board of directors 12 - mobilityone.com.my · london ec1v 9ee united kingdom nominated allenby...
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Company Information 2 Chairman’s Statement 3 Report of the Directors 5 Corporate Governance Report 10 Board of Directors 12
Report of the Independent Auditors 13
Consolidated Income Statement 15
Consolidated Statement of Comprehensive Income 16
Consolidated Statement of Changes in Equity 17
Consolidated Statement of Financial Position 19
Company Statement of Financial Position 21
Consolidated Statement of Cash Flows 22
Company Statement of Cash Flows 23
Notes to the Financial Statements 24
Notice of Annual General Meeting 61
Form of Proxy
2
DIRECTORS Dato’Dr.WanAzmibinAriffin(Non-ExecutiveChairman) Dato’[email protected](ChiefExecutiveOfficer) DerrickChiaKahWai(TechnicalDirector) SeahBoonChin(Non-ExecutiveDirectorsince15.11.2011) Dato’ShamsirbinOmar(Non-ExecutiveDirector) KjetilLanglandBohn(Non-ExecutiveDirector;resignedon1.3.2012)
SECRETARY TMFChannelIslandsLimited 28-30TheParade St Helier Jersey JE1 1EQ Channel Islands
REGISTERED 28-30TheParadeOFFICE St Helier Jersey JE1 1EQ 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
Company InformatIon
3
ChaIrman’s statement
INTRODUCTION
MobilityOneLimited'sorganisationstructureisdepictedbelow:
OPERATIONS REVIEW
2011wasanencouragingyear,withtheGroupachievinga36.8%growthinrevenueandasmallprofitaftertax,comparedtolossesinthe3previousyears.
Most revenue was contributed by two of the Group’s offerings. Firstly its fast growing mobile phone prepaid airtimereloadbusiness,viathebankingchannels(suchasmobilebanking,InternetbankingandATMs).Secondlyitselectronicdatacapture(“EDC”)terminalbase,whichincludesthoseatCarrefourMalaysia's23 hypermarkets and 20 express stores throughout the country.
Duringtheyear,MobilityOneMalaysiaentered intoanagreementwithFeldaTradingSdnBhd(“FeldaTrading”) (http://www.felda.net.my) toprovidemobilephoneprepaidairtime reloadsatFeldaTrading’s200plus retail chain stores throughoutMalaysia.FeldaHoldingsBhd (http://www.feldaholdings.com),basedinMalaysia,isoneoftheworld’slargestplantationoperatorsandemploysapproximately50,000people,themajorityofwhomaremigrantworkers.Itoperatesretailchainstoresatmostofitsoilpalmestates.MigrantworkershavebeenidentifiedbyMobilityOneasakeydemographicofpotentialusersofits prepaid airtime reloads.
TheGroup’sinternationalremittanceservicesalsogrewbutlessrapidlyasitisawaitingapprovalfromthecentralbankofMalaysiatoallowittoincreasethenumberofapprovedoutletsfromitscurrent6.However,theDirectorsremainconfident that thisbusinessareawillcontributepositively totheGroup’sfinancialperformanceinthelongterm,withtheopeningofmoreoutletsanddistributionchannels.
Cambodia and Indonesia were not aggressively targeted for expansion as the Group was focusing its time andinvestmentsonexpandingitsbusinessoperationsinMalaysia.However,itwillcontinuetolookoutforfurther opportunities to forge business partnerships in these countries in the near future.
NETOSSSDNBHD(Malaysia)100%
PAYSTATIONSDNBHD(Malaysia)100%
MOBILITYONESDNBHD(Malaysia)100%
MOBILITYONELIMITED(Jersey,ChannelIslands)
PTMOBILITYONEINDONESIA(Indonesia)
95%
4
WepresenttheauditedconsolidatedfinancialstatementsforMobilityOneLimitedfortheyearended31December 2011.
RESUlTS
Forthefinancialyearended31December2011,theGrouprecordedarevenueof£31.9million,representinganincreaseof36.8%(2010revenue:£23.3million).Withthestrongrevenuegrowth,theGroupmadeaprofitaftertaxof£1kcomparedtoalossaftertaxof£0.2millionfor2010.Theincreaseinrevenuewasmainly due to higher sales for the Group’s existing mobile phone’s prepaid airtime reload business through itsbankingchannels(i.e.,mobilebanking,ATMandInternetbanking)andEDCterminals.
CURRENT TRADING AND OUTlOOK
TheDirectorsexpectanimprovedperformancein2012,themaincontributioncomingfromthegrowingbusinessinMalaysiaandnewregionalexpansionplans,withthefollowinghighlights:
(i) Continuedrevenuegrowthfromprepaidairtimereloadsformobilephonesandbillpaymentservices via theGroup’s banking channels andEDC terminals, either organically or through strategic partnerships;
(i) AhighercontributionfromtheCompany’sinternationalremittanceservices,throughtheopeningof newchannelsandcontinueddevelopmentwiththeGroup’sexistingpartnerssuchasFelda;and
(ii) Increasedregionalexpansion,particularlyfromPTMobilityOneIndonesiaandtheCambodianmarket, withahigherexpectedcontributiontorevenuesfromtheseareas.Inaddition,theGrouphasstarted preliminary preparation to expand into the Philippines market.
TheGroupmaintainsitsstronginvestmentinresearchanddevelopment,allowingittocontinuetoinnovate.Notwithstanding thedifficulteconomicconditions, theGroup isnow inprofitandviews the futurewithoptimism.
CONClUSION
OnbehalfoftheBoardofDirectors,Iwouldliketotakethisopportunitytoextendourgreatestappreciationto our management and employees for their continuous efforts and dedication in bringing our Group to greater heights.
................................................... Dato’ Dr. Wan Azmi bin AriffinChairman
Date:28June2012
ChaIrman’s statement (continued)
5
TheDirectorspresenttheirreportwiththefinancialstatementsoftheCompanyandtheGroupfortheyearended 31 December 2011.
PRINCIPAl ACTIVITY
TheprincipalactivityoftheGroupintheyearunderreviewwasinthebusinessofprovidinge-commerceinfrastructure payment solutions and platforms.
KEY PERFORMANCE INDICATORS
Year ended Year ended 31.12.2011 31.12.2010 £ £
Revenue 31,860,274 23,291,599Operatingprofit/(loss) 179,651 (122,436)Profit/(loss)beforetax 28,802 (206,079)Netprofit/(loss) 1,218 (215,118)
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 DIreCtors For the year ended 31 December 2011
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
Theconsolidatedlossfortheyearended31December2011is£77,877(2010:profit£217,450)whichhas been transferred to reserves. No dividends will be distributed for the year ended 31 December 2011.
DIRECTORS
TheDirectorsduringtheyearunderreviewwere:
Dato’Dr.WanAzmibinAriffin(Non-ExecutiveChairman)Dato’[email protected](ChiefExecutiveOfficer)DerrickChiaKahWai(TechnicalDirector)SeahBoonChin(Non-ExecutiveDirectorsince15.11.2011)Dato’ShamsirbinOmar(Non-ExecutiveDirector)KjetilLanglandBohn(Non-ExecutiveDirector;resignedon1.3.2012)
DerrickChiaKahWaiandSeahBoonChinwhoareeligibleofferthemselvesforre-electionattheforthcomingAnnual General Meeting.
