60323 Frankfurt am Main Germany Tel. +49 (069) 713 75 88...

Freiherr-vom-Stein-Str. 31

60323 Frankfurt am Main

Germany

Tel. +49 (069) 713 75 88 80

Fax +49 (069) 713 75 88 89

www.heliad.de

Quarterly Review

2 3Quarterly Report Heliad

Company and Portfolio Development

During the last quarter, preparation for initial public

offering was the main focus of activity. The company’s

admission documents were being prepared as well as

initial talks being held with capital markets analysts. At

the annual general meeting on 16 August 2004 in Bad

Homburg, shareholders were informed of the company's

and portfolio businesses' newest developments and final

necessary changes to the articles of association were

decided upon to deem the company “fit” for the stock

exchange.

Furthermore, the quarterly review at hand was issued,

where you can find the latest information on the

company's financial and asset position and its

profitability. The accumulated statement of profit and loss

(01.01.2004 - 30.09.2004) contains single valuation

adjustments that had been taken in line with the

preparations for mid-year closing on 30.06.2004. In this

context, we have made extensive corrections to the

investment portfolio to disallow for undisclosed potential

losses. The company's net asset value (NAV) amounts to

1,19 Euro per share and was assessed according to the

EVCA's (European Private Equity & Venture Capital

Association) conservative guidelines.

The portfolio featured varying developments during this

year's third quarter that can be summed up as

satisfactory. A highlight that stands out in the area of

direct investments is the initial public offering of portfolio

company Alnylam that was part of the Heliad Equity

Partner's investment portfolio from day one. Alnylam

(formerly Ribopharma), whose formation was

significantly supported by the management board of

Heliad Equity Partners, is currently valued with a

market cap of 110m USD which corresponds to a double-

digit multiple of our investment.

In the area of fund investments the Wellspring Team

managed the torrific sale of portfolio company RSG where

likewise within a holding period of 15 months an excellent

multiple of our investment could be attained.

In the course of its further development, Heliad Equity

Partners focuses on organic as well as external growth.

The aim is always to continually improve the company's

capital base and to achieve an increase of company value

through acquisition. A first step in this direction was the

company's capital increase towards the end of 2003,

during which VentureCap 2000 GmbH & Co. KG was

integrated.

Outlook

In recent years, the management board has looked into

various other alternatives of external growth that each

feature different profiles and are appealing to Heliad

Equity Partners for different reasons.

The forthcoming quarters are all about managing the

existing portfolio companies and exit preparations, the

improvement of cash management and the scheduled

liquidation of VentureCap 2000 GmbH & Co. KG from

which an accrual of liquid funds can be expected for

Heliad Equity Partners.

Dear Shareholders, dear Business Partners,

When Heliad Equity Partners was founded in 2000

its main target was to set up a diversified portfolio of

businesses in various business stages, branches

and regions and to make it accessible to a broad

public of investors. Up to this day this has not

changed. With a diversified portfolio we are

addressing private investors whose potential to

invest in attractive Private Equity assets usually fails

at the high minimum capital, as well as the medium

to long-term oriented institutional investor who is

looking for a Private Equity component in his

portfolio.

A good four years after our formation we have come

a significant step further. During the first investment

cycle in our initial years we have financed several

direct investments in various branches and have laid

the foundation in the area of Fund Investments with

the participation in VCH Best-of-VC. The recessive

economic environment and the capital market

impairment made it difficult during those years to

save the portfolio from damages, even though the

portfolio was not affected as strongly as the

industry's average.

Looking ahead, the economic situation appears to

stabilise, even though many structural changes -

especially in Germany - are impending. With our

active portfolio and future growth potential we

continue to pursue our aim to obtain returns above

the industry's average with a diversified portfolio for

various groups of investors.

We cordially invite you to accompany us along the

way.

4 5

Fascination Private Equity

Quarterly Report Heliad

What is Private Equity?

What types of Private Equity Investments are there?

1 Vgl. EVCA (2004): Why and How to Invest in Private Equity, www.evca.com

Funding is typically granted in connection with

buy-out transactions.

