Synchronica plc 
Annual Report and Accounts 2009
Synchronica plc Annual Report and Accounts 2009 Synchronica plc is a leading developer of 
next‑generation mobile messaging solutions 
based on open industry standards. The award‑ winning product portfolio includes the flagship 
product Mobile Gateway, providing push email, 
synchronisation, instant messaging (IM), backup 
and restore, and mobile connectivity to social 
networks. Synchronica’s products are white‑ labelled 
and offered to mobile operators in emerging and 
developed markets. Our products provide mass 
market messaging services, increase data revenues 
and reduce churn.
 
CORPORATe STATeMeNT
 IFC CORPORATe STATeMeNT
 01 HIGHLIGHTS
 02 OUR CUSTOMeRS ANd PARTNeRS
 04 CHAIRMAN’S STATeMeNT
 06 CHIef exeCUTIve OffIC eR’S RePORT
 14 BOARd Of dIReCTORS ANd MANAGeMeNT TeAM
 16 RePORT Of THe dIReCTORS
 19 ReMUNeRATION RePORT
 22 RePORT ON CORPORATe GOveRNANCe
 23 STATeMeNT Of dIReCTORS’ ReSPONSIBILITIeS
 24 INdePeNdeNT AUdITORS’ RePORT
 26 CONSOLIdATed STATeMeNT Of COMPReHeNSIve INCOMe 
 27 STATeMeNT Of fINANCIAL POSITION
 28 CONSOLIdATed ANd COMPANY STATeMeNT Of CASH fLOW 
 30 CONSOLIdATed STATeMeNT Of CHANGeS IN eqUITY 
 31 COMPANY STATeMeNT Of CHANGeS IN eqUITY 
 32 NOTeS fORMING PART Of THe fINANCIAL STATeMeNTS 
 59 NOTICe Of GeNeRAL MeeTING
  Synchronica plc Annual Report and Accounts 2009 01
OVERVIEW CORPORATE GOVERNANCE FINANCIAl S TATEmENTS BuSINESS REVIEW
HIGHlIGHTS
Mobile Gateway 5
Next-generation messaging for any mobile phone
››  Revenues increased slightly to £3.83m (2008: £3.71m)
›› 	 Gr o s s 	pr ofits 	up	80%	t o	£3.67m	(2008:	£2.03m)
›› 	 	 Admini s tr ativ e	c o s ts 	do wn	t o	£6.91m	(2008:	£8.5m)
›› 	 	 L o s s 	bef or e	t ax 	h alv ed	at 	£3.22m	(2008:	£6.49m	lo s s)
›› 	 	 L o s s 	per	sh ar e	of 	0.6p	(2008:	lo s s 	per	sh ar e	of 	2.9p)
›› 	 	 C a sh	po s ition	of 	£2.63m	(2008:	£3.49m),	bef or e	
£2.79m (gross) placing post-period end
››  Record 13 new contract wins with mobile operators 
announced during 2009
›› 	 	 Mo b i l e	G at ew a y 	r el at ed	r ev enue s 	inc r e a sed	b y 	175%	
t o	£3.1m	(2008:	£1.16m)
£3.83m
REVENuE (2008: £3.71m)
+80%
INCREASE IN GROSS PROFITS 
(2008: £2.03m)
+175%
INCREASE IN mOBIlE GATEWAy 
Revenue s 	(2008:	£1.16m)
Email and Synchronisation 
mobile Gateway provides industry standard Push Email 
and Synchronisation using the built-in Email clients 
of a wide range of Smartphones and feature phones. 
C ruc i al ly ,	Mo b i l e	G at ew a y 	al so	s up por ts 	phone s 	whic h	
would not usually be able to access Push Email and 
Synchronisation services. mobile Gateway’s Email-to-mmS 
and Email-to-WAP technologies support entry level feature 
phone s 	whic h	do	not 	h av e	b ui lt -in	me s s agin g	c lients,	
and the Email-to-SmS gateway further extends the 
m ark et 	r e ac h	t o	l e g acy 	2G,	and	non-d at a	en ab l ed	
mobile phones.
Instant Messaging
using the built-in Instant messaging client found on 
m a n y 	 d e v i c e s , 	 M o b i l e 	 G a t e w a y 	 d e l i v e r s 	 I n s t a n t 	 M e s s a g i n g	
t o	a	w ide	r an g e	of 	mo b i l e	phone s,	al lo w in g	s ub s c riber s 	
to stay connected to their Im “buddies” without having 
to download additional software. With support for a 
w ide	r an g e	of 	IM	c ommu nitie s,	oper at or s 	c an	s timu l at e	
a	f a s t 	ser v ic e	t ak e-up ,	and	at 	the	s ame	time	e s t ab li sh	
operator-branded communities that generate data 
tr affic 	and	c omb at 	c hurn.
Social Networking
mobile Gateway provides Push Social Networking 
Services for a wide range of popular Social Networking 
Services to the built-in messaging clients of a wide 
range of Smartphones and feature phones. mobile 
Gateway extends Social Networking even to entry-level 
phones by sending feeds and status updates as mmS 
or SmS.
Web Feeds
mobile Gateway’s built-in Web-Feeds connector provides 
users with live updates from any website that supports 
RSS-Feeds. updates are pushed as emails into a separate 
m ai l bo x,	or	b y 	 s M s,	MM s 	or	 W AP	P u sh.	B y 	s up por tin g	
an y 	 on line 	 w e b s it e 	 th at 	 pr o v ide s 	 R s s 	 W e b-F eed s, 	 oper at or s	
c a n 	 p r o v i d e 	 r e a l - t i m e 	 a c c e s s 	 t o 	 l i t e r a l l y 	 t h o u s a n d s 	 o f 	 n e w s ,	
s p o r t i n g 	 a n d 	 e n t e r t a i n m e n t 	 s e rv i c e s , 	 g e n e r a t i n g 	 r e c u r r i n g	
r ev enue	s tr e ams 	and	inc r e a sed	d at a	tr affic .

Investor relations online at 
synchronica.com/investors

Discover the award-winning products  
online at synchronica.com/products 02 Synchronica plc Annual Report and Accounts 2009
OuR CuSTOmERS AND PARTNERS
Argentina to Zambia
Synchronica’s vision is to bring next-generation 
mo b i l e 	 me s s agin g 	 t o 	 an y 	 s ub s c riber , 	 r e g ar dl e s s 	
of the type of handset they own. We’re executing 
a strategy which helps us to achieve this by 
implementing a unique technology and developing 
scalable global distribution partnerships. 
W i t h 	 a 	 p a r t i c u l a r 	 f o c u s 	 o n 	 e m e r g i n g 	 e c o n o m i e s ,	
Synchronica helps mobile operators to provide 
advanced messaging services to the widest 
possible range of mobile phones.  Synchronica plc Annual Report and Accounts 2009 03
OVERVIEW CORPORATE GOVERNANCE FINANCIAl S TATEmENTS BuSINESS REVIEW 04 Synchronica plc Annual Report and Accounts 2009
CHAIRmAN’S STATEmENT
Synchronica continues to make great 
strategic and commercial progress as we 
focus our efforts on becoming the leading 
provider of push mobile email solutions 
for mobile operators in emerging markets. 
Key to this progress is the enhancement 
of our distribution network. 
During 2009 we successfully secured 
global reseller agreements with 
Brights t ar ,	nok i a	 siemen s 	netw ork s,	
and a large Asian-based network 
equipment vendor. This has resulted 
in us being able to substantially enlarge 
our	c u s t omer	f ootprint,	and	w elc ome	
new customers from our target markets 
of 	the	Mid dl e	e a s t 	and	Afric a,	e a s t ern	
e ur ope,	As i a	and	Latin	Americ a.	Our	
distribution partnerships provide 
Synchronica with global reach and 
local presence in all the high growth 
m ark ets 	and	w e	r em ain	c onfident 	th at 	
our focus on distribution will continue 
to bear fruit. 
Financial results
We increased revenue slightly on last 
year at £3.83m (2008: £3.71m). The 
consensus broker expectation had been 
for higher revenues in 2009 and in the 
latter part of 2009 and into 2010 we 
believed that this had been achieved. 
Ho w ev er ,	w e	w er e	inf ormed	in	e arly 	
2010	b y 	a	c u s t omer	th at,	a s 	a	r e s u lt 	
of that customer being involved in 
ac qui s ition	di s c u s s ion s,	the	r el ev ant 	
counter-signatures and purchase orders 
relating to the delivery of mobile Gateway 
in 2009 would not be received in time 
for us to recognise the revenue in 2009. 
We gave the appropriate guidance to 
the	m ark et,	and	h av e	in	the	me antime	
successfully restarted discussions with 
the customer aiming to conclude this 
contract soon after the acquisition 
is completed. 
Our	gr o s s 	pr ofits 	r em ain	c omf or t ab ly 	
abo v e	90%	of 	r ev enue	f or	our	c or e	
mobile Gateway product. Administrative 
c o s ts,	net 	of 	e x c eption al 	c h ar g e s,	h av e	
f a l l e n 	 f r o m 	 £ 6 . 6 m 	 i n 	 2 0 0 8 	 d o w n 	 t o 	 £ 6 . 0 m	
in 2009. Excluding exceptional items 
w e	r ec or ded	a	s ignific antly 	r educ ed	
operating loss of £2.31m against a loss 
of 	£4.55m	the	pr ev iou s 	 y e ar .	 The	lo s s 	
after tax was lower at £3.08m (2008: 
£6.10m)	and	lo s s 	per	sh ar e	w a s 	lo w er	
at 	0.6p	(2008:	lo s s 	per	sh ar e	2.9p).
Cash Position and Flow
The 	 Gr oup 	 t urned 	 the 	 y e ar 	 w ith 	 £2.63m	
(2008:	£3.49m)	of 	c a sh,	and	a d ded	
£2.8m (gross) from a placing in April 
2010,	w ith	a	f ur ther	£2m	on	a	tw enty 	
f our	month	sw ap ,	a s 	de s c ribed	belo w .	
We derive our revenue from a relatively 
sm al l 	 number 	 of 	 di s c r et e 	 lic en s in g 	 de al s,	
the frequency and timing of which is often 
diffic u lt 	t o	pr edict .	In	r ec ent 	 y e ar s 	our	
revenue has been heavily weighted 
towards the second half. 
With the level of interest shown in our 
pr oduct 	bein g	at 	an	al l 	time	high,	our	
sales pipeline has never been stronger. 
Ho w ev er , 	 w e 	 ar e 	 r eli ant 	 upon 	 a 	 s t e a dy 	
and sustained conversion of these 
prospects into revenue and cash. 
Pr ev iou s ly 	when	the	c a sh	flo w	fr om	
r ev enue 	 h a s 	 been 	 in s uffic ient 	 t o 	 meet	
the Group’s needs the Group has 
successfully sought and received 
the support of its shareholders. 
Each fundraising requires engagement 
with the Group’s shareholders and 
therefore we will need to undertake 
this discussion if and when the need 
arises. In this context please also see 
note 2.
MessagePhone™ collaboration 
and placing
In	Ju ne	2009,	the	C omp an y 	annou nc ed	
a 	 c o l l abor ation 	 agr eement 	 w ith 	 Brights t ar ,	
a	glo b al 	dev ic e	di s trib ut or	and	K CM,	a	
K or e an	dev ic e	m anuf act ur er	t o	de s ign,	
b ui l d, 	 m ark et 	 and 	 sel l 	 a 	 f ami ly 	 of 	 lo w 	 c o s t	
mobile devices which will be bundled 
with Synchronica’s mobile Gateway 
pr oduct .	£4.7m	w a s 	r ai sed	t o	f u nd	
messagePhone’s™ development and 
rollout via a placing. 
We launched messagePhone™ 
with our partners in February 2010 at 
events in l ondon and the mobile World 
Congress in Barcelona. We have since 
r ec eiv ed	the	fir s t 	p ur c h a se	or der s 	f or	
M e s s ag ePhone™,	inc ludin g	r ev enue s 	
for licences and services for the 
bundled mobile Gateway. 
Board changes and staff
On	the	18	no v ember	2009,	w e	
appointed michael Jackson to the 
Board as a Non-executive Director. 
michael is the founder and Chairman 
of 	el der s tr eet 	In v e s tments 	Limit ed,	
David A. mason
NON-ExECuTIVE CHAIRmAN Synchronica plc Annual Report and Accounts 2009 05
OVERVIEW CORPORATE GOVERNANCE FINANCIAl S TATEmENTS BuSINESS REVIEW
best known for investing in young 
and ambitious technology businesses. 
He is also recognised for his long and 
successful position as chairman of 
Sage plc. We welcome the experience 
which michael brings to Synchronica 
from the technology and smaller 
company arena.
On	31	M a y 	2010,	R o ber t 	M ah al sk i,	
a Non-executive Director since 
Januar y 	2008,	c ho se	t o	l e av e	the	
Synchronica Board. We would like 
to thank Robert for his contribution 
to Synchronica during this critical 
phase of the Group’s development.
A key asset of the Company is our 
t e am.	Onc e	ag ain,	 s y nc hr onic a’s 	
progress could not have been possible 
without the hard work and total 
dedication of our management team 
and	s t aff ,	al l 	of 	whom	ar e	c ommitt ed	
to Synchronica’s success.
