Ubisense Group plc Annual Report 2012

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Fax: +44 (0)1223 535 167
www.ubisense.net

Location
Innovation
Transformation
Annual Report 2012

The mission is clear:
to be the leading location solutions
provider delivering real-time
visibility and control for global
industrial companies.

VisionIn 2017, Ubisense will be the market leader in locationbased solutions by building the most effective team andtechnology in the world to provide outstanding location
products and solutions.

Real-Time Location Systems

Geospatial Systems

Ubisense location solutions offer unparalleledscalability to cover complex global operations
and a level of precision that can detect thesubtlest nuances in industrial environments
where objects are constantly on the move.
With a proven reliability, our solutions are usedin critical commercial operations and cuttingedge research programs around the globe.

The world’s largest and most successful
utility and telecommunications companies
partner with Ubisense for Geospatial Systems
that drive efficient and effective operations.
Ubisense customers lead their industries insafety, reliability and customer satisfaction.
Our solutions helped get them where they
are and enable them to maintain the highest
operational standards, every day.

More on Real-Time Location Systems p06

More on Geospatial Systems p10

www.ubisense.net

Shareholder information

Visit us online
Find out more about our divisions,customers and partners.

Highlights“2012 was a year of significant
strategic progress for the Group”
Richard Green
Chief Executive Officer

Overview£24.3mFinancial highlights• Group revenue increased by 2.1% to £24.3 million (FY 2011:£23.8 million)

Revenue• RTLS revenue in the manufacturing sector grew by 57.0%• Overall RTLS revenues grew by 10.3%

39.5%• Geospatial revenues grew 34.7%, made up of 20.4% organic and14.3% inorganic, excluding the impact of a large European telecom
customer which undertook a restructuring. Overall Geospatial
revenues reduced by 2.5%

Gross margin• Improved gross margin of 39.5% (FY 2011: 35.6%)£1.2m• Managed services (including M&S contracts) increased 22.3%
and represents 25.6% of total revenue (FY 2011: 21.4%)• Adjusted EBITDA* of £1.2 million (FY 2011: £1.4 million)

Adjusted EBITDA• Net cash of £2.7 million following increased investment in product suite

WinnerOperational highlights• Major new strategic RTLS wins with AGCO, Astrium, BAE andHyundai. Over a dozen new installations at customers such as
Renault, Smart and John Deere

Double Queen’s Awardfor innovation and International Trade• Extended installations with our existing RTLS customers including Airbus,
Aston Martin, BMW, Continental, Cummins, Daimler and Eurocopter• New Geospatial wins with Cogeco, IGC, Sovernet, Cambridge Water,
SESW, American Electric Power and DREWAG/ENSO• New strategic partnerships with Daifuku and Geoplan• Increased R&D spending to develop industry solutions including
Ubisense’s flagship end-to-end manufacturing solution Smart
Factory System• Double Queen’s Award winner for Innovation and International Trade

Overview

Governance

Highlights

01

Board of Directors

20

Chairman’s statement

02

Directors’ report

22

Corporate governance report

28

Directors’ responsibilities statement

31

Business review
Business overview

04

Products: Real-Time Location Systems

06

Financial statements – Group

Products: Geospatial Systems

10

Independent auditor’s report

32

Chief Executive’s review

14

Consolidated income statement

33

Financial review

16

Consolidated statement ofcomprehensive income

33

Consolidated statement ofchanges in equity

34* Measured as operating profit excluding depreciation, amortisation, sharebased payments charge and non-recurring costs such as reorganisation
costs, AIM listing expenses and acquisition costs

Consolidated statement offinancial position
Consolidated statement of cash flows
Notes to the consolidated financial
statements

35
36
37

Financial statements – Company
Independent auditor’s report
63
Company balance sheet
64
Notes to the Company financial statements 65
Shareholder information
Notice of annual general meeting

68

Advisers

72
Ubisense Group plc
Annual Report & Accounts for theyear ended 31 December 201201

The objective was set:to create the very best
Location Solutions available.

I am pleased to report Ubisense’s
results, for the year ended
31 December 2012. This has been a
crucial year for the Group, where wehave seen significant developments
within both of our operating divisions.
Andy Hopper
ChairmanUbisense Group plc
Annual Report & Accounts for theyear ended 31 December 201202

Chairman’s statement

We will continue to pursue opportunities
for growth both organically and throughacquisitions that align with ourstrategic objectives
Overview

Introduction
I am pleased to report Ubisense’s second full year of results as alisted company, for the year ended 31 December 2012. This has
been a crucial year for the Group, where we have seen significant
developments within both of our operating divisions.

2

Prestigious Awards

Overview
Group revenue increased by 2.1% to £24.3 million and we achieved an
Adjusted EBITDA of £1.2 million. Gross profit increased to £9.6 million,
representing an improvement in gross margin to 39.5%. The Group
has a robust balance sheet with Shareholder Funds of £18.9 million,
including net cash of £2.7 million.
We have continued the strong momentum this year in both our RTLS and
Geospatial divisions, through the strengthening of key customer relationships,
acquisition of new customers, improved market reach and our approach to
product management. We have ensured that our resources are fully focusedon delivering products for markets where we add the most value.
Our RTLS division has experienced considerable growth, throughmajor new strategic client wins, as the use of location driven
manufacturing solutions is becoming increasingly widespreadthrough many industries. We remain confident that the Company cancapitalise on the considerable opportunities we see in the high value
manufacturing sector and this will continue to drive our growth.

Ubisense management teamaccepting the Queen’s Awards
from The Lord Lieutenant ofCambridgeshire, Hugh Duberly cbe

In our Geospatial division, we have also delivered excellent progress
and further market traction. Our Geospatial product offering continues
to gain acceptance in the telecoms and utilities markets, extending our
reputation with customers that value reliability and exceptional service.
Current trading and outlook
In the period since the year end, current trading has been in line with theBoard’s expectations. Ubisense enters 2013 with increasing momentum
in the business and we intend to capitalise on the opportunities ahead.
We will continue to pursue opportunities for growth both organically andthrough acquisitions that align with our strategic objectives, enhance ouroffering and deliver value for our shareholders.
Although the world economic outlook remains uncertain, our ability toprovide innovative solutions for major customers in manufacturing markets
remains strong and we begin 2013 with a robust order book and pipeline.
AwardsThe Group has again received a number of awards during the year,
including two prestigious Queen’s Awards for the first time for its
outstanding and sustained achievement in developing innovative
products and solutions, and applying them to create significant
international commercial success.
Conclusion
On behalf of the Board, I would like to thank our customers, partners andemployees for their support in making 2012 such a strong year for the
Ubisense Group. I look ahead with confidence for the 2013 financial year.
Andy Hopper
Chairman
18th March 2013

Ubisense Group plc
Annual Report & Accounts for theyear ended 31 December 201203

The result is unprecedented:
location driven solutions providing
a new level of visibility and control
over assets and processes.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31 December 201204

Business overview

Ubisense focuses on global industrial
companies in manufacturing, utilities
and telecommunications.
Ubisense offers two location driven product lines:
RTLS (Real-Time
Location Systems)

Geospatial Systems

Ubisense location solutions provide significant efficiency and quality
benefits for our 500 customers world-wide by providing unprecedented
visibility and control over their assets and processes.

Business review

Ubisense RTLS based solutions are used by manufacturing
customers to continuously identify, locate, track and control assets
throughout their facilities both inside and outside of buildings. Our
Geospatial solutions are used by the world’s most successful
telecommunications and utility companies to drive efficient andeffective operations based on their network assets. Ubisense
customers include: BMW, Duke Energy, Aston Martin, Caterpillar,
Airbus, Daimler, Hyundai, AGCO and Cox Communications.
Ubisense is headquartered in Cambridge, UK, with offices in the USA,
Canada, France and Germany.

Ubisense Business Model
GlobalReachIntellectual
Property

Strong TechnicalCompetencies

Automotive Manufacturing

Utilities

Discrete Manufacturing

Telecoms

New product introduction
Smart Factory System

Increased software content
Geospatial managed services

Large blue chip customers with long-term order book
Systems implementation
Managed services

Ubisense Group plc
Annual Report & Accounts for theyear ended 31 December 201205

The solutions are unique:
our RTLS delivers the absolute
best in accuracy and reliability.

Products

Real-Time Location Systems
MissionOur mission is to improve production processes by leveraging location toprovide real-time, highly accurate visibility and control.
VisionOur vision is to be the market leader in real-time location-based leanmanagement for the global manufacturing industry. We will do this bybuilding the most effective team in the world to provide outstanding
products and solutions.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31 December 201206

Products
Real-Time Location Systems

A new initiative for leanmanufacturing
Ubisense Smart Factory System

Business review

Benefits for manufacturers• Measurable cost
reduction
Tasks which do not add
value are eliminated• Reliable quality control
Critical processes are
driven by real-timeaccurate data

• Continuous improvement
Movement and interactionsof assets are completely
visualised and documented

Manufacturing organisations are always looking for ways
to improve their production processes, reduce costs andimprove quality.
The current industry focus is on developing true “Lean
Manufacturing” processes. By tracking the precise
location of a production tool and the product it is
supposed to be working on, Ubisense dramaticallyreduces the error rates that result from the wrong tool(eg an industrial nut tightener) being used on the wrong
product (eg a MINI Cooper at BMW’s plant in Oxford).
In a similar vein, by tracking a car as it comes down the
production line, the same tools can be pre-programmed forthe particular vehicle before they reach a station, eliminating
the need to manually scan the car to identify it. This can saveas much as 6 seconds per tool operation and with up to 150
tools being used to assemble 1,000 cars per day delivers
huge productivity benefits and a very rapid payback.
The Ubisense Smart Factory System achieves thisfeat by using “active” tags that emit a radio signal
which is located to an accuracy of 30 cm by sensors• Sustainable processreliability
Wireless tools and devices arecontrolled using their location

installed in the factory. The tags can be mounted onany manufacturing asset and therefore the system isable to identify, locate, track and control the movementof production material, orders, work in progress andoperating equipment in real-time. It is designed to be
integrated with existing ERP, MES, shop floor and otheridentification, control and monitoring systems.
The software is organised into modules which may be
combined flexibly to address all areas of the factory
operation including inbound logistics, material handling,
tool and equipment management, assembly control,
inspection & rework, yard management and process
improvement. The system may be introduced into one
specific area and expanded step-by-step to address anincreasing number of process improvement requirements.
The products are designed and built in the UK and therevenues derived from sales of products and services
into the manufacturing sector are projected to growsignificantly over the next few years since the adoptionof the products has only occurred so far in a few of thethousands of manufacturing plants around the world.
Ubisense Group plc
Annual Report & Accounts for theyear ended 31 December 2012

07

The benefits are transformational:
revolutionising the managementof assets and processes, fixed
or mobile.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31 December 201208

Products – Case study
Real-Time Location Systems

BMW/Brilliance – Tiexi, China

Business review

The BMW/Brilliance Challenge
When BMW and Brilliance were building a new plant in
Tiexi, China, they were looking for a flexible identificationand tracking system that would identify vehicles at key
workstations where parts and/or operations vary due to avehicle’s specific options. The tracking system was to beinstalled along the assembly line and in the vehicle finishingarea. One key requirement was that the solution must be easy
to extend if production volume increases.
Ubisense Solution: Smart Factory System
Installed area: 12 line segments | Sensors: 150 | Tags: 450 |In production since: 2011
By precisely tracking Ubisense RTLS tags on vehicles, theUbisense Smart Factory System provides BMW with real-time
information to efficiently manage vehicle variability through:• Enabled a reliable VIN identification process in the
production line, preventing line stoppages due to manual
identification errors; and• Control of automated robots, ensuring the correct parts
are selected for the VIN in the station.
Benefits Realised
Using Ubisense RTLS technology as an identification andtracking system has:
• Enables a reliable VIN identification process in the
production process, preventing line stoppages due tomanual identification; and• Reduced effort and complexity to modify trigger points
through software-based configuration.
Due to the success and accuracy of the tracking system, it is
now being enhanced to be used as a full tool control solution
with 300 additional sensors being added.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31 December 201209

The solutions are unique:Ubisense products help ourcustomers realise the full potential of
their assets and enterprise networks.

Products

Geospatial Systems
MissionOur mission is to bring focussed geospatial solutions to the utility andtelecoms market which will transform the way our customers work andenable them to meet the challenges brought by the roll out of the smart
grid, renewable technologies, 4G and Fibre To The Home (FTTH).
VisionOur vision is to be the market leader for the next generation of geospatial
products that allow our customers to leverage their investment inenterprise data, supporting the planning, design, visualisation andmanagement of their networks and assets. We will do this by investingin new products and building the most trusted and effective team in theworld in this field. We will move GIS from the engineering departments tothe heart of the business, providing decision support for the enterprise.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31 December 201210

Products
Geospatial Systems

The right solutions, when you
need them, where you need them.
Ubisense geospatial solutions provide:
Visibility of Key
Resources

Planning/Engineering
Automation

Right Data
Where you need it

Business review

Streamlined
Deployment

On-TimeService Delivery

Ubisense’s geospatial customers have historicallypurchased GE Smallworld software products, andengaged Ubisense’s teams of software consultants toimplement, extend and manage their systems. Ubisense’s
core strength derives from the intimate knowledgeof its customers, their businesses and key enterprisetechnologies that our staff has built up throughsuccessful project delivery.
Major changes in regulation such as the requirement toinstall smart meters, in demographics (the individuals
within customers are retiring to make way for a younger
generation) and in technology such as cloud computing,
4G and FTTH are creating dramatic new opportunities forthe company to offer its own products rather than purely
integrating third party products. As a result the company
has developed a new suite of products, including:
myWorld, An intuitive and powerful product, delivering
spatial information to desktop and mobile users
throughout your enterprise. Smallworld data, workorders, customer information – anything from yourenterprise systems – is presented in a simple Google
Maps style view that is easy for everyone to understandand use, providing decision support at the heartof operations.
VeroTrack, which takes the paperwork out of fieldwork by tracking and mapping gas leaks using digital
mapping GIS data in the field. By using state-of
the-art GPS technology, it simplifies gas leak survey
documentation and works with major gas detectors toautomatically capture gas concentrations during surveys.
netSolutions, an integrated range of products fortelecoms operators, enabling service assignment,
capacity management, wireless engineering and fibreplanning. This product suite already forms a key part ofthe solutions for over forty operators around the world.
The FTTH netPlanning tool underpins the rollout of ultrahigh bandwidth next generation network.
Our solutions take advantage of the dramatic technology
changes that are already underway in the consumer
market including cloud technology, smart devices and the
web mapping products supplied by Google and others.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31 December 201211

The benefits are transformational:
streamlined processes, support
for new technologies, reduced
costs and a greatly improved
return on investment.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31 December 201212

Products – Case study
Geospatial Systems

Cox Communications
Third largest Multiple System Operator (MSO) in the
United States. Approximately 6 million cable TV, internet,
and phone subscribers.
The Cox Communications Challenge
Cox Communications use Ubisense netSolutions
products to plan, operate and document their telecoms
network. Telecoms networks are evolving rapidly, andCox’s geospatial solutions form a key part of their ability
to react, change and deliver service.
Business review

Ubisense Managed Services
Ubisense began working with Cox Communications in2005 on multiple projects, including their geospatial
network management upgrade. The Ubisense team’s
expertise ensures that Cox’s system performance andreliability meets operational metrics and that its featuresand capabilities evolve and improve with the everchanging needs of the business.
Benefits Realised
Ubisense works with Cox using agile methodologies
providing regular updates and interactions to the Coxteam who are involved in every step of the entire process,providing feedback which ultimately delivers the best
results to the system users.
This results in more focused system development, withstreamlined processes, and a greatly improved returnon the investment and reduced network management
costs. The partnership continues into its eighth year with
Ubisense providing consulting, application development,user support and administration support services to the
Cox team.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31 December 201213

The performance in 2012
was positive:
we are now installed in 8 out of
the top 15 auto manufacturers.

Ubisense performed well over theyear through challenging economic
conditions, delivering growth inrevenue and gross margin andincreasing investment in our
product offerings.
Richard Green
Chief Executive Officer

Ubisense Group plc
Annual Report & Accounts for theyear ended 31 December 201214

Chief Executive’s review

We remain committed to developing
strong partnerships that deliver
differentiated value propositions.
This was reflected in the growing awareness anddeployment of our leading location solutions to anincreasing number of top tier automotive manufacturers
providing good momentum on our growth strategy.
Our value proposition is one of our main growth drivers
as customers are seeing clear returns on investment fromincreased operational efficiencies leading to reduced
operating costs in their manufacturing operations.