According to the European Private Equity and Venture

Capital Association, EVCA, there are a multitude of

reasons for an investment in Private Equity¹:

In the last 20 years, Private

Equity investments were able to achieve an

outperformance compared to the MSCI and other

major indices.

While in many cases equity funds keep the

same security with slight variations, Private Equity

investors are true stock pickers. They have the

ability to identify upcoming businesses even in an

environment with low inflation and marginal

growth.

Private Equity features only limited

correlation between the equity and bond market

and constitutes an excellent possibility to diversify

a portfolio and lower the overall risk at a similar

return ratio.

Why should you invest in Private Equity?

Long-term Outperformance:

Stock-picking":"

Minor Correlation:

Great Contingency of Private Investments in GDP:

Utilisation of Insider Information:

Economic Aspect:

The largest part of

the European Domestic Product is generated by

private businesses, not the ones admitted to official

quotation. Consequently, the investment universe

for Private Equity investors is much larger than the

one for equity funds that invest in the stock market.

Private Equity investors have

legitimate access to insider information, can

therefore better evaluate a business' chance of

success and can t effect changes in the portfolio

company's strategy and management.

Private Equity investors support

entrepreneurs that set up businesses that are

strong in growth and in many cases establish new

technologies in the market.

The declining economic development of the last years, in

our view, began to find its ground in 2003. This was

expressed particularly through a consolidation

movement:

“Weaker” businesses were a) bought by “stronger” ones

or b) were seeking out, by way of co-operation/merger,

other “weak” businesses to reduce fixed costs and

become “strong” together or c) went insolvent and were

liquidated. Therefore, a few Private Equity Investors

focus, again more on Mergers & Acquisition and on

expansion financing. This tendency was accompanied by

a slightly brightening stock market climate that

loosened the Private Equity investors reluctance to invest

a little which had deadlocked over the past years.

The fundamentally more positive investment climate,

however, did not bring about a recovery of the valuations

investors have to pay and which had declined strongly in

recent years. Low evaluations and harder terms in favour

of the investors were for the most part continued to be

enforced by professional Private Equity investors. In

Venture Capital business in particular terms were

What Phase is the Private Equity MarketCurrently In?

employed that would give new investors control over the

respective financed venture as well as the subsequent

company shares' selling process even if they did not

possess the majority of company shares (co-sell rights

and obligations, drag-along and tag-along rights,

liquidation etc.). While in the US such terms of contract

have been deemed standard for many years this “tough”

equity business has only been proliferated across

Germany in recent years.

Conclusively, it can be said that a good foundation has

been laid for Private Equity Investors who want to invest

now. The conditions are still at an attractive level. They

are the basis for medium to long-term capital gains above

the classic stock market indexes, e.g. The MSCI.

In the broad sense, Private Equity is ranked among the group of Alternative Investments, together with, for example, real estate, hedge funds and natural resources. Private Equity refers primarily to investments in companies that are not admitted to official quotation. Such an investment calls for an entrepreneurial eye, a specific knowledge and comes with an active, value-oriented management approach.

Within the asset category Private Equity four different segments can be differentiated: Venture Capital, Buy-out, Special Situation and Mezzanine.

Venture Capital:

Buy-Out:

Special Situation:

Mezzanine:

Venture Capital denotes equity participation in

predominantly new businesses, not previously listed on

the stock exchange, that were attributed an

outstanding growth potential, despite minor current

profitability.

Buy-out denotes the funding of established

businesses where a change of the shareholder

structure is carried out for various reasons. A buy-out

fund typically acquires complete control over the target

business and recapitalizes it with the aid of structured

funding techniques.

This describes investments in companies that

are in a special situation (one-time opportunities), i.e.

because of structural changes in the business sector,

changes to the legal framework or for company-

specific reasons. Typically, these are strains on

liquidity, project funding, shareholder bail-outs, etc.

