statement were €23 Thous. vs €455 Thous. during the 1H-2008.

In May 2009 TANEO participated in a workshop to discuss emerging technology oriented ventures in Greece and potential synergies with Silicon Valley to foster innovation and growth. The event was organized by The Hellenic Association at Stanford (Hell.A.S.) in collaboration with the Corallia Clusters Initiative, HSIA (Hellenic Semiconductor Industry Association), TANEO (New Economy Development Fund) and Silicon Valley High Tech Professionals. More than 200 Silicon Valley entrepreneurs, practitioners and academics attended the workshop, exchanged ideas and established strong intelligence networks.

On 16-17 June 2009 the 10th International Venture Capital Forum was held, in collaboration with the “Invest in Greece” agency, the “Praxi Network and the Hellenic Venture Capital Association at the Athens Hilton hotel with more than 500 participants. 95 Business plans were submitted and more than 150 bilateral business meeting took place. The minister of Economy and Finance, Mr. Papathanasiou honored the event with his presence. In his key note speech, he highlighted the exceptional performance and the important role of TANEO and he expressed his intention of supporting TANEO to further grow its activities.

On 12th of June, Microsoft Hellas and TANEO signed the establishment agreement and the articles of association of the Microsoft Innovation Center which was inaugurated by the Prime Minister of Greece Mr. Kostas Karamanlis and the founder of Microsoft Mr. Bill Gates

2. Investment Review

A summary of TANEO’s Venture Capital Funds performance is provided below:

“Capital Connect Venture Partners”, a €24 m. fund where TANEO participated with

a stake of 49,99%. Since its inception, the fund accomplished three total realizations and a partial one, resulting in a pooled gross IRR of 6,71%. As of October 2008 the investment period of the fund expired. Therefore the total commitments are not expected to exceed €11m ( i.e. €8m actual draw downs plus €3m maximum planned


draw downs for following on investments). Its management examines different alternatives for following-on its two remaining portfolio companies.

“Zaitech Fund”, a €40 m. fund. TANEO’s commitment to the fund is €20m. for a 49,99% interest.. The Fund’s portfolio consists of eight companies for a total cost of €12,2 m. On July, 2009 the investment committee approved a new investment worth €5 m. on Erasineio Hospital S.A., a company operating in the health sector Furthermore the fund has committed €2,84m in 2 companies (Eyrydamantos and ENEP), thus rising the total committed amount allocated to portfolio companies to over €20 m. Due to the negative economic climate the three listed companies of the fund i.e Mediterra S.A., Doppler S.A. and Performance Technologies S.A.. experienced a significant fall on their prices resulting in decreasing the Fair Value of the Fund by €0,9m since 31/12/2008. Foodlink a portfolio company operating in 3P Logistic sector received listing approval by the ASE.

“IBG Hellenic Fund II”, a €17m. fund. where TANEO participated with a stake of 49,99% interest. The fund’s portfolio consists of five companies, three of them operating in the energy sector, for a total cost of €6,1 m. The fund retains the upside revaluation of its energy companies resulting in a pooled multiple to cost of 4,2x. The fund proceeded with a follow on investment in Autostop S.A. for €0,5m. and has already drawn €0,5m. for increasing its investment in "AIGAIAS ANAPTYXIAKI S.A." . Finally Mobile Technology S.A." expressed its interest to exercise the call option for the convertible bond issued by the company and held by the Fund. According to the initial terms of the convertible bond, the company holds the right to acquire the bond at a premium to the initial price set by the initial investment plus 25% IRR less any received interest and fees. The transaction is expected to be concluded by mid July

“AXON-TANEO (former Pancreta Development Fund)” a €40m fund where TANEO participated with a stake of 49,99%. After evaluating a number of companies, the fund is currently at the stage of submitting its investment proposals to the investment committee.

“Thermi - TANEO Venture Capital Fund” a €24 m. fund where TANEO participated with a stake of 49,90%. During 1H-2009the fund examined approximately 18 investment opportunities, initially approving a renewable energy project.

“ALPHA – TANEO Fund” a €30 m. fund where TANEO participated with a stake of 49,00%. At the moment the fund has invested in 3 companies: Upstream which is currently performing within the range of anticipated results and two new investments, Piraiki Microbrewery an investment of €1,1m on a small premium quality producer of branded beverages and Kritis GI SA with a total investment of €2,0m.