ThebeneficialinterestsoftheDirectorsholdingofficeat31December2011intheordinarysharesoftheCompany,wereasfollows: Ordinary 2.5p shares Dato’Dr.WanAzmibinAriffinDato’ Hussian @ Rizal bin A. RahmanDerrick Chia Kah WaiSeah Boon ChinDato’ShamsirbinOmarKjetil Langland Bohn
Interest at 31.12.11
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 2011
7
TheDirectorsalsoheldthefollowingordinarysharesunderoption:
Dato’Dr.WanAzmibinAriffinDato’ Hussian @ Rizal bin A. RahmanDerrick Chia Kah WaiSeah Boon ChinDato’ShamsirbinOmarKjetil Langland Bohn
Theoptionsweregrantedon5July2007atanexercisepriceof12.5p.Theperiodoftheoptionsisfive years. SUBSTANTIAl SHAREHOlDERS
Asat14June2012,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
Interest at 31.12.11
Nil2,000,0002,000,0002,000,000
NilNil
report of the DIreCtors (continued)For the year ended 31 December 2011
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 theCompanywillcontinueinbusinessfortheforeseeablefuture;and- statethatthefinancialstatementscomplywithInternationalFinancialReportingStandards(IFRS)as adopted by the European Union.
TheDirectors are responsible for keepingproper accounting recordswhich disclosewith reasonableaccuracyatanytimethefinancialpositionoftheCompanyandtheGroupandtoenablethemtoensurethatthefinancialstatementscomplywiththeArticle110oftheCompanies(Jersey)Law1991.Theyarealsoresponsible for safeguarding the assets of the Company and the Group and 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 2011
9
AUDITORS
JeffreysHenryLLPhaveexpressedtheirwillingnesstocontinueinoffice.AresolutionproposingthatJeffreysHenryLLPbere-appointedwillbeputtotheforthcomingAnnualGeneralMeeting.
ON BEHAlF OF THE BOARD:
................................................................Dato’ Hussian @ Rizal bin A. RahmanChiefExecutiveOfficer
Date:28June2012
report of the DIreCtors (continued)For the year ended 31 December 2011
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 2011
11
Corporate GovernanCe report (continued)For the year ended 31 December 2011
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,aMalaysianaged68,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’[email protected],aMalaysianaged50,istheChiefExecutiveOfficeroftheGroup.HehasextensiveexperienceintheITandtelecommunicationsindustriesinMalaysiaandisresponsibleforthedevelopmentoftheGroup’soverallmanagement,particularlyinsettingtheGroup’sbusinessdirectionandstrategies.HeiscurrentlyaNon-ExecutiveDirectorofAsiaMediaGroupBerhad,acompanylistedontheACEMarketofBursaMalaysiaSecuritiesBerhad(MalaysiaStockExchange).HeobtainedacertifiedMasterofBusinessAdministrationfromtheOxfordAssociationofManagement,England.
Derrick Chia Kah Wai (Technical Director)DerrickChiaKahWai,aMalaysianaged41,istheTechnicalDirectoroftheGroup.Hebeganhiscareerasaprogrammerin1994,hethenjoinedGHLSystemsBerhadinJanuary1998asaSoftwareEngineerandwaspromotedtoSoftwareDevelopmentManagerinDecember1999.HeobtainedhisBachelorDegreeinCommerce,majoringinManagementInformationSystemfromUniversityofBritishColumbia,Canada.HejoinedtheGroupinMay2005andisresponsiblefortheGroup’sR&Dteamwhichinclude the architectural design of its technology platform.
Seah Boon Chin (Non-Executive Director)SeahBoonChin,aMalaysianaged40,hassteppeddownastheCorporateFinanceDirectoron15November2011andremainsontheBoardasaNon-ExecutiveDirectoroftheCompany.HebeganhiscareerasaseniorofficerwithChungKhiawBank(Malaysia)Bhd.(nowUnitedOverseasBank(Malaysia)Berhad)from1995to1996.From1997toJanuary2007,heworkedintheCorporateFinanceDepartmentofestablishedfinancialinstitutionsinMalaysiaandSingaporeincludingCIMBInvestmentBankBerhad,AffinInvestmentBankBerhadandPublicInvestmentBankBerhad.HejoinedtheGroupin2007andiscurrentlytheHeadofCorporateFinancewithTASecuritiesHoldingsBerhadinMalaysia.HeobtainedhisBachelorDegreeinCommerce(Honours)withDistinctionfromMcMasterUniversity,Canada.
Dato’ Shamsir bin Omar (Non-Executive Director)Dato’ShamsirbinOmar,aMalaysianaged77isaNon-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; resigned on 1.3.2012)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
WehaveauditedthefinancialstatementsofMobilityOneLimitedfortheyearended31December2011whichcomprisetheConsolidatedIncomeStatement,ConsolidatedStatementofComprehensiveIncome,ConsolidatedStatementofChangesinEquity,ConsolidatedStatementofFinancialPosition,CompanyStatementofFinancialPosition,ConsolidatedStatementofCashFlows,CompanyStatementofCashFlowsandtherelatednotes.ThefinancialreportingframeworkthathasbeenappliedintheirpreparationisapplicablelawandInternationalFinancialReportingStandards(IFRSs)asadoptedbytheEuropeanUnionand,asregardstheparentcompanyfinancialstatements,asappliedinaccordancewiththeprovisionsoftheCompanies(Jersey)Law1991.
This report ismadesolely to theCompany'smembers,asabody, inaccordancewithArticle113AoftheCompanies(Jersey)Law1991.OurauditworkhasbeenundertakensothatwemightstatetotheCompany'smembersthosematterswearerequiredtostatetotheminanauditors'reportandfornootherpurpose.Tothefullestextentpermittedbylaw,wedonotacceptorassumeresponsibilitytoanyoneotherthantheCompanyandtheCompany'smembersasabody,forourauditwork,forthisreport,orfortheopinions we have formed.
RESPECTIVE RESPONSIBIlITIES OF DIRECTORS AND AUDITORS
AsexplainedmorefullyintheDirectors’ResponsibilitiesStatementsetoutonpages8,thedirectorsareresponsibleforthepreparationofthefinancialstatementsandforbeingsatisfiedthattheygiveatrueandfairview.OurresponsibilityistoauditandexpressanopiniononthefinancialstatementsinaccordancewithapplicablelawandInternationalStandardsonAuditing(UKandIreland).Thosestandardsrequireusto comply with the Auditing Practices Board’s Ethical Standards for Auditors.
SCOPE OF THE AUDIT OF THE FINANCIAl STATEMENTS
Anauditinvolvesobtainingevidenceabouttheamountsanddisclosuresinthefinancialstatementssufficienttogivereasonableassurancethatthefinancialstatementsarefreefrommaterialmisstatement,whethercausedbyfraudorerror.Thisincludesanassessmentof:whethertheaccountingpoliciesareappropriateto the group’s and the parent company’s circumstances and have been consistently applied and adequately disclosed;thereasonablenessofsignificantaccountingestimatesmadebythedirectors;andtheoverallpresentationofthefinancialstatements.
