MTS
Annual Report 2009

Plain-text annual report

www.mobiletornado.com Annual Report and Accounts for the year ended 31 December 2009 MT report & Accounts CVR_aw.indd 1 04/06/2010 14:40 Contents Chairman’s report Directors’ report Report of the independent auditor Consolidated income statement Consolidated statement of comprehensive income Consolidated statement of changes in equity Consolidated balance sheet Consolidated cash flow statement Accounting policies Notes to the financial statements Company balance sheet – prepared under UK GAAP Notes to the Company financial statements Notice of Annual General Meeting Corporate information Page 2 5 11 13 13 14 15 16 17 23 36 37 41 45 Page 1 Chairman’s report Introduction Mobile Tornado Group plc, the leading provider of mobile applications to the enterprise market, announces its results for the twelve month period to 31 December 2009. Financial results I am pleased to report a year of steady progress. Whilst we are yet to see this reflected in the bottom line I am confident that the decisions we took during the year and the initiatives that were launched will start to deliver increasing momentum during 2010. Turnover in the year to 31 December 2009 amounted to £2,340,000 (2008: £466,000). Operating losses before exchange differences reduced significantly to £1,985,000 (2008: £3,494,000). After exchange losses of £424,000 (2008: exchange gain £1,407,000) and net financing costs of £266,000 (2008: £132,000) the loss on ordinary activities before taxation was £2,675,000 (2008: £2,219,000). The revenue for the year was boosted through the £1.9 million sale of 10,000 BB3G phones to InTechnology plc, our exclusive UK partner. The phone was developed in partnership with ZTE, one of the leading mobile phone producers in China and showcases the Mobile Tornado applications suite, which combines Push to Talk, Push to Locate and Push to Alert on an integrated intuitive interface. InTechnology are selling the phone to customers in the UK and have had early successes with NSL, Loomis and a number of local authorities. Mobile Tornado has access to a stock of handsets which are being trialled by customers in Spain, South Africa, Germany, USA, France, Nigeria and Brazil. The response we have had is extremely positive and I expect the phone to assist us greatly as we seek to develop our customer base around the world. The balance of revenues in 2009 comprised license fee revenues from our partners in UK, Germany, Israel and Spain, and professional service fees derived from the deployment of new platforms for partners in South Africa and Canada. Operating expenses in the year were reduced by £700k when compared to the previous period and this reflects our continuing efforts to improve the efficiency of the business. Savings were made through the streamlining of both the technical and sales teams. Operational review During the period we have worked at refining our sales proposition into four key target segments: • • • • Service integrator/Operator – where the regional partner invests in our proprietary server platform, providing a managed service to enterprises, paying us a monthly license fee for every connection. Enterprise – where enterprises have sufficient scale to warrant owning and controlling their own platform, delivering services to their employees. Managed hosted – where we have established our own platforms to be used by partners who do not have the resources to invest in their own. Platforms have been deployed in the UK and Spain and we are in the process of deploying one in the USA. Specialised devices – where we offer a software developer kit to provide access to our API (application protocol interface) to device manufacturers or software integrators so they can access the functionality of our platform directly. Page 2 Chairman’s report Within each target market we made good progress during the period. InTechnology plc are our principal service integrator partner, operating on an exclusive basis in the UK. In addition we have partners in Germany and Israel and during the period signed up further partners in Canada and South Africa. We continue to engage with mobile operators and are currently negotiating with two operators in Israel and India respectively. Our preferred deal structure in all target markets is to secure a monthly license fee for each of the services provided as opposed to the perpetual license fee model which is the preferred deal structure for both of these operators. Where we feel it is appropriate we will sacrifice our desire to build up higher quality revenue streams for the benefits that the perpetual license fee model brings to short-term cashflow. Our plans to launch in the US, which is the biggest PTT market in the world with over 25 million users, continued during the period. We have chosen to establish our own platform in the USA which will be hosted in New York. We have been actively engaged with partners interested in leveraging our software platform into the market and I am pleased to announce today our partnership with Psion Teklogix Inc. The combination of Mobile Tornado software running on Psion Teklogix’s devices eliminates the need for workers to carry a separate mobile handset for Push to Talk in addition to their rugged mobile data capture device. Psion customers will now also be able to track employees in the field with Push to Locate, as well as send instant alerts in the event of an emergency with Push to Alert for improved effectiveness and safety. Under the terms of the agreement, Mobile Tornado will run the infrastructure and platform for the Push-to service for Psion customers. Psion will also resell the software as a white label product under the Psion brand. I am very hopeful that this deal and the interest we have already generated will lead to a meaningful presence in this huge market. We completed the development of our API capability during the period which will now allow companies interested in our product set to incorporate the PTT, PTL or PTA functionality into their own technology platforms. Our first engagement is with a company in Germany that delivers communication solutions into the global transportation sector. They have incorporated PTT into their latest offering and are now in the process of trialling it with three bus companies in Germany. There are many businesses in the world offering solutions to enterprises, particularly in the workforce management sector, where the addition of PTT in particular would add greatly to the overall proposition. The advantage to us is that customer bases are already in place and so our ability to now offer these customers easy access to our technology through these API’s will significantly enhance our market opportunity. We have continually sought to operate the business more efficiently and took the decision in the final quarter of 2009 to transition a large part of the Research and Development function from Israel to the UK and India. A new team of engineers have been recruited in India and we expect to complete the transition process by the end of June 2010. This will have a significant impact on the cost base of the business, with a reduction of approximately £700k per annum, delivering an annualised cost base effective from July 2010 of approximately £1.4 million. Outlook We have executed some major changes to the organisation structure since the year end. Transitioning our Research and Development function from Israel to India and the UK has been a challenge but I am pleased to say that we are nearing a successful conclusion. Centralising our management team in one location will significantly enhance our effectiveness and the shift of resource to a lower cost environment means that we are in a position to reduce the level at which the business becomes profitable. There are a number of market developments that give me confidence that we have a solution that will generate increasing demand over the coming months. The global roll-out of Page 3 Chairman’s report 3G networks continues and with this the reduction in data tariffs that help support the competitive price structure of our solution in the market. There is an acceptance amongst both mobile operators and enterprises that the managed services model is attractive, as in these difficult economic conditions capital expenditure budgets are being reduced or eliminated. There is a high level of interest in our solutions from the developing world, particularly Africa and Latin America. As these nations develop their mobile telecommunications infrastructure they are seeking out applications to suit the needs of their mobile workforces. In addition we are seeing an increasing number of devices being launched with a capability to offer Push to Talk which enhances our ability to penetrate existing customer bases through our API solution. We stand to benefit from these trends and the renewed focus we have on our sales activities has resulted in an increasing number of engagements with partners and customers around the world. I look forward to reporting on the closure of these in the coming months. Peter Wilkinson Chairman 7 June 2010 Page 4 Directors’ report The Directors present their annual report and audited financial statements of the Company and the Group for the year ended 31 December 2009. Principal activity Mobile Tornado is a provider of next generation instant messaging solutions which serve the market of mobile data services in the mobile communication industry. These services include a Group of services generically termed ‘Push to x’ services, of which ‘Push to Talk’ is the most commonly known. Business review The information that fulfils the requirements of the Business Review can be found in the Chairman’s Report on pages 2 to 4 which forms part of the Directors’ report. Results and dividends The Directors are unable to recommend the payment of a dividend in respect of the year ended 31 December 2009 (year ended 31 December 2008: £nil). The Company currently intends to reinvest future earnings to finance the growth of the business. The loss sustained for the year of £2,675,000 (year ended 31 December 2008: £2,219,000) will be deducted from reserves. Share Issues On 28 April 2009, InTechnology plc subscribed for 18,750,000 new non-voting preference shares of 8p each. In addition, the terms attached to the pre-existing 18,750,000 non-voting preferences issued to InTechnology plc in October 2007 were varied so that the same terms attach to all non-voting preference shares. The redemption date for all preference shares is 31 December 2010. Further details of these terms are included in note 