Mezzanine refers to the investment of typically

higher interest-bearing, but lower secured committed

assets (compared to first-class secured bank loans) in

connection with shareholder capital elements, like

call options and conversion rights. Mezzanine

6 7

The Investment Approach of Heliad Equity Partners

We chose the mission statement “Specialists in Corporate

Development” for Heliad Equity Partners. This

demonstrates that it is not our philosophy to act as a

passive administrative body of Private Equity investments

but rather to create value within the framework of an

active portfolio management and intensive support of our

portfolio companies. To assume this task in regard to

companies in different stages, sectors and regions in order

to offer our shareholders a sufficiently diversified portfolio,

is challenging and can only be fulfilled by several

specialised teams everything else would be an

overestimation of one's own capabilities.

By means of fund investments, Heliad Equity Partners has

deployed further teams that each covers a Private Equity

segment with their own investment strategy to the best

of their ability. From Venture Capital to Buy-out, from

Germany to the USA, from company formation to

market-leading global corporations all return/risk

profiles are actively developed at Heliad Equity

Partners by the respective “Specialists in Corporate

Development”.

The current portfolio's main focus lies in the area of

direct investments that are governed by VCH Management.

With the medium-term aim to compile a well-balanced

portfolio of various specialised teams, Heliad Equity

Partners wants to strengthen the area of fund investments

in the future (that is currently covered by participating in

VCH Best-of-VC). In the individual examination of the Heliad

Equity Partner's portfolio on the subsequent pages, all

teams that have contributed to the value development of

Heliad Equity Partners, are depicted side by side.

Why Do Specialists Make Sense?

The Investment Approach of Heliad Equity Partners


Just like in many asset categories, there is an enormous difference between the average and the top quartile of all management teams. The following chart describes the connection within the Private Equity market:

In the first place, it is difficult to assess which teams are really top quartile. There is a multitude of methods, tests and indicators to reach a “correct” decision from the outset but a firmed conclusion can only be made years later. However, it is very likely that in the case of deploying specialists in an investment segment there is a far greater chance that the overall result (average result of all teams) can ultimately be found among the top quartile, as opposed to a single team covering a broad spectrum of investment opportunities on their own. And that is why Heliad Equity Partners work with “Specialists in Corporate Development”.

9

Financial Data At A Glance Portfolio


Stock Price

30.09.2004

* Net Asset Value (simplified): Valuation standard for the inner/fundamental value per share. Put in simple terms, this is calculated by reducing an investment's acquisition costs by applicable write-offs caused by missed targets or by increasing it with potential write-ups as a result of higher prices paid by market participants (i.e. in a financing round).

1,19 - - -

DateNet Asset Value (NAV)*

Stock marketvalue

Premium (+) / Discount (-)

Changes comparedto previous quarter

Portfolio

Team Investmentstyle Branches Region Type of Invesment

VCH

Wellspring

Platinum

Heidelberg Innovation

Global Life Science Ventures

TVM Techno VentureManagement

TechnoStart

Special Situations

Buyout / Special Situations


Venture

Venture

Venture

Venture

Diversified

Old Economy /Diversified

Technology-oriented /Diversified

Life Sciences

Life Sciences

Information- and Communication-Technology

Applied physicsLife Sciences

D

North America

USA / Europe

D

USA / Europe

USA / Europe

D

Direct-Investments

Fund-Investments

Fund-Investments

Fund-Investments

Fund-Investments

Fund-Investments

Fund-Investments

Financial Data Technical Data

PositionsAmount (in Euro / in %)as of 30.09.2004

Book Equity

Financial Assets

Cash and Cash Equivalents

Interest-bearing Liabilities

Equity / Financial Debt Ratio

10.931.948

10.281.336

551.089

0

100 %

Stock market

Tickersymbol

ISIN Code

Frankfurt, regulatedMarket/Prime Standard (Submitted)

(Submitted)

DE0006047293

8

VCH Management

Head office

Website

Weighting

In Heliad Portfolio

Investment Style

Portfolio Phase

Current Portfolio

Portfolio News

Frankfurt am Main, Germany

www.vch-group.de

69 %

Special Situations

Majority and minority shares by companies domiciled in Germany.