Inaddition,wereadallthefinancialandnon-financialinformationintheChairman’sStatement,CorporateGovernanceReportandDirectors’Reportto identifymaterial inconsistencieswiththeauditedfinancialstatements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
OPINION ON THE FINANCIAl STATEMENTS
Inouropinion:
- thefinancialstatementsgiveatrueandfairviewofthestateofaffairsoftheGroupasat31December2011andofthelossoftheGroupfortheyearthenended;
- thegroupfinancialstatementshavebeenproperlypreparedinaccordancewithIFRSsasadoptedbytheEuropeanUnion;and
report of the InDepenDent auDItors to the memBers of moBIlItyone lImIteD
14
- theparentcompanyfinancialstatementshavebeenproperlypreparedinaccordancewithIFRSsasadopted by the European Union and as applied in accordance with the provisions of the Companies (Jersey)Law1991;and
- thefinancialstatementshavebeenpreparedinaccordancewiththerequirementoftheCompanies(Jersey)Law1991.
OPINION ON OTHER MATTERS
InouropiniontheinformationgivenintheReportoftheDirectorsforthefinancialyearforwhichthefinancialstatementsarepreparedisconsistentwiththefinancialstatements.
MATTERS ON WHICH WE ARE REqUIRED TO REPORT BY ExCEPTION
WehavenothingtoreportinrespectofthefollowingmatterswhereCompanies(Jersey)Law1991requiresustoreporttoyouif,inouropinion:
- adequateaccountingrecordshavenotbeenkeptbytheParentCompany,orreturnsadequateforaudithavenotbeenreceivedfrombranchesnotvisitedbyus;or
- thefinancialstatementsarenotinagreementwiththeaccountingrecordsandreturns;or- certaindisclosuresofDirectors'remunerationspecifiedbylawarenotmade;or- wehavenotreceivedalltheinformationandexplanationswerequireforouraudit.
Justin RandallSenior Statutory AuditorFor and on behalf of Jeffreys Henry LLP
Finsgate5-7CranwoodStreetLondonEC1V 9EEUnited Kingdom
Date:28June2012
report of the InDepenDent auDItors to the memBers of moBIlItyone lImIteD (continued)
15
ConsolIDateD InCome statementFor the year ended 31 December 2011
CONTINUING OPERATIONS
RevenueCost of sales
GROSS PROFIT
OtheroperatingincomeAdministration expensesOtheroperatingexpenses
OPERATING PROFIT/(lOSS)
Finance costs
PROFIT/(lOSS) AFTER TAx
Tax
PROFIT/(lOSS) AFTER TAx
Attributableto:OwnersoftheparentNon-controllinginterest
EARNING PER SHARE
Basicearningspershare(pence)Dilutedearningspershare(pence)
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)
2011£
31,860,274(29,464,977)
2,395,297
142,262
(1,856,629)(501,279)
179,651
(150,849)
28,802
(27,584)
1,218
(1,341)2,559
1,218
0.0010.001
Note
6
7
8
1010
Thenotesformpartofthesefinancialstatements
16
ConsolIDateD statement of ComprehensIve InComeFor the year ended 31 December 2011
PROFIT/(lOSS) AFTER TAx
OTHER COMPREHENSIVE (lOSS)/INCOME:
Foreign currency translation
TOTAl COMPREHENSIVE (lOSS)/INCOME
Totalcomprehensive(loss)/incomeattributableto:OwnersoftheparentMinority interest
2010£
(215,118)
433,103
217,985
217,450535
217,985
2011£
1,218
(76,536)
(75,318)
(77,877)2,559
(75,318)
Thenotesformpartofthesefinancialstatements
17
Thenotesformpartofthesefinancialstatements
As at 1 January 2010
Comprehensive (loss)/income
Loss for the yearForeign currency translationTotalcomprehensiveincome
/(loss)fortheyear
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 equItyFor the year ended 31 December 2011
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 2011
Comprehensive (loss)/income
Loss for the yearForeign currency translationTotalcomprehensive(loss)/
income for the year
As at 31 December 2011
Share premium
£
782,234
--
-
782,234
Total£
3,160,714
(1,341)(76,536)
(77,877)
3,082,837
Total£
3,160,245
1,218(76,059)
(74,841)
3,085,404
Foreign currency
translation reserve
£
985,244
-(76,536)
(76,536)
908,708
Share capital
£
2,339,374
--
-
2,339,374
Retained earnings
£
(1,655,089)
(1,341)-
(1,341)
(1,656,430)
Minority Interest
£
(469)
2,559477
3,036
2,567
Reverseacquisition
reserve£
708,951
--
-
708,951
Non-Distributable Distributable
ConsolIDateD statement of ChanGes In equIty (continued)For the year ended 31 December 2011
19
Thenotesformpartofthesefinancialstatements
ConsolIDateD statement of fInanCIal posItIonAs at 31 December 2011
ASSETSNon-current assetsIntangible assetsProperty,plantandequipment
Current assetsInventoriesTradeandotherreceivablesShort term investmentCash and cash equivalentsTaxrecoverable
lIABIlITIESCurrent liabilitiesTradeandotherpayablesAmount due to DirectorsLoans and borrowings – securedTaxpayable
NET CURRENT (lIABIlITIES)/ASSETS
Totalassetslesscurrentliabilities
Non-current liabilityLoans and borrowings – secured
NET ASSETS
2010£
2,232,5061,012,6443,245,150
1,349,0581,258,128
1,778732,4363,428
3,344,828
1,020,279238,698
2,070,533-
3,329,510
15,318
3,260,468
100,223
3,160,245
2011£
2,641,303860,429
3,501,732
1,021,5791,641,352
-1,154,665
11,1253,828,721
910,518217,097
3,009,04326,517
4,163,175
(334,454)
3,167,278
81,874
3,085,404
Note
1112
14151617
181920
20
20
Thenotesformpartofthesefinancialstatements
ConsolIDateD statement of fInanCIal posItIon (continued)As at 31 December 2011
SHAREHOlDERS’ EqUITY
Equity attributable to equity holders of the Company:Called up share capitalShare premiumReverse acquisition reserveForeign currency translation reserveRetained earnings
Shareholders’ equityNon-controllinginterest
TOTAl EqUITY
2010£
2,339,374782,234708,951985,244
(1,655,089)
3,160,714(469)
3,160,245
2011£
2,339,374782,234708,951908,708
(1,656,430)
3,082,8372,567
3,085,404
Note
2223242930
21
Thenotesformpartofthesefinancialstatements
Company statement of fInanCIal posItIonAs at 31 December 2011
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
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
2011£
2,040,930
985,5432,073
987,616
32,852153,853186,705
800,911
2,841,841
2,339,374782,234(279,767)
2,841,841
Note
13
1517
1819
222323
22
Thenotesformpartofthesefinancialstatements
ConsolIDateD statement of Cash flowsFor the year ended 31 December 2011
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 Proceeds from disposal of short term investments Proceedsfromdisposalofproperty,plantandequipment Additions to development costs
Netcashgeneratedfrom/(usedin)investingactivities
Cash flows from financing activities Drawdown of short term borrowings Repayment of term loans Repaymentoffinanceleasepayables
Netcashgeneratedfromfinancingactivities
(Decrease)/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
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
2011£
(28,695)(150,849)18,816(8,947)
(169,675)
(56,716)-
1,7335,382
(351,997)
(401,598)
372,703 - (14,948)
357,755 (213,518) 24,373 732,436 543,291
Note
25
11
17
23
Thenotesformpartofthesefinancialstatements
Company statement of Cash flowsFor the year ended 31 December 2011
Cash flow from operating activities Cash depleted in operations
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
2010£
(5)
(5)
44
2,043
2,082
2011£
-
(9)
-
2,082
2,073
Note
25
17
24
1. GENERAl INFORMATION
TheprincipalactivityoftheCompanyisinvestmentholding.TheprincipalactivitiesofthesubsidiarycompaniesaresetoutinNote13tothefinancialstatements.Therewerenosignificantchangesinthenatureoftheseactivitiesduringtheyear.