12 to the financial statements. Key performance indicators The key performance indicators used by the Board at this stage of the business to monitor performance are revenue and operating expenses. Revenue has increased by 402% and operating expenses have reduced by 23%. Directors The present Directors are detailed below. • • Peter Robert Wilkinson (56) was appointed Non-Executive Chairman on 24 November 2006. Peter is currently Chief Executive of InTechnology plc. Peter was formerly Chairman of Sports Internet Group plc which was sold to BSkyB plc for £301 million in May 2000. He also invented the free ISP model Freeserve, the internet access service which was launched by the Dixons Group plc. Jeremy Mark Fenn (47) is Managing Director and acting Finance Director and was appointed to the Board on 24 November 2006. Jeremy is a qualified chartered accountant and was formerly Chief Executive of Sports Internet Group plc. Following the sale of that business he remained as a Director of Skysports.com until December 2003. Prior to this he was Managing Director of Leeds United Football Club from 1996 to 1999. He is currently a Non-Executive Director of Eco City Vehicles plc, Commensus plc, Web Marketing Group Ltd, Autovip Ltd and Stonerings Ltd. Page 5 Directors’ report • • Richard Mark James (49) was appointed as Director and Company Secretary on 24 November 2006. Richard qualified as a solicitor with Allen & Overy in 1986 and was a Partner at Pinsent Curtis in 1991 before moving to Hammond Suddards as a Partner in 1996. Richard is also a Director and Company Secretary of InTechnology plc. John Paul Swingewood (56) stood down as Executive Chairman of Mobile Tornado on 24 November 2006 to become a Non-Executive Director. John has held senior Director positions with BSkyB plc and BT plc and is currently a Non-Executive Director of Eco City Vehicles plc, Emizon Group Ltd and Swingewood Consulting Ltd. The Directors and their families have the following beneficial interests in the ordinary share capital of the Company: Peter Wilkinson John Swingewood Jeremy Fenn Richard James 31 December 2009 % number 31 December 2008 % number 24,837,725 7,805,511 7,670,396 2,959,870 13.4 4.2 4.1 1.6 24,837,725 7,805,511 7,670,396 2,959,870 13.4 4.2 4.1 1.6 There were no changes in Directors’ interests between 1 January 2010 and 7 June 2010. Third party indemnity insurance is in place for the four Directors above. Details of related party transactions involving Directors of the Company are given in note 20 to the financial statements. Substantial shareholdings At 31 December 2009, InTechnology plc held 92,200,000 shares in the Company representing 49.9% of the issued ordinary share capital. At 31 December 2009, Jorge Pinievsky, a member of the senior management team, held 9,168,624 shares in the Company representing 5.0% of the issued ordinary share capital. There are no other shareholders, other than the Directors detailed above, who hold more than 3% of the Company’s issued share capital. Corporate governance As an AIM listed Group, Mobile Tornado Group plc applies those principles of good governance appropriate to a Group of its size. Audit Committee The Audit Committee is chaired by Peter Wilkinson and its other member is the other Non- Executive Director, John Swingewood. Meetings are also attended, by invitation, by the Executive Directors. This committee normally meets twice during the financial year, around the time of the preparation of the Group’s interim and final results. The committee assists the Board in ensuring that appropriate accounting policies, internal financial controls and compliance procedures are in place. Internal control The Directors acknowledge their responsibility for the Group’s systems of internal control. The Group maintains systems of internal controls, including suitable monitoring procedures, in order to provide reasonable, but not absolute, assurance of the maintenance of proper accounting records and the consequent reliability of the financial information used within the Page 6 Directors’ report business to identify and deal with any problems on a timely basis. The monitoring and control procedures include the specification of defined lines of responsibility and authorisation limits, the delegation of authority, the identification of risks and the continual process of the preparation of, and reporting against, annual budgets, forecasts and strategic plans. Principal risks and uncertainties The management of the business and the nature of the Group’s strategy are subject to a number of risks. The Directors have set out below the principal risks facing the business. The Directors are of the opinion that a thorough risk management process is adopted which involves the formal review of all the risks identified below. Where possible, processes are in place to monitor and mitigate such risks. Product obsolescence Due to the nature of the market in which the Group operates, products are subject to technological advances and as a result, obsolescence. The Directors are committed to the research and development strategy in place, and are confident that the Group is able to react effectively to the developments within the market. Competition The market in which the Group operates is highly competitive. As a result there is a risk of eroding margins and of being unable to meet customers’ expectations. Policies of constant price monitoring and ongoing market research are in place to mitigate such risks. Financial risk management The Group’s financial instruments comprise, principally, cash and short-term deposits and preference shares, and various items, such as trade debtors and trade creditors, arising directly from its operations. The main purpose of these financial instruments is to raise finance for the Group’s operations. The main risks arising from the Group’s financial instruments are currency risk, interest risk and liquidity risk. The Board’s policies for managing these risks are summarised as follows: Currency risk – the Group has no borrowings in foreign currency, and foreign currency liabilities are matched wherever possible by corresponding foreign currency assets. Foreign currency bank accounts are utilised where appropriate. No foreign currency transactions of a speculative nature are undertaken. Interest risk – the Group is exposed to interest rate risk as it invests surplus cash in floating rate deposit accounts. These funds are invested with the objective of maintaining a balance between accessibility of funds and competitive rates of return. Liquidity risk – the Group seeks to ensure sufficient liquidity is available to meet its foreseeable needs. The Board reviews cash flow projections and the headroom position in respect of its cash balances and banking facilities to ensure the Group is adequately funded. Credit risk – the Group’s exposure to credit risk is limited to the carrying amount of its financial assets at the balance sheet date. In respect of trade and other receivables, the Group is not exposed to any significant credit risk exposure to any single counterparty or group of counterparties having similar characteristics. The Group’s customers are generally companies with whom the Group has strong trading relationships with no recent history of default. The Group continually monitors its trade receivables and incorporates this information into its credit risk controls. Page 7 Directors’ report Going concern The Company’s forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Company should be able to operate within the level of its current cash balance, supplemented by additional investment, which has been agreed post year end (as further described in the basis of preparation). On this basis, the Directors consider that the going concern presumption is the correct basis for the preparation of the financial statements. Employees The Group places considerable value on the involvement of its employees and has continued its practice of keeping them informed of matters affecting them as employees and the various factors affecting the performance of the Group. The Directors recognise that continued and sustained improvement in the performance of the Group depends on its ability to attract, motivate and retain employees of the highest calibre. Furthermore, the Directors believe that the Group’s ability to sustain a competitive advantage over the long term depends in a large part on ensuring that all employees contribute to the maximum of their potential. The Group is committed to improving the performance of all employees through development and training. The Group is an equal opportunity employer. The Group’s policies seek to promote an environment free from discrimination, harassment and victimisation and to ensure that no employee or applicant is treated less favourably on the grounds of gender, marital status, age, race, colour, nationality or national origin, disability or sexual orientation or is disadvantaged by conditions or requirements, which cannot objectively be justified. Entry into, and progression within the Group, is solely determined on the basis of work criteria and individual merit. The Group continues to give full and fair consideration to applications for employment made by disabled persons, having regard to their respective aptitudes and abilities. The policy includes, where practicable, the continued employment of those who may become disabled during their employment and the provision of training and career development and promotion, where appropriate. Share schemes Share ownership is at the heart of the Group’s remuneration philosophy and the Directors believe that the key to the Group’s future success lies in a motivated workforce holding a stake in the Company. Details of share options granted are set out in note 14 to the financial statements. Pension costs The Group does not operate a pension scheme but makes contributions to the personal pension schemes of some of its employees. These contributions are charged against profits. Research and development The Group continues to undertake research and development of new products with the objective of increasing future profitability. The cost to the Group is charged to the profit and loss account as incurred. Policy and practice on payment of creditors It is the Group’s policy to agree terms and conditions for its business transactions with its suppliers. The Group seeks to abide by the payment terms agreed with suppliers whenever it Page 8 Directors’ report is satisfied that the supplier has provided the goods or services in accordance with the agreed terms and conditions. In the year ended 