Annual Report and Accounts 2011

Transforming location awarenessinto business intelligence

The location solutions company

Transforming location
awareness into businessintelligence.
Ubisense was founded on the notion that computers
monitoring or controlling anything in the real world need
to be able to sense the environment they operate in.
We are now the market leader of location solutions, delivering
mission‑critical enterprise asset tracking and geospatial systems.
We deliver precise, Real-time Location Solutions to locate assets,
vehicles, people or anything else you can imagine, to track precisely
both indoors and outdoors, and manage workforce and assets thatare moving or fixed.
Our systems provide the very best in...
Location awarenessReal-time
Location
Solutions
Turn to page 02-03

Location consulting
and software solutions
based in two key areas

Geospatial
Solutions
Turn to page 04-05

which translate technical information into
High-worth, actionable business intelligenceOverview

Our business

Where we operate

Our solutions solve real world
problems for industrial customers
around the world.

Vancouver

DenverUbisense is headquartered in Cambridge, UK and has officesin the USA, Canada, France, Germany, Singapore and Korea.

Our markets
Ubisense location solutions are
deployed in a wide range of markets
but the benefits of our technology
are applicable to any industry,
bringing bottom-line benefits toorganisations both large and small.

Automotive manufacturing

Aerospace• Major European and North American OEMs

• Multi-site, multi-country installations• Installations in North America, Europe
and Asia• North American and European installations• Automotive manufacturing• Aerospace manufacturing• General manufacturing• Transportation• Training applications• Utilities and telecoms

What we offer our customers

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What our location
solutions offer

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Ubisense’s Location Driven Manufacturing Solutions
improve productivity by providing real-time visibility
and control for a smarter production flow. By tracking
the location of critical assets, tools and components,
Ubisense Manufacturing Solutions provide unequalled
information about current and past production activities.
This data, delivered by best-in-class location sensors,
supports lean manufacturing goals by identifying
new efficiencies and opportunities for continuous
improvement, and making it easier to monitor andenforce stringent quality control.

P

Ubisense technology is powering the creation of a
new generation of location solutions.

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Dusseldorf

Cambridge(head office)Holderness

50

New customers

172

Employees worldwide

Paris Darmstadt
Seoul

2

Singapore

Acquisitions
throughout the year
Transportation

Utilities and Telecoms• North American and European installations• L eading utility and telecoms providers
in North America and Europe• Progress in large and small operators

Process optimisation

Operational efficiency

Improved quality
and flexibility

Ubisense Manufacturing Solutions
support continuous improvement
initiatives by measuring andanalysing process flow to identify
areas for potential improvement.

Location awareness means
knowing where everything is.
Having this information alone canreap a rapid return on investment.

Ubisense Manufacturing Solutions
enable WIP and tool identificationand tracking with six-sigma
reliability, far surpassing
traditional techniques.

When coupled with a baseline
production plan, automatic processmonitoring also provides real-timealerts whenever progress deviates
off schedule. This enables rapid
intervention long before impacting
delivery schedules.

Keeping track of critical asset helps
pinpoint misplaced items, streamline
audits, optimise bar-code scanningdelivery and maximise asset
utilisation. And, by automatingprocesses, Ubisense Manufacturing
Solutions can eliminate timeconsuming manual tasks like parts
scanning and quality inspection
stamping, ensuring production
operates at optimal efficiency.

By wirelessly associating tools withtasks, Ubisense offers a virtual tether,recording tool operations for quality
records and disabling tools fromperforming unauthorised tasks.
The elimination of the physicaltether allows tools to roam freely
and safely, and enables rapid
line reconfiguration.

Our year

Overview

Highlights

Business review
Corporate governance
Financial statements

Inside this report

Financial highlights
Revenue increased 34.4% to £23.8 million (2010: £17.7 million)

Overview
1 Highlights
2 At a glance: Real-time Location Solutions
4 At a glance: Geospatial
6	Chairman’s statement

Gross margin up from 33.5% to 35.6%
Adjusted EBITDA* increased 39.1% to £1.4 million (2010: £1.0 million)
Adjusted operating profit, excluding AIM admission and acquisition costs,
increased 6.0% to £0.7 million (2010: £0.6 million); reported operating profitof £0.3 million (2010: £0.6 million)

Business review

Adjusted diluted EPS** 5.5p (2010: 5.7p). EPS 0.2p (2010:3.3p)

Corporate governance

8 Chief executive’s review
10 Financial review

Net cash of £6.0 million (2010: £3.5 million)
Other highlights
Substantially oversubscribed initial public offering on AIM, raising £5.0 million
before expenses for the Group and £3.7 million for selling shareholders
Substantial new contracts with automotive, manufacturing and utility customers
Global license agreements with BMW and EADS, deepening existing long term
customer relationships
Increased R&D spend, driving product innovation
Two acquisitions completed, integrated and performing in line with expectations*	Measured as operating profit excluding depreciation, amortisation, share-based payments charge, AIM listing expenses
and acquisition costs**	Earnings measured as profit for the period excluding amortisation, share-based payments charge, AIM listing expenses
and acquisition costs£23.8mRevenue

Adjusted EBITDA*£23.8m12	Board of Directors
14 Directors’ report18	Corporate governance report21	Directors’ responsibilities statement

Financial statements
22 	Independent auditor’s report(on the consolidated financial statements)
23 	Consolidated income statement
23 	Consolidated statementof comprehensive income24 	Consolidated statement of changes in equity
25 Consolidated statement of financial position
26 	Consolidated statement of cash flows
27	Notes to the consolidated financial statements
52 	Independent auditor’s report(on the parent company financial statements)
53	Parent company balance sheet
54	Notes to the Company financial statements
57	Notice of annual general meeting
IBC	Advisers

£1.4m
£1.4m

£1.4m
£1.0m

£17.7m
£15.0m£9.7m£(0.3)m

08

09

10

11

£6.0m

Net cash

08

09

10

11

£12.0mOrder book

Visit us online
Find out more about our divisions,customers and partners.
www.ubisense.net£12.0m

£6.0m
£9.9m

£10.8m

£3.5m
£6.0m

£(0.8)m£(1.2)m

08

09

10

11

08

09

10

11

Ubisense Group plc
Annual Report and Accounts 20111

At a glance

Real-time Location Solutions

Providing visibility and control over assets
and processes in multifaceted environments
where assets are constantly on the move.
Ubisense location solutions offer unparalleled scalability to cover complex
global operations and a level of precision that can detect the subtlest nuances
in industrial environments where assets are constantly on the move. With aproven track record of reliability, our solutions are used in critical industrial
operations and cutting edge research programs around the globe.

Our solutions

Asset Manager

Visible Industrial Process(VIP)

Assembly Control System(ACS)

The Ubisense Visible Industrial
Process (VIP) software application isa web-based solution which uses the
Ubisense Real-time Location System(RTLS) to track components andassemblies in complex distributed
manufacturing environments. It provides
real-time visibility into the current
manufacturing situation.

Ubisense Assembly Control System(ACS) is a solution designed to enable
the automatic identification of productsin the assembly process, and assign
an automatic process to each via
computer-assisted process tools.
The Ubisense Assembly Control
System (ACS) is delivering reduced
cycle times, increased throughput andimproved quality on assembly lines.

Location Driven Training(LDT)/e-Kaizen

Transit Yard Manager(TYM)

Sensors and Tags

Ubisense LDT/e-Kaizen bring newlevels of automation to After Action
Review (AAR) for better and morecost effective training and e-Kaizen
for optimising workflow in production
workstations providing a real-timeview inside and outside movement ofparticipants. Ubisense LDT/e-Kaizen
provides automatic detection of relevant
events and instant video indexing for
retrieval by participant location or event.

By combining industry-leading
precise location technology witha real-time, web-based software
solution, organizations can achieve
reliable, system-wide vehicle location
down to the individual parking space
for all of their vehicles, both indoors
and outdoors.

Ubisense Asset Manager brings newlevels of precision to the tracking andmonitoring of tagged assets acrossdefined spaces.
Asset Manager is a web-based
application that can locate and monitor
tagged assets and report the locationand history of asset movement.

2

Ubisense Group plc
Annual Report and Accounts 2011

Ubisense installs a sensor network
throughout the area where assets will
be monitored. All sensors are standard
IP-based devices connected using
standard commercially-available
network equipment which are monitored
and tuned in real-time. Ubisense location
tags are then attached to assets andare registered with the system.

Overview
Business review
Corporate governance
Financial statements

Revenue contribution

£8.7m
+51%

36%

Case study

MINI
Multiple MINI models are produced on the same production
line necessitating loading specific tool programs into eachof the power tools based on the model variant to be worked
on at a particular station. Previously the identification of thevehicle occurred using a barcode scanner resulting in unproductive
work (around 6 seconds per tool operation at 165 tool stations
on 900 cars per day).

21 partners

Installed area: Approximately 1 mile assembly line
Sensors: 360
Tools tagged: 100
Reliability: 99.9%

Over 500 customers

The Ubisense solution:

We are proud to be working with some of theworld’s most renowned blue-chip companies.

Assembly Control System

Over 350

The Ubisense ACS solution tracks both vehicles and power tools detecting
when a tool is brought close to the vehicle. The required tool program is
obtained from the Manufacturing Engineering System using the Vehicle
Identification Number and sent directly to the Tool Controller to programand enable the tool on the production line.

Quick facts

21 partners across a range of markets
including Atlas Copco, IBS andGeneral Dynamics.

installations

Continued large and small-scale roll outsof installations throughout the year.

Customers we work with
• EADS Airbus

Result:Cost and time reduction on the assembly line with significant improvement
in quality by excluding human error and the need for re-work.

• BMW• Aston Martin• Cummins• Honda• Chicago Transit Authority

Progress
The RTLS division has continued
to grow winning business fromboth new and existing accounts• U bisense signed a global licenceagreement with BMW to provide its
RTLS solution across the BMW Group• S
 igned a master contract with EADS
and began a five year managed
services agreement with Airbus• U bisense signed a deal to install theGroup’s Transit Yard Management (TYM)
system at seven depots

Visit us online
You can find more information on our
Real-time Location Solutions divisionwww.ubisense.net/rtls-solutions

Ubisense Group plc
Annual Report and Accounts 20113

At a glance

Geospatial

Managing detailed mapping of network assets,
network management, planning and designfor large utilities and telecoms companies.
We develop close working relationships with our customers as we strive tounderstand their issues and their work flows, where geospatial technology
can make a difference in their operations.

Our solutions

myWorld

Fiber Planning

myWorld is a single solution fordelivering spatial information todesktop and mobile users throughout
your enterprise. Smallworld data, workorders, customer information – anythingfrom your enterprise systems – ispresented in a simple Google Maps
style view that is easy for everyone
to understand and use.

The economics of installing the fiber
network is highly dependent upon theextent to which existing infrastructure
can be used, for example by blowing thefiber through empty ducts. Conventional
planning methods have proven to be
extremely laborious in this context.
Ubisense Fiber Planning solutions
automatically generate a cost-optimised
detailed network configuration
suitable for use as input to the detailed
implementation planning task.

VeroTrack

Conflation and
Network Adjustment

VeroTrack takes the paperwork outof field work by tracking and mapping
gas leaks using digital mapping GIS datain the field. By using state-of-the-art
GPS technology, it simplifies gas leaksurvey documentation and works withmajor gas detectors to automatically
capture gas concentrations
during surveys.

4

Ubisense Group plc
Annual Report and Accounts 2011

Accurate spatial digital mapping
data is critical for the new generationsof enterprise geospatial applications.
Ubisense provides a complete
solution to improve the accuracyof facility networks, significantly
reducing the costs associatedwith landbase replacementand data migration.

Integrated Telecom
Network Solutions
Ubisense provides a suite of COTS
solutions for key Telecom businessprocesses that include:• Network Assignment• Capacity Management• Integrated Order
Handling Fulfilment.

GE Smallworld Office Suites
Ubisense maintains the largest
network of GE Smallworld expertisein North America and Europe.
Our wealth of experience in system
integration allows us to quickly deliver
office-based solutions to meet ourcustomer’s needs. Ubisense provides
consulting services and solutions
designed to include fully supported
data models and applications.

Overview
Business review
Corporate governance
Financial statements

Revenue contribution£15.1m+26.5% 64%

Case study

Duke Energy
The merger of Duke Energy and the Cinergy Corporation
left Duke with many overlapping information technology
organisations and systems. Duke commissioned multiple
projects to consolidate the various systems into a single
corporate standard based on the GE Smallworld Office
Suite platform.

Quick facts

7 partners

We distribute and support software products
from several providers including GE Energy,
GTI and Globema.

90 employees

Recruited and acquired 41 new staff.

Ubisense solution:

GE Smallworld Electric
Office Implementation
Ubisense provided project management, development support, and day to day
operational support for Duke’s Office Suite implementation. Currently they
have eight Ubisense consultants assigned to this project.

Result:With the support of Ubisense, Duke has successfully rolled out the GE Office
Suite products to several regions, with rollouts continuing to other regions.

Customers we work with• Deutsche Telekom• Duke Energy• Atmos Energy• Exelon• Cable and Wireless• Swisscom

Progress
The Geospatial division delivered
significant growth, led by the saleof a newly developed productFiber Planning• U bisense completed two acquisitionsin the second half of 2011. Both havebeen fully integrated and are performingin line with expectations• S ecured a major new win to implement
GE’s geospatial product suite for a large
US electric and gas utility.

