Novabase SGPS

Interim / Quarterly Report • Aug 30, 2010

Report and Accounts

1st Half 2010

Report & Accounts

I - Board of Directors Report and Consolidated Results

• 1 Key Indicators
• 2 Short Summary of the Activity
• 3 Stock Performance

II - Consolidated Financial Statements

III - Annexes to the Board of Directors' Report

• I Shareholder Structure and Qualified Holdings
• II Management Transactions
• III Own Shares Transactions

IV - Consolidated Accounts

Consolidated Results on June 30, 2010

Privileged Information (IFRS/IAS)

July 28, 2010

Turnover reaches 122.8 M€ (119.9 M€ in 6M09)

EBITDA reaches 11.6 M€ (12.0 M€ in 6M09)

Net Profit: 7.2 M€ (7.0 M€ in 6M09)

1. Key Indicators

The turnover and EBITDA consider the TV business in Germany only in the first nine months of 2008 (last period considered in the consolidation perimeter).

1.1. Turnover

The Consolidated Sales and Services rendered in 1st half of 2010 (6M10) reached 122.8 M€ (million euros), which represents an increase of 2.4% vs. the 119.9 M€ in 6M09.

The chart below shows Turnover variation compared to the prior periods.

Turnover (M€)

Novabase SGPS, S.A. Public Company Euronext code: NBA.AM Registered in TRO of Lisbon and Corporate Tax Payer nº 502.280.182 Capital: 15,700,697.00 € Head Office: Av. D. João II, Lote 1.03.2.3., 1998-031 Lisbon - PORTUGAL

María Gil Marín Investor Relations Tel. +351 213 836 300 Fax: +351 213 836 301 investor.relations@novabase.pt

1.2. EBITDA

EBITDA reached 11.6 M€ in 6M10 which represents a decrease of 3.3% compared to the 12.0 M€ in the 6M09.

EBITDA (M€)

The chart below shows EBITDA variation compared to the prior periods.

EBITDA margin in 6M10 was 9.5%, below the 10.0% margin in 6M09.

1.3. Net Profit

The Consolidated Net Profit, after Non-controlling interests and Results from discontinued operations, reached 7.2 M€, showing an increase of 2.2% vs. the 7.0 M€ in 6M09.

Net Profit (M€)

From EBITDA to Net Profit 6M10 Vs 6M09 (M€) 12.0 -2.4 9.7 -1.1 8.6 -1.7 6.9 0.1 7.0 11.6 -2.6 9.0 0.5 9.5 -1.9 7.6 -0.4 7.2 6M09 6M10

The reconciliation between EBITDA and Net Profit is as follows:

Depreciation and amortization reached -2.6 M€, above the amount registered in 6M09 (-2.4 M€).

Operating profit (EBIT), in the amount of 9.0 M€, decreased 6.6% compared to 6M09 (9.7 M€).

The Financial results reached a net positive value of 0.5 M€, above the net negative value of 1.1 M€ registered in the same period of the prior year.

EBT reached 9.5 M€ in this period, registering an increase of 10.2% vs. the 8.6 M€ booked in the same period of the prior year.

Income tax expense in the 6M10 reached -1.9 M€, above the -1.7 M€ in 6M09.

Non-controlling interests in 6M10 amounted to -0.4 M€, which compares to 0.1 M€ in 6M09.

Earnings per share (EPS) increased 2.6%, from 0.231 to 0.237 euros per share.

1.4. Cash

In the 6M10 Novabase shows a negative performance in cash generation, although without use of factoring for the fifth consecutive quarter. Novabase ended the 6M10 with 11.0 M€ in net cash which compares to 25.7 M€ in the 12M09.

However, it is to be noted that this cash reflects the payment of dividends in the amount of 9.7 M€ and an investment in working capital.

2. Short Summary of the Activity

The 1st half of 2010 shows a positive performance given the current economic context. These results reflect the value-oriented management and the preparation for a new phase of growth with strategic stakes for the future.

The percentage breakdown of turnover and EBITDA by the different businesses in the 6M10 is as follows:

Of Novabase overall turnover generated in 6M10, the services rendered represents 51.7%, which compares to 50.7% in 6M09.

Of the 122.8 M€ turnover, 10.2% is generated outside Portugal, that is 12.5 M€, which represents an increase, in value, of 1.9% towards the 12.2 M€ registered in 6M09.

Business outside Portugal is generated mainly in the Novabase Consulting business area, with international sales representing 12.1% of the respective turnover, and in the Novabase IMS business area, with international sales in 6M10 representing 10.4% of the respective turnover. Novabase Digital TV area increased the relative weight of the international business, which represents 3.6% of the respective turnover (compared to 2.6% in 6M09).

In terms of Human Resources, Novabase had on average in the 6M10, 1,950 employees, which represents an increase of 6.3% compared to the 6M09 (1,834) and an increase of 4.8% compared to FY09 (1,861).

The distribution by business area is as follows:

Average Number of Employees

2.1. Novabase Consulting

Novabase Consulting is organized around the following competency areas:

• Business & IT Consulting
• Advanced Custom Development
• Business Intelligence
• Enterprise Applications & Integration
• IT Contracting

Global turnover in this business area reached 41.4 M€, which represents growth of 0.2% compared to 6M09.

Turnover Novabase Consulting (M€)

Novabase Consulting EBITDA in 6M10 decreased 8.7% year on year (from 6.8 M€ to 6.2 M€), reaching an EBITDA margin of 15.0% (which compares to 16.5% in 6M09 and a margin of 14.6% in FY09).

This evolution results from a reduction in the average allocation rate of employees. However, operational profitability of this area is above the comparables in the sector internationally and can be regarded as positive in the current market conditions.

2.2. Novabase IMS

Novabase IMS includes three lines of business:

• Outsourcing: including Application Outsourcing and Infrastructure Outsourcing;

• IT Infrastructures: solutions including IT infrastructures ranging from physical components (cabling, routers, etc.) to business communications services, including videoconferencing and video on demand;

• Ticketing and Transport Solutions: core product and service offer for transports, covering the devices and systems for the whole ticket lifecycle, from production to back office revenue accounting.

Global turnover in this business area reached 51.8 M€, which represents an increase of 26.6% compared to 6M09.

Novabase IMS EBITDA in 6M10 increased 27.2% year on year (from 3.5 M€ to 4.5 M€), reaching an EBITDA margin of 8.7% (which compares to 8.7% in 6M09 and a margin of 8.0% in FY09).

This reflects a strategy of focusing on projects with higher technological complexity and higher added value as a measure to offset the adverse economic situation and consequent pressure on prices. However, this area should be analyzed for longer time periods.

2.3. Novabase Digital TV

The business of Novabase Digital TV has a profound know-how and an offer oriented to the operators business, complemented with licensing solutions and Chips-on-board (COB).

Global turnover in this business area reached 28.1 M€, which represents a 24.7% decrease compared to 6M09.

Turnover Novabase Digital TV (M€)

Novabase Digital TV EBITDA in 6M10 decreased 53.7% year on year (from 2.3 M€ to 1.1 M€), reaching an EBITDA margin of 3.8% (which compares to 6.2% in 6M09 and a margin of 4.5% in FY09).

This evolution is mainly due to the standard offer maturity stage and the development of new technologies for the COB's business. However, this area should be analyzed for longer time periods.

Without Digital TV Germany

2.4. Novabase Capital

This area of Novabase develops a Corporate Venture Capital activity and supports strategic and M&A projects of the Group.

Global turnover in this area reached 1.6 M€, which represents an increase of 291.6% compared to 6M09.

Novabase Capital EBITDA in 6M10 increased 77.3% year on year (from -0.6 M€ to -0.1 M€) reaching an EBITDA margin of -8.8%.

This result was still affected by the current phase of investment in international expansion and also product development of the subsidiary Collab (software company that develops solutions for IP multimedia contact centers).

In 3M10 it was released that Novabase Capital, under COMPETE Program and the Lisbon Regional Operating Program (POR Lisboa), has received approval to establish three new Venture Capital Funds, up to a total of 30.91 M€, which will focus on investments in technology-based SMEs in the area of ICTs. The approval of the financial contribution of COMPETE and POR Lisboa Programs depends on the submission of the project applications to the QREN.