31 December 2009 average creditor days for the Group and Company were 38 days (2008: 31 days) and 35 days (2008: 33 days) respectively. Environment The Group recognises the importance of environmental responsibility. The nature of its activities has a minimal effect on the environment but where they do, the Group acts responsibly and is aware of its obligations at all times. Statement of Directors’ responsibilities The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare financial statements in accordance with United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) for the Parent Company and International Financial Reporting Standards as adopted by the European Union (IFRSs) for the Group. The financial statements are required by law to give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. The financial statements are required by law to give a true and fair view of the state of affairs of the Group and Parent Company and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to: • • • • select suitable accounting policies and then apply them consistently; make judgments and estimates that are reasonable and prudent; state whether applicable UK Accounting Standards/IFRSs have been followed, subject to any material departures disclosed and explained in the financial statements; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. In so far as each of the Directors is aware: • • there is no relevant audit information of which the Company’s auditors are unaware; and the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Page 9 Directors’ report Annual General Meeting The next AGM of the Company will be held on 30 June 2010. Details of the business to be proposed at the AGM are contained within the Notice of Meeting, which is set out on pages 41 to 44. Independent auditor Grant Thornton UK LLP have indicated their willingness to continue in office and a resolution proposing that they be reappointed as independent auditor and authorising the Directors to fix their remuneration will be proposed at the Annual General Meeting. By order of the Board Jeremy Fenn Managing Director 7 June 2010 Page 10 Report of the independent auditor to the members of Mobile Tornado Group plc For the year ended 31 December 2009 We have audited the Group and Parent Company financial statements (the ‘financial statements’) of Mobile Tornado Group plc for the year ended 31 December 2009 which comprise the principal accounting policies, the Consolidated income statement, the Consolidated statement of comprehensive income, the Consolidated statement of changes in shareholders’ equity, the Consolidated and Parent Company balance sheets, the Consolidated cash flow statement and notes to the financial statements. The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial reporting framework that has been applied in the preparation of the Parent Company financial statements is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Companys’ members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of Directors and auditors As explained more fully in the Directors’ Report, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors. Scope of the audit of the financial statements A description of the scope of an audit of financial statements is provided on the APB’s website at www.frc.org.uk/apb/scope/UKNP. Opinion on financial statements In our opinion: • • • • the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2009 and of the Group’s loss for the year then ended; the Group financial statements have been properly prepared in accordance with IFRS as adopted by the European Union; the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and the financial statements have been prepared in accordance with the requirements of the Companies Act 2006. Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information given in the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements. Page 11 Report of the independent auditor to the members of Mobile Tornado Group plc For the year ended 31 December 2009 Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: • • • • adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or the Parent Company financial statements are not in agreement with the accounting records and returns; or certain disclosures of Directors’ remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit. Andrew Wood Senior Statutory Auditor for and on behalf of Grant Thornton UK LLP Statutory Auditor Chartered Accountants Leeds 7 June 2010 Page 12 Consolidated income statement For the year ended 31 December 2009 Continuing operations Revenue Cost of sales Gross profit Operating expenses Exchange differences Depreciation and amortisation expense Group operating loss Finance costs Finance income Loss before tax Income tax expense Loss for the year Attributable to: Equity holders of the parent Loss per share (pence) Basic and diluted Year ended 31 December 2009 £’000 Year ended 31 December 2008 £’000 Note 2 2,340 (1,836) 504 (2,358) (424) (131) (2,409) (268) 2 (2,675) – (2,675) 466 (48) 418 (3,058) 1,407 (854) (2,087) (153) 21 (2,219) – (2,219) (2,675) (2,219) (1.45) (1.20) 3 4 4 5 6 The accompanying accounting policies and notes form an integral part of these financial statements. Consolidated statement of comprehensive income For the year ended 31 December 2009 Loss for the period Other comprehensive income Exchange differences on translation of foreign operations Total comprehensive income for the period Year ended 31 December 2009 £’000 Year ended 31 December 2008 £’000 (2,675) (2,219) 964 (1,711) (2,683) (4,902) Page 13 Consolidated statement of changes in equity For the year ended 31 December 2009 Reverse Share Share acquisition Merger Translation Retained capital premium reserve reserve reserve earnings £’000 £’000 £’000 £’000 £’000 £’000 Total equity £’000 Balance at 1 January 2008 3,689 4,449 (7,620) 10,938 (434) (13,093) (2,071) Equity settled share-based payments Issue of share capital Transactions with owners Loss for the year Exchange differences on translation of foreign operations Total comprehensive income for the year – 10 10 – – – – – – – – – – – – – – – – – – – – – – – – – (29) – (29) 10 (29) (19) (2,219) (2,219) (2,683) – (2,683) (2,683) (2,219) (4,902) Balance at 31 December 2008 3,699 4,449 (7,620) 10,938 (3,117) (15,341) (6,992) Reverse Share Share acquisition Merger Translation Retained capital premium reserve reserve reserve earnings £’000 £’000 £’000 £’000 £’000 £’000 Total equity £’000 Balance at 1 January 2009 3,699 4,449 (7,620) 10,938 (3,117) (15,341) (6,992) Equity settled share-based payments Transactions with owners Loss for the year Exchange differences on translation of foreign operations Total comprehensive income for the year – – – – – – – – – – – – – – – – – – – – – – – 12 12 12 12 (2,675) (2,675) 964 – 964 964 (2,675) (1,711) Balance at 31 December 2009 3,699 4,449 (7,620) 10,938 (2,153) (18,004) (8,691) Page 14 Consolidated balance sheet As at 31 December 2009 Assets Non-current assets Intangible assets Property, plant & equipment Available-for-sale investments Current assets Trade and other receivables Cash and cash equivalents Liabilities Current liabilities Trade and other payables Borrowings Net current liabilities Non-current liabilities Trade and other payables Borrowings Net liabilities Shareholders’ equity Share capital Share premium Reverse acquisition reserve Merger reserve Share option reserve Foreign currency translation reserve Retained earnings Total equity Note 2009 £’000 2008 £’000 7 8 9 10 11 12 11 12 13 13 – 44 – 44 146 160 306 106 80 101 287 310 206 516 (3,112) (3,000) (5,806) (2,911) – (2,395) (2,929) – (8,691) (3,384) (1,500) (6,992) 3,699 4,449 (7,620) 10,938 46 (2,153) (18,050) (8,691) 3,699 4,449 (7,620) 10,938 34 (3,117) (15,375) (6,992) The financial statements on pages 13 to 35 were approved by the Board of Directors on 7 June 2010 and were signed on its behalf by: Jeremy Fenn Managing Director 7 June 2010 Company Number: 5136300 Page 15 Consolidated cash flow statement For the year ended 31 December 2009 Note Year ended Year ended 31 December 31 December 2008 £’000 2009 £’000 Operating activities Cash used in operations 15 (1,526) (1,609) Net cash used in operating activities (1,526) (1,609) Investing activities Purchase of property, plant & equipment Interest received Interest paid Net cash used in investing activities Financing Net proceeds from issue of ordinary share capital Issue of preference shares Net cash inflow from financing Effects of exchange rates on cash and cash equivalents Net decrease in cash and cash equivalents in the period Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period (5) 1 – (4) – 1,500 1,500 (16) (46) 206 160 (149) 21 (3) (131) 10 – 10 52 (1,678) 1,884 206 Page 16 Accounting policies 1 Summary of significant accounting policies The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. 1.1 Basis of preparation The consolidated financial statements have been prepared in accordance with applicable International Financial Reporting Standards as adopted by the EU. During the year the Group has applied IAS 1 Presentation of Financial Statements (Revised 2007). IAS 1 Presentation of Financial Statements (Revised 2007) requires presentation of a comparative balance sheet as at the beginning of the first comparative period, in some circumstances. Management considers that this is not necessary this year because the 2008 balance sheet is the same as that previously published. The adoption of IAS 1 Presentation of Financial Statements (Revised 2007) has introduced a number of terminology changes (including titles for the primary statements) and has resulted in a number of changes in presentation and disclosure. The revised standard has had no impact on the reported results or financial position of the Group. The Group has elected to present the ‘Statement of comprehensive income’ in two statements: the ‘Income statement’ and a ‘Statement of comprehensive income’. Going concern The stage of development of the business and the current economic conditions create uncertainty particularly over (a) the level of demand for the Company’s products; (b) the exchange rate between sterling and US dollar and thus the consequence for the value of revenue and (c) the requirement for funding in the foreseeable future. The Company’s forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Company should be able to operate within the level of its current cash balance, supplemented by the additional investment detailed below, which has been agreed post year end with InTechnology plc. InTechnology plc has agreed to provide an unsecured