Post year-end events
On 	 the 	 31 	 M ar c h 	 2010, 	 s y nc hr onic a 	 p lc	
announced the acquisition of the 
ImPS instant messaging business of 
C o libri a	As,	a	l e a din g	mo b i l e	in s t ant 	
messaging company. Synchronica has 
acquired Colibria’s ImPS technology 
and 13 contracts with mobile operators. 
We expect that the acquisition will 
accelerate our entry in to the instant 
me s s agin g 	 m ark et, 	 and 	 th at 	 it 	 w i l l 	 al so	
boost the demand for Synchronica mobile 
Gateway among those customers 
which use Colibria’s technology.
At the same time we announced a placing 
t o	r ai se	£4.8m	gr o s s,	£2.8m	in	c a sh	
and an equity swap placing providing 
the Company with further funding of 
approximately £2.0m over the next 
24	months.	 The	f u nd s 	h av e	been	u sed	
in part to satisfy the cash consideration 
element of the acquisition and will be 
used to provide the enlarged Company 
with further working capital for further 
development and roll-out of mobile 
G at ew a y 	 5, 	 our 	 a w ar d 	 w innin g 	 sof tw ar e.
Trading update
Thanks to the Company’s reseller network 
and	the	M e s s ag ePhone™,	2010	h a s 	
started positively building the sales 
pipeline to a higher level than ever 
bef or e. 	 Ho w ev er , 	 t o 	 d at e 	 the 	 c on v er s ion	
of this pipeline to revenue has been 
slower than expected. The Directors 
believ e 	 th at 	 the 	 s al e s 	 pipeline 	 i s 	 s uffic ient	
t o 	 meet 	 m ark et 	 e xpect ation s 	 f or 	 the 	 y e ar ,	
provided there is an accelerated rate of 
conversion to revenue in the remainder of 
the 	 y e ar . 	 In 	 pr ev iou s 	 y e ar s, 	 s y nc hr onic a’s	
revenue has been heavily weighted 
towards the second half. The slower 
conversion of the sales pipeline has 
led to a lower than expected level of 
c a sh 	 g ener ation, 	 ho w ev er , 	 the 	 Dir ect or s	
believ e	th at 	the	C omp an y 	h a s 	s uffic ient 	
funds to meet its present requirements. 
We are encouraged that the conversion 
rate is accelerating by the signing of 
three uS $1m plus deals in June 2010. 
Outlook
W ith	the	l au nc h	of 	Mo b i l e	G at ew a y 	4	
durin g	2009,	 s y nc hr onic a	w a s 	ab l e	t o	
offer a push email and synchronisation 
product which can support any mobile 
h and set,	r e g ar dl e s s 	of 	ho w	b a s ic 	it 	
m a y 	 be. 	 In 	 2010, 	 the 	 C omp an y 	 l au nc hed	
Mo b i l e	G at ew a y 	5,	whic h	in	a d dition	
to push email and synchronisation 
f or	an y 	mo b i l e	phone,	no w	intr oduc e s 	
Instant messaging and connectivity 
to Social Networking communities. 
W e	believ e	th at 	thi s,	in	t andem	w ith	
the	M e s s ag ePhone™	initi ativ e,	and	
our	s tr on g	s al e s 	c h annel s,	w i l l 	see	
Synchronica exceed the momentum 
of 	r ec ent 	c ontr act 	w in s,	and	l ev er ag e	
on our technological superiority to 
c apt ur e	a	s ignific ant 	m ark et 	sh ar e.	
David A Mason
Non-executive Chairman
29 June 2010
“”
T h e 	 C o m p a n y 	 l a u n c h e d 	 M o b i l e 	 G a t e w a y 	 5 	 w h i c h , 	 i n 	 a d d i t i o n	
t o	p u sh	em ai l 	and	sy nc hr oni s ation	f or	an y 	mo b i l e	phone,	
now introduces Instant messaging and connectivity to Social 
Networking communities. We believe that this, in tandem 
with the MessagePhone initiative and our strong sales channels, 
will see Synchronica exceed the momentum of recent contract 
wins, and leverage on our technological superiority to capture 
a	s ignific ant 	m ark et 	sh ar e. 06 Synchronica plc Annual Report and Accounts 2009
CHIEF ExECuTIVE OFFICER’S REPORT
In spite of the global economic crisis 
e xperienc ed	in	2009,	 s y nc hr onic a	h a s 	
shown the greatest progress yet by 
signing 13 new contracts with mobile 
oper at or s.	Our	in v e s tments 	in	r efinin g	
our product strategy are now beginning 
to bear fruit as we increased the revenues 
generated from our award-winning 
Mo b i l e	G at ew a y 	pr oduct 	b y 	175%	fr om	
2007	t o	2008	and	b y 	a	f ur ther	175%	
from 2008 to 2009. We have gained 
s ignific ant 	m ark et 	tr action	and	Mo b i l e	
Gateway is now positioned as a serious 
mobile messaging platform especially 
for operators in emerging economies.
We have seen an increased awareness 
in the industry for Synchronica as we 
continue to improve our competitive 
positioning from a technical and 
commercial perspective. This was 
validated with our biggest contract to 
d at e	f or	Mo b i l e	G at ew a y ,	a	usD	1.05m	
order from an Indonesian distributor 
in	M ar c h	2010,	and	the	pr e sent ation	
of 	Mo b i l e	G at ew a y 	t o	mor e	th an	40	
prospective mobile operator customers 
d u r i n g 	 M o b i l e 	 W o r l d 	 C o n g r e s s 	 2 0 1 0 , 	 t h e	
mobile industry’s most important event.
Thr oughout 	2009,	w e	h av e	e s t ab li shed	
a 	 n e w 	 r o u t e 	 t o 	 m a r k e t 	 a n d 	 d i v e r s i fi e d 	 o u r	
product and revenue streams in the form 
of 	the	M e s s ag ePhone™,	the	e xp an s ion	
of our product functionality to instant 
messaging and social networking 
and our new hosting services for 
cost-conscious customers. We are now 
starting to see these efforts paying off 
with greatly enhanced customer base 
and a strong pipeline.
Market overview
Synchronica believes that the mobile 
phone is becoming the preferred device 
for consumers in emerging markets 
to access Internet content and services. 
It is widely documented that in many 
d e v e l o p i n g 	 c o u n t r i e s , 	 t h e 	 m o b i l e 	 p h o n e	
i s 	s t ar tin g	t o	pr o v ide	an	ac c e s s ib l e,	
cost-effective alternative to Internet 
cafes. Operators in these markets 
continue to experience massive 
subscriber growth and are seeing a 
rapid increase of mobile data usage 
as mobile phones are contributing to 
the economic growth in these regions.
According to the Program for 
D ev elopment al 	entr epr eneur ship ,	
an initiative sponsored by the 
M a s s ac hu setts 	In s tit ut e	of 	 T ec hno log y ,	
a developing country’s GDP increases 
0.6%	whenev er	t en	mo b i l e	phone s 	
per	100	peop l e	ar e	a d ded.	 simi l arly ,	
Bly c r of t 	P ub li shin g,	a	uK -b a sed	
t e l e c o m m u n i c a t i o n s 	 p u b l i s h e r , 	 r e p o r t e d	
that Africa’s mobile phone market grew 
b y 	25%	in	2008,	attr actin g	74	mi l lion	
new subscribers and taking the total 
number of subscribers to 370 million. 
Some of the factors that contributed 
t o	thi s 	gr o wth,	the	s t udy 	f ou nd,	
included the launch of eleven new 
netw ork s 	in	Gh an a,	B enin,	Botsw an a,	
C on g o-Br azz av i l l e,	Guine a-C on ak r y ,	
K en y a,	nig er ,	nig eri a,	 sene g al,	 s ud an	
and uganda. A further study from 
Ernst & young (Africa Connected: 
A	t el ec ommu nic ation s 	gr o wth	s t or y),	
indicates this trend shows no sign 
of 	w anin g,	w ith	e xpect ation s 	of 	the	
mobile phone penetration in Africa 
t o	ri se	fr om	37%	t od a y 	t o	mor e	th an	
60%	in	2012.
Carsten Brinkschulte
CHIEF ExECuTIVE OFFICER
SUMMARY
››  Mobile Gateway 4 launched in 2009 
enables Synchronica to address the 
entire device landscape. 
››  Mobile Gateway 4 incorporates the 
Email-to-SMS, Email-to-SMS and 
transcoding technologies acquired from 
AxisMobile, and is compatible with 
100% of mobile phones in the market.
››  Mobile Gateway now represents the 
vast majority of the Company’s 
revenues. Revenue from Mobile 
Gateway has grown from £1.157m 
in 2008 to £3.1m in 2009.
››  Successfully expanded the global 
sales channel by signing reseller 
agreements with Nokia Siemens 
Networks and an unnamed top-five 
Asian network equipment provider, 
in addition to Brightstar.
››  Improved competitive positioning and 
reseller network resulted in 13 new 
contracts with mobile operators being 
signed in 2009 for initial launch licence 
requirements. Substantial expansion 
orders expected to be received within 
12-18 months.
››  MessagePhone™ launched in 2010 
is a turnkey, integrated solution which 
includes an optimised handset and 
messaging services delivered via 
Synchronica’s Mobile Gateway.
››  Acquisition of the Colibria IMPS business 
(post-period end) brings 13 additional 
operator contracts to Synchronica and 
the ownership of Colibria’s proven, 
carrier-grade IM technology. 
Discover the award-winning products  
online at synchronica.com/products
Synchronica plc Annual Report and Accounts 2009 07
OVERVIEW CORPORATE GOVERNANCE FINANCIAl S TATEmENTS BuSINESS REVIEW
using her mobile phone to reply to an email in the Afghan city 
of 	 Her at, 	 y ou 	 w ou l d 	 be 	 f or giv en 	 f or 	 think in g 	 th at 	 s aam an 	 Hak im 	
is a high-powered businesswoman with a BlackBerry device. 
In 	 f act, 	 s aam an 	 w ork s 	 a s 	 a 	 c a shier 	 at 	 the 	 B ah ari s t an 	 Hery 	 Hot el,	
and she relies on her Nokia 3110 to access her mTN mail account. 
mTN mail is mTN Afghanistan’s branded push email service. 
It is one of a number of initiatives taken by the country’s mobile 
operator to boost data usage and supplement voice revenues 
in	an	inc r e a s in gly 	c ompetitiv e	m ark et .	Impor t antly ,	M Tn	
Afghanistan targets the service to the enterprise as well as the 
c on s umer	se gments,	and	h a s 	k ept 	it 	ac c e s s ib l e	b y 	en s urin g	
compatibility with any handset connected onto their network. 
mTN mail represents an emerging trend that is being taken 
by a number of mobile operators around the globe – putting 
a BlackBerry-type service into the hands of their greater 
subscriber base.
Mo b i l e	oper at or s 	ar e	di s c o v erin g	th at 	mo b i l e	me s s agin g,	
which had previously only been targeted towards hard-nosed 
b u s ine s s 	 e x ec utiv e s, 	 c an 	 al so 	 be 	 e a s i ly 	 po s itioned 	 a s 	 a 	 luc r ativ e	
consumer product. 
And so we return to mTN mail. In a country notorious for low 
br o a db and	penetr ation,	doe s 	 saam an	r ely 	on	her	mo b i l e	
phone to send and receive email because it’s the only way 
she 	 c an? 	 O r 	 h av e 	 the 	 po w er s 	 th at 	 be 	 at 	 M T n	 c l ev erly 	 identified	
a massive gap in their market waiting to be exploited? Perhaps. 
W ith	90	tri l lion	em ai l s 	sent 	in	2009	t o	1.4	b i l lion	em ai l 	u ser s 	
w orl dw ide,	it 	i s 	e a sy 	t o	see	mo b i l e	me s s agin g	a s 	an	enric hin g,	
convenience-bringing resource. more and more people worldwide 
ar e 	 b u y in g 	 themselv e s 	 mo b i l e 	 phone s 	 – 	 and 	 w ith 	 mo b i l e 	 phone s,	
comes messaging too. 
Thi s 	 i s 	 the 	 g ap 	 th at 	 s y nc hr onic a 	 a s pir e s 	 t o 	 fil l	 w ith 	 Mo b i l e 	 G at ew a y .	
This award-winning mobile messaging middleware powers 
M T n	 M ai l, 	 in 	 a d dition 	 t o 	 s imi l ar 	 off erin g s 	 fr om 	 20 	 other 	 mo b i l e	
operators worldwide.
>> CASE STUDY
NExT-GENERATION MOBIlE 
MESSAGING FOR NExT 
GENERATION CONSUMERS
“”
In 	 t od a y’s 	 c lim at e, 	 bein g 	 ab l e 	 t o 	 off er 	 s ub s c riber s 	 a 	 lo w-c o s t	
mobile email service that works on existing handsets 
makes commercial sense. Synchronica Mobile Gateway 
fits our business model perfectly and is already proving 
that it can help to reduce churn rates and raise average 
revenue per user. Rodrigo 	 Baudrand, 	 Busine ss	 s o lutions 	 M anager , 	e nt el 	 PCs 	 Chi le 08 Synchronica plc Annual Report and Accounts 2009
CHIEF ExECuTIVE OFFICER’S REPORT CONTINuED
Market overview (continued)
Contrary to the common belief that 
subscribers in emerging markets lack 
sophistication and would not embrace 
services beyond simple voice and 
s M s,	Ju niper	R e se ar c h	e xpects 	mo b i l e	
revenues in the middle East and Africa 
t o 	 hit 	 $107bn 	 b y 	 2013, 	 w ith 	 d at a 	 serv ic e s	
e xpect ed	t o	m ak e	up	24%	of 	the	t ot al 	
billed service revenue. The developing 
world is hungry for access to the online 
applications we take for granted – 
em ai l,	in s t ant 	me s s agin g	and	soc i al 	
networking. Due to the low PC 
penetr ation	in	emer gin g	m ark ets,	
the mobile device has the opportunity 
to become the primary device for 
accessing these next-generation 
messaging applications.