TheCompanyis incorporatedinJersey,TheChannelIslandsundertheCompanies(Jersey)Law1991andis listedonAIM.Theregisteredofficeislocatedat28-30TheParade,StHelier,JerseyJE11EQ,ChannelIslands.Theconsolidatedfinancialstatementsfortheyearended31December2011comprisetheresultsoftheCompanyanditssubsidiarycompaniesundertakings.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,aresetoutinChairman’sstatementonpage3.ThefinancialpositionoftheGroup,itscashflows,liquiditypositionandborrowingfacilitiesaredescribedinthefinancialstatementsandassociatednotes.Inaddition,Note3tothefinancialstatementsincludestheGroup’sobjectives,policiesandprocessesformanagingitscapital;itsfinancialriskmanagementobjectives;detailsofitsfinancialinstrumentsandhedgingactivities;anditsexposurestocreditriskandliquidityrisk.
InordertoassessthegoingconcernoftheGroup,theDirectorshavepreparedcashflowforecastsforcompanieswithintheGroup.ThesecashflowforecastsshowtheGroupexpectsanincreaseinrevenueandwillhavesufficientheadroomoveravailablebankingfacilities.TheGrouphasobtainedbankingfacilitiessufficienttofacilitatethegrowthforecast infutureperiods. No matters have been drawn to the Directors’ attention to suggest that future renewals may not be forthcoming on acceptable terms.
Inaddition,ashareholderhasalsoundertakentoprovidesupporttoenablethegrouptomeetitsdebtsasandwhentheyfall due.
notes to the fInanCIal statements For the year ended 31 December 2011
25
2. ACCOUNTING POlICIES (Continued)
Going Concern (continued)
Aftermakingenquiries,theDirectorshaveareasonableexpectationthattheGrouphasadequateresourcestocontinueinoperationalexistencefortheforeseeablefuture.Accordingly,theycontinuetoadoptthegoingconcernbasisinpreparingthefinancialstatements.
Thefinancialstatementdoesnotincludeanyadjustmentsthatwouldresultiftheforecastwerenotachievedandshareholdersupport was withdrawn.
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’sintangibleassetsasat31December2011aredisclosedinNote11tothefinancialstatements.
(ii) Depreciationofproperty,plantandequipment
Thecostsofproperty,plantandequipmentoftheGrouparedepreciatedonastraight-linebasisovertheusefullivesoftheassets.Managementestimatestheusefullivesoftheproperty,plantandequipmenttobewithin5to10years.Thesearecommonlifeexpectanciesappliedintheindustry.Changesintheexpectedlevelofusageandtechnologicaldevelopmentscouldimpacttheeconomicusefullivesandtheresidualvaluesoftheseassets,thereforefuturedepreciationchargescouldberevised.ThecarryingamountsoftheGroup’sproperty,plantandequipmentasat31December2011aredisclosedinNote12tothefinancialstatements.
(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.
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
26
2. ACCOUNTING POlICIES (Continued)
Estimation uncertainty and critical judgements (continued)
(iii) Amortisationofintangibleassets(continued)
ThecarryingamountsoftheGroup’sintangibleassetsasat31December2011aredisclosedinNote11tothefinancialstatements.
However,iftheprojectedsalesdonotmaterialisethereisariskthatthevalueoftheintangibleassetsshownabovewould be impaired.
(iv) Impairmentofgoodwillonconsolidation
TheGroup'scashflowprojectionsincludeestimatesofsales.However,iftheprojectedsalesdonotmaterialisethereis a risk that the value of goodwill would be impaired.
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.
ThecarryingamountoftheGroup’sgoodwillonconsolidationasat31December2011isdisclosedintheNote11tothefinancialstatements.
(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.
TheDirectorsareoftheopinionthatnoprovisionisrequiredinrespectofthecontingentliabilitiesasdisclosedinNote28asitisnotprobablethatfuturesacrificeofeconomicbenefitswillberequiredortheamountisnotcapableofreliablemeasurement.
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
27
2. ACCOUNTING POlICIES (Continued)
IFRS AND IAS UPDATE FOR 31 DECEMBER 2011 ACCOUNTS
(a) New and amended standards adopted by the Group
TheGrouphasadoptedthefollowingnewandamendedIFRSsasof1January2011:
• IAS24(Amendment),‘Relatedpartytransactions’.Theamendedstandardiseffectiveforannualperiodsbeginningonorafter1January2011.Itclarifieddefinitionofarelatedpartytosimplifytheidentificationofsuchrelationshipsandtoeliminateinconsistenciesinitsapplication.Therevisedstandardintroducesapartialexemptionofdisclosurerequirementsforgovernment-relatedentities.Thecompanydoesnotexpectanyimpactonitsfinancialpositionorperformance.
(b) Standards, interpretations and amendments to published standards that are not yet effective
Thefollowingnewstandards,amendmentstostandardsandinterpretationshavebeenissued,butarenoteffectiveforthefinancialyearbeginning1January2011andhavenotbeenearlyadoptedbytheGroup:
• IFRS9,‘Financialinstruments:classificationandmeasurement’,asissuedreflectsthefirstphaseoftheIASBworkonthereplacementofIAS39andappliestoclassificationandmeasurementoffinancialassetsasdefinedinIAS39.Thestandardiseffectiveforannualperiodsbeginningonorafter1January2015.Insubsequentphases,theIASBwilladdressclassificationandmeasurementoffinancialliabilities,hedgeaccountingandderecognition.TheadoptionofthefirstphaseofIFRS9mighthaveaneffectontheclassificationandmeasurementofthecompany’sassets.Atthisjunctureitisdifficultforthecompanytocomprehendtheimpactonitsfinancialpositionandperformance.
• IFRS7,‘Financialinstruments:disclosures(amendment),iseffectiveforannualperiodsbeginningonorafter1July2011.Theamendmentsrequiresadditionalquantitativeandqualitativedisclosuresrelatingtotransfersoffinancialassets,wherefinancialassetsarederecognisedintheirentirety,butwheretheentityhasacontinuinginvolvementinthemandwherefinancialassetsarenotderecognisedintheirentirety.Inadditiontotheabovetherehasbeenasubsequent amendment effective for annual periods beginning on or after 1 January 2013 related to the offsetting offinancialassetsandfinancialliabilities.Theadoptionofthesewillhavenoeffectonthefinancialstatementsofthe company.
• IFRS12DisclosuresofInterestswithOtherEntitiesiseffectivefrom1January2013.Itrequiresincreaseddisclosureaboutthenature,risksandfinancialeffectsofanentity’srelationshipwithotherentitiesalongwithitsinvolvementwithotherentities.Theadoptionofthiswillhavenoeffectonthefinancialstatementsofthecompany.
• IFRS13FairValueMeasurementiseffectivefrom1January2013.Itdefinesfairvalue,setsoutinasingleIFRSaframeworkformeasuringfairvalueandrequiresdisclosuresaboutfairvaluemeasurements.Itincludesathree-levelfairvaluehierarchywhichprioritiestheinputsinafairvaluemeasurement.Theadoptionofthiswillhavenoeffectonthefinancialstatementsofthecompany.