loan of £450,000. The loan will be advanced in six equal stages against specific performance criteria which the Board has every expectation of delivering against. Significant accounting estimates and judgements The preparation of these financial statements requires management to make estimates and judgements that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue during the reporting period. Actual results could differ from these estimates. The key sources of estimation at the balance sheet date are: Share options – Share-based payments are dependent on estimates of the number of shares which are expected to vest. Intellectual property – the Group tests annually whether intellectual property has suffered any impairment. This calculation requires the use of estimates. Page 17 Accounting policies 1.2 Basis of consolidation The Group financial statements consolidate those of the Company and its subsidiary undertakings at 31 December 2009. A subsidiary is an entity controlled by the Group. Control is achieved where the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Acquisitions of subsidiaries are dealt with using the acquisition method of accounting except for the reverse takeover transaction detailed below. The acquisition method of accounting involves the recognition at fair value of all identifiable assets and liabilities, including contingent liabilities, of the subsidiary at the acquisition date regardless of whether or not they were recorded in the financial statements of the subsidiary prior to acquisition. On initial recognition, the assets and liabilities of the subsidiary are included in the consolidated balance sheet at their fair values, which are also used as the bases for subsequent measurement in accordance with the Group’s accounting policies. Goodwill is stated after separating out identifiable intangible assets. Any difference between the fair value of assets acquired and the consideration paid is treated as goodwill in the consolidated balance sheet. The results of subsidiaries are included from the date that control commences to the date that control ceases. On 31 October 2009, the trade and net assets of Mobile Tornado International Ltd were transferred to Mobile Tornado Group plc at book value. Further details of the accounting treatment are disclosed in the Company investment note on page 38. 1.3 Intangible assets Acquired intellectual property Intellectual property acquired separately and as part of a business combination is capitalised at cost and fair value as at the date of acquisition. Management must estimate the expected useful live of any intellectual property and charge amortisation accordingly. The useful life of the acquired intellectual property is estimated to be 5 years. Residual values and useful lives are reviewed at each reporting date. In addition, they are subject to impairment testing as described below. Impairment testing of intangible assets and property, plant and equipment For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash- generating unit level. Cash-generating units to which intangible assets have been allocated are tested for impairment at least annually. All other individual assets or cash- generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s or cash generating unit’s carrying amount exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from each asset or cash- generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. The data used for impairment testing procedures are directly linked to the Group’s latest approved budget, adjusted as necessary to exclude the effects of future reorganisations and asset enhancements. Discount factors are determined individually for each asset or cash-generating unit and reflect their respective risk profiles as assessed by management. An impairment charge is reversed if the asset or cash-generating unit’s recoverable amount exceeds its carrying amount. Page 18 Accounting policies Research and development Research expenditure, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is charged to income in the year in which it is incurred. Internal development expenditure, whereby research findings are applied to a plan for the production of new or substantially improved products or processes, is charged to income in the year in which it is incurred unless it meets the recognition criteria of IAS 38 ‘Intangible Assets’. Measurement and other uncertainties generally mean that such criteria are not met. Where, however, the recognition criteria are met, intangible assets are capitalised and amortised over their useful economic lives from product launch. Intangible assets relating to products in development are subject to impairment testing at each balance sheet date or earlier upon indication of impairment. Any impairment losses are written off immediately to income. 1.4 Revenue Recognition Revenue comprises the fair value for the sale of licences, services and goods, excludes inter-company sales and value-added taxes and represents net invoice value less estimated rebates, returns and settlement discounts. Licence and service revenues are recognised over the period to which the licence and services relate. Unrecognised license and service revenues and associated costs of sale are included as deferred income and deferred cost respectively in the balance sheet. The Group only recognises revenue on the sale of equipment once any obligation to install such equipment has been completed. 1.5 Interest Interest is recognised on a time-proportion basis using the effective interest method. 1.6 Employee benefits Pension obligations The Group does not operate a pension scheme but makes contributions to the personal schemes of some of its employees. These contributions are charged to the income statement. 1.7 Share-based payments The Group operates equity-settled share-based remuneration plans for its employees. The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair value of the options granted is measured using the Black-Scholes pricing model, which takes into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest except where variations are due only to share prices not achieving the threshold for vesting. 1.8 Foreign currency translation The consolidated financial statements are presented in UK Sterling (GBP £), which is also the functional currency of the Parent Company. Foreign currency transactions are translated into the functional currency of the respective Group entity, using the exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the Page 19 Accounting policies settlement of such transactions and from the remeasurement of monetary items at year-end exchange rates are recognised in profit or loss. Non-monetary items measured at historical cost are translated using the exchange rates at the date of the transaction (not retranslated). Non-monetary items measured at fair value are translated using the exchange rates at the date when fair value was determined. In the Group’s financial statements, all assets, liabilities and transactions of Group entities with a functional currently other than the CU (the Group’s presentation currency) are translated into CU upon consolidation. The functional currency of the entities in the Group have remained unchanged during the reporting period. On consolidation, assets and liabilities have been translated into CU at the closing rate at the reporting date. Income and expenses have been translation into the Group’s presentation currency at the average rate over the reporting period. Exchange differences are charged/credited to over comprehensive income and recognised in the currency translation reserve in equity. On disposal of a foreign operation, the cumulative translation differences recognised in equity are reclassified to profit or loss and recognised as part of the gain or loss on disposal. Goodwill and fair value adjustments arising on the acquisition of a foreign entity have been treated as assets and liabilities of the foreign entity and translated into CU at the closing rate. 1.9 Taxation The charge for taxation is based on the profits for the year and takes into account taxation deferred because of temporary differences between the treatment of certain items for taxation and for accounting purposes. Temporary differences arise from the inclusion of profits and losses in the accounts in different periods from which they are recognised in tax assessments and primarily arise as a result of the difference between tax allowances on property, plant & equipment and the corresponding depreciation charge. Full provision is made for the tax effects of these differences using tax rates substantively enacted at the balance sheet date. No provision is made for unremitted earnings of foreign subsidiaries where there is no commitment to remit such earnings. Similarly, no provision is made for temporary differences relating to investments in subsidiaries since realisation of such differences can be controlled and is not probable in the foreseeable future. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. 1.10 Property, plant & equipment Property, plant and equipment is stated at historical cost less depreciation. The Group’s policy is to write off the difference between the cost of all property, plant and equipment and their residual value on a straight line basis over their estimated useful lives as follows: Office equipment 3 years Computer equipment 3 years Reviews are made annually of the estimated remaining lives and residual values of individual productive assets, taking account of commercial and technological obsolescence as well as normal wear and tear, and adjustments are made where Page 20 Accounting policies appropriate. All individual assets are reviewed for impairment when there are indications that the carrying value may not be recoverable. 1.11 Equity Equity comprises the following: • • “Share capital” represents the nominal value of equity shares. “Share premium” represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses of the share issue. • “Reverse acquisition reserve” represents the difference between the required total of the Group’s equity instruments and the reported equity of the legal parent. • “Merger reserve” represents the difference between the nominal value of the share capital issued by the Company and their fair value at 7 March 2006, the date of the acquisition of Mobile Tornado International Ltd. • “Share option reserve” represents equity-settled share-based employee remuneration until such share options are exercised. • “Foreign currency translation reserve” represents the differences arising from translation of investments in overseas subsidiaries. • “Retained earnings” represents retained profits. 