Reporting on the mobile Im market in 
A f r i c a 	 a n d 	 L a t i n 	 A m e r i c a , 	 F r o s t 	 & 	 s u l l i v a n	
suggest that the total market for mobile 
Instant messaging solutions is estimated 
t o	gr o w	t o	almo s t 	500	mi l lion	u ser s 	b y 	
2015	fr om	almo s t 	 z er o	in	2008.	 Thi s 	
r epr e sents 	a	CAGR	of 	54%	o v er	the	
ne xt 	fiv e	t o	s i x 	 y e ar s 	in	the se	r e gion s.	
simi l arly ,	Inf orm a	e s tim at e s 	the	mo b i l e	
social networking market will undergo 
substantial growth over the next three 
y e ar s.	At 	the	end	of 	2008,	ther e	w er e	
ap pr o x im at ely 	92.5	mi l lion	mo b i l e	
soc i al 	netw ork in g	u ser s 	glo b al ly ,	w ith	
conservative estimates putting this 
number	at 	641.6	mi l lion	b y 	2013.	
Taking these observations into 
ac c ou nt,	 s y nc hr onic a	h a s 	m a de	
s ignific ant 	 in v e s tments 	 in 	 its 	 pr oduct	
and organisational structure to support 
our strategic objective of providing 
advanced mobile messaging services 
s pec ific al ly 	g e ar ed	t o	oper at or s 	in	
the high-growth emerging markets. 
W e	believ e	th at 	w ith	our	flag ship	
pr oduct,	Mo b i l e	G at ew a y 	5,	w e	no w	
enable our customers to access the 
largest market potential. mobile 
G at ew a y 	5	f u l ly 	a d dr e s se s 	the	need s 	
of operators in emerging markets 
delivering messaging services to the 
entire device landscape – from high-end 
Smartphones to the most basic mobile 
phone. We further believe that the 
technical limitation of competing 
products are exposed when compared 
t o	Mo b i l e	G at ew a y ,	a s 	they 	t end	t o	
address only high-end devices which 
are generally unsuitable to the 
demographic realities of operators 
in	emer gin g	m ark ets.	As 	a	r e s u lt,	
we are experiencing a high win-rate 
in competitive situations and we expect 
to continue expanding our customer 
base and market share.
Operational performance
D urin g	2009,	 s y nc hr onic a	l au nc hed	
Mo b i l e	G at ew a y 	4,	whic h	inc orpor at ed	
the	em ai l-t o- s M s,	em ai l-t o-MM s 	and	
document transcoding technologies 
which we acquired with Axismobile 
in	2008.	C on sequently 	our	flag ship	
me s s agin g	pr oduct,	Mo b i l e	G at ew a y ,	
which in 2008 could only support 
1,380 	 mo b i l e 	 phone s, 	 c an 	 no w 	 s up port	
v ir t ual ly 	an y 	dev ic e	–	a s 	of 	M a y 	2010,	
w e	li s t 	6,272	diff er ent 	model s 	fr om	
hu ndr ed s 	of 	dev ic e	m anuf act ur er s,	
r epr e sentin g	mor e	th an	4	b i l lion	
devices currently in use today. 
F o l lo w in g	the	r epor tin g	period,	w e	
l au nc hed	Mo b i l e	G at ew a y 	5	whic h	
in addition to mobile email and 
sy nc hr oni s ation,	no w	al so	pr o v ide s 	
instant messaging and connectivity 
to social networking communities.
As a result of the improved competitive 
p o s i t i o n 	 p r o v i d e d 	 b y 	 M o b i l e 	 G a t e w a y 	 4 ,	
Synchronica signed a record 13 new 
contracts with mobile operators 
throughout 2009 – predominantly 
in	the	emer gin g	m ark ets 	of 	Afric a,	
Asia and latin America. 
While in 2009 Synchronica received 
revenue from these customers for initial 
lic en se	r equir ements,	w e	e xpect 	t o	
receive further revenue as their user base 
grows and they place expansion orders. 
F or	e x amp l e,	fiv e	c ontr acts 	h av e	been	
signed with subsidiaries of a large 
Pan African and middle Eastern mobile 
group. Synchronica’s relationship with 
these subsidiaries presents us with 
s ignific ant 	e xp an s ion	pot enti al .	
C omb ined,	the	fiv e	s ub s idi arie s 	h av e	
p l a c e d 	 i n i t i a l 	 o r d e r s 	 w h i c h 	 t o t a l 	 3 6 0 , 0 0 0	
lic en se s 	f or	Mo b i l e	G at ew a y ,	 y et 	they 	
h av e	o v er	75	mi l lion	s ub s c riber s.	
Assuming a successful launch and 
r e a son ab l e	t ak eup-r at e s,	w e	h av e	
every reason to believe that we will 
see substantial expansion orders 
from these operators within the next 
12-18 months.
The impact expansion orders have 
on revenue contribution has already 
been	demon s tr at ed.	In	Apri l 	2009,	
w e 	 annou nc ed 	 tw o 	 s ignific ant 	 e xp an s ion	
orders with a combined value of 
us$645,000,	fr om	one	of 	the	l ar g e s t 	
mobile operators in Russia and the CIS. 
It is reasonable to expect subsequent 
expansion orders from our customers 
as they commercialise their service 
and the user base exceeds the initial 
license orders. Synchronica will also 
receive recurring revenues from 
customers in the form of hosting 
f ee s 	(wher e	ho s tin g	i s 	pr o v ided),	
annual support and maintenance 
s ub s c ription s,	and	annual 	lic en s in g	
from those customers who chose 
this arrangement. 
Discover the award-winning products  
online at synchronica.com/products
Synchronica plc Annual Report and Accounts 2009 09
OVERVIEW CORPORATE GOVERNANCE FINANCIAl S TATEmENTS BuSINESS REVIEW OVERVIEW CORPORATE GOVERNANCE FINANCIAl S TATEmENTS BuSINESS REVIEW
Enabling mobile phone or computer users to send real-time 
me s s ag e s 	t o	e ac h	other ,	In s t ant 	M e s s agin g	(IM)	c ontinue s 	t o	
grow as a fast and interactive method of online communication. 
A lr e a dy 	high ly 	pop u l ar	amon g s t 	16	t o	30	 y e ar	o l d s,	indu s tr y 	
a n a l y s t s 	 b e l i e v e 	 t h a t 	 w i t h i n 	 t w o 	 y e a r s , 	 1 . 6 	 b i l l i o n 	 p e o p l e 	 w o r l d w i d e	
will rely on their mobile phones to access an Im service. 
unti l 	no w ,	h and set 	c omp atib i lity 	h a s 	been	the	s in gl e	gr e at e s t 	
barrier to doing so. Capgemini revealed in an early study that 
1 9 % 	 o f 	 t h e 	 m o b i l e 	 s u b s c r i b e r s 	 w h o 	 s a i d 	 t h e y 	 w o u l d 	 b e 	 i n t e r e s t e d	
in subscribing to mobile Im owned a handset which could not 
support the service.
Th ank s 	 t o 	 r ec ent 	 h and set 	 s t and ar di s ation 	 and 	 Mo b i l e 	 G at ew a y 	 5	
s up port 	 f or 	 the 	 OMA 	 IMP s 	 and 	 XMPP 	 s t and ar d s, 	 a 	 gr e at er 	 amou nt 	
of people are now able to access their Im accounts from their 
current mobile phones.
Mo b i l e	G at ew a y 	5	al lo w s 	oper at or s 	and	dev ic e	m anuf act ur er s 	
to aggregate multiple Im communities – from Google Talk to 
F ac e book 	 Ch at. 	 B ut 	 mor e 	 impor t antly , 	 oper at or s 	 c an 	 u se 	 Mo b i l e	
G at ew a y’s 	 b ui lt -in 	 XMPP 	 serv er 	 t o 	 c r e at e 	 their 	 o wn 	 IM 	 c ommu nity ,	
r e g ain	c ontr o l 	of 	their	s ub s c riber’s 	identitie s,	inc r e a se	d at a	
revenues and combat churn.
Mo b i l e	G at ew a y 	5	s up por ts 	al l 	of 	the	f e at ur e s 	a s soc i at ed	w ith	
conventional Im. ‘Emoticons’ or ‘Smileys’ visually express 
emotion s,	whi l e	‘B uzz e s’	and	‘nudg e s’	al er t 	tho se	who	h av e	
s t op ped	c h attin g	t o	 y ou.	Fin al ly ,	IM	h a s 	dev eloped	its 	o wn	
lin g o	and,	whi l e	the	w orl d	nudg e s 	and	b uzz e s 	fr om	their	
phone s,	phr a se s 	lik e	BRB	(be	right 	b ac k)	w i l l 	@Te O T D	
(at the end of the day) become accessible to all.
>> TEChNOl OGY
IN AN INSTANT
“”
The real genius of Synchronica is how well it makes more 
advanced mobile comms channels work smoothly on low 
tech devices and low tech networks. These services are 
d e s i r e d , 	 j u s t 	 n o t 	 a v a i l a b l e . 	 s y n c h r o n i c a 	 c o u l d 	 m a k e 	 a n	
absolute killing by creating “chat” services in markets 
where most people don’t have access to computers or 
an Internet connection. Cian 	 O’ s ullivan, 	 GoMo 	n ew s 10 Synchronica plc Annual Report and Accounts 2009
CHIEF ExECuTIVE OFFICER’S REPORT CONTINuED
Operational performance (continued)
We also made great progress in 
expanding our global sales channel 
during the reporting period by signing 
reseller agreements with Nokia Siemens 
netw ork s 	and	an	u nn amed	t op-5	As i an	
network equipment provider. Both of 
the se	r e sel l er	p ar t ner s,	in	t andem	w ith	
our	e x i s tin g	p ar t ner	Brights t ar ,	pr o v ide	
Synchronica with global access to mobile 
operators and provide the local presence 
required to win and support mobile 
operators around the world.
Contract wins
2009 saw Synchronica win the most 
contracts signed by the Company 
in	a	s in gl e	 y e ar .	D urin g	the	period,	
Synchronica announced 13 new orders 
for operators in various fast growing 
emerging markets to deploy our 
me s s agin g	pr oduct 	Mo b i l e	G at ew a y ,	
in addition to an expansion order 
from one of the largest mobile 
operators in Russia and the CIS. 
mobile Gateway now represents the 
vast majority of the Company’s revenues. 
Revenue from mobile Gateway has grown 
fr om 	 £1.157m 	 in 	 2008 	 t o 	 £3.1m 	 in 	 2009.
Collaboration agreement, fund raising 
and launch of MessagePhone™
I n 	 J u n e 	 2 0 0 9 , 	 w e 	 a n n o u n ce d 	 a	
c o l l a b o r a t i o n 	 a g r e e m e n t 	 w i t h 	 B r i g h t s t a r ,	
a	l e a din g	dev ic e	di s trib ut or ,	and	K CM,	
a 	 K o r e a n 	 d e v i c e 	 m a n u f a c t u r e r , 	 t o 	 b u i l d ,	
market and sell a family of low cost mobile 
devices to be bundled with mobile 
Gateway. To fund its development and 
r o l lout,	w e	c omp l et ed	a	p l ac in g	whic h	
r ai sed 	 £4.7m, 	 and 	 in 	n o v ember 	 2009, 	 w e 	
announced that our partners had received 
the 	 fir s t	 or der 	 f or 	 M e s s ag ePhone™.	
The messagePhone™ was launched 
in February 2010 at events in l ondon 
and during mobile World Congress 
in Barcelona. messagePhone™ is 
a	t urnk ey ,	int e gr at ed	so lution	whic h	
includes an optimised handset and 
ho s t ed	p u sh	em ai l,	sy nc hr oni s ation	
(c al end ar ,	c ont acts 	and	t a sk s),	soc i al 	
networking feeds and instant messaging 
services delivered via Synchronica’s 
mobile Gateway.
The	fir s t 	p ur c h a se	or der s 	h av e	been	
received from subsidiaries of large 
mobile operator groups in Africa and 
Latin	Americ a.	In	M ar c h	2010,	w e	
announced that Synchronica had 
received a purchase order for mobile 
Gateway – which is to be bundled with 
the	initi al 	20,000	M e s s ag ePhone’s 	th at 	
will be shipped to the latin American 
customer. The messagePhone™ is 
d i s t r i b u t e d 	 b y 	 B r i g h t s t a r , 	 a 	 m u l t i - b i l l i o n	
Dollar distributor with global reach and 
local presence in our target markets. 
We expect sales of the messagePhone™ 
to accelerate in the second half of 2010 
a s 	the	fir s t 	tw o	oper at or s 	intr oduc e	
the product to the market and further 
operators are signed up to introduce 
the messagePhone™.
Reseller network 
During the period we made good 
progress in establishing further 
channel partnerships with two 
telecommunications equipment 
vendors. This supplements our existing 
r e sel l er	p ar t ner ship	w ith	Brights t ar ,	
which has successfully produced 
a number of contract wins in the 
latin American region for us.
