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1
2 Company Information 3 Chairman’s Statement
5 Report of the Directors
10 Corporate Governance Report
12 Board of Directors
13 Report of the Independent Auditors
15 Consolidated Income Statement
16 Consolidated Statement of Comprehensive Income
17 Consolidated Statement of Changes in Equity
19 Consolidated Statement of Financial Position
21 Company Statement of Financial Position
22 Consolidated Statement of Cash Flows
23 Company Statement of Cash Flows
24 Notes to the Financial Statements
62 Notice of Annual General Meeting
63 Form of Proxy
CONTENTS
2
DIRECTORS Dato’Dr.WanAzmibinAriffin(Non-ExecutiveChairman) Dato’Hussian@RizalbinA.Rahman(ChiefExecutiveOfficer) DerrickChiaKahWai(TechnicalDirector) SeahBoonChin(CorporateFinanceDirector) Dato’ShamsirbinOmar(Non-ExecutiveDirector) KjetilLanglandBohn(Non-ExecutiveDirector)
SECRETARY TMFChannelIslandsLimited Walker House 28-34HillStreet Jersey JE4 8PN Channel Islands
REGISTERED Walker HouseOFFICE POBox72 28-34HillStreet Jersey JE4 8PN Channel Islands BUSINESS 2-3,Incubator2ADDRESS TechnologyParkMalaysia BukitJalil,57000KualaLumpur Malaysia Tel:+60389963600
AUDITORS Jeffreys Henry LLP Finsgate5-7CranwoodStreet London EC1V 9EE United Kingdom
NOMINATED Allenby Capital LimitedADVISER Claridge HouseAND BROKER 32 Davoes Street Mayfair London W1K 4ND United Kingdom
JOINT BROKER Daniel Stewart & Company plc Becket House 36OldJewry London EC2R 8DD United Kingdom
COMPANY INFORMATION
3
INTRODUCTION
MobilityOneLimited'sorganisationstructureisdepictedbelow:
OPERATIONS REVIEW
With improvingeconomicconditions in theregion,especially inMalaysia, theGroupreportedahigherrevenuegrowthandareductioninlossesin2010comparedto2009.Duringtheyear,theGroupsignedanagreementwithCarrefourMalaysiatorolloutapproximately300electronicdatacapture(“EDC”)terminalsforprepaidmobilephoneairtimereloadsacrossCarrefourMalaysia's23hypermarketsand20expressstores throughout the country. Even though the Group has sustained its revenue contribution from the EDCterminalbase,howeverasubstantialincreaseinrevenuewasseeninthebankingchannelswherebythe prepaid mobile phone subscribers are becoming more familiar and comfortable with transacting via thebankingchannels,suchasmobilebanking,InternetbankingandATMs.Inaddition,theGroupwasawardedacontractfromTelekomMalaysiaBerhadtosupplytelecommunicationhardwareoveraperiodofthreeyears.ThetotalvalueofthecontractisRM22.7million(c.£4.7million)andtheGrouphasdeliveredapproximately 60% of the total contract value.
FortheGroup'sinternationalremittanceservices,theGrouphasenteredintoaMoneyTransferServicesAgreementwithCoinstarMoneyTransferLimited(previouslyknownasTravelexMoneyTransferLimited)(“CMT”)toprovideamoneytransferservicefromtheGroup’soutletsinMalaysiatoanyofCMT’slocationsworldwide.ThisisinadditiontotheGroup’sexistingagreementswithG-Xchange,Inc.andM.LhuillierinthePhilippinesaswellasPTFinnetIndonesiaandPTTelekomunikasiSelularinIndonesia,forthemoneytransfer service to the Philippines and Indonesia respectively.
InCambodia, theGroup has entered into agreementswith several telecommunications companies,namelyHelloAxiataCompanyLimited, LatelzCo. Ltd,CambodiaAdvanceCommunicationsCo. Ltd,Viettel(Cambodia)PteLtd,SotelcoLtdandApplifoneCompanyLtdtoselltheirprepaidreloads.However,MobilityOnehasnotbeenaggressivelyexpandingitsbusinessinCambodiaastheGrouphasbeenfocusingits time and investments on expanding its business operations in Malaysia.
CHAIRMAN’S STATEMENT
NETOSSSDNBHD(Malaysia)
100%
PAYSTATIONSDNBHD(Malaysia)
100%
MOBILITYONESDNBHD(Malaysia)
100%
MOBILITYONELIMITED(Jersey,ChannelIslands)
PTMOBILITYONEINDONESIA(Indonesia)
95%
4
InIndonesia,PTMobilityOneIndonesiahassecuredseveralcontractstoprovidesystemmaintenanceservicestotwomajormobileoperators,namelyIndosatandXLAxiata.
WepresenttheauditedconsolidatedfinancialstatementsforMobilityOneLimitedfortheyearended31December 2010.
RESULTS
Forthefinancialyearended31December2010,theGrouprecordedarevenueof£23.3million,representinganincreaseof69.6%comparedto£13.7millionfor2009,andalossaftertaxof£0.2million,representingareductionof76.5%comparedtoalossaftertaxof£0.9millionfor2009.Theincreaseinrevenuewasmainly due to a higher demand for the Group’s existing mobile phone’s prepaid airtime reload business. Despitetheincreaseinrevenue,theGrouprecordedasmallloss,whichwasduetohigheroperatingcostsand expenses for the new business in remittance and costs incurred to explore new business opportunities.
CURRENT TRADING AND OUTLOOK
TheDirectorsanticipatethattheperformanceoftheGroupwillcontinuetoimprovein2011,aftertakingintoconsiderationthefollowingdevelopments:
(i) ContinuedrevenuegrowthfromprepaidairtimereloadsformobilephonesviatheGroup’sbanking channels and EDC terminals;
(ii) AhighercontributionfromtheCompany’sinternationalremittanceservices,withastrategytoopen moreoutletsandtie-upwithmorecashoutpartnersinIndonesia,BangladeshandNepal;and
(iii) AhighercontributionfromPTMobilityOneIndonesiafromtheexistingandnewcontracts.
TheDirectorsareconfidentabouttheprospectsfortheGroupinthelongtermandbelievetheGroup’songoing investment in research and development to develop innovative solutions will produce positive resultsinfutureperiods.Barringanyunforeseencircumstances,theDirectorsarecautiouslyoptimisticonthe outlook of the Group in terms of revenue growth in 2011.
CONCLUSION
OnbehalfoftheBoardofDirectors,Iwouldliketoextendmyappreciationtothemanagementandstaffof the Group for their continuing commitment and dedication over the year.
...........................................................................Dato’ Dr. Wan Azmi bin AriffinChairman
Date:9June2011
CHAIRMAN’S STATEMENT (CONTINUED)
5
TheDirectorspresenttheirreportwiththefinancialstatementsoftheCompanyandtheGroupfortheyearended 31 December 2010.
PRINCIPAL ACTIVITY
TheprincipalactivityoftheGroupintheyearunderreviewwasinthebusinessofprovidinge-commerceinfrastructure payment solutions and platforms.
KEY PERFORMANCE INDICATORS
Year ended Year ended 31.12.2010 31.12.2009 £ £
Revenue 23,291,599 13,733,773Operatingloss (122,436) (846,286)Lossbeforetax (206,079) (917,343)Netloss (215,118) (917,343)
KEYS RISKS AND UNCERTANTIES
Operational risks
TheGroupisnotinsulatedfromgeneralbusinessriskaswellascertainrisksinherentintheindustryinwhichtheGroupoperates.Thismayincludetechnologicalchanges,unfavourablechangesinGovernmentandinternationalpolicies,theintroductionofnewandsuperiortechnologyorproductsandservicesbycompetitorsandchangesinthegeneraleconomic,businessandcreditconditions.
Dependency on Distributorships Agreements
TheGroupreliesonvarioustelecommunicationcompaniestoprovidethetelecommunicationproducts.Hencethe Group’s business may be materially and adversely affected if one or more of these telecommunication companiescutorreducedrasticallythesupplyoftheirproducts.TheGrouphasdistributorshipagreementswithtelecommunicationcompaniessuchasDiGiTelecommunicationsSdn.Bhd.,Celcom(M)BerhadandMaxisCommunicationBerhad,whicharesubjecttoperiodicrenewal.
Rapid technological changes/product changes in the e-commerce industry
Theabilitytokeeppacewithrapidtechnologicaldevelopmentinthee-commerceindustrywillaffecttheGroup’srevenuesandprofits.Thee-commerceindustryischaracterisedbyrapidtechnologicalchangesduetochangingmarkettrends,evolvingindustrystandards,newtechnologiesandemergingcompetition.Future success will be dependent upon the Group’s ability to enhance its existing technology solutions and introduce new products and services to respond to the constantly changing technological environment. Thetimelydevelopmentofnewandenhancedservicesorproductsisacomplexanduncertainprocess.
REPORT OF THE DIRECTORSFor the year ended 31 December 2010
6
Demand of products and services
TheGroup’sfutureresultsdependontheoveralldemandforitsproductsandservices.Uncertaintyintheeconomic environment may cause some business to curtail or eliminate spending on payment technology. Inaddition,theGroupmayexperiencehesitancyonthepartofexistingandpotentialcustomerstocommitto continuing with its new services.
REVIEW OF BUSINESS
TheresultsfortheyearandfinancialpositionoftheCompanyandtheGroupareasshownintheChairman’sstatement. RESULTS AND DIVIDENDS
Theconsolidatedlossfortheyearended31December2010is£215,118(31.12.2009:loss£917,343)whichhas been transferred to reserves. No dividends will be distributed for the year ended 31 December 2010.
DIRECTORS
TheDirectorsduringtheyearunderreviewwere:
Dato’Dr.WanAzmibinAriffin(Non-ExecutiveChairman)Dato’Hussian@RizalbinA.Rahman(ChiefExecutiveOfficer)DerrickChiaKahWai(TechnicalDirector)SeahBoonChin(CorporateFinanceDirector)Dato’ShamsirbinOmar(Non-ExecutiveDirector)KjetilLanglandBohn(Non-ExecutiveDirector)
Dato’ShamsirbinOmarandKjetilLanglandBohnwhoareeligibleofferthemselvesforre-electionattheforthcoming Annual General Meeting.
ThebeneficialinterestsoftheDirectorsholdingofficeat31December2010intheordinarysharesoftheCompany,wereasfollows: Ordinary 2.5p shares Dato’Dr.WanAzmibinAriffinDato’ Hussian @ Rizal bin A. RahmanDerrick Chia Kah WaiSeah Boon ChinDato’ShamsirbinOmarKjetil Langland Bohn
Interest at 31.12.10
Nil30,661,895
NilNil
9,131,677Nil
% of issued capital
Nil32.8
NilNil9.8Nil
REPORT OF THE DIRECTORS(CONTINUED)
For the year ended 31 December 2010
7
TheDirectorsalsoheldthefollowingordinarysharesunderoption:
Dato’Dr.WanAzmibinAriffinDato’ Hussian @ Rizal bin A. RahmanDerrick Chia Kah WaiSeah Boon ChinDato’ShamsirbinOmarKjetil Langland Bohn
Theoptionsweregrantedon5July2007atanexercisepriceof12.5p.Theperiodoftheoptionsisfive years. SUBSTANTIAL SHAREHOLDERS
Asat1June2011,theCompanyhadbeennotifiedofthefollowingbeneficialinterestsin3%ormoreoftheissuedsharecapitalpursuanttoPartVIofArticle110oftheCompanies(Jersey)Law1991:
Ordinary 2.5p shares
Dato’ Hussian @ Rizal bin A. RahmanThornbeamLimitedDatuk Yahaya bin Mat Ghani Dato’ShamsirbinOmarPerbadanan Nasional Berhad
PUBLICATION OF ACCOUNTS ON COMPANY WEBSITE
FinancialstatementsarepublishedontheCompany’swebsite.ThemaintenanceandintegrityofthewebsiteistheresponsibilityoftheDirectors.TheDirectors’responsibilityalsoextendstothefinancialstatementscontained therein.
INDEMNITY OF OFFICERS
TheGroupdoesnothavetheinsurancecoveragainstlegalactionboughtagainstitsDirectorsandofficers. GROUP'S POLICY ON PAYMENT OF CREDITORS
It is the Group’s normal practice to make payments to suppliers in accordance with agreed terms provided that the supplier has performed in accordance with the relevant terms and conditions.
Number of ordinary shares
30,661,89516,048,92210,500,0009,131,6775,290,000
% of issued capital
32.817.211.29.85.7
REPORT OF THE DIRECTORS (CONTINUED)For the year ended 31 December 2010
Interest at 31.12.10
Nil2,000,0002,000,0002,000,000
NilNil
8
EMPLOYEE INVOLVEMENT
TheGroupplacesconsiderablevalueontheinvolvementoftheemployeesandhascontinuedtokeeptheminformedonmattersaffectingtheGroup.Thisisachievedthroughformalandinformalmeetings.
GOING CONCERN
ThesefinancialstatementshavebeenpreparedontheassumptionthattheGroupisagoingconcern.FurtherinformationisgiveninNote2ofthefinancialstatements. STATEMENT OF DIRECTORS' RESPONSIBILITIES
TheDirectorsareresponsibleforpreparingthefinancialstatements inaccordancewithapplicable lawand regulations.
CompanylawrequirestheDirectorstopreparefinancialstatementsforeachfinancialyear.UnderthatlawtheDirectorshaveelectedtopreparethefinancialstatementsinaccordancewithInternationalFinancialReportingStandardsasadoptedforuseintheEuropeanUnion.ThefinancialstatementsarerequiredbylawtogiveatrueandfairviewofthestateofaffairsoftheCompanyandtheGroupandoftheprofitorlossoftheGroupforthatperiod.Inpreparingthesefinancialstatements,theDirectorsarerequiredto:
- selectsuitableaccountingpoliciesandthenapplythemconsistently;- makejudgmentsandestimatesthatarereasonableandprudent;- preparethefinancialstatementsonthegoingconcernbasisunlessitisinappropriatetopresumethat the Company will continue in business for the foreseeable future; and- statethatthefinancialstatementscomplywithInternationalFinancialReportingStandards(IFRS)as adopted by the European Union.
TheDirectors are responsible for keepingproper accounting recordswhich disclosewith reasonableaccuracyatanytimethefinancialpositionoftheCompanyandtheGroupandtoenablethemtoensurethatthefinancialstatementscomplywiththeArticle110oftheCompanies(Jersey)Law1991andArticle4oftheIASregulation.TheyarealsoresponsibleforsafeguardingtheassetsoftheCompanyandtheGroupand hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
SofarastheDirectorsareaware,thereisnorelevantauditinformation(asdefinedbySection234ZAoftheArticle110oftheCompanies(Jersey)Law1991)ofwhichtheGroup'sauditorsareunaware,andeachDirector has taken all the steps that he ought to have taken as a Director in order to make himself aware ofanyrelevantauditinformationandtoestablishthattheGroup'sauditorsareawareofthatinformation.