3. Stock Performance

The six months of 2010 were marked by a gain in the EuroStoxx Technology Index of 4.9%.

Novabase share price in 6M10 lost 22.5%, comparing with a 16.5% loss in the PSI20 Index. In this period, a dividend of €0.32/share was distributed.

Rotation in 6M10 represented 13.1% of the capital and 4.1 million shares were traded, below the values that have occurred in 6M09 (rotation of 16.4% of the capital and 5.2 million shares traded), reflecting the current negative situation in the stock market.

Novabase and the Market

When comparing Novabase share prices with other companies in the IT sector in Europe, we verify that Novabase share performance in 6M10 was lower than the performance of other IT.

The average price, weighted by volume, of Novabase shares during 6M10, was 4.13 euros per share. Approximately 4.1 million shares were traded in all the 126 Stock Exchange sessions in the 6M10, corresponding to a transaction value of 17.0 M€.

The average daily number of shares traded in 6M10 was approximately 32.6 thousand shares, corresponding to a daily average value of approximately 0.1 M€.

The price in the stock Exchange in the last tradable day of the 6M10, June 30, 2010, was 3.44 euros, which represents a loss of approximately 22.5% compared to the 4.44 euros which was Novabase's share price at the end of 2009.

The maximum closing price which took place during 2Q10 was 4.45 euros, while the minimum price registered was 3.34 euros. The market capitalization at the end of 6M10 was 108.0 M€.

Summary	2Q10	1Q10	4Q09	3Q09	2Q09
Minimum price (€)	3.34	3.90	4.33	4.46	4.09
Maximum price (€)	4.45	4.63	4.96	4.90	5.05
Volume weighted average price (€)	3.91	4.38	4.65	4.63	4.67
Closing price at the end of the Quarter (€)	3.44	4.30	4.44	4.80	4.86
Nr. of shares traded	2,194,905	1,916,989	1,925,349	1,390,806	2,541,391
Market cap in the last day of the period (M€)	108.0	135.0	139.4	150.7	152.6

Consolidated Statement of Financial Position Consolidated Income Statement

	30.06.10	31.12.09		30.06.10	30.06.09	Var. %
		(Thousands of Euros) of			(Thousands of Euros) of
Assets
Tangible assets	9,408	8,721	Sale of goods	59,307	59,045
Intangible assets	29,479	28,778	Cost of goods sold	(51,820)	(52,809)
Financial investments	1,946	1,939
Deferred income tax assets	7,985	8,341	Gross margin	7,487	6,236	20.1 %
Other non-current assets	139	134
			Other income
Total Non-Current Assets	48,957	47,913	Services rendered	63,489	60,822
			Supplementary income Supplementary income	365	203
Inventories	13,083	8,593	Other operating income	74	393
Trade debtors and accrued income	110,241	99,183
Other debtors and prepaid expenses	16,314	13,219		63,928	61,418
Derivative financial instruments	1,011	58
Cash and cash equivalents	10,837	24,972		71,415	67,654
Total Current Assets	151,486	146,025	Other expenses
			External supplies and services	(22,927)	(21,251)
Assets for continuing operations Assets for continuing operations	200,443 200,443	193,938	Employee benefit expense Employee benefit expense	(36,916) (36,916)	(34,086)
			(Provisions) / Provisions reversal	461	(8)
Assets for discontinued operations	226	826	Other operating expenses	(385)	(268)
Total Assets	200,669	194,764		(59,767)	(55,613)
Shareholders' Equity			Gross Net Profit (EBITDA)	11,648	12,041	-3.3 %
Share capital	15,701	15,701	Depreciation and amortization	(2,627)	(2,378)
Treasury shares	(603)	(723)
Share premium Reserves and retained earnings	43,560 , 20,445	49,213 , 16,425	Op erating Profit (EBIT) g ( ) Financial Gains / (Losses)	9,021 , 463	9,663 , (1,053)	-6.6 %
Net profit	7,151	12,882
			Net Profit before taxes (EBT)	9,484	8,610	10.2 %
Total Shareholders' Equity	86,254	93,498	Income tax expense	(1,888)	(1,733)
Non-controlling interests	5,557	5,644	Non-controlling interests	(445)	119
Total Equity	91,811	99,142
			Attributable Net Profit	7,151	6,996	2.2 %
Liabilities
Non-current borrowings	2,000	2,500
Finance lease liabilities	1,569	1,468
Provisions	2,094	2,245
Deferred income tax liabilities	100	100	Other information:
Other non-current liabilities	927	1,123
Total Non-Current Liabilities	6,690	7,436	Turnover	122,796	119,867	2.4 %
			EBITDA margin	9.5 %	10.0 %
Current borrowings Current borrowings	1 946 ,	3 162 ,	EBT % on Turnover EBT Turnover	77% .	72% .
Trade payables	40,416	28,852	Net profit % on Turnover	5.8 %	5.8 %
Other creditors and accruals	39,630	35,552
Derivative financial instruments	541	139
Deferred income	18,787	19,662
Total Current Liabilities	101,320	87,367
Total Liabilities for cont. operations	108,010	94,803
Total Liabilities for discont. operations	848	819
Total Liabilities	108,858	95,622
Total Equity and Liabilities	200,669	194,764
Net Cash	11,042	25,730

as at 30 June 2010 for the period of 6 Months ended 30 June 2010

	(Thousands of Euros) of			(Thousands of Euros) of
Assets
Tangible assets	9,408	8,721	Sale of goods	59,307	59,045
Intangible assets	29,479	28,778	Cost of goods sold	(51,820)	(52,809)
Financial investments	1,946	1,939
Deferred income tax assets	7,985	8,341	Gross margin	7,487	6,236	20.1 %
Other non-current assets	139	134
			Other income
Total Non-Current Assets	48,957	47,913	Services rendered	63,489	60,822
			Supplementary income Supplementary income	365	203
Inventories	13,083	8,593	Other operating income	74	393
Trade debtors and accrued income	110,241	99,183
Other debtors and prepaid expenses	16,314	13,219		63,928	61,418
Derivative financial instruments	1,011	58
Cash and cash equivalents	10,837	24,972		71,415	67,654
Total Current Assets	151,486	146,025	Other expenses
			External supplies and services	(22,927)	(21,251)
Assets for continuing operations Assets for continuing operations	200,443 200,443	193,938	Employee benefit expense Employee benefit expense	(36,916) (36,916)	(34,086)
			(Provisions) / Provisions reversal	461	(8)
Assets for discontinued operations	226	826	Other operating expenses	(385)	(268)
Total Assets	200,669	194,764		(59,767)	(55,613)
Shareholders' Equity			Gross Net Profit (EBITDA)	11,648	12,041	-3.3 %
Share capital	15,701	15,701	Depreciation and amortization	(2,627)	(2,378)
Treasury shares	(603)	(723)
Share premium	43,560 ,	49,213 ,	Op erating Profit (EBIT) g ( )	9,021 ,	9,663 ,	-6.6 %
Reserves and retained earnings	20,445	16,425	Financial Gains / (Losses)	463	(1,053)
Net profit	7,151	12,882
			Net Profit before taxes (EBT)	9,484	8,610	10.2 %
Total Shareholders' Equity	86,254	93,498	Income tax expense	(1,888)	(1,733)
Non-controlling interests	5,557	5,644	Non-controlling interests	(445)	119
Total Equity	91,811	99,142
Liabilities			Attributable Net Profit	7,151	6,996	2.2 %

Total Non-Current Liabilities	6,690	7,436	Turnover	122,796	119,867	2.4 %
			EBITDA margin	9.5 %	10.0 %
Current borrowings Current borrowings	1 946 ,	3 162 ,	EBT % on Turnover EBT Turnover	77% .	72% .
Trade payables	40,416	28,852	Net profit % on Turnover	5.8 %	5.8 %

Novabase S.G.P.S., S.A. Sociedade Aberta - Stock Code BVL: NBA.IN Share Capital 15,700,697.00 Euros - Corporate Re p pgistration CRCL N.º 1495 Head-office Av. D. João II, Lote 1.03.2.3, Parque das Nações, 1998-031 Lisbon, PORTUGAL Fiscal Identity N.º 502 280 182

