Preliminary Results

Acta S.p.A.

("Acta" or the "Company")

Preliminary Results for the year ended 31 December 2010

Acta S.p.A (AIM:ACTA), the clean energy products company, today announces its Preliminary Results for the twelve months ended 31 December 2010.

2010 Commercial Highlights

2010 Financial Results

Significant events since period end:

Robert Drummond, Chairman, said today:

"2010 was a year of strong commercial, financial and organisational progress for Acta. The uncertainty created in 2011 by the Italian Government in the photovoltaic sector by the poorly managed introduction of changes to the feed-in tariff regime has marred what was otherwise an outstanding year for the Company, and resulted in a €3.4 million revenue reduction in the 2010 accounts which would otherwise have been ahead of market profit expectations. The photovoltaic sector is key to Italy's future energy supply, and in the light of public concern following the Japanese nuclear crisis we are confident that the new regulations, due to be proposed shortly, will restore stability and long term viability to this important and rapidly growing sector of the Italian economy.

Once the expected sector stability is restored, the underlying value of Acta's progress made during 2010 will become quickly evident, through the resumption of revenues and profitability from our PV activities, and also through the commercial development of our highly promising product partnerships."

For further information please contact:

Media enquiries:

Chairman's Statement

I am pleased to present the full year results for the year ended 31 December 2010 and to provide this statement on Acta's commercial progress.

Overview

Our strategy during 2010 has been to move into commercial revenues for the first time through the development of PV project consents and EPC contract services in the Italian PV sector. This objective was achieved in a remarkably short time, with the signing of turnkey EPC installation agreements with two major customers and the delivery of €7.8 million in revenue during the second half of the year. Based on the latest Government statements the Board and market commentators expect the recent uncertainty in the PV sector to be resolved soon, and we therefore expect PV activity to resume strongly during the second half of 2011, with the sales of our consented project authorisations being a strong profit driver for the year.

In tandem with this commercial strategy we have made excellent progress in bringing our technologies through to finished products. Our award-winning hydrogen generation technology completed the CE certification process for consumer applications and our programme of marketing activities has generated significant industrial and public interest.

We have also tested and developed very exciting applications of our technologies in the field of diesel enrichment, an application which is both economically compelling and environmentally beneficial. Our product partnership announcements released since the year end, and in particular for the diesel enrichment ethanol reformer for the Brazilian truck market, show the commercial engagement that our products have achieved and their economic potential. The current year will see these products coming increasingly to the fore, both in our news-flow and in our commercial results.

Financial Results

Our financial performance during 2010 showed the benefit of our successful entry into the Italian PV sector, with revenues increasing from €370,000 to €7.9 million, and net losses falling from €4.2 million to €3.9 million. The 2010 results exclude €3.4 million of revenue which had been contracted in 2010 and expected to be recognised in the year, but which was subject to post-sale conditions which, due to circumstances arising in 2011 from the uncertainty over the new tariff regulations, have not subsequently been fulfilled. The Board is confident that the clarification of the new tariff scheme and related regulations, in line with the proposals currently being indicated by the Italian Government, will allow the sale of the project consents to be completed with the revenue recognised in 2011.

Substantial progress was nonetheless seen during the year, with net losses falling from €2.4 million in the first half to €1.5 million in the second half. This improvement was achieved despite increases in our cost base arising from the new activities and for the start-up of our production structure, exceptional costs relating to the Group's successful fundraising and corporate activity during the year, and no recognition of grant income during the year (2009 grant recognition: €816,000). The Company has however been pursuing a number of grant-funded activities during 2010, and grant income of €450,000 is expected to be recognised in relation to these activities during 2011.

Operating cash outflow was €3.1 million (2009: €2.7 million including grant receipts), excluding proceeds from the placing completed in September 2010, and well within operating losses. Cash balances at the year end improved to €4.4 million (2009: €3.6 million), benefiting from the proceeds of the placing and careful working capital management of the new activities. These cash balances include €3.4 million received in 2010 in relation to the revenues which have been subsequently excluded from the 2010 accounts, for which a corresponding liability has been recorded in 2010. In the light of the regulatory uncertainty and its impact upon the PV sector, we have adopted a prudent approach in our decision not to recognise the revenues for the sale of consents during 2010 against cash received at the time. We will however be meeting with our customers and the local authorities over the next few weeks and we expect to be able to resolve the disputed issues in the short term following these meetings, failing which we will take any necessary legal action to protect the Company's cash position. We will keep the market informed of developments on these matters in due course.

Based upon the expected resumption of EPC projects and consent sales by mid-year, the completion of the 2010 deferred sales (or the sale of these consents to other customers) and the commercialisation of our products, we believe that the Company will be profitable and cash generative for 2011, and that the cash resources of the business are sufficient for its foreseeable requirements.