Visit us online
You can find more information on our
Geospatial divisionwww.ubisense.net/geospatial

Ubisense Group plc
Annual Report and Accounts 20115

Overview

Chairman’s statement

The opportunity for Ubisense continues to be huge
and the Group continues to grow in an agile andprudent way.

Review in brief• A remarkable year of progress for Ubisensewith solid forward momentum• Good margin progress and prudent
cost management• Both acquisitions performing in line with
Board expectations• Grow the overall business by extending
footprint in priority G7 markets• Board looks forward to the year ahead
with confidence

Andy Hopper, Chairman

Introduction
It has been a year of remarkable progress for Ubisense. Since the
IPO in June 2011, the Group has shown solid forward momentum todeliver a strong financial performance at our maiden full year results
as a listed company.
Overview
The Board is very pleased with the performance for the financial year
ended December 31 2011, where Group revenue grew by 34.4% to£23.8 million and we achieved an operating profit, excluding AIM
admission and acquisition costs, of £0.7 million. Gross Profit
increased from £5.9 million to £8.5 million, representing an
improvement in Gross Margin from 33.5% to 35.6%.
We delivered adjusted EBITDA of £1.4 million, while adjusted diluted
EPS for FY 2011 is 5.5p from 5.7p in FY 2010. The Group has also
ended the year with a healthy net cash figure of £6.0 million.
We saw a strong performance from both of our operating divisions.
RTLS and Geospatial achieved considerable growth and displayed
momentum which we expect to continue into 2012.
• Our RTLS division has seen excellent progress with a number ofblue chip customers in automobile and aerospace manufacturing.
Two of our biggest customers, EADS and BMW, grew from single
RTLS deployments to multiple installations across their global
operations. We have continued to leverage partners’ brands andcustomers to accelerate growth. Our most notable partnershiphere is with Atlas Copco, a leading industrial tool manufacturer.
• In our Geospatial division, we delivered both organic and inorganic
growth and the merits of our strategy can be seen in the strategicallyimportant acquisitions we made in 2011.
In September 2011, we acquired Integrated Mapping Services, Inc.
(“InMaps”), a US-based company which strengthened our offeringin the electricity and gas industries.
In October 2011, Ubisense acquired Realworld OO Systems Limited("Realworld"), a UK-based company with considerable expertise inproviding location solutions to telecoms companies throughout
the world. This acquisition saw our customer base in the UK expand
to include Cable and Wireless Communications and Global Crossing.
Both of these acquisitions are performing in line with Board expectations.

6

Ubisense Group plc
Annual Report and Accounts 2011

Overview
Business review
Corporate governance
Financial statements

Strategy
The opportunity for Ubisense continues to be huge and the Group
continues to grow in an agile and prudent way. The Board’s focus in
the coming year is on growing the business by extending the modelin its priority G7 markets, particularly in the key Asian markets of Korea
and Japan, and to capture new customers through new strategic
partnerships like the one in place with Atlas Copco. Our aim is tocreate long lasting customer relationships with major global
businesses in high value markets.
Current trading and outlook
In the period since the year end, current trading has been in line with
the Board’s expectations and is ahead of the prior year.

It was fantastic to see
the continued long-term
support of our investors
rewarded with an IPO
which in turn has
positioned Ubisensestrongly for its next
growth phase.

New network build outs in the telecoms industry and continued
regulation in the energy sector set the scene for another positive
year of demand in our Geospatial division. In RTLS, the recovery in
the automotive sector continues and the dynamics for the aerospace
and transportation industries also look positive. Asia is also likely to
be a driver of growth for Ubisense in the year ahead following our
first installations in the Korean automotive market.
We begin 2012 with a record order book and the Board looks forward
to the year ahead with confidence.
Conclusion
Finally, it was fantastic to see the continued long-term support of ourinvestors rewarded with an IPO which in turn has positioned
Ubisense strongly for its next growth phase.
I would like to thank all of our employees, strategic partners andcustomers for their contributions and support in making 2011 sucha successful year for our shareholders.
Andy Hopper
Chairman
19 March 2012

Ubisense Group plc
Annual Report and Accounts 20117

Business review

Chief Executive’s review

We have delivered a robust set of results, ourfirst as a listed company, with a strong increase
in revenues, a substantial order book and growing
opportunity pipeline.
Review in brief• A record year for Ubisense continuing
on our proven growth strategy• Two acquisitions strengthening ourpresence, skill base, software productportfolios and customer list
• Continued investment in R&D led
to the release of new applications
in both divisions• Atlas Copco partnership developing welland presenting multiple site opportunities• Continue to look for acquisition
opportunities to enhance our productportfolios and geographical footprint

Richard Green, Chief Executive Officer

Overview
Ubisense performed very well over the year delivering record growth inrevenue and adjusted EBITDA. This reflected the growing awarenessand deployment of our market leading location solutions to top tierorganisations around the world and the continuing execution of ourproven growth strategy.
This growth was delivered in both the Real-time location andGeospatial divisions. This reflects improving market conditions in the
manufacturing sector and our success in building on our long term
customer relationships in both divisions. Following flotation in June
2011, we made two further acquisitions in the UK and North America
strengthening our presence, skill base, software product portfolio
and customer list in both territories.
Customer momentum
In September we extended our reach into China when we signed a
global license agreement with BMW. Our system is now operationalin five out of their eight plants worldwide. We estimate that more than
one million cars have been tagged and processed by our systemsince installation, making it the most widely deployed system of its
kind in the world.
EADS continued the trend and placed an order for a global license
agreement in December. They are deploying the system across eachmajor aircraft program at Airbus, including the A320, A330, A340,
A350, A380 and A400M, along with additional deployments
at Eurocopter.
Our continued success with new wins and contract extensions forour manufacturing accounts led to the establishment of a subsidiary
in France during the year.
Researchers continue to deploy our RTLS technology across multiple
applications. The most significant project in 2011 was University ofSouth Florida (“USF”) working with the US Department of VeteranAffairs (“VA”) on their Smart home project which was very high profilein the US.
In our Geospatial division, Deutsche Telekom continued to develop
as a strategic customer with the roll out of a Fibre Planning System
across 2000 users. We also took the lead in geospatial projects
in North America, with new wins at Atmos Energy and Puget
Sound Energy.

8

Ubisense Group plc
Annual Report and Accounts 2011

Overview
Business review
Corporate governance
Financial statements

Acquisitions
Significant progress was made in integrating our two acquisitions,
InMaps in North America and Realworld in the UK, into the business.
Both companies brought with them intellectual property which has
the potential to be introduced into the rest of our customer basearound the world.
We continue to look for acquisition opportunities to enhance our
product portfolio and geographical footprint.
Strategic Partnerships
Atlas Copco continued to introduce us to their customer baseworld-wide which resulted directly or indirectly in system sales toAudi, Jaguar Land Rover, GM, Hyundai and Paccar, all of which
represent multiple site opportunities in the future.
Last month, we added to our roster of strategic partnerships when wereached an agreement with ATS Global ("ATS"), a global company
serving the Manufacturing Execution Systems market. The alliancewill allow our joint customers to benefit from even greater levels of
flexibility and traceability, supporting manufacturing efficiency
goals such as automation, process control and error proofing.
Products
Continued investment in research and development led to therelease of new applications in both divisions. Transit Yard Manager(“TYM”), Assembly Control System (“ACS”), Fibre Planning System(“FPS”) and myWorld were all introduced during the year at early
customer sites for evaluation. Feedback so far has been very positive
and we look forward to an order book developing for these products.
Richard Green
Chief Executive Officer
19 March 2012

Outlook

Ubisense enters 2012 withstrong momentum in thebusiness and a healthyorder book.
Our priorities for the year

to grow the
1. Continue
overall business
Build on our existing customer relationships and secure
new markets.

our RTLS
2. Expanding
and Geospatial offerings
Continue our investment in market specificsoftware applications.

3. Develop our strategic partnerships

Continue the strategy of partnering with best of breed
and world leaders in their own right, such as Atlas Copco.

Ubisense Group plc
Annual Report and Accounts 20119

Business review

Financial review

The Group has a strong balance sheet with net assetsof £19.2 million, £6 million net cash and no debt.

Review in brief• R evenue growth of 34.4%, including contributions
from InMaps and Realworld acquisitions• G ross margins improved due to increased
contribution of RTLS revenues• A djusted EBITDA improved by 39%• O perating profit impacted by R&D
expenses and one off costs associatedwith AIM IPO and acquisitions• F unds from IPO used to fund debt
repayment, acquisitions, stock andworking capital

Gordon Campbell, Chief Financial Officer

Revenue
In the year ended 31 December 2011, the Group generated revenue of£23.8 million (2010: £17.7 million). The 2011 revenue figures include
the effect of the acquisitions of InMaps and Realworld from the
beginning of October.
Gross Margin
Gross Profit increased to £8.5 million (2010: £5.9 million), representing
an improvement in Gross Margin to 35.6% (2010: 33.5%). Operating
profit in 2011 was £0.3 million (2010: £0.6 million) as the Group
continues to invest in research and development activities. In 2011
the Group commenced research and development activities in its
Geospatial business and this investment was further enhanced by
the two acquisitions.
ProfitAdjusted EBITDA is calculated as operating profit adding backdepreciation and amortisation, share-based payment charges,
acquisition costs and AIM listing expenses. Adjusted EBITDA in 2011was £1.4 million (2010: £1.0 million).
Profit before tax was £0.1 million (2010: £0.4 million) and profit after
tax was £0.03 million (2010: £0.4 million). The Group has utilised tax
losses carried forward in several of its subsidiaries and has received
an R&D Tax Credit in the UK, the impact of which means that current
tax liabilities on profits are minimal. Deferred tax movements, relating
primarily to intangible assets, result in a net tax charge to the income
statement of £0.1m. The above profit figures for 2011 include
non-recurring items relating to the Initial Public Offering (“IPO”) in
June and the acquisition costs of Realworld and InMaps. Excludingthese charges, the adjusted profit after tax was £0.4 million (2010:£0.4 million).
Earnings per share (EPS)
Based on the average number of shares in issue during the year,
diluted earnings per share were 0.2 pence (2010: 3.2 pence) andadjusted diluted earnings per share were 5.5 pence (2010: 5.7 pence).

10

Ubisense Group plc
Annual Report and Accounts 2011

Overview
Business review
Corporate governance
Financial statements

Segmental performance
Revenue from the RTLS Division was £8.7 million, compared with
£5.7 million in 2010. This 51% growth in revenues was driven principallyby sales to new customers as well as increased penetration into existingcustomer accounts. The top 10 customers accounted for 66% of therevenue in 2011 (2010: 45%). Revenue from the Geospatial Division
was £15.1 million including acquisitions, compared with £12.0 million
in 2010. This 26.5% growth in revenues was driven by a number offactors including (i) two significant new customer wins in the USA(Puget Sound Energy and Atmos Energy); (ii) increased products
sales; (iii) the impacts of the two acquisitions and (iv) increased
engagement with our existing customer base. The top 10 customers
accounted for 89% of the revenue in 2011 (2010: 81%).

The cash position was
strengthened by the IPO,
such that net cash at
31 December 2011was £6.0 million(2010: £3.5 million).

Balance sheet and cash flow
The Group has a strong balance sheet with Shareholder Funds at
31 December 2011 of £19.2 million, equivalent to 89 pence per share(2010: Shareholder Funds of £11.5 million equivalent to 76 pence
per share). The cash position was strengthened by the IPO, suchthat net cash at 31 December 2011 was £6.0 million (2010: £3.5 million).
Funds raised from the IPO have been used to (i) repay the bankloans, (ii) increase the inventory levels of the Groups RTLS products,(iii) fund the acquisitions and (iv) pay for the costs of the IPO.
Operating cash flows before working capital were £1.1 million (2010:£1.0 million). After working capital, cash used by operations was£2.3 million (2010: £0.7 million generated), reflecting increases ininventory levels and trade receivables. Consistent with the Group’s
defined strategy of investing available funds in organic and inorganic
growth opportunities, the Board is not proposing to pay a dividendfor 2011 (2010: nil).
Gordon Campbell
Chief Financial Officer
19 March 2012

Ubisense Group plc
Annual Report and Accounts 201111

Corporate governance

Board of Directors

Professor Andrew Hopper CBE
Non-Executive Chairman
Andy is one of the foremost leaders in the technology industry having co-founded twelve successfulcompanies, 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 the Professor of Computer Technology and iscurrently Head of the University of Cambridge Computer Laboratory and a member of the University’s
Council. Andy has worked on location systems for over 20 years. He was elected as a Fellow of theRoyal Society in 2006 and the Royal Academy of Engineering in 1996. Andy was made a CBE in 2007
for services to the computer industry.

Richard Green
Chief Executive Officer
Richard initially trained as a mechanical engineer and has over twenty-five years of experience in thesoftware industry. Having established Smallworld as one of the leading geographic information systemcompanies serving utility and telecoms companies in Europe and the US, the company subsequently
listed on NASDAQ in 1996 and was acquired by GE in 2000 for $214 million. Richard was Ernst & Young
UK’s Science and Technology Entrepreneur of the Year in 2010. Richard is a Fellow of the Institute of
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 theRoyal Society of Arts.

Gordon Campbell
Chief Financial Officer
Gordon is a Fellow of the Institute of Chartered Accountants in England & Wales. After qualifying with
Deloitte in 1995 he moved 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 which merged into Ubisense in 2005 and he became
CFO in 2009 and joined the board in 2010. He has an M.A. in Engineering from the University of Cambridge.