In demand are small and medium-sized companies whose shares

can be acquired cheaply in a special situation (change of shareholder,

growth financing with hedging instruments, etc.).

www.biovision.de, www.berlinheart.com, www.metalife.de

www.alnylam.com, www.itn-nanovation.com, www.mcn-tele.com

Successful initial public offering of Alnylam Pharmaceuticals on

NASDAQ (USA), which were advised by Heliad Equity Partners since

their early stages. The whole company's current market capitalization is

110m USD rates the used capital as a double-digit multiple.

Recent investment ItN Nanovation: At the end of the second quarter

Heliad Equity Partners invested in the German nanotechnology

company ITN Nanovation. The strong-growing medium-sized company

employs approx. 50 members of staff at their sites in Halberstadt and

Saarbrücken.

Biotechnology enterprise Apovia had to file for insolvency after a failed

financing round. The company was subsequently cleared off the current

portfolio.

Portfolio development (since 2000)Start Closure

Successive funding

Portfolio sales / Write off

11

Portfolio

Quarterly Report Heliad 10

Platinum Equity Partners

Head office

Website

Weighting

In Heliad Portfolio

Investment Style

Portfolio phase

Current Portfolio

Portfolio News

Los Angeles, USA

www.platinumequity.com

8 %


Management Buy-out and Buy-in transactions in the USA in

technology-oriented and traditional industry sectors

(IT, chemical industry, logistics, etc.). In demand are large,

cash-flow positive international businesses offering mission

critical products or services and can be acquired cheaply in a

special situation (particularly complex transactions with no bidder

competition, etc.).

www.hays-logistics.com, www.compucom.com, www.dystar.com

Currently no website: Aether Transportation

Recent investment CompuCom Systems: IT Services enterprise with

a transaction volume of 1,4bn USD in 2003. Listed company

CompuCom will be taken off the stock market in line with the

transaction (PIPE transaction).

Recent investment Aether Transportation: Division in the area of

wireless communication that was identified by the Aether Systems

group of companies as no longer belonging to core business and was

subsequently acquired in a carve out.

Recent investment Dystar: The German pharmaceutical and chemical

companies BASF, Hoechst/Aventis and Bayer are selling their textile

industry paints business to Platinum. Dystar employs 3.900 members

of staff in 20 countries and generated revenues of approx. 1bn USD in 2003.

Wellspring Capital Partners

Head office

Website

Weighting

In Heliad Portfolio

Investment Style

Portfolio phase

Current Portfolio

Portfolio News

New York, USA

www.wellspringcapital.com

9 %

Buy-out /Special Situations

Management Buy-out and Buy-in transactions in North America in

classic industry sectors (“old economy”). In demand are cash-flow

positive businesses that can be acquired cheaply in a special situation

(i.e. vendor insolvency, complex transactions with no bidder competition,

etc.).

www.mfdg.com, www.edwinwatts.com.

Currently no website: Vatterott Education Holdings Inc.,

Residental Services Group, JW Aluminium

Successful sale of air conditioning manufacturer RSG Residential

Services Group. A multiple of the initial investment was achieved within

15 months.

Recent investment IMS International Mills Services: Company providing

services for the steel industry with a high market share and profitable

core business after restructuring.

Successful recapitalisation at JW Aluminium: Due to over-performance

of reached targets profits could be distributed earlier.


n.a.Successive funding

Portfolio sales / Write off Portfolio development (since 2004)Start Closure

n.a.Successive funding


13

Portfolio


Global Life Science Ventures

Head office

Website

Weighting

In Heliad Portfolio

Investment Style

Portfolio phase

Current Portfolio

Portfolio News

Munich, Germany

www.life-science-ventures.com

5 %

Venture

World-wide diversified portfolio of selected Life Science Companies.

