EUROTECH S.p.A : Le conseil d'administration d'Eurotech approuve les comptes consolid?s et statutaires au 31 d?cembre 2006.

(*) Price allocation: as set forth by IFRS 3, after acquisition, a company must record the fair value of identifiable assets (including intangible assets not previously recognized) and liabilities (including potential liabilities and excluding future restructuring). Following the purchase of the Arcom Group (executed in April 2006 and with effect from the Q2 2006), the resulting effects on the income statement arising from accounting this purchase have generated effects on costs of raw materials, amortization and depreciation and income taxes.

GROUP RESULTS

Group revenues grew by 70.0%, i.e. €20.91 million, rising from €29.85 million in 2005 to €50.76 million in 2006. This growth was achieved both organically and by virtue of the acquisition of the Arcom Group completed at the beginning of April 2006. If the business combination had taken place at the beginning of the year, ordinary operating revenues would have amounted to €56.45 thousand.

During the year in question, management pursued the plan for growth in size and internationalization on several fronts through acquisition of Arcom Control Systems Ltd. and Arcom Control Systems Inc. which took place in April 2006, and Applied Data Systems Inc., which took place in December and was executed the following month.

Management expects to continue to develop the plan to increase the size of the Group in 2007.

EBITDA amounted to €3.03 million net of €653 thousand due to price allocation for the business combination – recorded in the accounts pursuant to the provisions of IFRS 3 – involving purchase of the Arcom Group stake. The figure was influenced by management's desire to strengthen the industrial and managerial structure in order to cope with the future growth in size of the Group. EBIT, net of price allocation, posted a decrease between €1.07 million and €2.3 million in 2005. This incremental margin is closely related to the progress of EBITDA and is influenced by higher amortization and write downs charged in 2006. Financial management posted a positive change in absolute values of €2.54 million between 2005 and 2006, despite the negative net impact of €409 thousand, already shown in the infra-annual reports, due to acquisition of USD 24 million which took place in mid February and connected with contract obligations (option letters) undertaken 3 February 2006 for acquisition of the Arcom Group. Contributing to this positive change, in addition to the interest accruing on liquid assets pursuant to the increase in capital in July 2006, were the €1.31 million in net proceeds from taking part in the PTO of the English Radstone Technology Plc. which the Group attempted to acquire in September 2006. The pre-tax result increased by 65.6% equal to €1.32 million, increasing from €2.0 million in 2005 to €3.32 million in 2006, net of the "price allocation" . In terms of net results, the Group increased from €1,064 thousand in 2005 to €1,467 in 2006, net of the price allocation, with an increase of 37.9%. Besides reflecting the trend in pre-tax performance, this result was mainly due to the tax burden of the Group's various companies and to minority interest.

At 31 December 2006, the Group reported a positive net financial position of € 99.91 million, to be used mainly for external growth.

In addition, the shareholders' meeting was called to resolve on the proposal to authorize trading of treasury shares. In particular, the Board of Directors resolved to submit to the shareholders' meeting, in the ordinary session, the proposal to authorize trading of treasury shares, for a period of 18 months after the date of the ordinary shareholders' meeting, in accordance with the combined provisions of Articles 2357 and 2357-ter of the Civil Code and Article 132 of Leg. Decree 58/1998 and related implementation provisions. Transactions in treasury shares, subject of the authorization proposal to submit to the ordinary shareholders' meeting, can be made, on a case by case basis, contingent on the following purposes (i) to buy and/or sell treasury shares for investment and/or pegging the share and its liquidity on the securities market, in the terms of and with the methods established by applicable provisions, including in relation to the work of the broker hired by the Company to carry out the role of "Specialist" in the Star segment of the MTAX, in accordance with the market regulations of Borsa Italiana S.p.A., or (ii) use treasury shares as part of the transactions related to current operations or projects in line with the strategic lines that the Company intends to follow, in relation to which there is the opportunity for share trading. Authorization is required for the purchase of ordinary shares without par value, in one or more tranches, up to a maximum amount for which, considering ordinary Eurotech shares held in the portfolio of the Company and its subsidiaries, the number of treasury shares is not more than 10% of the share capital pursuant to Art. 2357, section 3, of the Civil Code. The Board also proposes that, except for the matters envisaged for the work of the Specialist, the acquisition price cannot be higher than the arithmetic mean of the reference prices of ordinary Eurotech shares in the 30 days prior to each transaction, plus 20% and not less than the aforementioned mean, minus 20%. As regards the work of the Specialist, the Board proposes to authorize trading treasury shares in compliance with the provisions of Borsa Italiana S.p.A. based on the average daily value of trading Eurotech shares in the previous six months, applying the spread (defined as the maximum price differential of the proposals, calculated as a ratio between the difference in the sale price and the purchase price and their subtotal) determined by Borsa Italiana in accordance with the Instructions. Currently, Eurotech holds 6,900 treasury shares in its portfolio, which represent 0.02% of the share capital.