We have now been installed in 8 out of the top 15 auto
manufacturers and we continue to penetrate the global
automotive market with new pilot installations at more
plants in North America, Europe and further adoptions inSouth Korea.
During the year, we saw new RTLS contracts including major
strategic wins at AGCO, Astrium, BAE and Hyundai. In addition
we established over a dozen new installations at customers
such as Renault, Smart and John Deere and extended ourinstallations at existing customers including Airbus, Aston
Martin, BMW, Continental, Cummins, Daimler and Eurocopter.
In the Geospatial division we are pleased to report newcustomer wins with Cogeco, IGC, Sovernet, Cambridge
Water, SESW, American Electric Power and DREWAG/ENSO.
New contract wins and managed services contract
renewals with major telecoms and utility companies
including Exelon, HLBG and Swisscom have continued
to build on the growth of the Geospatial division andare consistent with our plans for organic growth in bothestablished and emerging markets.
Acquisitions
The successful acquisitions of Realworld OO Systems Ltd
and Integrated Mapping Solutions Inc in 2011 contributed

Strategic Partnerships
Substantial progress was achieved with our strategic partner
Atlas Copco, now with more than 40 installations deployed.
We have also entered into new partnerships with the Daifuku
Corporation and Geoplan in Japan that are helping with
deployment of our RTLS products into the Asian market.
Our partnership with industrial automation experts, ATS
Global, also saw significant progress with a maiden
installation with the UK’s largest manufacturer. This
complementary partnership enables Ubisense to leverage
ATS Global’s unrivalled expertise in Manufacturing
Execution Systems (MES) whilst helping ATS ‘location
enable’ its solutions to afford manufacturing customers
a more compelling combined offering.
We remain committed to developing strong partnershipsthat deliver differentiated value propositions which are
beneficial for both our customers and our partners.
Products
We have continued to invest in research and development
in both divisions resulting in a consolidation of current
products into more market focused application suites suchas our flagship, end-to-end manufacturing solution, theSmart Factory System and our netSolutions product for thetelecommunications market. Feedback has continued to bevery positive and we look forward to introducing these new
application suites in 2013 and extending our order book.
Conclusion
By working in close co-operation with our customers wehave established a strong platform for growth and are in agood position to build on our successes. We look forward
to the future with confidence.
Richard Green
Chief Executive Officer
18th March 2013

Strategic Partners

Ubisense Group plc
Annual Report & Accounts for theyear ended 31 December 201215

Business review

Customer Momentum
The market opportunity for Ubisense is ever present. Within
RTLS, we have continued to grow the business by extending
the model in our priority G7 markets, with a particularfocus on high value manufacturing where we delivered
year-on-year growth in revenues of 57.0%. Our strategy inmanufacturing has been to enter the customer with a single
application and then extend the range of applications as they
increasingly look for an end-to-end location solution.

£2.1 million to revenues in 2012. These businesses are
now fully integrated into our existing business and haveconsolidated and extended our customer base. Researchand development and marketing activities have been
repatriated and consolidated back into the UK, giving rise
to a reorganisation cost of £0.4 million.

The results are encouraging:revenue and margins
both increased.

Ubisense enters 2013 with increasing
momentum in the business. We are
well placed for growth.
Gordon Campbell
Chief Financial Officer

Ubisense Group plc
Annual Report & Accounts for theyear ended 31 December 201216

Financial Review

The Group has a robust balance sheetwith Shareholder Funds of £18.9 million
including net cash of £2.7 million andno outstanding debt.
Revenue and Gross Margin
In the year ended 31 December 2012, the Group generated revenue of£24.3 million (2011: £23.8 million).
Gross Profit increased to £9.6 million (2011: £8.5 million), representing
an improvement in Gross Margin to 39.5% (2011: 35.6%).

Adjusted EBITDA was up significantly at £1.5 million (2011: £0.7 million).
The RTLS division continued to invest in the Atlas Copco relationship
who importantly accelerated the support of their pilot programme, which
is now running across many organisations including five of the largest
car manufacturers in the world. Headcount increases in our sales anddelivery teams, as well as our R&D team to expand our range of RTLS
applications, resulted in headcount averaging 70 for the year (2011: 60).

RTLS revenue growth+34.7%

Underlying Geospatial
revenue growth£3.2 million
Investment in R&D

Geospatial
Geospatial revenues reduced by 2.5% to £14.8 million (2011:£15.1 million). However, the underlying business grew by 34.7%, madeup of 20.4% organic and 14.3% inorganic. This excludes the impact ofa large European telecom customer which undertook a restructuring
throughout the year resulting in a drop in revenues of £3.6 million
from a peak in 2011 – we believe that business with this customer
has returned to more consistent levels now. The 2011 acquisitionsin Geospatial performed in line with expectations with revenues of£2.1 million up from £0.7 million in the prior year.
Gross margins improved to 28.0% (2011: 25.4%) as a result of somehigher margin product sales and a reduction in the number ofcontractors being used in the business.
Adjusted EBITDA was stable at £3.0 million (2011: £3.1 million) with
the increased gross profit being offset by increased R&D and presales expense. Total Geospatial headcount averaged 94 for the year
(2011: 64), 24 of this increase being a result of adding the staff from thetwo acquisitions.
CentralCentral corporate costs were £3.4 million (2011: £2.4 million). The
underlying increase in central corporate costs was due to an increasein headcount averaging at 20 for the year (2011: 14), marketing, foreignexchange losses and costs relating to being a listed company for a fullyear compared to six months only in 2011 following the IPO in June 2011.
Group operating profit and profit after tax
Adjusted EBITDA for the Group was £1.2 million (2011: £1.4 million). The
operating loss for the year was £0.8 million (2011: profit of £0.3 million)
including amortisation and depreciation charges of £1.4 million(2011: £0.8 million) and non-recurring reorganisation costs of £0.4 million(2011: non-recurring listing and acquisition costs of £0.4 million).

Ubisense Group plc
Annual Report & Accounts for theyear ended 31 December 201217

Business review

RTLS
RTLS’s revenues increased by 10.3% to £9.5 million (2011: £8.7 million).
The gross margins on RTLS revenue improved to 57.3% (2011: 53.6%)
as a result of a higher proportion of proprietary hardware and software
revenue within the mix.

+10.3%

Financial Review continued
Amortisation on acquired intangibles of £0.3 million (2011: £0.1 million)
increased as a result of there being a full year charge in 2012 on theintangibles from the acquisitions in the second half of 2011. Amortisationof other intangibles of £1.0 million (2011: £0.5 million) was higher as
development costs capitalised increased. Total R&D spend before
capitalisation and amortisation was £3.2 million (2011: £2.2 million).
Net interest receivable for the period was £38,000 (2011: £148,000
expense) with interest expense being virtually eliminated following theconversion of the Convertible Loans and repayment of the bank loan
at the time of the IPO in June 2011.
Reported loss before tax was £0.7 million (2011: £0.1 million profit).
The Group has a net tax credit of £90,000, almost entirely comprising ofa cash R&D tax credit of £203,000 partially offset by non-cash deferred
tax on capitalised development costs and acquired intangible assets.
Earnings per share and dividend
Adjusted diluted earnings per share was 0.5 pence (2011: 2.7 pence).
Reported basic and diluted loss per share was 2.8 pence (2011:
earnings of 0.2 pence).
The Board do not feel it appropriate at this time to pay a dividend. The
cash held on the balance sheet will be used to fund growth, R&D andpotential acquisitions in line with the strategy set out when listing on
AIM in June 2011.

£2.7 million

Cash

Balance sheet and cash
The Group has a robust balance sheet with Shareholder Funds at
31 December 2012 of £18.9 million (2011: £19.2 million), including net cashof £2.7 million (2011: £6.0 million) and no outstanding debt. In November
2012, the Group negotiated a £2 million bank facility to provide additional
future working capital capacity – this facility has yet to be drawn down.
The main components to the cash movements in 2012 include a
reduced cash outflow from operating activities of £0.8 million (2011:£2.3 million outflow), capital investment in product development
and plant and equipment of £2.3 million (2011: £1.4 million) andconsideration paid of £0.4 million (2011: £1.6 million) in respect of
the Realworld acquisition made in October 2011.
Capital structure
The issued share capital at 31 December 2012 was 21,919,744(December 2011: 21,657,698) ordinary shares of £0.02 each. The
increase of 262,046 shares related to 154,937 employee share option
exercises and 107,109 warrant exercises. The total number of unexercised
share options at 31 December 2012 was 2,057,720. There are no
unexercised warrants at 31 December 2012. The issued sharecapital at 18 March 2013 is 21,925,786 shares.
Current trading and outlook
Ubisense enters 2013 with increasing momentum. We are wellplaced for growth in 2013, with the Geospatial acquisitions now fully
integrated into our business and increased penetration of RTLS in
the manufacturing sector.
Gordon Campbell
Chief Financial Officer
18th March 2013
Ubisense Group plc
Annual Report & Accounts for theyear ended 31 December 201218

Our partners location system products

The outlook is exciting:
Ubisense enters 2013 withincreasing momentum.

Business review

Ubisense Group plc
Annual Report & Accounts for theyear ended 31 December 201219

Board of Directors
Professor Andrew
Hopper CBE
Non-executive Chairman

Richard Green
Chief Executive
Officer

Age: 59

Age: 54

Date of Board appointment:
November 2005

Date of Board appointment:
November 2005

Committees:
A – (Observer) R – (Observer) N

Andy is one of the foremost leaders in the technology
industry having co-founded twelve successful companies,
including Acorn Computers Limited acquired by Olivetti;
Virata, Inc. listed on NASDAQ; Adaptive Broadband
Limited, acquired by California Microwave, Inc., Cambridge
Broadband Limited, Level 5 Networks Limited and RealVNC
Limited. Andy is Professor of Computer Technology at
the University of Cambridge and is currently Head of the
University of Cambridge Computer Laboratory and amember of the University’s Council. Andy has worked on
location systems for over 20 years. He was elected as a
Fellow of the Royal Society in 2006 and the Royal Academyof Engineering in 1996. Andy was made a CBE in 2007 forservices to the computer industry.

Richard initially trained as a mechanical engineer andhas over twenty-five years of experience in the software
industry. Having established Smallworld as one of theleading geographic information system companies serving
utility and telecoms companies in Europe and the US, thecompany subsequently listed on NASDAQ in 1996 andwas acquired by GE in 2000 for $214 million. Richard was
Ernst & Young UK’s Science and Technology Entrepreneurof the Year in 2010. Richard is a Fellow of the Instituteof Mechanical Engineers and sits on the Institute of
Mechanical Engineers Manufacturing Industries Board.
He is also Entrepreneur in Residence at Judge Business
School, Cambridge and a Fellow of the Royal Society of Arts.

Gordon Campbell
Chief Financial
OfficerPeter Harverson
Non-executive
Director

Age: 45

Age: 66

Date of Board appointment:
September 2010

Date of Board appointment:
November 2005
Committees:
R – (Chair) N

Gordon is a Fellow of the Institute of Chartered Accountantsin England & Wales. After qualifying with Deloitte in 1995 hemoved into the technology industry with Smallworld, where
he was part of the team involved in the NASDAQ listing.
After leaving Smallworld in 2000 he joined UbiNetics, a
3G telecoms technology company and spin out from PA
Consulting, where he was involved in private fundraisingsof £65 million. Gordon joined Ten Sails LLP in 2004 whichmerged into Ubisense in 2005 and he became CFO in2009 and joined the board in 2010. He has an M.A. in
Engineering from the University of Cambridge. Gordon
was included in the Hot 20 FDs in TMT in 2012.

Peter has held a number of senior international sales
and marketing roles in the IT industry. These included
Regional Director, Intel Corporation and Vice President
Europe, Cadence Design Systems. In 1995, he joined
Sun Microsystems where he was responsible for thedevelopment of the company’s European Corporate
Accounts programme. More latterly, he became Director ofServices Sales – EMEA with a charter to develop new areasof business, including professional services. Peter retired
from Sun Microsystems in December 2005. Most recently
he was Non-executive Chairman of Aspex Semiconductors
Limited, sold to Ericsson AB in July 2012. Currently, Peteris a non-executive director of Brady plc, CRFS Limited, andChairman of eoSemi Limited. Peter is also an adviser toCambridge IP Limited.

Board Committee MembershipA – Audit Committee

R – Remuneration Committee

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201220

N – Nominations Committee

J Keith Lomas
Non-executive
Director

Dr Richard Newell
Non-executive
Director

Age: 42

Age: 70

Date of Board appointment:
December 2008

Date of Board appointment:
December 2005

Committees:

Committees:

A R

A N

Keith has more than twenty years senior management
experience in both small and medium sized entrepreneurial
and extensive multinational companies. Keith wasappointed Managing Director of CLPL in 1996 and,after leading the successful acquisition of UltraVisionInternational in 2003, Keith was appointed as President
and CEO of the UltraVision CLPL group. The combinedgroup is one of the largest independent manufacturers
and suppliers of contact lenses in Europe. Prior to his
involvement in the contact lens world, Keith was aninvestment banker at S.G. Warburg, Kleinwort Benson
and Daiwa Europe. Keith is an active investor in othertechnology start-up companies. Keith accepted theQueen’s Award for Enterprise: Innovation 2006 and 2010
on behalf of UltraVision CLPL.

Dick has spent over 35 years in the software industry in
Computer aided design (CAD) and Geographic Information
Systems (GIS). He co-founded his first company,
Cambridge Interactive Systems Limited (CIS) in 1977.
CIS was part of what became known as “The Cambridge
Phenomenon”. Dick was a co-founder of Smallworld in1988. Dick was Chairman of both CIS and Smallworld. He
was the original project manager of PDMS, a core productof AVEVA Group plc and is also a Non-executive Directorof UltraVision CLPL.

Paul Taylor
Non-executive
Director

Age: 53

Age: 48

Date of Board appointment:
December 2005

Date of Board appointment:
February 2011

Committees:

Committees:

R N – (Chair)A – (Chair) R

An active angel investor and mentor to start-ups,
Robert is founder of the Cambridge Angels, a group of
seasoned technology and bio-technology entrepreneurs
who invest in and mentor technology start-ups in the
Cambridge area. Previously, Robert was co-founder,
CTO and Director of FORE Systems, Inc, a leading
provider of networking equipment. FORE was listed on
NASDAQ in 1994 and subsequently acquired by Marconi
for $4.5 billion in 1999. Additionally, Robert served as
the Chief Technology Officer at Marconi in 1999. Robert
is a member of the board of Directors of Cambridge
Communications Systems Limited, CRFS Limited andNetronome Systems, Inc. He was elected as a Fellow of
the Royal Academy of Engineering in 2010.

Governance

Dr Robert Sansom
Non-executive
Director

Paul is a Fellow of the Association of Chartered Certified
Accountants. Paul joined AVEVA Group Plc in 1989 andwas heavily involved in the flotation process and was
responsible for UK accounting and for the developmentof AVEVA’s overseas subsidiaries including adherence togroup standards. Between 1998 and 2001, Paul was also
UK Director of Human Resources and was appointed tothe position of Finance Director and Company Secretaryof AVEVA Group plc on 1st March 2001. Before joining
AVEVA, Paul trained within the accountancy profession
before moving to Philips Telecommunications (UK) where
he was responsible for the management accounts of its
Public Sectors division. Paul was a recipient of the FTSE250
Finance Director of the Year award and is also a Nonexecutive Director of Anite plc, Escher Group Holdings plc
and, from 1st April 2012, Digital Barriers plc.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201221

Directors’ report

The Directors present their annual report on the affairs of the Group together with the audited financial statements for theyear to 31st December 2012.
Principal activities and future developments
Ubisense is a world leader in providing end to end (hardware, software and services) real-time location solutions tocompanies allowing them to track people and assets with a high degree of accuracy. The Group operates in two divisions:
Real-Time Location Systems (“RTLS”) and Geospatial.
The RTLS division targets high-value manufacturing businesses that use Ubisense’s proprietary technology to track assets,such as tools, people and vehicles, in factories and other indoor environments with accuracy that satellite-based systems
cannot currently achieve. Ubisense’s ultra-wideband (“UWB”) based RTLS is currently one of the few systems that delivers
both reliable accuracy and the ability to track resources in three dimensions in real time.
The Geospatial division uses Ubisense’s expertise in location solutions to deliver applications, software and other solutions
primarily in the utilities and telecom sectors. The Geospatial division focuses on the detailed mapping of network assets
and provides, on behalf of its customers, network management planning and design, and has particular expertise in GE
Smallworld software and solutions.
Further future developments are addressed in the Chairman’s Review, Chief Executive Officers’ Review and Financial
Review on pages 2 to 18.
Review of business
Revenue for the Group was £24.3m (2011: £23.8m). The Group’s loss after tax was £0.64 million (2011: profit of£0.03 million). Further analysis of the year’s results, as well as the outlook for the coming year, is set out in the Chairman’s
Review, Chief Executive Officers’ Review and Financial Review on pages 2 to 18.
Key performance indicators
The primary financial key performance indicator for the Group is adjusted EBITDA, on which it reports monthly. Adjusted
EBITDA for the year was £1.2 million (2011: £1.4 million). The Group also monitors the order pipeline and cash balances.
At the close of the year the outstanding orders totalled 47% of annual sales (2011: 50%). The closing net cash balance for
the Group was £2.7 million (2011: £6.0 million). Having regularly reviewed the KPIs in respect of changes within periods andchanges between reporting periods the Directors believe that the Group has made satisfactory progress against the KPIs,
especially the order pipeline, compared to budget.
Financial instruments
Information on both the Group’s financial risk management objectives and the Group’s policies on exposure to relevantrisks in respect of financial instruments are set out in note 27 of the consolidated financial statements.
Principal risks and uncertainties
The Group faces competitive and strategic risks that are inherent in a rapidly growing emerging market. The Board of theCompany and the Global Management Team review future strategy and risks to the business regularly. Where possible,
processes are in place to monitor and mitigate the identified risks. 		
Financial and trading risks are discussed in Note 27 of the consolidated financial statements. The key business risks
affecting the Group are set out below:
Technological risks
The Group operates in an industry where competitive advantage is heavily dependent on technology. It is possible thattechnological development may reduce the importance of the Group’s function in the market or render the patents on which
it relies redundant. For instance, the Group’s real time location systems rely on ultra-wideband radio signals to operate. Thereis no guarantee that technological advances will not render systems based on ultra-wideband radio obsolete. The Group’s
existing reference designs may become obsolete or may be superseded by new technologies or changes in customer
requirements. The technology used in the Group’s products is still evolving and is highly complex and may change rapidly.
In order to mitigate this risk, Ubisense invests in a range of research and development activities to maintain its competitive
advantage and participates in industry and research forums in order to keep abreast of technological advances.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201222

Reliance on third parties, including manufacturers
The Group relies on third party equipment manufacturers in the completion of its products and, therefore, does notalways have complete control over the equipment and materials it requires to comply with its obligations under customer
contracts. To the extent that the Group cannot acquire equipment or materials according to its plans and budgets, its ability
to complete its work for its customers within the timetable laid down by the contract or at a profit may be impaired. If amanufacturer is unable to deliver the products for any reason, the Group may be required to purchase such equipment ormaterials from another source at a higher price. The resulting additional costs may be substantial and the Group may be inbreach of its contracts with customers, which may result in a financial loss on a particular contract or a loss of business. In
addition, any resulting failure to fulfil contracts with customers and other business partners may have an adverse effect on
the Group’s future profitability and reputation. One key supplier supplies more than 75% of the RTLS components required
annually by the Group.
In order to mitigate this risk, the Group closely manages and reviews its relationship with key suppliers on a regular basis.
Dependence on key customers
The Group is dependent on a number of key contracts and customer relationships for its current and future growthand development. In the financial year to 31st December 2012 the Group’s ten largest customers accounted for 67%
of the Group’s revenue (2011: 68%). The loss of a major customer could result in a decrease in Group revenues, margins
and profitability.
In order to mitigate this risk, the Group has extensive sales and account management processes and procedures.
Staff recruitment and retention
The contribution made by Ubisense’s highly skilled and experienced staff is vital to the Group’s success. As the Groupgrows, it is important to recruit and retain staff.
The Group has in place appropriate incentivisation structures to attract and retain the calibre of employees necessary toensure the efficient management and development of the Group.