REPORT OF THE DIRECTORS(CONTINUED)
For the year ended 31 December 2010
9
AUDITORS
JeffreysHenryLLPhaveexpressedtheirwillingnesstocontinueinoffice.AresolutionproposingthatJeffreysHenryLLPbere-appointedwillbeputtotheforthcomingAnnualGeneralMeeting.
ON BEHALF OF THE BOARD:
............................................................................Dato’ Hussian @ Rizal bin A. RahmanChief Executive Officer
Date:9June2011
REPORT OF THE DIRECTORS (CONTINUED)For the year ended 31 December 2010
10
TheDirectorsacknowledgetheimportanceofthePrinciplessetoutintheCombinedCodeissuedbytheCommitteeonCorporateGovernance.AlthoughtheCombinedCodeisnotcompulsoryforAIMcompanies,the Directors intend to apply the principles as far as practicable and appropriate for a relatively small public companyasfollows:
THE BOARD OF DIRECTORS
TheBoardisresponsibleforstrategy,performance,approvalofmajorcapitalprojectsandtheframeworkofinternalcontrols.ToenabletheBoardtodischargeitsduties,allDirectorsreceiveappropriateandtimelyinformation.BriefingpapersaredistributedtoallDirectorsinadvanceofBoardmeetings.AllDirectorshaveaccesstotheadviceandservicesoftheCompanySecretary,whoisresponsibleforensuringthatBoardprocedures are followed and that applicable rules and regulations are complied with.
AUDIT COMMITTEE AND REMUNERATION COMMITTEE
TheAuditCommitteeandtheRemunerationCommitteecompriseoftheNon-executiveDirectors.TheAuditCommitteereceivesandreviewsreportsfrommanagementandtheCompany'sauditorsrelatingtotheannualandinterimaccountsandtheaccountingandinternalcontrolsystemsoftheCompany.TheAuditCommitteehasunrestrictedaccesstotheGroup'sauditors.
TheRemunerationCommitteereviewstheperformanceoftheExecutiveDirectors,setstheirremuneration,determines the payment of bonuses to Executive Directors and considers the allocation of share options to Directors and employees.
INTERNAL FINANCIAL CONTROL
TheBoardisresponsibleforestablishingandmaintainingtheGroup’ssystemofinternalfinancialcontrolandplacesimportanceonmaintainingastrongcontrolenvironment.ThekeyprocedureswhichtheDirectorshaveestablishedwithaviewtoprovidingeffectiveinternalfinancialcontrolareasfollows:
• TheGroup’sorganisationalstructurehasclearlinesofresponsibility.
• TheCompanypreparesacomprehensiveannualbudgetthatisapprovedbytheBoard.Monthlyresults are reported against the budget and variances are closely monitored by the Directors.
• TheBoard is responsible for identifying themajor business risks facedby theCompanyand for determining the appropriate courses of action to manage those risks.
• TheBoardisinvolvedinregularsubsidiarycompanyBoardmeetingsandwithstructuredoperational reporting requirements.
TheDirectors recognise, however, that such a systemof internal financial control can provide onlyreasonable,notabsolute,assuranceagainstmaterialmisstatementorloss.TheDirectorshavereviewedtheeffectivenessofthesystemofinternalfinancialcontrolthatwillbeoperatedbytheGroup.
CORPORATE GOVERNANCE REPORTFor the year ended 31 December 2010
11
CORPORATE GOVERNANCE REPORT (CONTINUED)For the year ended 31 December 2010
SERVICE CONTRACTS
TheDirectorshaveservicecontractsandlettersofappointment,whichrequirenotlessthan3months’notice of termination.
MODEL CODE
TheCompanyhasadoptedandoperatesasharedealingcodeforDirectorsandseniorexecutivesonthesame terms as the London Stock Exchange Model Code for companies whose shares have been admitted to AIM.
RELATIONS WITH SHAREHOLDERS
Communicationswithshareholdersaregivenhighpriority.TheBoardusestheAnnualGeneralMeetingtocommunicatewithinvestorsandwelcomestheirparticipation.TheChairmanaimstoensurethattheDirectors are available at Annual General Meetings to answer questions.
12
Dato’ Dr. Wan Azmi bin Ariffin (Non-Executive Chairman)
Dato’Dr.WanAzmibinAriffin,aMalaysianaged67,istheNon-ExecutiveChairmanoftheCompany.Hebeganhiscareerasateacherforsecondaryschoolsfrom1965to1977andlaterbecameauniversitylecturerfrom1979to1981.Sincethen,hehas been active in the Malaysian politics. He obtained his Bachelor Degree in Geography from Universiti Sains Malaysia and a Master’sDegreeinEconomicDevelopmentandaPhDinPoliticalEconomicsfromMcGillUniversity,Canada.
Dato’ Hussian @ Rizal bin A. Rahman (Chief Executive Officer)
Dato’Hussian@RizalbinA.Rahman,aMalaysianaged49,istheChiefExecutiveOfficeroftheGroup.HehasextensiveexperienceintheITandtelecommunicationsindustriesinMalaysiaandisresponsibleforthedevelopmentoftheGroup’soverallmanagement,particularlyinsettingtheGroup’sbusinessdirectionandstrategies.HeobtainedacertifiedMasterofBusinessAdministrationfromtheOxfordAssociationofManagement,England.
Derrick Chia Kah Wai (Technical Director)
DerrickChiaKahWai,aMalaysianaged40,istheTechnicalDirectoroftheGroup.Hebeganhiscareerasaprogrammerin1994,hethenjoinedGHLSystemsBerhadinJanuary1998asaSoftwareEngineerandwaspromotedtoSoftwareDevelopmentManagerinDecember1999.HeobtainedhisBachelorDegreeinCommerce,majoringinManagementInformationSystemfromUniversityofBritishColumbia,Canada.HejoinedtheGroupinMay2005andisresponsiblefortheGroup’sR&Dteamwhichinclude the architectural design of its technology platform.
Seah Boon Chin (Corporate Finance Director)
SeahBoonChin,aMalaysianaged39,istheCorporateFinanceDirectoroftheCompany.HebeganhiscareerasaseniorofficerwithChungKhiawBank(Malaysia)Bhd.(nowUnitedOverseasBank(Malaysia)Berhad)from1995to1996.From1997toJanuary2007,heworkedintheCorporateFinanceDepartmentofestablishedfinancialinstitutionsinMalaysiaandSingaporeincludingCIMBInvestmentBankBerhad,AffinInvestmentBankBerhadandPublicInvestmentBankBerhad.HeobtainedhisBachelorDegreeinCommerce(Honours)withDistinctionfromMcMasterUniversity,Canada.HejoinedtheGroupinJanuary2007andisresponsiblefortheGroup’scorporatefinanceactivities.
Dato’ Shamsir bin Omar (Non-Executive Director)
Dato’ShamsirbinOmar,aMalaysianaged76isaNon-ExecutiveDirectoroftheGroup.HecommencedhiscareerwiththeMalaysianGovernmentinAugust1960astheAuditorandAccountantintheDepartmentofCooperativeDevelopment.In1966,hewasappointedastheChiefAccountantintheMinistryofEducation,Malaysia.In1967,hewaspromotedtothepositionofDeputyAccountantGeneralintheMinistryofFinance,Malaysia.In1968,hebecametheAccountantGeneral,Malaysia,apostheheldfor22yearsuntilhisretirementinJuly1989.Afterretirementfromgovernmentservicein1989,hejoinedShamsirJasaniGrantThornton,Malaysia.Hehasbeentheaccountingfirm’sChairmansincethen.HeisafellowmemberoftheInstituteof Chartered Accountants in Australia.
Kjetil Langland Bohn (Non-Executive Director)
KjetilLanglandBohn,aNorwegianaged41isaNon-ExecutiveDirectoroftheCompany.HegraduatedfromtheNorwegianBusiness School in Bergen and began his career as a journalist with Hegnar Media AS from 1996 to 2000. In July 2000 he founded VivaTechnologiesASandactedasCEOuntilFebruary2004whenhefoundedVykeAS.In2009,heleftVykeCommunicationsplcandfoundedAgrinosAS,abio-technologycompany.
BOARD OF DIRECTORS
13
WehaveauditedtheGroupandtheCompanyfinancialstatementsofMobilityOneLimitedfortheyearended31December2010whichcomprisetheConsolidatedIncomeStatement,ConsolidatedStatementofComprehensive Income,ConsolidatedStatement ofChanges inEquity,ConsolidatedStatement ofFinancialPosition,CompanyStatementofFinancialPosition,ConsolidatedStatementofCashFlows,CompanyStatementofCashFlowsandtherelatednotes.Thesefinancialstatementshavebeenpreparedunder the accounting policies set out therein.
ThisreportismadesolelytotheCompany'smembers,asabody,inaccordancewithArticle110oftheCompanies(Jersey)Law1991.OurauditworkhasbeenundertakensothatwemightstatetotheCompany'smembersthosematterswearerequiredtostatetotheminanauditors'reportandfornootherpurpose.Tothefullestextentpermittedbylaw,wedonotacceptorassumeresponsibilitytoanyoneotherthantheCompanyandtheCompany'smembersasabody,forourauditwork,forthisreport,orfortheopinionswe have formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
TheDirectors'responsibilitiesforpreparingthefinancialstatementsinaccordancewithapplicablelawandInternational Financial Reporting Standards as adopted for use in the European Union are set out on page 8.
Our responsibility is toaudit thefinancialstatements inaccordancewith relevant legaland regulatoryrequirementsandInternationalStandardsonAuditing(UKandIreland).
Wereport toyououropinionas towhether thefinancialstatementsgivea trueand fairviewandareproperlypreparedinaccordancewiththeCompanies(Jersey)Law1991.WealsoreporttoyouwhetherinouropiniontheinformationgivenintheReportoftheDirectorsisconsistentwiththefinancialstatements.
Inaddition,wereporttoyouif,inouropinion,theCompanyhasnotkeptproperaccountingrecords,ifwehavenotreceivedalltheinformationandexplanationswerequireforouraudit,orifinformationspecifiedbylawregardingDirectors'remunerationandothertransactionsisnotdisclosed.
We read other information contained in the Annual Report and consider whether it is consistent with the auditedfinancialstatements.TheotherinformationcomprisesonlytheChairman’sStatement,CorporateGovernanceReportandDirectors’Report.Ourresponsibilitydoesnotextendtoanyotherinformation.
BASIS OF AUDIT OPINION
WeconductedourauditinaccordancewithInternationalStandardsonAuditing(UKandIreland)issuedbytheAuditingPracticesBoard.Anauditincludesexamination,onatestbasis,ofevidencerelevanttotheamountsanddisclosuresinthefinancialstatements.ItalsoincludesanassessmentofthesignificantestimatesandjudgmentsmadebytheDirectorsinthepreparationoftheGroup’sfinancialstatements,andofwhethertheaccountingpoliciesareappropriatetotheGroup’sandtheCompany’scircumstances,consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessaryinordertoprovideuswithsufficientevidencetogivereasonableassurancethattheGroup’sfinancialstatementsarefreefrommaterialmisstatement,whethercausedbyfraudorotherirregularityorerror. In forming our opinion we also evaluated the overall adequacy of the presentation of information in thefinancialstatements.
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF MOBILITYONE LIMITED
14
OPINION ON THE FINANCIAL STATEMENTS
Inouropinion:
- theGroup’sfinancialstatementsgiveatrueandfairview,inaccordancewithInternationalFinancialReportingStandardsasadoptedforuseintheEuropeanUnion,ofthestateofaffairsoftheGroupasat 31 December 2010 and of the loss of the Group for the period then ended;
- theCompany’sfinancialstatementsgiveatrueandfairview,inaccordancewithInternationalFinancialReportingStandardsasadoptedforuseintheEuropeanUnion,asappliedinaccordancewiththeprovisionsoftheCompanies(Jersey)Law1991,ofthestateoftheCompany’saffairsasat31December2010; and
- thefinancialstatementshavebeenproperlypreparedinaccordancewiththeCompanies(Jersey)Law1991and,inrelationtotheGroupfinancialstatements.
OPINION ON OTHER MATTERS
InouropiniontheinformationgivenintheReportoftheDirectorsforthefinancialyearforwhichthefinancialstatementsarepreparedisconsistentwiththefinancialstatements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
WehavenothingtoreportinrespectofthefollowingmatterswhereCompanies(Jersey)Law1991requiresustoreporttoyouif,inouropinion:
- adequateaccountingrecordshavenotbeenkeptbytheParentCompany,orreturnsadequateforaudit have not been received from branches not visited by us; or
- theCompanyfinancialstatementsarenotinagreementwiththeaccountingrecordsandreturns;or
- certaindisclosuresofDirectors'remunerationspecifiedbylawarenotmade;or
- wehavenotreceivedalltheinformationandexplanationswerequireforouraudit.
Justin RandallSenior Statutory AuditorFor and on behalf of Jeffreys Henry LLP
Finsgate5-7CranwoodStreetLondonEC1V 9EEUnited Kingdom
Date:9June2011
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF MOBILITYONE LIMITED
(CONTINUED)
15
CONSOLIDATED INCOME STATEMENTFor the year ended 31 December 2010
CONTINUING OPERATIONS
RevenueCost of sales
GROSS PROFIT
OtheroperatingincomeAdministration expensesOtheroperatingexpenses
OPERATING LOSS
Finance costs
LOSS BEFORE TAX
Tax
LOSS AFTER TAX
Attributableto:Equity holders of the CompanyMinority interest
EARNING PER SHARE
Basicearningspershare(pence)Dilutedearningspershare(pence)
2009£
13,733,773(12,719,917)
1,013,856
71,713(1,496,741)(435,114)
(846,286)
(71,057)
(917,343)
-
(917,343)
(916,220)(1,123)
(917,343)
(1.15)(1.15)
2010£
23,291,599(21,353,213)
1,938,386
179,433(1,807,137)(433,118)
(122,436)
(83,643)
(206,079)
(9,039)
(215,118)
(215,653)535
(215,118)
(0.23)(0.23)
Note
6
7
8
1010
Thenotesformpartofthesefinancialstatements
16
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2010
LOSS AFTER TAX
OTHER COMPREHENSIVE INCOME/(LOSS)
Foreign currency translation
TOTAL COMPREHENSIVE INCOME/(LOSS)
Totalcomprehensiveincome/(loss)attributableto:OwnersoftheparentMinority interest
2009£
(917,343)
(557,375)
(1,474,718)
(1,473,595)(1,123)
(1,474,718)
2010£
(215,118)
433,103
217,985
217,450535
217,985
Thenotesformpartofthesefinancialstatements
17
Thenotesformpartofthesefinancialstatements
As at 1 January 2009
Comprehensive income/(loss)
Loss for the yearForeign currency translationTotalcomprehensiveincome
for the year
Transactions with ownersIssue of shares in MobilityOneLimited
Totaltransactionswithowners for the year
As at 31 December 2009
Share premium
£
782,234
--
-
-
-
782,234
Total£
3,991,700
(856,061)(557,375)
(1,413,436)
365,000
365,000
2,943,264
Total£
3,992,550
(857,184)(558,029)
(1,415,213)
365,000
365,000
2,942,337
Foreign currency
translation reserve
£
1,049,357
60,159(557,375)
(497,216)
-
-
552,141
Share capital
£
1,974,374
--
-
365,000
365,000
2,339,374
Retained earnings
£
(523,216)
(916,220)-
(916,220)
-
-
(1,439,436)
Minority Interest
£
850
(1,123)(654)
(1,777)
-
-
(927)
Reverseacquisition
reserve£
708,951
--
-
-
-
708,951
Non-Distributable Distributable
CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFor the year ended 31 December 2010
18
Share capital is the amount subscribed for shares at nominal value.