The shareholders' meeting is also called to resolve on increasing the fee paid to the independent auditors, Reconta Ernst & Young S.p.A., for the accounting audit done for the financial years 2006 and 2007 pursuant to changes taking place in the structure of the Eurotech Group, resulting from the acquisitions of Arcom Control Systems Ltd., Arcom Control Systems Inc. and Applied Data Arcom Systems Inc, executed in 2006 and 2007.

Finally, the shareholders' meeting is called to resolve on extending the audit assignment to Reconta Ernst & Young for the financial years 2008-2013, in compliance with legislative changes taking place.

During the meeting, the Board of Directors approved a series of amendments to the corporate governance documents of the Company, in order to consider - among other things - adaptation of the Self-Governance Code of March 2006. Specifically, the Board of Directors increased to three the number of members of the Remuneration Committee (now comprised of Directors Michele Vitali, Alberto Felice De Toni and Giovanni Spangaro) and the Internal Control Committee (now comprised of Directors Caterina Belletti, Alberto Felice De Toni and Giovanni Spangaro), (ii) approved an updated version of the Internal Dealing Procedure, and (iii) approved the annual report on corporate governance.

RESTATED CONSOLIDATED INCOME STATEMENT

OPERATING RESULTS
(Thousands of Euro)	31/12/2005	%	31/12/2006	%
Revenues from sales of products and services	29,851	100.0%	50,759	100.0%
Cost of materials	(14,559)	-48.8%	(25,296)	-49.8%
Gross profit	15,292	51.2%	25,463	50.2%
Service costs	(5,639)	-18.9%	(11,601)	-22.9%
Lease & hire costs	(492)	-1.6%	(1,007)	-2.0%
Payroll costs	(7,211)	-24.2%	(12,889)	-25.4%
Other provisions and other costs	(204)	-0.7%	(296)	-0.6%
Other revenues	1,552	5.2%	2,703	5.3%
Profit before depreciation and amortization	3,298	11.0%	2,373	4.7%
Profit before depreciation and amortization
(EBITDA)	3,298	11.0%	2,373	4.7%
Depreciation & amortisation	(987)	-3.3%	(2,528)	-5.0%
Asset impairment	(11)	0.0%	(181)	-0.4%
Operating profit	2,300	7.7%	(336)	-0.7%
Share of associates' profit af equity	3	0.0%	(51)	-0.1%
PTO launch charges	0	0.0%	(2,003)	-3.9%
Income from PTO	0	0.0%	3,312	6.5%
Finance expense	(595)	-2.0%	(2,033)	-4.0%
Finance income	295	1.0%	3,022	6.0%
Profit before taxes	2,003	6.7%	1,911	3.8%
Income tax	(981)	-3.3%	(1,445)	-2.8%
Net profit (loss) before minority inerest	1,022	3.4%	466	0.9%
Minority interest	(42)	-0.1%	(106)	-0.2%
Group net profit (loss) for period	1,064	3.6%	572	1.1%
Base earnings per share	0.095		0.022
Diluted earnings per share	0.101		0.021

CONSOLIDATED INCOME STATEMENT – RECONCILIATION OF OPERATING AND REPORTED DATA

		12 months		12 months		Effect of	12 months of
		2005	%	2006	%	purchase price	2006 net of	%
						allocation	price
OPERATING DATA (€'000)							allocation
SALES REVENUES		29,851	100.0%	50,759	100.0%		50,759	100.0%
COST OF MATERIALS		(14,559)	-48.8%	(25,296)	-49.8%	653	(24,643)	-48.5%
GROSS PROFIT		15,292	51.2%	25,463	50.2%	653	26,116	51.5%
OTHER OPERATING COSTS	(*)	(13,546)	-45.4%	(25,793)	-50.8%		(25,793)	-50.8%
OTHER OPERATING
REVENUES	(**)	1,552	5.2%	2,703	5.3%		2,703	5.3%
EBITDA		3,298	11.0%	2,373	4.7%	653	3,026	6.0%
DEPRECIATION &
AMORTIZATION		(998)	-3.3%	(2,709)	-5.3%	753	(1,956)	-3.9%
EBIT		2,300	7.7%	(336)	-0.7%	1,406	1,070	2.1%
(EXPENSES) REVENUES FROM
RADSTONE TRANSACTION				1,309	2.6%		1,309	2.6%
FINANCE INCOME (EXPENSE)		(297)	-1.0%	938	1.8%		938	1.8%
PROFIT (LOSS) BEFORE TAX		2,003	6.7%	1,911	3.8%	1,406	3,317	6.5%
INCOME TAX		(981)	-3.3%	(1,445)	-2.8%	(511)	(1,956)	-3.9%
NET PROFIT (LOSS) BEFORE
MINORITIES		1,022	3.4%	466	0.9%	895	1,361	2.7%
GROUP NET PROFIT (LOSS)
FOR PERIOD		1,064	3.6%	572	1.1%	895	1,467	2.9%