In	F e bruar y 	2009,	w e	annou nc ed	the	
signing of a global reseller agreement 
w ith 	n ok i a 	 s iemen s 	n etw ork s, 	 the 	 w orl d’s 	
second largest network equipment 
provider. While the agreement provides 
u s 	 w i t h 	 a 	 v a l u a b l e 	 g l o b a l 	 s a l e s 	 c h a n n e l ,	
it also reiterates the strong competitive 
position that mobile Gateway occupies 
in the market. We also signed our third 
distribution agreement with a large 
Asian telecommunications equipment 
vendor that wishes to remain unnamed. 
The vendor currently provides services 
t o	31	of 	the	50	l ar g e s t 	w orl dw ide	
t e l e c o m s 	 o p e r a t o r s , 	 a n d 	 h a s 	 i n v e s t e d	
a great deal of effort in building 
relationships with operators in 
particular in emerging markets. 
We believe that our enlarged reseller 
netw ork 	–	Brights t ar ,	nok i a	 siemen s 	
netw ork s,	and	the	As i an-b a sed	
telecommunications vendor – delivers 
a 	 g l o b a l 	 r e a c h 	 t o 	 o u r 	 p r o d u c t s . 	 W i t h 	 fi v e	
contract wins from our reseller network 
in	2009,	it 	i s 	o b v iou s 	th at 	the	s tr at e g y 	
i s 	 y iel din g	r e s u lts.	 W e	ar e	c onfident 	of 	
increased success via these channels 
for 2010 and beyond. 
Discover the award-winning products  
online at synchronica.com/products
Synchronica plc Annual Report and Accounts 2009 11
OVERVIEW CORPORATE GOVERNANCE FINANCIAl S TATEmENTS BuSINESS REVIEW
“Wh at 	ar e	 y ou	doin g?”	a sk s 	 T w itt er ,	whic h	r ec eiv e s 	40	mi l lion	
an sw er s 	e ac h	d a y 	fr om	a	l e gion	of 	75	mi l lion	tw eet er s 	whic h	
inc lude	c el e brity 	n ame s 	s uc h	a s 	Brit ney 	 s pe ar s,	 Y ok o	Ono ,	
and Barack Obama. 
The unprecedented global success of social networking is well 
doc ument ed. 	 F ac e book 	 h a s 	 a 	 s t ag g erin g 	 400 	 mi l lion 	 u ser s 	 fr om	
every continent. Almost half of its users access the service 
d ai ly 	in	35	diff er ent 	l an guag e s.	
C our t e sy 	 of 	 soc i al 	 netw ork in g, 	 ‘T w eetin g’, 	 ‘P ok in g’ 	 and 	 ‘C onnectin g’	
are fast becoming mainstream terms in everyday conversation.
Social networking is by no means a phenomenon limited to the 
West. The use of social networking within emerging markets is 
e xp lodin g. 	 In 	 a 	 r ec ent 	 s t udy , 	 c om s c or e 	 r eport ed 	 th at 	 the 	 gr e at e s t 	
year-on-year growth of registrations came from the middle East 
and	Afric a	(66%)	and	Latin	Americ an	(33%)	r e gion s.	
On 	 the 	 ev enin g 	 of 	 26 	n o v ember 	 2008, 	 a 	 M umb ai-b a sed 	 s t udent 	
u sed	 T w itt er	t o	annou nc e	“4	po lic emen	k i l l ed	in	att acts 	[s ic]”.	
Wh at 	f o l lo w ed	w a s 	an	e s tim at ed	16	tw eets 	e ac h	sec ond,	a s 	
hundreds of eyewitnesses in the city provided live commentary 
of 	the	dr am a	th at 	w a s 	u nf o l din g	ar ou nd	them.	new s 	ag enc ie s,	
s uc h	a s 	the	BBC,	sy ndic at ed	the se	tw eets 	 v i a	liv e	upd at e s 	
p ag e s,	en ab lin g	mi l lion s 	t o	h av e	minut e-b y -minut e	upd at e s 	
pushed directly to their RSS clients.
Mo b i l e	G at ew a y 	5	u se s 	the	b ui lt -in	me s s agin g	c lients 	f ou nd	
on	a	w ide	r an g e	of 	f e at ur e	phone s,	or	MM s 	and	 s M s 	f or	
entr y -l ev el 	phone s,	t o	pr o v ide	p u sh	 soc i al 	netw ork in g	t o	a	
w ide	r an g e	of 	pop u l ar	ser v ic e s,	inc ludin g	F ac e book,	 T w itt er ,	
and linkedIn. 
W ith	Mo b i l e	G at ew a y 	5,	u ser s 	c an	g et 	the	l at e s t 	new s 	fr om	
their	c ont acts,	up lo a d	and	sh ar e	phot o s,	send	and	r ec eiv e	
wall posts using their existing mobile phones and chat 
online with other Facebook users. 
>> TREND
SOCIAl UPRISING
Revenue from Mobile Gateway (£m) Revenue from Emerging Markets (£m)
2009 2009 2.8 3.1
2008 2008 0.9 1.2
2007 2007 0.3 0.4 12 Synchronica plc Annual Report and Accounts 2009
CHIEF ExECuTIVE OFFICER’S REPORT CONTINuED
Enhancements to  
Synchronica Mobile Gateway 
In order to improve the market reach 
and feature set of Synchronica’s 
flag ship 	 me s s agin g 	 pr oduct, 	 Mo b i l e	
G at ew a y , 	 w e 	 h av e 	 m a de 	 s ignific ant	
investments in research and 
dev elopment .	In	F e bruar y 	2009,	
w e 	 a n n o u n c e d 	 M o b i l e 	 G a t e w a y 	 4 	 w h i c h	
extends mobile email and synchronisation 
to virtually any mobile phone in use 
today. This is achieved by combining 
em ai l-t o- s M s 	and	em ai l-t o-MM s,	in	
addition to attachment transcoding 
t ec hno log y ,	w ith	the	e x i s tin g	indu s tr y 	
standards used by mobile Gateway. 
Th ank s 	t o	the se	inno v ation s,	w e	ar e	
now able to address the entire device 
landscape from high-end Smartphones 
t o	the	lo w e s t 	c ommon	denomin at or ,	
which is essential in our target market 
of emerging economies.
Continuing to improve the competitive 
po s itionin g	of 	our	pr oduct,	w e	
announced post the period end the 
launch of our latest version of mobile 
Gateway. In addition to push email and 
synchronisation for virtually any mobile 
phone	in	u se,	Mo b i l e	G at ew a y 	5’s 	
f u n c t i o n a l i t y 	 i s 	 s i g n i fi c a n t l y 	 e x p a n d e d	
with the introduction of instant 
messaging and connectivity to social 
networking and newsfeeds. Initial 
feedback from existing and prospective 
customers has been very positive. 
Acquisition of the IM business 
of Colibria AS (post-period end)
In	Apri l 	2010,	w e	c omp l et ed	the	
acquisition of the ImPS instant 
me s s agin g	b u s ine s s 	of 	C o libri a	As,	
a leading developer of mobile instant 
messaging technologies. In addition 
t o	C o libri a’s 	IMP s 	t ec hno log y ,	
Synchronica also acquired as part 
of the transaction 13 contracts with 
mo b i l e	oper at or s.	C o libri a’s 	pr o v en,	
carrier-grade mobile Im technology and 
emerging markets-oriented customer 
base complement our focus on open 
s t and ar d s-b a sed	me s s agin g	so lution s,	
and we believe that the transaction 
will accelerate our entry into the mobile 
instant messaging market. In addition to 
b o l s t e r i n g 	 s a l e s 	 o f 	 t h e 	 M e s s a g e P h o n e ™ ,	
which will be shipped with the technology 
r e a dy -in s t al l ed,	w e	al so	int end	t o	u se	
the acquisition as a springboard for 
cross-selling and up-selling opportunities 
to further expand our market share in 
emerging markets.
Group strategy
Synchronica’s strategy remains largely 
unchanged in that we continue to focus 
our efforts on mobile operators in 
emer gin g	m ark ets,	ser v ic e	pr o v ider s 	
and handset manufacturers. The new 
f e at ur e s 	 pr o v ided 	 b y 	 Mo b i l e 	 G at ew a y 	 5	
mean that Synchronica can now provide 
a ‘one-stop’ solution for next-generation 
mobile messaging. Our industry 
standards based approach to connect 
u ser s 	t o	em ai l,	In s t ant 	M e s s agin g,	
Social Networks and Web-Feeds – 
off erin g	a	true,	m a s s-m ark et 	so lution	
with the largest possible addressable 
m ark et 	and	ser v ic e	upt ak e,	pr o v ide s 	
operators with a solution that can 
s ignific antly 	inc r e a se	r ev enue s 	fr om	
d at a	tr affic 	and	c an	help	t o	c omb at 	
subscriber churn. We will also continue 
to expand the messagePhone™ 
initi ativ e,	in	whic h	w e	r em ain	c onfident 	
th at 	w ith	a	s ignific ant 	a d dr e s s ab l e	
m ark et 	in	emer gin g	ec onomie s,	it 	w i l l 	
prove successful having already 
received two orders.
Outlook 
Th ank s 	t o	our	r e sel l er	netw ork,	and	the	
M e s s ag ePhone™,	2010	h a s 	s t ar t ed	
s t r o n g l y . 	 I n 	 a d d i t i o n 	 t o 	 m o b i l e 	 o p e r a t o r s ,	
w e	ar e	no w	s t ar tin g	t o	see	s ignific ant 	
interest from device manufacturers and 
distributors who wish to bundle mobile 
G at ew a y 	w ith	their	pr oducts,	al lo w in g	
them to offer advanced mobile messaging 
to their users. This presents Synchronica 
w ith 	 s ignific ant 	 op por t u nitie s 	 and 	 a d d s 	
substantially to our sales prospects. 
As subscribers in emerging markets 
continue to sign on to mobile services 
in	dr o v e s,	w e	r em ain	s t e a df a s t 	in	
focusing our efforts on being part of 
this massive opportunity. We continue 
to value and appreciate the support of 
our	sh ar eho l der s,	in	a d dition	t o	our	
dedicated team which is focused on 
building Synchronica to become the 
preferred developer of next generation 
mobile messaging.
Carsten Brinkschulte
Chief Executive
29 June 2010 
Discover the award-winning products  
online at synchronica.com/products
Synchronica plc Annual Report and Accounts 2009 13
OVERVIEW CORPORATE GOVERNANCE FINANCIAl S TATEmENTS BuSINESS REVIEW
most mobile users agree that mobile telephony has positively 
influenc ed	al l 	a s pects 	of 	lif e.	Mo b i l e	phone s 	c onnect 	peop l e	
t o	c u s t omer s,	r el ativ e s 	and	friend s.	 They 	help	w ith	ac c e s s 	t o	
information and create business opportunities. mobile phones 
lower transaction costs and enhance social interaction. 
But as subscribers around the world become more sophisticated 
in	their	need s,	mo b i l e	t el ephon y 	tr an s c end s 	s imp l e	 v oic e	and	
SmS. The mobile phone is evolving into a truly ubiquitous 
social tool.
messagePhone delivers Smartphone-like functionality and 
messaging services at a fraction of the cost of competing 
so lution s.	It 	i s 	an	int e gr at ed	dev ic e	and	ser v ic e	so lution,	
powered by Synchronica’s mobile Gateway. 
Designed from the ground up to provide operators in emerging 
m ark ets 	 w ith 	 a 	 lo w-c o s t, 	 y et 	 high-quality , 	 f u l l-f e at ur ed 	 me s s agin g	
dev ic e,	M e s s ag ePhone	al lo w s 	oper at or s 	t o	r e g ain	c ontr o l 	of 	
their subscriber base by branding and owning their services 
as they wish. 
I n 	 a d d i t i o n 	 t o 	 f u l l y 	 s u p p o r t i n g 	 M o b i l e 	 G a t e w a y , 	 M e s s a g e P h o n e	
also provides additional features to enhance the user’s 
experience and conserve costly network bandwidth. A built-in 
ebook reader allows users to download and read more than 
30,000 	 p l ain 	 t e xt 	 r o y alty -fr ee 	 e book s. 	 An 	 FM 	 r a dio , 	 al so 	 inc luded	
w ith	M e s s ag ePhone,	pr o v ide s 	fr ee	high-quality 	br o a dc a s t 	
entertainment as a substitute to bandwidth-hungry online 
s tr e amin g 	 serv ic e s. 	 Fin al ly , 	 M e s s ag ePhone’s 	 b ui lt -in 	 BOL T 	 w e b	
browser quickly and accurately displays web pages just as they 
w ou l d 	 ap pe ar 	 on 	 de skt op 	 c omp ut er s, 	 w ith 	 f a s t er 	 lo a d 	 time s 	 and	
bandwidth consumption at a fraction used by traditional mobile 
br o w ser s, 	 c ourt e sy 	 of 	 o v er -the- air 	 d at a 	 c ompr e s s ion.	
F or	m an y 	s ub s c riber s,	M e s s ag ePhone	c ou l d	bec ome	the	
u ser’s 	 fir s t 	 and 	 prim ary 	 Int ernet 	 dev ic e, 	 pot enti al ly 	 r ep l ac in g 	 the	
traditional Internet cafe. messagePhone is a great phone with 
a 	 l ar g e 	 s c r een 	 and 	 Q W e R T Y 	 k ey bo ar d, 	 and 	 h a s 	 f u l l 	 Int ernet 	 ac c e s s,	
p u sh	em ai l,	sy nc hr oni s ation,	In s t ant 	M e s s agin g,	c onnectiv ity 	
to social networks. And it can retail for less than $100!