The main focus is on Germany and the USA.The companies may be

at different stages of their development but the focal point is on

start-up financing in particular.

www.xantos-bio.de, www.combinatorx.com, www.pieris-ag.de

www.cyberkinetics.com, www.intercell.com, www.coleypharma.com,

www.glycart.com, www.convergemed.com, www.agendia.com,

www.carex.fr, www.neurogesx.com, www.nitec-pharma.ch

Appointments at the Life Science Ventures Team: Dr. Holger Reithinger

(Principal, as of October) and Dr. Bert van Toor (Investment Manager,

as of June) introduce their contacts and knowledge to the team.

Portfolio company Xantos Biomedicine receives successive financing in

the third financing round. With the capital raised significant technological

milestones in the areas of cancer and metabolic illnesses shall be achieved.

Recent investment Nitec Pharma: Atlas Venture and Life Science Ventures

invest 10m Euro in a Merck KGaA spin-off located in Switzerland. Nitec

Pharma develops medication designed to combat inflammation diseases.


Successive funding


Heidelberg Innovation

Head office

Website

Weighting

In Heliad Portfolio

Investment Style

Portfolio phase

Current Portfolio

Portfolio News

Heidelberg, Germany

www.heidelberg-innovation.de

2 %

Venture

Heidelberg Innovation invests in emerging Life Science businesses in Central

Europe with the main focus on Germany. The portfolio is made up of approx.

25 companies in all stages of development, ranging from formation to initial

public offering and trade sale, MBO/LBO, etc. respectively.

www.cellzone.com, www.graffinity.com, www.ars-arthro.de, www.febit.com,

www.mtm-laboratories.com, www.microcuff.com, www.iongate.de,

Www.mbiotech.de, www.europroteome.com, www.axxima.com, www.biovision.de,

www.berlinheart.com, www.axovan.com, www.m-phasys.com,

www.cenixbioscience.de, www.therascope.com, www.heidelberg-pharma.de,

www.biofrontera.de, www.pelikantechnologies.com, www.xerion-pharma.com,

www.emblventures.com, www.the-genetics.com.

Currently no website:

STM Medizintechnik GmbH, SNP Gene ID GmbH.

Additional funding at IonGate: The Frankfurt based biotechnology enterprise

receives further funding acceptance and in line with this enforces its advisory

board with the addition of Lars-Eric Uttermann of Amersham Biosciences.

Portfolio company Biofrontera receives a strategic investment from

DNAPrint (USA) amounting to 20m Euro. Using capital resources Biofrontera

wants to press ahead with clinical developments and ease their access onto

the American market.

Portfoliodevelopment (since 2001)Start Closure

Successive funding


15

Portfolio


TVM Techno Venture Management

Head office

Website

Weighting

In Heliad Portfolio

Investment Style

Portfolio phase

Current Portfolio

Portfolio News

Munich, Germany

www.tvmvc.de

5 %

Venture

World-wide diversified portfolio of selected businesses in the areas of

IT and Communications Technology. The main focus is on Germany

and the USA with the aim to enable the company's transatlantic expansion.

The companies may be at different stages of their development but the

focal point is on start-up financing in particular.

www.aventon.com, www.arteris.net, www.clearsightsystems.com

www.enigmasemi.com, www.hymite.com, www.itac.de

Aventeon opens a branch in Bangalore, India. The branch enables

Aventeon to significantly increase its staff size at manageable costs

and offering more capacity to more customers.

Hymite reaches a significant milestone in the development of certain

cases for electronic circuits.


Successive funding


TechnoStart

Head office

Website

Weighting

In Heliad Portfolio

Investment Style

Portfolio phase

Current Portfolio

Portfolio News

Ludwigsburg, Germany

www.technostart.com

2 %

Venture

TechnoStart invests in approx. 15-20 emerging companies, mainly in

Germany. The team interested in platform technologies focuses on

the sectors Applied Physics (especially nanotechnology) and Life Sciences.

The main focus is on early business stages.

www.febit.com, www.graffinity.com, www.itn-nanovation.com,

www.m-phasys.com, www.cenix-bioscience.de, www.complexbiosystems.de,

www.novaled.de, www.blue-membranes.com.