In order to mitigate this risk, the Group undertakes extensive due diligence on acquisition targets and uses dedicatedproject teams to integrate acquisitions into the Group.
Dividends
The Directors do not recommend payment of a dividend for the year (2011: £nil).
Incorporation and constitution
Ubisense Group plc is domiciled in England and incorporated in England and Wales under Company Number 05589712.
Ubisense Group plc’s Articles of Association are available on the Group’s website at www.ubisense.net.
Capital structure
The Company has one class of ordinary share of two pence each which carries no right to fixed income. Each sharecarries the right to one vote at general meetings of the Company.
Details of the share capital of the Company, including shares issued during the year, can be found in Note 21 of theconsolidated financial statements.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201223

Governance

Growth management and acquisitions
The Directors believe that further expansion, either organic or via acquisition, will be required in the future to capitalise on
the anticipated increase in demand for the Group’s systems. The Group’s future success will depend, in part, on its ability
to manage this anticipated expansion. Such expansion is expected to place demands on management, support functions,accounting, sales and marketing and other resources. If the Group is unable to manage its expansion effectively, its
business and financial results could suffer.

Directors’ report continued

Substantial shareholdings
On 1st March 2013, the Company had been notified of the following significant interests in its ordinary share capital:

Robert Sansom
Fidelity Investments Limited
Richard Green
Ruffer LLPDavid Theriault
Amati Global Investors Limited
Newton Investment Management Limited

Total holding
Number% of issued
share capital

2,493,676
1,344,322
1,543,011
1,108,615
892,000
750,691
758,654

11.37%
6.13%
7.04%
5.06%
4.07%
3.42%
3.46%

Directors
The Directors, who served throughout the year except as noted, were as follows:
G M Campbell
R T GreenP G Harverson
Prof A Hopper
J K Lomas
R G Newell
R SansomP Taylor 		
Directors’ interests – shares
Directors’ interests in the ordinary shares of Ubisense Group plc at 31st December 2012 and 31st December 2011were as follows:
2012
NumberGordon Campbell
Richard Green

2011
Number

87,987

87,987

1,543,011

1,543,011

Peter Harverson

65,161

65,161

Andrew Hopper

225,000

225,000

J Keith Lomas

47,71247,712

Richard Newell643,354643,354

Robert Sansom

2,493,676

2,493,676

Total

5,105,901

5,105,901

There has been no change in the interests set out above between 31st December 2012 and 18th March 2013.
Directors’ remuneration, share options and loans
Details of Directors’ remuneration, share options and loans are provided in note 7 of the financial statements.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201224

Directors’ indemnity arrangements
The Group has made qualifying third party indemnity provisions for the benefit of its Directors which were madeduring the year and remain in force at the date of this report.
The Group has purchased and maintained throughout the year Directors’ & Officers’ liability insurance in respectof itself and its Directors.
Research and development (R&D)
The Group continues to invest in R&D, spending £3.2 million in its R&D programmes in the year (2011: £2.2 million) of
which £1.8 million (2011: £1.1 million) was capitalised. The Group undertakes R&D in both divisions and this is discussed
in the Chief Executive Officer’s review on page 15. The Group will continue to commit a significant level of resource andexpenditure, as appropriate, to R&D.
Intellectual property
The Group owns intellectual property both in its software tools and the products derived from them. The Directors
consider such properties to be of significant value to the business.
Employee involvement
The Group aims to attract, retain and motivate the best staff regardless of race, religion, sexual orientation, age
or disability. To that end it is committed to offering equal employment opportunities.
The Group provides its employees systematically with information on matters of concern to them and regularly
consults its staff, or their representatives, for views on matters affecting them.
The Group encourages employee involvement in the Group’s performance by granting share options and Group
performance related variable compensation, and ensures that employees are fully aware of financial and economic
factors affecting the performance of the Group.
Employment policies
The Group is committed to following the applicable employment laws in each territory in which it operates.

Health and safety environment
The Group is committed to maintaining a safe and healthy working environment for all staff. To that end it provides
appropriate training and supervision and complies with all applicable regulatory requirements.
The Group seeks wherever possible to minimise its impact on the environment for the benefit of its staff and the publicat large. The Group is committed to complying with environmental regulations in particular WEEE and encourages andsupports staff in waste recycling within its offices.
Supplier payment policy and practice
The Group’s policy concerning the payment of suppliers is to agree terms of payment at the start of business with eachsupplier or to ensure the supplier is made aware of the standard payment terms. The Group’s normal policy is to pay
supplier invoices in accordance with those terms and conditions provided there has been compliance with all trading
terms. At 31st December 2012 the Group had an average of 65 days (2011: 63 days) creditors outstanding in trade
payables. The Company has no outstanding trade payables at 31st December 2012 (2011: nil).

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201225

Governance

The Group is committed to ensuring that disabled persons, whether registered or not, have equal opportunities
when applying for vacancies, with due regard to their aptitudes and abilities. In addition to complying with legislativerequirements, procedures ensure that disabled employees are fairly treated and that their training and career development
needs are carefully managed. For those employees becoming disabled during the course of their employment, every effort
is made, whether through retraining or redeployment, to provide an opportunity for them to remain with the Group.

Directors’ report continued

Donations and community support
The Group made charitable donations during the year of £nil (2011: £nil). There were no donations to political parties.
Employees of the Group participate actively in the community of entrepreneurial businesses clustered around Cambridge
including Cambridge Network and the Judge Business School. Companies within the Group occasionally take students
from higher education on work experience programmes as well as occasional international students on placement.
Corporate governance
The Company’s statement on corporate governance can be found in the Corporate Governance report on page 28 to 30 ofthese financial statements. The Corporate Governance report forms part of the Directors’ report and is incorporated into it
by cross-reference.
Post balance sheet events
There are no significant events since the balance sheet date.
AuditorA resolution to re-appoint Grant Thornton UK LLP as the Group’s auditor will be proposed at the forthcoming Annual General
Meeting. In accordance with normal practice, the Directors will be authorised to determine the Auditor’s remuneration.
Annual General Meeting (“AGM”)
The AGM of the Company is due to take place at the offices of FTI Consulting, Holborn Gate, 26 Southampton Buildings,
London WC2A 1PB on 19th April 2013 at 10.00 am.
The resolutions to be proposed at the AGM are explained in detail below and are set out in full in the notice of Annual
General Meeting which is set out on pages 68 to 71 of this document. Resolutions 1, 2, 3, 4 and 5 are being proposed
as ordinary resolutions (and therefore need the approval of a simple majority of those shareholders who are present andvoting in person or by proxy at the AGM) and resolution 6 is being proposed as a special resolution (and therefore needs
the approval of at least 75% of those shareholders who are present and voting in person or by proxy at the AGM).
Presentation of the Company’s annual accounts (Resolution 1)
Resolution 1 deals with the adoption of the annual accounts for the financial year ending 31st December 2012.
Re-election of Directors (Resolutions 2 and 3)
The Company’s articles of association require that one third (or the nearest number not exceeding one third) of the Board
retire and seek re-election at each annual general meeting.
At this meeting, Professor Andrew Hopper CBE and Dr. Richard Newell will retire and stand for re-election as Directors.
Having considered the performance of and contribution made by Professor Hopper and Dr. Newell, the Board remains
satisfied that their performance continues to be effective and that they demonstrate commitment to the role and, as such,
recommends their re-election.
Reappointment and remuneration of auditors (Resolution 4)
Resolution 4 proposes the reappointment of Grant Thornton UK LLP as auditors of the Company and authorises the
Directors to set the auditors’ remuneration.
Authority to issue new ordinary shares (Resolutions 5 and 6)
The Company is seeking a general shareholder authority to authorise the Directors to allot and issue shares and/or
grant rights to subscribe for or to convert any security into shares up to an aggregate nominal value of £146,172 (being
the nominal value of approximately one third of the current issued share capital of the Company).
Authority to issue new ordinary shares (Resolutions 5 and 6)
The Company is also seeking a limited authority to generally disapply pre-emption rights. This limited authority is only
being sought in respect of up to an aggregate nominal value of £65,777 (being the nominal value of approximately 15% of
the current issued share capital of the Company). Accordingly, the Directors will only be able to issue this smaller amount(and not the full amount referred to in the paragraph above) for cash unless, at the time of any issue of a larger amount, theCompany’s then existing Shareholders are also given the opportunity to participate in such larger issue (subject to certain
limited exclusions), pro rata to their respective holdings of ordinary shares.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 2012

26

The Directors do not currently have any immediate intention to use these additional authorities but it is considered
prudent and is widely accepted practice amongst quoted companies to maintain general authorities so as to enable
the Directors to take advantage of opportunities to develop the Company’s business.
Resolutions 5 and 6 also ensure that the Directors maintain sufficient authority to issue Ordinary Shares on the exercise
of options that were granted by the Company prior to the Company’s admission to trading on the AIM Market of the
London Stock Exchange.
Resolution 5 provides for the general authority to allot and issue shares under section 551 of the Companies Act 2006
and Resolution 6 provides for the dis-application of the pre-emption provisions of section 570 of the Companies Act 2006.
Approved by the Board of Directors
And signed on behalf of the Board
Gordon Campbell
Company Secretary
18th March 2013
Ubisense Group plc
Registered number: 05589712

GovernanceUbisense Group plc
Annual Report & Accounts for theyear ended 31st December 201227

Corporate governance report

Although not required to do so by the AIM Listing Rules, the Directors have chosen to provide selected corporate
governance disclosures with this report, which they consider to be valuable to the reader.
The Directors believe that effective corporate governance, appropriate to the Group considering its size and stage ofdevelopment, will assist in the delivery of corporate strategy, the generation of shareholder value and the safeguarding ofshareholders’ long-term interests. Therefore, the Directors are committed, wherever it is reasonably practicable, to ensurethat the Group is managed in accordance with the principles set out in the UK Corporate Governance Code June 2010(“the Code”).
Composition of the Board
The Board comprises the Non-executive Chairman, five Non-executive Directors and two Executive Directors. Biographicaldetails of all members of the Board are set out on pages 20 and 21.
Since the flotation of the Company in 2011, no equity-based incentives have been granted to Non-executive Directors andthere are no such plans for any such grants in the future. At the end of the year, the only Non-executive Director with neither
shares nor share options is Mr Taylor.
The holding of shares and share options by Non-executive Directors could, amongst other things, be relevant indetermining whether a Non-executive Director is independent. Therefore, after detailed consideration, the Board has
determined that Mr Taylor is the only independent Non-executive Director within the meaning of the Code.
The roles of Chairman and Chief Executive Officer are vested in separate individuals, each with clear allocation of
accountability and responsibility. The Chairman has prime responsibility for running the Board and the Chief Executive
Officer has executive responsibilities for the Group’s strategic development, operations and results. The structure of
the Board and the integrity of each Director ensures that there is no one individual or group dominating the decision
making process.
The role of the Board
The Board holds full meetings at least ten times per year, with attendance required in person whenever possible.
The principal matters that it considers are as follows:• reviewing operating and financial performance;• ensuring that appropriate management development and succession plans are in place;• determining of corporate strategy, including consideration and approval of the Company’s annual strategy review;• establishing of dividend policy;• approving and accepting all new committed funding facilities;• approving and accepting major changes in the capital structure of the Company;• reviewing and approving formal treasury policies relating to funding, liquidity, transactional foreign exchange andinterest rate risk management;• reviewing the health and safety and environmental performance of the Company;		
• approving corporate acquisitions, mergers, divestments, joint ventures and major capital expenditure; and• receiving, reviewing and approving recommendations by the designated committee on matters related to audit,
nominations and remuneration.
The Board is supplied with information in a timely manner and in a form and of a quality appropriate to enable it todischarge its duties. The Board has a policy to set out which matters are reserved for the decision of the Board andthose to which the Executive Directors need not refer for approval. This policy also requires that all recommendations anddecisions by a Board Committee are approved or ratified by the Board.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201228

Summary of Board meeting attendance in 2012
The Board is expected to meet regularly on a formal basis ten times a year. Sixteen Board meetings were held in 2012.
Attendance at the meetings was as follows:
Regularmeetings

Additional
meetings

Total Meetings
attendedGordon Campbell

10 (10)6 (6)16 (16)

Richard Green

10 (10)6 (6)16 (16)

Peter Harverson

10 (10)4 (6)14 (16)

Andrew Hopper

10 (10)6 (6)16 (16)

J Keith Lomas

9 (10)6 (6)15 (16)

Richard Newell

9 (10)5 (6)

14 (16)

Robert Sansom

8 (10)

4 (6)

12 (16)

Paul Taylor

10 (10)6 (6)16 (16)

Figures in brackets denote the maximum number of meetings that could have been attended.
Board Committees
The Board has established three Committees: the Audit Committee, the Nomination Committee and theRemuneration Committee.
Summary of Committee membership
Audit
Committee

Nomination
Committee

Remuneration
Committee

Peter Harverson

–

Yes

Chair

Andrew Hopper

Observer

Yes

Observer

Yes

–

Yes

Richard Newell

Yes

Yes

–

Robert Sansom

–

Chair

Yes

Chair

–

Yes

Audit
Committee

Nomination
Committee

Remuneration
Committee

Peter Harverson

–

1 (1)

4 (4)

Andrew Hopper

2 (3)

1 (1)

1 (4)

J Keith Lomas

3 (3)

–

3 (4)

Richard Newell

3 (3)

1 (1)

–

Robert Sansom

–

1 (1)

2 (4)

3 (3)

–

4 (4)

Paul Taylor
Summary of Committee meeting attendancePaul Taylor

Figures in brackets denote the maximum number of meetings that could have been attended.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201229

Governance

J Keith Lomas

Corporate governance report continued

The role of each Committee is described in more detail below:
Audit Committee
The Audit Committee has responsibility for the following matters:• reviewing the accounts and the key judgements and policies underlying them in relation to the interim and annual
financial statements before they are submitted to the Board for final approval;• reviewing management’s reports on internal controls;• reviewing the Group’s risk management process, including the adequacy of insurance cover;• reviewing the appointment of the external auditors together with the audit fee;• monitoring the audit and non-audit work of the external auditors, including reviewing any management letters and theCompany’s response; and• reviewing the arrangements by which staff may, in confidence, raise concerns about possible improprieties.
As part of its procedures, the Committee discusses the interim and annual financial statements with the external auditors.
When appropriate, non-Committee members are invited to attend. During the period under review, the Committee has met
three times on a formal basis excluding meetings of the Chairman with external advisers. The Committee is expected tomeet formally four times a year.
Nomination Committee
The Nomination Committee has responsibility for the following matters:• reviewing the size and composition of the Board;• identifying and nominating suitable candidates to fill vacancies on the Board; and• reviewing succession planning for both Directors and the management team.
During the period under review, the Committee has met once on a formal basis. The Committee is expected to meetformally twice a year.
Remuneration Committee
The Remuneration Committee has responsibility for the following matters:• setting the basic pay of executive Directors and the remuneration of the Chairman;• operating the performance-related bonus plan for the Executive Directors;• agreeing the allocation and term for the granting of share-based incentives to executive Directors; and• overseeing the overall annual staff pay review and the operation of the equity-based incentive schemes.
The Group has a formal and transparent procedure for developing policy on Directors’ remuneration. No Director isinvolved in deciding his own remuneration.
The Committee aims to set levels of remuneration for executive Directors that are sufficient to attract, retain andmotivate Directors of the quality required, without paying more than necessary, and that are appropriate for the size andcomplexity of the Group. It aims to see that a significant proportion of each executive Director’s remuneration package isperformance-related.
During the period under review, the Committee has met four times on a formal basis. The Committee is expected to meetformally twice a year.
Internal control
The Board of Directors has overall responsibility for the Group’s system of internal control and for reviewing its
effectiveness. The risk managing process and systems of internal control are designed to manage rather than eliminate therisk of failure to achieve the Company’s objectives. It should be recognised that such systems can only provide reasonable
but not absolute assurance against material misstatement or loss.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201230