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
28
2. ACCOUNTING POlICIES (Continued)
(b) Standards, interpretations and amendments to published standards that are not yet effective (continued)
• IFRS10ConsolidatedFinancialStatements,IFRS11JointArrangements,IFRS12DisclosuresofInterestswithOtherEntitiesalongwithrelatedamendmentstoIAS27SeparateFinancialStatementsandIAS28InvestmentsinAssociates and Joint Ventures will have an effective date of 1 January 2013. Early adoption of these standards is permitted,butonlyifallfiveareearlyadoptedtogether.
IFRS 10 does not change consolidation procedures but changes whether an entity is consolidated by revising the definitionofcontrolandprovidesanumberofclarificationsonapplyingthenewdefinitionofcontrol.Theadoptionofthiswillhavenoeffectonthefinancialstatementsofthecompany.
• IAS1PresentationofItemsofOtherComprehensiveIncome–AmendmentstoIAS1iseffectiveforannualperiodsbeginningonorafter1July2012.Itemsthatwouldbereclassifiedtotheprofitandlossatafuturepointwouldbepresentedseparatelyfromitemsthatwillneverbecapitalised.Theadoptionofthiswillhavenoeffectonthefinancialstatements of the company.
• IAS19EmployeeBenefits(Revised)effectiveforannualperiodsbeginningonorafter1January2013.Fordefinedbenefitplanstheabilitytodeferrecognitionofactuarialgainsandlosseshasbeenremoved.Therearenewobjectivesfor disclosure stated in the revised standard along with new or revised disclosure requirements. Plus the recognition ofterminationbenefitsandthedistinctionofshort-termandotherlong-termemployeebenefitshavechanged.Theadoptionofthiswillhavenoeffectonthefinancialstatementsofthecompany.
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.
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
29
2. ACCOUNTING POlICIES (Continued)
Basis of consolidation (continued) (ii) Basisofconsolidation
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.
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.
Subsidiarycompaniesareconsolidatedfromthedateofacquisition,beingthedateonwhichtheGroupobtainscontrol,andcontinuetobeconsolidateduntilthedatethatsuchcontrolceases.Inpreparingtheconsolidatedfinancialstatements,intra-groupbalances,transactionsandunrealisedgainsorlossesareeliminatedinfull.Uniformaccountingpoliciesareadoptedintheconsolidatedfinancialstatementsforliketransactionsandeventsinsimilarcircumstances.
Thesharecapitalintheconsolidatedstatementofchangesinequityfortheboththecurrentandcomparativeperioduses a historic exchange rate to determine the equity value.
AspermittedbyandinaccordancewithArticle110oftheCompanies(Jersey)Law1991,aseparateincomestatementofMobilityOneLimited,isnotpresented.
Revenue recognition
RevenueisrecognisedwhenitisprobablethateconomicbenefitsassociatedwiththetransactionwillflowtotheGroupandthe amount of the revenue can be measured reliably.
(i) Revenuefromtradingactivities
RevenueinrespectofusingtheGroup’se-Channelplatformarisesfromthesalesofprepaidcredit,salescommissions received 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.
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
30
2. ACCOUNTING POlICIES (Continued)
Basis of consolidation (continued)
(i) Revenuefromtradingactivities(continued)
Revenuefromsolutionsalesandconsultancycomprisesalesofsoftwaresolutions,hardwareequipment,consultancy feesandmaintenanceand support services. For sales of hardwareequipment, revenue is recognisedwhen the significantrisksassociatedwiththeequipmentaretransferredtocustomersortheexpiryoftherightofreturn.Forall otherrelatedsales,revenueisrecognisedupondeliverytocustomersandovertheperiodinwhichservicesareexpected to be provided to customers.
(ii) Interestincome
Interest income is recognised on a time proportion basis that takes into account the effective yield on the asset.
(iii) Rentalincome
Rental income is recognised on an accrual basis.
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.
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
31
2. ACCOUNTING POlICIES (Continued)
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.
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 2011 4.90 4.91 Year ended 31 December 2010 4.78 4.96
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
32
2. ACCOUNTING POlICIES (Continued)
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.
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.
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
33
2. ACCOUNTING POlICIES (Continued)
Intangible assets (continued)
(ii) Goodwillonconsolidation(continued)
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.
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.
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
34
2. ACCOUNTING POlICIES (Continued) Property, plant and equipment (continued)
(i) Recognitionandmeasurement(continued)
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.
(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.
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
35
2. ACCOUNTING POlICIES (Continued) Property, plant and equipment (continued)
(iii)Depreciation(continued)
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.
Cash and cash equivalents
Cashandcashequivalentsincludecashinhand,depositsheldatcallwithbanks,othershort-termhighlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorlesswhichhaveaninsignificantriskofchangesinvalueandbankoverdrafts.ForthepurposeofStatementofCashFlows,cashandcashequivalentsarepresentednetofbankoverdrafts. Trade and other payables
Tradeandotherpayablesarerecognisedinitiallyatfairvalueoftheconsiderationtobepaidinthefutureforgoodsandservices received.
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
36
2. ACCOUNTING POlICIES (Continued)
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.
Ordinarysharesareclassifiedasequity.Incrementalcostsdirectlyattributabletotheissueofnewsharesoroptionsareshowninequityasadeduction,netofvalueaddedtax,fromtheproceeds.
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.
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
37
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 2011
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
011
Fixedrate:
Fixe
d de
posi
tFi
nanc
e le
ases
Floatingrate:
Bank
ove
rdra
ftBa
nker
s’ a
ccep
tanc
eLe
tter o
f cre
dits
Trustreceipts
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
Total £
705,208
(97,745)
(611,374)
(1,345,941)
(595,189)
(440,668)
467,777
(115,420)
(1,101,700)
(536,420)
(417,216)
4-5
year
s £ -(13,163) - - - - -
(19,366) - - -
2-3years £ -
(17,906) - - - - -
(17,282) - - -
With
in1
year £
705,208
(15,871)
(611,374)
(1,345,941)
(595,189)
(440,668)
467,777
(15,197)
(1,101,700)
(536,420)
(417,216)
Mor
e th
an5
year
s £ -(14,992) - - - - -
(29,012) - - -
3-4
year
s £ -(18,924) - - - - -
(18,324) - - -
1-2
year
s £ -(16,889) - - - - -
(16,239) - - -
Effe
ctiv
eIn
tere
st R
ate %
2.92
3.08
8.20
5.22
1.57
6.58
2.58
3.08
5.22
2.44
2.79
Not
e
17 21 21 21 21 21 17 21 21 21 21
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
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 2011 Tradereceivables - 63,636 63,636 Group At 31 December 2010 Tradereceivables 49,896 95,144 145,040
(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 2011
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 2011
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 interestBank overdraftLetter of credit interestTrustreceiptinterest
2010£
56,7733,1248,5253,318
-6,2975,606
83,643
2011£
91,6151,3776,1484,8336,4037,53732,936
150,849
Group
Group
2010£
430,5136,02586,43324,421547,392(189,861)
357,531
115,85577,733
1678,624
202,379(55,180)
147,199
2011£
514,5785,16449,15225,150594,044(246,005)
348,039
115,50098,949
25311,247
225,949(59,959)
165,990
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
42
7. PROFIT/(lOSS) BEFORE TAx
Theprofit/(loss)beforetaxisstatedaftercharging/(crediting):
Auditors’ remuneration Auditors’ remuneration overprovidedEmployeebenefitsexpense(excludingDirectors’remuneration)(Note4)Directors’remuneration(Note4)Depreciation(Note12)Rental of premises and equipmentRental of motor vehiclesAmortisationofintangibleassets(Note11)Amortisationofdevelopmentcosts(Note11)Property,plantandequipmentwrittenoffImpairment loss on development costsInventories written offBad debts written offDeposits written offOperatingleaseexpenseInterest incomeRental incomeProfitondisposalofproperty,plantandequipmentGain on foreign exchange-realised
IncludedintheauditfeefortheGroupisanamountof£13,100(2010:£13,700)inrespectoftheCompany.