“OXYGEN – TANEO Fund” a €30 m. fund where TANEO participated with a stake of 49,99%. During 1H-2009, the fund has committed to invest €0,75m in Lead Generation S.A., a company operating the spitogatos.gr a real estate classifieds website. The investment will be finalised on July 2009 with the payment of the first tranche of €0,5m.

“GIVE – TANEO Fund” a €20 m. fund where TANEO participated with a stake of 49,99%. The Management Company of the fund has been actively evaluating approximately thirty four prospective investments during 1H-2009, with a focus on renewable and "Green" energy. Among these Eco Green Power has been singled out as a first investment in this sector that will take place during the second half of 2009.

“Piraeus – TANEO Fund” a €30 m. fund where TANEO participated with a stake of 49,99%. During 1H-2009 and after screening 120 companies as potential investments, the fund’s investment committee has approved 3 deal alerts. The relevant companies


operate in the areas of voice recognition, proton exchange membranes, an electronic platform for shipping related transactions and fuel cells for a total capital of 7,5m. The management of the fund is currently executing these investments.

“New Mellon – TANEO Fund” a €15 m. fund where TANEO participated with a stake of 49,99No significant developments during the period up to 30/6/09. The management team focused on the sourcing of potential investments mainly in the area of PV Farms.

TANEO - FGRES Fund” a €24 m. fund where TANEO participated with a stake of 49,99%. By the end of 30/6/2009, most of the investment proposals examined, have been rejected mainly due to immature status or limited return potential in correlation to the risk involved, however a number of interesting proposals are being currently examined.

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 2009 the pre tax loss reached €3.956 Thous. versus pre tax losses of €238 Thous. in the 1st half of 2008

Regarding the income from operating activities the fall of interest rates in Eurozone had a negative effect in the credit interests deriving from the invested money in Money Market Funds. These credit interests went down in the1st half of 2009 amounting to €1.117 Thous. The average return from these investments during the 1st half of 2009 was 1,9% versus 4,4% during the 1st half of 2008. As there were not any realizations from itsTANEO’s underlying funds the gains from FVTPL investments reached the amount of €23 Thous.,deriving from a dividend distribution, versus 455 Thous for the same period last year. Moreover as there was not any reason for VC Funds to rise the fair market valuation of their portfolio companies, this class of income was also fell behind comparing to 1H-2008. 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. Given the very recent start of TANEO investment activities, the small size of such returns in the period examined here is considered to be reasonable.

Regarding the expenses, debit interests on the bond loan decreased versus last year due to the abovementioned fall of interest rates. More specifically debit interests amounted to €1.846 Thous.for the period 1/1/2009-30/06/2009 versus €2.527 Thous.for the period 1/1/2008-30/06/2008. The interest rate (6m Euribor) on the loan notes was about 3,9% versus 4,7% 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 2009 was €313 Thous. Payroll costs for the period amounted to €190 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 set-up fees of the new funds b) the management fees for the period c) the fact that some of the Venture Capital Funds valued their portfolio companies in historical cost and d) the fall in stock market prices of the listed portfolio companies of Zaitech Fund. Other operating expenses without including any extraordinary or non-recurring item, amounted to €315Thous. versus €378Thous. for the period 1/1/2008-30/06/2008


3. Significant Events and perspectives in 2nd Half of 2009

Six months after the completion of the investment period and the commitment of funds under management, TANEO has achieved to establish an efficient system of monitoring its funds and evaluating the submitted investment proposals. Until now TANEO has initially reviewed more than 50 investment proposals thus enhancing its underlying funds deal flow pipeline. This fact allows it to have an extended knowledge of the Greek market and to identify thoroughly hidden opportunities and existing weaknesses. Therefore TANEO is currently planning its next strategic movement towards areas where profound gaps of investment financing exist.