1.12 Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. 1.13 Financial assets – loans and receivables Financial assets comprise trade receivables and cash and cash equivalents. Financial assets are recognised in the Group’s consolidated balance sheet when the Group becomes a party to the contractual provisions of the instrument. Loans and receivables are measured at initial recognition at fair value and are subsequently recorded at amortised cost using the effective interest method. Appropriate allowances for estimated irrecoverable amounts are recognised in the income statement when there is objective evidence that the asset is impaired. 1.14 Financial liabilities Financial liabilities are obligations to pay cash or other financial assets and comprise trade payables and borrowings. Financial liabilities are recognised in the Group’s consolidated balance sheet when the Group becomes a party to the contractual provisions of the instrument. They are subsequently recorded at amortised cost using the effective interest method. Trade payables are measured at initial recognition at fair value. Changes in fair value are recognised in the income statement. Borrowings are initially recorded at fair value and then subsequently recorded at amortised cost using the effective interest method. Page 21 Accounting policies 1.15 Deferred consideration Deferred consideration arising on acquisition of intellectual property is held as a creditor in the balance sheet until such time as those amounts are paid. 1.16 Investments Investments are classified as available-for-sale financial assets. All financial assets within this category are initially measured at historic cost and subsequently at fair value, with changes in value recognised in equity, through the statement of changes in equity. Gains and losses arising from investments classified as available-for-sale are recognised in the income statement when they are sold or when the investment is impaired. 1.17 Standards and interpretations not yet applied The following standards and interpretations currently in issue but not effective for accounting periods commencing on 1 January 2009 and which have not been applied in the 2009 consolidated financial statements are: • • • IFRS 9 Financial Instruments (effective 1 January 2013) IAS 24 (Revised 2009) Related Party Disclosures (effective 1 January 2011) Improvements to IFRSs 2009 (various effective dates, earliest of which is 1 July 2009, but mostly 2010) The above is not an exhaustive list but represents those most relevant to the Group. The standards are expected to have an impact on presentation only. Page 22 Notes to the financial statements For the year ended 31 December 2009 2 Segmental analysis The Group presents its results in accordance with internal management reporting information. Under IFRS 8, the Group has only one operating segment. Therefore the results presented in the income statement are the same as those required under IFRS 8, save for the year end entry of IFRS 2 share option charge of £12,000 (year ended 31 December 2008: £29,000 credit). Revenue is reported by geographical location of customers. Non-current assets are reported by geographical location of assets. Year ended At 31 December 31 December 2009 Revenue Non-current assets £’000 £’000 2009 UK Europe North America South America Middle East Africa Asia/Pacific Total 2,022 153 56 5 39 65 – 2,340 18 – – – 26 – – 44 Year ended 31 December 2008 Revenue £’000 – 30 83 153 98 76 26 466 At 31 December 2008 Non-current assets £’000 – 246 – – 41 – – 287 Total revenue comprises £2,047,000 relating to the sale of goods and £293,000 relating to the sale of services. Details of sales made to InTechnology plc, a large customer in the period, are detailed in the related party note. 3 Loss for the year Year ended Year ended 31 December 31 December 2008 £’000 2009 £’000 Loss on ordinary activities before taxation is stated after charging/(crediting): Staff costs (note 17) Depreciation of owned property, plant & equipment (note 8) Amortisation of intangible assets (note 7) Other operating lease rentals Net exchange loss/(gain) 1,445 34 97 202 424 1,861 161 693 248 (1,407) Page 23 Notes to the financial statements For the year ended 31 December 2009 Auditor remuneration During the year the Group obtained the following services from the Group’s auditor at costs as detailed below: Year ended Year ended 31 December 31 December 2008 £’000 2009 £’000 Fees payable to the Company’s auditor for the audit of the Company’s annual accounts Fees payable to the Company’s auditor and its associates for other services: The audit of the Company’s subsidiaries pursuant to legislation Tax services Other services pursuant to legislation Total 4 Net financial expenses 19 3 4 2 28 20 15 3 2 40 Year ended Year ended 31 December 31 December 2008 £’000 2009 £’000 Interest expense: – finance charge on preference shares – other interest payable Finance costs Finance income: – bank interest receivable – other interest receivable Finance income Net finance costs 5 Tax Factors affecting the tax charge for the year (268) – (268) – 2 2 (266) (150) (3) (153) 21 – 21 (132) Year ended Year ended 31 December 31 December 2008 £’000 2009 £’000 Loss before tax At standard rate of corporation tax of 28% (2008: 28%) (2,675) (749) (2,219) (621) Effects of: Amortisation of intangible assets Expenses not deductible for tax purposes Un-utilised tax losses Total charge for the year 37 – 712 – 194 – 427 – The most appropriate tax rate for the Group is considered to be 28% (2008: 28%), the standard rate of profits tax in the UK which is the primary source of revenue for the Group. Page 24 Notes to the financial statements For the year ended 31 December 2009 Deferred Tax At 31 December 2009, the Group had accumulated tax losses of £16,080,000 (31 December 2008: £14,326,000) which are available for offset against future trading profits of certain Group operations, subject to agreement with the relevant tax authorities. No deferred tax asset has been recognised in respect of these losses given the level of uncertainty over their recoverability. 6 Loss per share Basic loss per share is calculated by dividing the loss attributable to ordinary shareholders of £2,675,000 (2008: £2,219,000) by the weighted average number of ordinary shares in issue during the year of 184,953,708 (2008: 184,503,773). The adjusted basic loss per share has been calculated to provide a better understanding of the underlying performance of the Group as follows: Year ended 31 December 2009 Basic and diluted (Loss)/ earnings (Loss)/ (Loss)/ earnings earnings per share (Restated) Year ended 31 December 2008 Basic and diluted (Loss)/ earnings per share (Restated) pence £’000 £’000 pence Loss attributable to Ordinary shareholders Amortisation of goodwill Adjusted basic loss per share (2,675) 97 (2,578) (1.45) 0.05 (1.40) (2,219) 693 (1,526) (1.20) 0.38 (0.82) The loss attributable to ordinary shareholders and the weighted average number of ordinary shares for the purpose of calculating the diluted earnings per ordinary share are identical to those used for basic earnings per ordinary share. This is because the exercise of share options is not dilutive under the terms of IAS 33. Page 25 Notes to the financial statements For the year ended 31 December 2009 7 Intangible assets Cost At 1 January 2008 Exchange Adjustments At 31 December 2008 Exchange Adjustments At 31 December 2009 Amortisation At 1 January 2008 Charge for the year Exchange Adjustments At 31 December 2008 Charge for the year Exchange Adjustments At 31 December 2009 Net book amount at 31 December 2009 Net book amount at 31 December 2008 8 Property, plant & equipment Office Computer Leasehold Equipment Equipment Improvement £’000 £’000 £’000 Cost At 1 January 2008 Additions Disposals Exchange Adjustments At 31 December 2008 Additions Exchange Adjustments At 31 December 2009 Accumulated depreciation At 1 January 2008 Charge for the year Impairment charge Exchange Adjustments At 31 December 2008 Charge for the year Exchange Adjustments At 31 December 2009 13 1 – 4 18 1 (1) 18 1 2 – 1 4 1 – 5 Net book amount at 31 December 2009 Net book amount at 31 December 2008 13 14 Page 26 272 148 (26) 129 523 4 (52) 475 197 29 130 110 466 33 (47) 452 23 57 8 – – 3 11 – (1) 10 1 – – 1 2 – – 2 8 9 Purchased Intellectual Property £’000 3,208 1,028 4,236 (375) 3,861 2,486 693 951 4,130 97 (366) 3,861 – 106 Total £’000 293 149 (26) 136 552 5 (54) 503 199 31 130 112 472 34 (47) 459 44 80 Notes to the financial statements For the year ended 31 December 2009 9 Investments At 1 January 2009 Write down of carrying value in Jukata investment At 31 December 2009 The investment is classified as available for sale in accordance with IAS 39. 10 Trade and other receivables £’000 101 (101) – Trade receivables Less: provision for impairment of trade receivables Trade receivables – net Other receivables Prepayments and accrued income Deferred cost of sales Current portion The age of the Group’s year end past due receivables is as follows: Impaired Over 6 months Not impaired Less than 3 months 2009 £’000 2008 £’000 55 – 55 52 39 – 146 146 252 (181) 71 66 156 17 310 310 2009 £’000 2008 £’000 – – 55 55 181 181 71 71 The individually impaired receivables relate to customers in unexpectedly difficult economic circumstances. The overdue receivables against which no provision has been made relate to a number of customers for whom there is no recent history of default or any other indication that settlement will not be forthcoming. The carrying amounts of the Group’s receivables are all denominated in US dollar. The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not hold any collateral as security. Page 27 Notes to the financial statements For the year ended 31 December 2009 Movement on the Group’s provision for impairment of trade receivables are as follows: At 1 January 2009/1 January 2008 Provision for receivables impairment Receivables written off during the year as uncollectable Exchange differences The other classes of receivables do not contain impaired assets. 