Consolidated Income Statement by SEGMENTS for the period of 6 Months ended 30 June 2010

(Thousands of Euros)			Digital	Novabase
	Consulting	IMS	TV	Capital	NOVABASE
Sale of goods	1,267	37,532	20,508	-	59,307
Cost of goods sold g	(, ) 1264	( ) 32232 ,	( ) 18324 ,	-	( )51820 ,
Gross margin	3	5,300	2,184	-	7,487
Other income	-	-	-	-	-
Services rendered	40,125	14,220	7,562	1,582	63,489
Supplementary income and subsidies	224	-	141	-	365
Other operating income	18	35	21	-	74
	40,367	14 14,255	7 7,724	1 1,582	63 63,928
	- 40,370	- 19,555	- 9,908	- 1,582	- 71,415
Other expenses	-	-	-	-	-
External supplies and services	(10,428)	(6,708)	(5,283)	(508)	(22,927)
Employee benefit expense	(23,963)	(8,052)	(3,698)	(1,203)	(36,916)
(Provisions) / Provisions reversal	360	(131)	232	-	461
Other operating expenses	(125)	(162)	(87)	(11)	(385)
	- (34 156) (34,156) -	- (15 053) (15,053) -	- (8 836) (8,836) -	- (1 722) (1,722) -	- (59 767) (59,767) -
Gross Net Profit (EBITDA)	6,214	4,502	1,072	(140)	11,648
Depreciation and amortization	- (1,554)	- (695)	- (345)	- (33)	- (2,627)
Operating Profit (EBIT)	4,660	3,807	727	(173)	9,021
Fi Financial Gains i l G i / (L (Losses) )	- 20	- 195 195	- 262 262	- (14)	- 463
Net Profit / (Loss) before Taxes (EBT)	4,680	4,002	989	(187)	9,484
Income tax expense	- (1,292)	- (917)	- 231	- 90	- (1,888)
Non-controlling interests	(451)	(4)	-	10	(445)
Attributable Net Profit Attributable Net Profit / (Loss)	2,937	3 3,081	1 1,220	(87)	7 7,151
Other information :	-	-	-	-	-
Turnover	41,392	51,752	28,070	1,582	122,796
EBITDA	6,214	4,502	1,072	(140)	11,648
EBITDA % on Turnover	15.0%	8.7%	3.8%	-8.8%	9.5%
EBT % on Turnover	11.3%	7.7%	3.5%	-11.8%	7.7%

Annex I - Board of Directors' Report June 30, 2010

Shareholder Structure and Qualified Holdings

Shareholdings of Members of the Management and Supervisory Boards (point 5 of Article 447 of the Company Code) ¹

Shareholders	no. shares	% capital and voting rights
José Afonso Oom Ferreira de Sousa	2,514,947	8.01%
Pedro Miguel Quinteiro Marques de Carvalho Miguel Quinteiro	2 170 679 2,170,679	6 91% 6.91%
Rogério dos Santos Carapuça	1,884,787	6.00%
Luís Paulo Cardoso Salvado	1,918,040	6.11%
João Nuno da Silva Bento	1,799,793	5.73%
Álvaro José da Silva Ferreira	935,000	2.98%
Nuno Carlos Dias dos Santos Fórneas	81,017	0.26%
Manuel Alves Monteiro	9,000	0.03%
Luís Mira Amaral	6,305	0.02%
João Luís Correia Duque	500	0.00%
Total	11,320,068	36.05%

Shareholdings of Members of the Corporate Boards and Qualified Holdings (point 4 of Article 448 of the Company Code and Article 16 of the Securities Code - 'CVM') 1

Shareholders	partial no.	no. shares	% capital and voting rights
Partbleu Sociedade Gestora de Participações Partbleu, Sociedade Gestora de		3 180 444 3,180,444	10 13% 10.13%
ES TECH VENTURES, SGPS, SA	1,792,144
Other Group Companies	1,157,395
Corporate Board Members	100
Grupo Banco Espírito Santo, SA (point 1 of Article 20 of CVM)		2,949,639	9.39%
José Afonso Oom Ferreira de Sousa		2,514,947	8.01%
Pedro Miguel Quinteiro Marques de Carvalho		2,170,679	6.91%
Rogério dos Santos Carapuça		1,884,787	6.00%
Luís Paulo Cardoso Salvado		1,918,040	6.11%
João Nuno da Silva Bento		1,799,793	5.73%
Fernando Fonseca Santos		1,575,020	5.02%
Álvaro José da Silva Ferreira		935,000	2.98%
Fundo Santander Acções Portugal	1,234,775
Fundo Santander PPA	191,663
Outros	144,128
Santander Asset Management - Soc.Gestora de Fundos de Investimento Mobiliário, SA (point 1 of Article 20
of CVM)		1,570,566	5.00%
Total		20,498,915	65.28%

1 The shareholding of each of these S Th h h ldi f h f th Sh h ld i th l t iti t d t th til J 30 2010 hareholders is the last position reported to the company until June 30, 2010.

Novabase – Sociedade Gestora de Participações Sociais, S.A. Public Company - Code BVL: NBA.IN Head Office: Av. D. João II, Lote 1.03.2.3 Parque das Nações 1998-031 Lisboa Capital: 15,700,697.00 Euros Corporate Tax Payer no. 502.280.182

June 30, 2010 Annex II - Board of Directors' Report

Management Transactions

List of Management Transactions (pursuant to the terms of points 6 and 7 of Article 14.º of the Portuguese Securities Commission Regulation nº. 5/2008)

Director	Transaction	Date	Time	Location	Number of shares	Price per share (€)
Luís Paulo Cardoso Salvado	Acquisition	23-03-2010	08:12:18	Euronext Lisbon	15,000	4.30
Álvaro José da Silva Ferreira	Acquisition	23-03-2010	08:12:18	Euronext Lisbon	15,000	4.30
Nuno Carlos Dias dos Santos Fórneas	Acquisition	30-03-2010	-	Over-the-Counter	15,405	3.40
Nuno Carlos Dias dos Santos Fórneas	Acquisition	26-05-2010	-	Over-the-Counter	3,906	4.00

The above mentioned directors, as a result of such transactions, hold the following shareholdings in the company's share capital:

Director	no. shares	% capital and voting rights
Luís Paulo Cardoso Salvado	1,918,040	6.11%
Álvaro José da Silva Ferreira	935,000	2.98%
Nuno Carlos Dias dos Santos Fórneas Nuno Carlos Dias dos Santos	81 017 ,	0 26% .

Annex III - Board of Directors' Report June 30, 2010

Own Shares Transactions

Information of transactions on own shares (pursuant to the terms of d) of point 5 of Article 66.º of the Company Code)

Transaction	Date	Location	Number of shares	Price per share (€)
Transfer	30-03-2010	Over-the-Counter	90,132	3.40
Transfer	30-03-2010	Over-the-Counter	17,779	4.42
Transfer	30-03-2010	Over-the-Counter	7,324	4.42
T Transfer f	30 03 2010 30-03-2010	Over-the-Counter O th C t	26 316 26,316	4.19 4 19
Transfer	17-05-2010	Over-the-Counter	24,826	4.29
Transfer	18-05-2010	Over-the-Counter	12,413	4.29
Transfer	18-05-2010	Over-the-Counter	12,413	4.29
Transfer	21-05-2010	Over-the-Counter	12,413	4.29
Transfer	21-05-2010	Over-the-Counter	15,558	3.98
Transfer	25-05-2010	Over-the-Counter	5,580	4.00
Transfer	25-05-2010	Over-the-Counter	1,674	4.00
Transfer	25-05-2010	Over-the-Counter	3,348	4.00
Transfer	25-05-2010	Over-the-Counter	5 580 ,	4 00 .
Transfer	26-05-2010	Over-the-Counter	3,906	4.00

At 31 December 2009, Novabase S.G.P.S. held 1,445,905 own shares, representing 4.60% of its share capital.

During 1st half 2010, the company transferred 239,262 own shares at the average price of 3.91 euros.

Own shares transfers were used in the settlement of acquisitions to non-controlling interests occurred in 2008 and in 2010 and as bonuses to employees.

At 30 June 2010, Novabase S.G.P.S. held 1,206,643 own shares, representing 3.84% of its share capital.