Α. Interim Income Statement for the period 1/1/2009 – 30/06/2009

Notes 1/1 - 30/06/2009 1/1 - 30/06/2008Amounts in thousands Euro

Credit interests & other finance income 4.1 1.117 2.810

Gains from FVTPL Investments 4.2 23 455Increase in fair value investments carried at fair value through the income statement 4.3 45 1.347Other operating income 16 4

Income from operating activities 1.201 4.616

Debit interests & other finance expenses 4.4 (2.159) (3.908)

Payroll expenses (190) (173) Depreciation (3) (4) Decrease in fair value investments carried at fair value through the income statement 4.3 (2.490) (392) Other operating expenses 4.5 (315) (378) Total Operating expenses (5.157) (4.853)

Profit / (Loss) before taxes (3.956) (238)

Income tax (Deffered tax) 156 78

Profit / (Loss) after taxes (3.800) (159)


Β. Interim Balance Sheet for the period 1/1/2009 – 30/06/2009 Notes 30.06.2009 30.06.2008

Amounts in thousands Euro

Assets

Non-Current AssetsTangible Assets 31 5Intangible Assets 0 1Investments carried at fair value through the income statement 4.6 24.722 16.297Long term receivables 12 16

24.765 16.319

Current AssetsInvestments available for sale 4.7 113.134 119.820Other receivables 4.8 175 468Cash and cash equivalents 4.9 1.644 3.327

114.954 123.614

Total Assets 139.719 139.933

Equity and liabilities

EquityShare capital 1.000 1.000Retained Earnings / (Accumulated losses) -9.883 -10.060Total Equity -8.883 -9.060

Long term liabilitiesPreferred stock 4.10 45.000 45.000

Bond loan 4.11 102.196 101.570

Deferred taxes 472 862

Provisions 751 1.080148.419 148.512

Short term liabilities

Other liabilities 4.12 183 481183 481

Total liabilities 148.602 148.993

Total Equity and Liabilities 139.719 139.933


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 31.12.2008, 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 2009 covering the period January 1st – June 30th 2009, 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 2008 and must be read in correlation with the Company’s financial statements of December 31st 2008. The accounting principles and the calculations based on which the financial statements were drafted are consistent with the ones used to draft the annual financial statements of the financial year which ended on 31/12/2008 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 credit 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 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 70 -70 110 -110Equity 70 -70 110 -110

1/1-30/06/2009 1/1-30/06/2008Amounts 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 and it maintains adequate funds to cover its current and future needs. The financial liabilities maturity on June 30th 2009 and June 30th 2008 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 173 481

173 0 0 150.000 481 0 0 150.000

Short term Long term

1/1-30/06/2008Amounts in thousands Euro

Short term Long term

1/1-30/06/2009Amounts in thousands Euro

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

30.06.2009 30.06.2008


Interest from securities (Money market funds) 1.109 2.796Other Income 8 14

1.117 2.810

The aforementioned interest revenue amounting to Euro 1.109 thous. originates from investments in non-Greek mutual funds. More information is provided in note 4.7.

4.2. Gains from FVTPL Investments

30.06.2009 30.06.2008Amounts in thousands Euro

Capital Connect 304Zaitech Fund 23 151

23 455 The Gain from Zaitech Fund refers to a dividend distribution of one portfolio company


4.3. Increase / (Decrease) in Fair Value Investments

30.06.2009 30.06.2008

Zaitech Fund 0 1287IBG Hellenic Fund II 0 60AXON - TANEO 45 0Increase in Fair Value 45 1.347

Capital Connect (15) (93)Zaitech Fund (1.133) 0 IBG Hellenic Fund II (124) 0 Thermi - TANEO (147) (131)Alpha - TANEO (215) (169)Oxygen - TANEO (188) 0Give - TANEO (122) 0 Piraeus - TANEO (330) 0 New Mellon - TANEO (161) 0 FG RES - TANEO (54) 0 Decrease in Fair Value (2.490) (392)

Net Result from Valuation of Investments

(2.445) 955


The decrease in Fair Value Investments is due to a) the set-up fees of the new funds b) the management fees for the period c) the fact that some of the Venture Capital Funds valued their portfolio companies in historical cost and d) the fall in stock market prices of the listed portfolio companies of Zaitech Fund.