2010£
20,473-
357,531147,199181,702
--
76,94384,53612,927
-455
62,8893,34879,425(10,956)(6,746)(38,075)
(100,996)
2011£
19,547(1,585)
348,039165,990182,77780,4862,982
176,302143,253
-63,695
-31,096
--
(18,816)(3,229)(3,146)
(80,730)
Group
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
43
8. TAx
Current tax expense:UK corporation tax for the yearForeign tax
Underprovisioninprioryear:Foreign tax
A reconciliation of income tax expense applicable to loss before tax at the statutory income tax rate to income tax expense attheeffectiveincometaxrateoftheGroupisasfollows:
Profit/(loss)beforetax
TaxationatUKCorporationtaxrateof27%(2010:28%)Effect of different tax rates in other countriesEffect 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 purposesUnderprovision of tax expense in prior year
Taxexpensefortheyear
Currentincometaxiscalculatedattheweightedaveragetaxrateof27%(2010:28%).
Thedirectsubsidiarycompany,MobilityOneSdn.Bhd.,wasgrantedPioneerStatusbytherelevantauthoritiesforanadditionalperiodoffiveyearseffectivefrom26April2010to25April2015.
Group
2010£
(206,079)
(57,703)930
75,454(21,820)
8,22175,209(71,252)
-
9,039
2011£
28,802
7,776(1,187)92,447
(162,968)
62,78228,647
-87
27,584
Group
2010£
-9,039
-
9,039
2011£
-27,497
87
27,584
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
44
8. TAx (Continued)
Asat31December2011,theunrecogniseddeferredtaxassetsoftheGroupareasfollows:
Unabsorbed tax lossesUnabsorbed capital allowancesTaxabletemporarydifferences
Thepotentialnetdeferred taxassetsamounting to£73,311 (2010:£347,681)hasnotbeen recognised in thefinancialstatementsbecauseitisnotprobablethatfuturetaxableprofitwillbeavailableagainstwhichthesubsidiarycompanycanutilisethebenefits.
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£269,622(2010:£43,042).
10. EARNINGS PER SHARE
Consolidatedlossaftertax(£)
Weighted average number of shares in issueFully diluted weighted average number of shares in issue
Basicearningspershare(pence)Dilutedearningspershare(pence)
Thebasicearningspershareiscalculatedbydividingthelossof£1,341(2010:lossof£215,653)attributabletoordinaryshareholders by theweighted average number of ordinary shares outstanding during the year,which is 93,574,951 (2010:93,574,951).
Thedilutedearningspershareiscalculatedusingtheweightedaveragenumberofsharesadjustedtoassumetheconversionofalldilutivepotentialordinaryshares.Fortheyearended31December2011,thedilutedearningspershareisequivalentto the basic earnings per share as the exercise price of the share options is above the current market price.
2010
(215,653)
93,574,95193,574,951
(0.23)(0.23)
2011
(1,341)
93,574,95193,574,951
0.0010.001
Group
2010£
139,520208,161
-
347,681
2011£
38,76634,701(156)
73,311
Group
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
45
11. INTANGIBlE ASSETS
GROUP31 December 2011
COSTAt 1 January 2011ReclassificationfrominventoriesAdditionsForeign exchange difference
At 31 December 2011
ACCUMUlATED AMORTISATION AND IMPAIRMENT lOSSAt 1 January 2011Amortisation charge for the periodImpairment loss for the periodForeign exchange difference
At 31 December 2011
NET CARRYING AMOUNTAt 31 December 2011
GROUP31 December 2010
COSTAt 1 January 2010AdditionsWritten offForeign exchange difference
At 31 December 2010
ACCUMUlATED AMORTISATION AND IMPAIRMENT lOSSAt 1 January 2010Amortisation charge for the periodWritten offForeign exchange difference
At 31 December 2010
NET CARRYING AMOUNTAt 31 December 2010
Total£
2,962,943499,065351,997(75,569)
3,738,436
730,437319,55463,695(16,553)
1,097,133
2,641,303
Total£
2,318,671285,009
-359,263
2,962,943
489,271161,479
-79,687
730,437
2,232,506
Development Costs
£
734,772-
351,997(16,530)
1,070,239
224,759143,25263,695(4,872)
426,834
643,405
Development Costs
£
381,535285,009
-68,228
734,772
119,09684,536
-21,127
224,759
510,013
Goodwill on consolidation
£
1,429,292--
(33,426)
1,395,866
----
-
1,395,866
Goodwill on consolidation
£
1,242,603--
186,689
1,429,292
----
-
1,429,292
Software£
798,879499,065
-(25,613)
1,272,331
505,678176,302
-(11,681)
670,299
602,032
Software£
694,533--
104,346
798,879
370,17576,943
-58,560
505,678
293,201
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
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£1,395,866(2010:£1,429,292).It'srecoverableamounthasbeendeterminedbasedonvalueinuseusingcashflowprojectionsandkeyassumptionsasdescribedin(b)above.
Development costs
Developmentcostswillnotbeamortisediftheproductisstillinitsdevelopmentphase.Theamortisationofthedevelopmentcostsisover5yearsperiod,whichintheopinionoftheDirectorsisadequate.
2010£
189,86155,180143,952
2011£
246,00559,95925,687
Group
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
47
12.
PRO
PER
TY, P
lAN
T A
ND
Eq
UIP
MEN
T
Gro
up
31 D
ecem
ber 2
011
CO
ST
At 1
Jan
uary
201
1Ad
ditio
nsD
ispo
sals
Fore
ign
exch
ange
diff
eren
ce
At 3
1 D
ecem
ber 2
011
DEP
REC
IATI
ON
At 1
Jan
uary
201
1D
epre
ciat
ion
char
ge fo
r the
pe
riod
Dis
posa
lsFo
reig
n ex
chan
ge d
iffer
ence
At 3
1 D
ecem
ber 2
011
NET
CA
RRY
ING
AM
OU
NT
At 3
1 D
ecem
ber 2
011
Tota
l £
1,648,751
56,716
(2,283)
(38,452)
1,664,732
636,107
182,778
(47)
(14,535)
804,303
860,429
Offi
ce
equi
pmen
t £
32,047 38-
(749)
31,336
14,006
3,126 -
(321)
16,811
14,525
Com
pute
r so
ftwar
e £
759,475
829 -
(17,756)
742,548
231,774
74,087-
(5,283)
300,578
441,970
Elec
tron
ic
Dat
a C
aptu
re
equi
pmen
t £
386,876
41,741
(2,283)
(8,974)
417,360
151,939
39,845 (47)
(3,480)
188,257
229,103
Ren
ovat
ion £
50,090 897 -
(1,170)
49,817
19,569
4,940 -
(446)
24,063
25,754
Furn
iture
an
d fit
tings £
77,519
1,737 -
(1,810)
77,446
29,792
7,671 -
(683)
36,780
40,666
Com
pute
r eq
uipm
ent £
189,574
11,474-
(4,411)
196,637
147,219
23,328-
(3,400)
167,147
29,490
Mot
orVe
hicl
es £
153,170 - -
(3,582)
149,588
41,808
29,781-
(922)
70,667
78,921
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
48
12.