Directors’ responsibilities statement

The Directors are responsible for preparing the Directors’ Report and the financial statements in accordance withapplicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors
are required to prepare the consolidated financial statements in accordance with International Financial ReportingStandards (IFRSs) as adopted by the European Union and have elected to prepare the parent company financial
statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom AccountingStandards and applicable laws). Under company law the Directors must not approve the financial statements unlessthey give a true and fair view of the state of affairs and profit or loss of the Company and Group for that period. In
preparing these financial statements, the Directors are required to:• select suitable accounting policies and then apply them consistently;• make judgements and estimates that are reasonable and prudent;• state whether applicable IFRSs have been followed, subject to any material departures disclosed and explained in
the consolidated financial statements;• state whether applicable UK Accounting Standards have been followed, subject to any material departures
disclosed and explained in the Company financial statements; and• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company
will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company andenable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible forsafeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud
and other irregularities.
The Directors confirm that:• so far as each Director is aware, there is no relevant audit information of which the Company’s auditor are unaware; andGovernance• the Directors have taken all steps that they ought to have taken as Directors to make themselves aware of any relevant
audit information and to establish that the auditors are aware of that information.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on
the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201231

Independent auditor’s report
To the members of Ubisense Group plc

We have audited the Group financial statements of Ubisense Group plc for the year ended 31st December 2012 which
comprise the consolidated income statement, the consolidated statement of comprehensive income, the consolidated
statement of changes in equity, the consolidated statement of financial position, the consolidated statement of cashflows
and the related notes. The financial reporting framework that has been applied in their preparation is applicable law andInternational Financial Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of theCompanies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members thosematters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members asa body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and auditor
As explained more fully in the Directors’ Responsibilities Statement set out on page 31, the Directors are responsible for the
preparation of the Group financial statements and for being satisfied that they give a true and fair view. Our responsibility
is to audit and express an opinion on the Group financial statements in accordance with applicable law and International
Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s)
Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the APB’s website atwww.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements
In our opinion the Group financial statements:• give a true and fair view of the state of the Group’s affairs as at 31st December 2012 and of its loss for the year then ended;• have been properly prepared in accordance with IFRSs as adopted by the European Union; and• have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ Report for the financial year for which the Group financial statements
are prepared is consistent with the Group financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to you if, in our opinion:• certain disclosures of Directors’ remuneration specified by law are not made; or• we have not received all the information and explanations we require for our audit.
Other matter
We have reported separately on the parent company financial statements of Ubisense Group plc for the year ended
31st December 2012.
Alison Seekings
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Cambridge
18th March 2013

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201232

Consolidated income statement
For the year ended 31st December 2012

Notes

Revenue5

Cost of sales
Gross profit

2012
£’000

2011
£’000

24,292

23,785(14,690)(15,308)

9,602

8,477

(10,368)(8,188)

(766)

289

Gross profit

9,602

8,477

Other administrative expenses(8,445)(7,029)

1,157

1,448

Depreciation

(227)

(140)

Amortisation of acquired intangible assets

(257)

(112)

Administrative expenses
Operating (loss)/profit

5

Analysed as:

Adjusted EBITDA

5

Amortisation of other intangible assets

(953)

(512)

Share-based payments charge

22.2

(63)

(24)

Reorganisation costs

9.2

(423)

–

AIM listing expenses

–

(324)

Acquisition costs

–

(47)

Operating (loss)/profit

5

(766)

289

Finance income

8

38

37

Finance costs

8

–

(185)

(Loss)/profit before tax

9

(728)

141

10.1

90

(107)

(638)

34

Income tax(Loss)/profit for the year attributable to the equity shareholders of the Company
Earnings per share (pence)
Basic

11

(2.8p)

0.2p

Diluted11(2.8p)

0.2p

2012
£’000

2011
£’000

(638)

34

33

14

(605)

48

The notes on pages 37 to 62 are an integral part of these consolidated financial statements.

For the year ended 31st December 2012

Notes

(Loss)/profit for the year
Other comprehensive income:Exchange difference on retranslation of net assets and results of overseas subsidiaries

23

Total comprehensive income attributable to equity shareholders of the Company
The notes on pages 37 to 62 are an integral part of these consolidated financial statements.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201233

Financial statements

Group

Consolidated statement of comprehensive income

Consolidated statement of changes in equity		For the year ended 31st December 2012

Share
capital
£’000

Share
premium
£’000

Other
reserves£’000

Retainedearnings
£’000

Total
£’000

304

14,550953(4,272)

11,535

Profit for the year

–

–

–

34

34

Exchange difference on retranslation of net
assets and results of overseas subsidiaries

–

–

14

–

14

Total comprehensive income for the year

–

–

14

34

48

Reserve credit for equity-settled share-based payment

–

–

45

–

45

Equity component of loans

–

–

(502)

502

–

Issue of new share capital

129

–

–

–

129

Premium on new share capital

–

7,968

–

–

7,968

Share issue costs

–

(487)

–

–

(487)

Transactions with owners

129

7,481

(457)

502

7,655

Balance at 31 December 2011

433

22,031510(3,736)

19,238Loss for the year

–

–

–

(638)

(638)

Exchange difference on retranslation of net
assets and results of overseas subsidiaries

–

–

33

–

33

Total comprehensive income for the year

–

–

33

(638)

(605)

Reserve credit for equity-settled share-based payment

–

–

63

–

63

Issue of new share capital

5

–

–

–

5

Balance at 1 January 2011

Premium on new share capital

–

220

–

–

220

Transactions with owners

5

220

63

–

288

438

22,251606(4,374)18,921

Balance at 31 December 2012

The notes on pages 37 to 62 are an integral part of these consolidated financial statements.
A reconciliation of the components of Other reserves is given in note 23.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201234

Consolidated statement of financial position
At 31st December 2012

Notes

2012
£’000

2011
£’000

Goodwill

12

7,418

7,418

Other intangible assets

13

2,901

2,258

Property, plant and equipment

14

621

366

10,94010,042

AssetsNon-current assets

Total non-current assets
Current assets
Inventories

15

862

1,667

Trade and other receivables

16

10,302

9,498

Cash and cash equivalents

17

2,716

6,034

Total current assets

13,88017,199Total assets

24,82027,241(5,246)(7,294)(5,246)(7,294)

Liabilities
Current liabilities
Trade and other payables

18

Total current liabilities
Non-current liabilities
Deferred income tax liabilities

10

(653)

(549)

Other liabilities

20

–

(160)

(653)

(709)

Total liabilities(5,899)(8,003)

Net assets

18,921

19,238

Total non-current liabilities

Equity attributable to owners of the parent company
Share capital

21

438

433

Share premium account21

22,251

22,031Other reserves

23

606

510
(3,736)18,921

19,238The notes on pages 37 to 62 are an integral part of these Consolidated financial statements.
The financial statements were approved by the Board of Directors on 18th March 2013 and signed on its behalf by:
Richard Green
Chief Executive Officer

Gordon Campbell
Chief Financial Officer

Registered Number: 05589712

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 2012

35

Financial statements(4,374)

Total equity

Group

Retained earnings

Consolidated statement of cash flows
For the year ended 31st December 2012

Notes

(Loss)/profit before tax

2012
£’000

2011
£’000

(728)

141

Adjustments for:
Depreciation

9, 14

227

140

Amortisation

9, 13

1,210

624

9

5

–

6.2, 22.2

63

24

Finance income

8

(38)

(37)

Finance costs

8

–

185

Operating cash flows before working capital movements

739

1,077

Change in inventories

805(1,303)

Change in receivables(839)(2,065)

Change in payables(1,691)(96)

Cash used in operations before tax(986)(2,387)

Loss on the disposal of property, plant and equipment
Share-based payments charge

Net income taxes received

203

102

Net cash flows from operating activities(783)(2,285)(400)(1,600)

(492)

(256)

1

–

(1,849)(1,130)38

33(2,702)(2,953)

Repayment of borrowings–(1,014)

Interest paid

–

(47)

Proceeds from the issue of ordinary share capital

225

5,238

Net cash flows from financing activities

225

4,177

Net decrease in cash and cash equivalents(3,260)(1,061)

Cash and cash equivalents at start of period

6,034

7,130

(58)

(35)

2,716

6,034

Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired

26

Purchases of property, plant and equipment
Proceeds on disposal of property, plant and equipment
Expenditure on intangible assets
Interest received
Net cash flows from investing activities
Cash flows from financing activities

Exchange differences on cash and cash equivalents
Cash and cash equivalents at end of period

17

The notes on pages 37 to 62 are an integral part of these Consolidated financial statements.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201236

Notes to the consolidated financial statements
For the year ended 31st December 2012

1 General information		
Ubisense Group plc (“the Company”) and its subsidiaries (together, “the Group”) deliver mission-critical enterprise asset
tracking and geospatial systems.
The Company is a public limited company which is listed on the Alternative Investment Market (“AIM”) of the London Stock
Exchange (UBI) and is incorporated and domiciled in the United Kingdom. The Company was incorporated as Ubisense
Trading Limited on 11th October 2005 and changed its name to Ubisense Group plc on 31st May 2011 ahead of its initialpublic offering and listing on AIM on 22nd June 2011. The address of its registered office is St. Andrew’s House, St.
Andrew’s Road, Chesterton, Cambridge, CB4 1DL.
The Group has its main operations in the UK, US, Canada, France, and Germany and sells mainly in North America,
Europe and Asia.
The Group legally consists of seven companies headed by Ubisense Group plc (UK). The subsidiaries are all 100% owned
by Ubisense Group plc and are: Ubisense Limited (UK); Ubisense AG (Germany); Ubisense, Inc. (US); Ubisense Solutions,
Inc. (Canada); Ubisense SAS (France) and Geospatial Systems Limited (UK).
These consolidated financial statements have been approved for issue by the Board of Directors on 18th March 2013.
2 New accounting standards
For the purposes of the preparation of these consolidated financial statements, the Group has applied all standards andinterpretations that are effective for accounting periods beginning on or after 1st January 2012.
No new standards, amendments or interpretations to existing standards that have been published and that are mandatory
for the Group’s accounting periods beginning on or after 1st January 2013, or later periods, have been adopted early. The
Directors do not consider that the adoption of these standards and interpretations would have a material impact on theGroup’s financial statements.
3 Summary of significant accounting policies		
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated.
Basis of preparation
The consolidated financial statements of Ubisense Group plc have been prepared in accordance with International
Financial Reporting Standards (“IFRS”) as adopted by the European Union (IFRSs as adopted by the EU) and theCompanies Act 2006 applicable to companies reporting under IFRS. The consolidated financial statements have been
prepared under the historical cost convention. The consolidated financial statements are presented in Sterling and allvalues are rounded to the nearest thousand pounds (£’000) except when otherwise indicated.

Going concern basis
The Group meets its day-to-day working capital requirements through its bank facilities. The Group had cash of£2.7 million at the balance sheet date along with a £2 million undrawn bank facility as well as an order book equivalent
to 47% of annual revenue. In this context, the Group’s forecasts and projections, taking account of reasonably possible
changes in trading performance, support the conclusion that there is a reasonable expectation that the Company and
the Group have adequate resources to continue in operational existence for the foreseeable future, a period of not lessthan twelve months from the date of this report. The Group, therefore, continues to adopt the going concern basis inpreparing its financial statements.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 2012

37

Financial statements

Group

The preparation of these financial statements in conformity with IFRS requires the Directors to make certain criticalaccounting estimates and judgements that affect the amounts reported in the financial statements and accompanying
notes. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are
significant to the consolidated financial statements, are disclosed in note 4.

Notes to the consolidated financial statements continued
For the year ended 31st December 2012

3 Summary of significant accounting policies continued
Consolidation
The Group financial statements include the results, financial position and cash flows of the Company and all of its
subsidiary undertakings. Subsidiary undertakings are those entities controlled directly or indirectly by the Company.
Control arises when the Company has the power to govern the financial and operating policies of an entity so as to obtainbenefits from its activities.
The financial statements of the subsidiaries are prepared for the same reporting year as the Company, using consistentaccounting policies. Businesses acquired or disposed during the year are accounted for using acquisition method
principles from, or up to, the date control passed. Intra-Group transactions and balances are eliminated on consolidation.
All subsidiaries use uniform accounting policies for like transactions and other events and similar circumstances.
Foreign currencies(a) Functional and presentation currency
The functional currency of each Group entity is the currency of the primary economic environment in which each entity
operates. The consolidated financial statements are presented in Sterling, which is the Company’s functional andpresentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency of each Group entity using the exchange rates
prevailing at the dates of transactions. Monetary assets and liabilities denominated in foreign currencies are translated at
rates ruling at the period end date. Such exchange differences are included in the income statement within “administrative
expenses”. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using theexchange rates as at the dates of the initial transactions.		
(c) Consolidation
For the purpose of presenting consolidated financial statements, the results and financial position of all the Group entities(none of which have the currency of a hyperinflationary economy) that have a functional currency other than Sterling aretranslated into Sterling as follows:• assets and liabilities for each statement of financial position are translated at the exchange rate at the period end date;• income and expenses for each income statement are translated at the exchange rate ruling at the time of each period
the transaction occurred; and• all resulting exchange differences are recognised in other comprehensive income.
Segment reporting
The Group is organised on a global basis into two operating segments, being the Real-Time Location Systems (“RTLS”) and
Geospatial divisions. Centrally incurred costs not directly attributable to operating segments are reported under “Central”.
This is based upon the Group’s internal organisation and management structure and is the primary way in which the Chief
Operating Decision Maker (CODM) and the rest of the Board are provided financial information. The Directors believe that
the CODM is the Chief Executive Officer of the Group.
Revenue recognition
Revenue represents amounts derived from the provision of goods and services which fall within the Group’s ordinary
activities, exclusive of value added tax and other similar sales taxes. Revenue is measured by reference to the fair value ofconsideration received or receivable.
Revenues on product sales are recognised at the time that units are shipped, except for shipments under arrangements
involving significant acceptance requirements. Under such arrangements, revenue is recognised when the Group has
substantially met all its performance obligations.
Revenue earned from sales under licence agreements is recognised when the software is made available. When the saleincludes a period of support and maintenance, a proportion of the revenue is deferred and recognised rateably over theperiod of support. For licence rental fees, amounts are recognised over the period of the contract, commencing from when
the software is available for use.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201238

Services and training revenue from time and materials contracts is recognised in the period that the services and training
are provided on the basis of time worked at agreed contractual rates and as direct expenses are incurred.
Revenue from fixed price, long-term customer specific contracts, including customisation and modification, is recognisedon the stage of completion of each assignment at the period end date compared to the total estimated service to beprovided over the entire contract where the outcome can be estimated reliably. If a contract outcome cannot be estimatedreliably, revenues are recognised equal to costs incurred, to the extent that costs are expected to be recovered. An
expected loss on a contract is recognised immediately in the income statement.
Where bundled sales including a combination of some or all of the above are made, the revenue attributable to the deal isapportioned across the constituents of the bundle, and then recognised according to the policies stated above.
Employee benefits(a) Retirement benefits
The Group operates various defined contribution pension arrangements for its employees.
For defined contribution pension arrangements, the amount charged to the income statement represents the contributions
payable in the period. Differences between contributions payable in the period and contributions actually paid are shownas either accruals or prepayments in the statement of financial position.
(b) Share-based payments
The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments aremeasured at fair value at the date of grant using the Black-Scholes pricing model. The fair value is expensed on a straightline basis over the vesting period, together with a corresponding increase in equity, based on the Group’s estimate of thenumber of shares that will eventually vest.
(c) Termination benefits
Termination benefits are recognised as an expense when the Group is demonstrably committed, without realistic possibilityof withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide
termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary
redundancies are recognised as an expense if the Group has made an offer of voluntary redundancy, it is probable theoffer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable more than twelve
months after the reporting date, then they are discounted to their present value.
Operating lease income and expense(a) Rental expense
Operating lease rentals are charged as other administrative expenses to the income statement in equal annual amounts
over the lease term. Assets leased under operating leases are not recorded in the statement of financial position because
the lessor retains a significant portion of the risks and rewards of ownership.

Exceptional items
Exceptional items are disclosed separately in the financial statements where it is necessary to do so to provide further
understanding of the financial performance of the Group. They are material non-recurring items of income or expense thathave been shown separately due to the significance of their nature or amount.
Interest income and expense
Interest income and expense is included in the income statement on a time basis, using the effective interest method byreference to the principal outstanding.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 2012

39

Financial statementsGroup(b) Lease incentives
The benefit of lease incentives such as rent-free periods or up-front cash payments are spread equally on a straight-line
basis over the lease term.