Currently no website:

Spinox Ltd. (Oxford, GB), TF Instruments, Fludicon.

TF Instruments reaches a technological breakthrough in the diagnosis

of Alzheimer patients as part of a clinical trial by the Central Institute

for Mental Health in Mannheim.

TechnoStart participation Graffinity Pharmaceutical announces fusion

with Swiss Myocontract AG. The new company will be known as Santhera

Pharmaceuticals and develops neuropathic and metabolic drugs.

TechnoStart participation Cenix and American biotech company Ambion

announce the launch of their new RNAi library.


Successive funding


17

Balance Sheet Profit- and LossStatement


Assets (in Euro)

Total Assets 10.931.347

30.09.2004

Intangible Assets

Financial Assets

Long-term Assets

31.537

10.281.336

10.312.873

Assets

Tax Receivables 20.110

Other Income

Depreciation on Intangible Assets

Other Expenses

Other Interest Income

Depreciation on Financial Assets

Operating Result

Taxes

Loss

0

1.087

176.317

5.665

0

-171.739

0 0 0

171.739

20 25.000 25.706

3.2631.088

68.578 195.779

3.262

442.925

25.149 10.978 41.366

2.954.302 40.000 110.000

-3.375.320 -73.688 -241.969

-0,27

3.375.320 73.688 241.969

Liabilities (in Euro)

Total Liabilities 10.931.947

30.09.2004

Subscribed Capital

Additional paid-in Capital

Accumulated Deficit

8.596.432

9.382.701

-7.047.185

Equity

Provisions 7.000

Trade Payables 14.729

5.864.717

30.09.2003

35.888

3.977.703

84.915

5.864.717

30.09.2003

3.369.232

5.658.573

-3.166.215

1.500

1.628

Liabilities

Profit- and Loss Statement (in Euro)

16

01.07.-30.09.04 01.01.-30.09.04

01.07.-30.09.03 01.01.-30.09.03

Cash and Cash Equivalents (start of period)

Proceeds (+) / Cash Outflow(-)Form Operating Activities

Proceeds (+) / Cash Outflow (-)

From Investing Activities

Proceeds (+) / Cash Outflow (-)From Financing Activities

Increase (+) / Decrease(-)Of Cash and Cash Equivalents

Cash and Cash Equivalents (end of period)

Cash Flow Statement (in Euro)

01.01.-30.09.04 01.01.-30.09.03

-3.375

-4.953 -718

32-4.990

8.951 0

1.608551

-242

4.013.591

Other Receivables 69.603 157.719

Cash 551.089 1.608.492

General Notes

18 19

The report of Heliad Equity Partners GmbH & Co.

KGaA has been prepared in accordance with the

standards of the International Accounting Standards

Board (IASB).

Thereby, all of the obligatory International Accounting

Standards (IAS), interpretations of the International

Reporting Interpretations Committee (IFRIC) and

interpretations of the Standard Interpretations

Committee (SIC) have been applied.

Fixed Assets

Current Assets

Provisions

Purchased intangible assets are capitalised in

accordance with IAS 38 when it is probable that the

use of the asset is associated with a future economic

benefit and the costs can be determined on a reliable

basis. Purchased intangible assets are capitalised at

acquisition cost and are depreciated on a scheduled

basis over the estimated useful life of 10 years.

Financial assets, accounted for as held-for-trading

assets, have been valued at their fair value. Changes

of the fair value are recognised in the profit and loss

statement (IAS 39).

The accounts payable and the other assets are valued

at their nominal value or respective cost of acquisition.

The other provisions are created when the company

has a present obligation (legal or constructive) as a

result of a past event, an outflow of resources

embodying economic benefits is likely to be required

to settle the obligation, and the obligation amount can

be reliably estimated.

Provisions for future expenses have not been created.

Liabilities

The liabilities are balanced at their historic carrying cost.

Fixed Assets

The intangible assets contain necessary software licenses

in connection with the administration of the share

register which have been valued with their acquisition cost.

