Notes to the financial information for the half-year ended 31 August 2011

1. Basis of preparation

This consolidated half-yearly financial information, which is condensed and unaudited for the half-year ended 31 August 2011, has been prepared in accordance with the accounting policies which the group expects to adopt in its next annual report and is consistent with those adopted in the consolidated financial statements for the year ended 28 February 2011. These accounting policies are based on the EU-adopted International Financial Reporting Standards ("IFRS") and International Financial Reporting Interpretations Committee ("IFRIC") interpretations that the group expects to be applicable at that time. This consolidated half-yearly information for the half-year ended 31 August 2011 has been prepared in accordance with IAS 34: Interim Financial Reporting, as adopted by the EU and under the historical cost convention.

The information relating to the half-years ended 31 August 2011 and 31 August 2010 is unaudited and does not constitute statutory financial statements as defined in section 434 of the Companies Act 2006. It has, however, been reviewed by the auditors and their report is set out at the end of this document. The comparative figures for the year ended 28 February 2011 have been extracted from the consolidated financial statements, on which the auditors gave an unqualified opinion and did not include a statement under section 498 (2) or (3) of the Companies Act 2006. The annual report and accounts for the year ended 28 February 2011 has been filed with the Registrar of Companies.

The group's financial risk management objectives and policies are consistent with those disclosed in the 2011 annual report and accounts.

The half-yearly report was approved by the board of directors on 28 October 2011.

The half-yearly report is available on Tangent's website, www.tangentplc.com, and is being sent to shareholders. Further copies are available at the Tangent's registered office, 84-86 Great Portland Street, London W1W 7NR.

Going concern

The directors are satisfied that the group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

2. Operating segments

On 1^st March 2011 Tangent revised its business segments as follows:-

Software and communications

This segment includes Tangent Snowball and Tangent Labs.

Design and print

This segment includes Ravensworth and Tangent on Demand.

This disclosure correlates with the information that is presented to the group's chief decision maker, the board of directors, which reviews revenues and operating profits by segment but assets at a consolidated level.

The comparative periods below have been amended to reflect the change in business segments as noted above, this change does not have any impact on previously reported operating profits, net assets or earnings per share of the group.

2. Operating segments (continued)

3. Share options and share-based payment charge

The total share-based payment charge for the period was £15,000 (half-year ended 31 August 2010: £6,000 and year ended 28 February 2011: £17,000) and has been included with operating expenses.

The movements in share options and the corresponding weighted average exercise prices ("WAEP") are summarised below:

For the share options outstanding at 31 August 2011 exercise prices ranged between 1p and 13.25p per share and the weighted average remaining contractual life was 4.23 years.

4. Earnings per share

The calculation of the basic and diluted earnings per share is based on the following:

4. Earnings per share (continued)

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. Tangent has two categories of dilutive potential ordinary shares: share options and shares contingently issuable as consideration for an acquisition.

A calculation is performed for the share options to determine the number of shares that could have been acquired at fair value based on the monetary value of the subscription rights attached to the outstanding share options. The number of shares from this calculation is compared with the number of shares that would have been issued assuming the exercise of the options and the difference is deemed to be the number of dilutive shares attributable to share options.

The estimated number of shares that will be issued in the future as purchase consideration for current subsidiaries is deemed to be the number of dilutive shares issuable as consideration for acquisitions.

5. Property, plant and equipment

During the period the group spent £278,195 on additions to plant, equipment and computers to upgrade production facilities and enhance client services.

6. Dividends

Amounts recognised as distributions to equity holders in the period:

The Tangent employee share ownership trust holds 1,428,340 shares and it has waived its right to receive dividends.

The dividend for the year ended 28 February 2011 was approved by shareholders at the annual general meeting on 30 August 2011 and paid on 21 September 2011 it has therefore been recognised as a liability at 31 August 2011.

7. Provisions

Provisions are for the cash consideration payable for the acquisition of the entire share capital of The DDG Network Limited together with the business and assets of Double D Management LLP.

8. Share Capital

Allotted and fully paid

8. Share Capital (continued)

9. Cash flow from operations

10. Analysis of net funds