Notes to the consolidated financial statements continued
For the year ended 31st December 2012

3 Summary of significant accounting policies continued
Tax
The tax charge or credit comprises current tax payable and deferred tax:(a) Current tax
The current tax charge represents an estimate of the amounts payable to tax authorities in respect of the Group’s taxable
profits and is based on an interpretation of existing tax laws. Taxable profit differs from profit before tax as reported in theincome statement because it excludes certain items of income and expense that are taxable or deductible in other years or
are never taxable or deductible.
(b) Deferred tax
Deferred income taxes are calculated using the liability method on temporary differences. This involves the comparisonof the carrying amounts of assets and liabilities in the consolidated financial statements with their respective tax bases.
In addition, tax losses available to be carried forward as well as other income tax credits to the Group are assessed forrecognition as deferred tax assets. However, deferred tax is not provided on the initial recognition of goodwill, nor on
the initial recognition of an asset or liability, unless the related transaction is a business combination or affects tax oraccounting profit.
Deferred tax liabilities are always provided in full. Deferred tax assets are recognised to the extent that it is probable thatthe underlying deductible temporary differences will be able to be offset against future taxable income. Deferred tax
assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective periodof realisation, provided they are enacted or substantively enacted at the reporting date. Deferred tax is recognised as acomponent of tax expense in the income statement, except where it relates to items charged or credited directly to othercomprehensive income or equity when it is recognised in other comprehensive income or equity.
Business combinations
The Group applies the acquisition method to account for business combinations. The consideration transferred for theacquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of theacquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or
liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group
recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the
non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets.
Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity
interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequentchanges to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised inaccordance with IAS 39 either in profit or loss or as a change to other comprehensive income. Contingent considerationthat is classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of noncontrolling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than thefair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.
Goodwill
Goodwill arising on an acquisition of a business is the difference between the fair value of the consideration paid and the
net fair value of the assets and liabilities acquired. Goodwill is carried at cost less accumulated impairment losses.
Research and development
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
Development activities involve a plan or design for the production on new or substantially improved products andprocesses. Development expenditure is only capitalised if all of the following conditions are met:
• completion of the intangible asset is technically feasible so that it will be available for use or sale;• the Group intends to complete the intangible asset and use or sell it;

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201240

• the Group has the ability to use or sell the intangible asset;• the intangible asset will generate probable future economic benefits. Among other things, this requires that there is amarket for the output from the intangible asset or for the intangible asset itself, or, if it is to be used internally, the asset
will be used in generating such benefits;• there are adequate technical, financial and other resources to complete the development and to use or sell theintangible asset; and• the expenditure attributable to the intangible asset during its development can be measured reliably.
Internally-generated intangible assets, consisting mainly of direct labour costs, are amortised on a straight-line basis overtheir useful economic lives. Amortisation is shown within administrative expenses in the income statement. The estimateduseful lives of current development projects are three years. Upon completion the assets are subject to impairment testing.
Where no internally-generated intangible asset can be recognised, development expenditure is recognised as an expensein the period in which it is incurred.
Other intangible assets
Intangible assets purchased separately, such as software licences that do not form an integral part of related hardware,
are capitalised at cost and amortised on a straight-line basis over their useful economic life which is typically 3 to 5 years.
Intangible assets acquired through a business combination are initially measured at fair value and amortised on a straightline basis over their useful economic lives. Amortisation is shown within administrative expenses in the income statement.
The useful economic lives of the other intangible assets are as follows:• Software products recognised on acquisition: 3 years• Customer relationships recognised on acquisition: 5 years• Order backlog: based on contract life, typically less than 1 year
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss.
Depreciation is charged to the income statement so as to write off the cost or valuation less estimated residual values
over their expected useful lives on a straight-line basis over the following periods:• Fixtures and fittings: 5 to 8 years, or period of the lease if shorter• Computer equipment: 3 years• Demonstration equipment: 1 year
Residual values and useful economic lives are assessed annually. The gain or loss on the disposal or retirement of anasset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognisedin administrative expenses.

An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes ofassessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cashgenerating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of
the impairment at each reporting date.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is based on the cost of purchase on a first in,
first out basis. Net realisable value is based on estimated selling price less additional cost to completion and disposal.
Provision is made for obsolete, slow moving or defective items where appropriate and are recognised as an expense in the
period in which the write-down or loss occurs.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201241

Financial statements

Group

Impairment of non-financial assets
Assets that have an indefinite useful life – for example, goodwill or intangible assets not ready to use – are not subject toamortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Notes to the consolidated financial statements continued
For the year ended 31st December 2012

3 Summary of significant accounting policies continued
Trade receivables
Trade receivables are amounts due from customers for products sold or services performed in the ordinary course ofbusiness. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as
non-current assets.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less provision for impairment.
Cash and cash equivalents
In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call withbanks and other short-term highly liquid investments with original maturities of three months or less.
Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of businessfrom suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they
are presented as non-current liabilities.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method.
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried atamortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in
the income statement over the period of the borrowings using the effective interest method.
Fees paid on the establishment of debt facilities are recognised as transaction costs of the debt to the extent that it isprobable that some or all of the facility will be drawn-down. In this case, the fee is deferred until the draw-down occurs.
To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised
as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.
Share capital and share premium
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options areshown in equity as a deduction, net of tax, from the proceeds. The nominal value of shares issued is classified as sharecapital and the amounts paid over the nominal value in respect of share issues, net of related costs, is classified asshare premium.
4 Critical accounting estimates and judgements		
The Group makes estimates and assumptions concerning the future. Actual results may differ from these estimates. The
estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are addressed below.
Impairment of goodwill and other intangible assets
The Group tests goodwill for impairment annually. This requires an estimation of the value in use of the cash-generating
units to which the goodwill is allocated. Estimating the value in use requires the Group to make an estimate of the
expected future cash flows from the cash-generating unit and also to choose a suitable discount rate in order tocalculate the present value of those cash flows. The Group uses pre-tax discount rates of between 9.7% and 12.5%
for this purpose. The carrying amount of goodwill at 31st December 2012 is £7,418,000. Further consideration of theimpairment of goodwill is included in note 12.
Capitalisation of development costs
The point at which development costs meet the criteria for capitalisation is critically dependent on management’s
judgement of the point at which technical and commercial feasibility is demonstrable. The carrying amount of capitalised
development costs at 31st December 2012 is £2,110,000.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201242

Revenue recognition
Significant management judgement is applied in determining the allocation and timing of the recognition of revenue oncontracts. In this process management takes into account milestones, hardware supplied, actual work performed andfurther obligations and costs expected to complete the work. The carrying amount of amounts recoverable on contracts at
31st December 2012 is £2,439,000.
Provision for impairment of trade receivables
The Group assesses trade receivables for impairment which requires the Directors to estimate the likelihood of payment
forfeiture by customers.
Inventories
The provision for obsolete, slow-moving or defective inventory is based on management’s estimation of the commercial
life of inventory lines and is applied on a prudent basis. In assessing this, management takes into consideration the sales
history or products and the length of time that they have been available for resale.
Deferred tax
A deferred tax asset is recognised where the Group considers it probable that future tax profits will be available against
which the tax credit will be utilised in the future. This specifically applies to tax losses and to outstanding vested shareoptions at the statement of financial position date. In estimating the amount of the deferred tax asset that should berecognised, the Directors make judgements based on current budgets and forecasts about the amount of future taxable
profits and the timings of when these will be realised. No deferred tax asset is currently recognised.
Valuation of separately identifiable intangible assets
As detailed in note 3, separately identifiable intangible assets are identified and amortised over defined periods. The
Directors use an acknowledged valuation approach but this is reliant upon certain judgements which they determine
are reasonable by reference to companies in similar industries.
The Directors do not consider that there are any other critical accounting judgements or key sources of estimation uncertainty.
5 Segment information
5.1 Operating segments
Management has determined the operating segments to be the Group’s two divisions based on the reports reviewed by
the Chief Executive Officer, who is the Chief Operating Decision Maker.
The Real-Time Location Systems division (“RTLS”) delivers mission-critical enterprise asset tracking solutions utilisingultra-wideband (“UWB”) technology to locate people and assets in 3D, bringing visibility and control to industrial businessprocesses. The Geospatial division delivers core location-based solutions, typically to blue chip utility and communications
companies, to allow them to better plan and maintain their dispersed network of assets. Centrally incurred costs notdirectly attributable to operating segments are reported under “Central”.

43

Financial statements

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 2012Group

Each of these operating segments is managed separately as each deal with different technologies and predominantly
different customer bases. The performance of the operating segments is assessed on a measurement of Adjusted
EBITDA. The measurement basis excludes depreciation, amortisation, share-based payments charge, non-recurring
expenditure such as reorganisation costs, acquisition costs and AIM listing expenses, finance income and expense andincome taxes. This is the measure reported to the Chief Operating Decision Maker for the purposes of resource allocation
and assessment of segment performance.

Notes to the consolidated financial statements continued
For the year ended 31st December 2012

5 Segment information
5.1 Operating segments continued
Segment revenue represents revenue generated from external customers, there is no inter-segment revenue. The resultsof each segment have been prepared using accounting policies consistent with those of the Group as a whole.

Year ended 31 December 2012

RTLS
£’000

Geospatial£’000

Central
£’000

Total
£’000

Revenue

9,540

14,752–

24,292

Cost of sales(4,072)(10,618)–(14,690)

Gross profit

5,468

4,134

–

9,602

Other administrative expenses(3,946)(1,101)(3,398)(8,445)Adjusted EBITDA

1,522

3,033

(3,398)

1,157

–

–

(227)

(227)

Depreciation
Amortisation of acquired intangible assets
Amortisation of other intangible assets
Share-based payments charge

–

(257)

–

(257)

(640)

(222)

(91)

(953)

–

–

(63)

(63)

Reorganisation costs

(157)

(209)

(57)

(423)

Operating profit/(loss)

725

2,345

(3,836)(766)

Finance income

–

–

38

38

725

2,345

(3,798)

(728)

–

–

90

90

Profit/(loss) after tax

725

2,345

(3,708)(638)

Year ended 31 December 2011

RTLS
£’000

Geospatial£’000

Central
£’000

Total
£’000

Revenue

8,650

15,135–23,785

Cost of sales(4,012)(11,296)–(15,308)

Gross profit

4,638

3,839

–

8,477

Other administrative expenses(3,936)(738)(2,355)(7,029)

702

3,101

(2,355)

1,448

Depreciation

–

–

(140)

(140)

Amortisation of acquired intangible assets

–

(112)

–

(112)

(437)

(57)

(18)

(512)

Share-based payments charge

–

–

(24)

(24)

AIM listing expenses

–

–

(324)

(324)

Acquisition costs

–

–

(47)

(47)

265

2,932

(2,908)289

Finance income

–

–

37

37

Finance costs

–

–

(185)

(185)

265

2,932

(3,056)

141

–

–

(107)

(107)

265

2,932

(3,163)

34

Profit/(loss) before tax
Income tax

Adjusted EBITDA

Amortisation of other intangible assets

Operating profit/(loss)

Profit/(loss) before tax
Income tax
Profit/(loss) after tax
		

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201244

5.2 Geographical areas
The Group’s operating segments operate in four main geographical areas, even though they are managed on a global
basis. Revenue and non-current assets (excluding goodwill) by geographical area are as follows:
Revenue

Non-current assets

2012
£’000

2011
£’000

2012
£’000

2011
£’000

UK

1,441

1,471

2,216

1,760

Germany

8,328

11,469

176

224

US

8,141

8,853

1,035

635

Asia Pacific

2,733

406

–

–

Other

3,649

1,586

63

5

Total

24,292

23,785

3,490

2,624

Revenues from external customers in the Group’s domicile, the UK, as well as its major markets, Germany, US and Asia
Pacific, have been identified on the basis of the customer’s geographical location. Non-current assets are allocated basedon their physical location.
5.3 Information about major customers
During 2012, revenues of £2.9 million (2011: £1.3 million) derived from one Geospatial customer in the US, revenues of£2.6 million (2011: £2.1 million) and £1.7 million (2011: £5.3 million) derived from two Geospatial customers based inGermany and revenues of £1.0 million (2011: £2.6 million) from one RTLS customer based in both Germany and the US.
6 Employee information
6.1 Employee numbers
The average monthly number of people, including Executive Directors, employed by the Group during the year was:2012
Number

2011
NumberTechnical consultants

96

75

Sales and Marketing

37

28

Research and Development

3121

Administration

20

14

Total average number of employees

184

138

Geospatial

94

64

RTLS

70

60

Central20

14

Total average number of employees

184

138

By activity

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201245

Financial statements

The total number of employees at 31st December 2012 was 175 (2011: 172).		

Group

By segment

Notes to the consolidated financial statements continued
For the year ended 31st December 2012

6 Employee information continued
6.2 Employee benefits		
2012
£’000

2011
£’000

Wages and salaries

12,286

10,236Social security costs

1,265

979

562

419

Notes

Contributions to defined contribution pension arrangements
Share-based payments

22.2

Total aggregate employee benefits

63

24

14,176

11,658

Included in the above are termination benefits of £404,000 (2011: £nil) which are presented as reorganisation costs in theincome statement – see note 9.2.
6.3 Key management compensation
Key management includes Directors (Executive and Non-executive) and members of the Global Management Team.
During the year, there were 13 key management personnel (2011: 14). The compensation paid or payable to key
management for employee services is shown below:
2012
£’000

2011
£’000

Wages and salaries

879

925

Social security costs

84

59

Other benefits

21

29

984

1,013

52

74

24

11

1,060

1,098

Short-term employee benefits

Post-employment benefits
Contributions to defined contribution pension arrangements
Share-based payments
Equity-settled share-based payments
Total key management compensation
7 Directors’ remuneration and interests		
7.1 Directors’ remuneration		Basicsalary£’000

Performance
payments£’000

Benefits
in kind£’000

Subtotal£’000

Employer’s
contributions
to defined
contribution
pensionarrangements£’000

Gordon Campbell*

96

12

1

109

15

124

106

Richard Green*

135

50

3

188

13

201

137

Peter Harverson

15

–

–

15

–

15

16

Andrew Hopper

25

–

–

25

–

25

15

Director

Total
2012
£’000

Total
2011
£’000

J Keith Lomas

15

–

–

15

–

15

6

Richard Newell

15

–

–

15

–

15

–

Robert Sansom**

–

–

–

–

–

–

–

Paul Taylor

15

–

–

15

–

15

13

Total

316

62

4

382

28

410

293

*

The Directors are remunerated through the Company’s flexible benefits scheme under which they can elect to switch basic salary into pension
contributions and other benefits. The basic salary entitlement in the year was: Richard Green £140,000; Gordon Campbell £105,000.

** Robert Sansom has waived his entitlement to annual remuneration in the year of £15,000.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201246

7.2 Directors’ interests – share options		

Director

Award
date
Years

Vests
Years

Gordon Campbell

2010

Richard Green

Awardsoutstandingat 1
Exercise
January
Expires
price
2011
Year
£
numberGranted Exercised
during during thethe year
year
numbernumberLapsedduringthe yearnumberAwardsoutstanding
at 31
December
2012
numberAwardsexercisable
at 31
December
2011
number

2011–13

2020

0.140

120,500–––

120,500

80,3352011 2012–14

2021

1.050

32,500–––32,50010,8342012 2013–15

2022

2.125

–

40,000––40,000–153,000

40,000––193,000

91,16920102011–13

2020

0.140

76,278–––76,27850,8532011 2012–14

2021

1.050

100,000–––

100,000

33,3342012 2013–15

2022

2.125

–

60,000––60,000–176,278

60,000––236,278

84,187

Peter Harverson

2010

2011–13

2020

0.140

91,333–––

91,33360,889Andrew Hopper

2010

2011–13

2020

0.140

20,278–––20,27813,519Richard Newell2010

2011–13

2020

0.140

1,056

–

–

–

1,056

704

441,945 100,000––

541,945

250,468

Total

The 2012 grants vest subject to meeting performance criteria set out in the long-term incentive plan (“LTIP”). No other
Directors have been granted share options in the Company or other Group entities. None of the terms and conditions of
the share options were varied during the year. All options were granted in respect of qualifying services. There have beenno options granted to or exercised by Directors between 31st December 2012 and 18th March 2013.
The market price of the Company’s shares at the end of the financial year was £2.315. The range of market prices during
the year was between £1.825 and £2.325.
7.3 Directors’ interests – shares
Directors’ interests in the ordinary shares of Ubisense Group plc, at 31st December 2012 and 31st December 2011,were as follows:

87,987

87,987

1,543,011

1,543,011

Peter Harverson

65,161

65,161

Andrew Hopper

225,000

225,000

J Keith Lomas

47,71247,712

Richard Newell643,354643,354

Robert Sansom

2,493,676

2,493,676

Total

5,105,901

5,105,901

Gordon Campbell
Richard Green

There has been no change in the interests set out above between 31st December 2012 and 18th March 2013.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201247

Financial statements

2011
NumberGroup

2012
NumberNotes to the consolidated financial statements continued
For the year ended 31st December 2012

8 Finance income and costs
2012
£’000

2011
£’000

Interest income from cash and cash equivalents

38

37

Finance income

3837Interest payable – bank

–

(26)

Interest payable – other loans

–

(159)

Finance costs

–

(185)

Net finance income/(costs)

38

(148)

9 Profit before tax: analysis of expenses by nature
9.1 Expenses by nature
The following items have been charged/(credited) to the income statement in arriving at profit before tax:
Notes