Outlook

2011 has started well, with strong commercial developments on the product side of the business and satisfactory progress in our PV installation contracts. Market commentators and the Board expect the hiatus caused to the PV sector by the changes to the tariff regime to be temporary, and that stability and normal commercial activities will be restored in the second quarter of the year.

There is considerable political pressure in Italy in favour of the economic, energy security, and environmental benefits generated by the growth of the domestic PV sector, and the recent Japanese disaster in the nuclear industry in conjunction with political unrest in Middle East oil producing countries has served only to underline the necessity for the development of renewable energy resources, and PV energy in particular.

We have entered a number of important partnerships for the development and production of our products, and we look forward to announcing progress on these during the year. The Company is preparing for production and commercial activities through the implementation of the ISO 9001 quality assurance programme which encompasses product quality control as well as organisational structure and procedures. We believe that this will strengthen the Company's management and structure as we continue our progress into full commercialisation.

I would like to thank all our staff for their continued dedication to our success, and look forward to updating our shareholders on our progress in due course.

Chief Executive's Review

Introduction

During 2010 we focused the business on the development of commercial activities in the PV sector, while continuing the technical development and the creation of a production structure for our key technologies in hydrogen generation from water and ethanol, and fuel cell applications.

Photovoltaic Market

During 2010 the Italian PV market grew from an installed base of 1.1 GW to an estimated installed base, including applications for grid connection, of 7.2 GW, in the process becoming the second largest PV market in the world and approaching the government's target of 8GW PV capacity connected by 2020.

The rate of growth of the market greatly exceeded government expectations, and resulted in concerns about the ability of the Italian utility companies to manage the connection of these installations to the grid in a reasonable time, as well as the need to reallocate resources from other renewable incentives to finance PV tariffs beyond the initial 8GW target. In March 2011, the Italian Cabinet approved a legislative decree which terminated the current feed-in tariff regime at the end of May 2011, and indicated that a new tariff scheme would be introduced from 1 June 2011 onwards which would seek to reduce tariffs in line with market conditions and introduce other caps to prevent the over-supply of the sector.

The lack of clarity in relation to the new tariff levels, the mechanism of the caps, and other restrictions on large land-based installations have caused the temporary suspension of project financing by Italian and international banks to new installation projects, causing an outcry from sector participants, as well as from banks, agricultural, economic and environmental lobby groups. In response, the government has announced that it will issue new guidelines shortly, to restore regulatory certainty to the sector.

We believe that the public and political support for the PV sector, which has been a significant source of inward investment and job creation over the past three years, will lead to the reestablishment of a tariff scheme and mechanisms only marginally less attractive than those currently in place, and still more than sufficient to support continuing investor interest in the sector.

During 2010 the Company developed a substantial pipeline of authorisations for PV installation projects of which 17 projects, totalling 15.8 MW, have now received project consent. We strongly believe that regulatory stability will return to the PV sector during the second quarter of 2011, and that this will allow us to recognise the sale of these project consents to our customers during the current year, with a significant benefit to our 2011 financial performance.

Product Review

Our award winning and highly innovative hydrogen generator achieved CE certification during the first half of last year, and has been used at trade fairs and other key industry events to demonstrate practical consumer applications of hydrogen fuel cell technology, such as electric outboard motors, fuel cell electric bikes, and power generators. Our "hydrogen village" demonstration at Viareggio in July 2010 showed a practical demonstration of a PV canopy powering our hydrogen generator, with the hydrogen produced being used to fuel electric bikes and dinghies.

The commercialisation of this system has given rise to a series of important product development partnerships announced after the year end with Claind S.r.l., a high profile Italian electrolyser producer with whom we are developing a 1 m3 electrolyser for industrial and automotive applications. With the Swiss company MES S.A., we entered an agreement for the production of 250W and 500W portable fuel cell power generators, which we will apply also in the development of an integrated hydrogen generator-fuel cell UPS system. The integrated PV canopy developed with Girelli Bruni S.p.A. has also attracted considerable attention from local authority agencies such as Port Authorities and Municipalities and the private sector, and we are developing a commercial version of the system for supply to these customers.

In April 2010 we disclosed the results of tests that we had been conducting on the use of our compact hydrogen generator stack to produce hydrogen onboard a diesel vehicle and to feed this into the engine air intake to accelerate the flame rate of the engine ("diesel enrichment"). These tests indicated an improvement in combustion efficiency that resulted in a consumption saving of up to 17% and a substantial reduction in particulate emissions.

We have pursued this application of our technology during the year, firstly in its water electrolyser form. This technology delivers excellent performance for cars and light commercial vehicles, while we have found that the electrical supply capacity of the engine is inadequate on certain larger truck engines unless a secondary alternator is installed. We have therefore proposed ethanol reforming as a source of hydrogen for larger engine applications, which is the most attractive market opportunity.