Peter Harverson
Non-Executive Director
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 the development of the company’s European Corporate
Accounts programme. More latterly he became Director of Services Sales – EMEA with a charter todevelop new areas of business, including professional services. Peter retired from Sun Microsystems
in December 2005. Currently, Peter is a non-executive director of each of Brady plc and CRFS Limited,
and a non-executive director and chairman of each of eoSemi Limited and Aspex Semiconductors
Limited. Peter is also an adviser to Pulsic Limited and Cambridge IP Limited.

12

Ubisense Group plc
Annual Report and Accounts 2011

Overview
Business review
Corporate governance
Financial statements

J Keith Lomas
Non-Executive Director
Keith has more than eighteen years senior management experience in both small and medium sized
entrepreneurial and extensive multinational companies. Keith was appointed Managing Director of CLPL
in 1996 and, after leading the successful acquisition of UltraVision International in 2003, Keith wasappointed as President and CEO of the UltraVision CLPL group. The combined group is one of thelargest independent manufacturers and suppliers of contact lenses in Europe. Prior to his involvementin the contact lens world, Keith was an investment banker at S.G. Warburg, Kleinwort Benson andDaiwa Europe. Keith is an active investor in other technology start-up companies. Keith accepted
the Queen’s Award for Enterprise: Innovation 2006 and 2010 on behalf of UltraVision CLPL.

Dr Richard Newell
Non-Executive Director
Dick has spent over 30 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 in 1988. Dick was Chairman of both CIS and Smallworld. He was the original
project manager of PDMS, a core product of AVEVA Group plc and is also a Non-Executive Director of
UltraVision CLPL.

Dr Robert Sansom
Non-Executive Director
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 and Netronome Systems, Inc. He holds a Ph.D. in Computer Sciencefrom Carnegie Mellon University and an M.A. in Computer Science from the University of Cambridge.

Paul Taylor
Non-Executive Director
Paul Taylor is a Fellow of the Association of Chartered Certified Accountants. Paul joined AVEVA GroupPlc in 1989 and was heavily involved in the flotation process and was responsible for UK accounting andfor the development of AVEVA’s overseas subsidiaries including adherence to group standards. Between
1998 and 2001, Paul was also UK Director of Human Resources and was appointed to the position of
Finance Director and Company Secretary of AVEVA Group plc on 1 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 Non-Executive Director of Anite plc,
Escher Group Holdings plc and, from 1 April 2012, Digital Barriers plc.

Ubisense Group plc
Annual Report and Accounts 201113

Corporate governanceDirectors’ report

The Directors present their annual report on the affairs of the Group together with the audited financial statements for the year to
31 December 2011.
Change of Company nameDuring the year, the Company changed its name from Ubisense Trading Limited to Ubisense Group plc in preparation for the initial public
offering on AIM.
Company’s listing
The Company listed on the Alternative Investment Market (‘AIM’) of the London Stock Exchange on 22 June 2011. Information required
by AIM Rule 26 has been provided on the Group’s website, www.ubisense.net.
Principal activities and future developments
Ubisense is a world leader in providing end to end (hardware, software and services) Real-time Location Solutions to companies 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 uses Ubisense’s proprietary technology to target high value manufacturing businesses which are used to track assets,such as tools, people and vehicles, in factories and other indoor environments with an 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 theability 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 behalfof 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 Officer’s Review and Financial Review on pages 6 to 11.
Review of business
Revenue for the Group was £23.8m (2010: £17.7m). The Group profit after tax was £0.03m (2010: £0.4m). 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 Officer’s Review and Financial Review on pages
6 to 11.
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 £1.4 million (2010: £1.0 million). The Group also monitors the order pipeline and cash balances. At the close of the year the outstandingorders totalled 50% of annual sales (2010: 41%). The closing net cash balance for the Group was £6.0 million (2010: £3.5 million). Having regularly
reviewed the KPIs in respect of changes within periods and changes between reporting periods the Directors believe that the Group has madegood progress against the KPIs, especially the order pipeline, compared to budget.
Principal risks and uncertainties
The Group faces competitive and strategic risks that are inherent in a rapidly growing emerging market. The Board of the Company 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 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 that technologicaldevelopment 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. There is 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 besuperseded by new technologies or changes in customer requirements. The technology used in the Group’s products is still evolving andis 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.

14

Ubisense Group plc
Annual Report and Accounts 2011

Overview
Business review
Corporate governance
Financial statements

Principal risks and uncertainties continued
Reliance on third parties, including manufacturers
The Group relies on third party equipment manufacturers in the completion of its products, and therefore does not always 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 a manufacturer is unable to deliver the products for any reason, the Group may
be required to purchase such equipment or materials from another source at a higher price. The resulting additional costs may be substantial
and the Group may be in breach of its contracts with customers, which may result in a financial loss on a particular contract or a loss ofbusiness. 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 annuallyby 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 growth and development. In thefinancial year to 31 December 2011 the Group’s ten largest customers accounted for 68% of the Group’s revenue (2010: 65%). The loss ofa 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 Group grows, it is importantto recruit and retain staff.
In order to mitigate this risk, the Group has in place appropriate incentivisation structures to attract and retain the calibre of employees
necessary to ensure the efficient management and development of the Group.
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 anticipatedincrease 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.
In order to mitigate this risk, the Group undertakes extensive due diligence on acquisition targets and uses dedicated project teams
to integrate acquisitions into the Group.
Dividends
The Directors do not recommend payment of a dividend for the year (2010: £nil).
Capital structure
Details of the shares issued during the year are detailed in Note 21 to the financial statements. The Company has one class of ordinary share
which carries no right to fixed income. Each share carries the right to one vote at general meetings of the Company.
Substantial shareholdings
On 31 January 2012, the Company had been notified of the following significant interests in its ordinary share capital:

Robert Sansom
Fidelity Investments Limited
Richard GreenDavid Theriault
Amati Global Investors Limited
Newton Investment Management Limited
Arthur Chance

Total holding
Number% of issued
share capital

2,493,676
1,613,322
1,543,011
1,002,000
750,691
693,144654,695

11.51%
7.45%
7.12%
4.61%
3.47%
3.2%
3.02%

Ubisense Group plc
Annual Report and Accounts 201115

Corporate governanceDirectors’ report continued

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 (Appointed 28 February 2011)
Directors’ interests – shares
Directors’ interests in the ordinary shares of Ubisense Group plc, at 31 December 2011 and 31 December 2010 were as follows:		
2011
Number

2010
NumberGordon Campbell
Richard GreenPeter Harverson
Andrew Hopper
J Keith Lomas
Richard Newell
Robert Sansom

87,987
1,543,011
65,161225,000
47,712643,354
2,493,676

53,817
1,323,068
54,051225,000
8,824
587,000
1,604,788

Total

5,105,901

3,857,348

There has been no change in the interests set out above between 31 December 2011 and 19 March 2012.
Directors’ remuneration, share options and loans
Details of Directors’ remuneration, share options and loans are provided in note 7 of the financial statements.
Directors’ indemnity arrangements
The Group has made qualifying third party indemnity provisions for the benefit of its Directors which were made during 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 respect of itself and its Directors.
Research and development (R&D)
The Group continues to invest in R&D, spending £2.2 million in its R&D programmes in the year (2010: £1.3 million) of which £1.1 million(2010: £0.4 million) was capitalised. The Group undertakes R&D in both divisions and this is discussed in the Chief Executive’s review
on page 8.
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 theirrepresentatives, 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.

16

Ubisense Group plc
Annual Report and Accounts 2011

Overview
Business review
Corporate governance
Financial statements

Employment policies
The Group is committed to following the applicable employment laws in each territory in which it operates.
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 legislative requirements, 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.
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 minimize its impact on the environment for the benefit of its staff and the public at large. The Groupis committed to complying with environmental regulations in particular WEEE and encourages and supports 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 each supplier 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 thoseterms and conditions provided there has been compliance with all trading terms. At 31 December 2011 the Group had an average of 63 days(2010: 45 days) creditors outstanding in trade payables. The Company has no outstanding trade payables at 31 December 2011 (2010: nil).
Donations and community support
The Group made charitable donations during the year of £nil (2010: £nil). There were no donations to political parties. Members of theGroup 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.
AuditorA resolution to re-appoint Grant Thornton UK LLP as the Group’s auditors 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.
Corporate Governance
The Company’s statement on corporate governance can be found in the corporate governance report on pages 18 to 20 of these 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.
Approved by the Board of Directors
And signed on behalf of the Board
G M Campbell
Company Secretary
19 March 2012
Ubisense Group plc
Registered number: 05589712

Ubisense Group plc
Annual Report and Accounts 201117

Corporate governanceCorporate governance report

Although not required to do so by the AIM Listing Rules, the Directors have chosen to provide selected corporate governance disclosureswith 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 of development, will assist
in the delivery of corporate strategy, the generation of shareholder value and the safeguarding of shareholders’ long-term interests. Therefore,
the Directors are committed, wherever it is reasonably practicable, to ensure that 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. Biographical details of all
members of the Board are set out on pages 12 and 13.
Prior to the flotation of the Company in 2011, Paul Taylor was appointed to the Board. Since his appointment, no equity‑based incentives
have been granted to Non-executive Directors and there 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 or share options is Mr Taylor.
The holding of shares and share options by Non-executive Directors could, amongst other things, be relevant in determining whethera 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 andresponsibility. 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 thatit 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 considering and approving 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 and interest raterisk 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 to discharge its duties.
The Board has a policy to set out which matters are reserved for the decision of the Board and those to which the Executive Directors
need not refer for approval. This policy also requires that all recommendations and decisions by a Board Committee are approvedor ratified by the Board.

18

Ubisense Group plc
Annual Report and Accounts 2011

Overview
Business review
Corporate governance
Financial statements

Summary of Board meeting attendance in 2011
The Board is expected to meet regularly on a formal basis ten times a year. 28 Board meetings were held in 2011. The additional meetings,
including subsets of the Board where not all Board members were expected to attend, were required to update on progress and ratify decisions
as the Company successfully completed its Initial Public Offering to become listed on AIM and subsequently completed two acquisitions.
Attendance at the meetings was as follows:

Gordon Campbell
Richard GreenPeter Harverson
Andrew Hopper
J Keith Lomas
Richard Newell
Robert Sansom
Paul Taylor

Regularmeetings

Additional
meetings

Total
meetings

10 (10)10 (10)10 (10)10 (10)10 (10)10 (10)10 (10)8 (8)18 (18)17 (18)14 (18)15 (18)10 (18)11 (18)10 (18)13 (17)28 (28)27 (28)24 (28)25 (28)20 (28)21 (28)20 (28)21 (25)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 Nominations Committee and the Remuneration Committee.
Summary of Committee membershipPeter Harverson
Andrew Hopper
J Keith Lomas
Richard Newell
Robert Sansom
Paul Taylor

Audit
Committee

Nomination
Committee

Remuneration
Committee–
Observer
Yes
Yes
–
Chair

Yes
Yes
–
Yes
Chair
–

Chair
Observer
Yes
–
Yes
Yes

Audit
Committee

Nomination
Committee

Remuneration
Committee

–
2 (2)
2 (2)
1 (1)
–
2 (2)

1 (1)
1 (1)
–
1 (1)
1 (1)
–

6 (7)
6 (7)
7 (7)
–
7 (7)
7 (7)

Summary of Committee meeting attendancePeter Harverson
Andrew Hopper
J Keith Lomas
Richard Newell
Robert Sansom
Paul Taylor
Figures in brackets denote the maximum number of meetings that could have been attended.

Ubisense Group plc
Annual Report and Accounts 201119

Corporate governanceCorporate 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 the Company’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 twice on a formal basis. The Committee
is expected to meet formally twice a year.
Nominations Committee
The Nominations 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.
The Committee was constituted on 6 June 2011. Since then, the Committee has met once on a formal basis and no new appointments
to the Board were made.
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 is involved in deciding
his own remuneration.
The Committee aims to set levels of remuneration for Executive Directors that are sufficient to attract, retain and motivate Directors of thequality required, without paying more than necessary, and that are appropriate for the size and complexity of the Group. It aims to see thata significant proportion of each Executive Director’s remuneration package is performance related.
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 the risk 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 loss.

20

Ubisense Group plc
Annual Report and Accounts 2011

Overview

Directors’ responsibilities statement

Business review
Corporate governance
Financial statements

Directors are responsible for preparing the Directors’ Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected toprepare the consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the European
Union (IFRSs) and the parent company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice(United Kingdom Accounting Standards and applicable laws). Under company law the Directors must not approve the financial statements
unless they 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 thesefinancial statements, the Directors are required to:• select suitable accounting policies and then apply them consistently;• make judgements and estimates that are reasonable and prudent;• s tate whether applicable IFRSs have been followed, subject to any material departures disclosed and explained in the consolidated
financial statements;• s tate whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explainedin the Company financial statements; and• p
 repare 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 and enable them to ensure that the financial statementscomply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
Insofar as each of the Directors are aware:• there is no relevant audit information of which the Company’s auditors are unaware; and• the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establishthat 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 legislationin other jurisdictions.