Share premium represents the excess of the amount subscribed for share capital over the nominal value of the respective shares net of share issue expenses.
ThereverseacquisitionreserverelatestotheadjustmentrequiredbyaccountingforthereverseacquisitioninaccordancewithIFRS3.
TheCompany’sassetsandliabilitiesstatedintheStatementofFinancialPositionweretranslatedintoPoundSterling(£)usingtheclosingrateasattheStatementofFinancialPositiondateandtheincomestatementsweretranslatedinto£usingtheaveragerateforthatperiod.All resulting exchange differences are taken to the foreign currency translation reserve within equity.
Retained earnings represent the cumulative earnings of the Group attributable to equity shareholders.
Thenotesformpartofthesefinancialstatements
As at 1 January 2010
Comprehensive income/(loss)
Loss for the yearForeign currency translationTotalcomprehensiveincome
for the year
As at 31 December 2010
Share premium
£
782,234
--
-
782,234
Total£
2,943,264
(215,653)433,103
217,450
3,160,714
Total£
2,942,337
(215,118)433,026
217,908
3,160,245
Foreign currency
translation reserve
£
552,141
-433,103
433,103
985,244
Share capital
£
2,339,374
--
-
2,339,374
Retained earnings
£
(1,439,436)
(215,653)-
(215,653)
(1,655,089)
Minority Interest
£
(927)
535(77)
458
(469)
Reverseacquisition
reserve£
708,951
--
-
708,951
Non-Distributable Distributable
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(CONTINUED)For the year ended 31 December 2010
19
Thenotesformpartofthesefinancialstatements
CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAs at 31 December 2010
ASSETSNon-current assetsIntangible assetsProperty,plantandequipment
Current assetsInventoriesTradeandotherreceivablesShort term investmentCash and cash equivalentsTaxrecoverable
Non-currentassetsheldforsale
LIABILITIESCurrent liabilitiesTradeandotherpayablesAmount due to DirectorsLoans and borrowings – secured
Liabilityrelatingtonon-currentassetsheldforsale
NET CURRENT ASSETS
Totalassetslesscurrentliabilities
Non-current liabilityLoans and borrowings – secured
NET ASSETS
2009£
1,829,400988,465
2,817,865
728,094415,713
-400,3047,434
1,551,545375,442
1,926,987
449,56229,047
1,182,4981,661,107
71,0901,732,197
194,790
3,012,655
70,318
2,942,337
2010£
2,232,5061,012,6443,245,150
1,349,0581,258,128
1,778732,4363,428
3,344,828-
3,344,828
1,020,279238,698
2,070,5333,329,510
-3,329,510
15,318
3,260,468
100,223
3,160,245
Note
1112
14151617
18
192021
18
21
20
Thenotesformpartofthesefinancialstatements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(CONTINUED)As at 31 December 2010
SHAREHOLDERS’ EQUITY
Equity attributable to equity holders of the Company:Called up share capitalShare premiumReverse acquisition reserveForeign currency translation reserveAccumulated loss
Shareholders’ equityMinority interest
TOTAL EQUITY
2009£
2,339,374782,234708,951552,141
(1,439,436)
2,943,264(927)
2,942,337
2010£
2,339,374782,234708,951985,244
(1,655,089)
3,160,714(469)
3,160,245
Note
2324253132
21
Thenotesformpartofthesefinancialstatements
COMPANY STATEMENT OF FINANCIAL POSITIONAs at 31 December 2010
ASSETSNon-current assetInvestment in subsidiary companies
Current assetsTradeandotherreceivablesCash and cash equivalents
Current liabilitiesTradeandotherpayablesAmount due to Directors
NET CURRENT ASSETS
NET ASSETS
SHAREHOLDERS’ EQUITY
Equity attributable to equity holders of the Company:Called up share capitalShare premium(Accumulatedloss)/retainedearnings
TOTAL EQUITY
2009£
2,040,930
1,155,1282,043
1,157,171
14,54929,04743,596
1,113,575
3,154,505
2,339,374782,23432,897
3,154,505
2010£
2,040,930
1,190,8202,082
1,192,902
28,26694,103122,369
1,070,533
3,111,463
2,339,374782,234(10,145)
3,111,463
Note
13
1517
1920
232424
22
Thenotesformpartofthesefinancialstatements
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2010
Cash flow from operating activitiesCash depleted in operations Interest paid Interest received Taxpaid
Net cash used in operating activities
Cash flows from investing activities Purchaseofproperty,plantandequipment Purchase of short term investment Proceedsfromdisposalofproperty,plantandequipment Additions to development costs
Netcashgeneratedfrom/(usedin)investingactivities
Cash flows from financing activities Drawdown of short term borrowings Repayment of term loans Repaymentoffinanceleasepayables Proceeds from issuance of ordinary shares
Netcashgeneratedfromfinancingactivities
Increase in cash and cash equivalents
Effect of foreign exchange rate changes
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
2009£
(489,661)(71,057)1,902
-
(558,816) (57,804) - - -
(57,804) 472,719 (89,122) (4,662) 365,000
743,935 127,315 (137,096) 410,085 400,304
2010£
(281,553) (83,643) 10,956 (1,635)
(355,875) (40,078) (1,713) 454,005 (285,009)
127,205
864,705(184,393)(12,297)
-
668,015
439,345
(107,213)
400,304
732,436
Note
26
11
17
23
Thenotesformpartofthesefinancialstatements
COMPANY STATEMENT OF CASH FLOWSFor the year ended 31 December 2010
Cash flow from operating activities Cash depleted in operations
Cash flows from investing activity Proceeds from issuance of ordinary shares
Decrease in cash and cash equivalents
Effect of foreign exchange rate changes
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
2009£
(366,280)
365,000
(1,280)
(94)
3,417
2,043
2010£
(5)
-
(5)
44
2,043
2,082
Note
26
17
24
1. GENERAL INFORMATION
TheprincipalactivityoftheCompanyisinvestmentholding.TheprincipalactivitiesofthesubsidiarycompaniesaresetoutinNote13tothefinancialstatements.Therewerenosignificantchangesinthenatureoftheseactivitiesduringtheyear.
TheCompanyisincorporatedinJersey,TheChannelIslandsundertheCompanies(Jersey)Law1991andislistedonAIM.Theregisteredofficeislocatedat28-34HillStreet,StHelier,JerseyJE48PN,ChannelIslands.Theconsolidatedfinancialstatements for the year ended 31 December 2010 comprise the results of the Company and its subsidiary companies undertakings.TheCompany’ssharesaretradedonAIMoftheLondonStockExchange.
MobilityOneLimitedistheholdingcompanyofanestablishedgroupofcompanies(“Group”)basedinMalaysiawhichisinthebusinessofprovidinge-commerceinfrastructurepaymentsolutionsandplatformsthroughtheirproprietarytechnologysolutions,whicharemarketedunderthebrandsMoCSTMandABOSSETM.
TheGrouphasdevelopedanend-to-ende-commercesolutionwhichconnectsvariousserviceprovidersacrossseveralindustriessuchasbanking,telecommunicationandtransportationthroughmultipledistributiondevicessuchasEDCterminals,shortmessagingservices,AutomatedTellerMachineandInternetbanking.
TheGroup’stechnologyplatformisflexible,scalableandhasbeendesignedtofacilitatecash,debitcardandcreditcardtransactions(according to thedevice) frommultipledeviceswhilecontrollingandmonitoring thedistributionofdifferentproducts and services.
2. ACCOUNTING POLICIES
Basis of preparation ThesefinancialstatementshavebeenpreparedinaccordancewithInternationalFinancialReportingStandards(IFRSsandIFRICinterpretations)issuedbytheInternationalAccountingStandardsBoard(IASB),asadoptedbytheEuropeanUnion,andwiththosepartsof theCompanies(Jersey)Law1991applicabletocompaniespreparingtheirfinancialstatementsunderIFRS.Thefinancialstatementshavebeenpreparedunderthehistoricalcostconvention.
Going Concern
TheGroup’sbusinessactivities,togetherwiththefactorslikelytoaffectitsfuturedevelopment,performanceandposition,aresetoutintheBusinessReviewonpage3.ThefinancialpositionoftheGroup,itscashflows,liquiditypositionandborrowingfacilitiesaredescribedinthefinancialstatementsandassociatednotes.Inaddition,Note3tothefinancialstatementsincludestheGroup’sobjectives,policiesandprocessesformanagingitscapital;itsfinancialriskmanagementobjectives;detailsofitsfinancialinstrumentsandhedgingactivities;anditsexposurestocreditriskandliquidityrisk.
InordertoassessthegoingconcernoftheGroup,theDirectorshavepreparedcashflowforecastsforcompanieswithintheGroup.ThesecashflowforecastsshowtheGroupwillhaveincreasedsalesbasedprimarilyonsignedcontractsandhavingsufficientheadroomoveravailablebankingfacilities.TheGrouphasobtainedbankingfacilitiessufficienttofacilitatethegrowth forecast in future periods. No matters have been drawn to the Directors’ attention to suggest that future renewals may not be forthcoming on acceptable terms.
Aftermakingenquiries,theDirectorshaveareasonableexpectationthattheGrouphasadequateresourcestocontinueinoperationalexistencefortheforeseeablefuture.Accordingly,theycontinuetoadoptthegoingconcernbasisinpreparingthefinancialstatements.
NOTES TO THE FINANCIAL STATEMENTSFor the year ended 31 December 2010
25
2. ACCOUNTING POLICIES (Continued)
Estimation uncertainty and critical judgements
Thesignificantareasofestimationuncertaintyandcriticaljudgementsinapplyingaccountingpoliciesthathavethemostsignificanteffectontheamountrecognisedinthefinancialstatementsareasfollows:
(i) Acquisitionofsubsidiarycompanies
Intangible assets acquired have been accounted for in accordance with IFRS 3 ‘Business Combinations’ and IAS 38 ‘IntangibleAssets’.Thekeyassumptionsaretheidentifiableintangibleassetsacquired,forecastfuturecashflowsandthediscountrate.ThecarryingamountsoftheGroup’sintangibleassetsasat31December2010aredisclosedinNote11tothefinancialstatements.
(ii) Depreciationofproperty,plantandequipment
Thecostsofproperty,plantandequipmentoftheGrouparedepreciatedonastraight-linebasisovertheusefullivesoftheassets.Managementestimatestheusefullivesoftheproperty,plantandequipmenttobewithin5to10years.Thesearecommonlifeexpectanciesappliedintheindustry.Changesintheexpectedlevelofusageandtechnologicaldevelopmentscouldimpacttheeconomicusefullivesandtheresidualvaluesoftheseassets,thereforefuturedepreciationchargescouldberevised.ThecarryingamountsoftheGroup’sproperty,plantandequipmentasat31December2010aredisclosedinNote12tothefinancialstatements.
(iii) Amortisationofintangibleassets
Software is amortised over its estimated useful life. Management estimated the useful life of this asset to be within 10 years. Changes in the expected level of usage and technological development could impact the economic useful life therefore future amortisation could be revised.
TheGroupdetermineswhethergoodwillisimpairedatleastonanannualbasis.Thisrequiresanestimationofthevalue-in-useofthecashgeneratingunits(“CGU”)towhichgoodwillisallocated.Estimatingavalue-in-useamountrequiresmanagementtomakeanestimationoftheexpectedfuturecashflowsfromtheCGUandalsotochooseasuitablediscountrateinordertocalculatethepresentvalueofthosecashflows.
Theresearchanddevelopmentcostsareamortisedonastraight-linebasisoverthelifespanofthedevelopedassets.Management estimated the useful life of these assets to be within 5 years. Changes in the technological developments couldimpacttheeconomicusefullifeandtheresidualvaluesoftheseassets,thereforefutureamortisationchargescould be revised.
ThecarryingamountsoftheGroup’sintangibleassetsasat31December2010aredisclosedinNote11tothefinancialstatements.
(iv) Impairmentofgoodwillonconsolidation
TheGroup'scashflowprojectionsincludeestimatesofsales.However,iftheprojectedsalesdonotmaterialisethereis a risk that the value of goodwill would be impaired.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)For the year ended 31 December 2010
26
2. ACCOUNTING POLICIES (Continued)
Estimation uncertainty and critical judgements (continued)
TheDirectorshavecarriedoutadetailedimpairmentreviewinrespectofgoodwill.TheGroupassessesateachreportingdatewhetherthereisanindicationthatanassetmaybeimpaired,byconsideringthenetpresentvalueofdiscountedcashflowsforecastswhichhavebeendiscountedat8.5%.Thecashflowprojectionsarebasedontheassumptionthat the Group can realise projected sales. A prudent approach has been applied with no residual value being factored. Attheperiodend,basedontheseassumptionstherewasnoindicationofimpairmentofthevalueofgoodwillorofdevelopment costs.
However,iftheprojectedsalesdonotmaterialisethereisariskthatthevalueoftheintangibleassetsshownabovewould be impaired.
ThecarryingamountoftheGroup’sgoodwillonconsolidationasat31December2010isdisclosedintheNote11tothefinancialstatements.