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


Interest expenses on the bond issue 1.846 2.527Additional Return on the bond issue 1.068Amortization on the issue and restructuring expenses of the bond 313 313Other expenses 1

2.159 3.908


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


Investment advisor fees 40 75Trustee fees 34 4Cash management fees 11 11BOD fees 62 62Lawyers fees 38 38Auditors fees 16 15Accountants fees 12 12Communication expenses 7 5Leasing expenses 44 42Travel expenses 21 13Advertising and promotion expenses 11 52Insurance fees 5 9Other Overheads 15 40

315 378

4.6. Investments carried at fair value through the income statement


Investments in venture capital funds (AKES) 24.335 7.468

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


Fund Name 1H 2009Untill

30.06.2009 1H 2009Untill

30.06.2009 1H 2009Untill

30.06.2009(1) (2) (3) 4=(1)-(2)+(3)

Capital Connect 150 4.167 0 1.250 -15 -1.948 969

Zaitech Fund 510 8.249 0 39 -1.133 -827 7.384

IBG Hellenic Fund II 593 5.056 0 719 -124 4.790 9.127

AXON - TANEO 0 3.000 0 0 45 -164 2.836

Thermi - TANEO 0 599 0 0 -147 -420 179

Alpha - TANEO 2.940 0 0 -215 -511 2.429

Oxygen - TANEO 470 545 0 0 -188 -279 266

Give - TANEO 500 0 0 -122 -282 218

Piraeus - TANEO 0 750 0 0 -330 -330 420

New Mellon - TANEO 750 750 0 0 -161 -161 589

TANEO FG RES 360 360 0 0 -54 -54 305

2.833 26.916 0 2.009 -2.445 -186 24.722

Investments Carried at Fair

Value at 30.06.2009

Contributions to FundsDistributions from realized investments (Capital part)

Increase / (decrease) in Fair Value

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

Capital Connect 49,99% May-03 5.349 4.167 1.904 1.182

Zaitech Fund 49,99% Sep-08 (2nd Closing) 20.000 8.249 275 11.751

IBG Hellenic Fund II 49,99% Nov-04 8.530 5.056 1.347 3.474

AXON - TANEO 49,99% Jun-08 (2nd Closing) 19.999 3.000 0 16.999

Thermi - TANEO 49,90% Mar-08 11.976 599 0 11.377

Alpha - TANEO 49,00% Jun-08 14.700 2.940 0 11.760

Oxygen - TANEO 49,99% Nov-08 (2nd Closing) 14.998 545 0 14.454

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

Piraeus - TANEO 49,99% Dec-08 15.000 750 0 14.250

New Mellon - TANEO 49,99% Dec-08 7.500 750 0 6.750

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

140.049 26.916 3.526 113.133

Closing DateCommitments as

30.06.2009Fund Name%

Particip.

Remain to be invested as 30.06.2009

Total Contributions

untill 30.06.2009

Total Distributions

untill 30.06.2009

The aforementioned participations amounting to Euro 16.297 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:

30.06.2009 30.06.2008

Investments in mutual funds (Money market funds) 113.134 119.820



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

30.06.2009 30.06.2008

Accrued interest (income) 113 446Prepaid expenses 39 18Other debtors 23 4

175 468


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 The cash and cash equivalents comprise:

a) short term bank deposits (demand deposits) amounting to Euro 97 thous. b) short term bank deposits (repos) amounting to Euro 850 thous. for an initial time

period of deposit of one month. c) Bank deposits amounting to Euro 697 thous. maintained by Deutsche Bank. This

account receives all the amounts payable to TANEO in respect of its participation in any Investment Vehicle. 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 30/06/2009 comprise only 19,2% 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 30/06/2009 comprise only 19,2% 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 2009, is Euro 1.846 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 2009 and 2008 are as follows:

30.06.2009 30.06.2008

Nominal value 105.000 105.000Issue and restructuring costs -2.804 -3.430Carrying amount 102.196 101.570



4.12. Other Liabilities 30.06.2009 30.06.2008

Accrued interest (expense) 114 387Other Accrued expenses 24 16Liabilities from bond issuerestructuringOther liabilities 46 78

183 481


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 30.06.2009 30.06.2008

Commitments for venture capital funds (AKES) investments 113.283 62.240


The analysis of the company’s commitments is provided in Note 4.6. of the financial statements. 5. Events occurring after the 30/06/2009 No significant event that should be disclosed, occurred after the Interim Balance sheet date.

new economy development fund s.a. (“taneo”) interim financial...association), taneo (new economy...

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