Ubisense Group plc
Annual Report and Accounts 201121

Financial statements

Independent auditors’ report
To the members of Ubisense Group plc

We have audited the Group financial statements of Ubisense Group plc for the year ended 31 December 2011 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 cash flows and the related notes. The financial reporting framework that has been
applied in their preparation is applicable law and International 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 the Companies Act 2006.
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to themin an auditors’ 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 auditors
As explained more fully in the Directors’ Responsibilities Statement set out on page 21, the Directors are responsible for the preparationof the 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 financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require
us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the APB’s website at www.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements
In our opinion:• the financial statements give a true and fair view of the state of the Group’s affairs as at 31 December 2011 and of the Group’s profit
for the year then ended;• the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union; and• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ Report for the financial year for which the financial statements are prepared is consistent
with the financial statements.
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:• 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 31 December 2011.
Alison Seekings
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Cambridge
19 March 201222

Ubisense Group plc
Annual Report and Accounts 2011

Overview

Consolidated income statement

Business review
Corporate governanceFor the year ended 31 December 2011

Financial statements

Notes

2011
£’000

2010
£’000

5

23,785

17,697

Cost of sales(15,308)(11,762)

Gross profit

8,477

5,935

Administrative expenses(8,188)(5,308)289

627

Adjusted EBITDA

1,448

1,041

Depreciation

(140)

(97)

Amortisation

(624)

(299)

Share-based payments charge

(24)

(18)

AIM listing expenses

(324)

–

Acquisition costs

(47)

–

Revenue

Operating profit

5

Analysed as:

Operating profit

5

289

627

Finance income

8

37

5

Finance costs

8

(185)

(237)

Profit before tax

9

141

395

Income tax

10

(107)

3

34

398

Profit for the period attributable to the equity shareholders of the Company
Earnings per share (pence)
Basic

11

0.2p

3.3p

Diluted

11

0.2p

3.2p

2011
£’000

2010
£’000

34

398

14

(29)

48

369

The notes on pages 27 to 51 are an integral part of these consolidated financial statements.

Consolidated statement of comprehensive income
For the year ended 31 December 2011

Notes

Profit for the period
Other comprehensive income:Exchange difference on retranslation of net assets and results of overseas subsidiaries
Total comprehensive income attributable to equity shareholders of the Company

23

The notes on pages 27 to 51 are an integral part of these consolidated financial statements.

Ubisense Group plc
Annual Report and Accounts 201123

Financial statements

Consolidated statement of changes in equity
For the year ended 31 December 2011

Sharecapital
£’000

Share
premium
£’000

Other
reserves£’000

Retainedearnings
£’000

Total
£’000

235

9,773

961

(4,670)6,299

Profit for the period

–

–

–

398

398

Exchange difference on retranslation of net assets and resultsof overseas subsidiaries

–

–

(29)

–

(29)

Total comprehensive income for the year

–

–

(29)

398

369

Reserve credit for equity-settled share-based payment

–

–

18

–

18

Equity component of loans

–

–

3

–

3

Issue of new share capital

69

–

–

–

69

Premium on new share capital

–

4,973

–

–

4,973

Share issue costs

–

(196)

–

–

(196)

Transactions with owners

69

4,777

21

–

4,867

Balance at 31 December 2010

304

14,550953(4,272)

11,535

Profit for the period

–

–

–

34

34

Exchange difference on retranslation of net assets and resultsof 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 converted

–

–

(502)

502

–

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)

19,238

Balance at 1 January 2010

Issue of new share capital

The notes on pages 27 to 51 are an integral part of these consolidated financial statements.
A reconciliation of the components of Other reserves is given in note 23.

24

Ubisense Group plc
Annual Report and Accounts 2011

Overview

Consolidated statement of financial position

Business review
Corporate governanceAt 31 December 2011

Financial statements

Notes

2011
£’000

2010
£’000

Goodwill

12

7,418

6,069

Other intangible assets

13

2,258

525

Property, plant and equipment

14

366

279

10,042

6,873

AssetsNon-current assets

Total non-current assets
Current assets
Inventories

15

1,667

364

Trade and other receivables

16

9,498

6,900

Cash and cash equivalents

17

6,034

7,130

Total current assets

17,19914,394

Total assets

27,241

21,267

Liabilities
Current liabilities
Loans and borrowings

19–(2,372)

Trade and other payables

18(7,294)(5,974)(7,294)(8,346)

Total current liabilities
Non-current liabilities
Loans and borrowings

19–(1,246)

Deferred income tax liabilities

10

(549)

(140)

Other liabilities

20

(160)

–

(709)

(1,386)

Total liabilities(8,003)(9,732)

Net assets

19,238

11,535

Total non-current liabilities

Equity attributable to owners of the parent company
Share capital

21

433

304

Share premium account21

22,031

14,550

Other reserves

23

510

953

Retained earnings(3,736)(4,272)

Total equity

19,238

11,535The notes on pages 27 to 51 are an integral part of these consolidated financial statements.
The financial statements were approved by the Board of Directors on 19 March 2012 and signed on its behalf by:
Richard Green
Chief Executive Officer

Gordon Campbell
Chief Financial Officer

The Company’s registered number is 05589712.

Ubisense Group plc
Annual Report and Accounts 201125

Financial statements

Consolidated statement of cash flows
For the year ended 31 December 2011

Notes

Profit before tax

2011
£’000

2010
£’000

141

395

Adjustments for:
Depreciation

9,14

140

97

Amortisation

9,13

624

299

6.2, 22.2

24

18

Finance income

8

(37)

(5)

Finance costs

8

185

237

Foreign exchange differences

9

12

(12)

Operating cash flows before working capital movements

1,089

1,029

Change in inventories(1,303)(100)

Change in receivables(2,065)(3,244)

Change in payables

(108)

3,009

(2,387)

694

102

32

(2,285)726(1,600)

–

(256)

(218)

(1,130)

(400)

33

5

(2,953)

(613)

–

150

(1,014)

(255)

(47)

(108)

Proceeds from the issue of share capital

5,238

4,846

Net cash flows from financing activities

4,177

4,633

Net (decrease)/increase in cash and cash equivalents(1,061)

4,746

Cash and cash equivalents at start of period

7,130

2,396

(35)

(12)

6,034

7,130

Share-based payments charge

Cash (used in)/generated by operations before tax
Net income taxes received
Net cash flows from operating activities
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired

26

Purchases of property, plant and equipment
Purchases of intangible assets
Interest received
Net cash flows from investing activities
Cash flows from financing activities
Proceeds from the issue of borrowings
Repayment of borrowings
Interest paid

Exchange differences on cash and cash equivalents
Cash and cash equivalents at end of period
The notes on pages 27 to 51 are an integral part of these Consolidated financial statements.

26

Ubisense Group plc
Annual Report and Accounts 201117

OverviewNotes to the consolidated financial statements
For the year ended 31 December 2011

Business review
Corporate governance
Financial statements

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.L)
and is incorporated and domiciled in the United Kingdom. The Company was incorporated as Ubisense Trading Limited on 11 October 2005
and changed its name to Ubisense Group plc on 31 May 2011 ahead of its Initial Public Offering and listing on AIM on 22 June 2011. The addressof its registered office is St. Andrew’s House, 90 St. Andrew’s Road, Chesterton, Cambridge CB4 1DL.
The Group has operations in the UK, US, Canada, France, Germany, Korea and Singapore and sells mainly in the North America and Europe.
The Group legally consists of eight 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);
Realworld OO Systems Limited (UK); and Integrated Mapping Services, Inc. (US).
These consolidated financial statements have been approved for issue by the Board of Directors on 19 March 2012.
2 New accounting standards
In 2011, several new, revised and amended standards and interpretations became effective. These are IAS 24 (revised) “Related party
disclosures”, IFRS 1 (amendment) “First time adoption: financial instrument disclosure”, IAS 32 (amendment) “Financial instruments:
Presentation on classification of rights issues”, IFRIC 19 “Extinguishing financial liabilities with equity instruments”, IFRIC 14 “Prepaymentsof a minimum funding requirement”, and Improvements to IFRSs (2010). The adoption of these standards and interpretations has not had
a material impact on the financial statements of the Group.
At the date of authorisation of these financial statements, the following standards and relevant interpretations, which have not been appliedin these financial statements, were in issue but not yet effective (and some of which were pending endorsement by the EU). All standards
and interpretations are not expected to have any significant impact on the financial statements, in their periods of initial application.
NumberTitle

Effective foraccounting periods
beginning on or after

IFRS 1 (amendment)
IFRS 7 (amendment)
IAS 1 (amendment)
IAS 12 (amendment)
IFRS 9IFRS 10
IAS 19 (revised)
IAS 27 (revised)
IAS 28IFRS 9IFRS 11IFRS 12IFRS 13

Severe hyperinflation and removal of fixed dates for first-time adopters
Financial instruments: Disclosures on derecognition
Presentation of financial statements – Other comprehensive income
Deferred Tax – Recovery of Underlying Assets
Financial instruments on classification and measurement”
Consolidated financial statements
Employee benefits
Separate Financial Statements
Investments in Associates and Joint Ventures
Financial instruments – Classification and measurement
Joint arrangements
Disclosure of interests in other entities
Fair value measurement

1 July 2011
1 July 2011
1 July 2012
1 January 2012
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2015
1 January 2013
1 January 2013
1 January 2013

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 havebeen 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 ReportingStandards as adopted by the European Union (IFRSs as adopted by the EU) and the Companies 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 all values are rounded to the nearest thousand pounds (£’000) except when otherwise indicated.
The preparation of these financial statements requires the Directors to make critical accounting estimates and judgements that affect theamounts 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.
Going concern basis
The Group’s forecasts and projections, taking account of reasonably possible changes in trading performance, support the conclusionthat 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 less than twelve months from the date of this report. The Group therefore continues to adopt
the going concern basis in preparing its financial statements.

Ubisense Group plc
Annual Report and Accounts 201127

Financial statements

Notes to the consolidated financial statements continued

For the year ended 31 December 2011

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 obtain benefits from its activities.
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 and presentation 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 datesof transactions. Monetary assets and liabilities denominated in foreign currencies are translated at rates ruling at the period end date. Such
non-material exchange differences are included in the income statement within “other administrative expenses”. Non-monetary items that aremeasured in terms of historical cost in a foreign currency are translated using the exchange 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 whichhave the currency of a hyperinflationary economy) that have a functional currency other than Sterling are translated 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 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 with financial information. The Directors believe that the CODM is theChief 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, exclusiveof value added tax and other similar sales taxes. Revenue is measured by reference to the fair value of consideration 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 sale includes a periodof support and maintenance, a proportion of the revenue is deferred and recognised rateably over the period of support. For licence rental fees,amounts are recognised over the period of the contract, commencing from when the software is available for use.
Services and training revenue from time and materials contracts is recognised in the period that the services and training are provided on thebasis 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 recognised on the stage ofcompletion of each assignment at the period end date compared to the total estimated service to be provided over the entire contract where
the outcome can be estimated reliably. If a contract outcome cannot be estimated reliably, 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 is apportioned
across the constituents of the bundle and then recognised according to the policies stated above.

28

Ubisense Group plc
Annual Report and Accounts 2011

Overview
Business review
Corporate governance
Financial statements

3 Summary of significant accounting policies continued
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 shown as either accruals or prepayments in thestatement of financial position.
(b) Share-based payments
The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fairvalue at the date of grant using the Black-Scholes pricing model. The fair value is expensed on a straight-line basis over the vesting period,
together with a corresponding increase in equity, based on the Group’s estimate of the number of shares that will eventually vest.
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 portionof the risks and rewards of ownership.
(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.
Interest income and expense
Interest income and expense is included in the income statement on a time basis, using the effective interest method by reference to theprincipal outstanding.
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 basedon an interpretation of existing tax laws. Taxable profit differs from profit before tax as reported in the income 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 comparison of the carrying
amounts of assets and liabilities in the consolidated financial statements with their respective tax bases. In addition, tax losses available tobe carried forward as well as other income tax credits to the Group are assessed for recognition 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 or accounting profit.
Deferred tax liabilities are always provided in full. Deferred tax assets are recognised to the extent that it is probable that the 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 period of realisation, provided they are enacted or substantively
enacted at the reporting date. Deferred tax is recognised as a component of tax expense in the income statement, except where it relates
to items charged or credited directly to other comprehensive income or equity.
Business combinations
The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiaryis the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree 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 theacquisition 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 theacquiree 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. Subsequent changes to the fairvalue of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39 either in profit or loss
or as a change to other comprehensive income. Contingent consideration that is classified as equity is not remeasured and its subsequent
settlement is accounted for within equity.