The devolopment of Fixed Assets is summarized below:

Other Income

Expenses

Financial Expenses

Other income contains value appreciation of securities

held as fixed assets in the amount of EUR 40 k.

Expenses contain in particular management fees in

the amount of Euro 187 k, losses in connection with

bad debt of EUR 91 k and other administration

costs of Euro 165 k.

The item contains the changes in the fair value of the

financial assets (IAS 39).

In the reporting period depreciations according to IAS 39

have been made with respect to Biovision AG, das://blaue.

Buero GmbH, Q1 Carrier AG, apovia AG and VentureCap

Beteiligungen 2000 GmbH & Co. KG.

Current Assets

Shareholders Equity

Capital Reserve

The securities have been valued at their respective

acquisition cost. The accounts payable and the other

assets are valued at their face value and have

maturities up to one year.

The bank deposits mainly contain short-term time

deposits.

The resolution of the annual shareholders meeting

on 26. September 2003 provided for the allowance

to increase the subscribed capital from EUR 4.627.200

to EUR 7.996.432.

In connection with the capital increase the company

recived an interest in the limited partnership

“Venture Cap Beteiligungen 2000 GmbH & Co.KG”

(Bayreuth, HR A 3021) in the amount of a nominal

value of EUR 11.568.000. The interest was transfered

by VCH Treuhand- und Verwaltungs GmbH. The closing

date was 31. December 2003. The remark in the trade

register was made on 16. March 2004.

The resolution of the annual Shareholders meeting

provided for the allowance to increase the subscribed

capital by EUR 600.000 to EUR 8.596.432. The remark

in the trade register was made on 5. July 2004.

The increase in capital results from the premium on

capital increases (in total Euro 3.724.128).

Provisions

Liabilities

Other Disclosure

The other provisions contain expected future payments

for the costs of the annual statement of account for

the ongoing year.

Liabilities have maturities up to the year.

On the closing date of the balance sheet, neither

contingent liabilities nor other financial obligations

not visible from the balance sheet or from the statement

of income existed.

The company`s subscribed capital amounts to

EUR 8.596.432 and is composed of 8.596.432

registered shares with proportional interest of EUR 1,00

in the capital stock of the company.

Following the resolution of the shareholders meeting on

13. November 2000 the management is allowed, upon the

approval of the supervisory board, to increase the capital

of the company up to EUR 100.000 until 12. November

2005. With the resolution of the shareholders meeting on

16. August 2004, the partner liable to unlimited extent,

has been authorized to increase the subscribed capital by

30. June 2009 with the consent of the supervisory board

by issuing up to 4.198.216,00 new registered shares for

cash or non-cash contributions once or in several times

up to the total amount of Euro 4.198.216,00 (authorized

capital). The partner liable to unlimited extent may

exclude the shareholder's rights of subscription with

consent of the supervisory board.

The shareholders`meeting on 16. August 2004

unanimously authorized the management of the company,

as set forth in § 71 Abs. 1 Nr. 8 German Corporation Act,

to acquire the company's own shares in an amount of up

to 10% of subscribed capital. The authorization may occur

unmitigated or in parts.


B. Accounting and Valuation Methodology

A. General Notes

C. Notes to the Profit- and Loss Statement

D. Notes to the Balance Sheet

I. Intangible

Assets

Concessions

II. Financial Assets

a) Investments

b) Securities

Sum:

Previous Year

35.887

3.337.703

640.000

4.013.590

Book Values

30.09.2004

31.537

9.625.561

655.775

10.312.874

Overview of Assets (Amounts in EUR)

I. Intangible

Assets

Concessions


a) Investments

b) Securities

Sum:

01.01.2004

43.500

9.573.376

1.000.000

10.616.875

30.09.2004

43.500

14.507.497

1.055.775

15.606.772

Inflow

0

4.934.121

55.775

4.989.896

Overview of Assets (Amounts in EUR)

Outflow

0

0

0

0

I. Intangible

Assets

Concessions


a) Investments

b) Securities

Sum:

01.01.2004

8.700

1.887.633

440.000

2.336.333

30.09.2004

11.963

4.881.936

400.000

5.293.898

Inflow

3.263

2.994.303

0

2.997.585

Cumulated Depreciation

Outflow

0

0

40.000

40.000

General Notes

20 21

The company does not employ own staff. The partner

liable to unlimited extent, VCH Management GmbH,

is solely authorized and obliged to manage the company.