(v) Incometaxes
TheGrouphasexposuretoincometaxesinnumerousjurisdictions.Therearecertaintransactionsandcomputationforwhich theultimate taxdetermination isuncertainduring theordinarycourseofbusiness.Significant judgementis involved especially in determining tax base allowances and deductibility of certain expenses in determining the Group-wideprovisionforincometaxes.TheGrouprecognisesliabilitiesforexpectedtaxissuesbasedonestimatesofwhetheradditionaltaxeswillbedue.Wherethefinaltaxoutcomeofthesemattersisdifferentfromtheamountsthatwereinitiallyrecognised,suchdifferenceswillimpacttheincometaxanddeferredtaxprovisionsintheperiodinwhichsuch determination is made.
(vi) Contingentliabilities
Whereitisnotprobablethatanoutflowofeconomicbenefitswillberequired,ortheamountcannotbeestimatedreliably,theobligationisdisclosedasacontingentliability,unlesstheprobabilityofoutflowofeconomicbenefitsisremote.Possibleobligations,whoseexistencewillonlybeconfirmedbytheoccurrenceornon-occurrenceofoneormorefutureeventsarealsodisclosedascontingentliabilitiesunlesstheprobabilityofoutflowofeconomicbenefitsisremote.
TheDirectorsareoftheopinionthatnoprovisionisrequiredinrespectofthecontingentliabilitiesasdisclosedinNote30asitisnotprobablethatfuturesacrificeofeconomicbenefitswillberequiredortheamountisnotcapableofreliablemeasurement.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2010
27
2. ACCOUNTING POLICIES (Continued)
IFRS AND IAS UPDATE FOR 31 DECEMBER 2010 ACCOUNTS
(a) New and amended standards adopted by the Group
TheGrouphasadoptedthefollowingnewandamendedIFRSsasof1January2010:
IFRS3 (revised), ‘Business combinations’ and consequential amendments to IAS27, ‘Consolidatedand separatefinancialstatements’,IAS28,‘Investmentsinassociates’andIAS31,‘Interestsinjointventures’,effectiveprospectivelytobusinesscombinationsforwhichtheacquisitiondateisonorafterthebeginningofthefirstannualreportingperiodbeginning on or after 1 July 2009.
Therevisedstandardcontinuestoapplytheacquisitionmethodtobusinesscombinations,withsomesignificantchanges.Forexample,allpaymentstopurchaseabusinessaretoberecordedatfairvalueattheacquisitiondate,withcontingentpaymentsclassifiedasdebtsubsequentlyre-measuredthroughthestatementofcomprehensiveincome.Thereisachoiceonanacquisition-by-acquisitionbasistomeasuretheminorityinterestintheacquireeeitheratfairvalueorattheminorityinterest’sproportionateshareoftheacquiree’snetassets.Allacquisition-relatedcostsshouldbeexpensed.
• IAS27(revised),‘Consolidatedandseparatefinancialstatements’,(effectivefrom1July2009).Therevisedstandardrequirestheeffectsofalltransactionswithnon-controllingintereststoberecordedinequityifthereisnochangeincontrolandthesetransactionswillnolongerresultingoodwillorgainsandlosses.Thestandardalsospecifiestheaccountingwhencontrolislost.Anyremaininginterestintheentityisremeasuredtofairvalue,andagainorlossisrecognisedinprofitorloss.ThecompanywillapplyIAS27(revised)prospectivelytotransactionswithnon-controlling interests from 1 January 2010.
• IAS38(amendment),‘Intangibleassets’.TheamendmentispartoftheIASB’sannualimprovementsprojectpublishedinApril2009andthecompanywillapply IAS38(amendment) fromthedate IFRS3(revised) isadopted.Theamendmentclarifiesguidanceinmeasuringthefairvalueofanintangibleassetacquiredinabusinesscombinationand it permits the grouping of intangible assets as a single asset if each asset has a similar useful economic life. Theamendmentwillnotresultinamaterialimpactonthecompany’sfinancialstatements.
• IAS32(amendment),‘Financialinstruments:presentation–classificationofrightsissue’,iseffectivefromannualperiodsbeginningonorafter1February2010andamendedthedefinitionofafinancialliabilityinordertoclassifyrightsissues(andcertainoptionsorwarrants)asequityinstrumentsincaseswheresuchrightsaregivenpro-ratatoalloftheexistingownersofthesameclassofanentity’snon-derivativeequityinstruments,ortoacquireafixednumberoftheentity’sownequityinstrumentsforafixedamountinanycurrency.Thisamendmentwillhavenoimpact on the company after initial application.
• IFRS2,Share-basedPayment:GroupCash-settledShare-basedPaymentTransactionseffective1January2010.TheIASBissuedanamendmenttoIFRS2thatclarifiedthescopeandtheaccountingforgroupcash-settledshare-basedpaymenttransactions.Thecompanyadoptedthisamendmentasof1January2010.Itdidnothaveanimpactonthefinancialpositionorperformanceofthecompany.
• IAS39FinancialInstruments:RecognitionandMeasurement–EligibleHedgedItemseffective1July2009.Theamendmentclarifiesthatanentityispermittedtodesignateaportionofthefairvaluechangesorcashflowsvariabilityofafinancialinstrumentasahedgeditem.Thisalsocoversthedesignationofinflationasahedgedriskorportioninparticularsituations.ThecompanyhasconcludedthattheamendmentwillhavenoimpactonthefinancialpositionorperformanceoftheCompany,astheCompanyhasnotenteredintosuchhedges.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)For the year ended 31 December 2010
28
2. ACCOUNTING POLICIES (Continued)
IFRS AND IAS UPDATE FOR 31 DECEMBER 2010 ACCOUNTS (continued)
(a) New and amended standards adopted by the Group (continued)
Thefollowingnewstandards,amendments tostandardsand interpretationsaremandatory for thefirst timefor thefinancialyearbeginning1January2010,butarenotcurrentlyrelevantforthecompany:
• IFRIC17,‘Distributionsofnon-cashassetstoowners’,effectiveforannualperiodsbeginningonorafter1July2009.Thisisnotcurrentlyapplicabletothecompany,asithasnotmadeanynon-cashdistributions.
• IFRIC18,‘Transfersofassetsfromcustomers’,effectivefortransfersofassetsreceivedonorafter1July2009.Thisisnotrelevanttothecompany,asithasnotreceivedanyassetsfromcustomers.
(b) Standards, interpretations and amendments to published standards that are not yet effective
Thefollowingnewstandards,amendmentstostandardsandinterpretationshavebeenissued,butarenoteffectiveforthefinancialyearbeginning1January2010andhavenotbeenearlyadopted:
• IAS24(Amendment),‘Relatedpartytransactions’.Theamendedstandardiseffectiveforannualperiodsbeginningonorafter1January2011.Itclarifieddefinitionofarelatedpartytosimplifytheidentificationofsuchrelationshipsandtoeliminateinconsistenciesinitsapplication.Therevisedstandardintroducesapartialexemptionofdisclosurerequirementsforgovernment-relatedentities.Thecompanydoesnotexpectanyimpactonitsfinancialpositionorperformance.
• IFRIC14(Amendment),‘Prepaymentsofaminimumfundingrequirement’.TheamendmenttoIFRIC14iseffectiveforannualperiodsbeginningonorafter1January2011withretrospectiveapplication.Theamendmentprovidesguidanceonassessingtherecoverableamountofanetpensionasset.Theamendmentpermitsanentitytotreattheprepaymentofaminimumfundingrequirementasanasset.Theamendmentisdeemedtohavenoimpactonthefinancialstatementsofthecompany.
• IFRS9,‘Financialinstruments:classificationandmeasurement’,asissuedreflectsthefirstphaseoftheIASBworkonthereplacementofIAS39andappliestoclassificationandmeasurementoffinancialassetsasdefinedinIAS39.Thestandardiseffectiveforannualperiodsbeginningonorafter1January2013.Insubsequentphases,theIASBwilladdressclassificationandmeasurementoffinancialliabilities,hedgeaccountingandderecognition.Thecompletionofthisprojectisexpectedinearly2011.TheadoptionofthefirstphaseofIFRS9mighthaveaneffectontheclassificationandmeasurementofthecompany’sassets.Atthisjunctureitisdifficultforthecompanytocomprehendtheimpactonitsfinancialpositionandperformance.
• IFRIC19,‘Extinguishingfinancialliabilitieswithequityinstruments’,iseffectiveforannualperiodsbeginningonorafter1July2010.Theinterpretationclarifiesthatequityinstrumentsissuedtoacreditortoextinguishafinancialliabilityqualifyasconsiderationpaid.Theequityinstrumentsissuedaremeasuredattheirfairvalue.Incasethatthiscannotbereliablymeasured,theinstrumentsaremeasuredatthefairvalueoftheliabilityextinguished.Anygainorlossisrecognisedinprofitorloss.Theadoptionofthisinterpretationwillhavenoeffectonthefinancialstatements of the company.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2010
29
2. ACCOUNTING POLICIES (Continued)
IFRS AND IAS UPDATE FOR 31 DECEMBER 2010 ACCOUNTS (continued)
(b) Standards, interpretations and amendments to published standards that are not yet effective (continued)
• ImprovementstoIFRS(issuedinMay2010).TheIASBissuedimprovementtoIFRSs,anomnibusofamendmentstoitsIFRSstandards.Theamendmentshavenotbeenadoptedastheybecomeeffectiveforannualperiodsonorafter1January2011or1July2010.Theamendmentslistedbelow,areconsideredtohaveareasonablepossibleimpactonthecompany:
- IFRS3Businesscombinations - IFRS7Financialinstruments:disclosures - IAS1Presentationoffinancialstatements - IAS27Consolidatedandseparatefinancialstatements
Thecompanyexpectsnoimpactfromtheadoptionoftheaboveamendmentsonitsfinancialpositionorperformance.
Basis of consolidation
TheconsolidatedfinancialstatementsincorporatethefinancialstatementsoftheCompanyandentitiescontrolledbytheCompany(itssubsidiarycompanies)madeupto31Decembereachyear.ControlisachievedwheretheCompanyhasthepowertogovernthefinancialandoperatingpoliciesofaninvesteeentitysoastoobtainbenefitsfromitsactivities.
Transactions,balancesandunrealisedgainsontransactionsbetweenGroupcompaniesareeliminated.Unrealisedlossesare also eliminated but considered an impairment indicator of the asset transferred. Accounting policies of its subsidiary companieshavebeenchanged(wherenecessary)toensureconsistencywiththepoliciesadoptedbytheGroup.
(i) Subsidiarycompanies
SubsidiarycompaniesareentitiesoverwhichtheGrouphastheabilitytocontrolthefinancialandoperatingpoliciessoastoobtainbenefitsfromtheiractivities.Theexistenceandeffectofpotentialvotingrightsthatarecurrentlyexercisableor convertible are considered when assessing whether the Group has such power over another entity.
IntheCompany’sseparatefinancialstatements,investmentsinsubsidiarycompaniesarestatedatcostlessimpairmentlosses.Ondisposalofsuchinvestments,thedifferencebetweennetdisposalproceedsandtheircarryingamountsisincludedinprofitorloss.
(ii) Basisofconsolidation
Thesharecapitalintheconsolidatedstatementofchangesinequityfortheboththecurrentandcomparativeperioduses a historic exchange rate to determine the equity value.
On22June2007MobilityOneLimitedacquiredtheentireissuedsharecapitalofMobilityOneSdn.Bhd.bywayofashareforshareexchange,underIFRSthistransactionmeetsthecriteriaofaReverseAcquisition.Theconsolidatedaccountshave therefore been presented under the Reverse Acquisition Accounting principles of IFRS 3 and show comparatives forMobilityOneSdn.Bhd..Forfinancialreportingpurposes,MobilityOneSdn.Bhd.(thelegalsubsidiarycompany)istheacquirerandMobilityOneLimited(thelegalparentcompany)theacquiree.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)For the year ended 31 December 2010
30
2. ACCOUNTING POLICIES (Continued)
Basis of consolidation (continued) Wherenecessary,adjustmentsaremadetothefinancialstatementsofsubsidiariestobringtheaccountingpoliciesused
into line with those used by the Group.
Allinter-groupbalancesandtransactions,includingunrealisedprofitsarisingfromintra-grouptransactions,areeliminatedfully on consolidation.
Subsidiarycompaniesareconsolidatedfromthedateofacquisition,beingthedateonwhichtheGroupobtainscontrol,andcontinuetobeconsolidateduntilthedatethatsuchcontrolceases.Inpreparingtheconsolidatedfinancialstatements,intra-groupbalances,transactionsandunrealisedgainsorlossesareeliminatedinfull.Uniformaccountingpoliciesareadoptedintheconsolidatedfinancialstatementsforliketransactionsandeventsinsimilarcircumstances.
NogoodwillhasbeenrecordedandthedifferencebetweentheparentCompany’scostofinvestmentandMobilityOneSdn. Bhd.’s share capital and share premium is presented as a reverse acquisition reserve within equity on consolidation.
TheconsolidatedfinancialstatementsincorporatethefinancialstatementsoftheCompanyandallentitiescontrolledbyitaftereliminatinginternaltransactions.ControlisachievedwheretheGrouphasthepowertogovernthefinancialandoperatingpoliciesofaGroupundertakingsoastoobtaineconomicbenefitsfromitsactivities.Undertakings’resultsareadjusted,whereappropriate,toconformtoGroupaccountingpolicies.
AspermittedbyandinaccordancewithArticle110oftheCompanies(Jersey)Law1991,aseparateincomestatementofMobilityOneLimited,isnotpresented.
Revenue recognition
RevenueisrecognisedwhenitisprobablethateconomicbenefitsassociatedwiththetransactionwillflowtotheGroupandthe amount of the revenue can be measured reliably.
(i) Revenuefromtradingactivities
RevenueinrespectofusingtheGroup’se-Channelplatformarisesfromthesalesofprepaidcredit,salescommissionsreceived and fees per transaction charged to customers. Revenue for sales of prepaid credit is deferred until such time as the products and services are delivered to end users. Sales commissions and transaction fees are received from various product and services providers and are recognised when the services are rendered and transactions are completed.
Revenuefromsolutionsalesandconsultancycomprisesalesofsoftwaresolutions,hardwareequipment,consultancyfeesandmaintenanceand support services. For sales of hardwareequipment, revenue is recognisedwhen thesignificantrisksassociatedwiththeequipmentaretransferredtocustomersortheexpiryoftherightofreturn.Forallotherrelatedsales,revenueisrecognisedupondeliverytocustomersandovertheperiodinwhichservicesareexpectedto be provided to customers.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2010
31
2. ACCOUNTING POLICIES (Continued)
Revenue recognition (Continued)
(ii) Interestincome
Interest income is recognised on a time proportion basis that takes into account the effective yield on the asset. Employee benefits
(i) Shorttermemployeebenefits
Wages,salaries,bonusesandsocialsecuritycontributionsarerecognisedasanexpenseintheperiodinwhichtheassociated services are rendered by employees of the Group. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensationabsences.Shorttermnon-accumulatingcompensatedabsencessuchassickandmedical leavearerecognised when the absences occur.