Ubisense Group plc
Annual Report and Accounts 201129

Financial statements

Notes to the consolidated financial statements continued

For the year ended 31 December 2011

3 Summary of significant accounting policies continued
Business combinations continued
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the
net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair 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 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.
An internally generated intangible asset arising from the Group’s development activities is recognised only 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;• 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 a market 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 the intangible asset; and• the expenditure attributable to the intangible asset during its development can be measured reliably.
Internally generated intangible assets, consisting of direct labour costs, are amortised on a straight-line basis over their useful economic
lives on completion of the asset. Amortisation is shown within administrative expenses in the income statement. The estimated useful livesof 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 expense in 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 costand amortised on a straight-line basis over their useful economic life which is typically 3 to 5 years. Intangible assets acquired through a businesscombination are initially measured at fair value and amortised on a straight line basis over their useful economic lives. Amortisation is shownwithin 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 recognised on acquisition:

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 an asset is determinedas the difference between the sales proceeds and the carrying amount of the asset and is recognised in administrative expenses.
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 to amortisation
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.
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 of assessing impairment, assets are groupedat the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwillthat suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

30

Ubisense Group plc
Annual Report and Accounts 2011

Overview
Business review
Corporate governance
Financial statements

3 Summary of significant accounting policies continued
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.
Trade receivables
Trade receivables are amounts due from customers for product sold or services performed in the ordinary course of business. 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 with banks and othershort-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 business from 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.
Compound instruments
The Group applied the requirements of IAS 32 “Financial Instruments” to account for the convertible and bank loans. The bank loan
was repaid and the convertible loans were either converted or repaid prior to the initial public offering on 22 June 2011. These loans
were regarded as compound instruments, consisting of a liability component and an equity component. At the date of issue, the fair valueof the liability component was estimated using the prevailing market interest rate for a similar debt instrument without a conversion feature.
The difference between the loan balance and the fair value assigned to the liability component, representing the embedded equity element(option to convert the liability into equity of the Group or warrants over shares in the Company), was accounted for as an equity instrument.
The interest expense on the liability component is calculated by applying the prevailing market interest rate for similar debt instrument
to the liability component. The difference between this amount and the interest paid is added to the carrying amount of the loan.
On conversion of debt to equity the carrying value of the debt instrument is transferred to equity and no gain or loss arises on conversion.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity
as a deduction, net of tax, from the proceeds.
4 Critical accounting estimates and judgements
The Group makes estimates and assumptions concerning the future. Actual results may differ from these estimates. The estimates andassumptions 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 to calculate the present value of those cash flows. The Group uses pre‑tax discountrates between 9.7% and 12.5% for this purpose. The carrying amount of goodwill at 31 December 2011 is £7,418,000. Further considerationof the impairment 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 31 December 2011is £1,127,000.
Revenue recognition
Significant management judgement is applied in determining the allocation and timing of the recognition of revenue on contracts. In thisprocess management takes into account milestones, hardware supplied, actual work performed and further obligations and costs expected
to complete the work. The carrying amount of amounts recoverable on contracts at 31 December 2011 is £1,588,000.
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.

Ubisense Group plc
Annual Report and Accounts 201131

Financial statements

Notes to the consolidated financial statements continued

For the year ended 31 December 2011

4 Critical accounting estimates and judgements continued
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 timethat 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 share options at the statement of financial position
date. In estimating the amount of the deferred tax asset that should be recognised, 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
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 Operating
Decision Maker. The Chief Operating Decision Maker is Chief Executive Officer.
The Real-Time Location Systems division (RTLS) delivers mission-critical enterprise asset tracking solutions utilising ultra-wideband (UWB)
technology to locate people and assets in 3D, bringing visibility and control to industrial business processes. The Geospatial division delivers
core location‑based solutions, typically to blue chip utility and communications companies, to allow them to better plan and maintain theirdispersed network of assets. Centrally incurred costs not directly attributable to operating segments are reported under “Central”.
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, finance income and expense and income taxes. Other administrative
expenses for the year ended 31 December 2010 have been reclassified to be consistent with current internal management reporting. The effecton the period ended 31 December 2010 was to decrease administrative expenses for RTLS by £727,000 and increase Geospatial and Centralby £66,000 and £661,000 respectively.
RTLS
£’000

Geospatial£’000

Central
£’000

Total
£’000

Revenue
Cost of sales

8,650(4,012)

15,135(11,296)––

23,785(15,308)

Gross profit
Other administrative expenses

4,638(3,936)

3,839
(738)

–
(2,355)

8,477(7,029)Adjusted EBITDA
Depreciation
Amortisation
Share-based payments charge
AIM listing expenses
Acquisition costs

702
–
(437)
–
–
–

3,101
–
(169)
–
–
–

(2,355)
(140)
(18)
(24)
(324)
(47)

1,448
(140)
(624)
(24)
(324)
(47)

Operating profit/(loss)
Finance income
Finance costs

265
–
–

2,932
–
–

(2,908)
37
(185)

289
37
(185)

Profit/(loss) before tax
Income tax

265
–

2,932
–

(3,056)
(107)

141
(107)

Profit/(loss) after tax

265

2,932

(3,163)34

Year ended 31 December 201132

Ubisense Group plc
Annual Report and Accounts 2011

Overview
Business review
Corporate governance
Financial statements

5 Segment information continued
5.1 Operating segments continued
RTLS
£’000

Geospatial£’000

Central
£’000

Total
£’000

Revenue
Cost of sales

5,729(2,520)11,968(9,242)––

17,697(11,762)

Gross profit
Other administrative expenses

3,209(3,168)

2,726
(229)

–
(1,497)

5,935(4,894)

Adjusted EBITDA
Depreciation
Amortisation
Share-based payments charge

41
(2)
(299)
–

2,497
–
–
–

(1,497)
(95)
–
(18)

1,041
(97)
(299)
(18)

Operating (loss)/profit
Finance income
Finance costs

(260)
–
–

2,497
–
–

(1,610)
5
(237)

627
5
(237)

(Loss)/(profit) before tax
Income tax

(260)
–

2,497
–

(1,842)
3

395
3

Profit after tax

(260)

2,497

(1,839)398

Year ended 31 December 2010

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 andnon-current assets excluding goodwill by geographical area are as follows:
Revenue

Non-current assets

2011
£’000

2010
£’000

2011
£’000

2010
£’000

UK
Germany
US
Other

1,471
11,469
8,853
1,992

478
8,294
6,436
2,489

1,760
224
635
5

598
165
41
–

Total

23,785

17,697

2,624

804

Revenues from external customers in the Group’s domicile, the UK, as well as its major markets, Germany and the US, have been identified
on the basis of the customer’s geographical location. Non-current assets are allocated based on their physical location.
During 2011, revenues of £5.3 million (2010: £3.7 million) and £2.1 million (2010: £2.0 million) respectively were derived from two Geospatial
customers based in Germany and revenue of £2.6 million (2010: £0.6 million) from one RTLS customer based in both Germany and the US.

Ubisense Group plc
Annual Report and Accounts 201133

Financial statements

Notes to the consolidated financial statements continued

For the year ended 31 December 2011

6 Employee information
6.1 Employee numbers
The average monthly number of people, including Executive Directors, employed by the Group during the year was:2011
Number

2010
NumberBy activity
Technical consultants
Sales and marketing
Research and development
Administration

75
28
21
14

60
18
12
9

Total average number of employees

138

99

By segment
Geospatial
RTLS
Central

64
60
14

45
45
9

Total average number of employees

138

99

Notes

2011
£’000

2010
£’000

22.2

10,236
979
419
24

6,724
679
307
18

11,658

7,728

The total number of employees at 31 December 2011 was 172 (2010: 113).
6.2 Employee benefits

Wages and salaries
Social security costs
Contributions to defined contribution pension arrangements
Share-based payments
Total aggregate employee benefits

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
14 key management personnel (2010: 13). The compensation paid or payable to key management for employee services is shown below:

Short-term employee benefits
Wages and salaries
Social security costs
Other benefits

Post-employment benefits
Contributions to defined contribution benefit pension arrangements
Share-based payments
Equity-settled share-based payments
Total key management compensation

34

Ubisense Group plc
Annual Report and Accounts 2011

2011
£’000

2010
£’000

925
59
29

746
48
12

1,013

806

74

68

11

6

1,098

880

Overview
Business review
Corporate governance
Financial statements

7 Directors’ remuneration and interests
7.1 Directors’ remuneration

Subtotal£’000

Employer’s
contributions
to defined
contribution
pensionarrangements
£’000

Total
2011
£’000

Total
2010
£’000

15
13
–
–
–
–
–
–

106
137
16
15
6
–
–
13

99
131
16
15
6
–
–
–

28

293

267

Basic salary£’000

Performance
payments£’000

Benefits
in kind£’000

Gordon Campbell*Richard Green*Peter Harverson
Andrew Hopper
J Keith Lomas
Richard Newell**Robert Sansom**Paul Taylor***

89
115
16
15
6
–
–
13

1
5
–
–
–
–
–
–

1
4
–
–
–
–
–

–

91
124
16
15
6
–
–
13

Total

254

6

5

265

Director*	The Directors are remunerated through the Company’s flexible benefits scheme under which they can elect to switch basic salary into pension contributions and otherbenefits. The basic salary entitlement in the year was: Richard Green £125,000; and Gordon Campbell £95,000.
**	Richard Newell and Robert Sansom have waived their entitlement to annual remuneration of £3,000 as per their letters of appointment for the years 31 December 2011
and 31 December 2010.
***	Remuneration from date of appointment on 28 February 2011.

7.2 Directors’ interests – share options

Director

Gordon Campbell

Richard GreenPeter Harverson
Andrew Hopper
Richard Newell
Total

Awardsoutstandingat
31 December
2011
NumberAwardsexercisableat
31 December
2011
Number

Award
date
Year

Vests
Years

ExpiresYear

Exercise
price£Awardsoutstandingat
1 January
2011
Number2010
2011

2011–13
2012–14

2020
2021

0.14
1.05

120,500––
32,500––––120,500
32,50040,168–120,500

32,500––153,000

40,16876,278––100,000––––

76,278100,000

25,427–76,278100,000––

176,278

25,427

91,333
20,278
1,056

–
–
–

–
–
–

–
–

91,333
20,2781,056

30,445
6,760
352

309,445

132,500––

441,945

103,152

2010
2011

2010
2010
2010

2011–13
2012–142011–13
2011–13
2011–13

2020
2021

2020
2020
2020

0.14
1.05

0.14
0.14
0.14

Grantedduringthe year
NumberExercisedduringthe year
NumberLapsedduringthe year
Number–No other Directors have been granted share options in the Company or other Group entities. None of the terms and conditions of the shareoptions were varied during the year. All options were granted in respect of qualifying services.
There have been no options granted to or exercised by Directors between 31 December 2011 and 19 March 2012.
The market price of the Company’s shares at the end of the financial year was £1.94. The range of market prices during the year was
between £1.47 and £2.32.

Ubisense Group plc
Annual Report and Accounts 201135

Financial statements

Notes to the consolidated financial statements continued

For the year ended 31 December 2011

7 Directors’ remuneration and interests continued
7.3 Directors’ interests – shares
Directors’ interests in the ordinary shares of Ubisense Group plc, at 31 December 2011 and 31 December 2010, were as follows.
2011
Number

2010
NumberGordon Campbell
Richard GreenPeter Harverson
Andrew Hopper
J Keith Lomas
Richard Newell
Robert Sansom

87,987
1,543,011
65,161225,000
47,712643,354
2,493,676

53,817
1,323,068
54,051225,000
8,824
587,000
1,604,788

Total

5,105,901

3,857,348

There has been no change in the interests set out above between 31 December 2011 and 19 March 2012.
7.4 Directors’ interests – loans
Some of the Directors had beneficial interests in the Company’s convertible loans as listed below. All of the Directors’ interests in convertibleloans were converted into ordinary shares in the year ahead of the initial public offering.
At
1 January
2011£

Interest
accrued£Interest
paid£

Converted
intoordinaryshares£At
31 December
2011£

30,753
107,949
9,999
34,99949,999799,999

393
927
100
319
500
8,000

(393)
(927)
(100)
(319)
(500)
(8,000)(30,753)(107,949)(9,999)(34,999)(49,999)(799,999)

–
–
–
–
–
–

1,033,698

10,239(10,239)(1,033,698)

–

2011
£’000

2010
£’000

Interest income from cash and cash equivalents

37

5

Finance income

375Interest payable – bank
Interest payable – other loans

(26)
(159)

(43)
(194)

Finance costs

(185)

(237)

Net finance costs

(148)

(232)

Gordon Campbell
Richard GreenPeter Harverson
J Keith Lomas
Richard Newell
Robert Sansom
Total
8 Finance income and costs

Finance costs for the year ended 31 December 2011 includes an imputed non-cash amount of £138,000 relating to interest as a resultof conversion of the convertible loans into shares and exercise of the warrants attaching to the bank loan (see note 19).