Hydrogen may be stripped from ethanol through a reforming reaction incorporating our patented catalysts using no more electrical energy input, even for large trucks, than for a cigarette lighter. The amount of ethanol consumed is approximately 5% of the diesel consumption, and yet this produces a saving of more than three times its own volume in diesel. We recognised that this alternative design for the application is ideally suited for a market such as Brazil, where diesel is scarce and bio-ethanol is cheap and produced in abundance (Brazil is an exporter of bio-ethanol, which is produced from sugar cane that does not compete with food crops). Furthermore, the saving in diesel is achieved from ethanol without drawing power from the diesel engine (as is the case with water-electrolyser based diesel enrichment), so that a gross rather than net saving in fossil fuel is achieved. The adoption of E85 in the US will create another readily addressable market for this innovative application.

Following the development of the application during last year we undertook prototype system tests in Brazil at Decar Motor Sport S.A., a large motor racing company co-owned by Nelson Piquet, the three times F1 world champion driver; and these tests led to the signing of a joint development agreement, announced in February 2011, with a group of Brazilian entrepreneurs led by Nelson Piquet and LAAR, a Brazilian engineering consultancy company. Upon successful completion of the tests in Brazil of the final prototype, currently undergoing testing in Italy, the partners intend to form a joint venture production company for the local production and distribution of the system to the large Brazilian and North American markets.

Acta has continued its activities also in the area of hydrogen production from ammonia cracking. This application uses the Company's low-cost catalysts to reform ammonia at temperatures which are lower than those achieved using commercial, platinum group metals-based catalysts. This application is being pursued through the €1.2 million grant-funded Savia project, together with major partners including EDI S.p.A., an Italian engineering company working for FIAT and Piaggio which built FIAT's Multipla hydrogen fuelled car, and Bigas S.r.l., a Florentine company which produces LPG tanks for cars.

Under this project, the Company's ammonia reactor is being used to strip hydrogen from ammonia, which is then used to accelerate the flame rate in an ammonia-burning internal combustion engine. Although a long-term development project, the Company believes that this application has high commercial potential in India and China, which combine a booming automotive market with limited gasoline infrastructure and availability, and are the world's largest producers of ammonia.

Major Addressable Markets

Our products are designed to address mass market applications in a way that is economically viable and environmentally friendly. The technologies we employ are predominantly based on our precious metal-free catalysts, which offer enormous commercial advantages in terms of low cost, supply abundance and positive economies of scale.

The ethanol reformer diesel enrichment addresses the very substantial and fast growing Brazilian diesel truck market. Brazil has the largest diesel truck market in South America, with a fleet of approximately two million vehicles and internal sales of 170,000 vehicles in 2010 (Source: ANTT, ANFAVEA). Our partner Nelson Piquet is a majority shareholder, together with Qualcomm Inc., of AutoTrac S.A., a Brazilian truck fleet services company that provides satellite tracking and communication systems for a customer base of over 130,000 vehicles. We believe that this will give our Brazilian joint venture significant market access for distribution and support, assisted by the prominence and popularity of our partners to the Brazilian public.

Our diesel enrichment product based on water electrolysis addresses a similar market demand, but in markets where ethanol is not in widespread automotive use. We have seen good commercial demand in Italy and in the UK, primarily for retrofit into vehicles which are out of manufacturer's warranty. We have begun talks also with manufacturers and engine conversion companies to address manufacturer's warranty certification.

Our hydrogen generator addresses the large market demand for fuel cell systems, particularly in light mobility applications. The fuel cell market is forecast to grow to $20 billion by 2020 (Carbon Trust), and we believe that one of the key barriers to the development of this market is the lack of a consumer hydrogen infrastructure. Our compact and low cost hydrogen generator will allow consumers and industrial users to generate their own hydrogen onsite from renewable intermittent energy sources, removing this barrier and facilitating the adoption of mid-sized fuel cell systems. The Company continues to demonstrate its technology at fuel cell and related exhibitions and has received partnership interest in relation to a number of fuel cell applications, including the large commercial market for UPS systems.

Notes to preliminary financial results

1. Earnings per Share

The calculation of basic earnings per share is based upon the net loss attributable to the ordinary shareholders of €3,925,485 (2009: €4,142,067) and weighted average number of shares in issue of 42,285,960 (2009: 40,995,125).

2. In view of its accumulated losses and in accordance with Italian law, the Company is not in a position to make payment of a final dividend (2009: £nil).

3. These financial statements are presented in Euros as that is the currency of the primary economic environment in which the Company operates.

4. Copies of the Company's Annual Report and Accounts will be available from the Company at Via di Lavoria 56/G, 56040 Crespina (PI), Italy. Alternatively this statement and the Annual Report and Accounts will be available to download from the investor relations section on the Company's website at www.actagroup.it.