Chairman's Statement

As I indicated in my statement in November 2005 that accompanied the final
results for the year ended 30 June 2005, trading in the current year started
well and I am delighted to report that the group's progress continues.

The turnover (which includes our share of the turnover from the SUMO joint
venture) for the six months ended 31 December 2005 of £970,000 is an increase of 30.2 per cent. over the comparative period in 2004 and the retained loss for
the six months ended 31 December 2005 has reduced to £100,000 compared with a loss of £270,000 in the same period last year.

The Water Industry has now started investing a planned £5.5 billion over the
period 2005-2010 (£3 million per day) to improve drinking water, to protect the
environment and to attempt to tackle the issue of pipe leakage, which has been
well publicised over the last few years. The Board also anticipates an increase
in public pressure towards water companies to reduce leakage particularly given
the recent media coverage regarding the application by a water company for
"water scarcity status" which will allow them to apply compulsory metering on
their customers. Consequently, Adien have seen a significant increase in
activity in the water sector and this work will continue in 2006.

Adien's program of diversification has seen them continue to secure prestigious
contracts outside of the water industry. During the period Adien has again
worked in mainland Europe on contracts which are expected to continue into the
Summer of 2006.

Similarly, SUMO has also benefited from the increase in activity in the water
sector and shareholders will see from the accounts that we have consolidated
our first profit from their results. SUMO is now accelerating its aggressive
marketing campaign to secure further growth.

The Technology Division continues to make progress. During the period it has
supported Adien in designing a Ground Penetrating Radar system to find larger
diameter waterpipes which are buried under fields. In addition to MineHawk, the
mine detection programme, which continues on track, the Technology Division is
at an early stage in a number of other encouraging initiatives for the
development of the next phase of the Company's growth.

In summary, trading continues to improve and we continue to look forward to the
future with confidence.

Gordon Watt
Chairman