36

Ubisense Group plc
Annual Report and Accounts 2011

Overview
Business review
Corporate governance
Financial statements

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

Amortisation of intangibles
Depreciation of owned property, plant and equipment
Operating lease rental charges – land and buildings
Operating lease rental charges – otherResearch and development costs expensed
Net foreign currency gains
AIM listing expenses
Acquisition costs
Auditors’ remuneration

13
14

26
9.2

2011
£’000

2010
£’000

624
140
320
134
1,109
(12)
324
47
165

299
97
359
101
939
(80)
–
–
68

9.2 Auditors’ remuneration
During the year the Group (including its overseas subsidiaries) obtained the following services from the Company’s auditors and their associates:
2011
£’000

2010
£’000

13
27

10
22

40

32

5
120

3
33

125

36

165

68

2011
£’000

2010
£’000

Current tax
UK corporation tax
Foreign tax
Research and development tax credits – prior years

–
(9)
(124)

23
–
(47)

Total current tax credit

(133)

(24)

Deferred tax
Origination and reversal of temporary differences

240

21

Total deferred tax expense

240

21

Total income tax expense/(credit)

107

(3)

Notes

Fees payable to the Group’s auditors for the audit of the Company and Group financial statements– Parent company and consolidated financial statements– Financial statements of subsidiaries, pursuant to legislation

Fees payable to the Group’s auditors for other services:
Tax services
Other services

Auditors’ remuneration

9.1

The auditors of Ubisense Group plc are Grant Thornton UK LLP.
10 Income tax
10.1 Income tax expense

Ubisense Group plc
Annual Report and Accounts 201137

Financial statements

Notes to the consolidated financial statements continued

For the year ended 31 December 2011

10 Income tax continued
10.1 Income tax expense continued
The tax expense (2010: credit) differs from the standard rate of corporation tax in the UK for the year of 26% (2010: 28%) for the following reasons:
2011
£’000

2010
£’000

Profit before tax

141

395

Profit before tax multiplied by the standard rate of corporation tax in the UK of 26% (2010: 28%)
Tax effects of:
Expenses not deductible for tax purposes
Creation/(utilisation) of tax losses
Research and development tax credits – prior years
Differential on overseas tax rates
Remeasurement of deferred tax – change of rate
Other temporary timing differences

37

111

113
14
(124)
(8)
(5)
80

37
(73)
(47)
(5)
–
(26)

Total income tax expense/(credit)

107

(3)

10.2 Factors that may affect future tax charges
The Group has tax losses of £2.9 million (2010: £3.0 million) that are available for offset against future taxable profits of those subsidiarycompanies in which the tax losses arose. Deferred tax assets have not been recognised in respect of these 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 reinvestedby the Group and no tax is expected to be payable on them in the foreseeable future.
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

2011
£’000

2010
£’000

2011
£’000

2010
£’000

–
119
(119)

–
–
–

(140)
(288)
(121)

(119)
–
(21)

–

–

(549)

(140)

2011
£’000

2010
£’000

Development costs capitalised
Intangible assets recognised on acquisition of subsidiaries

(293)
(256)

(140)
–

Total deferred income tax liabilities

(549)

(140)

At 1 January
Arising on acquisition of subsidiaries
Net deferred tax charge to the income statement
At 31 December

The components of deferred tax included in the consolidated statement of financial position are as follows:

Deferred tax assets have not been recognised in respect of the following items because it is not probable that future taxable profits will beavailable against which the Group can utilise the benefits:

Tax losses carried forward
Equity-settled share options temporary differences
Other temporary differences
Total unrecognised deferred tax assets

38

Ubisense Group plc
Annual Report and Accounts 2011

2011
£’000

2010
£’000

851
168
–

804
182
(1)

1,019

985

Overview
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Corporate governance
Financial statements

11 Earnings per share
2011

2010

Earnings
Profit for the period (£’000)

34

398

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

34

398

18,897

12,034

334
59

444
107

19,29012,585

Basic earnings per share (pence)

0.2p

3.3p

Diluted earnings per share (pence)

0.2p

3.2p

Number of shares
Basic weighted average number of shares (’000)
Effect of dilutive potential ordinary shares:– share options (’000)– warrants (’000)
Diluted weighted average number of shares (’000)

Basic earnings per share is calculated by dividing profit for the period attributable to ordinary shareholders of the Company by the weighted
average number of ordinary shares outstanding during the period. For diluted earnings per share, the weighted average number of sharesis adjusted to allow for the effects of dilutive share options and warrants.
The Group also presents an adjusted diluted earnings per share figure which excludes amortisation, share-based payments charge,
AIM listing expenses and acquisition costs from the measurement of profit for the period.
Adjusted diluted earnings per share

2011

2010

34

398

624
24
324
47

299
18
–
–

Net adjustments (£’000)

1,019

317

Adjusted earnings (£’000)

1,053

715

Adjusted diluted earnings per share (pence)

5.5p

5.7p

Note

Goodwilll
£’000

26

6,069
1,349

Earnings for the purposes of diluted earnings per share (£’000)
Adjustments:
Reversal of amortisation (£’000)
Reversal of share-based payments charge (£’000)
Reversal of AIM listing expenses (£’000)
Reversal of acquisition costs (£’000)

Note

9,13
9

12 Goodwill

Balance at 1 January 2010 and 31 December 2010
Acquisition of subsidiaries
Balance at 31 December 2011

7,418

The goodwill arising in the year relates to the acquisitions of Integrated Mapping Solutions, Inc. and Realworld OO Systems Limited which
is further described in note 26.
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:
2011
£’000

2010
£’000

RTLS
Geospatial

3,256
4,162

3,256
2,813

Total

7,418

6,069

The recoverable amounts of all CGUs have been determined from value-in-use calculations based on 5 year forecasts projected from the2012 annual operating plan approved by the Board for each CGU with an assumed terminal growth rate of nil and no improvement in relative
operating margin during or after the forecast period. This is considered prudent when compared to recent experience and current expectationsof the long-term industry growth rate for both CGUs.

Ubisense Group plc
Annual Report and Accounts 201139

Financial statements

Notes to the consolidated financial statements continued

For the year ended 31 December 2011

12 Goodwill continued
Impairment testing for cash-generating units containing goodwill continued
A discount rate of 12.5% for RTLS and 9.7% for Geospatial has been estimated using pre‑tax rates that reflect current market assessmentsof the time value of money and the risks specific to each CGU.
Revenue growth assumptions are based on the annual operating plan taking into account industry growth rates and Ubisense’s historicalexperience in the context of the wider industry and economic conditions. The revenue growth rate for RTLS is assumed to be 20% (actual
growth in 2011 was 51.0%) 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 growth rate for Geospatial
is assumed to be 10% (actual growth in 2011 was 26.5%) 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 growth rate was 7%, or if the discount rate is increased in isolation to 17%, the estimated recoverable
amount is equal to carrying value. For Geospatial, if the growth rate reduced to 0%, or if the discount factor increased to 20%, this would
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.
13 Other intangible assets
Capitalised
development
costs
£’000

Software£’000

Acquired
softwareproducts£’000

Acquiredcustomer
relationships
and order
backlog£’000

Cost
At 1 January 2010
Additions

1,087
389

–
11

–
–

–
–

1,087
400

At 31 December 2010

1,476

11

–

–

1,487

Reclassification
Additions
Acquisition of subsidiaries

–
1,103
–

56
225
3

–
–
529

–
–
449

56
1,328
981

At 31 December 2011

2,579

295

529

449

3,852

Accumulated amortisation
At 1 January 2010
Charge for the year

663
295

–
4

–
–

–
–

663
299

At 31 December 2010

958

4

–

–

962

Reclassification
Charge for the year

–
494

8
18

–
44

–
68

8
624

At 31 December 2011

1,452

30

44

68

1,594

Net book amountAt 31 December 2011

1,127

265

485

381

2,258

At 31 December 2010

518

7

–

–

525

Total
£’000

The acquired software products, customer relationships and order backlog additions arising in the year relate to the acquisitions of Integrated
Mapping Solutions, Inc. and Realworld OO Systems Limited which are further described in note 26.

40

Ubisense Group plc
Annual Report and Accounts 2011

Overview
Business review
Corporate governance
Financial statements

14 Property, plant and equipment
Fixturesand fittings£’000

Computerequipment
£’000

Total
£’000

Cost
At 1 January 2010
Effect of movements in exchange rates
Additions
Disposals

309
(3)
18
(150)

334
(5)
200
(89)

643
(8)
218
(239)

At 31 December 2010

174

440

614

Effect of movements in exchange rates
Reclassification
Additions
Acquisition of subsidiaries
Disposals

(3)
–
47
3
–

(5)
(56)
213
14
(1)

(8)
(56)
260
17
(1)

At 31 December 2011

221

605

826

Accumulated depreciation
At 1 January 2010
Effect of movements in exchange rates
Charge for the year
Disposals

218
(2)
29
(150)

263
(3)
68
(88)

481
(5)
97
(238)

At 31 December 2010

95

240

335

Effect of movements in exchange rates
Reclassification
Charge for the year
Disposals

(1)
–
34
–

(5)
(8)
106
(1)

(6)
(8)
140
(1)

At 31 December 2011

128

332

460

Net book amountAt 31 December 2011

93

273

366

At 31 December 2010

79

200

279

2011
£’000

2010
£’000

1,667

364

15 Inventories

Finished goods

The cost of inventories recognised as an expense and included in “cost of sales” amounted to £1,426,000 (2010: £1,018,000).
16 Trade and other receivables
Notes

2011
£’000

2010
£’000

16.2

7,541
(7)

5,469
(83)

Trade receivables net
Amounts recoverable on contracts
Other receivables
Prepayments and accrued income
VAT and taxation receivable

7,534
1,588
21
314
41

5,386
555
21
816
122

Total trade and other receivables

9,498

6,900

Trade receivables, grossAllowances for credit losses

All amounts disclosed are short term. The carrying value of trade receivables is considered a reasonable approximation of fair value.

Ubisense Group plc
Annual Report and Accounts 201141

Financial statements

Notes to the consolidated financial statements continued

For the year ended 31 December 201116 Trade and other receivables continued
16.1 Ageing of past due but not impaired receivables
2011
£’000

2010
£’000

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

6,120

3,030

881
533

2,113
243

Total

7,534

5,386

2011
£’000

2010
£’000

83
(1)
–
(82)
7

125
–
(52)
–
10

7

83

2011
£’000

2010
£’000

Cash at bank and in hand
Short-term bank deposits

3,367
2,667

7,130
–

Cash and cash equivalents

6,034

7,130

16.2 Movement in allowance for doubtful debts

At 1 January
Exchange differences
Amounts written off as uncollectable
Amounts recovered in the year
Allowance madeAt 31 December
17 Cash and cash equivalents

The carrying amount approximates to fair value because of the short-term maturity of these instruments, being no greater than three months.
Cash at bank earns interest at floating rates based on daily bank overnight deposit rates. Short-term cash deposits earn interest at fixed rates
for the term of the deposit.
The composition of cash and cash equivalents by currency is as follows:
2011
£’000

2010
£’000

British Pound (GBP)
Euro (EUR)
US Dollar (USD)
Canadian Dollar (CAD)

3,939
1,619
414
62

5,424
1,023
344
339

Cash and cash equivalents

6,034

7,130

Note

2011
£’000

2010
£’000

26.2

1,995
2,110
1,633
–
817
339
400

2,178
1,945
933
8
717
193
–

7,294

5,974

18 Trade and other payables

Payments received on accountTrade payables
Trade accruals
Current tax liability
Other taxation and social security
Other payables
Other liabilities – contingent consideration
Total trade and other payables

All amounts disclosed are short term. The carrying value of trade payables is considered a reasonable approximation of fair value.
The current element of the contingent consideration relates to the acquisition of Realworld OO Systems Limited in the year, which
is further described in note 26.

42

Ubisense Group plc
Annual Report and Accounts 2011

Overview
Business review
Corporate governance
Financial statements

19 Loans and borrowings
2011
£’000

2010
£’000

Non-current
Bank loan
Convertible loan

–
–

492
754

Total non-current loans and borrowings

–

1,246

Current
Bank loan
Convertible loan

–
–

398
1,974

Total current loans and borrowings

–

2,372

Total loans and borrowings

–

3,618

During the period, the bank loan was repaid in full. Of the convertible loan, £2,364 was repaid with the remainder converted into ordinary
shares (see note 21).
20 Other liabilities

Other liabilities – contingent consideration

Note

2011
£’000

2010
£’000

26.2

160

–

The non-current element of the contingent consideration relates to the acquisition of Realworld OO Systems Limited in the year, which is further
described in note 26.
21 Share capital and premium
Number ofordinaryshares of£0.02 eachSharecapital
£’000

Share
premium
£’000

Total
£’000

Balance at 1 January 2010
Share issue
Share issue costs
Issued under share-based payment plans
Issued on conversion of convertible loan

11,755,265
3,401,360–
26,50028,365

235
68
–
–
1

9,773
4,932
(196)
16
25

10,008
5,000
(196)
16
26

Change in year

3,456,225

69

4,777

4,846

Balance at 31 December 2010

15,211,490

304

14,55014,854

Share issue
Share issue costs
Issued under share-based payment plans
Issued on conversion of convertible loan
Issued on exercise of warrants

2,777,778–
376,308
3,176,772
115,350

56
–
8
63
2

4,944
(486)
125
2,796
102

5,000
(486)
133
2,859
104

Change in year

6,446,208

129

7,481

7,610

Balance at 31 December 2011

21,657,698

433

22,031

22,464The Company has one class of ordinary shares which carry no right to fixed income.
During the period, the Company issued 6,446,208 shares, increasing the total number of shares in issue from 15,211,490 to 21,657,698 as follows:• 2,777,778 shares as a result of new share subscriptions at £1.80 per share for total cash consideration of £5,000,000, with share issue
costs of £486,000 charged against the share premium account and listing expenses of £324,000 charged to the income statement.
Included in the share issue costs charged to the share premium account is an amount of £22,000 relating to share-based payments
in respect of warrants granted to professional advisers in lieu of fees;• 376,308 shares as a result of options exercised with a weighted average exercise price of £0.36 per share for total cash considerationof £134,099;• 3,176,772 shares as a result of the convertible loans being converted at £0.90 per share for total loan value converted of £2,859,095; and• 115,350 shares as a result of exercise of warrants entitled under the bank loan at £0.90 per share for cash consideration of £103,815.