PRO
PER
TY, P
lAN
T A
ND
Eq
UIP
MEN
T (C
ontin
ued)
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
0D
epre
ciat
ion
char
ge fo
r the
pe
riod
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 £
27,070 877 -
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 2011
49
12. PROPERTY, PlANT AND EqUIPMENT (Continued)
(a) Duringthefinancialyear,theGroupacquiredproperty,plantandequipmentataggregatecostsof£56,716(2010:£74,884)ofwhichNil(2010:£34,806)wasacquiredbymeansoffinanceleasesarrangements.Cashpaymentsof£56,716(2009:£40,078)weremadebytheGrouptopurchaseproperty,plantandequipment.
(b) Includedinproperty,plantandequipmentoftheGrouparemotorvehicleswithnetcarryingamountsof£78,921(2010:£111,362)heldunderfinanceleasesarrangements.
13. INVESTMENT IN SUBSIDIARY COMPANIES
COSTAt1January/31December
2010£
2,040,930
2011£
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
2011 2010 (%) (%) 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 2011
50
14. INVENTORIES
At Cost: Air timeSoftwareHardware
15. TRADE AND OTHER RECEIVABlES
Tradereceivables-Thirdparties
Otherreceivables-Deposits-Prepayments-Sundryreceivables-Amountduefromsubsidiarycompanies
Totaltradeandotherreceivables
(a) TheGroup’sandtheCompany’snormaltradecredittermsrangefrom30to60days(2010:30to60days).Othercredit terms are assessed and approved on a case to case basis.
Ageing analysis Anageinganalysisoftradereceivablesthatareneitherindividuallynorcollectivelyconsideredtobeimpairedisasfollows:
Neither past due nor impaired
1-2monthspastdue 3-12monthspastdue
2010£
551,982499,065298,011
1,349,058
2011£
751,383-
270,196
1,021,579
Group
2010£
440,119
404,61113,431
418,042
858,161
2011£
928,712
42,51178,725
121,236
1,049,948
Group
2010£
-
---
1,190,8201,190,820
1,190,820
2010£
858,161
297,79911,07791,091
-399,967
1,258,128
2011£
-
---
985,543985,543
985,543
2011£
1,049,948
288,2249,131
294,049-
591,404
1,641,352
CompanyGroup
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
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 bank balancesLess:Bankoverdraft(Note20)
Cash and cash equivalents
TheabovefixeddepositshavebeenpledgedtolicensedbanksassecuritiesforcreditfacilitiesgrantedtotheGroupasdisclosedinNote20tothefinancialstatements.
TheGroup’seffectiveinterestratesandmaturitiesofdepositsare2.92%(2010:2.58%)and12months(2010:12months)respectively.
2010£
1,778
2011£
-
Group
2010£
2,082-
2,082-
2,082
2011£
2,073-
2,073-
2,073
Company2010
£
264,659467,777
732,436-
732,436
2011£
449,457705,208
1,154,665(611,374)
543,291
Group
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
52
18. TRADE AND OTHER PAYABlES
Tradepayables-Thirdparties
Otherpayables-Deposits-Accruals-Sundrypayables
TotaltradeandotherpayablesAdd:AmountduetoDirectors(Note19)Add:Loansandborrowings(Note20)
Totalfinancialliabilitiescarriedatamortisedcost
(a) TheGroup’snormaltradecredittermsrangefrom30to90days(2010:30to90days).
(b) Other payable are non-interest bearing.Other payables are normally settled on an average terms of 60 days (2010:60days).
(c) Theamountduetoholdingcompanyisunsecured,non-interestbearingandisrepayableondemand.
19. AMOUNT DUE TO DIRECTORS
Theseareunsecured,interestfreeandrepayableondemand.
2010£
-
-12,66015,60628,266
28,26694,103
-
122,369
2010£
699,421
54,75455,011211,093320,858
1,020,279238,698
2,170,756
3,429,733
2011£
-
-14,90117,95132,852
32,852153,853
-
186,705
2011£
455,953
48,63338,301367,631454,565
910,518217,097
3,090,917
4,218,532
CompanyGroup
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
53
20. FINANCIAl lIABIlITIES – lOANS AND BORROWINGS
Non-CurrentSecured:Financeleasepayables(Note21)
CurrentSecured:Bankers’ acceptanceBankoverdraft(Note17)Financeleasepayables(Note21)Letter of creditsTrustreceipts
Total BorrowingsSecured:Bankers’ acceptanceBankoverdraft(Note17)Financeleasepayables(Note21)Letter of creditsTrustreceipts
Thebankers’acceptance,bankoverdraft,letterofcreditsandtrustreceiptsaresecuredbythefollowing:
(a) pledgeoffixeddepositsofasubsidiarycompany(Note17);
(b) personalguaranteebyaDirector;and
(c) corporateguaranteebytheCompany.
Group2010
£
100,223
100,223
1,101,700-
15,197536,420417,216
2,070,533
1,101,700-
115,420536,420417,216
2,170,756
2011£
81,874
81,874
1,345,941611,37415,871595,189440,668
3,009,043
1,345,941611,37497,745595,189440,668
3,090,917
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
54
20. FINANCIAl lIABIlITIES – lOANS AND BORROWINGS (Continued)
TheeffectiveinterestratesoftheGroupfortheabovefacilitiesareasfollows:
Bankers’ acceptanceBank overdraftLetter of creditsTrustreceipts
Thematurityofborrowings(excludingfinanceleases)isasfollows:
Within one year
OtherinformationonfinancialrisksofborrowingsaredisclosedinNote3.
2010£
2,055,336
2,055,336
2010%
5.22-
2.442.79
2011£
2,993,172
2,993,172
2011%
7.588.201.576.58
Group
Group
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
55
21. 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(Note20)Dueafter12months(Note20)
TheGrouphasfinanceleasecontractsforcertainmotorvehiclesasdisclosedonNote12(b).
OtherinformationonfinancialrisksoffinanceleasepayablesaredisclosedinNote3.
2010£
21,42421,42464,27330,972138,093(22,673)
115,420
15,19716,23954,97229,012
115,420
15,197100,223
115,420
2011£
20,92320,92356,05815,823113,727(15,982)
97,745
15,87116,88949,99314,992
97,745
15,87181,874
97,745
Group
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
56
22. CAllED UP SHARE CAPITAl
Authorised in MobilityOne limited
At1January/31December
Issued and fully paid in MobilityOne limited
At1January/31December
23. COMPANY EqUITY INSTRUMENT
At 1 January 2010Deficitfortheyear
At 31 December 2011
At 1 January 2010Deficitfortheyear
At 31 December 2010
24. 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.