Theexpectedcostofaccumulatingcompensatedabsencesismeasuredastheadditionalamountexpectedtobepaidas a result of the unused entitlement that has accumulated at the Statement of Financial Position date.
(ii) Definedcontributionplans
Asrequiredbylaw,companiesinMalaysiamakecontributionstothestatepensionscheme,theEmployeesProvidentFund(“EPF”).Suchcontributionsarerecognisedasanexpenseintheincomestatementintheperiodtowhichtheyrelate.Theothersubsidiarycompaniesalsomakecontributiontotheirrespectivecountries’statutorypensionschemes.
Finance leases
Assetsfinancedbyleasingarrangements,whichgiverightsapproximatingtoownership,aretreatedasiftheyhadbeenpurchased outright and are capitalised and depreciated over the shorter of the estimated useful life of the assets and the periodoftheleases.Thecapitalelementoffuturerentalsistreatedasaliabilityandtheinterestelementischargedagainstprofitsinproportiontothebalancesoutstanding.Therentalcostsofallotherleasedassetsarechargedagainstprofitsonastraight-linebasisovertheleaseterm.
Operating leases
Leases inwhichasignificantportionof therisksandrewardsofownershipareretainedby the lessorareclassifiedasoperatingleases.Paymentsmadeunderoperatingleases(netofincentivesreceivedfromthelessor)arechargedtotheincome statement.
Functional currency translation
(i) Functionalandpresentationcurrency
ItemsincludedinthefinancialstatementsofeachoftheGroup’sentitiesaremeasuredusingthecurrencyoftheprimaryeconomicenvironmentinwhichtheentityoperates(thefunctionalcurrency).ThefunctionalcurrencyoftheGroupisRinggitMalaysia(RM).TheconsolidatedfinancialstatementsarepresentedinPoundSterling(£),whichistheCompany’spresentational currency as this is the currency used in the country in which the entity is listed.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)For the year ended 31 December 2010
32
2. ACCOUNTING POLICIES (Continued)
Functional currency translation (continued)
AssetsandliabilitiesaretranslatedintoPoundSterling(£)atforeignexchangeratesrulingattheStatementofFinancialPositiondate.ResultsandcashflowsaretranslatedintoPoundSterling(£)usingaverageratesofexchangefortheperiod.
(ii) Transactionsandbalances
Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from thetranslationatyear-endexchangeratesofmonetaryassetsand liabilitiesdenominated in foreigncurrenciesarerecognised in the income statement.
Thefinancialinformationsetoutbelowhasbeentranslatedatthefollowingrates:
Exchange rate (RM: £) At Statement of Financial Average for Position date year Year ended 31 December 2010 4.78 4.96 Year ended 31 December 2009 5.50 5.53
Taxation
Taxationontheincomestatementforthefinancialperiodcomprisescurrentanddeferredtax.Currenttaxistheexpectedamountoftaxespayableinrespectofthetaxableprofitforthefinancialperiodandismeasuredusingthetaxratesthathavebeen enacted at the Statement of Financial Position date.
Deferred tax is recognised on the liability method for all temporary differences between the carrying amount of an asset or liability in the Statement of Financial Position and its tax base at the Statement of Financial Position date. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporarydifferences,unusedtaxlossesandunusedtaxcreditstotheextentthatitisprobablethatfuturetaxableprofitwillbeavailableagainstwhich thedeductible temporarydifferences,unused tax lossesandunused taxcreditscanbeutilised. Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or from the initial recognitionofanassetorliabilityinatransactionwhichisnotabusinesscombinationandatthetimeofthetransaction,affectsneitheraccountingprofitnortaxableprofit. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realisedortheliabilityissettled,basedonthetaxratesthathavebeenenactedorsubstantivelyenactedbytheStatementofFinancialPositiondate.ThecarryingamountofadeferredtaxassetisreviewedateachStatementofFinancialPositiondateandisreducedtotheextentthatitbecomesprobablethatsufficientfuturetaxableprofitwillbeavailable.
Deferredtaxisrecognisedintheincomestatement,exceptwhenitarisesfromatransactionwhichisrecogniseddirectlyinequity, inwhichcasethedeferredtaxisalsochargedorcrediteddirectlyinequity,orwhenitarisesfromabusinesscombinationthatisanacquisition,inwhichcasethedeferredtaxisincludedintheresultinggoodwillornegativegoodwill.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2010
33
2. ACCOUNTING POLICIES (Continued)
Intangible assets
(i) Researchanddevelopmentcosts
All research costs are recognised in the income statement as incurred.
Expenditure incurred on projects to develop new products is capitalised and deferred only when the Group can demonstrate the technical feasibilityofcompleting the intangibleassetso that itwillbeavailable foruseorsale, its intention tocompleteanditsabilitytouseorselltheasset,howtheassetwillgeneratefutureeconomicbenefits,theavailabilityofresources to complete the project and the ability to measure reliably the expenditure during the development. Product development expenditures which do not meet these criteria are expensed when incurred.
Developmentcosts,consideredtohavefiniteusefullives,arestatedatcostlessanyimpairmentlossesandareamortisedthroughotheroperatingexpensesintheincomestatementusingthestraight-linebasisoverthecommerciallivesoftheunderlyingproductsnotexceedingfiveyears.Impairmentisassessedwheneverthereisanindicationofimpairmentand the amortisation period and method are also reviewed at least at each Statement of Financial Position date.
(ii) Goodwillonconsolidation
Goodwillacquiredinabusinesscombinationisinitiallymeasuredatcost,representingtheexcessofthepurchasepriceovertheGroup’sinterestinthenetfairvalueoftheidentifiableassets,liabilitiesandcontingentliabilities.
Following the initial recognition,goodwill ismeasuredatcost lessaccumulated impairment losses.Goodwill isnotamortisedbutinstead,itisreviewedforimpairmentannuallyormorefrequentwhenthereisobjectiveevidencethatthecarryingvaluemaybeimpaired,inaccordancewiththeaccountingpolicydisclosedinimpairmentofassets.
Gains or losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Impairment of assets
Thecarryingamountsofassetsarereviewedateachreportingdatetodeterminewhetherthereisanyindicationofimpairment.
Ifanysuchindicationexiststhentheasset’srecoverableamountisestimated.Forgoodwillthathasanindefiniteusefullife,recoverableamountisestimatedateachreportingdateormorefrequentlywhenindicationsofimpairmentareidentified.
Animpairment lossisrecognisedif thecarryingamountofanassetor itscash-generatingunitexceedsitsrecoverableamountunlesstheassetiscarriedatarevaluedamount,inwhichcasetheimpairmentlossisrecogniseddirectlyagainstany revaluation surplus for the asset to the extent that the impairment loss does not exceed the amount in the revaluation surplusforthatsameasset.Acash-generatingunitisthesmallestidentifiableassetgroupthatgeneratescashflowsthatare largely independent from other assets and groups. Impairment losses are recognised in the income statement in the periodinwhichitarises.Impairmentlossesrecognisedinrespectofcash-generatingunitsareallocatedfirsttoreducethecarrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (groupofunits)onaproratabasis.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)For the year ended 31 December 2010
34
2. ACCOUNTING POLICIES (Continued)
Impairment of assets (continued)
Therecoverableamountofanassetorcash-generatingunitisthegreaterofitsvalueinuseanditsfairvaluelesscoststosell.Inassessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheasset.
Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an asset other than goodwill is reversedif,andonlyif,therehasbeenachangeintheestimatesusedtodeterminetheasset’srecoverableamountsincethelastimpairmentlosswasrecognised.Thecarryingamountofanassetotherthangoodwillisincreasedtoitsrevisedrecoverableamount,providedthatthisamountdoesnotexceedthecarryingamountthatwouldhavebeendetermined(netofamortisationordepreciation)hadnoimpairmentlossbeenrecognisedfortheassetinprioryears.Areversalofimpairmentlossforanassetotherthangoodwillisrecognisedintheincomestatementunlesstheassetiscarriedatrevaluedamount,inwhichcase,suchreversalistreatedasarevaluationincrease.
Property, plant and equipment
(i) Recognitionandmeasurement
Property,plantandequipmentarestatedatcostlessaccumulateddepreciationandaccumulatedimpairmentlosses.
Cost includesexpendituresthataredirectlyattributable to theacquisitionof theasset.Thecostofself-constructedassets includes thecostofmaterialsanddirect labour,anyothercostsdirectlyattributable tobringing theasset toworkingconditionforitsintendeduse,andthecostsofdismantlingandremovingtheitemsandrestoringthesiteonwhich they are located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.
Thecostofproperty,plantandequipmentrecognisedasaresultofabusinesscombinationisbasedonfairvalueatacquisitiondate.Thefairvalueofpropertyistheestimatedamountforwhichapropertycouldbeexchangedonthedateof valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein thepartieshadeachactedknowledgeably,prudentlyandwithoutcompulsion.Thefairvalueofotheritemsofplantandequipment is based on the quoted market prices for similar items.
Whensignificantpartsofanitemofproperty,plantandequipmenthavedifferentusefullives,theyareaccountedforasseparateitems(majorcomponents)ofproperty,plantandequipment.
(ii) Subsequentcosts
Thecostofreplacingpartofanitemofproperty,plantandequipmentisrecognisedinthecarryingamountoftheitemifitisprobablethatthefutureeconomicbenefitsembodiedwithinthepartwillflowtotheGroupanditscostcanbemeasuredreliably.Thecostsoftheday-to-dayservicingofproperty,plantandequipmentarerecognisedintheincomestatement as incurred.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2010
35
2. ACCOUNTING POLICIES (Continued)
Property, plant and equipment (continued)
(iii)Depreciation
Depreciationisrecognisedintheincomestatementonastraight-linebasisovertheestimatedusefullivesofproperty,plantandequipment.Leasedassetsaredepreciatedovertheshorteroftheleasetermandtheirusefullives.Property,plant and equipment under construction are not depreciated until the assets are ready for their intended use.
Theestimatedusefullivesforthecurrentandcomparativeperiodsareasfollows:
Motor vehicles 5 yearsElectronic Data Capture equipment 10 yearsComputer equipment 5 yearsComputer software 10 yearsFurnitureandfittings 10yearsOfficeequipment 10yearsRenovation 10 years
Thedepreciableamountisdeterminedafterdeductingtheresidualvalue.
Depreciationmethods,usefullivesandresidualvaluesarereassessedateachfinancialperiodend.
Upondisposalofanasset,thedifferencebetweenthenetdisposalproceedsandthecarryingamountoftheassetsischargedorcreditedtotheincomestatement.Ondisposalofarevaluedasset,theattributablerevaluationsurplusremaining in the revaluation reserve is transferred to the distribution reserve.
Investments
Investments in subsidiary companies are stated at cost less any provision for impairment.
Inventories
Inventoriesarevaluedatthelowerofcostandnetrealisablevalueandaredeterminedonthefirst-in-first-outmethod,aftermaking due allowance for obsolete and slow moving items. Net realisable value is based on estimated selling price in the ordinary course of business less the costs of completion and selling expenses.
Trade and other receivables
Tradeandotherreceivablesarerecognisedinitiallyatfairvalueandsubsequentlymeasuredattheircostwhenthecontractualrighttoreceivecashorotherfinancialassetsfromanotherentityisestablished.
A provision for doubtful debts is made when there is objective evidence that the Group will not be able to collect all amounts dueaccordingtotheoriginaltermsofthereceivables.Significantfinancialdifficultiesofthedebtor,probabilitythatthedebtorwillenterbankruptcyorfinancialreorganisationanddefaultordelinquencyinpaymentsareconsideredindicatorsthatatrade and other receivables are impaired.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)For the year ended 31 December 2010
36
2. ACCOUNTING POLICIES (Continued)
Cash and cash equivalents
Cashandcashequivalentsincludecashinhand,depositsheldatcallwithbanks,othershort-termhighlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorlesswhichhaveaninsignificantriskofchangesinvalueandbankoverdrafts.ForthepurposeofStatementofCashFlows,cashandcashequivalentsarepresentednetofbankoverdrafts. Non-current assets held for sale
Non-currentassetsareclassifiedasheldforsaleandstatedatthelowerofcarryingamountandfairvaluelesscosttosellif theircarryingamountwillberecoveredprincipallythroughasaletransactionratherthanthroughcontinuinguse.Thiscondition is regarded a met only when the sale is highly probable and the asset is available for immediate sale in its present condition subject only to terms that are usual and customary.
Trade and other payables
Tradeandotherpayablesarerecognisedinitiallyatfairvalueoftheconsiderationtobepaidinthefutureforgoodsandservices received.
Borrowing costs
Borrowingcostsdirectlyattributabletotheacquisition,constructionorproductionofqualifyingassets,whichareassetsthatnecessarilytakeasubstantialperiodoftimetogetreadyfortheirintendeduseorsale,arecapitalisedaspartofthecostofthoseassets,untilsuchtimeastheassetsaresubstantiallyreadyfortheirintendeduseorsale.
Whentheborrowingsaremadespecificallyforthepurposeofobtainingaqualifyingasset,theamountofborrowingcostseligible for capitalisation is the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of funds drawndown from those borrowings. Whentheborrowingsaremadegenerally,andusedforthepurposeofobtainingaqualifyingasset,theborrowingcostseligible for capitalisation are determined by applying a capitalisation rate which is weighted on the borrowing costs applicable totheGroup’sborrowingsthatareoutstandingduringthefinancialperiod,otherthanborrowingsmadespecificallyforthepurpose of acquiring another qualifying asset.
Borrowingcostswhicharenoteligibleforcapitalisationarerecognisedasanexpenseintheprofitorlossintheperiodinwhich they are incurred.
Equity instruments
InstrumentsthatevidencearesidualinterestintheassetsoftheGroupafterdeductingallofitsliabilitiesareclassifiedasequity instruments. Issued equity instruments are recorded at proceeds received net of direct issue costs.
Ordinary shares are classifiedas equity. Incremental costs directly attributable to the issueof new shares or options areshowninequityasadeduction,netofvalueaddedtax,fromtheproceeds.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2010
37
2. ACCOUNTING POLICIES (Continued)
Financial instruments
FinancialinstrumentscarriedontheStatementofFinancialPositionincludecashandbankbalances,deposits,investments,receivables,payablesandborrowings.FinancialinstrumentsarerecognisedintheStatementofFinancialPositionwhenthe Group has become a party to the contractual provisions of the instrument.