(*) The item "other operating costs" includes operating costs, provisions to the risk fund and provisions to the allowance for doubtful accounts.

(**) The item "other operating revenues" includes the contributions received from public bodies, capitalized costs for internal increases and other minor proceeds:

CONSOLIDATED BALANCE SHEET

(Thousands of Euro)	31/12/2005	31/12/2006	Changes	(b-a)
ASSETS
Intangible assets	6,235	26,715	20,480
Property, Plant and equipment	2,550	4,121		1,571
Investments in associate and other companies	82	757		675
Deferred tax assets	1,008	3,715		2,707
Other non-current assets	22	139		117
Total non-current assets	9,897	35,447	25,550
Inventories	6,004	12,307		6,303
Contracts in progress	2,044	810	(1,234)
Trade receivables	7,267	10,351		3,084
Other current assets	2,090	4,260		2,170
Cash & cash equivalents	25,584	119,614	94,030
Totale current assets	42,989	147,342	104,353
Total assets	52,886	182,789	129,903
LIABILITIES AND EQUITY
Share capital	4,656	8,751		4,095
Reserves	26,734	131,436	104,702
Net profit (loss) for period	1,064	572		(492)
Group shareholders' equity	32,454	140,759	108,305
Minority capital and reserves	593	39		(554)
Minority profit (loss) for period	(42)	8		50
Equity attributable to minority interest	551	47		(504)
Total shareholders' equity	33,005	140,806	107,801
Medium-/long-term borrowing	2,597	15,910	13,313
Employee benefit obligations	481	569		88
Deferred tax liabilities	324	3,594		3,270
Other non-current liabilities	75	374		299
Total non-current liabilities	3,477	20,447	16,970
Trade payables	9,572	12,234		2,662
Short-term borrowing	2,639	3,790		1,151
Valore equo strumenti derivati	28	15		(13)
Tax liabilities	392	2,885		2,493
Other current liabilities	3,773	2,612	(1,161)
Total current liabilities	16,404	21,536		5,132
Total liabilities	19,881	41,983	22,102
Total liabilities and equity	52,886	182,789	129,903

NET FINANCIAL POSITION

(€'000)	31/12/2005	31/12/2006
Cash & cash equivalents	25,584	119,614
Short-term borrowing	(2,639)	(3,790)
Short-term net financial position	22,945	115,824
Medium-/long-term borrowing	(2,597)	(15,910)
Medium-/long-term net financial position	(2,597)	(15,910)
NET FINANCIAL POSITION	20,348	99,914

NET WORKING CAPITAL

(€'000)	31/12/2005	31/12/2006	Changes
	(a)	(b)	(b-a)
Inventories	6,004	12,307	6,303
Contracts in progress	2,044	810	(1,234)
Trade receivables	7,267	10,351	3,084
Other current assets	2,090	4,260	2,170
Current assets	17,405	27,728	10,323
Trade payables	(9,572)	(12,234)	(2,662)
Tax liabilities	(392)	(2,885)	(2,493)
Other current liabilities	(3,801)	(2,627)	1,174
Current liabilities	(13,765)	(17,746)	(3,981)
Net working capital	3,640	9,982	6,342

OPERATING RESULTS Eurotech S.p.A

OPERATING RESULTS
(Thousands of Euro)	31/12/2005	%	31/12/2006	%
Revenues from sales of products and services	16,940	100.0%	16,323	100.0%
Other revenues	65	0.4%	215	1.3%
Cost of materials	(10,171)	-60.0%	(9,372)	-57.4%
Service costs	(3,096)	-18.3%	(5,911)	-36.2%
Lease & hire costs	(245)	-1.4%	(195)	-1.2%
Payroll costs	(2,495)	-14.7%	(3,376)	-20.7%
Other provisions and other costs	(100)	-0.6%	(104)	-0.6%
Costs adjustments for in-house generation of non-
current assets	864	5.1%	1,204	7.4%
Depreciation & amortisation	(495)	-2.9%	(1,008)	-6.2%
Asset impairment	0	0.0%	0	0.0%
Write-down of investments	0		(430)	-2.6%
Operating profit	1,267	7.5%	(2,654)	-16.3%
Finance expense	(498)	-2.9%	(2,669)	-16.4%
Finance income	305	1.8%	2,561	15.7%
Profit before taxes	1,074	6.3%	(2,762)	-16.9%
Income tax	(643)	-3.8%	305	1.9%
Net profit (loss) before minority inerest	431	2.5%	(2,457)	-15.1%
Minority interest	0	0.0%	0	0.0%
Group net profit (loss) for period	431	2.5%	(2,457)	-15.1%
Base earnings per share	0.095		(0.070)
Diluted earnings per share	0.101		(0.070)