Managing Directors of VCH Management GmbH:

Peter Brumm, Frankfurt

Andreas Lange, Frankfurt

Ralph Konrad, Hürth

The following persons are appointed as members of the

supervisory board:

Prof. Dr. Armin Heinzl (Chairman), Mannheim, Germany,

Professor

Dr. Wolf Bertling, Nuremberg, CEO November AG

Volker Rofalski, Munich, CEO Tradecross AG

Payments to the supervisory board during the reporting

period account for Euro 3 K.

Frankfurt, September 2004

Andreas Lange Peter Brumm Ralph Konrad

List of Participations

We undertook this assignment in November 2004 in

our offices in Bayreuth.

The starting point of our activities was the annual

statement of account of 31. December 2003.

The preparation of the report was conducted in

accordance with the International Financial Reporting

Standards (IFRS). The IFRS comprise the newly

declared IFRS, published by the International

Accounting Standards Board (IASB), the interpreta-

tions of the International Reporting Interpretations

Committee (IFRIC) as well as the interpretations of

the Standing Interpretations Committee (SIC).

Accounting material, the complete vouchers, as well

as account statements by the company's banks were

used as underlying sources for this preparation. All

requests for information, explanations, and proofs of

evidence were adduced voluntarily by the management

as well as by employees appointed to provide information.

In addition, the Management Board has confirmed us

in writing for the profession common statement

of completeness that all obligatory assets, liabilities,

risks and matching of the accountancy have been

considered, all expenses and income have been

included, all necessary disclosures have been made

and all statutes of liabilities have been pointed out.

The type, coverage and result of our preparation and

auditing activities have been documented in our

employment papers. The administrative accounting

and asset accounting of the company is being

managed with DATEV system, Nuremberg.

In particularly, we have focused our auditing activities

on the financial assets, on the other securities, on the

liquid assets, as well as on the long-term liabilities.

The non-current assets were audited especially in

regard to the additions and disposals. Additions were

audited especially in regard to permissible capitalizations

and in regard to the completeness of included

capitalization costs. Furthermore, we convinced

ourselves of the accuracy of anticipated depreciations.

The bank balances were mainly audited by presented

account statements.

While auditing the shareholder's equity, we adjusted

the capital stock with excerpts from the Commercial

Register and protocols from the Annual General Meeting.

The accounts payable as well as liabilities payable to

associated companies were mainly audited in regard

to the complete and correct inclusion of creditors as

well as the transaction of payments.

The audit of the other operating expenses occurred

with targeted random samples in individual substantial

expense items.


E. Audit Assignment

das://blaue.buero GmbH

VentureCap Beteiligungen

2000 GmbH & Co.KG

Hamburg

Bayreuth

Euro

76.511

8.889.823

%

41,83

92,65

LFY in Euro

-283.128

-363.114

Location Equity Shareholding Net income/loss

General Notes

22 23

F. Certification

After the completion of our assignment we grant the

following certification:

The quaterly report at hand as of 30. September 2004

was prepared on the basis of the accountancy of the

Heliad Equity Partners GmbH & Co. KGaA, Frankfurt, in

accordance with International Financial Reporting

Standards (IFRS). We convinced ourselves of the

regularity of the underlying accountancy.

Bayreuth, 26. November, 2004

Oberfränkische Revisions- und Treuhandgesellschaft mbH

Steuerberatungsgesellschaft

Wirtschaftsprüfungsgesellschaft

Dr. Jürgen Rosenschon Matthias Waha

Accountant Tax advisor


60323 Frankfurt am Main Germany Tel. +49 (069) 713 75 88...

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