Ubisense Group plc
Annual Report and Accounts 201143

Financial statements

Notes to the consolidated financial statements continued

For the year ended 31 December 201122 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 aroundthe 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 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, the Group granted warrants to a professional advisor in lieu of fees. 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 are exercisable immediately and have a contractual
life of 18 months from the date of grant after which they expire if unexercised.
The services received have been measured by reference to the fair value of the warrants granted as the fair value of the services received
cannot be reliably estimated as the number of warrants granted was on a basis of 0.5% of the Company’s share capital as a result of theplacing on 22 June 2011. The expense of £22,000 was included in the share issue costs written off to the share premium account.
22.2 Analysis of amounts recognised in the financial statementsa) Analysis of amounts recognised in the consolidated income statement
2011
£’000

2010
£’000

24

18

2011
£’000

2010
£’000

Net credit to the share-based payments reserve
Charge to the share premium account

46
(22)

18
–

Net share-based payments credit recognised in equity

24

18

2011
£’000

2010
£’000

591

546

Total share-based payments charge recognised in operating profitb) Analysis of amounts recognised in the consolidated statement of changes in equity in the yearc) Cumulative amounts included within equity in the consolidated statement of financial position

Cumulative reserve credit for share-based payments
22.3 Reconciliation of movements in equity-settled share-based payment arrangements in the year

Arrangement

Options

Award
date
Year

Vests
Years

Expires
Year

2006
2006
2006
2007
2008
2009
2010
2011
2011

2007–09
2007–09
2007–09
2008–10
2009–1120092011–13
2012–142012–14

2016
2016
2016
2017
2018
2019
2020
2021
2021

2011

Total
Weighted average
exercise price (pence)

44

Ubisense Group plc
Annual Report and Accounts 2011

2011

2012

Awardsexercisableat
31 December
2011
Number(131,000)(21,500)(5,250)(7,200)(1,850)(564)(208,944)––––(15,500)–(11,500)
2,500(1,250)300(1,000)650–
4,457(21,290) 1,404,647(2,500) 488,800–
32,532

–
–
2,500
300
650
4,457
335,389––

523,832(376,308)(53,040) 1,933,886

343,296–

107,109–

1,839,402

630,941(376,308)

0.20p

0.41p

0.36p

Grantedduringthe year
NumberExercisedduringthe year
Number0.57
131,000
0.77
37,0000.90
19,250
0.90
8,750
0.90
3,500
0.90
5,021
0.14 1,634,881
1.05
–
1.98
–

–
–
–
–
–
–
–
491,300
32,532

1,839,402

Exercise
price£

Options
Warrants

Awardsoutstandingat
31 December
2011
NumberAwardsoutstandingat
1 January
2011
Number1.80

Lapsedduringthe year
Number

–107,109107,109(53,040) 2,040,995

450,405

0.51p

0.23p

0.55p

Overview
Business review
Corporate governance
Financial statements

22 Share-based payments: options and warrants continued
22.3 Reconciliation of movements in equity-settled share-based payment arrangements in the year continued
The weighted average share price during the year for options exercised was £1.95 (2010: £0.90).
During 2010, 1,602,131 options were replaced following an agreed repricing with HM Revenue & Customs. The replacement options vest
over the dates 18 March 2011 and 18 March 2012 and were accounted for as a modification.
22.4 Principal assumptions
The fair value of share-based payments grants has been valued using the Black-Scholes option-pricing model. No performance conditions
were included in the fair value calculations. Expected volatility was determined based on the historic volatility of comparable companies.
The expected life is the expected period from option to exercise based on management’s best estimate of the effects of non-transferability,
exercise restrictions and behavioural considerations. The risk‑free rate of return is an average yield on the zero-coupon UK government bondin issue 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 2011
and 31 December 2010:
Instrument

Number granted
Grant date
Share price at grant date (£)
Exercise price (£)
Fair value per option (£)
Expected life (years)
Expected volatility (%)
Risk-free interest rate (%)
Expected dividends expressed
as a dividend yield (%)

OptionWarrant

OptionOptionOption32,53226 September 2011
1.98
1.98
0.31
3.0
20.00
1.40

107,109
22 June 2011
1.80
1.80
0.20
1.5
20.00
2.03

491,300
16 May 2011
1.05
1.05
0.18
3.0
20.00
2.30

12,20019 September 2010
0.14
0.14
0.03
3.0
20.00
5.00

22,35018 March 2010
0.14
0.14
0.03
3.0
20.00
5.00

0.00

0.00

0.00

0.00

0.00

23 Other reserves
Equitycomponent ofConvertibleloans andwarrants£’000

Share-based
payment
reserve£’000

Translation
reserve
£’000

Total
£’000

Balance at 1 January 2010
Exchange difference on retranslation of net assets and results of overseas subsidiaries
Reserve credit for equity-settled share-based payment
Equity component of loans

499
–
–
3

528
–
18
–

(66)
(29)
–
–

961
(29)
18
3

Balance at 31 December 2010

502

546

(95)

953

Exchange difference on retranslation of net assets and results of overseas subsidiaries
Reserve credit for equity-settled share-based payment
Equity component of loans converted

–
–
(502)

–
45
–

14
–
–

14
45
(502)

–

591

(81)

510

Balance at 31 December 2011

Ubisense Group plc
Annual Report and Accounts 201145

Financial statements

Notes to the consolidated financial statements continued

For the year ended 31 December 2011

24 Operating lease commitments
Leases as lessee
At 31 December 2011, the Group has lease agreements in respect of property and equipment for which payments extend over a numberof years. The Group enters into these arrangements as these are a cost-efficient way of obtaining the short-term 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 annual commitment for future minimum lease payments under non-cancellable operating leases are as follows:
Land and buildings

No later than one year
Later than one year and no later than five years
Later than five years
Total

Other

2011
£’000

2010
£’000

2011
£’000

2010
£’000

326
635
535

307
148
–

125
95
–

92
96
–

1,496

455

220

188

25 Principal subsidiaries
The Company’s subsidiary undertakings at 31 December 2011 are shown below. All are included in the Group financial statements and wholly
owned directly by the Company. All subsidiaries prepare accounts up to 31 December each year except for Realworld OO Systems Limited
which prepares accounts up to 31 March.
Subsidiary

Country of incorporation

Principal activity

UK
Germany
FranceUS
CanadaUS
UK

Location solutions
Location solutions
Location solutions
Location solutions
Location solutions
Location solutions
Location solutions

Ubisense Limited
Ubisense AG
Ubisense SAS
Ubisense, Inc.
Ubisense Solutions, Inc.
Integrated Mapping Services, Inc.
Realworld OO Systems Limited
26 Business combinations
26.1 Subsidiaries acquired
Subsidiary

Country of incorporation

Principal activity

Date of acquisitions

Proportion of equity
interest acquired

Integrated Mapping Services, Inc.
Realworld OO Systems Limited

US
United Kingdom

Location solutions
Location solutions

26 September 2011
4 October 2011

100%
100%

Integrated Mapping Services, Inc. (“InMaps”) and Realworld OO Systems Limited (“Realworld”) were acquired to continue the expansion of
the Group’s Geospatial division. Both InMaps and Realworld are location solutions businesses providing geospatial software products andconsulting, the former with a focus on the electric and gas sector, the latter on the telecommunications sector. The acquisitions will enhance
the Group’s product range, product development capability, sector presence and geographical footprint.
26.2 Consideration transferred
InMaps£’000

Realworld
£’000

Total
£’000

Cash consideration paid
Contingent cash consideration arrangement

393
–

1,250
560

1,643
560

Consideration transferred

393

1,810

2,203

Under the contingent cash consideration arrangement, the Group is required to pay additional amounts to the vendors of Realworld basedon the achievement of two separate performance milestones that may arise between 2012 and 2013 with a combined undiscounted rangeof 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 the probability-adjusted expected cash outflow from the arrangement. As at 31 December 2011 the amount recognised forthis arrangement was unchanged based on the most recent management estimates.

46

Ubisense Group plc
Annual Report and Accounts 2011

Overview
Business review
Corporate governance
Financial statements

26 Business combinations continued
26.2 Consideration transferred continued
The maturity of contingent consideration is as follows:

Non-current
Current

Notes

2011
£’000

2010
£’000

20
18

160
400

–
–

560

–

Total

Acquisition related costs amounting to £47,000 (InMaps: £16,000; Realworld: £31,000) have been excluded from the considerationtransferred and have been recognised as an expense in the current year within the “administrative expenses” line item in the
consolidated income statement.
26.3 Assets acquired and liabilities recognised at the date of acquisition
InMaps£’000

Realworld
£’000

Total
£’000

AssetsNon-current assets
Software products
Customer relationships
Order backlog
Property, plant and equipment
Deferred income tax assets

191
184
11
11
32

338
218
36
8
88

529
402
47
19
120

Total non-current assets

429

688

1,117

Current assets
Trade and other receivables
Cash and cash equivalents

83
32

379
11

462
43

Total current assets

115

390

505

Total assets

544

1,078

1,622

Liabilities
Current liabilities
Loans and borrowings
Trade and other payables

(36)
(51)

–
(307)

(36)
(358)

Total current liabilities

(87)

(307)

(394)

Non-current liabilities
Loans and borrowings
Deferred income tax liabilities

(86)
(134)

–
(154)

(86)
(288)

Total non-current liabilities

(220)

(154)

(374)

Total liabilities

(307)

(461)

(768)

Fair value of identifiable net assets acquired

237

617

854

The fair value of trade and other receivables of £462,000 includes trade receivables with a fair value and gross contractual value of £415,000(InMaps: £80,000; Realworld: £335,000), all of which is expected to be collectable.

Ubisense Group plc
Annual Report and Accounts 201147

Financial statements

Notes to the consolidated financial statements continued

For the year ended 31 December 2011

26 Business combinations continued
26.4 Goodwill arising on acquisitions
InMaps£’000

Realworld
£’000

Total
£’000

Consideration transferred
Less: fair value of identifiable net assets acquired

393
(237)

1,810
(617)

2,203
(854)

Goodwill arising on acquisitions

156

1,193

1,349

Goodwill arose on the acquisitions of InMaps and Realworld in respect of the benefits of highly knowledgeable workforces, expected
operational synergies, revenue growth and future market development. These benefits are not recognised separately from goodwill
because they do not meet the recognition criteria for identifiable intangible assets.
Goodwill has been allocated to the Geospatial segment and is not expected to be deductible for tax purposes.
26.5 Net cash outflow on acquisition of subsidiaries
InMaps£’000

Realworld
£’000

Total
£’000

Cash consideration paid
Less: cash and cash equivalent balances acquired

393
(32)

1,250
(11)

1,643
(43)

Net cash outflow on acquisition of subsidiaries

361

1,239

1,600

Beforeacquisitions£’000

InMaps£’000

Realworld
£’000

Total
£’000

23,022
1,295
100

78
(66)
(103)

685
219
144

23,7851,448
141

26.6 Impact of acquisitions on the results of the GroupThe incremental impact of acquisitions to the Group’s results for the year are set out in the table below:

Revenue
Adjusted EBITDA
Profit/(loss) before tax

If the acquisitions were effective from 1 January 2011, the Group’s estimated results would have been as follows:

Revenue
Adjusted EBITDA
Profit/(loss) before tax

Beforeacquisitions£’000

InMaps£’000

Realworld
£’000

Total
£’000

23,022
1,295
100

435
(96)
(133)

2,080
(153)
(228)

25,5371,046(261)

27 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 aresummarised below. The main types of risks are market risk, credit risk and liquidity risk.
The Group’s risk management is coordinated at its headquarters, in close cooperation with the Board of Directors, and focuses 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 are described below.
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.

48

Ubisense Group plc
Annual Report and Accounts 2011

Overview
Business review
Corporate governance
Financial statements

27 Financial risk management continued
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 not considered significant enough to warrant this.
The carrying amounts of the Group’s foreign currency denominated monetary assets and liabilities at the reporting date, not denominatedin the local functional currency, are as follows:
US Dollars

AssetsLiabilities

Euros

2011
£’000

2010
£’000

2011
£’000

2010
£’000

539
(7)

330
(64)

485
–

351
–

27.3 Foreign currency sensitivity analysis
The Group’s principal functional currency is Sterling. The Group is mainly exposed to US Dollars and Euros. The Group seeks to manage
cash inflows and outflows in each currency 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

Euros

2011
£’000

2010
£’000

2011
£’000

2010
£’000

Effect of an 5% strengthening in relevant exchange rate on:
Income statement
Equity

25
25

13
13

23
23

17
17

Effect of an 5% weakening in relevant exchange rate on:
Income statement
Equity

(28)
(28)

(14)
(14)

(26)
(26)

(18)
(18)

27.4 Interest rate sensitivity
Following the repayment of the Group’s debt facilities at the time of the initial public offering in June 2011, 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 capital preservation and flexibility 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 with varying maturity dates.
The aggregate amount of the Group’s cash deposits on fixed interest terms as at 31 December 2011 was £2.7 million (2010: £nil). The weighted
average fixed interest rate on the cash balances during the year was 1.21% (2010: nil) and the weighted average period for which the rate is fixedis 40 days (2010: nil). The aggregate amount of cash deposits on variable interest terms held with clearing bankers as at 31 December 2011was £3.3 million (2010: £7.1 million).
The following table illustrates the sensitivity of the net profit of the Group for the year and equity to a possible change in interest rates
of +0.5% and -0.5%, with effect from the beginning of the year. A positive number indicates an increase in profit or equity.
2011
£’000

2010
£’000

Effect of an 5% strengthening in relevant exchange rate on:
Income statement
Equity

32
32

10
10

Effect of an 5% weakening in relevant exchange rate on:
Income statement
Equity

(20)
(20)

(5)
(5)

Ubisense Group plc
Annual Report and Accounts 201149

Financial statements

Notes to the consolidated financial statements continued

For the year ended 31 December 201127 Financial risk management continued
27.5 Credit risk analysis
The Group’s maximum exposure to credit risk is limited to the carrying amount of financial assets recognised at the reporting 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 continually 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 othercounterparties are obtained and used.
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 forcustomers 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.
None of the Group’s financial assets are secured by collateral or other credit enhancements.
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 are compared to balances in order to determine headroom or any shortfalls. This analysis shows if available cash is
expected to be sufficient and the need for securing finance from its shareholder base.
The Group’s financial liabilities have contractual maturities as summarised below:
Current

Non-current

Within6 months£’000

Between
6 and 12months£’000

Between1 and 5
years
£’000

Later than
5 years£’000

As at 31 December 2011
Trade and other payables
Loans and borrowings

4,482
–

–
–

160
–

–
–

As at 31 December 2010
Trade and other payables
Loans and borrowings

3,071
2,213

–
209

–
1,397

–
–

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 accessterms 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 returnto stakeholders. The capital structure of the Group consist of cash and cash equivalents of the Company, as disclosed in the consolidated
statement of financial position.
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 ofdividends payable to shareholders or return capital to shareholders. During 2011, the Group issued 6,446,208 Ordinary shares raising £5,238,000
in cash (before expenses) to provide funds for the growth and development of the Group and repaid or converted all debt instruments.
The Group is not subject to externally imposed capital requirements. The capital structure is continually monitored by the Group.