>> PRODUCT
ThE lOW -COST, 
MESSAGING-ORIENTATED 
hANDSET
“”
The messagePhone device-centric solution provides 
b e n e fi t s 	 t o 	 o p e r a t o r s 	 d e s p e r a t e 	 t o 	 o f f s e t 	 f a l l i n g 	 v o i c e	
revenues by increasing the size of revenues generated 
from data services and to retain existing customers 
at 	 a 	 time 	 when 	 u ser s 	 ar e 	 bec omin g 	 mor e 	 fic k l e.
n ic k 	 Jotis c hky , 	 Principal	 Analyst, 	 Informa 14 Synchronica plc Annual Report and Accounts 2009
BOARD OF DIRECTORS AND mANAGEmENT TEAm
1
3
4
5
6
7
2
8 Synchronica plc Annual Report and Accounts 2009 15
OVERVIEW CORPORATE GOVERNANCE FINANCIAl S TATEmENTS BuSINESS REVIEW
1. David A. Mason 
Non-executive Chairman
Dav id	i s 	an	entr epr eneur ,	c h ar t er ed	el ectr onic s 	en gineer ,	
and company director with extensive experience of both 
private and publicly listed companies. David has a proven 
track record of 	b u s ine s s 	e xper ti se,	in-depth	e xperienc e	
w ithin 	 a 	 w ide 	 r an g e 	 of 	 indu s trie s, 	 and 	 e xperti se 	 in 	 s tr at e gic 	
p l annin g,	b u s ine s s 	p l annin g,	t e am	b ui l din g,	outsour c in g,	
r ai s in g	fin anc e,	ac qui s ition s,	di s po s al s,	and	flot ation s.	
Amon g s t 	hi s 	m an y 	ac hiev ements,	he	f ou nded	the	M a son	
Group in 1993 and built it into the uK’s leading independent 
telecoms/IT consultancy. David is an Approved Corporate 
Finance Advisor under the FSA regulations.
2. Michael Jackson 
Non-executive Director
michael is the founder and chairman of Elderstreet Investments 
Limit ed	and	i s 	r eno wned	f or	s up por tin g	 y ou n g,	amb itiou s 	
businesses operating in the technology sector. A chartered 
ac c ou nt ant, 	 Mic h ael 	 w a s 	 pr ev iou s ly 	 the 	 c h airm an 	 of 	 s ag e 	 p lc, 	
the FTSE 100 group that develops and markets global 
accounting software.
3. Carsten Brinkschulte 
Chief 	ex ec utiv e	O ffic er
Carsten was a co-founder of Synchronica Software GmbH 
and has spent his entire career developing and bringing to 
market innovative software solutions for telecommunications 
and web applications. His experience includes time spent 
w i t h 	 v e r y 	 l a r g e 	 c o m p a n i e s , 	 s u c h 	 a s 	 s A P 	 a n d 	 A p p l e , 	 i n 	 a d d i t i o n	
to spells with technology-based startups. Carsten is responsible 
f or	definin g	Synchronica’s overall corporate and product 
strategy. In addition t o	thi s,	he	o v er see s 	glo b al 	s al e s 	and	
b u s ine s s 	dev elopment 	s tr at e g y ,	p l a y in g	a	h and s-on	r o l e	
guiding the efforts of Synchronica’s experienced sales and 
pre-sales teams. 
4. Angus Dent 
Chief 	Fin anc i al 	O ffic er
An gu s 	 qualified 	 a s	 a 	 c h ar t er ed 	 ac c ou nt ant 	 w ith 	 Pric e 	 W at erhou se	
and	then	mo v ed	t o	the	Kiri l 	Mi s c heff 	(KM)	Gr oup	Limit ed,	
a group of food trading and manufacturing companies 
wher e	he	r o se	fr om	gr oup	ac c ou nt ant 	t o	fin anc e	dir ect or .	
An gu s 	j oined	fr om	OneC lic kHR	p lc,	a	l e a din g	uK 	dev eloper	
and supplier of human resources software where he was 
fin anc e	dir ect or .	An gu s 	c ontr o l s 	 s y nc hr onic a’s 	s tr at e gic 	
fin anc i al 	p l annin g,	ac c ou nts,	and	c ontr act 	m an ag ement .	
He is also responsible for human resources management 
within Synchronica. Angus has joint responsibility for investor 
r el ation s, 	 en s urin g 	 s t ak eho l der s 	 ar e 	 k ept 	 r e gu l arly 	 inf ormed.
5. Nicole Meissner 
Chief 	Oper atin g	O ffic er
nic o l e	c o-f ou nded	 s y nc hr onic a	 sof tw ar e	GmbH,	no w	
s y nc hr onic a 	 p lc . 	 Prior 	 t o 	 th at 	 she 	 serv ed 	 a s 	 v ic e 	 pr e s ident,	
m ark etin g 	 and 	 pr oduct 	 m an ag ement, 	 at 	 sev er al 	 IT 	 c omp anie s	
and developed startups for venture capital and turnaround 
firms.	 she	f ormerly 	w ork ed	a s 	m an ag er ,	int ern ation al 	pr e s s 	
and	in v e s t or	r el ation s,	at 	 siemen s 	AG.	As 	Chief 	Oper atin g	
O ffic er ,	nic o l e	c omb ine s 	inn at e	c ommer c i al 	ac umen	and	
pragmatic management style with deep expertise in designing 
and delivering corporate strategies by driving marketing 
and operational excellence initiatives and managing the 
product life cycle. Nicole is responsible for customer 
r el ation s,	pr oj ect 	deliv erie s,	pr oduct 	m an ag ement,	
m ark etin g,	and	p ub lic 	r el ation s.	A lon g	w ith	An gu s 	D ent,	
Nicole directs Synchronica’s investor relations activities.
6. Kim hartlev 
Chief 	 T ec hnic al 	O ffic er
Kim holds a BSc in Engineering from the Aarhus Engineering 
C o l l e g e,	D enm ark.	He	h a s 	a	s tr on g	tr ac k 	r ec or d	in	the	mo b i l e	
d e v i c e 	 m a n a g e m e n t 	 i n d u s t r y , 	 f o l l o w i n g 	 s i x 	 y e a r s ’ 	 e x p e r i e n c e	
at 	Mo b i l ethink 	in	D enm ark,	a	s pec i ali s t 	in	o v er -the- air	(O T A)	
mo b i l e	dev ic e	c onfigur ation	so lution s.	He	i s 	activ e	in	the	
Open	Mo b i l e	A l li anc e	(OMA),	Gs MA ,	and	O T AFF 	indu s tr y .	
Kim 	 pr o v ide s 	 the 	 t ec hnic al 	 v i s ion 	 f or 	 the 	 or g ani s ation, 	 en s urin g	
Synchronica’s products remain competitive and innovative. 
He is responsible for leading the development and support 
teams and managing all quality assurance and testing of 
Synchronica’s award-winning products. He is also responsible 
for overseeing customisation work undertaken for key 
c u s t omer s,	a s 	w el l 	a s 	int ern al 	IT .
7. John Turtle 
Chief 	 sal e s 	O ffic er	–	 sof tw ar e
John joined Synchronica in 2009 from the infrastructure and 
services vendor Telsis. With a sales focus on Synchronica’s 
sof tw ar e 	 and 	 pr of e s s ion al 	 serv ic e s, 	 John 	 h a s 	 v a s t 	 e xperienc e	
in selling complex software solutions to large network operators. 
He has previously worked at senior sales level for a number 
of renowned software vendors including Nortel Networks 
and	Qualc omm.	At 	 s y nc hr onic a,	John	i s 	r e s pon s ib l e	f or	
driv in g	glo b al 	infr a s truct ur e	sof tw ar e	s al e s,	o v er seein g	
the	p ar t ner ship	and	r e sel l er	netw ork s,	and	l e a din g	
Synchronica’s experienced sales and pre-sales teams.
8. Patric Olenczak 
Chief 	 sal e s 	O ffic er	–	D ev ic e s
Patric joined Synchronica in may 2008 from a mobile instant 
messaging specialist. He brings with him considerable wireless 
and technology sales expertise and a track record of success 
with a strong background in international sales and sales 
management. He has worked at VP level at a number of 
market-leading telecommunications technology organisations 
inc ludin g	Gl en a y r e,	O sI,	B u l l 	Int e gri s 	 T el ec ommu nic ation s.	
Patric is responsible for driving forward Synchronica’s 
device-related sales. 16 Synchronica plc Annual Report and Accounts 2009
RepoRt of the DiRectoRs
foR the yeAR enDeD 31 DecembeR 2009
the Directors present their report and accounts for the year ended 31 December 2009.
Principal activities
During the course of the year the principal activity of the Group remained the development and provision of mobile device 
management and synchronisation solutions.
Review of the business
We continued to focus the business on two software products, synchronica mobile Gateway and synchronica mobile backup; 
both targeted on the mass market particularly in developing countries. We further developed our direct sales and our sales 
channels; please see the chairman’s and chief executive’s statements. 
Results and dividends
the loss on ordinary activities after taxation for the year was £3.077m (2008: £6.100m).
no dividend is proposed for the year ended 31 December 2009 (2008: £nil).
Research and development
the Group has a continuing commitment to a high level of research and development spending (2009: £1.500m, 2008: £1.421m). 
the Group’s accounting policy on research and development is detailed in the notes to the accounts, during 2008, all costs 
incurred on research and development were charged to the income statement. close to the end of 2008, the Group reached 
a position where the conditions, as set out in the Group’s accounting policies, had been met which compelled the Group 
to capitalise development expenditure as required by international financial reporting standards in relation to its two products 
synchronica mobile Gateway and synchronica mobile backup. With effect from 1 January 2009 the Group began capitalising 
development expenditure related directly to these two products. the assets created are amortised over a period of four years 
from the time the features of the software comes into use by customers. Development costs are ongoing and reflect the Group’s 
commitment to being at the forefront of technological advances necessary to ensure future growth. Research and development 
in the year concentrated on further improvements in the technical features and capabilities of the key products in the business. 
Subsequent events 
on 7 April 2010, the c ompany issued 8,510,204 ordinary shares to settle the deferred consideration outstanding as a 
result of the acquisition of concluded in september 2008. 
on 7 April 2010, the c ompany issued 88,000,000 ordinary shares in connection with an equity swap placing to provide 
working capital over a two year period.
on 21 April 2010, the c ompany issued 54,054,054 ordinary shares and €700,000 in cash for the initial consideration 
for the acquisition of assets and the instant messaging and presence service (imps) business of c olibria As of norway. 
in addition the company issued 111,600,000 new ordinary shares with institutional and private investors at 2.5p. 
the funds were raised to fund the acquisition and to develop, market and support the imps business. 
Directors and Directors’ interests
the Directors that served during the year were as follows:
c brinkschulte 
A Dent  
D mason 
R mahalski (Resigned 31 may 2010) 
m Jackson (Appointed 18 november 2009)
the Directors’ interests in the share capital of the c ompany are set out in the Remuneration Report.

Download this report online at 
synchronica.com/documents o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 17
Substantial shareholdings
At the close of business on 28 May 2010 the Company had been notified of the following material interests (excluding Directors’ 
interests which are shown in the Remuneration Report) of 3% or more of its ordinary share capital:
          o rdinary  
shareholder         shares percentage
lanstead c apital l.p.         110,082,062 13.11
fidelity international        78,985,000 9.41
colibria As        54,054,054 6.44
hRh prince hussam bin saud bin Abdulaziz Alsaud     53,066,666 6.32
eDistel        49,428,480 5.89
Williams de broe        31,549,354 3.76
Group policy to the payment of creditors
it is the policy of the Group that, where possible, payments are made within the terms established with suppliers, provided 
that the supplier is also complying with all relevant terms and conditions. the weighted average number of days’ purchases 
outstanding during 2009 was 98 days (2008: 50 days).
Key Performance Indicators (“KPI’s”)
the board uses the following Kpi’s to monitor the performance of the business:
          2009 2008 
          £’000 £’000
Revenue         3,827 3,708
l oss for the year after tax         3,077 6,100
cash         2,633 3,494
the board sets a budget each year and monitors Kpi’s against this.
Principal risks and uncertainty
Competition
there is a competitive market for the Group’s products; on occasion this places pressure on sales price and sales margin. 
the Group monitors the products offered by competitors, functionality and price and if necessary adjusts price accordingly. 
Employees
the Group’s performance depends largely on key staff. the resignation of key individuals and the inability to recruit people 
with the right skills could adversely impact the Group’s results. to mitigate these issues the Group provides a share option 
scheme and remuneration packages designed to retain key individuals. 
Technological change
the pace of technological change is rapid and the Group seeks to be part of this. the Group is a member of key industry 
standard setting bodies, is seen as a thought leader, regularly monitors the activities of its competitors and continuously 
invests in product development. it is therefore considered unlikely that markets will develop without the Group responding 
in such a way as to make the Group’s products less attractive than those of its competitors.
Financial risk management 
Price and credit control risk
t he Group has set prices for its products, which only senior management can adjust. t he majority of the Group’s customers are 
national mobile phone operators and offer it low credit risk. there is also a risk that governments impose exchange restrictions.