Financialinstrumentsareclassifiedasliabilitiesorequityinaccordancewiththesubstanceofthecontractualarrangement.Interest,dividendsandgainsandlossesrelatingtoafinancialinstrumentclassifiedasaliability,arereportedasanexpenseor income.Distributions toholdersoffinancial instrumentsclassifiedasequityarechargeddirectly toequity.Financialinstruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.
TheparticularrecognitionmethodadoptedforfinancialinstrumentsrecognisedontheStatementofFinancialPositionis
disclosed in the individual accounting policy statements associated with each item.
Share based payments Charges for employees services received in exchange for share based payments have been made for all options granted
inaccordancewithIFRS2“ShareBasedPayments”optionsgrantedundertheGroup’semployeeshareschemeareequitysettled.ThefairvalueofsuchoptionshasbeencalculatedusingaBlack-scholesmodel,baseduponpubliclyavailablemarketdata,andischargedtotheprofitorlossoverthevestingperiod.
3. FINANCIAL INSTRUMENTS
(a) Financial risk management objectives and policies
TheGroupandtheCompany’sfinancialriskmanagementpolicyistoensurethatadequatefinancialresourcesareavailableforthedevelopmentoftheGroupandoftheCompany’soperationswhilstmanagingitsfinancialrisks,includinginterestraterisk,creditrisk,foreigncurrencyexchangerisk,liquidityandcashflowriskandcapitalrisk.TheGroupandtheCompanyoperateswithinclearlydefinedguidelinesthatareapprovedbytheBoardandtheGroup’spolicyisnotto engage in speculative transactions.
(b) Interest rate risk
Cashflowinterestrateriskistheriskthatthefuturecashflowsofafinancialinstrumentwillfluctuatebecauseofchangesinmarketinterestrates.Fairvalueinterestrateriskistheriskthatthevalueofafinancialinstrumentwillfluctuateduetochangesinmarketinterestrates.AstheGrouphasnosignificantinterest-bearingfinancialassets,theGroup’sincomeandoperatingcashflowsaresubstantiallyindependentofchangesinmarketinterestrates.
TheGroup’sinterestrateriskarisesprimarilyfrominterest-bearingborrowings.BorrowingsatfloatingratesexposetheGrouptocashflowinterestraterisk.BorrowingsobtainedatfixedratesexposetheGrouptofairvalueinterestraterisk.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)For the year ended 31 December 2010
38
3.
FIN
AN
CIA
L IN
STR
UM
ENTS
(Con
tinue
d)
Thefollowingtablessetoutthecarryingam
ounts,theeffectiveinterestra
tesasattheStatementofF
inancialPositiondateandtheremaining
maturitiesoftheGroup’sfinancialinstrumentsthatareexposedtointerestraterisk:
At 3
1 D
ecem
ber 2
010
Fixedrate:
Fixe
d de
posi
tFi
nanc
e le
ases
Floatingrate:
Bank
ers’
acc
epta
nce
Lette
r of c
redi
tsTrustreceipts
At 3
1 D
ecem
ber 2
009
Fixedrate:
Fixe
d de
posi
tTermloans
Fina
nce
leas
es
Floatingrate:
Bank
ers’
acc
epta
nce
Termloans
Tota
l £
467,777
(115,420)
(1,101,700)
(536,420)
(417,216)
343,414
(27,489)
(80,028)
(1,006,345)
(138,954)
4-5
year
s £ -(19,366) - - - - -
(12,531) - -
2-3
year
s £ -(17,282) - - - - -
(11,120) - -
With
in1
year £
467,777
(15,197)
(1,101,700)
(536,420)
(417,216)
343,414
(27,489)
(9,710)
(1,006,345)
(138,954)
Mor
e th
an5
year
s £ -(29,012) - - - - -
(24,427) - -
3-4
year
s £ -(18,324) - - - - -
(11,825) - -
1-2
year
s £ -(16,239) - - - - -
(10,415) - -
Effe
ctiv
eIn
tere
st R
ate %
2.58
3.08
5.22
2.44
2.79
2.10
8.58
2.88
6.88
7.30
Not
e
17 21 21 21 21 17 21 21 21 21
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2010
39
3. FINANCIAL INSTRUMENTS (Continued)
(c) Credit risk
TheGroup’sandtheCompany’sexposuretocreditriskarisesmainlyfromreceivables.Receivablesaremonitoredonanongoing basis via management reporting procedure and action is taken to recover debts when due. At each Statement ofFinancialPositiondate,therewasnosignificantconcentrationofcreditrisk.ThemaximumexposuretocreditriskfortheGroupandtheCompanyisthecarryingamountofthefinancialassetsshownintheStatementofFinancialPosition.
(d) Foreign currency exchange risk
TheGroupandtheCompanyisexposedtoforeigncurrencyriskonsales,purchasesandborrowingsthataredenominatedinacurrencyotherthanRinggitMalaysia.ThecurrencygivingrisetothisriskisprimarilyUSdollars.TheGroupandthe Company maintains a natural hedge that minimises the foreign exchange exposure by matching foreign currency income with foreign currency costs.
TheGroupdoesnotconsideritnecessarytoenterintoforeignexchangecontractsinmanagingitsforeignexchangeriskresultingfromcashflowsfromtransactionsdenominatedinforeigncurrency,giventhenatureofthebusinessforthe time being.
ThenetunhedgedfinancialassetsoftheGroupthataredenominatedinitsfunctionalcurrencyareasfollows:
Net Financial Asset Held in Non-Functional Currency
Indonesian Rupiah US Dollars Total £ £ £
Group At 31 December 2010 Tradereceivables 49,896 95,144 145,040 Group At 31 December 2009 Tradereceivables 8,594 - 8,594
(e) Liquidity and cash flow risks
TheGroupand theCompanyseeks toachieveaflexibleandcosteffectiveborrowingstructure toensure that theprojected net borrowing needs are covered by available committed facilities. Debt maturities are structured in such a way to ensure that the amount of debt maturing in any one year is within the Group’s and the Company’s ability to repayand/orrefinance.
TheGroupandtheCompanyalsomaintainsacertainlevelofcashandcashconvertibleinvestmentstomeetitsworkingcapital requirements.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)For the year ended 31 December 2010
40
3. FINANCIAL INSTRUMENTS (Continued)
(f) Capital risk
TheGroup’sandtheCompany’sobjectiveswhenmanagingcapitalaretosafeguardtheGroup’sandtheCompany’sabilitytocontinueasagoingconcerninordertoprovidereturnsforshareholdersandbenefitsforotherstakeholdersandtomaintainanoptimalcapitalstructuretoreducethecostofcapital.Inordertomaintainoradjustthecapitalstructure,theGroupandtheCompanymayadjusttheamountofdividendspaidtoshareholders,returncapitaltoshareholders,issue new shares or sell assets to reduce debt.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2010
41
4. EMPLOYEES AND DIRECTORS
EMPLOYEESWages,salariesandbonusesSocial security contributionContributiontodefinedcontributionplanOtherstaffrelatedexpenses
Less:Capitalisedindevelopmentcosts(Note11)
DIRECTORSFeesWages,salariesandbonusesSocial security contributionContributiontodefinedcontributionplanTotalremunerationLess:Capitalisedindevelopmentcosts(Note11)
5. SEGMENTAL ANALYSIS
TheGroup’sactivitiesaretreatedasasingleclassofbusiness,allarisingfromgoodsandservicesprovidedintheFarEast.Accordingly,nosegmentalanalysisofrevenues,profits,assetsandliabilitiesisavailableforpresentation.
6. FINANCE COSTS
Bankers’ acceptance interestTermloansinterestFinance lease interest Bank guarantee interestLetter of credit interestTrustreceiptinterest
2009£
52,69116,0742,292
---
71,057
2010£
56,7733,1248,5253,3186,2975,606
83,643
Group
Group
2009£
312,2433,58833,08415,116
364,031-
364,031
106,22169,706
1497,743
183,819-
183,819
2010£
430,5136,02586,43324,421547,392
(189,861)
357,531
115,85577,733
1678,624
202,379(55,180)
147,199
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)For the year ended 31 December 2010
42
7. LOSS BEFORE TAX
Thelossbeforetaxisstatedaftercharging/(crediting):
Auditors’ remuneration Employeebenefitsexpense(excludingDirectors’remuneration)(Note4)Directors’remuneration(Note4)Depreciation(Note12)Amortisationofintangibleassets(Note11)Amortisationofdevelopmentcosts(Note11)Property,plantandequipmentwrittenoffDevelopment costs written offInventories written offBad debts written offDeposits written offOperatingleaseexpenseWaiver of debtInterest incomeRental incomeGrant incomeProfitondisposalofproperty,plantandequipment(Gain)/Lossonforeignexchange-realised-unrealised
IncludedintheauditfeefortheGroupisanamountof£13,700inrespectoftheCompany.
2009£
14,345364,031183,819149,64669,08494,7658,08670,956
-42,360
-62,563(813)
(1,902)(3,979)(54,254)
-
(10,218)218
2010£
20,473357,531147,199181,70276,94384,53612,927
-455
62,8893,34879,425
-(10,956)(6,746)
-(38,075)
(100,996)-
Group
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2010
43
8. TAX
Current tax expense:UK corporation tax for the yearForeign tax
A reconciliation of income tax expense applicable to loss before tax at the statutory income tax rate to income tax expense attheeffectiveincometaxrateoftheGroupisasfollows:
Loss before tax
TaxationatUKCorporationtaxrateof28%(2009:28%)Effect of different tax rates in other countriesPioneer status tax incentiveEffect of expenses not deductible for taxEffect of utilisation of previous unrecognised unabsorbed capital allowanceDeferred tax not recognised in respect of current year’s tax losses and unabsorded capital allowancesTemporarydifferencesinrespectofproperty,plantandequipmentnotrecognisedEffect of development costs capitalised deductible for tax purposes
Taxexpensefortheyear
Currentincometaxiscalculatedattheweightedaveragetaxrateof28%(2009:28%).
Thedirectsubsidiarycompany,MobilityOneSdn.Bhd.,wasgrantedPioneerStatusbytherelevantauthoritiesforanadditionalperiodoffiveyearseffectivefrom26April2010to25April2015.
Group
2009£
(917,343)
(256,856)20,319(13,564)97,090
-
94,70358,308
-
-
2010£
(206,079)
(57,703)930
-75,454(21,820)
8,22175,209(71,252)
9,039
Group
2009£
--
-
2010£
-9,039
9,039
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)For the year ended 31 December 2010
44
8. TAX (Continued)
Asat31December2010,theunrecogniseddeferredtaxassetsoftheGroupareasfollows:
Unabsorbed tax lossesUnabsorbed capital allowancesTaxabletemporarydifferences
Thepotentialnetdeferred taxassetsamounting to£347,681(2009:£82,442)hasnotbeenrecognised in thefinancialstatementsbecauseitisnotprobablethatfuturetaxableprofitwillbeavailableagainstwhichthesubsidiarycompanycanutilisedthebenefits.
Theavailabilityoftheunusedtaxlossesandunabsorbedcapitalallowancesforoffsettingagainstfuturetaxableprofitsofthe subsidiary company is subject to no substantial changes in shareholdings of the subsidiary company under Section 44(5A)and(5B)ofIncomeTaxAct,1967.
9. LOSS OF COMPANY
TheprofitorlossoftheCompanyisnotpresentedaspartofthesefinancialstatements.TheCompany’slossforthefinancialyearwas£43,042(2009:£440,533).
10. EARNINGS PER SHARE
Consolidatedlossaftertaxation(£)
Weighted average number of shares in issueFully diluted weighted average number of shares in issue
Basicearningspershare(pence)Dilutedearningspershare(pence)
Thebasicearningspershareiscalculatedbydividingthelossof£215,653(2009:lossof£916,220)attributabletoordinaryshareholdersbytheweightedaveragenumberofordinarysharesoutstandingduringtheyear,whichis93,574,951(2009:79,934,951).
Thedilutedearningspershareiscalculatedusingtheweightedaveragenumberofsharesadjustedtoassumetheconversionofalldilutivepotentialordinaryshares.Fortheyearended31December2010,thedilutedearningspershareisequivalentto the basic earnings per share as the exercise price of the share options is above the current market price.
2009
(916,220)
79,934,95179,934,951
(1.15)(1.15)
2010
(215,653)
93,574,95193,574,951
(0.23)(0.23)
Group
2009£
45,60936,833
-
82,442
2010£
139,520208,161
-
347,681
Group
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2010
45
11. INTANGIBLE ASSETS
GROUP31 December 2010
COSTAt 1 January 2010AdditionsWritten offForeign exchange difference
At 31 December 2010
DEPRECIATIONAt 1 January 2010Charge for the periodWritten offForeign exchange difference
At 31 December 2010
NET CARRYING AMOUNTAt 31 December 2010
GROUP31 December 2009
COSTAt 1 January 2009AdditionsWritten offForeign exchange difference
At 31 December 2009
DEPRECIATIONAt 1 January 2009Charge for the periodWritten offForeign exchange difference
At 31 December 2009
NET CARRYING AMOUNTAt 31 December 2009
Total£
2,318,671285,009
-359,263
2,962,943
489,271161,479
-79,687
730,437
2,232,506
Total£
2,671,895-
(109,163)(244,061)
2,318,671
399,348163,849(38,207)(35,719)
489,271
1,829,400
Development Costs
£
381,535285,009
-68,228
734,772
119,09684,536
-21,127
224,759
510,013
Development Costs
£
540,538-
(109,163)(49,840)
381,535
68,47594,765(38,207)(5,937)
119,096
262,439
Goodwill on consolidation
£
1,242,603--
186,689
1,429,292
----
-
1,429,292
Goodwill on consolidation
£
1,367,189--
(124,586)
1,242,603
----
-
1,242,603
Software£
694,533--
104,346
798,879
370,17576,943
-58,560
505,678
293,201
Software£
764,168--
(69,635)
694,533
330,87369,084
-(29,782)
370,175
324,358
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)For the year ended 31 December 2010
46
11. INTANGIBLE ASSETS (Continued)
Includedindevelopmentcostsincurredduringthefinancialyearare:-
Employeebenefitsexpenses(Note4)Directors’remuneration(Note4)Rental of premises
TheGroupassessesateachreportingdatewhetherthereisanindicationthatanassetmaybeimpaired,byconsideringthenetpresentvalueofdiscountedcashflowsforecasts.Ifanindicationexistsanimpairmentreviewiscarriedout.Attheyearend,therewasnoindicationofimpairmentofthevalueofgoodwillonconsolidationorofdevelopmentcosts.
Goodwill on consolidation
(a) Impairmenttestingforgoodwillonconsolidation
Goodwill on consolidation has been allocated for impairment testing purposes to the individual entities which is also the cash-generatingunits(“CGU”)identified.