50

Ubisense Group plc
Annual Report and Accounts 2011

Overview
Business review
Corporate governance
Financial statements

27 Financial risk management continued
27.8 Summary of financial assets and liabilities by category
The carrying amounts presented in the Consolidated Statement of Financial Position relate to the following categories of financial assets
and liabilities:
2011
£’000

2010
£’000

Loans and receivables
Trade and other receivables
Cash and cash equivalents

9,143
6,034

5,962
7,130

Total loan and receivables

15,177

13,092Financial liabilities at amortised cost
Current liabilities
Loans and borrowings
Trade and other payables–(4,482)(2,372)(3,071)(4,482)(5,443)

Non-current liabilities
Loans and borrowings
Other liabilities

–
(160)

(1,246)–

Total non-current liabilities–(1,386)(4,642)(9,732)

Total liabilities

Ubisense Group plc
Annual Report and Accounts 201151

Financial statements

Independent auditors’ report
To the members of Ubisense Group plc

We have audited the parent company financial statements of Ubisense Group plc for the year ended 31 December 2011 which comprisethe 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 the Companies Act 2006.
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to themin an auditors’ 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 auditors
As explained more fully in the Directors’ Responsibilities Statement, the Directors are responsible for the 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 applicable law and International Standards on Auditing (UK and Ireland). Those standards
require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the APB’s website at ww.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 31 December 2011;• 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 are prepared 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 not been received frombranches not visited by us; or• the parent company financial statements are not in agreement with the accounting records and returns; or• certain disclosures of Directors’ remuneration specified by law are not made; or• we have not received all the information and explanations we require for our audit.
Other matter
We have reported separately on the Group financial statements of Ubisense Group plc for the year ended 31 December 2011.
Alison Seekings
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Cambridge
19 March 201252

Ubisense Group plc
Annual Report and Accounts 2011

Overview

Company balance sheet

Business review
Corporate governanceAt 31 December 2011

Financial statements

Notes

2011
£’000

2010
£’000

3

16,003

13,763

4

8,067

4,822

2

–

8,069

4,822

(400)

(1,974)

Net current assets

7,669

2,848

Total assets less current liabilities

23,672

16,611

(160)

(754)

23,51215,857

Fixed assets
Investments in subsidiaries
Current assets
Debtors
Cash at bank and in hand

Creditors – amounts falling due within one year

Creditors – amounts falling due after more than one year

5, 7

6, 7

Net assets
Capital and reserves
Called‑up share capital

8

433

304

Share premium account9

22,031

14,550Equity component of loans

9

–

457

Share‑based payment reserve

9

591

546

Profit and loss reserve

9

457

–

Equity shareholders’ funds

10

23,51215,857

The notes on pages 54 to 56 are an integral part of the Company financial statements.
The financial statements were approved by the Board of Directors on 19 March 2012 and signed on its behalf by:
Richard Green
Chief Executive Officer

Gordon Campbell
Chief Financial Officer

The Company’s registered number is 05589712

Ubisense Group plc
Annual Report and Accounts 201153

Financial statements

Notes to the Company financial statements
For the year ended 31 December 2011

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 the preceding year.
The Company has taken advantage of the exemption allowed under FRS 8 “Related party disclosures” not to show transactions with otherwholly-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 share‑based 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 subsidiary. Investments in subsidiaries are increased by the aggregate amountof share‑based payment with a corresponding increase in shareholders’ funds for the same amount.
Investments in subsidiaries
Fixed asset investments are shown at cost less provision for impairment.
Compound instruments
The Company applied the requirements of FRS 25 “Financial Instruments – Presentation” to account for the convertible and bank loans.
The bank loan was repaid and the convertible loans were either converted or repaid prior the initial public offering on 22 June 2011. Theseloans were regarded as compound instruments, consisting of a liability component and an equity component. At the date of issue, the fair valueof the liability component was estimated using the prevailing market interest rate for a similar debt instrument without a conversion feature.
The difference between the loan balance and the fair value assigned to the liability component, representing the embedded equity element(option to convert the liability into equity of the Group, or warrants over shares in the Company), was accounted for as an equity instrument.
The interest expense on the liability component is calculated by applying the prevailing market interest rate for similar debt instrument
to the liability component. The difference between this amount and the interest paid is added to the carrying amount of the loan.
On conversion of debt to equity the carrying value of the debt instrument is transferred to equity and no gain or loss arises on conversion.
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 and law. Timing differences arise fromthe 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 Profit 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 profit for the financial year ended 31 December 2011 of nil (2010: nil).
The Company does not have any employees (2010: nil). Directors’ emoluments are disclosed in note 7 of the consolidated financial statements.
The Directors were not remunerated by the parent Company.

54

Ubisense Group plc
Annual Report and Accounts 2011

Overview
Business review
Corporate governance
Financial statements

3 Investments in subsidiaries
Investments
in subsidiaries£’000

Cost and net book amountAt 1 January 2011
Additions
Capital contribution relating to share‑based payments

13,7632,216
24

At 31 December 2011

16,003

Additions
The additions in the year relate to:• subscription for ordinary shares in a new subsidiary, Ubisense SAS, for total consideration of £13,000;• the acquisition of Integrated Mapping Solutions, Inc. for total consideration of £393,000; and• the acquisition of Realworld OO Systems Limited for total consideration of £1,810,000.
Further details of the acquisitions are given in note 26 of the consolidated financial statements.
Capital contribution
The capital contributions relating to share‑based payments arise because the Company has granted share options to the employeesof its various subsidiaries.
Subsidiary undertakings
A complete list of subsidiary undertakings is given in note 25 of the consolidated financial statements.
4 Debtors

Amounts owed by subsidiary undertakings

2011
£’000

2010
£’000

8,067

4,822

2011
£’000

2010
£’000

–
400

1,974
–

400

1,974

2011
£’000

2010
£’000

–
160

754
–

160

754

5 Creditors: amounts falling due within one year

Convertible loan
Other liabilities – contingent consideration

6 Creditors: amounts falling due after more than one year

Convertible loan
Other liabilities – contingent consideration

Ubisense Group plc
Annual Report and Accounts 201155

Financial statements

Notes to the Company financial statements continued
For the year ended 31 December 2011

7 Maturity of financial liabilities

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

2011
£’000

2010
£’000

–
400

1,974
–

400

1,974

–
160

754
–

160

754

560

2,728

Convertible loan
£2,364 of the convertible loan was repaid in year with the remainder converted into ordinary shares.
Contingent consideration
The contingent consideration relates to the acquisition of Realworld OO Systems Limited in the year which is further described in note 26
in the consolidated financial statements.
8 Share capital

Allotted, called up and fully paid
Ordinary shares of £0.02 each

2011
Number

2010
Number

2011
£’000

2010
£’000

21,657,698

15,211,490

433

304

A description of the movements in share capital in the year is given in note 21 of the consolidated financial statements.
9 Reserves
Sharepremium£’000

Equitycomponentof convertible
loans
£’000

Share‑based
payment
reserve£’000

Profit andloss reserve£’000

Balance at 1 January 2011
Profit for the year
Reserve credit for equity‑settled share‑based payment
Equity component of loans converted
Premium on new share capital
Share issue costs

14,550
–
–
–
7,968
(487)

457
–
–
(457)
–
–

546
–
45
–
–
–

–
–
–
457
–
–

Change in year

7,481

(457)

45

457

Balance at 31 December 201122,031

–

591

457

2011
£’000

2010
£’000

Profit/(loss) for the year
Reserve credit for equity‑settled share‑based payment
Issue of new share capital
Premium on new share capital
Share issue costs
Premium on new share capital

–
45
129
7,968
(487)
–

–
18
69
4,973
(196)
–

Net change in shareholders’ funds

7,655

10,993

Shareholders’ funds at 1 January

15,857

4,864

Shareholders’ funds at 31 December

23,51215,857

10 Reconciliation of movements in shareholders’ funds

56

Ubisense Group plc
Annual Report and Accounts 2011

Overview

Notice of annual general meeting

Business review
Corporate governance
Financial statements

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 be held at the offices
of FTI Consulting, Holborn gate, 26 Southampton Buildings, London WC2A 1PB on 26 April 2012 at 09.30 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 31 December 2011, together with the directors’ report and auditor’sreport on those accounts, be received and adopted.
Re-election of directors
2. To re-elect Richard Green, who retires by rotation and offers himself for re-appointment by general meeting, as a director of the Company.
3. To re-elect Peter Harverson, 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 this meeting until theconclusion of the next meeting at which accounts are laid before the Company and that the Directors be authorised to agree theremuneration 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 accordance with 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 toconvert any security into shares (“Rights”):
a.	up to an aggregate nominal value of £145,000 (being the nominal value of approximately one third of the issued share capital of theCompany); andb.	up to an aggregate nominal value of £65,000 in connection with options granted in accordance with the Company’s articles of association,	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 the Company 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 conferredhereby had not expired. This resolution revokes and replaces all unexercised authorities previously granted to the Directors to allot sharesor grant Rights but without prejudice to any allotment of shares or grant of Rights already made, offered or agreed to be made pursuant
to such authorities.

Ubisense Group plc
Annual Report and Accounts 201157

Financial statements

Notice of annual general meeting continued

6.	THAT subject to and conditional upon the passing of resolution number 5 above, the Directors be and are hereby generally authorisedin 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 this authority 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 with fractional entitlements or legal or practicalproblems 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 of association up to an
aggregate nominal value of £65,000;c.	the allotment of equity securities (otherwise than pursuant to sub-paragraphs (a) and (b) above) up to a maximum aggregate nominal
value of £65,000 (being the nominal value of approximately 15 percent. 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 dateon which this resolution becomes unconditional and the date 15 months after the passing of this resolution save that the Company may
make any offer(s) or enter into any agreement(s) before such expiry which would or 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 and replaces all unexercised authorities previously granted to the Directors to allot equity securities
but without prejudice to any allotment of equity securities already made, offered or agreed to be made pursuant to such authorities.
By order of the Board
Ubisense Group plc
Gordon Campbell
Company Secretary	St. Andrew’s House
90 St. Andrew’s Road
Chesterton
Cambridge
CB4 1DL
2 April 2012		58

Ubisense Group plc
Annual Report and Accounts 2011

Overview
Business review
Corporate governance
Financial statements

Notes to the notice of annual general meeting
Entitlement to attend and vote1.	Pursuant 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 voteat 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 thenotes 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 right to 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 anotherperson 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 toappoint 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 more than one proxy to exercise
rights attached to any one share. To appoint more than one proxy, you may photocopy the proxy form. Please indicate the proxy holder’s name and the number of sharesin 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 and should be returned together in the same envelope. Failure to specify the number ofshares to which each proxy appointment relates or specifying more shares than the number of shares held by you at the time set out in note 1 above will result in theproxy 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 1DL or emailed to
The Company Secretary at companysecretary@ubisense.net; and•received 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 proxy appointment 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 the company or an attorney
for the company.
	Any power of attorney or any other authority under which the proxy form is signed (or a duly certified copy of such power or authority) must be included withthe 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 to their CREST sponsor or voting service provider(s),who will be able to take the appropriate action on their behalf.
	In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a “CREST Proxy Instruction”) must be properly authenticatedin 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 (as determined 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 be communicated to the appointee through other means.
	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 sponsored member or has appointed a voting service provider(s), to procurethat his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system
by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to thosesections 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 senior holder will be
accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s register of members in respect of the joint holding(the first-named being the most senior).

Ubisense Group plc
Annual Report and Accounts 201159

Financial statements

Notes to the notice of annual general meeting continued
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 of proxy appointments(see above) also apply in relation to amended instructions; any amended proxy appointment received after the relevant cut-off time will be disregarded.
	Where you have appointed a proxy using the hard-copy proxy form and would like to change the instructions using another hard-copy proxy form, please contact
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 proxyappointment 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 the company or an attorney for the company.
Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified copy of such power or authority) must be included with therevocation 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, your proxyappointment 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 in person,
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 morethan 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 21,684,461 ordinary shares of £0.02 each. Each ordinary sharecarries 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 21,684,461.
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 and theRelevant 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. Except 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

You may not use any electronic address provided either:•in this notice of annual general meeting; or•any related documents (including the proxy form),to communicate with the Company for any purposes other than those expressly stated.

60

Ubisense Group plc
Annual Report and Accounts 2011

Advisers

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

Lawyers to the Company
Mills & Reeve LLP
Cambridge Office:Francis House
112 Hills Road
Cambridge CB2 1PH

Nominated Advisors and Brokers
Canaccord Genuity Limited
88 Wood Street
London EC2V 7QR

AuditorGrant Thornton LLP
Cambridge Office:
101 Cambridge Science Park
Milton Road
Cambridge CB4 0FYThis Annual report and accounts has been printed on Symbol Freelife, certified by the FSC®
and produced at mills with ISO 14001 environmental management systems. The printer is a
CarbonNeutral® company.

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