11 Trade and other payables Trade payables Accruals Social security and other taxes Other creditors Deferred income Deferred consideration 2009 £’000 181 – (166) (15) – 2009 £’000 153 653 91 304 1,757 3,083 6,041 2008 £’000 91 61 – 29 181 2008 £’000 257 530 134 398 1,488 3,488 6,295 Less non-current portion: deferred consideration Current portion (2,929) 3,112 (3,384) 2,911 The deferred consideration arose on the purchase of intellectual property from Tersync Ltd and represents a royalty payable on future sales of Push to Talk related products by Mobile Tornado, payable in part consideration for the acquisition of the rights to the technology underlying such product. The royalty is payable quarterly on any relevant sales (on a cash receipts basis) as follows: (i) 50% of the first US$200,000 relevant sales. (ii) 15% of any additional relevant sales, subject to any related cumulative royalty payments being capped at a maximum of US$5.3 million. Direct reseller and other third party costs may be deducted in arriving at these royalty payments, subject to such costs not exceeding 10% of the relevant sales. The deferred consideration is secured by a charge over the intellectual property of the Mobile Tornado Group. The deferred income balance includes an amount of £1,723,000 (2008: £1,171,000) received from InTechnology plc in respect of 12 month licenses that had not been brought into use at the balance sheet date. Page 28 Notes to the financial statements For the year ended 31 December 2009 12 Borrowings, other financial liabilities and other financial assets Preference shares Deferred consideration Total borrowings Maturity analysis In one year or less Between one and two years Between two and five years Group 2009 £’000 3,000 3,083 6,083 2009 £’000 3,154 1,873 1,056 6,083 2008 £’000 1,500 3,488 4,988 2008 £’000 104 2,998 1,886 4,988 The following additional terms apply to all non-voting preference shares: The non-voting preference shares carry a cumulative annual coupon of 10%. The Company may, at any time on not less than 10 business days’ notice in writing to the holders of preference shares, redeem, in multiples of not less than 6,250,000 preference shares, such total number of preference shares as is specified in such notice. If all or some of the preference shares are not redeemed by 31 December 2010, a holder of preference shares may from that date give to the Company notice in writing of the conversion of all or some of his preference shares. Each preference share shall convert into one fully paid ordinary share. Not less than 10 business days’ prior to the sale of a controlling interesting in the Company, the Company shall notify in writing the preference shareholders of such sale. Following receipt of a sale notice, a preference shareholder may: (a) elect to convert all or some of his preference shares into ordinary shares; or (b) elect not to convert any of his preference shares. Holders of preference shares not converted pursuant to the above may at anytime from the date of a sale give to the Company a conversion notice in respect of the conversion of all or some of the preference shares held by such shareholder. Non-voting preference shares not redeemed or converted will continue to be afforded the existing rights under the Articles until such time as they are redeemed or converted. Financial risks The main financial risks faced by the Group include interest rate risk, liquidity risk and foreign currency risk. The Board reviews and agrees policies for managing each of these risks. The Group’s financial instruments comprise cash, liquid resources and various items, such as debtors and creditors that arise directly from its operations. It is, and has been throughout the year under review, the Group’s policy that no trading in financial instruments shall be Page 29 Notes to the financial statements For the year ended 31 December 2009 undertaken. The year end position reflects these policies and there have been no changes in policies or risks since the year end. Financial asset returns are maximised by ongoing review of the Group’s cash flow requirements. Any funds surplus to short-term working capital requirements are placed on interest bearing deposit. Interest rate risk profile of financial assets The interest rate profile of the financial assets of the Group comprise cash of £160,000 (2008:£206,000) as follows: Currency Sterling US dollar Euro Israel Shekel Total Floating rate 31 December 31 December 2008 £’000 2009 £’000 91 13 45 11 160 48 98 26 34 206 The sterling, US dollar and euro financial assets relate to cash at bank and bear interest based on GBP LIBOR, US dollar LIBOR and EURIBOR respectively. There are no fixed rate financial assets (2008: £nil). Interest rate risk profile of financial liabilities The interest rate profile of the financial liabilities of the Group is as follows: Fixed rate 10% preference shares Total Currency risk Fixed 31 December 31 December 2008 £’000 2009 £’000 3,000 3,000 1,500 1,500 The table below shows the extent to which Group companies have monetary assets and liabilities in currencies other than their local currency. Functional currency of operation: Sterling US Dollar (net liabilities)/net assets Euro (net liabilities) Total Functional currency of operation: Euro US Dollar liabilities (net) Total 31 December 31 December 2008 £’000 2009 £’000 (3,162) (48) (3,210) 6,548 – 6,548 – – (10,020) (10,020) Page 30 Notes to the financial statements For the year ended 31 December 2009 Sensitivity analysis Financial assets and liabilities are sensitive to movements in interest rates and foreign exchange rates. A 10% movement in exchange rates would result in a charge or credit to profit and equity of £280,000 (2008: £228,000). A 1% movement in interest rates would result in a charge or credit to profit and equity of £2,000 (2008: £2,000). Capital management The Group’s capital management objectives are: To ensure the Group’s ability to continue as a going concern; and To provide and adequate return to shareholders. These objectives are maintained by pricing products and services commensurately with the level of risk. The Group’s goal in capital management is to maintain adequate cash balances with the minimum necessary borrowing. There are no externally imposed capital requirements during the period covered by the financial statements. In accordance with the objectives and goals, a loan facility was completed after the year end as referred to in the basis of preparation section of the accounting policies. Summary of the Group’s financial assets and liabilities as defined in IAS 39 ‘financial instruments: recognition and measurement’ Current assets – loans and receivables Trade and other receivables Cash and cash equivalanets Current liabilities – held at amortised cost Trade and other payables Borrowings Non-current liabilities – held at amortised cost Trade and other payables Borrowings Net financial assets and liabilities 31 December 31 December 2008 £’000 2009 £’000 107 160 267 (3,021) (3,000) (6,021) (2,929) – (2,929) (8,683) 153 206 359 (2,777) – (2,777) (3,384) (1,500) (4,884) (7,302) The Directors consider that the fair value of financial assets and liabilities equates to the carrying value for both 2009 and 2008. Page 31 Notes to the financial statements For the year ended 31 December 2009 13 Share capital and share premium Number of shares ’000 Share captital £’000 Share premium £’000 At 1 January 2008 Issue of shares As at 31 December 2008 and 2009 184,431 522 184,953 3,689 10 3,699 4,449 – 4,449 Total £’000 8,138 10 8,148 The total authorised number of ordinary shares is 475 million (2008: 475 million) with a par value of 2p per share (2008: 2p per share). Non-voting preference shares At 1 January 2009 Issue of preference shares of 8p each As at 31 December 2009 Number of shares ’000 18,750 18,750 37,500 Value £’000 1,500 1,500 3,000 The above preference shares are classified as debt and therefore shown within creditors. 14 Share-based payments The Group has a share option scheme for certain employees and Directors. Options are exercisable at a price equal to the average market price of the Company’s shares on the date of grant. The vesting period is usually two to three years. The options are settled in equity. During the year options were granted for an aggregate of 4,781,000 ordinary shares. 1,231,000 options were granted on 2 February 2009 as replacement options for those that had expired at 31 December 2008. The terms of this grant were the same as those that had expired such that all options were immediately vested. A further 3,550,000 options were granted on 2 February 2009. The fair value of this option award was calculated using the Black-Scholes option-pricing model, the inputs into which were: Share price at grant date (pence) Exercise price (pence) Expected volatility Risk-free rate Expected time to exercise 3,550,000 shares 5.0 5.0 14% 1% 2.0 years Page 32 Notes to the financial statements For the year ended 31 December 2009 A reconciliation of option movements over the year to 31 December 2009 is shown below: 2009 2008 Weighted average exercise price pence 5.0 4.0 – – – 4.3 5.0 Number ’000 2,000 4,781 – – – 6,781 667 Weighted average exercise price pence 3.8 5.0 5.0 2.0 2.0 5.0 5.0 Number ’000 6,062 2,000 (3,600) (323) (2,139) 2,000 267 Outstanding at 1 January 2009/2008 Granted Forfeited Exercised Expired Outstanding at 31 December Exercisable at 31 December The closing mid-market share price on 2 June 2010 was 4.25 pence. The weighted average remaining contractual life of the share options outstanding at 31 December 2009 was 9.0 years. The total charge for the year relating to employee share-based payment plans was £12,000 (2008: £29,000 credit), all of which related to equity-settled share-based payment transactions. 15 Cash used in operations Year ended Year ended 31 December 31 December 2008 £’000 2009 £’000 Loss before taxation (2,675) (2,219) Adjustments for: Depreciation and impairment Amortisation of non-financial assets Write down of investment Share based payment (credit)/charge Net finance costs Changes in working capital Decrease in trade and other receivables Increase/(decrease) in trade and other payables Net cash used in operations 34 97 101 12 266 196 443 (1,526) 161 693 – (29) 132 594 (941) (1,609) Page 33 Notes to the financial statements For the year ended 31 December 2009 16 Directors’ remuneration Year ended Year ended 31 December 31 December 2008 £’000 2009 £’000 Salary Pension Other benefits Compensation paid to past Director for loss of office Sums paid to third parties for services Total Highest Paid Director Salary Pension Other benefits Sums paid to third parties for services Total 5 – 1 – 263 269 5 – 1 185 191 44 – 4 59 243 350 – – – 165 165 These represent emoluments of the Directors of the legal parent Company, Mobile Tornado Group plc. 17 Employee information The average monthly number of persons (including Executive Directors) employed by the Group during the year was: Year ended Year ended 31 December 31 December 2008 Number 2009 Number Sales Product development Finance & administration Total Staff costs for the persons above were: 5 17 5 27 7 21 6 34 Year ended Year ended 31 December 31 December 2008 £’000 2009 £’000 Wages and salaries Social security costs Pension costs Other benefits Total 1,231 45 50 119 1,445 1,579 57 65 160 1,861 Page 34 Notes to the financial statements For the year ended 31 December 2009 18 Capital commitments The Group had no capital commitments at 31 December 2009. 