2012
£’000

2011
£’000

Amortisation of acquired intangible assets

13

257

112

Amortisation of other intangible assets

13

953

512

Depreciation of owned property, plant and equipment

14

227

140

Loss on disposal of property, plant and equipment

5–

Operating lease rental charges – land and buildings

355

320

Operating lease rental charges – other

124

134

1,312

1,109

Research and development costs expensed
Net foreign currency losses

153

12

423

–

AIM listing expenses–

324

Acquisition costs

–

47

81

165

Reorganisation costs

Auditors’ remuneration

9.2

9.3

9.2 Reorganisation costs
During the year, the Group incurred reorganisation costs totalling £423,000 comprising mainly redundancy costs in order
to integrate the Geospatial acquisitions made in 2011 and to centralise the Research and Development and Sales andMarketing functions of both divisions.
9.3 Auditors’ remuneration
During the year, the Group (including its overseas subsidiaries) obtained the following services from the Company’s auditor
and its associates:
2012
£’000

2011
£’000

Parent Company and consolidated financial statements

14

13

Financial statements of subsidiaries, pursuant to legislation

43

27

57

40

Notes

Fees payable to the Group’s auditor for the audit of:Fees payable to the Group’s auditor for other services:
Tax services

15

5

Other services

9

120

24

125

81

165

Auditors’ remuneration
The auditor of Ubisense Group plc is Grant Thornton UK LLP.
Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 2012

48

9.1

10 Income tax		
10.1 Income tax recognised in the income statement
2012
£’000

2011
£’000

UK Corporation Tax––

Foreign tax

9(9)Research and development tax credits – prior years

(203)

(124)

Total current tax credit

(194)

(133)

Origination and reversal of temporary differences

104

240

Total deferred tax expense

104

240

Total income tax (credit)/expense

(90)

107

Current tax

Deferred tax

The tax credit (2011: expense) differs from the standard rate of corporation tax in the UK for the year of 24% (2011: 26%) for
the following reasons:
2012
£’000

2011
£’000

(Loss)/profit before tax

(728)

141

(Loss)/profit before tax multiplied by the standard
rate of corporation tax in the UK of 24% (2011: 26%)

(175)

37

Expenses not deductible for tax purposes

21

113

Accrued contingent consideration released not subject to tax

(38)

–

Utilisation of previously unrecognised tax losses

(259)

–

Tax losses for which no deferred tax asset was recognised

832

14

9

–

Tax effects of:

Tax unprovided in prior years

(124)

(233)

(8)

Remeasurement of deferred tax – change of rate

(58)

(5)

Other temporary differences

14

80

Total income tax (credit)/expense

(90)

107

10.2 Factors that may affect future tax charges
The Group has tax losses of £4.4 million (2011: £2.9 million) that are available for offset against future taxable profits of
those subsidiary companies in which the tax losses arose. Deferred tax assets have not been recognised in respect ofthese losses as they may not be used to offset taxable profits elsewhere in the Group, and they have arisen in subsidiaries
whose future taxable profits are uncertain. No deferred tax has been recognised on the unremitted earnings of overseas
subsidiaries, because the earnings are continually reinvested by the Group and no tax is expected to be payable on themin the foreseeable future.
As a result of the reduction in the UK corporation tax rate to 23% that was substantively enacted on 3rd July 2012 andeffective from 1st April 2013, the deferred tax balances have been remeasured. The proposed reduction of the main rateof corporation tax to 22% from 1st April 2014 is expected to be enacted separately later in 2013. This change has not been
substantively enacted at the balance sheet date and, therefore, is not recognised in the financial statements.
		

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201249

Financial statements

(203)

Group

Research and development tax credits – prior years
Differential on overseas tax rates

Notes to the consolidated financial statements continued
For the year ended 31st December 2012

10 Income tax continued
10.3 Deferred tax
The movement in deferred tax in the Consolidated statement of financial position during the year is as follows:
Deferred income tax assets

Deferred income tax liabilities

2012
£’000

2011
£’000

2012
£’000

2011
£’000

–

–

(549)

(140)

Arising on acquisition of subsidiaries

–

119

–

(288)

Deferred tax credited to the income statement

–

–

88

32

Deferred tax charged to the income statement

–

(119)

(192)

(153)

At 31 December

–

–

(653)

(549)

At 1 January

The components of deferred tax included in the Consolidated statement of financial position are as follows:
2012
£’000

2011
£’000

Development costs capitalised

(485)

(293)

Intangible assets recognised on acquisition of subsidiaries

(168)

(256)

Total deferred income tax liabilities

(653)

(549)

Deferred tax assets have not been recognised in respect of the following items because it is not probable that futuretaxable profits will be available against which the Group can utilise the benefits:
2012
£’000

2011
£’000

1,343

851

289

168

1,632

1,019

2012

2011

(Loss)/profit for the period (£’000)

(638)

34

Earnings for the purposes of diluted earnings per share (£’000)

(638)

34

21,76418,897

1,383

1,423

–

57

Diluted weighted average number of shares (‘000)

23,147

20,377

Basic earnings per share (pence)(2.8p)

0.2p

Diluted earnings per share (pence)(2.8p)

0.2p

Tax losses carried forward
Equity-settled share options temporary differences
Total unrecognised deferred tax assets
11 Earnings per share
Basic and diluted earnings per share
Earnings

Number of shares
Basic weighted average number of shares (‘000)
Effect of dilutive potential ordinary shares:– Share options (‘000)– Warrants (‘000)

Basic earnings per share is calculated by dividing profit for the period attributable to ordinary shareholders of theCompany by the weighted average number of ordinary shares outstanding during the period. For diluted earnings per
share, the weighted average number of shares is adjusted to allow for the effects of all dilutive share options and warrants
outstanding at the end of the year. Options have no dilutive effect in loss-making years, and hence the diluted loss per
share for the year is the same as the basic loss per share.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201250

The Group also presents an adjusted diluted earnings per share figure which excludes amortisation on acquired intangible
assets, share-based payments charge and non-recurring expenditure such as reorganisation costs, AIM listing expenses
and acquisition costs from the measurement of profit for the period.
Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders by theweighted average number of ordinary shares outstanding during the year (adjusted for the effects of dilutive options andthe Group’s convertible bonds).
Adjusted diluted earnings per share

Notes

Earnings for the purposes of diluted earnings per share (£’000)

2012

2011

(638)

34

257

112

Adjustments:
Reversal of amortisation on acquired intangible assets (£’000)

9, 13

Reversal of share-based payments charge (£’000)

9

63

24

Reversal of reorganisation costs

9

423

–

Reversal of AIM listing expenses (£’000)

9

–

324

Reversal of acquisition costs (£’000)

9

Net adjustments (£’000)

–

47

743

507

Adjusted earnings (£’000)

105

541

Adjusted diluted earnings per share (pence)

0.5p

2.7p

12 Goodwill
Goodwilll£’000

Balance at 1 January and 31 December 2012

7,418

Impairment testing for cash-generating units containing goodwill
Goodwill acquired through business combinations is allocated to groups of cash generating units (‘CGU’s) for impairment
testing as follows:		
2012
£’000

2011
£’000

RTLS

3,256

3,256

Geospatial

4,162

4,162

Total

7,418

7,418

Revenue growth assumptions are based on the annual operating plan taking into account industry growth rates andUbisense’s historical experience in the context of the wider industry and economic conditions. The underlying organic revenue
growth rate for RTLS is assumed to be 20% with the division expected to continue at above-average rates for the foreseeable
future as a result of significant investment in research and development and a growing opportunity customer base and sector
presence. The underlying organic growth rate for Geospatial is assumed to be 10% reflecting steady growth in a more mature
market where the division is increasing its presence in key sectors where it has acknowledged expertise.
The Board has considered reasonable possible sensitivities in key assumptions on which the value-in-use calculations
are based. For RLTS, sensitivity analysis shows that if the underlying organic revenue growth rate was below 6%, or if
the discount rate is increased in isolation above 21%, the estimated recoverable amount is equal to carrying value. For
Geospatial, if the underlying organic revenue growth rate reduced to 0%, or if the discount factor increased to 20%, thiswould not cause the carrying value to exceed estimated recoverable amount.
There was no impairment of goodwill as the estimated recoverable amount exceeded the carrying value for all CGUs.
Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 2012

51

Financial statements

A discount rate of 12.5% for RTLS and 9.7% for Geospatial has been estimated using pre-tax rates that reflect current
market assessments of the time value of money and the risks specific to each CGU.

Group

The recoverable amounts of all CGUs have been determined from value-in-use calculations based on 5 year forecasts
projected from the 2013 annual operating plan approved by the Board for each CGU with an assumed terminal growth rateof nil and no improvement in relative operating margin during or after the forecast period. This is considered prudent whencompared to recent experience and current expectations of the long-term industry growth rate for both CGUs.

Notes to the consolidated financial statements continued
For the year ended 31st December 2012

13 Other intangible assets		
Acquiredcustomer
relationships
and order
backlog
£’000

Total
£’000

Capitalised
development
costs
£’000

Software£’000

Acquired
softwareproducts£’000

At 1 January 2011

1,476

11

–

–

1,487

Reclassifications

–

56

–

–

56

1,103

225

–

–

1,328

–

3

529

449

981

2,579

295

529

449

3,852

–

(12)

–

–

(12)

Additions

1,845

16

–

–

1,861

At 31 December 2012

4,424

299

529

449

5,701

At 1 January 2011

958

4

–

–

962

Reclassification

–

8

–

–

8

Charge for the year

494

18

44

68

624

At 31 December 2011

1,452

30

44

68

1,594

–

(4)

–

–

(4)

862

91

177

80

1,210

2,314

117

221

148

2,800

At 31 December 2012

2,110

182

308

301

2,901

At 31 December 2011

1,127

265

485

381

2,258

Cost

Additions
Acquisition of subsidiaries
At 31 December 2011
Effects of movement in exchange rates

Accumulated amortisation

Effects of movement in exchange rates
Charge for the year
At 31 December 2012
Net book amount

Capitalised development assets relate to expenditure that can be applied to a plan or design for the production of new or
substantially improved products and processes.
The software assets represent assets purchased from third parties.
The acquired software products, customer relationships and order backlog assets arose on the acquisitions in 2011 ofIntegrated Mapping Solutions, Inc. (now merged into Ubisense, Inc.) and Realworld OO Systems Limited (now re-named
Geospatial Systems Limited).

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201252

14 Property, plant and equipment		Fixturesand Fittings£’000

ComputerEquipment
£’000

Total
£’000

At 1 January 2011

174

440

614

Effect of movements in exchange rates

(3)

(5)

(8)

Reclassification

–

(56)

(56)

Additions

47

213

260

Acquisition of subsidiaries

3

14

17

Cost

Disposals

–

(1)

(1)

221

605

826

Effect of movements in exchange rates

(7)

(13)

(20)

Reclassification

31

(31)

–

Additions

321

174

495

Disposals

(23)

(218)

(241)

At 31 December 2012

543

517

1,060

At 1 January 2011

95

240

335

Effect of movements in exchange rates

(1)

(5)

(6)

Charge for the year

34

106

140

Reclassification

–

(8)

(8)

Disposals

–

(1)

(1)

128

332

460

(6)

(7)

(13)

At 31 December 2011

Accumulated depreciation

At 31 December 2011
Effect of movements in exchange rates
Charge for the year

77

150

227

Reclassification

20

(20)

–

Disposals

(20)

(215)

235)

At 31 December 2012

199

240

439

At 31 December 2012

344

277

621

At 31 December 2011

93

273

366

2012
£’000

2011
£’000

Raw materials

182–

Finished goods

680

1,667

Total inventories

862

1,667

Net book amountThe cost of inventories recognised as an expense and included in “cost of sales” amounted to £1,571,000 (2011: £1,426,000).

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 2012

53

Financial statements

Included in the analysis above are impairment provisions against inventory amounting to £44,000 (2011: £56,000).
The Group’s inventories are comprised of products which are not generally subject to rapid obsolescence on accountof deterioration in condition, market trends or technological reasons.

Group

15 Inventories

Notes to the consolidated financial statements continued
For the year ended 31st December 201216 Trade and other receivables		
Notes

Trade receivables, gross

2012
£’000

2011
£’000

7,390

7,541

Allowances for doubtful debts

16.1

(80)

(7)

Trade receivables, net

16.2

7,310

7,534

2,439

1,588

Other receivables

40

21

Prepayments and accrued income

502

314

VAT and taxation receivable11

41

10,302

9,498

Amounts recoverable on contracts

Total trade and other receivables

All amounts disclosed are short-term. The carrying value of trade receivables is considered a reasonable approximationof fair value.
Due to having a blue chip customer base and effective credit control procedures, the Group is not significantly exposedto the risk of bad debt. The following disclosures are in respect of trade receivables that are either impaired or past due.
The individually impaired receivables mainly relate to customers who are in unexpectedly difficult economic situations. Any
impairment is assessed on a customer-by-customer basis following a detailed review of the particular circumstances. To theextent they have not been specifically provided against, the trade receivables are considered to be of sound credit rating.
16.1 Movement in allowance for doubtful debts
2012
£’000

2011
£’000

At 1 January

(7)

(83)

Exchange differences–

1

Amounts recovered in the year

7

82

Allowance made

(80)

(7)

At 31 December

(80)

(7)

2012
£’000

2011
£’000

5,360

6,120

1,360

881

More than 90 days overdue

590

533

Total

7,310

7,534

16.2 Ageing of past due but not impaired receivables

Neither past due nor impaired
Past due but not impaired:
0 to 90 days overdue

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201254

17 Cash and cash equivalents
2012
£’000

2011
£’000

Cash at bank and in hand

2,716

3,367

Short-term bank deposits

–

2,667

2,716

6,034

Cash and cash equivalents

The carrying amount approximates to fair value because of the short-term maturity of these instruments, being no greaterthan three months.
Cash at bank earns interest at floating rates based on daily bank overnight deposit rates. Short-term cash deposits earninterest at fixed rates for the term of the deposit.
The composition of cash and cash equivalents by currency is as follows:
2012
£’000

2011
£’000

British Pound (GBP)

723

3,939

Euro (EUR)

1,101

1,619

US Dollar (USD)

847

414

Canadian Dollar (CAD)

45

62

2,716

6,034

2012
£’000

2011
£’000

Payments received on account

1,002

1,995

Trade payables

1,936

2,110

Trade accruals

1,404

1,633

Other taxation and social security

612

817

Other payables

292

339

–

400

5,246

7,294

Cash and cash equivalents
18 Trade and other payables
Notes

Other liabilities – contingent consideration

26

Total trade and other payables

Financial statements

Group

All amounts disclosed are short-term. The carrying value of trade payables is considered a reasonable approximation offair value.
19 Loans and borrowings
In November 2012, the Group agreed a new annual bank facility of up to £2.0 million to provide additional future
working capital capacity. Interest is payable at LIBOR plus 3.00% and the facility is secured on the fixed and floating
assets of the Group. The facility is subject to certain operating performance and net worth covenants of the business.
As at 31 December 2012, and as at 18th March 2013, the facility is undrawn.
20 Other liabilities

Other liabilities – contingent consideration

Notes

2012
£’000

2011
£’000

26

–

160

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201255

Notes to the consolidated financial statements continued
For the year ended 31st December 2012

21 Share capital and premium
Number ofordinary shares of£0.02 eachSharecapital
£’000

Share
premium
£’000

Total
£’000

Balance at 1 January 201115,211,490

304

14,55014,854

Share issue

2,777,778

56

4,944

5,000

–

–

(486)

(486)

Issued under share-based payment plans

376,308

8

125

133

Issued on conversion of Convertible Loan

3,176,772

63

2,796

2,859

Issued on exercise of warrants

115,350

2

102

104

Share issue costs

Change in year

6,446,208

129

7,481

7,610

Balance at 31 December 2011

21,657,698

433

22,031

22,464

Issued under share-based payment plans

154,9373

29

32

Issued on conversion of warrants

107,109

2

191

193

Change in year

262,046

5

220

225

21,919,744

438

22,251

22,689Balance at 31 December 2012

The Company has one class of ordinary shares which carry no right to fixed income.
During the period, the Company issued 262,046 shares, increasing the total number of shares in issue from 21,657,698
to 21,919,744 as follows:• 154,937 shares as a result of options exercised with a weighted average exercise price of £0.21 per share fortotal cash consideration of £32,461; and• 107,109 shares as a result of exercise of warrants at £1.80 per share for cash consideration of £192,796.
22 Share-based payments: options and warrants
22.1 Equity-settled share-based payment arrangementsa) Share option plans
The Group operates a number of plans to award options over shares in the Company to the best-performing employees of
the Group around the world.
Options are generally granted at an exercise price equal to the market price of the shares under option at the date of the
grant. The options generally vest evenly over three years on the anniversary from the date of the grant or entirely on thethird anniversary from the date of grant, depending on continuing service during the vesting period. The contractual life of
the options is ten years from the date of grant after which they expire if unexercised.
b) Warrants
During 2011, at the time of the initial public offering on AIM, the Group granted warrants to a professional adviser in lieu offees. The warrants were granted at a subscription price equal to the market price of the shares under warrant at the date of
the grant. The warrants were exercisable immediately and had a contractual life of eighteen months from the date of grant
after which they expire if unexercised. The warrants were exercised in their entirety during 2012 and no further warrants
have been granted.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201256

22.2 Analysis of amounts recognised in the financial statementsa) Analysis of amounts recognised in the Consolidated income statement

Total share-based payments charge recognised in operating profit

2012
£’000

2011
£’000

63

24

b) Analysis of amounts recognised in the Consolidated statement of changes in equity in the year
2012
£’000

2011
£’000

Net credit to the share-based payments reserve

63

46

Charge to the share premium account

–

(22)

Net share-based payments credit recognised in equity

6324c) Cumulative amounts included within equity in the Consolidated statement of financial position
2012
£’000

2011
£’000

Cumulative reserve credit for share-based payments654
				
22.3 Reconciliation of movements in equity-settled share-based payment arrangements in the year		Awardsoutstandingat 1
Exercise
January
Vests Expires
price
2012
Years
Year
£
numberArrangement

Award
date
Year

Options

2006 2007–09

2016

0.900

2,500

Grantedduring theyear
numberExercisedduring theyear
numberForfeited
during theyear
numberAwardsoutstanding
at 31
December
2012
numberAwardsexercisable
at 31
December
2012
number

–

–

–

2,500

2,500

0.900

300

–

–

–

300

300

0.900

650

–

–

–

650

650

2009

2009

2019

0.900

4,457

–

–

–

4,457

4,457

2010 2011–13

2020

0.140

1,404,647–(143,102)(17,730)

1,243,815

726,658

2011 2012–14

2021

1.050

488,800–(11,835)(49,499)

427,466

141,630

2011 2012–14

2021

1.980

32,532–––32,532

10,8452012 2013–15

2022

2.125

–

347,000–(1,000)346,000–

1,933,886

347,000(154,937)(68,229)2,057,720

887,040

2011

2011

2012

Total
Weighted average exercise price (pence)

1.800

107,109–(107,109)–––

2,040,995

347,000(262,046)(68,229)2,057,720

887,040

0.477

2.125

0.860

0.829

0.695

0.315

The weighted average share price at the date of exercise for options exercised during the year was £2.126 (2011: £1.950).