Novabase – Sociedade Gestora de Participações Sociais, S.A. Public Company - Code BVL: NBA.IN Head Office: Av. D. João II, Lote 1.03.2.3 Parque das Nações 1998-031 Lisboa Capital: 15,700,697.00 Euros Corporate Tax Payer no. 502.280.182

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Condensed Consolidated Interim Financial Statements for the 1st half 2010

NOVABASE S.G.P.S., S.A.

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INDEX

I.	CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the period of 6 Months ended 30 June 2010	5
	● Condensed Consolidated Interim Statement of Financial Position as at 30 June 2010 Condensed Consolidated Interim Statement of Financial Position as at 30 June 2010	6
	● Condensed Consolidated Interim Statement of Comprehensive Income for the period of 6 Months ended 30 June 2010	7
	● Condensed Consolidated Interim Statement of Changes in Equity for the period of 6 Months ended 30 June 2010	8
	● Condensed Consolidated Interim Statement of Cash Flows for the period of 6 Months ended 30 June 2010	9
	● Selected Notes to the Condensed Consolidated Interim Financial Statements for the period of 6 Months ended 30 June 2010	10
	Note 1. General Information	10
	Note 2. Accounting Policies	10
	Note 3. Segment information	12
	Note 4. Companies included in consolidation p	12
	Note 5. Deferred income tax assets	12
	Note 6. Trade and other receivables	13
	Note 7. Cash and cash equivalents	13
	Note 8. Share capital, share premium, treasury shares and share options	14
	Note 9. Reserves and retained earnings	14
	Note 10. Non-controlling interests	15
	Note 11. Borrowings	15
	Note 12. Provisions	16
	Note 13. Trade and other payables p y	16
	Note 14. Other gains/(losses) - net	16
	Note 15. Income tax expense	17
	Note 16. Earnings per share	17
	Note 17. Related-party transactions	17
	Note 18. Contingencies	19
	Note 19. Events after the reporting period	19
	Note 20. Seasonality	19
II.	SUPERVISORY BOARD AND AUDITORS REPORT IN RESPECT OF THE CONDENSED CONSOLIDATED SUPERVISORY BOARD AND AUDITORS REPORT IN RESPECT OF THE CONDENSED CONSOLIDATED
	INTERIM FINANCIAL INFORMATION	21
	● Opinion of the Audit Committee on the Consolidated Financial Information	23
	● Limited Review Report on the Consolidated Half Year Information	25
III.	SECURITIES ISSUED BY THE COMPANY AND OTHER GROUPCOMPANIES, HELD BY BOARD MEMBERS	27
	● Detail of securities issued by the company and other group companies, held by board members as at 30 June 2010	29

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I. CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the period of 6 Months ended 30 June 2010

Condensed Consolidated Interim Statement of Financial Position as at 30 June 2010

		(Amounts expressed in thousands of Euros)
	Note	30.06.10	31.12.09
Assets
Non-current assets
Property, plant and equipment quipment		9 9,408	8,721 8
Intangible assets		29,479	28,778
Investments in associates		1,921	1,914
Available-for-sale financial assets		25	25
Deferred income tax assets	5	7,985	8,341
Other non-current assets		139	134
Total non-current assets		48,957	47,913
Current assets Current
Inventories		13,083	8,593
Trade and other receivables	6	101,276	94,060
Accrued income		16,200	11,055
Income tax receivable		3,726	4,802
Derivative financial instruments		1,011	58
Other current assets		5,353	2,485
Cash and cash equivalents	7	10,837	24,972
Total current assets current		151,486 151,486	146,025 146
Assets for discontinued operations		226	826
Total assets		200,669	194,764
Equity
Share capital	8	15,701	15,701
Treasury shares	8	(603)	(723)
Share premium	8	43,560	49,213
Reserves and retained earnings	9	20,445	16,425
Profit for the period attributable to equity holders		7,151	12,882
Equity attributable to the company's equity holders		86,254	93,498
Non-controlling interests	10	5,557	5,644
Total equity		91,811	99,142
Liabilities
Non current liabilities Non-current
Borrowings	11	3,569	3,968
Provisions	12	2,094	2,245
Deferred income tax liabilities		100	100
Other non-current liabilities		927	1,123
Total non-current liabilities		6,690	7,436
Current liabilities
Borrowings	11	3 460 ,	4 502 ,
Trade and other payables	13	78,393	62,774
Income tax payable		139	290
Derivative financial instruments		541	139
Deferred income and other current liabilities		18,787	19,662
Total current liabilities		101,320	87,367
Liabilities for discontinued operations		848	819
Total liabilities Total		108,858	95,622 95
Total equity and liabilities		200,669	194,764

THE ACOUNTANT THE BOARD OF DIRECTORS

The accompanying notes are an integral part of these condensed consolidated interim financial statements

Condensed Consolidated Interim Statement of Comprehensive Income for the period of 6 Months ended 30 June 2010

				(Amounts expressed in thousands of Euros)
		6 M *		3 M * (Unaudited)
	Note	30.06.10	30.06.09	30.06.10	30.06.09
Sales	3	59,307	59,045	32,660	31,498
Services rendered	3	63,489	60,822	32,133	29,470
Cost of sales		(51,820)	(52,809)	(28,990)	(27,957)
External supplies and services		(22,927)	(21,251)	(12,057)	(11,354)
Employee benefit expense		(36,916)	(34,086)	(18,486)	(16,465)
Other gains/(losses) - net	14	515	320	221	126
Depreciation and amortisation		(2,627)	(2,378)	( 1 432)	( 1 200)
Operating profit		9 021 ,	9 663 ,	4 049 ,	4 118 ,
Finance income		4,451	1,946	2,535	764
Finance costs		(3,978)	(2,584)	(2,470)	(1,595)
Share of (loss)/profit of associates		(10)	(415)	8	(415)
Profit before income tax		9,484	8,610	4,122	2,872
Income tax expense	15	(1,888)	(1,733)	(733)	(434)
Profit for the period Profit for the		7 596 ,	6 877 ,	3 389 ,	2 438 ,
Other comprehensive income		-	-	-	-
Total comprehensive income for the period		7,596	6,877	3,389	2,438
Profit attributable to:
Equity holders of the Company		7,151	6,996	3,129	2,803
Non-controlling interests Non-controlling interests	10	445	(119)	260	(365)
		7,596	6,877	3,389	2,438
Total comprehensive income attributable to:
Equity holders of the Company		7,151	6,996	3,129	2,803
Non-controlling interests	10	445	(119)	260	(365)
		7,596	6,877	3,389	2,438
Earnings per share
attributable to the equity holders of the Company (expressed in EUR per share)
Basic earnings per share	16	0.24 euros	0.23 euros	0.10 euros	0.09 euros
Diluted earnings per share	16	0.24 euros	0.23 euros	0.10 euros	0.09 euros

3 M * - period of 3 months ended

THE ACOUNTANT THE BOARD OF DIRECTORS

Condensed Consolidated Interim Statement of Changes in Equity for the period of 6 Months ended 30 June 2010

(Amounts expressed in thousands of Euros)

			Attributable to equity holders of the Company
	Share Capital	Treasury shares	Share premium	Legal reserves	Stock Options reserves	earnings	Non Retained -controlling Interests	Total Equity
Balance at January 1, 2009	15,701	(429)	49,213	1,276	854	16,818	5,165	88,598
Total comprehensive income for the period	-	-	-	-	-	6,996	(119)	6,877
Transactions with owners
Legal reserve	-	-	-	282	-	(282)	-	-
Treasury shares movements	-	(159)	-	-	-	(1,327)	-	(1,486)
Share-based payments	-	-	-	-	57	-	-	57
Transactions with owners	-	(159)	-	282	57	(1,609)	-	(1,429)
Changes in ownership interests in subsidiaries that do not result in a loss of control
Transactions with non-controlling interests	-	-	-	-	-	77	(272)	(195)
Balance at June 30, 2009	15,701	(588)	49,213	1,558	911	22,282	4,774	93,851
Balance at January 1, 2010	15,701	(723)	49,213	1,558	379	27,370	5,644	99,142
Total comprehensive income for the period	-	-	-	-	-	7,151	445	7,596
Transactions with owners
Share capital reduction	(5,652)	-	-	-	-	217	-	(5,435)
Share capital increase	5,652	-	(5,652)	-	-	-	-	-
Dividends to equity holders	-	-	-	-	-	(9,662)	-	(9,662)
Legal reserve	-	-	-	807	-	(807)	-	-
Treasury shares movements	-	120	-	-	-	816	-	936
Share-based payments	-	-	-	-	284	-	-	284
Changes in consolidation universe	-	-	-	-	-	-	176	176
Foreign currency translation reserve	-	-	-	-	-	32	34	66
Transactions with owners	-	120	(5,652)	807	284	(9,404)	210	(13,635)
Changes in ownership interests in subsidiaries that do not result in a loss of control
Transactions with non-controlling interests	-	-	-	-	-	(549)	(742)	(1,291)
Balance at June 30, 2010	15,701	(603)	43,560	2,365	663	24,568	5,557	91,811