Liquidity and cash flow risk
The Group monitors its cash position on a daily basis and maintains a detailed rolling weekly cash flow forecast for three months 
ahead. The Group’s annual budgets include a cash flow forecast. All of these documents are regularly reviewed by the Directors. 
the Group does not have any borrowings and the Group’s assets are principally funded by equity and cash in bank.
Foreign currency risk
The main financial risk arising from the Group’s operations is foreign currency risk as the Group receives a significant 
proportion of its revenues in us Dollars and euros. there were no forward contracts outstanding at year end.
Treasury management 
the Group invests its cash balances, which are mainly held in sterling (see note 25) for appropriate periods with institutions 
with high credit ratings. The release of funds from deposit has been timed to reflect the Group’s ongoing cash needs. 
the Group monitors interest rates, switching cash balances to bank accounts that provide competitive rates of return. 18 Synchronica plc Annual Report and Accounts 2009
RepoRt of the DiRectoRs continueD
foR the yeAR enDeD 31 DecembeR 2009
Financial risk management (continued)
Environmental risk
the Group’s policy is to ensure that it fully understands and manages the actual and potential environmental impact 
of its activities. our operations are conducted in such a way that we comply with the legal requirements relating to 
the environment in all areas of our business.
Disclosure of information to auditors
At the date of making this report each of the Group’s Directors, as set out on page 14, confirm the following:
››  so far as each Director is aware, there is no relevant information needed by the Group’s auditors in connection with 
preparing their report of which the Group’s auditors are unaware; and
››  each Director has taken all the steps that he ought to have taken as a Director in order to make himself aware of any 
relevant information needed by the Group’s auditors in connection with preparing their report and to establish that 
the Group’s auditors are aware of that information.
Auditors
A resolution to re-appoint bDo llp as the c ompany’s auditors will be proposed at the forthcoming General meeting.
Annual General Meeting
notice of a General meeting to be held on 28 July 2010 is set out on page 59 of the Annual Report.
Resolutions 1 and 2 are ordinary resolutions dealing with the adoption of the financial statements and the Directors’ 
Remuneration Report for the year ended 31 December 2009.
Resolutions 3 and 4 are ordinary resolutions dealing with the re-election of Directors. Directors appointed to the board 
since the date of the last Annual General meeting are required to be re-elected at the following Annual General meeting. 
thereafter Directors are required to be re-elected by rotation at lease once every three years. 
Resolution 5 is an ordinary resolution and deals with the appointment of the auditors of the company.
Resolution 6 is an ordinary resolution dealing with the Directors’ authority to issue shares. 
Resolutions 7 is a special resolution.
this special business proposed for consideration at the Annual General m eeting relates to the ability of the Directors to 
issue new shares. under the c ompanies Act 2006, the Directors of a company may only allot unissued shares if authorised 
to do so. The Act also prevents allotments for cash, other than to existing shareholders unless the Directors are specifically 
authorised. this gives the shareholders what are known as “pre-emption rights”. the Articles of Association envisage the 
Directors having general authority to allot unissued shares and disapply the pre-emption rights in respect of amounts to be 
fixed by shareholder resolutions. Passing these resolutions will extend the Directors’ flexibility to act in the best interests 
of the shareholders, when opportunities arise to issue new shares.
the Directors will be able to allot new shares up to an aggregate nominal value of £1,679,238.
The arrangements are intended to give the Directors a measure of operational flexibility, while at the same time ensuring 
that the interests of the existing shareholders are protected. f or example, in the event of a share issue, the proportionate 
interests of existing shareholders could not, without their agreement, be reduced by more than 17% by the new issue of shares 
for cash to new shareholders. the board has no current plans to allot shares except in connection with the m anagement 
incentive plan and the outstanding warrants.
the authority sought by resolutions 6 and 7 will expire on 28 July 2015, but could be varied or withdrawn by agreement 
of shareholders at an intervening general meeting.
Approval
the Directors’ Report was approved by the board and signed on its behalf by:
Angus Dent
Chief Financial Officer
29 April 2010 o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 19
RemuneRAtion RepoR t
foR the yeAR enDeD 31 DecembeR 2009
the parent company is listed on Aim and is therefore not required to prepare a report on Directors’ remuneration. 
the following information is voluntary and is unaudited.
The Remuneration Committee
The Remuneration Committee comprises the Non-executive Directors of the Company who have no personal financial 
interest in the matters addressed by the committee.
the Remuneration c ommittee determines, inter alia, the policy on the remuneration of executive Directors and senior 
management. the objectives of the policy include ensuring that senior executive rewards and incentives are aligned with 
the performance of the Group and the interests of shareholders. Salary and benefits of Directors are reviewed annually, 
taking into account Group and individual performance.
Service agreements
each of the Directors has a letter of appointment or a service agreement with the parent company which sets out the 
basic terms and conditions of employment. the c ompany may at its discretion, pay salary in lieu of notice in any case 
where it might otherwise serve notice to terminate. under the service agreements the notice period for executive Directors 
is six months and the notice period for non-executive Directors is one month.
Directors’ interests
the Directors of the Group and parent company as at 31 December 2009 and their respective interests in the share capital 
of the company were as follows:
Ordinary shares of 1p each
        2009 2008
Executive Directors
c brinkschulte       2,762,136 762,136
A Dent       1,000,000 1,000,000
Non-executive Directors
R mahalski       600,000 600,000
D mason       284,008 284,008
m Jackson       — — 20 Synchronica plc Annual Report and Accounts 2009
RemuneRAtion RepoR t continueD
foR the yeAR enDeD 31 DecembeR 2009
in addition to these holdings, the Directors were interested in share options and warrants in respect of the ordinary shares 
of the company as follows:
   At    At exercise   
   1 January Granted surrendered 31 December price   
share options note 2009 in year in period 2009 £ from to
c brinkschulte 1 200,000 — 66,667 133,333 0.27 December 2005 December 2015
c brinkschulte 1 200,000 — 66,667 133,333 0.27 December 2006 December 2015
c brinkschulte 1 200,000 — 66,666 133,334 0.27 December 2007 December 2015
c brinkschulte 2 359,000 — — 359,000 0.12 may 2007 may 2017
c brinkschulte 2 359,000 — — 359,000 0.12 may 2008 may 2017
c brinkschulte 2 359,000 — — 359,000 0.12 may 2009 may 2017
c brinkschulte  343,959 — — 343,959 0.08 f ebruary 2007 f ebruary 2017
c brinkschulte  343,959 — — 343,959 0.08 f ebruary 2008 f ebruary 2017
c brinkschulte  343,959 — — 343,959 0.08 f ebruary 2009 f ebruary 2017
A Dent 3 100,000 — — 100,000 0.15 August 2007 August 2017
A Dent 3 100,000 — — 100,000 0.15 August 2008 August 2017
A Dent 3 100,000 — — 100,000 0.15 August 2009 August 2017
A Dent 2 150,000 — — 150,000 0.12 may 2007 may 2017
A Dent 2 150,000 — — 150,000 0.12 may 2008 may 2017
A Dent 2 150,000 — — 150,000 0.12 may 2009 may 2017
A Dent  235,308 — — 235,308 0.08 f ebruary 2007 f ebruary 2017
A Dent  235,308 — — 235,308 0.08 f ebruary 2008 f ebruary 2017
A Dent  235,308 — — 235,308 0.08 f ebruary 2009 f ebruary 2017
D mason  116,667 — 116,667 — 0.08 f ebruary 2007 f ebruary 2017
D mason  116,667 — 116,667 — 0.08 f ebruary 2008 f ebruary 2017
D mason  116,667 — 116,667 — 0.08 f ebruary 2009 f ebruary 2017
R mahalski  116,667 — 116,667 — 0.08 f ebruary 2007 f ebruary 2017
R mahalski  116,667 — 116,667 — 0.08 f ebruary 2008 f ebruary 2017
R mahalski  116,667 — 116,667 — 0.08 f ebruary 2009 f ebruary 2017
no options were exercised during the year.
Share option notes
1. options granted on 21 December 2005 can be exercised at a price of 27p provided that the prevailing market price of a share exceeds 60p. 
2. options granted on 4 m ay 2007 can be exercised at a price of 11.75p provided that the prevailing market price of a share exceeds 18p. 
3. on 7 August 2006 A Dent was issued options at a price of 15p provided that the prevailing market price of a share exceeds 60p.
the market price of a share of the c ompany at 31 December 2009 was 3.25p and the lowest and highest market prices 
during the year of such shares were 2.25p and 4.75p respectively. o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 21
Directors’ emoluments
                  Benefits  Total total 
      salary f ees bonus in kind 2009 2008 
     note £’000 £’000 £’000 £’000 £’000 £’000
Executives
c brinkschulte     179 — 109 8 296 290
A Dent     134 — 40 2 176 233
Non-executive
D mason    1 — 30 — — 30 24
R mahalski    2 — 20 — — 20 20
m Jackson    3 — 3 — — 3 —
s sadler    4 — — — — — 2
      313 53 149 10 525 569
Notes
1. D mason was appointed as a Director on 26 April 2007. 
2. R mahalski was appointed as a Director on 14 January 2008 and resigned on 31 may 2010. 
3. m Jackson was appointed as a Director on 18 november 2009. 
4. s sadler resigned as a Director on 14 January 2008.
on behalf of the Remuneration c ommittee:
Michael Jackson
chairman of the Remuneration c ommittee
29 June 2010  22 Synchronica plc Annual Report and Accounts 2009
RepoRt on c oRpoRA te Go VeRnAnce
foR the yeAR enDeD 31 DecembeR 2009
Policy statement
the board’s aim is to achieve a high standard of c orporate Governance. As an Aim traded group, full compliance with the 
combined code is not a formal obligation. notwithstanding this exemption, the Group has sought to adopt the provisions 
of the combined code that are appropriate to its size and organisation and establish frameworks for the achievement of 
this objective.
The Board of Directors
the board comprises two executive and two non-executive Directors. the board meets, at least monthly, to consider the 
current state of the business and the strategic issues. board papers including detailed management accounts are circulated 
in advance of meetings and all board and c ommittee meetings, and their attendees, are recorded. the board considers 
strategic matters, business development policy, expenditure on major capital items, annual operating budgets, management 
structure and internal control procedures.
The roles of the (Non-executive) Chairman and Chief Executive Officer are separated. David Mason and Michael Jackson 
are considered by the board to be independent non-executive Directors. neither take part in the executive management 
of the Group and their holdings of the parent company’s shares are insufficient, in the opinion of the Board, to influence 
the exercise of their independent judgement. non-executive Directors have access to all information and, if required, external 
advice at the expense of the Group. 
Appointments to the Board
The Board has the responsibility of selecting suitable candidates to hold office as Director. Both Executive and Non-executive 
Directors are required to retire by rotation in accordance with the Articles of Association of the company and re-appointment 
is subject to confirmation by shareholders at the Annual General Meeting. Given its size, the Board does not consider it 
necessary to establish a nominations c ommittee.
Remuneration Committee
All of the non-executive Directors serve on the Remuneration c ommittee, which is chaired by michael Jackson. the Remuneration 
Committee is responsible for determining the remuneration, contract terms and other benefits of the Executive Directors 
and all other employees where the proposed annual salary is in excess of £50,000.
Audit Committee
All of the non-executive Directors serve on the Audit c ommittee, which is chaired by michael Jackson. the Audit c ommittee 
meets at least twice a year and in addition, the auditors may request a meeting at any time. the Audit c ommittee is responsible 
for reviewing the interim and final accounts prior to submission to the Board. The Committee agrees the scope and approach 
to the annual audit and interim review in advance with the auditors. the c ommittee keeps under review the appointment 
and remuneration of the external auditors, their cost effectiveness, their independence and objectivity. the chief financial 
Officer attends meetings of the Audit Committee by invitation.
Internal control and risk management
the board is responsible for maintaining an appropriate system of internal control to provide reasonable assurance of 
the quality and reliability of financial information used to direct the business, safeguard assets and recognise liabilities 
in accordance with company law and generally accepted accounting practices and for reviewing its effectiveness. Authority 
levels for purchase and capital commitments are defined. The Group has developed detailed budgets and monthly management 
reporting of actual results against budgets and analyses variances in performance. Regular re-forecasting and projection 
of results are carried out during the year as required.
Investor relations
management has put in place procedures to enable a regular dialogue with institutional investors and analysts particularly 
in relation to interim and full year results. All shareholders will receive the Annual Report and the interim financial statements. 
the board welcomes as many investors as possible to the Annual General m eeting and invites discussion on issues facing 
the Group. 
Going concern
The financial statements have been prepared on a going concern basis. The Directors have a reasonable expectation that 
the Group has adequate resources to continue in operational existence for the foreseeable future. the rationale for the 
going concern basis is set out in note 2 to the financial statements. o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 23
stAtement of DiRectoRs’ Responsibilities
Statement of Directors’ responsibilities
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s 
transactions, and disclose with reasonable accuracy at any time the financial position of the parent company and the Group, 
and enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006. They 
are also responsible for safeguarding the assets of the parent company and the Group and hence for taking reasonable 
steps for the prevention and detection of fraud and other irregularities.
the Directors are responsible for preparing the Annual Report and the financial statements in accordance with the 
Companies Act 2006. The Directors are also required to prepare financial statements for the Group in accordance with 
international financial Reporting standards as adopted by the european union (ifRss) and the rules of the l ondon stock 
exchange for companies trading securities on the Alternative investment market. the Directors have chosen to prepare 
financial statements for the parent company in accordance with IFRSs.