19 Post balance sheet event Since the balance sheet date, the Group has commenced the transition of a large part of the Research and Development function from Israel to the UK and India. A new team of engineers have been recruited in India and we expect to complete the transition process by the end of June 2010. This will have a significant impact on the costbase of the business, with a reduction of approximately £700k per annum, delivering an annualised costbase effective from July 2010 of approximately £1.4 million. 20 Related party transactions For the purposes of IAS 24, key management of the Group are the same as those of the board of Directors. There was no share-based payment credit or charge in relation to key management personnel. Key management personnel remuneration includes the following expenses: Year ended Year ended 31 December 31 December 2008 £’000 2009 £’000 Salaries including bonuses Pension Company car allowance Other benefits Sums paid to third parties for services Total short-term employee benefits Termination benefits Total remuneration 5 – – 1 263 269 – 269 44 – 4 – 243 291 59 350 Peter Wilkinson is a shareholder and Director of InTechnology plc. Mobile Tornado Group plc has bought services totalling £56,000 (year ended 31 December 2008; £82,000) from InTechnology plc in the year to 31 December 2009. As at 31 December 2009, Mobile Tornado Group plc owed InTechnology plc £4,000 (31 December 2008; £27,000). InTechnology plc has bought services totalling £52,000 from Mobile Tornado Group plc in the year to 31 December 2009 (year ended 31 December 2008; £18,000). InTechnology plc has bought future use licences totalling £303,000 in the year to 31 December 2009 (year ended 31 December 2008; £nil) from Mobile Tornado Group plc. As at 31 December 2009, there was no amount owing to Mobile Tornado Group plc by InTechnology plc (31 December 2008; £nil). InTechnology plc has bought goods and future use licences totalling £2,364,000 from Mobile Tornado International Limited in the year to 31 December 2009 (year ended 31 December 2008; £957,000). As at 31 December 2009, there was no amount owing to Mobile Tornado International Limited by InTechnology plc (31 December 2008; £nil). Payments to a third party, Stonerings Ltd, are made in respect of the services provided by Jeremy Fenn. As at 31 December 2009, Mobile Tornado Group plc owed £nil (31 December 2008: £nil) to Jeremy Fenn. Page 35 Company balance sheet – prepared under UK GAAP As at 31 December 2009 Fixed assets Tangible assets Investments Intangible assets Current assets Debtors Cash at bank and in hand Creditors – amounts falling due within one year Net current (liabilities)/assets Total assets less current liabilities Creditors – amounts falling due after one year Net assets Capital and reserves Called up share capital Share premium account Merger reserve Share option reserve Profit and loss account Shareholders’ funds Note 2009 £’000 2008 £’000 2 3 4 5 6 18 – 12,758 12,776 68 149 217 – 12,859 – 12,859 6,835 11 6,846 (5,761) (5,544) 7,232 (2,044) 4,802 17,661 (2,929) 4,303 – 17,661 7, 8 8 8 8 8 3,699 4,449 10,938 46 (14,829) 4,303 3,699 4,449 10,938 34 (1,459) 17,661 The financial statements on pages 36 to 40 were approved by the Board of Directors on 7 June 2010 and were signed on its behalf by: Jeremy Fenn Managing Director 7 June 2010 Company Number: 5136300 The accompanying notes form an integral part of these financial statements. Page 36 Notes to the Company financial statements prepared under UK GAAP For the year ended 31 December 2009 1 Principal accounting policies 1.1 Basis of preparation The financial statements have been prepared under the historical cost basis of accounting and under United Kingdom Generally Accepted Accounting Practice (UK GAAP). 1.2 Share options The Group grants share options to employees and Directors on a discretionary basis. The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair value of the options granted is measured using the Black-Scholes pricing model, which takes into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest except where variations are due only to share prices not achieving the threshold for vesting. 1.3 Foreign currencies Transactions in foreign currencies are recorded at the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated to sterling at the exchange rates ruling at the balance sheet date. All other exchange differences are taken to the profit and loss account. 1.4 Tangible fixed assets The cost of tangible fixed assets is their purchase cost. Depreciation is calculated so as to write-off the cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows: Office equipment Computer equipment 3 years 3 years The Directors review tangible fixed assets for impairment if events or changes in circumstances indicate that the carrying value of may not be recoverable. 1.5 Goodwill Purchased goodwill is capitalised and amortised over five years, on a straight line basis, with provision made for any permanent diminution in value. 1.6 Investments Investments are stated at cost less provision for any permanent impairment in value. The carrying value of investments is reviewed annually to determine the need for any provision for impairment. Page 37 Notes to the Company financial statements prepared under UK GAAP For the year ended 31 December 2009 2 Tangible assets Cost At 31 December 2008 Transfer from subsidiary At 31 December 2009 Accumulated depreciation At 31 December 2008 Transfer from subsidiary Charge for the year At 31 December 2009 Net book amount at 31 December 2009 Net book amount at 31 December 2008 3 Investments At 1 January 2009 Write down of carrying value in Jukata investment Transfer to goodwill (note 4) At 31 December 2009 Computer Equipment £’000 Total £’000 – 199 199 – 179 2 181 18 – – 199 199 – 179 2 181 18 – £’000 12,859 (101) (12,758) – On 31 October 2009 the trade and net assets of Mobile Tornado International Ltd were transferred to Mobile Tornado Group plc at book value, following which the net investment held by Mobile Tornado Group plc in Mobile Tornado International Ltd was £12,758,000. Consequently, the value of the investment held in Mobile Tornado International Ltd is not supported by any net assets or future cash flows. As the transfer does not impair the future profitability of the Company, £12,758,000 has been transferred from investments to goodwill in the Company balance sheet. Details of the principal investments at 31 December 2009 in which the Company holds more than 20% of the nominal value of ordinary share capital are as follows: Subsidiary undertakings Country of incorporation or registration Mobile Tornado International Ltd Republic of Ireland M.T. Labs Ltd Israel Nature of business Dormant Group Company proportion proportion held held 100% 100% Sale of instant communication services 100% 100% Page 38 Notes to the Company financial statements prepared under UK GAAP For the year ended 31 December 2009 4 Intangible assets Cost and net book amount At 1 January 2009 Transferred from investments (note 3) At 31 December 2009 5 Debtors Trade receivables Less: provision for impairment of trade receivables Trade receivables - net Other debtors and prepayments Amounts owed by Group undertakings 6 Creditors – amounts falling due within one year Trade creditors and accruals Other taxation and social security 10% cumulative preference shares Amounts owed to Group undertakings Other creditors Deferred income Deferred consideration Less non-current portion: deferred consideration 7 Share capital Authorised 475,000,000 (2008: 475,000,000) Ordinary shares of 2p each Total Allotted, called up and fully paid 184,953,708 (2008: 184,953,708) Ordinary shares of 2p each Total Page 39 Goodwill £’000 12,758 12,758 2008 £’000 – – – 74 6,761 6,835 2008 £’000 497 47 1,500 – – – – 2,044 – 2,044 2008 £’000 9,500 9,500 2008 £’000 3,699 3,699 2009 £’000 47 – 47 21 – 68 2009 £’000 681 67 3,000 98 4 1,757 3,083 8,690 (2,929) 5,761 2009 £’000 9,500 9,500 2009 £’000 3,699 3,699 Notes to the Company financial statements prepared under UK GAAP For the year ended 31 December 2009 Non-voting preference shares At 1 January 2009 Issue of preference shares of 8p each As at 31 December 2009 8 Shareholders’ funds Number of shares ’000 18,750 18,750 37,500 Value £’000 1,500 1,500 3,000 Ordinary Share share premium Merger Share option Profit Total share- & loss holders’ capital account reserve reserve account £’000 £’000 £’000 £’000 £’000 funds £’000 At 1 January 2009 Issue of shares Employee share option adjustment Loss for the year 3,699 4,449 10,938 – – – – – – – – – 34 – 12 – (1,459) 17,661 – – – 12 (13,370) (13,370) At 31 December 2009 3,699 4,449 10,938 46 (14,829) 4,303 9 Related party transactions The Company has taken advantage of the exemption available under FRS 8 ‘Related Party Disclosures’ from disclosing transactions between the Company and its subsidiary undertakings as these have been eliminated on consolidation of these financial statements. Payments to a third party, Stonerings Ltd, are made in respect of the services provided by Jeremy Fenn. As at 31 December 2009, Mobile Tornado Group Plc owed £nil (31 December 2008: £nil) to Jeremy Fenn. 10 (Loss)/profit for the financial year The Parent Company has taken advantage of Section 408 of the Companies Act 2006 and has not included its own profit and loss account in these financial statements. The Parent Company’s loss for the year ended 31 December 2009 was £13,370,000 (year ended 31 December 2008: £675,000 profit). Page 40 Notice of Annual General Meeting NOTICE IS HEREBY GIVEN that an Annual General Meeting of the Company will be held at Central House, Beckwith Knowle, Harrogate, HG3 1UG on 30 June 2010 at 10.00 a.m. to transact the following business: As ordinary business: 1. 2. 3. 