THE ACOUNTANT THE BOARD OF DIRECTORS

Condensed Consolidated Interim Statement of Cash Flows for the period of 6 Months ended 30 June 2010

			(Amounts expressed in thousands of Euros)
	6 M *		3 M * (Unaudited)
Note	30.06.10	30.06.09	30.06.10	30.06.09
Cash flows from operating activities
Net Cash generated / (used) in operating activities	1,459	12,625	(3,349)	(6,686)
Cash flows from investing activities
Receipts:
Cash of Novabase Angola consolidated for the 1st time	349	-	349	-
Loan repayments received from associates	-	229	-	229
Interest received	121	585	28	305
	470	814	377	534
Payments:
Acquisition of subsidiaries	(430)	(3,245)	(430)	(195)
Loans granted to associates	(185)	(515)	(120)	(22)
Purchases of property, plant and equipment Purchases of intangible assets	(1,447) (1,599)	(517) (1,218)	(781) (826)	(63) (1,118)
	(3,661)	(5,495)	(2,157)	(1,398)
Net Cash used in investing activities	(3,191)	(4,681)	(1,780)	(864)
Cash flows from financing activities
Receipts:
Proceeds from borrowings	-	3,000	-	2,974
Proceeds from sale of treasury shares 8	-	45	-	45
	-	3,045	-	3,019
Payments:
Repayments of borrowings	(771)	(2,720)	(47)	(871)
Dividends paid	(9,662)	-	(9,662)	-
Payment of finance lease liabilities	(864)	(818)	(455)	(422)
Interest paid Purchase of treasury shares 8	(227) -	(610) (2,448)	(69) -	(429) (1,447)
	(11,524)	(6,596)	(10,233)	(3,169)
Net Cash used in financing activities	(11,524)	(3,551)	(10,233)	(150)
Cash, cash equivalents and bank overdrafts at beginning of period	24,026	19,796	26,132	31,889
Net increase / (decrease) of cash, cash equivalents and bank overdrafts	(13,256)	4,393	(15,362)	(7,700)
Effect of exchange rate fluctuations on cash held	67	-	67	-
Cash, cash equivalents and bank overdrafts at end of period 7	10,837	24,189	10,837	24,189

6 M * - period of 6 months ended 3 M * - period of 3 months ended

THE ACOUNTANT THE BOARD OF DIRECTORS

The accompanying notes are an integral part of these condensed consolidated interim financial statements

Selected Notes to the Condensed Consolidated Interim Financial Statements for the period of 6 Months ended 30 June 2010

1. General Information

Novabase, S.G.P.S., SA (hereunder referred to as Novabase or the Company), with its head office in Av. D. João II, Lote 1.03.2.3, Parque das Nações – 1998-031 Lisboa - Portugal, holds and manages financial holdings in other companies as an indirect way of doing business, being the Holding Company of Novabase Group.

Novabase is listed on the Euronext Lisbon.

These condensed consolidated interim financial statements were approved for issue by the Board of Directors on July 26, 2010. In the opinion of the Board of Directors these financial statements fairly present the Group operations, as well as its financial position, financial performance, and cash flows.

2. Accounting Policies

These condensed consolidated interim financial statements for the period of six months ended June 30, 2010 have been prepared in accordance with IAS 34, 'Interim financial reporting'. The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2009, which have been prepared in accordance with IFRSs, as adopted by the European Union (EU).

These financial statements are presented in thousands of Euros.

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2009, as described in those financial statements.

Taxes on income in this interim period were accrued using the tax rate that would be applicable to expected total annual earnings for the year 2010.

a) The impacts of the adoption of standards and amendments to standards that became effective at 1 January 2010, are the following:

Standards

• IFRS 1 (amendment), 'First-time Adoption of International Financial Reporting Standards'. This amendment exempt entities that use the full cost method for oil and gas properties from retrospective application of IFRSs. It also exempts entities with existing leasing contracts from reassessing the classification of those contracts in accordance with IFRIC 4, 'Determining whether an arrangement contains a lease', as long as the earlier assessment in accordance with the previous GAAP would have resulted in the same outcome. This amendment had no impact on the Group's financial statements, as Novabase is already reporting under IFRSs.

• IFRS 3 (revised), 'Business combinations'. The revised standard continues to apply the acquisition method to business combinations but with some significant changes. For example, all payments to purchase a business are recorded at fair value. There is a choice on an acquisition-byacquisition basis to measure the non-controlling interest in the acquiree either at the non-controlling interest's proportionate share of the acquiree's net assets or at fair value of the assets and liabilities acquired. All acquisition-related costs are expensed. There have been no business combinations until the reporting date.

• IAS 27 (revised), 'Consolidated and separate financial statements'. IAS 27 (revised) requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains or losses. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is re-measured to fair value, and a gain or loss is recognised in profit or loss. There have been transactions with non-controlling interests as disclosed in note 9.

• IFRS 5 (2008 improvement), 'Non-current assets held for sale and discontinued operations'. This improvement 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 control. Relevant disclosures should be made if the subsidiary described above is a disposal group meeting the definition of a discontinued operation. There have been no disposal or partial disposal of any subsidiary until the reporting date.

• IFRS 2 (amendment), 'Group cash-settled share-based payment transactions'. This amendment incorporate IFRIC 8, 'Scope of IFRS 2' and IFRIC 11, 'IFRS 2 - Group and Treasury Share Transactions', and address the classification of group arrangements, in which the entity that receive goods or services in a share-based payment transaction settled by the Group, is not responsible for any payment. The amended IFRS 2 had no impact on the Group's financial statements.

• IAS 39 (amendment), 'Financial instruments - Eligible hedged items'. This amendment clarifies on what principles to apply in specific situations to determine whether a hedged risk or a portion of cash-flows is eligible to be designated as "hedging". This amendment had no impact on the Group's financial statements.

• Annual Improvements to IFRSs – 2009. As part of the 'annual improvements project', the IASB decided to improve some standards with the objective to clarify areas of inconsistency in IFRSs. The more significant improvements refers to the amendments to standards IAS 17, IAS 36 and IAS 38. The adoption of these 2009 improvements had no impact on the Group's financial statements.

Interpretations

• IFRIC 12, 'Service concession arrangements'. IFRIC 12 addresses how service concession operators should apply existing International Financial Reporting Standards (IFRSs) to account for the obligations they undertake and rights they receive in service concession arrangements. This interpretation had no impact on the Group's financial statements.

• IFRIC 15, 'Agreements for construction of real estates'. IFRIC 15 clarifies whether IAS 18, 'Revenue', or IAS 11, 'Construction contracts', should be applied to particular transactions, resulting that a wider range of transactions will qualify for the application of IAS 18, 'Revenue'. This interpretation had no impact on the Group's financial statements.

• IFRIC 16, 'Hedges on a net investment in a foreign operation'. IFRIC 16 is applied to group's that hedges the currency risks resulted from investments in foreign operations and clarifies the conditions that should be satisfied in order to classify it as an accounting hedge. This interpretation also clarifies the amounts that should be reclassified from foreign currency reserve in equity to profit or loss, when the investment in a foreign operation is disposed. IFRIC 16 had no impact on the Group's financial statements.