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201257

Financial statements

2017
2018

Group

2007 2008–10
2008 2009–11

Options
Warrants

591

Notes to the consolidated financial statements continued
For the year ended 31st December 201222 Share-based payments: options and warrants continued
22.4 Principal assumptions
The fair value of share-based payments grants has been valued using the Black-Scholes option-pricing model. Expectedvolatility was determined based on the historic volatility of comparable companies. The expected life is the expected period
from grant to exercise based on management’s best estimate of the effects of non-transferability, exercise restrictions andbehavioural considerations. The risk-free rate of return is an average yield on the zero-coupon UK Government Bond inissue at the date of grant with a similar life to the option or warrant.
The following assumptions were used in the model for options and warrants granted during the years ended
31 December 2012 and 31st December 2011:
Instrument

Number granted
Grant date

OptionOptionWarrant

Option347,000

32,532

107,109491,300

29 June 2012 26 September 201122 June 2011

16 May 2011

Share price at grant date (£)

2.125

1.980

1.800

1.050

Exercise price (£)

2.125

1.980

1.800

1.050

0.6

0.31

0.20

0.18

Fair value per option (£)
Expected life (years)

3.0

3.0

1.5

3.0

Expected volatility (%)

20.00%

20.00%

20.00%

20.00%

Risk-free interest rate (%)

0.87%

1.40%

2.03%

2.30%

Expected dividends expressed as a dividend yield (%)

0.00%

0.00%

0.00%

0.00%

23 Other reserves
Equity componentof convertibleloans andwarrants£’000

Share-based
payment reserve£’000

Translation
reserve
£’000

Total
£’000

502

546

(95)

953

Exchange difference on retranslation of
net assets and results of overseas subsidiaries

–

–

14

14

Reserve credit for equity-settled share-based payment

–

45

–

45

(502)

–

–

(502)

Balance at 31 December 2011

–

591

(81)

510

Exchange difference on retranslation of
net assets and results of overseas subsidiaries

–

–

33

33

Reserve credit for equity-settled share-based payment

–

63

–

63

Balance at 31 December 2012

–

654

(48)

606

Balance at 1 January 2011

Equity component of loans

Share-based payment reserve
The share-based payment reserve relates to cumulative charge made in respect of share options granted by the Company
to the Group’s employees under its employee share option plans.
Translation reserve
Exchange differences relating to the translation of the results and net assets of the Group’s foreign operations from theirfunctional currencies to the Group’s presentation currency of Sterling are recognised directly in other comprehensive
income and accumulated in the translation reserve.		

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201258

24 Operating lease commitments
Leases as lessee
At 31st December 2012, the Group has lease agreements in respect of property and equipment for which payments extend
over a number of years. The Group enters into these arrangements as these are a cost-efficient way of obtaining the shortterm benefits of these assets. The Group lease rental charge is disclosed in note 9. There are no other material off-balance
sheet arrangements.
The Group’s future aggregate minimum lease payments under non-cancellable operating leases are as follows:
Land and buildings

Other

2012
£’000

2011
£’000

2012
£’000

2011
£’000

No later than one year

360

326

111

125

Later than one year and no later than five years

1,512

635

91

95

Later than five years

853

535

–

–

2,725

1,496

202

220

Total

The above table reflects the committed cash payments under operating leases, rather than the expected charge to theincome statement in the relevant periods. The effect on the income statement will differ to the above figures due to theamortisation of rent-free and discounted rent periods included in a new property lease signed in 2012. The expectedcharge in 2013 for operating leases is expected to be £103,000 higher than the committed cash payments shown above.
The Group has guaranteed rent bonds issued by its banks on its behalf totalling £125,000 as at 31st December 2012(2011: £ nil). These are not expected to result in any material financial loss.
25 Principal subsidiaries
The Company’s subsidiary undertakings at 31st December 2012 are shown below. All are included in the Group financial
statements and wholly owned directly by the Company. All subsidiaries prepare accounts up to 31st December each year
except for Geospatial Systems Limited (formerly Realworld OO Systems Limited) which prepares accounts up to 31st March.
Subsidiary

Country of incorporation

Principal activity

Ubisense Limited

UK

Location solutions

Ubisense AG

Germany

Location solutions

Ubisense SAS

FranceLocation solutions

Ubisense, Inc.

US

Location solutions

Ubisense Solutions, Inc.

CanadaLocation solutions

Geospatial Systems Limited

UK

Location solutions

Notes

2012
£’000

2011
£’000

Current

18

–

400

Non-current

20

–

160

–

560

Total

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 2012

59

Financial statements

The maturity of contingent consideration is as follows:Group

26 Contingent consideration		
Under the contingent cash consideration arrangement, the Group is required to pay additional amounts to the vendors of
Realworld OO Systems Limited (now Geospatial Systems Limited) based on the achievement of two separate performancemilestones that may have arisen between 2011 and 2013 with a combined undiscounted range of outcomes between nil
and £1,150,000. A liability of £560,000 was recognised at the acquisition date, based on management’s best estimate of theprobability-adjusted expected cash outflow from the arrangement. £400,000 was paid in the year relating to the first milestone
and the amount recognised for the second milestone has been reduced to nil based on most recent management estimates.

Notes to the consolidated financial statements continued
For the year ended 31st December 201227 Financial risk management27.1 Risk management objectives and policies
The Group is exposed to various risks in relation to financial instruments. The Group’s financial assets and liabilities by
category are summarised below. The main types of risks are market risk, credit risk and liquidity risk. The Group is exposed
to market risk through its use of financial instruments and specifically to currency risk and interest rate risk, which result
from its operating activities.
The Group’s risk management is coordinated at its headquarters, in close cooperation with the Board of Directors, andfocuses on actively securing the Group’s short to medium-term cash flows. The Group does not actively engage in the
trading of financial assets for speculative purposes. The most significant financial risks to which the Group is exposed aredescribed below.
27.2 Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies. The Group’s policy is to maintain natural
hedges where possible, by matching foreign currency revenue and expenditure. The Group does not enter into forward
exchange contracts to mitigate the exposure to foreign currency risk as the Group’s currency transactions are notconsidered significant enough to warrant this.
The carrying amounts of the Group’s foreign currency denominated monetary assets and liabilities at the reporting date,
not denominated in the local functional currency, are as follows:
US Dollars

Euros

2012
£’000

2011
£’000

2012
£’000

2011
£’000

Assets

752

539

817

485

Liabilities

(16)

(7)

(3)

–

27.3 Foreign currency sensitivity analysis
The Group is mainly exposed to US Dollars and Euros. The Group seeks to manage cash inflows and outflows in eachcurrency to mitigate currency exposure and exchange risk. The following table details the Group’s sensitivity to a 5%
increase and decrease in the Sterling exchange rate against the relevant foreign currencies. The sensitivity analysis
includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period
end for a 5% change in foreign currency rates. A positive number indicates an increase in profit or equity.
US Dollars

Euro

2012
£’000

2011
£’000

2012
£’000

2011
£’000

Income statement

37

25

39

23

Equity

37

25

39

23

Income statement

(40)

(28)

(43)

(26)

Equity

(40)

(28)

(43)

(26)

Effect of a 5% strengthening in relevant exchange rate on:

Effect of a 5% weakening in relevant exchange rate on:

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201260

27.4 Interest rate sensitivity
During 2012, the Group had no outstanding debt facilities and so the Group’s exposure to interest rates is minimal.
The Group’s exposure to market risk for the changes in interest rates relates primarily to the Group’s bank deposits. The
Group’s policy is to maintain flexibility and preserve capital rather than to optimise interest rates on bank deposits held,
but the exposure to interest rate fluctuations on its deposits is reduced by placing these at fixed rates of interest withvarying maturity dates.
The aggregate amount of the Group’s cash deposits on fixed interest terms as at 31st December 2012 was £nil
(2011: £2.7 million). The weighted average fixed interest rate on the cash balances during the year was 1.28% (2011: 1.21%)
and the weighted average period for which the rate is fixed was 31 days (2011: 40 days). The aggregate amount of cash
deposits on variable interest terms held with clearing bankers as at 31st December 2012 was £2.7 million (2011: £3.3 million).
The following table illustrates the sensitivity of the net profit of the Group for the year and equity to a possible change ininterest rates of +0.5% and -0.5%, with effect from the beginning of the year. A positive number indicates an increase inprofit or equity.
2012
£’000

2011
£’000

Income statement

17

32

Equity17

32

Income statement

16

(20)

Equity16(20)

Effect of a 0.5% strengthening in interest rate on:

Effect of a 0.5% weakening in interest rate on:

27.5 Credit risk analysis
The Group’s maximum exposure to credit risk is limited to the carrying amount of financial assets recognised at thereporting date, as summarised in note 27.8, which are principally cash and cash equivalents and trade receivables.
Cash and cash equivalents are held at banks with good independent credit ratings in accordance with the Group Treasury
policy. The Group continuously monitors defaults of customers and other counterparties, identified either individually or
by group, and incorporates this information into its credit risk controls. Where available at reasonable cost, external credit
ratings and/or reports on customers and other counterparties are obtained and used.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 2012

61

Financial statements

None of the Group’s financial assets are secured by collateral or other credit enhancements.

Group

The Group’s policy is to deal only with creditworthy counterparties. The Group’s management considers that its financial
assets that are not impaired or past due for each of the reporting dates under review are of good credit quality. All
receivables are subject to regular review to ensure that they are recoverable and any issues identified as early as possible.
In order to manage credit risk the Directors set limits for customers based on a combination of payment history and third
party credit references. Credit limits are reviewed by the credit controller on a regular basis in conjunction with debt ageing
and collection history. In addition, many of the Group’s customers, and approximately 80% by balance at any given time,
are large utility companies and other blue-chip companies that would be considered a low credit risk.

Notes to the consolidated financial statements continued
For the year ended 31st December 201227 Financial risk management continued
27.6 Liquidity risk analysis
Liquidity risk is the risk arising from the Group not being able to meet its obligations as they fall due. The Group seeks
to manage this risk by ensuring sufficient liquidity is available to meet the foreseeable needs and to invest cash assets
safely and profitably. The Group policy throughout the year has been to place surplus funds on short-term treasury
deposit or interest bearing reserve accounts based on its cash flow forecasting. The Group manages its liquidity needs
by carefully monitoring forecast cash inflows and outflows due in day-to-day business. Net cash requirements arecompared to balances in order to determine headroom or any shortfalls. As disclosed in note 19, the Group enteredinto a bank facility of up to £2 million in November 2012 which had not been drawn down as at 31st December 2012.
The Group’s financial liabilities have contractual maturities as summarised below:
Current

Non-current

Within 6 Between 6 and 12
monthsmonths£’000£’000

As at 31 December 2012
Trade and other payables
As at 31 December 2011
Trade and other payables

Between 1 and 5
years
£’000

Later than
5 years
£’000

3,632

–

–

–

4,482

–

160

–

Financial assets used for managing liquidity risk
Cash flows from trade and other receivables are contractually due within six months. Cash is generally held in accounts
with immediate notice. Where surplus cash deposits are identified these are placed in accounts with access terms of no
more than three months.		
27.7 Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as going concern whilst
maximising the return to stakeholders. The capital structure of the Group consists of cash and cash equivalents and capitaland reserves attributable to the owners of the Company, as disclosed in the consolidated statement of financial position,with no outstanding debt as at 31st December 2012 or 31st December 2011.
In order to maintain or adjust the capital structure, the Group may issue shares, take on debt, sell assets to raise cash, adjust
the amount of dividends payable to shareholders or return capital to shareholders. The Group is not subject to externallyimposed capital requirements. The capital structure is continually monitored by the Group. As disclosed in note 19, the Group
entered into a bank facility of up to £2 million in November 2012 which had not been drawn down as at 31st December 2012.
27.8 Categories of financial instruments
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis ofmeasurement and the basis on which income and expenses are recognised in respect of each class of financial asset,
financial liability and equity instrument, are disclosed in the accounting policies in note 3. The carrying amounts presented
in the Consolidated Statement of Financial Position relate to the following categories of financial instrument:

Notes

Financial assets
Loans and receivables:– Trade receivables– Amounts recoverable on contracts– Other receivables– Cash and cash equivalents
Total financial assets
Financial liabilities
Amortised cost:– Trade payables– Trade accruals– Other payables– Contingent consideration
Total financial liabilities
Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 2012

62

16
16
16
17

18
18
18
26

2012
£’000

2011
£’000

7,310
2,439
40
2,716
12,505

7,534
1,588
21
6,034
15,177

1,936
1,404
292
–
3,632

2,110
1,633
339
560
4,642

Independent auditor’s report 		To the members of Ubisense Group plc		

We have audited the parent company financial statements of Ubisense Group plc for the year ended 31st December 2012
which comprise the parent company balance sheet and the related notes. The financial reporting framework that has
been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally
Accepted Accounting Practice).
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of theCompanies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members thosematters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members
as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and auditor
As explained more fully in the Directors’ Responsibilities Statement set out on page 31, the Directors are responsible forthe preparation of the parent company financial statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the parent company financial statements in accordance with applicablelaw and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing
Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the APB’s website atwww.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements
In our opinion the parent company financial statements:• give a true and fair view of the state of the Company’s affairs as at 31st December 2012;• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and• have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ Report for the financial year for which the financial statements areprepared is consistent with the parent company financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if,
in our opinion:• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have notbeen received from branches not visited by us; or• the parent company financial statements are not in agreement with the accounting records and returns; or• certain disclosures of Directors’ remuneration specified by law are not made; orFinancial statements

Company• we have not received all the information and explanations we require for our audit.
Other matter
We have reported separately on the Group financial statements of Ubisense Group plc for the year ended
31st December 2012.
Alison Seekings
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Cambridge
18th March 2013

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201263

Company balance sheet
At 31st December 2012

Notes

2012
£’000

2011
£’000

3

15,906

16,003

4

7,772

8,067

–

2

7,772

8,069

–

(400)

Net current assets

7,772

7,669

Total assets less current liabilities

23,67823,672–(160)

23,67823,512

Fixed assets
Investments in subsidiaries
Current assets
Debtors
Cash at bank and in hand
Creditors – amounts falling due within one year

5, 7

Creditors – amounts falling due after more than one year

6, 7

Net assets
Capital and reserves
Called-up share capital

8

438

433

Share premium account9

22,251

22,031

Share-based payment reserve

9

654

591

Profit and loss reserve

9

335

457

Equity shareholders’ funds

10

23,67823,512The notes on pages 65 to 67 are an integral part of the Company financial statements.
The financial statements were approved by the Board of Directors on 18th March 2013 and signed on its behalf by:

Richard Green
Chief Executive Officer
Registered Number: 05589712

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201264

Gordon Campbell
Chief Financial Officer

Notes to the Company financial statements
For the year ended 31st December 2012

1 Principal accounting policies
The separate financial statements of the Company are presented as required by the Companies Act 2006. They have been
prepared under the historical cost convention and in accordance with applicable United Kingdom Accounting Standards
and law.
The principal accounting policies are summarised below. They have been applied consistently throughout the year and thepreceding year.
The Company has taken advantage of the exemption allowed under FRS 8 “Related party disclosures” not to showtransactions with other wholly-owned companies in the Group headed by Ubisense Group plc.
Share-based payments
The Company issues equity-settled share-based payments to certain employees of its subsidiaries. Equity-settled sharebased payments are measured at fair value at the date of grant using the Black-Scholes pricing model. The expected
life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability,
exercise restrictions and behavioural considerations. The share-based payment is accounted for as a capital contribution
to the subsidiaries. Investments in subsidiaries are increased by the aggregate amount of share-based payment with acorresponding increase in shareholders’ funds for the same amount.
Investments in subsidiaries
Fixed asset investments are shown at cost less provision for impairment.
Deferred taxation
Deferred tax is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax,
or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates andlaw. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods
different from those in which they are included in financial statements. Deferred tax assets are recognised to the extent that
it is regarded as more likely than not that they will be recovered. Deferred tax assets and liabilities are not discounted.
2 Loss for the year
As permitted by Section 408 of the Companies Act 2006, the Company has elected not to present its own profit and loss
account for the year. Ubisense Group plc reported a loss for the financial year ended 31st December 2012 of £122,000(2011: nil).
The Company does not have any employees (2011: nil). Directors’ emoluments are disclosed in note 7 of the consolidated
financial statements. The Directors were not remunerated by the parent company.