4. to receive and adopt the report of the Directors and the audited accounts of the Company and its subsidiaries for the financial year ended 31 December 2009 together with the report of the auditors thereon; to re-appoint Grant Thornton UK LLP as auditors of the Company to hold office until the conclusion of the next general meeting at which accounts are laid before the Company and to authorise the Directors to fix their remuneration; to re-appoint Jeremy Fenn, who retires in accordance with Article 92 of the Company’s articles of association and who, being eligible, offers himself for re-appointment as a Director; to re-appoint Richard James, who retires in accordance with Article 92 of the Company’s articles of association and who, being eligible, offers himself for re-appointment as a Director; As special business: To consider and, if thought fit, pass the following resolutions, with resolution 5 being proposed as an ordinary resolution and resolution 6 being proposed as a special resolution: 5. 6. THAT, in substitution for all existing and unexercised authorities (save for the authority granted pursuant to resolution number 2 passed at the general meeting of the Company held on 28 April 2009, which shall expire on 27 April 2014), pursuant to section 551 of the Companies Act 2006 (the “Act”), as amended, the Directors of the Company be and are hereby generally and unconditionally authorised to exercise all or any of the powers of the Company to allot and grant equity securities (within the meaning of section 560 of the Act) in the capital of the Company up to a maximum nominal amount of £1,233,012, provided that this authority shall, unless previously revoked or varied by the Company in general meeting, expire at the conclusion of the next annual general meeting of the Company after the passing of this resolution, save that the Company may before the expiry make an offer or agreement which would or might require equity securities to be allotted or granted after such expiry and the Directors of the Company may allot or grant equity securities in pursuance of such an offer or agreement as if the authority conferred hereby had not expired. THAT, subject to the passing of resolution 5 (and in addition to the authority granted pursuant to resolution number 3 passed at the general meeting of the Company held on 28 April 2009, which shall expire on 27 April 2014), the Directors of the Company be and are hereby empowered pursuant to section 570 and 573 of the Act to allot equity securities (as defined in section 560 of the Act) for cash or otherwise pursuant to the authority given by resolution 5 and/or to allot equity securities where such allotment constitutes an allotment of securities by way of section 560(2)(b) of the Act, as if section 561(1) of the Act did not apply to any such allotment, provided that this power shall be limited to the allotment of equity securities: (i) in connection with the grant of options under any share option scheme of the Company; (ii) in connection with or the subject of an offer or invitation, including a rights issue or open or equivalent offer to holders of ordinary shares and such other equity securities of the Company as the Directors may determine on the register on a fixed Page 41 Notice of Annual General Meeting record date, in proportion (as near as may be) to the respective holdings of such shares, but subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or any legal or practical problems under the laws of, or the requirements of, any recognised regulatory body or any stock exchange in any territory; and (iii) otherwise than pursuant to sub-paragraphs (a) and (b) above, up to an aggregate nominal amount of £184,953; provided that this authority shall expire on the conclusion of the next annual general meeting of the Company or 15 months from the date of this resolution, whichever is earlier and save that the Company may before such expiry make an offer, agreement or other arrangement which would or might require equity securities to be allotted after such expiry and the Directors of the Company may allot equity securities pursuant to any such offer, agreement or other arrangement as if the authority hereby conferred had not so expired. By Order of the Board Richard James Company Secretary 7 June 2010 Registered office: Central House Beckwith Knowle Otley Road Harrogate HG3 1UG Page 42 Notice of Annual General Meeting Notes: Appointment of proxies 1 As a member of the Company, you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at the Meeting and you should have received a proxy form with this notice of Meeting. You can only appoint a proxy using the procedures set out in these notes and the notes to the proxy form. 2 3 4 A proxy does not need to be a member of the Company but must attend the Meeting to represent you. Details of how to appoint the Chairman of the Meeting or another person as your proxy using the proxy form are set out in the notes to the proxy form. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy, please contact Capita Registrars at PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU. If you do not give your proxy an indication of how to vote on any resolution, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote or abstain from voting as he or she thinks fit in relation to any other matter which is put before the Meeting. Appointment of proxy using hard copy proxy form 5 The notes to the proxy form explain how to direct your proxy how to vote on each resolution or withhold their vote. To appoint a proxy using the proxy form, the form must be: • • • completed and signed; sent or delivered to Capita Registrars at PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU; and received by Capita Registrars by no later than 10.00 a.m. on 28 June 2010. In the case of a member which is a company, the proxy form must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. Any power of attorney or any other authority under which the proxy form is signed (or a duly certified copy of such power or authority) must be included with the proxy form. Appointment of proxy by CREST 6 If you are a CREST member and wish to appoint a proxy or proxies through the CREST electronic proxy appointment service you may do so by using the procedures described in the CREST Manual (available via www.euroclear.com/CREST). CREST personal members or other CREST sponsored members, and those CREST members who have appointed a service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a “CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s specifications, and must contain the information required for such instruction, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by Capita Registrars (ID: RA10) by the latest time for receipt of proxy appointments specified in this notice of meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the time stamp applied to the message by the CREST Application Host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means. If you are a CREST member or, where applicable, a CREST sponsor, or voting service provider, you should note that Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, you and, where applicable, your CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001. Appointment of proxy by joint members 7 In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s register of members in respect of the joint holding (the first-named being the most senior). Page 43 Notice of Annual General Meeting Changing proxy instructions 8 To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note that the cut-off time for receipt of proxy appointments (see above) also apply in relation to amended instructions; any amended proxy appointment received after the relevant cut-off time will be disregarded. Where you have appointed a proxy using the hard-copy proxy form and would like to change the instructions using another hard-copy proxy form, please contact Capita Registrars at PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence. Termination of proxy appointments 9 In order to revoke a proxy instruction you will need to inform Capita Registrars by sending a signed hard copy notice clearly stating your intention to revoke your proxy appointment to Capita Registrars at PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU. In the case of a member which is a company, the revocation notice must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified copy of such power or authority) must be included with the revocation notice. In either case, the revocation notice must be received by Capita Registrars by no later than 10.00 a.m. on 28 June 2010. If you attempt to revoke your proxy appointment but the revocation is received after the time specified then, subject to the paragraph directly below, your proxy appointment will remain valid. The return of a completed proxy form, other such instrument or any CREST Proxy Instruction will not prevent you from attending the Meeting and voting in person if you wish to do so. If you have appointed a proxy and attend the Meeting in person, your proxy appointment will automatically be terminated. Communication 10 Except as provided above, members who wish to communicate with the Company in relation to the Meeting should write to the Company Secretary, Mobile Tornado Group plc, Central House, Beckwith Knowle, Otley Road, Harrogate HG3 1UG. No other methods of communication will be accepted. Uncertificated Securities Regulations 11 Pursuant to regulation 41(1) of the Uncertificated Securities Regulations 2001 (2001 No. 3755), the Company has specified that only those members registered on the register of members of the Company at 10.00 a.m. on 28 June 2010 (or if the Meeting is adjourned 6.00 p.m. on the day two days prior to the date of the adjourned Meeting) shall be entitled to attend and vote at the Meeting in respect of the number of shares registered in their name at that time. Changes to the register of members after that date shall be disregarded in determining the rights of any person to attend and vote at the Meeting. Page 44 Corporate information Company Registration Number: 5136300 Registered Office: Directors: Nominated Advisor and Broker: Bankers: Solicitors: Registrars: Auditors: Central House Otley Road Harrogate HG3 1UG P R Wilkinson J M Fenn J P Swingewood R M James (Non-Executive Chairman) (Managing Director) (Non-Executive Director) (Director & Company Secretary) Astaire Securities Plc 30 Old Broad Street London EC2N 1HT Barclays Bank Plc Hanover Square 50 Pall Mall London SW1Y 5AX Hammonds 2 Park Lane Leeds LS3 1ES Capita Registrars Ltd The Registry 34 Beckenham Road Beckenham Kent BR3 4TU Grant Thornton UK LLP No 1 Whitehall Riverside Leeds LS1 4BN Internet address: www.mobiletornado.com Page 45 sterling 132846 www.mobiletornado.com Annual Report and Accounts for the year ended 31 December 2009 MT report & Accounts CVR_aw.indd 1 04/06/2010 14:40 

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