2010£
10,000,000
2,339,374
2011£
10,000,000
2,339,374
Amount2010
400,000,000
93,574,951
2011
400,000,000
93,574,951
Number of ordinary shares of £0.025 each
Share premium
£
782,234-
782,234
782,234-
782,234
Share capital£
2,339,374-
2,339,374
2,339,374-
2,339,374
Total£
3,111,463(269,622)
2,841,841
3,154,505(43,042)
3,111,463
Retained earnings
£
(10,145)(269,622)
(279,767)
32,897(43,042)
(10,145)
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
57
25. RECONCIlIATION OF lOSS BEFORE TAx TO CASH GENERATED FROM OPERATIONS
GROUPCash flow from operating activities
Profit/(Loss)beforetaxAdjustmentsfor: Profitondisposalofproperty,plantandequipment Depreciation Amortisation of intangible assets Amortisation of development costs Property,plantandequipmentwrittenoff Impairment loss on development costs Bad debts written off Inventories written off Deposit written off Interest paid Interest received
Operatingprofitbeforeworkingcapitalchanges
Increase in inventories Increase in receivables (Decrease)/increaseinamountduetoDirectors (Decrease)/increaseinpayables
Cash depleted in operations
COMPANYCash flow from operating activities
Loss before taxAdjustmentfor: Loss/(gain)onforeignexchange–unrealised
Operatinglossbeforeworkingcapitalchanges
Increase in payables Increase in amount due to Directors Increase in amount due from subsidiary company
Cash depleted in operations
2010£
(206,079)
(38,075)181,70276,94384,53612,927
-62,889
4553,34883,643(10,956)
251,333
(511,569)(823,968)
214,861587,790
(281,553)
(43,042)
(165,947)
(208,989)
13,71765,056130,211
(5)
2011£
28,802
(3,146)182,778176,302143,252
-63,69531,096
--
150,849(18,816)
754,812
(198,040)(441,704)(21,447)(122,316)
(28,695)
(269,622)
36,869
(232,753)
4,58659,750168,417
-
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
58
26. RElATED PARTY TRANSACTIONS
Duringtheyear,MobilityOneSdn.Bhd.receivedadvances£167,657(2010:£86,850)fromLMSTechnologyDistributionSdn.Bhd.,acompanywhichisrelatedtoaDirector.
AttheStatementofFinancialPositiondate,theGroupowedtheDirectors£217,097(2010:£238,698),theCompanyowedtheDirectors£153,853(2010:£94,103),MobilityOneSdn.Bhd.owedtheCompany£985,543(2010:£1,190,820),NetossSdn.Bhd.owedMobilityOneSdn.Bhd.£317,052(2010:£367,054),PayStationSdn.Bhd.owedMobilityOneSdn.Bhd.£3,366(2010:£4,183)andPT.MobilityOneIndonesiaowedMobilityOneSdn.Bhd.£614,261(2010:£617,346),MobilityOneSdn.Bhd.owedLMSTechnologyDistributionSdn.Bhd.£299,961(2010:£86,850),OneTranzactSdn.Bhd.(formerlyknownasSteadyTransactSdn.Bhd.),acompanywithcommonDirectors,owedMobilityOneSdn.Bhd.£3,155(2010:Nil),LMSTechnologyDistributionSdn.Bhd.owedP.T.MobilityOneIndonesia£111,418(2010:Nil)andNetossSdn.Bhd.owedLMSDigitalSdn.Bhd.,acompanyrelatedtoaDirector,£13,582(2010:£5,214)andLMSTechnologyDistributionSdn.Bhd.£2,179(2010:Nil).Theamountsowingtoorfromthesubsidiarycompaniesandrelatedpartiesarerepayableondemandand are interest free.
Duringtheyear,MobilityOneSdn.Bhd.settledtheliabilitiesonbehalfofOneTranzactSdn.Bhd.£2,742(2010:£403).NetossSdn.Bhd.paidLMSDigitalSdn.Bhd.andLMSTechnologyDistributionSdn.Bhd.£8,562(2010:£4,935)and£734(2010:£916)respectivelyonexpensesincurred.
27. UlTIMATE CONTROllING PARTY
IntheopinionoftheDirectors,thereisnoultimatecontrollingpartyintheCompanyfortheyearended31December2011.
28. 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
Amount utilisedBanker’s guarantee in favour of third parties
2010£
21,645,022
373,455
2011£
4,186,920
356,552
Group
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
59
29. 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.
30. 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
2010£
552,141433,103
985,244
2011£
985,244(76,536)
908,708
2010£
(1,439,436)(215,653)
(1,655,089)
2011£
(1,655,089)(1,341)
(1,656,430)
Group
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
60
31. SHARE BASED PAYMENTS
Duringtheyearended31December2007theGroupgrantedshareoptionsof7,416,558sharesat12.5p2,000,000eachtoDato’[email protected],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 5yearsRiskfreerate 4.40%Expectedvolatility 40%Expecteddividendyield 0%Fair value of options 2p
No options have been exercised or lapsed.
2010
12.5p
2011
12.5p
Exercise price2010
7,416,558
2011
7,416,558
NumberCompany
notes to the fInanCIal statements (continued)For the year ended 31 December 2011
61
NOTICEISHEREBYGIVENTHATanAnnualGeneralMeetingofMOBIlITYONE lIMITED (“Company”) will be held at 9.00 a.m.Malaysiatimeon23July2012atMalaysianPetroleumClub,Level42,Tower2,PetronasTwinTowers,KualaLumpurCityCentre,50088KualaLumpur,Malaysia,andforthepurposeofconsideringand,ifthoughtfit,adoptingthefollowingresolutions,atthemeeting,orofanyadjournmentthereof:
ORDINARY RESOlUTIONS
1. THATtheCompany'saccountsandreportsoftheDirectorsandAuditorsfortheyearended31December2011beadopted.
2. THATDerrickChiaKahWaiisre-electedasaDirector.
3. THATSeahBoonChinisre-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:29June2012
notICe of annual General meetInG
62
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(continued)
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 2011 be adopted.
2. THATDerrickChiaKahWaiisre-electedasaDirector.
3. THATSeahBoonChinisre-electedasaDirector.
4. THATJeffreysHenryLLPofFinsgate,5-7CranwoodStreet,EC1V9EELondon,UnitedKingdombereappointedasAuditorsoftheCompany(inaccordancewithArticle33oftheArticlesofAssociationoftheCompany)toholdofficeuntiltheconclusionofthenextgeneralmeeting.
5. THATtheDirectorsbeauthorisedtofixtheremunerationoftheAuditors.
If by an individual:
Signed:....................................................................................
Dated:.............................................................................2012
If for and on behalf of a corporation:
Signed by: .................................................................................
for and on behalf of: ...................................................................
Position: ....................................................................................
Dated:.............................................................................2012
I/We:(fullname)……………………………………………………………………………………………...............................................
of:(address)…………………………………………………………………………………………………................................................
beingamemberofMobilityOneLimited,doherebyappoint:(fullname)…………………………………...........................................
orfailinghim:(fullname)……………………………………………………………………………………................................................
orfailinghimtheChairmanoftheMeetingasmy/ourproxytoattendtheAnnualGeneralMeetingofMobilityOneLimitedtobe
heldatMalaysianPetroleumClub,Level42,Tower2,PetronasTwinTowers,KualaLumpurCityCentre,50088KualaLumpur,
Malaysia on 23 July 2012 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