Group financial statements
International Accounting Standard 1 requires that financial statements present fairly for each financial year the Group’s 
financial position, financial performance and cash flows. This requires the faithful representation of the effects of 
transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, 
income and expenses set out in the international Accounting standards board’s “framework for the preparation and 
presentation of financial statements’. In virtually all circumstances, a fair presentation will be achieved by compliance with 
all applicable ifRss. A fair presentation also requires the Directors to:
››  consistently select and apply appropriate accounting policies; 
››  present information, including accounting policies, in a manner that provides relevant, reliable, comparable and 
understandable information; and 
››    provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient to enable users 
to understand the impact of particular transactions, other events and conditions on the entity’s financial position and 
financial performance. 
Parent company financial statements
Company law requires the Directors to prepare financial statements for each financial year which give a true and fair view 
of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period. In preparing these 
financial statements, the Directors are required to:
››  select suitable accounting policies and then apply them consistently; 
››    prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will 
continue in business; 
››  make judgements and estimates that are reasonable and prudent; and 
››  state whether applicable accounting standards have been followed, subject to any material departures disclosed and 
explained in the financial statements. 
f inancial statements are published on the Group’s website in accordance with legislation in the united Kingdom governing the 
preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance 
and integrity of the Group’s website is the responsibility of the Directors. the Directors’ responsibility also extends to the 
ongoing integrity of the financial statements contained therein.  24 Synchronica plc Annual Report and Accounts 2009
inDepenDent AuDitoRs’ RepoR t
We have audited the financial statements of Synchronica plc for the year ended 31 December 2009 which comprise the 
consolidated statement of c omprehensive income, consolidated and company statement of financial p osition, consolidated 
and company statement of c ash flow, c onsolidated statement of changes in e quity, company statement of changes in e quity 
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 e uropean union.
this report is made solely to the c ompany’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 c ompany’s members those matters we are 
required to state to them in an auditor’s report and for no other purpose. to the fullest extent permitted by law, we do not 
accept or assume responsibility to anyone other than the company and the 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 statement of Directors’ responsibilities, the Directors are responsible for the preparation of the 
financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial 
statements in accordance with applicable law and international standards on Auditing (uK and ireland). those standards 
require us to comply with the Auditing practices board’s (Apb’s) ethical standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. 
this includes an assessment of: whether the accounting policies are appropriate to the Group’s and the parent company’s 
circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting 
estimates made by the Directors; and the overall presentation of the financial statements. 
Opinion on financial statements
in our opinion: 
››    the financial statements give a true and fair view of the state of the Group’s and the parent company’s affairs 
as at 31 December 2009 and of the Group’s loss for the year then ended;
››    the financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
››    the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Report of the Directors 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:
››  adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not 
been received from branches not visited by us; or
››    the parent company financial statements are not in agreement with the accounting records and returns; or
››    certain disclosures of Directors’ remuneration specified by law are not made; or
››  we have not received all the information and explanations we require for our audit. o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 25
Emphasis of matter – going concern
In forming our opinion on the financial statements, which is not qualified, we have considered the adequacy of the disclosure 
made in note 2 of the financial statements concerning the Group’s ability to continue as a going concern. The Company is 
reliant on signing new deals with customers which are expected but not guaranteed in order to continue as a going concern. 
These conditions, along with other matters discussed in note 2 to the financial statements, indicate the existence of a material 
uncertainty which may cast significant doubt about the Company’s ability to continue as a going concern. The financial 
statements do not include any adjustments that would result if the Group was unable to continue as a going concern.
John Everingham
senior statutory auditor
f or and on behalf of bDo llp , statutory auditor
Gatwick
united Kingdom
29 June 2010
bDo llp is a limited liability partnership registered in england and Wales (with registered number oc305127). 26 Synchronica plc Annual Report and Accounts 2009
consoliDA teD st Atement of compRehensiVe income 
foR the yeAR enDeD 31 DecembeR 2009
          2009 2008 
          £’000 £’000  
         note  (restated)
Revenue        5 3,827 3,708
cost of sales         (154) (1,675)
Gross profit         3,673 2,033
Administrative cost
exceptional items        10 (925) (1,956)
other administrative expenses        (5,986) (6,587)
total administrative costs         (6,911) (8,543)
Operating loss        6 (3,238) (6,510)
finance income        11 92 518
finance costs        11 (75) (495)
Loss before taxation         (3,221) (6,487)
taxation        13 144 387
Loss for the year after tax attributable to the equity holders of the parent company   (3,077) (6,100)
Other comprehensive income
exchange difference on translation of foreign operations      (98) (92)
Total comprehensive income for the year       (3,175) (6,192)
Loss per ordinary share from continuing operations 
basic and diluted loss per share       15 (0.6)p (2.9)p o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 27
stAtement of finAnciAl position
At 31 DecembeR 2009
        the Group  the c ompany
        2009 2008 2009 2008 
        £’000 £’000 £’000 £’000 
company number: 3276547      note  (restated)  (restated)
Non-current assets
intangible assets      16 5,079 4,205 1,557 460
property, plant and equipment     17 165 192 55 124
investment in subsidiaries      18 — — 727 1,401
Derivative financial instruments          21  194 465 194 465
Total non-current assets       5,438 4,862 2,533 2,450
Current assets
trade and other receivables      19 1,659 1,718 1,572 1,350
corporation tax       14 104 — 104
cash and cash equivalents       2,633 3,494 2,338 2,647
Total current assets       4,306 5,316 3,910 4,101
Total assets       9,744 10,178 6,443 6,551
Current liabilities
trade and other payables      22 1,911 3,848 3,235 3,510
corporation tax       88 21 — —
provisions      27 1,027 1,135 77 68
Total current liabilities       3,026 5,004 3,312 3,578
Non-current liabilities
provisions      27 336 411 336 411
Deferred tax liability      28 76 140 — —
Total non-current liabilities       412 551 336 411
Total liabilities       3,438 5,555 3,648 3,989
Equity and reserves
o rdinary shares      29 5,775 3,785 5,775 3,785
share premium       20,572 17,783 20,572 17,783
merger reserve       1,578 1,578 1,578 1,578
Accumulated losses       (21,436) (18,438) (25,095) (20,584)
translation reserve       (183) (85) (35) —
Equity attributable to shareholders of the parent company    6,306 4,623 2,795 2,562
Total equity and liabilities       9,744 10,178 6,443 6,551
The financial statements on pages 26 to 58 were approved by the Board of Directors on 29 June 2010 and were signed on its 
behalf by:
Angus Dent  David Mason  28 Synchronica plc Annual Report and Accounts 2009
consoliDA teD AnD comp Any st Atement of cAsh flo W 
foR the yeAR enDeD 31 DecembeR 2009
        the Group  the c ompany
        2009 2008 2009 2008 
        £’000 £’000 £’000 £’000 
         (restated)  (restated)
Cash flows from operating activities
l oss before taxation       (3,221) (6,487) (4,771) (8,362)
Adjusted for:
Depreciation       134 218 99 86
Amortisation of intangibles       413 297 222 235
impairment of intangibles       35 415 — —
impairment of investments       — — 674 1,602
l oss on disposal of property, plant and equipment    19 — 5 —
finance income       (92) (518) (66) (426)
finance cost       75 495 68 493
equity-settled share-based payment       79 125 79 125
Cash flows from operating activities  
before changes in working capital and provisions     (2,558) (5,455) (3,690) (6,247)
Decrease in assets held for resale      — 1,675 — —
(increase)/decrease in receivables      (134) 476 (401) 640
(Decrease)/increase in payables      (1,937) 209 (275) 2,104
(Decrease)/increase in provisions      (108) 79 (108) (106)
cash utilised from operations      (4,737) (3,016) (4,474) (3,609)
tax received       251 282 285 273
interest paid       — (2) — —
Net cash used in operating activities      (4,486) (2,736) (4,189) (3,336)
Cash flows from investing activities
Acquisition of subsidiary net of cash acquired     — (66) — —
investment in subsidiary       — — — (267)
purchase of intangible assets      (1,322) (145) (1,319) (138)
purchase of property, plant and equipment     (126) (166) (35) (105)
Net cash used in investing activities      (1,448) (377) (1,354) (510) o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 29
consoliDA teD AnD comp Any st Atement of cAsh flo W 
foR the yeAR enDeD 31 DecembeR 2009
        the Group  the c ompany
        2009 2008 2009 2008 
        £’000 £’000 £’000 £’000
Cash flows from financing activities
net proceeds from issue of ordinary shares     4,779 5,128 4,779 5,128
Proceeds from derivative financial instruments          461 357 461 357 
finance costs paid       (7) — — —
interest received       22 31 6 28
Net cash generated from financing activities     5,255 5,516 5,246 5,513
net (decrease)/increase in cash and cash equivalents    (679) 2,403 (297) 1,667
cash and cash equivalents at 1 January 2009     3,494 757 2,647 643
effects of exchange rate changes on cash and cash equivalents   (182) 334 (12) 337
Cash and cash equivalents at 31 December 2009     2,633 3,494 2,338 2,647 30 Synchronica plc Annual Report and Accounts 2009
consoliDA teD st Atement of chAnGes in equity 
foR the yeAR enDeD 31 DecembeR 2009
           total  
           attributable  
       share merger Accumulated  to equity 
      share premium reserve losses translation  shareholders  
      capital (restated) (restated) (restated) reserve of the parent 
      £’000 £’000 £’000 £’000 £’000 £’000
At 1 January 2008     840 13,167 — (12,463) 7 1,551
Adjustment for share-based payments    — — — 125 — 125
proceeds from placing     1,681 3,447 — — — 5,128
Share issued in exchange for derivative financial assets    517  1,169  —  —  —  1,686
consideration on acquisition of subsidiary    681 — 1,446 — — 2,127
shares issued in exchange for debt on acquisition of subsidiary 66 — 132 — — 198
total comprehensive income     — — — (6,100) (92) (6,192)
At 31 December 2008     3,785 17,783 1,578 (18,438) (85) 4,623
Adjustment for share-based payments    — — — 79 — 79
proceeds from placing     1,990 2,789 — — — 4,779
total comprehensive income     — — — (3,077) (98) (3,175)
At 31 December 2009     5,775 20,572 1,578 (21,436) (183) 6,306 o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 31
compAny st Atement of chAnGes in equity 
foR the yeAR enDeD 31 DecembeR 2009
          Accumulated 
       o rdinary share  merger losses 
       shares premium reserve (restated) total  
the c ompany      £’000 £’000 £’000 £’000 £’000
At 1 January 2008      840 13,167 — (12,603) 1,404
share-based payments      — — — 125 125
proceeds from placing      1,681 3,447 — — 5,128
Share issued in exchange for derivative financial assets      517  1,169  —  —  1,686
consideration on acquisition of subsidiary    681 — 1,446 — 2,127
share issued in exchange for debt on acquisition of subsidiary  66 — 132 — 198
total comprehensive income      — — — (8,106) (8,106)
At 31 December 2008      3,785 17,783 1,578 (20,584) 2,562
share-based payments      — — — 79 79
proceeds from placings      1,990 2,789 — — 4,779
total comprehensive income      — — — (4,637) (4,637)
At 31 December 2009      5,775 20,572 1,578 (25,142) 2,783 32 Synchronica plc Annual Report and Accounts 2009
notes foRminG p ARt of the finAnciAl st Atements 
foR the yeAR enDeD 31 DecembeR 2009
1 General information
Synchronica plc is incorporated in England under the Companies Act 2006. The address of its registered office 
is mount pleasant house, l onsdale Gardens, Royal tunbridge Wells, Kent tn1 1ny , united Kingdom.
These consolidated financial statements are presented in pound Sterling, which represented the reporting currency of the 
Group and parent company, the functional currency of the Group entities is the united states Dollar. f oreign operations are 
consolidated in accordance with the policies set out in note 2 below.
2 Significant accounting policies
Basis of preparation
The Group and parent company financial statements have been prepared in accordance with EU endorsed International 
financial Reporting standards (ifRs), international financial Reporting interpretations c ommittee (ifRic) interpretations 
and with those parts of the companies Act 2006 applicable to companies reporting under ifRs. All accounting standards 
and interpretations issued by the international Accounting standards board and the international financial Reporting 
Interpretations Committee effective at the time of preparing these financial statements have been applied.
A summary of the significant Group and Company accounting policies adopted in the preparation of the financial statements 
is set out below. these policies have been consistently applied to all the years presented, unless otherwise stated.
The preparation of financial statements which comply with IFRS requires the use of estimates and assumptions, and for 
management to exercise its judgement in the process of applying the Group’s accounting policies. critical judgements and 
key estimates and assumptions are disclosed in note 3.
As of 1 January 2009, the company and Group changed its functional currency from sterling to us Dollar. the change 
reflects the majority of the revenues are from competitive markets priced and settled in US Dollars. The translation procedures 
applicable to the new functional currency were applied prospectively from the date of change. the presentational currency 
has remained as Sterling for the benefit of investors.
Going concern
These Group financial statements have been prepared on the going concern basis which is supported by forecasts and 
projections covering the period to 31 December 2011.
the Group made a loss of £3.077m for the year to 31 December 2009 (2008: £6.100m) and had cash of £2.633m at that 
time. in April 2010 the Group raised an additional £4.8m (£2.8m in cash plus £2m on a 24 month swap) before expenses 
from existing and new shareholders. from this placing £0.611m was used as part consideration for the acquisition of the 
colibria imps business (see note 36). 