• IFRIC 17, 'Distributions of non-cash assets to owners'. This interpretation clarifies that: (a) a dividend payable should be recognised when the dividend is appropriately authorised and is no longer at the discretion of the entity; (b) an entity should measure the dividend payable at the fair value of the net assets to be distributed; (c) an entity should recognise the difference between the dividend paid and the carrying amount of the net assets distributed in profit or loss. IFRIC 17 had no impact on the Group's financial statements.

• IFRIC 18, 'Transfers of assets from customers'. This interpretation clarifies the accounting for arrangements where an item of property, plant and equipment, which is provided by the customer, is used to provide an ongoing service. This is particularly relevant to the utility sector by involving services such as gas or electricity. IFRIC 18 had no impact on the Group's financial statements.

b) There are new standards, amendments and interpretations to existing standards, that although have been published, are only mandatory for annual periods beginning on or after 1 February 2010, and have not been early adopted by the Group:

Standards

• IAS 32 (amendment), 'Financial instruments: presentation - classification of rights issues' (effective for annual periods beginning on or after 1 February 2010). The amendment to IAS 32 addresses the accounting for rights issues that are denominated in a currency other than the functional currency of the issuer. If the rights are issued pro rata to all existing shareholders for a fixed amount in any currency, then these rights should be classified as equity instruments. Otherwise, should be accounted for as a derivative liability.

• IFRS 1 (amendment), 'First time adoption of IFRS' (effective for annual periods beginning on or after 1 July 2010, in EU). This amendment provides first-time adopters with the same transition provisions as included in amendment to IFRS 7,'Financial instruments: Disclosures', regarding comparative information for the three level classification disclosures required by IFRS 7.

• IAS 24 (amendment), 'Related party disclosures' (effective for annual periods beginning on or after 1 January 2011). The amended standard eliminates general requirements in respect of certain related party disclosures for public-sector entities, but requires providing information about the relationship of the entity with the Government and significant transactions with the Government or other Government-related entities. Additionally, the definition of a related party has been amended to remove some inconsistencies in the identification and disclosure of related parties.

• IFRS 9 (new), 'Financial Instruments: recognition and measurement' (effective for annual periods beginning on or after 1 January 2013). This standard is still subject to the adoption process by EU. IAS 39 establishes two measurement categories: amortised cost and fair value. All equity instruments are measured at fair value. A debt instrument is measured at amortised cost only if the objective is to collect contractual cash flows and the cash flows are solely payments of principal and interest on principal. Otherwise, all debt instruments are measured at fair value through profit or loss.

• Annual Improvements to IFRSs – 2010, generally applicable for annual periods beginning on or after 1 January 2011. These improvements to several standards have not been yet adopted by EU. The annual improvements process provides a vehicle for making non-urgent but necessary amendments to IFRSs and affect six standards and one IFRIC: IFRS 1, IFRS 3, IFRS 7, IAS 1, IAS 27, IAS 34 and IFRIC 13.

Standards

• IFRIC 14 (amendment), 'The limit on a defined benefit asset, minimum funding requirements and their interaction' (effective for annual periods beginning on or after 1 January 2011). IFRIC 14 clarifies that when an asset is consequence of pre-payment of minimum funding contributions in respect of future service, the surplus can be recognised as an asset.

• IFRIC 19, 'Extinguishing financial liabilities with equity' (effective for annual periods beginning on or after 1 July 2010). IFRIC 19 clarifies the accounting when an entity renegotiates the terms of its debt with the result that the liability is extinguished by the debtor issuing its own equity instruments to the creditor. A gain or loss is recognised in profit or loss, based on the fair value of the equity instruments issued and comparing to the carrying amount of the financial liability. The simple reclassification of the financial liability to equity is not allowed.

3. Segment information

			Digital	Novabase
	Consulting	IMS	TV	Capital	Novabase
At 30 June 2009
Sales and services rendered	41,330	40,872	37,261	404	119,867
Operating profit/(loss)	5,415	2,956	1,938	(646)	9,663
Finance costs – net	673	(273)	(1,026)	(12)	(638)
Share of (loss)/profit of associates	(3)	-	-	(412)	(415)
Income tax expense	(841)	(840)	(247)	195	(1,733)
Profit/(Loss) from operations	5,244	1,843	665	(875)	6,877
At 30 June 2010
Sales and services rendered	41,392	51,752	28,070	1,582	122,796
Operating profit/(loss)	4,660	3,807	727	(173)	9,021
Finance costs – net	30	195	262	(14)	473
Share of (loss)/profit of associates	(10)	-	-	-	(10)
Income tax expense	(1,292)	(917)	231	90	(1,888)
Profit/(Loss) from operations	3,388	3,085	1,220	(97)	7,596

4. Companies included in consolidation

In the first half of 2010, NBASIT - Sistema de Informação e Telecomunicações, S.A. (Angola) and Novabase Digital TV EURL (France) were incorporated, to strengthening activities in the IMS and Digital TV business areas, respectively, and the international presence of the Group.

5. Deferred income tax assets

The movement in the deferred income tax assets is as follows:

	30.06.10	31.12.09
Opening balance	8,341	10,092
Transfers	(23)	224
Profit or loss charge	(333)	(1,975)
Balance at the end of the period	7,985	8,341

The movement in deferred tax assets during the period, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows:

	Tax losses	Tax incentives	Provisions	Total
Balance at 1 January 2009	4,121	4,380	1,591	10,092
Profit or loss charge	(1,026)	(966)	17	(1,975)
Transfers	219	-	5	224
Balance at 31 December 2009	3,314	3,414	1,613	8,341
Profit or loss charge	(672)	(258)	597	(333)
Transfers	(12)	-	(11)	(23)
Balance at 30 June 2010	2,630	3,156	2,199	7,985

6. Trade and other receivables

	30.06.10	31.12.09
Trade receivables	96,640	91,580
Allowance for impairment of trade receivables	(2,599)	(3,452)
	94,041	88,128
Prepayments to suppliers	946	1,011
Employees	62	151
V.A.T.	1,263	2,167
Receivables from related parties (note 17)	1,070	896
Financial investments disposal	152	149
Receivables from funded projects	2,481	1,206
Other receivables	4,801	4,107
Allowance for impairment of other receivables	(3,540)	(3,755)
	7,235	5,932
	101,276	94,060

Movements in allowances for impairment of trade and other receivables are as follows:

		Trade receivables		Other receivables		Total
	30.06.10	31.12.09	30.06.10	31.12.09	30.06.10	31.12.09
Balance at 1 January	3,452	2,693	3,755	3,960	7,207	6,653
Impairment	52	978	-	66	52	1,044
Impairment reversal	(424)	(219)	(56)	(225)	(480)	(444)
Transfers	111	-	-	(232)	111	(232)
Write-offs	(592)	-	(159)	186	(751)	186
	2,599	3,452	3,540	3,755	6,139	7,207

7. Cash and cash equivalents

With reference to the Consolidated Statement of Cash Flows, the detail and description of Cash, cash equivalents and bank overdrafts is analysed as follows:

	30.06.10	31.12.09
- Cash	17	4
- Short term bank deposits	10,820	24,968
Cash and cash equivalents	10,837	24,972
- Overdrafts	-	(946)
	10,837	24,026

8. Share capital, share premium, treasury shares and share options

The share capital, fully subscribed and paid of EUR 15,700,697, is represented by 31,401,394 shares with a nominal value of EUR 0.5 each.

	Number of shares (thousands)	Ordinary shares	Share premium	Treasury shares	Total
Balance at 1 January 2009	31,401	15,701	49,213	(429)	64,485
Treasury shares purchased	-	-	-	(416)	(416)
Treasury shares transferred	-	-	-	117	117
Treasury shares disposed	-	-	-	5	5
Balance at 31 December 2009	31,401	15,701	49,213	(723)	64,191
Share capital reduction	-	(5,652)	-	-	(5,652)
Share capital increase	-	5,652	(5,652)	-	-
Treasury shares transferred	-	-	-	120	120
Balance at 30 June 2010	31,401	15,701	43,560	(603)	58,658

In the annual General Meeting of Shareholders held on April 29, 2010, it was approved:

(i) The reduction of the share capital to EUR 10,048,446, to be carried out by means of a reduction of the nominal value of all the shares representing the share capital. Each share will have the nominal value of EUR 0.32 and the freed amount of EUR 5,652,251 shall be directly allocated to shareholders, corresponding to EUR 0.18 per share; and

(ii) The increase of the share capital to EUR 15,700,697 by incorporation of EUR 5,652,251 from share premium reserve, to be carried out by means of an increase of the nominal value of all the shares representing the share capital in the amount of EUR 0.18. As a result of the share capital increase, each share will have the nominal value of EUR 0.50.