INCOME STATEMENT – EUROTECH SPA

(Thousands of Euro)	31/12/2005	31/12/2006	Changes (b-a)
ASSETS
Intangible assets	2,023	2,742	719
Property, Plant and equipment	1,261	2,795	1,534
Investments in subsidiaries	5,467	44,846	39,379
Investments in associate and other companies	79	551	472
Deferred tax assets	834	3,122	2,288
Finanziamenti a società controllate a medio/lungo termine	242	24,894	24,652
Other non-current assets	17	31	14
Total non-current assets	9,923	78,981	69,058
Inventories	3,704	5,560	1,856
Contracts in progress	2,045	810	(1,235)
Trade receivables	4,162	2,896	(1,266)
Trade receivables - subsidiaries and associate companies	661	3,183	2,522
Other current assets	964	3,615	2,651
Finanziamenti a società controllate a breve termine	1,268	860	(408)
Cash & cash equivalents	25,231	71,902	46,671
Totale current assets	38,035	88,826	50,791
Total assets	47,958	167,807	119,849
LIABILITIES AND EQUITY
Share capital	4,656	8,751	4,095
Reserves	26,446	131,636	105,190
Net profit (loss) for period	496	(2,457)	(2,953)
Shareholders' equity	31,598	137,930	106,332
Medium-/long-term borrowing	2,406	15,416	13,010
Employee benefit obligations	245	305	60
Other non-current liabilities	52	129	77
Total non-current liabilities	2,703	15,850	13,147
Trade payables	8,392	7,836	(556)
Trade payables - subsidiaries and associate companies	138	223	85
Short-term borrowing	1,950	3,402	1,452
Valore equo strumenti derivati	28	15	(13)
Tax liabilities	290	1,187	897
Other current liabilities	2,859	1,364	(1,495)
Total current liabilities	13,657	14,027	370
Total liabilities	16,360	29,877	13,517
Total liabilities and equity	47,958	167,807	119,849

NET FINANCIAL POSITION – EUROTECH S.p.A

(€'000)	31/12/2005	31/12/2006
Cash & cash equivalents	25,231	71,902
Finanziamenti a società controllate a breve termine	1,268	860
Short-term borrowing	(1,950)	(3,402)
Short-term net financial position	24,549	69,360
Finanziamenti a società controllate a medio/lungo termine	242	24,894
Medium-/long-term borrowing	(2,406)	(15,416)
Medium-/long-term net financial position	(2,164)	9,478
NET FINANCIAL POSITION	22,385	78,838

NET WORKING CAPITAL – EUROTECH S.p.A

(€'000)	31/12/2005	31/12/2006	Changes
	(a)	(b)	(b-a)
Inventories	3,704	5,560	1,856
Contracts in progress	2,045	810	(1,235)
Trade receivables	4,162	2,896	(1,266)
Trade receivables - subsidiaries and associate comp	661	3,183	2,522
Other current assets	964	3,615	2,651
Current assets	11,536	16,064	4,528
Trade payables	(8,392)	(7,836)	556
Trade payables - subsidiaries and associate compa	(138)	(223)	(85)
Tax liabilities	(290)	(1,187)	(897)
Other current liabilities	(2,887)	(1,379)	1,508
Current liabilities	(11,707)	(10,625)	1,082
Net working capital	(171)	5,439	5,610

THE EUROTECH GROUP

Eurotech (ETH.MI) is a company active in the research, development, production and marketing of miniaturised computers (NanoPCs) and of computers featuring high-performance computing capability (HPCs).

Eurotech SpA www.eurotech.com

Company contacts:

Investor relations
Massimo Mauri
Tel. 0433-485411
e-mail:[email protected]

Communication Department
Barbara Razzini
Tel. 0433-485411
e-mail: [email protected]

Press Office:

Community- Communication consulting
Marco Rubino
Tel. 02-89404231
e-mail: [email protected]