Financial statements

Company
Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201265

Notes to the Company financial statements continued
For the year ended 31st December 2012

3 Investments in subsidiaries
Investments in
subsidiaries £’000

Cost and net book amountAt 1 January 2012

16,003

Contingent consideration adjustment(160)

Capital contribution relating to share-based payments

63

At 31 December 2012

15,906

Capital contribution
The capital contributions relating to share-based payments arise because the Company has granted share options to theemployees of its various subsidiaries.
Contingent consideration adjustment
The contingent consideration adjustment relates to a reduction in the estimate of amounts payable to the vendorsof Realworld OO Systems Limited (now Geospatial Systems Limited) as disclosed in note 26 of the consolidated
financial statements.
Subsidiary undertakings
A complete list of subsidiary undertakings is given in note 25 of the consolidated financial statements.
4 Debtors
2012
£’000

2011
£’000

7,769

8,067

3

–

7,772

8,067

Notes

2012
£’000

2011
£’000

7

–

400

Notes

2012
£’000

2011
£’000

7

–

160

Amounts owed by subsidiary undertakings
Other debtors

5 Creditors: amounts falling due within one year

Other liabilities – contingent consideration
6 Creditors: amounts falling due after more than one year

Other liabilities – contingent consideration				

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201266

7 Maturity of financial liabilities
Notes

2012
£’000

2011
£’000

5

–

400

–

400

–

160

–

160

–

560

In one year or less
Other liabilities – contingent consideration
Within one to two years
Other liabilities – contingent consideration

6

Contingent consideration
The contingent consideration related to the acquisition of Realworld OO Systems Limited (now Geospatial Systems
Limited) in 2011 which is further described in note 26 in the consolidated financial statements.		
8 Share capital
2012
Number

2011
Number

2012
£’000

2011
£’000

Allotted, called up and fully paid
Ordinary shares of £0.02 each
21,919,744
21,657,698
438
433
		
A description of the movements in share capital in the year is given in note 21 of the consolidated financial statements.
9 Reserves

Balance at 1 January 2012

Sharepremium£’000

Share-based
payment reserve£’000

Profitand loss
reserve£’000

22,031

591

457

–

(122)

–

63

–

Premium on new share capital

220

–

–

Change in year

220

63

(122)

22,251

654

335

2012
£’000

2011
£’000

(122)

–

Reserve credit for equity-settled share-based payment

6345

Issue of new share capital

5

129

220

7,968

–

(487)

166

7,655

Shareholders’ funds at 1 January

23,51215,857

Shareholders’ funds at 31 December

23,67823,512

Balance at 31 December 2012		
10 Reconciliation of movements in shareholders’ funds

Loss for the year

Premium on new share capital
Share issue costs
Net change in shareholders’ funds

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 2012

67

Financial statements–

Reserve credit for equity-settled share-based payment

Company

Loss for the year

Notice of Annual General Meeting

Ubisense Group plc(Incorporated and registered in England and Wales with registered number 05589712)
Notice is hereby given that the Annual General Meeting (“Meeting”) of Ubisense Group plc (the “Company”) is to beheld at the offices of FTI Consulting, Holborn Gate, 26 Southampton Buildings, London WC2A 1PB on 19th April 2013at 10.00 am.
You will be asked to consider and vote on the resolutions below. Resolutions 1, 2, 3, 4 and 5 will be proposed as ordinary
resolutions and resolution 6 will be proposed as a special resolution.
Ordinary business
Report and accounts
1.	THAT the Company’s annual accounts for the financial year ended 31st December 2012, together with the Directors’
report and auditor’s report on those accounts, be received and adopted.
Re-election of Directors
2.	To re-elect Professor Andrew Hopper CBE, who retires by rotation and offers himself for re-appointment bygeneral meeting, as a Director of the Company.
3.	To re-elect Dr. Richard Newell, who retires by rotation and offers himself for re-appointment by general meeting,as a Director of the Company.
Re-appointment of auditors
4.	THAT Grant Thornton UK LLP be reappointed as the Company’s auditors to hold office from the conclusion of thismeeting until the conclusion of the next meeting at which accounts are laid before the Company and that the Directors
be authorised to agree the remuneration of the auditors.
Special business
Issue of Ordinary Shares
5.	THAT the Directors be hereby generally and unconditionally authorised and empowered pursuant to and in accordancewith Section 551 of the Companies Act 2006 (the ”Act”) to exercise all the powers of the Company to allot shares and/or
grant rights to subscribe for or to convert any security into shares (“Rights”):
a.	up to an aggregate nominal value of £146,172 (being the nominal value of approximately one third of the issued
share capital of the Company); andb.	up to an aggregate nominal value of £30,000 in connection with options granted in accordance with the Company’s
articles of association prior to the Company’s admission to trading on the AIM Market of the London Stock Exchange,	such authorities to expire on the earlier of the next Annual General Meeting of the Company held after the date on
which this resolution becomes unconditional and the date 15 months after the passing of this resolution, save that theCompany may at any time before such expiry make any offer(s) or enter into any agreement(s) which would or might
require shares to be allotted or Rights to be granted after such expiry and the Directors may allot shares or grant Rights
in pursuance of any such offer(s) or agreement(s) as if the authority conferred hereby had not expired. This resolution
revokes and replaces all unexercised authorities previously granted to the Directors to allot shares or grant Rights but
without prejudice to any allotment of shares or grant of Rights already made, offered or agreed to be made pursuant tosuch authorities.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201268

6.	THAT subject to and conditional upon the passing of resolution number 5 above, the Directors be and are hereby
generally authorised in accordance with Section 570 of the Act to allot equity securities (as defined in Section 560 of
the Act) of the Company for cash as if Section 561(1) of the Act did not apply to any such allotment, provided that thisauthority shall be limited to:a.	the allotment of equity securities in connection with an offer by way of rights in favour of the holders of equity securities
in proportion (as nearly as may be possible) to the respective number of ordinary shares of £0.02 each held by them,but subject to such exclusions or other arrangements as the Directors may deem necessary or expedient to deal withfractional entitlements or legal or practical problems in respect of overseas holders or otherwise;b.	the allotment of equity securities in connection with options granted in accordance with the Company’s articles ofassociation prior to the Company’s admission to trading on the AIM Market of the London Stock Exchange up toan aggregate nominal value of £30,000; andc.	the allotment of equity securities (otherwise than pursuant to sub-paragraphs (a) and (b) above) up to a maximum
aggregate nominal value of £65,777 (being the nominal value of approximately 15%. of the issued share capital of
the Company),	and this authority shall expire on the earlier of the conclusion of the next Annual General Meeting of the Company
held after the date on which this resolution becomes unconditional and the date 15 months after the passing of thisresolution save that the Company may make any offer(s) or enter into any agreement(s) before such expiry which wouldor might require equity securities to be allotted after such expiry and the Directors may allot equity securities pursuant
to any such offer(s) or agreement(s) as if the authority conferred hereby had not expired. This resolution revokes andreplaces all unexercised authorities previously granted to the Directors to allot equity securities but without prejudice toany allotment of equity securities already made, offered or agreed to be made pursuant to such authorities.
By order of the Board
Gordon Campbell 								Company Secretary

Ubisense Group plc
St Andrew’s House
St. Andrew’s Road
Chesterton
Cambridge
CB4 1DL
18th March 2013

Shareholder information

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201269

Notes to the notice of Annual General Meeting

Entitlement to attend and vote
1. P
 ursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only those members registered on the
Company’s register of members at:•

at the time which is 48 hours prior to the Meeting; or,•if this Meeting is adjourned, at the time which is 48 hours prior to the adjourned meeting,shall be entitled to attend and vote at the Meeting.
Appointment of proxies
2.	If you are a member of the Company at the time set out in note 1 above, you are entitled to appoint a proxy to exercise all or any of your rights to attend,
speak and vote at the Meeting and you should have received a proxy form with this notice of meeting. You can only appoint a proxy using the procedures
set out in these notes and the notes to the proxy form.
3.	If you are not a member of the Company but you have been nominated by a member of the Company to enjoy information rights, you do not have a rightto appoint any proxies under the procedures set out in this “Appointment of proxies” section. Please read the section “Nominated persons” below.
4.	A proxy does not need to be a member of the Company but must attend the Meeting to represent you. Details of how to appoint the Chairman of the
Meeting or another person as your proxy using the proxy form are set out in the notes to the proxy form. If you wish your proxy to speak on your behalf at
the Meeting you will need to appoint your own choice of proxy (not the Chairman) and give your instructions directly to them.
5.	You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint morethan one proxy to exercise rights attached to any one share. To appoint more than one proxy, you may photocopy the proxy form. Please indicate theproxy holder’s name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed
the number of shares held by you). Please also indicate if the proxy instruction is one of multiple instructions being given. All forms must be signed andshould be returned together in the same envelope. Failure to specify the number of shares to which each proxy appointment relates or specifying moreshares than the number of shares held by you at the time set out in note 1 above will result in the proxy appointments being invalid.
6.	A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. If no voting
indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks
fit in relation to any other matter which is put before the Meeting.
Appointment of proxies using hard copy form
7. The notes to the proxy form explain how to direct your proxy how to vote on each resolution or withhold their vote.
To appoint a proxy using the proxy form, the form must be:•completed and signed;•		•sent or delivered to The Company Secretary, Ubisense Group plc, St. Andrew’s House, St. Andrew’s Road, Chesterton, Cambridge CB4 1DLor emailed to The Company Secretary at companysecretary@ubisense.net; andreceived by The Company Secretary no later than 48 hours prior to the time set for the start of the Meeting.

	CREST members should use the CREST electronic proxy appointment service and refer to note 8 below in relation to the submission of a proxyappointment via CREST.
	In the case of a member which is a company, the proxy form must be executed under its common seal or signed on its behalf by an officer of thecompany or an attorney for the company.
	Any power of attorney or any other authority under which the proxy form is signed (or a duly certified copy of such power or authority) must be included
with the proxy form.
	In each case the proxy appointment must be received not less than 48 hours before the time for the holding of the Meeting or adjourned meeting together(except in the case of appointments made electronically) with any authority (or notarially certified copy of such authority) under which it is signed.
Appointment of proxies through CREST
8.	As an alternative to completing the hardcopy proxy form, CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic
proxy appointment service may do so for the Meeting and any adjournment(s) of it by using the procedures described in the CREST Manual. CREST
Personal Members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer totheir CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
	In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a “CREST Proxy Instruction”) must be properly
authenticated in accordance with Euroclear UK & Ireland Limited’s (“EUI”) specifications and must contain the information required for such instructions,as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or an amendment to the instruction
given to a previously appointed proxy, must, in order to be valid, be transmitted so as to be received by the Company’s agent (ID: RA 10) by not later
than 48 hours prior to the time appointed for the Meeting or adjourned meeting. For this purpose, the time of receipt will be taken to be the time (asdetermined by the timestamp applied to the message by the CREST Applications Host) from which the Company’s agent is able to retrieve the message
by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should becommunicated to the appointee through other means.
	

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201270	CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not make available special
procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy
Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsoredmember or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall benecessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and,
where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning
practical limitations of the CREST system and timings.
	The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities
Regulations 2001.
Appointment of proxy by joint members
9.	In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most seniorholder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s register of members in
respect of the joint holding (the first-named being the most senior).
Changing proxy instructions
10.	To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note that the cut-off time for receipt ofproxy appointments (see above) also apply in relation to amended instructions; any amended proxy appointment received after the relevant cut-off time
will be disregarded.
		Where you have appointed a proxy using the hard-copy proxy form and would like to change the instructions using another hard-copy proxy form,
please contact The Company Secretary, Ubisense Group plc, St. Andrew’s House, St. Andrew’s Road, Chesterton, Cambridge CB4 1DL.
	If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence.
Termination of proxy appointments
11.	In order to revoke a proxy instruction you will need to inform the Company by sending a signed hard copy notice clearly stating your intention to revoke
your proxy appointment to The Company Secretary, Ubisense Group plc, St. Andrew’s House, St. Andrew’s Road, Chesterton, Cambridge CB4 1DL. In
the case of a member which is a company, the revocation notice must be executed under its common seal or signed on its behalf by an officer of thecompany or an attorney for the company. Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified
copy of such power or authority) must be included with the revocation notice.
	The revocation notice must be received by The Company Secretary not less than 48 hours before the time for holding the Meeting or adjourned meeting.
	If you attempt to revoke your proxy appointment but the revocation is received after the time specified then, subject to the paragraph directly below, yourproxy appointment will remain valid.
	Appointment of a proxy does not preclude you from attending the Meeting and voting in person. If you have appointed a proxy and attend the Meeting inperson, your proxy appointment will automatically be terminated.
Corporate representatives
12.	A corporation which is a member can appoint one or more corporate representatives who may exercise, on its behalf, all its powers as a member provided
that no more than one corporate representative exercises powers over the same share.
Issued shares and total voting rights
13.	As at 5.00 p.m. on date before the date of this notice, the Company’s issued share capital comprised 21,925,786 ordinary shares of £0.02 each. Eachordinary share carries the right to one vote at a general meeting of the Company and, therefore, the total number of voting rights in the Company as at
5.00 p.m. on the date before the date of this notice is 21,925,786.
Nominated persons
14.	If you are a person who has been nominated under section 146 of the Companies Act 2006 to enjoy information rights (“Nominated Person”):
	You may have a right under an agreement between you and the member of the Company who has nominated you to have information rights (“Relevant
Member”) to be appointed or to have someone else appointed as a proxy for the Meeting.
	If you either do not have such a right or if you have such a right but do not wish to exercise it, you may have a right under an agreement between you andthe Relevant Member to give instructions to the Relevant Member as to the exercise of voting rights.
	Your main point of contact in terms of your investment in the Company remains the Relevant Member (or, perhaps, your custodian or broker) and you
should continue to contact them (and not the Company) regarding any changes or queries relating to your personal details and your interest in the
Company (including any administrative matters). The only exception to this is where the Company expressly requests a response from you.
Communication
15.	E xcept as provided above, members who have general queries about the Meeting should use the following means of communication:• 	calling The Company Secretary on +44 (0) 1223 535165;•	or calling our shareholder helpline on 0870 707 1131 or +44 (0) 870 707 1131 from outside of the UK. Lines are open Monday to Friday,
9.00 a.m. to 5.00 p.m.; or•emailing The Company Secretary at companysecretary@ubisense.net•

in this notice of Annual General Meeting; or•any related documents (including the proxy form),

Shareholder information

You may not use any electronic address provided either:to communicate with the Company for any purposes other than those expressly stated.

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201271

Advisers

Registered Office
Ubisense Group plc
St. Andrew’s House
St. Andrew’s Road
Chesterton
Cambridge CB4 1DL
Tel: +44 (0)1223 535 170
Fax: +44 (0)1223 535 167
Website: www.ubisense.net
Public Relations Advisors
FTI Consulting
Holborn Gate
26 Southampton Buildings
London WC2A 1PB
Nominated Advisors and Brokers
Canaccord Genuity Limited
88 Wood Street
London EC2V 7QR
Lawyers to the Company
Mills & Reeve LLP
Cambridge Office:Francis House
112 Hills Road
Cambridge CB2 1PH
AuditorGrant Thornton LLP
Cambridge Office:
101 Cambridge Science Park
Milton Road
Cambridge CB4 0FY

Ubisense Group plc
Annual Report & Accounts for theyear ended 31st December 201272

The mission is clear:
to be the leading location solutions
provider delivering real-time
visibility and control for global
industrial companies.

VisionIn 2017, Ubisense will be the market leader in locationbased solutions by building the most effective team andtechnology in the world to provide outstanding location
products and solutions.

Real-Time Location Systems

Geospatial Systems

Ubisense location solutions offer unparalleledscalability to cover complex global operations
and a level of precision that can detect thesubtlest nuances in industrial environments
where objects are constantly on the move.
With a proven reliability, our solutions are usedin critical commercial operations and cuttingedge research programs around the globe.

The world’s largest and most successful
utility and telecommunications companies
partner with Ubisense for Geospatial Systems
that drive efficient and effective operations.
Ubisense customers lead their industries insafety, reliability and customer satisfaction.
Our solutions helped get them where they
are and enable them to maintain the highest
operational standards, every day.

More on Real-Time Location Systems p06

More on Geospatial Systems p10

www.ubisense.net

Shareholder information

Visit us online
Find out more about our divisions,customers and partners.

Ubisense Group plc Annual Report 2012

St. Andrew’s House
St. Andrew’s Road
Chesterton
Cambridge CB4 1DL
Tel: +44 (0)1223 535 170
Fax: +44 (0)1223 535 167
www.ubisense.net

Location
Innovation
Transformation
Annual Report 2012