As a result of the registration of these operations, the nominal value of all shares representing Novabase's share capital is EUR 0.50, as prior to the execution of such operations.

In accordance with the resolutions of the referred General Meeting, share capital reduction and increase operations above mentioned were executed. The payment of the amounts freed as a result of the share capital reduction is to be settled at the reporting date, being that the amount to deliver to the shareholders is EUR 5,435 thousand (note 13) and the amount corresponding to the treasury shares that will not be paid is EUR 217 thousand, which was already transferred to other reserves in these financial statements.

9. Reserves and retained earnings

In 2010, the Group performed operations of acquisitions to non-controlling interests, with the following impact (see note 17):

			30.06.10			31.12.09
			Acquisition / % share of the			Acquisition / % share of the
		disposal	equity acquired Acquisition		disposal	equity acquired Acquisition
		cost	/ (disposed)	Difference	cost	/ (disposed)	Difference
(i)	Acquisition of 12.73% of NB Infraestruturas	214	-	214	180	-	180
(i)	Acquisition of the business of Digital TV	(16)	-	(16)	(206)	-	(206)
(ii)	Reorganization of Novabase EA	-	-	-	-	(727)	727
	Acquisition of 24.5% of Collab	-	-	-	15	272	(257)
(iii)	Acquisition of 10% of NB Internat.Solutions	1,093	742	351	-	-	-
		1,291	742	549	(11)	(455)	444

(i) In the sequence of the transactions with non-controlling interests occurred in 2008, the acquisition cost was reviewed, in 2009 and 2010, based on the achievement of goals by the subsidiary.

(ii) Internal reorganization of Novabase EA with dilution effect in the Group share.

(iii) Acquisition of 10% of NB International Solutions and, consequently, of the remaining financial holding of NB Solutions Middle East and Novabase EA, and of 5.5% of Celfocus.

In the operations described above, as the financial holdings were acquired to non-controlling interests in which the Group already had control, the Economic Entity Model Method was applied, and the difference between the acquisition cost and the net assets value of the subsidiaries acquired has been booked in Equity, in the total amount of EUR 549 thousand. The non-controlling interests decreased by EUR 742 thousand.

10. Non-controlling interests

	30.06.10	31.12.09
Balance at 1 January	5,644	5,165
Transactions with non-controlling interests - see note 9	(742)	455
Change in consolidation universe (*)	176	(142)
Foreign currency translation differences for foreign operations	34	-
Profit attributable to non-controlling interests	445	166
	5,557	5,644

(*) In 2009, Contactless was dissolved, being lapsed the balance of non-controlling interests (EUR 142 thousand). In 2010, NBASIT - Sistema de Informação e Telecomunicações, S.A. (Angola) was incorporated.

11. Borrowings

	30.06.10	31.12.09
Non-current
Bank borrowings	2,000	2,500
Finance lease liabilities	1,569	1,468
	3,569	3,968
Current
Bank borrowings	1,946	3,162
Finance lease liabilities	1,514	1,340
	3,460	4,502
Total borrowings	7,029	8,470

The contractual repricing dates of the current bank borrowings at the end of the reporting period are as follows:

	30.06.10	31.12.09
6 months or less	1,446	1,980
6 to 12 months	500	1,182
	1,946	3,162

The maturity of non-current bank borrowings is as follows:

	30.06.10	31.12.09
Between 1 and 2 years	1,000	1,000
Between 2 and 5 years	1,000	1,500
	2,000	2,500

The effective interest rates at the reporting date were as follows:

	30.06.10	31.12.09
Bank borrowings	2.776%	2.658%
Bank overdrafts	N/A	2.016%

Gross finance lease liabilities – minimum lease payments:

	30.06.10	31.12.09
No later than 1 year	1,939	1,817
Between 1 and 5 years	2,118	1,989
	4,057	3,806
Future finance charges on finance leases	(974)	(998)
Present value of finance lease liabilities	3,083	2,808

The present value of finance lease liabilities is as follows:

	30.06.10	31.12.09
No later than 1 year	1,514	1,340
Between 1 and 5 years	1,569	1,468
	3,083	2,808

12. Provisions

Movements in Provisions are analyzed as follows:

		Legal	Other risks
	Warranties	claims	and charges	Total
Balance at 1 January 2009	791	100	959	1,850
Additional provisions	626	15	460	1,101
Used during the year	(627)	-	(300)	(927)
Transfers	-	384	(163)	221
Balance at 31 December 2009	790	499	956	2,245
Additional provisions	104	-	256	360
Used during the period	(396)	(15)	(100)	(511)
Balance at 30 June 2010	498	484	1,112	2,094

13. Trade and other payables

	30.06.10	31.12.09
Trade payables	38,902	27,512
Remunerations, vacations and vacation and Christmas subsidies	11,001	7,468
Bonus	5,707	10,413
Ongoing projects	2,716	1,959
V.A.T.	7,090	7,000
Social security contributions	958	1,704
Income tax withholding	916	1,050
Amount to pay to shareholders from the share capital reduction (note 8)	5,435	-
Employees	26	122
Prepayments from trade receivables	201	205
Acquisition of financial interests to non-controlling interests (note 17)	913	646
Other accrued expenses	3,951	4,099
Other payables	577	596
	78,393	62,774

14. Other gains/(losses) - net

	30.06.10	30.06.09
Impairment and impairment reversal of trade and other receivables	428	(138)
Impairment and impairment reversal of inventories	(118)	3
Warranties provision	292	46
Legal claims provision	15	-
Provisions for other risks and charges	(156)	81
Operating subsidies	290	146
Other	(236)	182
	515	320

15. Income tax expense

The tax on the Group's profit before tax differs from the theoretical amount that would arise using the weighted average rate applicable to profits of the consolidated entities as follows:

	30.06.10	30.06.09
Profit before income tax	9,484	8,610
Income tax expense at nominal rate	2,371	2,153
Tax benefit on the net creation of employment for young and long term unemployed people	(184)	(200)
Provisions and amortisations not considered for tax purposes	109	103
Associates' results reported net of tax	3	104
Autonomous taxation	281	272
Losses in companies where no deferred tax is recognised	(65)	14
Expenses not deductible for tax purposes	142	(88)
Research & Development tax benefit	(1,089)	(828)
Municipal surcharge	230	206
Impairment of Special Payment on Account	97	-
Other	(7)	(3)
Income tax expense	1,888	1,733

16. Earnings per share

	30.06.10	30.06.09
Weighted average number of ordinary shares in issue	30,082,427	30,378,646
Stock options adjustment	42,706	-
Adjusted weighted average number of ordinary shares in issue	30,125,133	30,378,646
Profit attributable to equity holders of the Company	7,151	6,996
Basic earnings per share (euro per share)	0.24 euros	0.23 euros
Diluted earnings per share (euro per share)	0.24 euros	0.23 euros

17. Related-party transactions

For reporting purposes, related-party consider subsidiaries, associates, shareholders with management influence and key elements in the Group management.