(b) Keyassumptionsusedtodeterminerecoverableamount
TherecoverableamountofaCGUisdeterminedbasedonvalueinusecalculationsusingcashflowprojectionsbasedonfinancialbudgetsapprovedbytheDirectorscoveringa5yearsperiod.Theprojectionsarebasedontheassumptionthat the Group can realise projected sales. A prudent approach has been applied with no residual value being factored into these calculations. If the projected sales do not materialise there is a risk that the total value of the intangible assets shownabovewouldbeimpaired.Apre-taxdiscountrateof8.50%perannumwasappliedtothecashflowprojections,aftertakingintoconsiderationtheGroup’scostofborrowings,theexpectedrateofreturnandvariousrisksrelatingtothe CGU.
Duringthefinancialyear,theGroupdidnotrecogniseanyimpairmentlossinrespectofthegoodwillonconsolidation.AsignificantproportionofgoodwillonconsolidationrelatestotheacquisitionofNetossSdn.Bhd.whichisaCGUandhasacarryingamountof£1,486,174(2009:£4,391,072).It'srecoverableamounthasbeendeterminedbasedonvalueinuseusingcashflowprojectionsandkeyassumptionsasdescribedin(b)above.
Development costs
Developmentcostswillnotbeamortisediftheproductisstillinitsdevelopmentphase.Theamortisationofthedevelopmentcostsisover5yearsperiod,whichintheopinionoftheDirectorsisadequate.
2009£
---
2010£
189,86155,180143,952
Group
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2010
47
12.
PRO
PER
TY, P
LAN
T A
ND
EQ
UIP
MEN
T
Gro
up
31 D
ecem
ber 2
010
CO
ST
At 1
Jan
uary
201
0Ad
ditio
nsW
ritte
n of
fFo
reig
n ex
chan
ge d
iffer
ence
At 3
1 D
ecem
ber 2
010
DEP
REC
IATI
ON
At 1
Jan
uary
201
0C
harg
e fo
r the
per
iod
Writ
ten
off
Fore
ign
exch
ange
diff
eren
ce
At 3
1 D
ecem
ber 2
010
NET
CA
RRY
ING
AM
OU
NT
At 3
1 D
ecem
ber 2
010
Tota
l £
1,381,767
74,884
(17,685)
209,785
1,648,751
393,303
181,702
(4,759)
65,861
636,107
1,012,644
Offi
ce
equi
pmen
t £
27,070 87
7 -4,100
32,047
9,400
3,077
-
1,529
14,006
18,041
Com
pute
r so
ftwar
e £
659,699
640 -
99,136
759,475
135,375
73,256-
23,143
231,774
527,701
Elec
tron
ic
Dat
a C
aptu
re
equi
pmen
t £
313,654
25,137-
48,085
386,876
99,754
35,827-
16,358
151,939
234,937
Ren
ovat
ion £
57,275
2,477
(17,685)
8,023
50,090
15,365
6,587
(4,759)
2,376
19,569
30,521
Furn
iture
an
d fit
tings £
65,676
1,903 -
9,940
77,519
19,182
7,442
-
3,168
29,792
47,727
Com
pute
r eq
uipm
ent £
160,209
5,100 -
24,265
189,574
103,863
26,728
-
16,628
147,219
42,355
Mot
orVe
hicl
es £
98,184
38,750-
16,236
153,170
10,364
28,785-
2,659
41,808
111,362
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)For the year ended 31 December 2010
48
12.
PRO
PER
TY, P
LAN
T A
ND
EQ
UIP
MEN
T (C
ontin
ued)
Gro
up
31 D
ecem
ber 2
009
CO
ST
At 1
Jan
uary
200
9Ad
ditio
nsW
ritte
n of
fFo
reig
n ex
chan
ge d
iffer
ence
At 3
1 D
ecem
ber 2
009
DEP
REC
IATI
ON
At 1
Jan
uary
200
9C
harg
e fo
r the
per
iod
Writ
ten
off
Fore
ign
exch
ange
diff
eren
ce
At 3
1 D
ecem
ber 2
009
NET
CA
RRY
ING
AM
OU
NT
At 3
1 D
ecem
ber 2
009
Tota
l £
1,378,366
142,493
(13,415)
(125,677)
1,381,767
273,102
149,646
(5,329)
(24,117)
393,302
988,465
Offi
ce
equi
pmen
t £
29,623
3,828
(3,661)
(2,720)
27,070
8,848
2,815
(1,465)
(798)
9,400
17,670
Com
pute
r so
ftwar
e £
724,884
871
-
(66,056)
659,699
76,402
65,585
-
(6,612)
135,375
524,324
Elec
tron
ic
Dat
a C
aptu
re
equi
pmen
t £
332,619
11,345-
(30,310)
313,654
75,404
31,055-
(6,705)
99,754
213,900
Ren
ovat
ion £
60,297
7,465
(4,966)
(5,521)
57,275
12,751
5,743
(1,987)
(1,143)
15,364
41,911
Furn
iture
an
d fit
tings £
72,855
3,873
(4,390)
(6,662)
65,676
15,470
6,806
(1,712)
(1,382)
19,182
46,494
Com
pute
r eq
uipm
ent £
158,088
16,927
(398)
(14,408)
160,209
84,227
27,333
(165)
(7,532)
103,863
56,346
Mot
orVe
hicl
es £ -98,184- -
98,184
-10,309-
55
10,364
87,820
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2010
49
12. PROPERTY, PLANT AND EQUIPMENT (Continued)
(a) During thefinancial year, theGroupacquiredproperty,plantandequipmentataggregatecostsof£74,884 (2009:£142,493)ofwhich£34,806(2009:£84,689)wasacquiredbymeansoffinanceleasesarrangements.Cashpaymentsof£40,078(2009:£57,804)weremadebytheGrouptopurchaseproperty,plantandequipment.
(b) Includedinproperty,plantandequipmentoftheGrouparemotorvehicleswithnetcarryingamountsof£111,362(2009:£87,820)heldunderfinanceleasesarrangements.
13. INVESTMENT IN SUBSIDIARY COMPANIES
COSTAt1January/31December
2009£
2,040,930
2010£
2,040,930
Company
Name of Subsidiary Company
MobilityOneSdn.Bhd.
Direct subsidiary companies of MobilityOne Sdn. Bhd.
Netoss Sdn. Bhd.
Pay Station Sdn. Bhd.
PT.MobilityOneIndonesia
Country of incorporation
Malaysia
Malaysia
Malaysia
Indonesia
EffectiveOwnership Interest
2010 2009 (%) (%) 100 100
100 100 100 100
95 95
Principal Activities
Provision of e-Channel products andservices,technologymanagedservicesand solution sales and consultancy
Provision of solution sales and services
Dormant
Provision of e-Channel products andservices,technologymanagedservicesand solution sales and consultancy
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)For the year ended 31 December 2010
50
14. INVENTORIES
At Cost: Air timeSoftwareHardware
15. TRADE AND OTHER RECEIVABLES
Tradereceivables-Thirdparties
Otherreceivables-Deposits-Prepayments-Sundryreceivables-Amountduefromsubsidiarycompanies
Totaltradeandotherreceivables
(a) TheGroup’sandtheCompany’snormaltradecredittermsrangefrom30to60days(2009:30to60days).Othercredit terms are assessed and approved on a case to case basis.
Ageing analysis Anageinganalysisoftradereceivablesthatareneitherindividuallynorcollectivelyconsideredtobeimpairedisasfollows:
Neither past due nor impaired
1-2monthspastdue 3-12monthspastdue More than 12 months past due
2009£
241,855486,239
-
728,094
2010£
551,982499,065298,011
1,349,058
Group
2009£
210,804
26,95087,3898,594
122,933
333,737
2010£
440,119
404,61113,431
-418,042
858,161
Group
2009£
-
---
1,155,1281,155,128
1,155,128
2009£
333,737
11,90756,66713,402
-81,976
415,713
2010£
-
---
1,190,8201,190,820
1,190,820
2010£
858,161
297,79911,07791,091
-399,967
1,258,128
CompanyGroup
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2010
51
15. TRADE AND OTHER RECEIVABLES (Continued)
Receivables that were neither past due nor impaired relate to a wide range of customers for whom there was no recent history of default.
Receivables that were past due but not impaired relate to a number of independent customers that have a good track record withtheGroup.Basedonpastexperience,managementbelievesthatnoimpairmentallowanceisnecessaryinrespectofthesebalancesastherehasnotbeenasignificantchangeincreditqualityandthebalancesarestillconsideredfullyrecoverable.
(b) Relatedpartybalances
Theamountduefromsubsidiarycompaniesisunsecured,non-interestbearingandisrepayableondemand.
16. SHORT TERM INVESTMENTS
Financialassetsatfairvaluethroughprofitorloss: Unittrust,quotedinMalaysia
17. CASH AND CASH EQUIVALENTS
Cash in hand and at banksFixed deposits with licensed banks
Cash and cash equivalents
TheabovefixeddepositshavebeenpledgedtolicensedbanksassecuritiesforcreditfacilitiesgrantedtotheGroupasdisclosedinNote21tothefinancialstatements.
TheGroup’seffectiveinterestratesandmaturitiesofdepositsare2.58%(2009:2.1%)and12months(2009:12month)respectively.
2009£
-
2010£
1,778
Group
2009£
2,043-
2,043
2010£
2,082-
2,082
Company2009
£
56,890343,414
400,304
2010£
264,659467,777
732,436
Group
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)For the year ended 31 December 2010
52
18. NON-CURRENT ASSETS HELD FOR SALE
Property,plantandequipmentPrepaid lease payment
Depositsclassifiedasheldforsale(Note19)Disposals
MobilityOneSdn.Bhd.enteredintoaSaleandPurchaseAgreementtodisposeofitslandandbuildingforadisposalpriceof£454,005.Asatthedateofthisreport,thedisposalwascompleted.
19. TRADE AND OTHER PAYABLES
Tradepayables-Thirdparties
Otherpayables-Deposits-Accruals-Sundrypayables
Depositclassifiedasheldforsale(Note18)
TotaltradeandotherpayablesAdd:AmountduetoDirectors(Note20)Add:Loansandborrowings(Note21)
Totalfinancialliabilitiescarriedatamortisedcost
a) TheGroup'snormaltradecredittermsrangefrom30to90days(2009:30to90days).
b) Other payable are non-interest bearing.Other payables are normally settled on an average terms of 60 days (2009:60days).
c) Theamountduetoholdingcompanyisunsecured,non-interestbearingandispayableondemand.
2009£
177,111198,331
375,442(71,090)
-
304,352
2010£
177,111198,331
375,442-
(375,442)
-
Group
2009£
-
-13,635
91414,549
-14,549
14,54929,047
-
43,596
2009£
135,470
71,69531,614281,873385,182
(71,090)314,092
449,56229,047
1,252,816
1,731,425
2010£
-
-12,66015,60628,266
-28,266
28,26694,103
-
122,369
2010£
699,421
54,75455,011211,093320,858
-320,858
1,020,279238,698
2,170,756
3,429,733
CompanyGroup
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2010
53
20. AMOUNT DUE TO DIRECTORS
Theseareunsecured,interestfreeandrepayableondemand.
21. FINANCIAL LIABILITIES – LOANS AND BORROWINGS
Non-CurrentSecured:Financeleasepayables(Note22)
CurrentSecured:TermloansBankers’ acceptanceFinanceleasepayables(Note22)Letter of creditsTrustreceipts
Total BorrowingsSecured:TermloansBankers’ acceptanceFinanceleasepayables(Note22)Letter of creditsTrustreceipts
Thebankers’acceptanceandtermloansfromlicensedbanksaresecuredbythefollowing:(a) pledgeoffixeddepositsofthesubsidiarycompany(Note17);(b) personalguaranteebyaDirector;and(c) corporateguaranteebytheCompany.
Group2009
£
70,318
70,318
166,4431,006,345
9,710--
1,182,498
166,4431,006,345
80,028--
1,252,816
2010£
100,223
100,223
-1,101,700
15,197536,420417,216
2,070,533
-1,101,700115,420536,420417,216
2,170,756
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)For the year ended 31 December 2010
54
21. FINANCIAL LIABILITIES – LOANS AND BORROWINGS (Continued)
TheeffectiveinterestratesoftheGroupfortheabovefacilitiesareasfollows:
TermloansBankers’ acceptanceLetter of creditsTrustreceipts
Thematurityofborrowings(excludingfinanceleases)isasfollows:
Within one year
OtherinformationonfinancialrisksofborrowingsaredisclosedinNote3.
2009£
1,172,788
1,172,788
2009%
7.516.88
--
2010£
2,055,336
2,055,336
2010%
-5.222.442.79
Group
Group
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2010
55
22. FINANCE LEASE PAYABLES
Minimumleasepayments: Not later than 1 year Later than 1 year but not later than 2 years Later than 2 years but not later than 5 years Later than 5 years
Less:Futurefinancecharges
Presentvalueoffinanceleaseliabilities
Presentvalueoffinanceleasepayments: Not later than 1 year Later than 1 year but not later than 2 years Later than 2 years but not later than 5 years Later than 5 years
Analysedas:Duewithin12months(Note21)Dueafter12months(Note21)
TheGrouphasfinanceleasecontractsforcertainmotorvehiclesasdisclosedonNote12(a).
OtherinformationonfinancialrisksoffinanceleasepayablesaredisclosedinNote3.
2009£
14,22314,22342,66926,03197,146(17,118)
80,028
9,71010,41535,47624,427
80,028
9,71070,318
80,028
2010£
21,42421,42464,27330,972138,093(22,673)
115,420
15,19716,23954,97229,012
115,420
15,197100,223
115,420
Group
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)For the year ended 31 December 2010
56
23. CALLED UP SHARE CAPITAL
Authorised in MobilityOne Limited
At1January/31December
Issued and fully paid in MobilityOne Limited
At 1 JanuaryAt 8 December 2009 Issuance of shares
At 31 December
On8December2009,theCompanyissuedatotalof14,600,000ordinarysharesat2.5pencepershare.Accordingly,asaresultoftheaboveissuanceofshares,theissuedsharecapitaloftheCompanyincreasedto93,574,951ordinarysharesof 2.5 pence each.