The following transactions were carried out with related parties:

i) Sales of goods and services rendered

	30.06.10	30.06.09
BES Group	6,659	10,957
	6,659	10,957

The above identified transactions were performed at arm's length.

ii) Purchases of goods and services

	30.06.10	30.06.09
BES Group	216	99
	216	99

iii) Key management compensation

		30.06.10	30.06.09
	Salaries and other short-term employee benefits Stock options granted	4,125 284	2,925 -
		4,409	2,925
iv)	Advanced payments / loans to key management
		30.06.10	31.12.09
	Advanced payments	1	98
		1	98
v)	Balances arising from purchases/sales of goods and services
		30.06.10	31.12.09
	Receivables from related parties
	BES Group	3,408	6,607
		3,408	6,607
	Payables from related parties
	BES Group	94	-
		94	-
vi)	Acquisition of financial interests to related parties (see note 9)
		30.06.10	31.12.09
	Former shareholders of Novabase Infraestruturas, SGPS	214	180
	Former shareholders of NB Digital TV, S.A.	(16)	(206)
	Former shareholders of Collab	-	15

Former shareholders of in Novabase International Solutions B.V. 1,093 -

vii) Balances arising from acquisitions of financial interests to related parties

	Non-current		Current (note 13)		Total
	30.06.10	31.12.09	30.06.10	31.12.09	30.06.10	31.12.09
Former shareholders of NB C. SGPS	306	612	307	307	613	919
Former shareholders of NB Infraestr.	-	-	-	50	-	50
Former shareholders of DTV, ITV and OnTV	-	179	230	178	230	357
Former shareholders of NB ACD.	157	235	78	78	235	313
Former shareholders of SAF	65	97	32	33	97	130
Former shareholders of NB Int. Sol.	399	-	266	-	665	-
	927	1,123	913	646	1,840	1,769

1,291 (11)

viii) Other balances with related parties

	30.06.10	31.12.09
Loan to Mind	259	259
Loan to Forward	22	22
Loan to NB Atlântico	744	559
Loans to other associates	45	56
Receivables from related parties (note 6)	1,070	896
Provisions for loans provided to associates	(259)	(259)
	811	637

ix) Bank deposits and finance investments (including overdrafts)

	30.06.10	31.12.09
BES Group	7,200	7,692

18. Contingencies

Given the disclosed in the annual financial statements for the year 2009, the material changes in the judicial processes are the following:

• The Capital Fund for Qualified Investors Novabase/FCR FIQ, which is managed by the subsidiary Novabase Capital, is co-defendant in a procedure brought forward by a shareholder of a Manchete against the other two shareholders, the Fund and another individual shareholder. The Plaintiff is claiming violation of the Shareholders Agreement and requests (i) payment of a compensation in the amount of EUR 446 thousand in lieu of remunerations he would have received for the remaining period that the Shareholders Agreement would remain in force; (ii) an amount equal to 8.5% of company results before tax related to the years 2010 and further until final decision on the proceeding is issued; (iii) that the defendants are ordered to buy the plaintiff's shares for the price of EUR 750 thousand. The procedure waits the term for filing opposition by the defendants.
• Novabase Serviços has been served regarding a procedure brought forward by the Instituto de Gestão Financeira da Segurança Social which refers to alleged absence of payment of social security contributions in the years 2005, 2006, 2007, 2008 and 2009, in the amount of EUR 103 thousand. The company has filed opposition regarding the allegations demonstrating compliance with applicable laws, payment of all amounts due and providing documents to that respect.

19. Events after the reporting period

Novabase strengthens its energy area through the acquisition of Iberwind assets

In July 2010, Novabase and Iberwind, leading producer of wind energy in Portugal, signed a deal for the acquisition of a management and control platform for wind power production – SCADA, in the amount of EUR 750 thousand. Simultaneously, Novabase and Iberwind signed a five year outsourcing contract of 2,7 Million euros that begins by transferring to Novabase the team responsible for the SCADA system, that shall continue to ensure the operations of the wind farms explored by Iberwind.

20. Seasonality

The activity of Consulting and IMS is usually lower in 3rd quarter due to holiday period.

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II. SUPERVISORY BOARD AND AUDITORS REPORT IN RESPECT OF THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

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À

Opinion of the Audit Committee on the Consolidated Financial Information

Dear Shareholders,

Pursuant to the law, the mandate from our shareholders and the provisions of Article 423-F, Item g) and number 1 of Article 508-D, both of the Portuguese Company Code, we now present a brief summary of our supervisory activities, together with our opinion on the Half Year Report and Consolidated Financial Statements presented by the Novabase SGPS, SA Board of Directors for the period of 6 month ended 30 June 2010.

Over the course of the six month period ended June 30 2010, the Audit Committee held 8 formal meetings as well as some informal meetings to supervise the following:

• Company management, in terms of compliance with the law, the memorandum of association and other regulations in force, as well as in relation to management activities, policies pursued and the transparency, diligence and credibility of conduct;
• The efficacy of risk management systems and internal control and auditing activities; and
• Mechanisms, procedures and activities employed in preparing and disclosing financial information and reviewing the accuracy of the accounting documentation, accounting policies and valuation criteria used by the Company, to ensure that these entail an accurate assessment of the Company's assets and results.

Under the powers given to us, we have confirmed that:

The Consolidated Report accurately, clearly and fully reflects the most significant aspects of the Company's business and financial situation; similarly, all existing risks of both an operational and financial nature have been duly identified; and

Audit Committee

The Consolidated Financial Statements and corresponding Annex truly and fairly reflect the Company's financial situation.

Therefore, in light of the information received from the Board of Directors and the Company's various departments, together with the conclusions of the Limited Review Report on the Consolidated half year Financial Information, that received our agreement, it is our opinion that:

• The Consolidated Half Year Report be approved;
• The Consolidated Financial Statements be approved.

Lisbon, 26 July 2010

The Audit Committee

Luis Mira Amaral (Chairman)

Manuel Alves Monteiro (Member)

João Luís Duque (Member)

III. SECURITIES ISSUED BY THE COMPANY AND OTHER GROUP COMPANIES, HELD BY BOARD MEMBERS

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	Share Capital	Total Number of Shares	Number of shares held by board members at 31.12.09	Transactions	Number of shares held by board members at 30.06.10	% of shares held by board members at 30.06.10
Novabase SGPS, S.A.	15,700,697 €	31,401,394	11,270,757	49,311	11,320,068	36.0%
José Afonso Oom Ferreira de Sousa			2,514,947	0	2,514,947	8.0%
Pedro Miguel Quinteiro Marques de Carvalho			2,170,679	0	2,170,679	6.9%
Rogério dos Santos Carapuça			1,884,787	0	1,884,787	6.0%
Luís Paulo Cardoso Salvado			1,903,040	15,000	1,918,040	6.1%
João Nuno da Silva Bento			1,799,793	0	1,799,793	5.7%
Álvaro José da Silva Ferreira			920,000	15,000	935,000	3.0%
Nuno Carlos dos Santos Fórneas			61,706	19,311	81,017	0.3%
Manuel Alves Monteiro			9,000	0	9,000	0.0%
Luis Mira Amaral			6,305	0	6,305	0.0%
João Luís Correia Duque			500	0	500	0.0%
NBASIT - Sist. Inf. e Telecomunicações, S.A.	47,500,000 AOA	100,000	0	800	800	0.8%
Álvaro José da Silva Ferreira			0	400	400	0.4%
Francisco Paulo Figueiredo Morais Antunes			0	200	200	0.2%
Luís Paulo Cardoso Salvado			0	200	200	0.2%
CelFocus	100,000 €	100,000	3	0	3	0.0%
Paulo Jorge Barros Pires Trigo			1	0	1	0.0%
Francisco Manuel Martins Pereira do Valle			1	0	1	0.0%
José Afonso Oom Ferreira de Sousa			1	0	1	0.0%
COLLAB – Sol. I. Com. e Colab., S.A.	61,333 €	61,333	3,750	0	3,750	6.1%
Pedro Cabrita Quintas			3,750	0	3,750	6.1%
Forward, S.A.	250,000 €	250,000	200,000	0	200,000	80.0%
Bernardo Gomes Pinto			50,000	0	50,000	20.0%
Carlos Costa Brito			50,000	0	50,000	20.0%
Miguel Leite Fragoso			50,000	0	50,000	20.0%
Nuno Baião dos Santos			50,000	0	50,000	20.0%
Manchete, S.A.	150,000 €	150,000	37,501	0	37,501	25.0%
Mª de Fátima da Silva Rebelo			37,501	0	37,501	25.0%
Novabase International Solutions, B.V.	18,000 €	18,000	1,080	(1,080)	0	0.0%
Paulo Jorge Barros Pires Trigo			720	(720)	0	0.0%
Jamie Bridel			360	(360)	0	0.0%
Novabase S.R.L	35,920 RON	3,592	1	0	1	0.0%
Álvaro José da Silva Ferreira			1	0	1	0.0%

DETAIL ON SECURITIES ISSUED BY THE COMPANY AND OTHER GROUP COMPANIES, HELD BY BOARD MEMBERS

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