2009£
10,000,000
1,974,374365,000
2,339,374
2010£
10,000,000
2,339,374-
2,339,374
Amount2009
400,000,000
78,974,95114,600,000
93,574,951
2010
400,000,000
93,574,951-
93,574,951
Number of ordinary shares of £0.025 each
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2010
57
24. COMPANY EQUITY INSTRUMENT
At 1 January 2010Deficitfortheyear
At 31 December 2010
At 1 January 2009DeficitfortheyearIssuance of shares
At 31 December 2009
25. REVERSE ACQUISITION RESERVE
TheacquisitionofMobilityOneSdn.Bhd.byMobilityOneLimited,whichwasaffectedthroughashareexchange,wascompletedon5July2007andresultedinMobilityOneSdn.Bhd.becomingawhollyownedsubsidiaryofMobilityOneLimited.Pursuanttoashareswapagreementdated22June2007theentireissuedandpaid-upsharecapitalofMobilityOneSdn.Bhd.wastransferredtoMobilityOneLimitedbyitsowners.Theconsiderationtotheownerswasthetransferof178,800,024existingordinarysharesandtheallotmentandissuancebyMobilityOneLimitedtotheownersof81,637,200ordinarysharesof2.5peach.Theacquisitionwascompletedon5July2007.TotalcostofinvestmentbyMobilityOneLimitedis£2,040,930,thedifferencebetweencostofinvestmentandMobilityOneSdn.Bhd.sharecapitalof£708,951hasbeentreatedasareverseacquisition reserve.
Total£
3,154,505(43,042)
3,111,463
3,230,038(440,533)365,000
3,154,505
Retained earnings
£
32,897(43,042)
(10,145)
473,430(440,533)
-
32,897
Share premium
£
782,234-
782,234
782,234--
782,234
Share capital£
2,339,374-
2,339,374
1,974,374-
365,000
2,339,374
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)For the year ended 31 December 2010
58
26. RECONCILIATION OF LOSS BEFORE TAX TO CASH GENERATED FROM OPERATIONS
GROUPCash flow from operating activities
Loss before taxAdjustmentsfor: Profitondisposalofproperty,plantandequipment Depreciation Amortisation of intangible assets Amortisation of development costs Property,plantandequipmentwrittenoff Development costs written off Bad debts written off Inventories written off Deposit written off Waiver of debts Loss on foreign exchange – unrealised Interest paid Interest received
Operatingprofit/(loss)beforeworkingcapitalchanges
(Increase)/decreaseininventories Increase in receivables Increase/(decrease)inamountduetoDirectors Increase/(decrease)inpayables
Cash depleted in operations
COMPANYCash flow from operating activities
Loss before taxAdjustmentfor: (Gain)/lossonforeignexchange–unrealised
Operatinglossbeforeworkingcapitalchanges
Increase/(decrease)inpayables Increase/(decrease)inamountduetoDirectors Increase/(decrease)inamountduefromsubsidiarycompany
Cash depleted in operations
2009£
(917,343)
-149,64669,08494,7658,08670,95642,360
--
(813)218
71,057(1,902)
(413,886)
70,604(36,196)(77,206)(32,977)
(489,661)
(440,533)
239,807
(200,726)
(32,226)(57,202)(76,126)
(366,280)
2010£
(206,079)
(38,075)181,70276,94384,53612,927
-62,889
4553,348
--
83,643(10,956)
251,333
(511,569)(823,968)
214,861587,790
(281,553)
(43,042)
(165,947)
(208,989)
13,71765,056130,211
(5)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2010
59
27. FINANCIAL COMMITMENTS
Capital commitment
Authorised and contracted for: Property,plantandequipment
28. RELATED PARTY TRANSACTIONS
Duringtheyear,MobilityOneSdn.Bhd.receivedadvances£86,850(2009:£115,918)fromacompanywhichisrelatedtoa Director.
AttheStatementofFinancialPositiondate,theGroupowedtheDirectors£238,698(2009:£29,047),theCompanyowedtheDirectors£94,103(2009:£29,047),MobilityOneSdn.Bhd.owedtheCompany£1,190,820(2009:£1,155,129),NetossSdn.Bhd.owedMobilityOneSdn.Bhd.£367,054(2009:£309,264),PayStationSdn.Bhd.owedMobilityOneSdn.Bhd.£4,183(2009:£541)andPT.MobilityOneIndonesiaowedMobilityOneSdn.Bhd.£617,346(2009:£19,445),MobilityOneSdn.Bhd.owedacompanywhichisrelatedtoaDirector£86,850(2009:£115,918).Theamountsowingtoorfromthesubsidiary companies are repayable on demand and are interest free.
29. ULTIMATE CONTROLLING PARTY
IntheopinionoftheDirectors,thereisnoultimatecontrollingpartyintheCompanyfortheyearended31December2010.
30. CONTINGENT LIABILITIES
Saveasdisclosedbelow,theGrouphasnocontingentliabilitiesarisinginrespectoflegalclaimsarisingfromtheordinarycourse of business and it is not anticipated that any material liabilities will arise from the contingent liabilities other than those provided for.
Limit of guaranteesCorporate guarantees given to licensed banks by a subsidiary company for
credit facilities granted to a third party
Amount utilisedBanker’s guarantee in favour of a third party
2009£
33,329
2010£
-
Group
2009£
1,109,090
83,626
2010£
21,645,022
373,455
Group
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)For the year ended 31 December 2010
60
31. FOREIGN CURRENCY TRANSLATION RESERVE
Thesubsidiarycompanies’assetsandliabilitiesstatedintheStatementofFinancialPositionweretranslatedintoSterlingPound(£)usingtheclosingrateasattheStatementofFinancialPositiondateandtheincomestatementsweretranslatedinto£usingtheaveragerateforthatperiod.Allresultingexchangedifferencesaretakentotheforeigncurrencytranslationreserve within equity.
As at 1 JanuaryCurrency translation differences during the year due from subsidiary companies
As at 31 December
Theforeigncurrencytranslationreserveisusedtorecordexchangedifferencesarisingfromthetranslationofthefinancialstatements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Group’s net investment inforeignoperations,wherethemonetaryitemisdenominatedineitherthefunctionalcurrencyofthereportingentityortheforeign operation.
32. RETAINED EARNINGS
Retained earnings represents the cumulative earnings of the Group attributable to equity shareholders.
As at 1 JanuaryLoss for the year
As at 31 December
2009£
1,049,357(497,216)
552,141
2010£
552,141433,103
985,244
2009£
(523,216)(916,220)
(1,439,436)
2010£
(1,439,436)(215,653)
(1,655,089)
Group
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2010
61
33. SHARE BASED PAYMENTS
Duringtheyearended31December2007theGroupgrantedshareoptionsof7,416,558sharesat12.5p2,000,000eachtoDato’Hussian@RizalbinA.Rahman,SeahBoonChinandDerrickChiaKahWaiand1,416,558toHBCorporate.Nocharge has been made for the share based payments as it is not considered to be material.
Thedetailsoftheshareoptionsareasfollows:
Outstandingatbeginningofyear/Balancecarriedforward
ThefairvaluesoftheoptionsgrantedhavebeencalculatedusingBlack-Scholesmodelassumingtheinputsshownbelow:
Grant date 5 July 2007Share price at grant date 12.5pExercise price 12.5pOptionlifeinyears 5yearsRisk free rate 4.40%Expected volatility 40%Expected dividend yield 0%Fair value of options 2p
No options have been exercised or lapsed.
2009
12.5p
2010
12.5p
Exercise price2009
7,416,558
2010
7,416,558
NumberCompany
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)For the year ended 31 December 2010
62
NOTICEISHEREBYGIVENTHATanAnnualGeneralMeetingofMOBILITYONE LIMITED (“Company”) will be held at 9.00 a.m.Malaysiatimeon22July2011atMalaysianPetroleumClub,Level42,Tower2,PetronasTwinTowers,KualaLumpurCityCentre,50088KualaLumpur,Malaysia,andforthepurposeofconsideringand,ifthoughtfit,adoptingthefollowingresolutions,atthemeeting,orofanyadjournmentthereof:
ORDINARY RESOLUTIONS
1. THATtheCompany'saccountsandreportsoftheDirectorsandAuditorsfortheyearended31December2010beadopted.
2. THATDato’ShamsirbinOmarisre-electedasaDirector.
3. THATKjetilLanglandBohnisre-electedasaDirector.
4. THATJeffreysHenryLLPofFinsgate,5-7CranwoodStreet,EC1V9EELondon,UnitedKingdombereappointedasAuditors oftheCompany(inaccordancewithArticle33oftheArticlesofAssociationoftheCompany)toholdofficeuntiltheconclusion of the next general meeting.
5. THATtheDirectorsbeauthorisedtofixtheremunerationoftheAuditors.
BY ORDER OF THE BOARD
Dato’ Dr. Wan Azmi bin Ariffin Chairman
Dated:30June2011
Notes:
1 A member of the Company entitled to attend and vote at the above mentioned meeting is entitled to appoint a proxy to attend and,onapoll,tovoteinhis/herplace.Aproxymaydemand,orjoinindemanding,apoll.Aproxyneednotbeamember of the Company. A member may appoint more than one proxy to attend on the same occasion.
2 Theinstrumentappointingaproxyandthepowerofattorneyorotherauthority(ifany)underwhichitissigned,oranotarially certifiedcopyofsuchpowerorauthority,shallbedepositedwiththeCompany’sregistrars,ComputershareInvestorServices (ChannelIslands)Limited,QueenswayHouse,HilgroveStreet,StHelier,JerseyJE11ES,ChannelIslands,oratsuchother placeasisspecifiedforthatpurposeinthenoticeofthemeetingorintheinstrumentofproxyissuedbytheCompanyatleast 24 hours before the time appointed for holding the meeting or adjourned meeting at which the person named in the instrument proposestovoteor,inthecaseofapoll,atleast24hoursbeforethetimeappointedfortakingthepolland,indefault,the instrument of proxy shall not be treated as valid.
3 Completion of the instrument appointing a proxy does not preclude a member from subsequently attending and voting at themeetinginpersonifhe/shesowishes.
4 Inthecaseofjointholders,thevoteoftheseniorwhotendersavote,whetherinpersonorbyproxy,shallbeacceptedto theexclusionofthevotesoftheotherjointholders,andseniorityshallbedeterminedbytheorderinwhichthenamesof the Holders stand in the register of members of the Company.
5 AspermittedbyRegulation40(1)oftheCompanies(UncertificatedSecurities)(Jersey)Order1999,onlypersonsentered on the register of members of the Company not later than 48 hours before the time appointed for the meeting are entitled to attendand/orvoteatthemeetinginrespectofthenumberofsharesregisteredintheirnameatthattime.Changestoentries ontheregisterofmembersafterthattimewillbedisregardedindeterminingtherightsofanypersontoattendand/orvote at the meeting.
NOTICE OF ANNUAL GENERAL MEETING
Notes:1. AmemberoftheCompanyentitledtoattendandvoteattheabovementionedmeetingisentitledtoappointaproxytoattendand,onapoll,
tovoteinhis/herplace.Aproxymaydemand,orjoinindemanding,apoll.AproxyneednotbeamemberoftheCompany.Amembermay appoint more than one proxy to attend on the same occasion.
2. Theinstrumentappointingaproxyandthepowerofattorneyorotherauthority(ifany)underwhichitissigned,oranotariallycertifiedcopyofsuchpowerorauthority,shallbedepositedwiththeCompany’sregistrars,ComputershareInvestorServices(ChannelIslands)Limited,QueenswayHouse,HilgroveStreet,StHelier,JerseyJE11ES,ChannelIslands,oratsuchotherplaceasisspecifiedforthatpurposeinthe notice of the meeting or in the instrument of proxy issued by the Company at least 24 hours before the time appointed for holding the meetingoradjournedmeetingatwhichthepersonnamedintheinstrumentproposestovoteor,inthecaseofapoll,atleast24hoursbeforethetimeappointedfortakingthepolland,indefault,theinstrumentofproxyshallnotbetreatedasvalid.
3. Completion of the instrument appointing a proxy does not preclude a member from subsequently attending and voting at the meeting in personifhe/shesowishes.
4. Inthecaseofjointholders,thevoteoftheseniorwhotendersavote,whetherinpersonorbyproxy,shallbeacceptedtotheexclusionofthevotesoftheotherjointholders,andseniorityshallbedeterminedbytheorderinwhichthenamesoftheHoldersstandintheregisterof members of the Company.
5. AspermittedbyRegulation40(1)oftheCompanies(UncertificatedSecurities)(Jersey)Order1999,onlypersonsenteredontheregisterofmembersoftheCompanynotlaterthan48hoursbeforethetimeappointedforthemeetingareentitledtoattendand/orvoteatthemeetingin respect of the number of shares registered in their name at that time. Changes to entries on the register of members after that time will bedisregardedindeterminingtherightsofanypersontoattendand/orvoteatthemeeting.
FOR AGAINST WITHHOLDORDINARY RESOLUTIONS
1. THATtheCompany'saccountsandreportsoftheDirectorsandAuditorsfor the year ended 31 December 2010 be adopted.
2. THATDato’ShamsirbinOmarisre-electedasaDirector.
3. THATKjetilLanglandBohnisre-electedasaDirector.
4. THATJeffreysHenryLLPofFinsgate,5-7CranwoodStreet,EC1V9EELondon,UnitedKingdombereappointedasAuditorsoftheCompany(inaccordancewithArticle33oftheArticlesofAssociationoftheCompany)toholdofficeuntiltheconclusionofthenextgeneralmeeting.
5. THATtheDirectorsbeauthorisedtofixtheremunerationoftheAuditors.
If by an individual:
Signed:....................................................................................
Dated:.............................................................................2011
If for and on behalf of a corporation:
Signed by: .................................................................................
for and on behalf of: ...................................................................
Position: ....................................................................................
Dated:.............................................................................2011
I/We:(fullname)……………………………………………………………………………………………...............................................
of:(address)…………………………………………………………………………………………………................................................
beingamemberofMobilityOneLimited,doherebyappoint:(fullname)…………………………………...........................................
orfailinghim:(fullname)……………………………………………………………………………………................................................
orfailinghimtheChairmanoftheMeetingasmy/ourproxytoattendtheAnnualGeneralMeetingofMobilityOneLimitedtobe
heldatMalaysianPetroleumClub,Level42,Tower2,PetronasTwinTowers,KualaLumpurCityCentre,50088KualaLumpur,
Malaysia on 22 July 2011 at 9.00 a.m. Malaysia time or any adjournment thereof.
Please indicate by marking “X” in the respective box. If no indication is given, your proxy will have discretion to vote or to abstain (including on any other matter which may properly come before the meeting as he/she thinks fit).
I/Werequestsuchproxytovoteasindictedbelow:
THEN FOLD HERE
FIRST FOLD HERE
AFFIXSTAMP
COMPANY'S REGISTRARSMOBILTYONE LIMITEDQUEENSWAY HOUSEHILGROVE STREET, ST. HELIERJERSEY JE1 1ESCHANNEL ISLANDS
FOLD THIS FLAP FOR SEALING
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