The forecasts and projections, which include monthly cash flows, suggest that provided the Group trades in line with 
expectations it has sufficient funds to meet its liabilities as they fall due. There is however a risk that the Group may not 
meet its revenue expectations and/or that while it may meet these revenue expectations it might meet them more slowly 
than anticipated; either or both of these could test the Group’s cash flow. The forecasts are reliant on signing new deals 
with new customers which is expected but not guaranteed, negotiations are ongoing.
in addition, the Group operates in a highly specialised and fast moving environment in which in order to generate revenue 
it is necessary that the products are and remain up to date. this leaves the Group with little opportunity to reduce costs 
if it is to remain competitive.
Given the above, the Directors acknowledge that there is a material uncertainty related to these events, that may cast 
significant doubt on the Group’s ability to continue as a going concern and, therefore, that it may be unable to realise 
its assets and discharge its liabilities in the normal course of business.
the Group has faced the uncertainties noted above throughout its life. to date, when required, management has been successful 
in raising additional funding from existing and new investors. based on forecasts and projections and the additional funding 
raised since the balance sheet date, management expects the company to continue as a going concern. o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 33
2 Significant accounting policies (continued)
Standards adopted
ifRs 8 “operating segments” (effective for period beginning on or after 1 January 2009) replaces iAs 14 “segmental 
Reporting”. the effects of adopting this standard are included in note 9. 
ifRs 3 “business combinations” (revised) has been adopted. the effects of adopting this standard are included in note 32. 
the Group has adopted the revised iAs 1 “presentation of financial statements (2007)”, which became effective as of 
1 January 2009. As a result, the Group presents in the consolidated statement of changes in equity all owner changes in 
equity, whereas all non-owner changes in equity are presented in the consolidated statement of comprehensive income. 
As permitted under the revised iAs 1, the Group has elected to present a single statement of comprehensive income. 
comparative information has been re-presented so that it also is in conformity with the revised standard.
the Group has applied “improving Disclosures about financial instruments (Amendments to ifRs 7)” effective for the year 
ending 31 December 2009. this amendment requires enhanced disclosures about fair value measurements and liquidity 
risk which have been provided in note 21. the amendment does not change the recognition or measurements of transactions 
and balances in the financial statements.
Standards, amendments and interpretations to published standards not yet effective
certain new standards, amendments and interpretations to existing standards have been published that are mandatory 
for the Group’s accounting periods beginning on or after 1 January 2009 or later periods and which the Group has decided 
not to adopt early. these are:
››  amendment to iAs 39 “financial instrument: eligible hedged items” and “financial instruments Recognition and 
Measurement” (effective for accounting periods beginning on or after 1 July 2009). This amendment clarifies principals 
relating to one sided hedge transactions and inflation on financial hedged items. Management is currently assessing 
the impact of this amendment on the financial statements. 
››  amendment to ifRic 9 “Reassessment of embedded Derivatives” (effective for accounting periods beginning on or after 
30 June 2009). This amendment clarifies the treatment of embedded derivatives to be consistent with changes in IAS 39 
and IFRS 7. Management is currently assessing the impact of this amendment on the financial statements.
››  ifRic 17 Distribution of non-cash Assets to owners (effective for accounting periods beginning on or after 1 July 2009). 
This interpretation clarifies the treatment of non-cash distributions to owners such as non-cash dividends. No such 
transactions are planned by management and the standard is not expected to have a material effect on the Group’s 
financial statements.
››  ifRic 18 “transfer of Assets from customers” (effective for accounting periods beginning on or after 1 July 2009). 
this standard relates to assets transferred to the entity that it must use to connect to the customers network. 
Management is currently assessing the impact of the interpretation on the financial accounts. 
››  ifRs 2 “Group cash-settled share-based payment transactions” (effective for accounting periods beginning on or 
after 1 January 2010). Management is currently assessing the impact of this amendment on the financial accounts.
››  ifRs 1 Additional exemptions for first time Adopters (effective for accounting periods beginning on or after 1 January 2010). 
These are specific exemptions on first time adoption that do not apply to the entity and therefore will have no impact 
on the results or disclosure of the Group.
››    IAS 32 “Classification of Rights Issues” (effective for accounting periods beginning on or after 1 February 2010). 
Management is currently assessing the impact of this amendment on the financial accounts.
Basis of consolidation
The consolidated financial statements incorporate the results, assets, liabilities and cash flows of the Company and each 
of its subsidiaries for the financial year ended 31 December 2009.
subsidiaries are entities controlled by the Group. control is deemed to exist when the Group has the power, directly or indirectly 
to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The results, assets, 
liabilities and cash flows of subsidiaries are included in the consolidated financial statements from the date control 
commences until the date that control ceases.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used 
into line with those used by the Group.
intra-group balances and transactions are eliminated on consolidation. 34 Synchronica plc Annual Report and Accounts 2009
notes foRminG p ARt of the finAnciAl st Atements continueD
foR the yeAR enDeD 31 DecembeR 2009
2 Significant accounting policies (continued)
Foreign currencies 
The consolidated financial statements are presented in Sterling, the Group’s presentation currency. Items included in the 
financial statements of each of the Group’s entities are measured using US Dollars as the currency of the primary economic 
environment in which the entity operates (the ‘functional currency’).
transactions entered into by Group entities in a currency other than the currency of the primary economic environment in 
which it operates (the “functional currency”) are recorded at the rates ruling when the transactions occur. f oreign currency 
monetary assets and liabilities are translated at rates ruling at the statement of financial p osition date. exchange differences 
arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in the statement of 
comprehensive income.
on consolidation, the statement of financial position of the overseas subsidiary undertakings are translated at the rate of exchange 
ruling at the statement of financial p osition date. the exchange differences arising on the retranslation of opening net assets, 
together with the year-end adjustment to closing rates of statement of c omprehensive income translated at average rates, 
are taken directly to reserves. t he statement of comprehensive income of the overseas subsidiary undertakings are translated 
at average exchange rates (unless this average is not a reasonable approximation of the effect of the rates prevailing on the 
transaction dates, in which case the income and expenses are translated at the rate on the dates of the transactions). All other 
translation differences are taken to the statement of c omprehensive income. 
Revenue
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for 
licences granted and services provided in the normal course of business, net of discounts, any refunds due and VAt.
t he Group derives revenue from one trade in software licences and providing customer support and other services in relation 
to those licences. customer support includes telephone support and maintenance updates. other services include the sale 
of professional services to install and maintain software and to train licensees in the maintenance and use of the software.
Revenue allocable to software licences is recognised when all of the following conditions are met:
››    the Group has transferred to the buyer the significant risks and rewards of ownership;
››  the Group retains neither continuing managerial involvement to the degree usually associated with ownership 
nor effective control over the goods sold;
››  the amount of revenue can be measured reliably;
››    it is probable that the economic benefit associated with the transaction will flow; and
››  the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue allocable to customer support and maintenance is recognised on a straight line basis over the term of the contract, 
usually one year. Revenue not recognised in the Statement of Comprehensive Income under this policy is classified as deferred 
income in the statement of financial p osition.
Revenue allocable to other services is recognised when the service has been rendered to the customer and the value can 
be measured reliably with reference to the stage of completion of the project.
Share-based payments
the Group operates an employee share option scheme. the fair value of options or shares granted under the scheme is 
recognised in the statement of c omprehensive income as an expense over the period in which any performance conditions 
are fulfilled ending on the date on which the relevant employees become fully entitled to the award, based on management’s 
best estimate of the number of awards that will ultimately vest. A corresponding amount is credited to equity. no expense 
is recognised for awards that do not ultimately vest, except for those where the vesting depends on a market condition. 
Whether or not the market condition is satisfied, these are treated as vesting as long as all other performance conditions 
are satisfied.
the fair value of the awards are measured at the date at which they are granted using a black- scholes-merton option-pricing model. 
Goods and services received in exchange for warrants are recognised when the goods are obtained or the services are 
received. the goods and services received in exchange for warrants are recognised as assets or expenses as appropriate 
with a corresponding increase in equity. o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 35
2 Significant accounting policies (continued)
Leases
Where substantially all of the risks and rewards incidental to ownership are not transferred to the Group (an “operating lease”), 
the total rentals payable under the lease are charged to the consolidated statement of c omprehensive income on a straight 
line basis over the lease term. The aggregate benefit of lease incentives is recognised as a reduction of the rental expense 
over the lease term on a straight line basis.
Investments
investments in subsidiaries are stated at cost less provision for impairment where necessary to reduce book value to recoverable 
amount. Cost is purchase price including acquisition expenses, but excluding any payment for accrued interest or fixed 
dividend entitlement.
Intangible assets – goodwill
Goodwill arising on the acquisition of subsidiary undertakings and businesses, representing any excess of the fair value 
of the consideration given over the fair value of the identifiable assets and liabilities acquired is capitalised and provision 
is made for any impairment.
Goodwill and intellectual property rights are allocated to cash-generating units for the purpose of impairment testing. 
the recoverable amount of the cash-generating unit to which the goodwill or intellectual property rights relate is tested 
annually for impairment or when events or changes in circumstances indicate that it might be impaired.
Intangible assets – intellectual property rights
intellectual property rights acquired as part of a business acquisition are capitalised separately from goodwill if their value 
can be measured reliably on initial recognition and they are controlled through custody or legal rights. these rights are initially 
recorded at fair value which is based on replacement cost and are amortised over four years which is their estimated useful 
economic life. provision is made for any impairment.
intellectual property rights purchased separately from a business are capitalised at cost and are amortised over four years 
which is their estimated useful economic life. provision is made for any impairment.
Intangible assets – computer software and customer relationships
computer software and customer relationships are amortised on a straight line basis, to reduce their carrying value to their 
residual value, over their estimated useful lives. the following useful lives were applied during the year:
computer software — up to 2 years 
customer relationships — up to 2½ years 
Deferred development expenditure — up to 4 years
methods of amortisation, residual values and useful lives are reviewed and adjusted if necessary at each statement of financial 
position date.
Intangible assets – collaboration rights
costs attributed to rights acquired in a tripartite collaboration for the design, production, email and instant message enabling, 
sale and distribution of devices are capitalised and amortised on a straight line basis over the first 500,000 units sold.
Impairment 
in an impairment test, the recoverable amount of the cash-generating unit or asset is estimated to determine the extent of 
any impairment loss. the recoverable amount is the higher of the fair value less costs to sell and the value in use in the 
Group. An impairment loss is recognised to the extent that the carrying value exceeds the recoverable amount.
In determining a cash-generating unit’s value in use, estimated future cash flows are discounted to their present value 
using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to 
the cash-generating unit or asset that has not already been included in the estimate of future cash flows.
Reversals of impairment losses other than for goodwill are recognised immediately in the statement of c omprehensive income. 36 Synchronica plc Annual Report and Accounts 2009
notes foRminG p ARt of the finAnciAl st Atements continueD
foR the yeAR enDeD 31 DecembeR 2009
2 Significant accounting policies (continued)
Research and development
An intangible asset arising from development (or from the development phase of an internal project) will be recognised if, 
and only if, it can be demonstrated that all of the following conditions are met:
››    it is probable that the asset will create future economic benefits;
››  the development costs can be measured reliably;
››  technical feasibility of completing the intangible asset can be demonstrated;
››  there is the intention to complete the asset and use or sell it;
››  there is the ability to use or sell the asset; and
››    adequate technical, financial and other resources to complete the development and to use the asset are available.
subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated 
amortisation and accumulated impairment losses on the same basis as intangible assets acquired separately.
Property, plant and equipment 
property, plant and equipment are stated at cost less accumulated depreciation and impairment losses if applicable. 
Depreciation on property, plant and equipment is charged on an asset’s residual value over its useful economic life as follows:
Office equipment  —  up to 2 years 
Fixtures, fittings and equipment  —  up to 4 years
Residual values and useful lives are reviewed and adjusted, if appropriate, at each statement of financial p osition date.
Share capital
Financial instruments issued by the Group are treated as equity only to the extent that they do not meet the definition 
of a financial liability. The Group’s ordinary shares are classified as equity instruments. The Group considers its capital 
to comprise its ordinary share capital, share premium and accumulated retained earnings. there have been no changes 
in what the Group considers to be capital since the previous period. 
the Group is not subject to any externally imposed capital requirements.
Cash and cash equivalents
For the purpose of preparation of the cash flow statement, cash and cash equivalents include cash at bank and in hand 
and short-term deposits with an original maturity period of three months or less. 
Trade and other receivables
trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective 
interest method, less provision for impairment. A provision for impairment of trade receivables is established when there 
is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. 
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation 
and default or delinquency in payments are considered indicators that the trade receivable is impaired. the amount of the 
provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted 
at the original effective interest rate. the carrying amount of the asset is reduced through the use of an allowance account 
and the amount of the loss is recognised in the statement of c omprehensive income within administrative expenses. When 
a trade receivable is uncollectible, it is written-off against the allowance account for trade receivables. subsequent recoveries 
of amounts previously written-off are credited against administrative costs in the statement of c omprehensive income.
Taxation
the charge for current income tax is based on the results for the year as adjusted for items which are not taxed or disallowed. 
it is calculated using tax rates that have been enacted or substantively enacted by the statement of financial p osition date.
Deferred income tax is accounted for using the liability method in respect of temporary differences arising from differences 
between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the 
extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. 
such assets and liabilities are not recognised if the temporary difference is due to goodwill arising on a business combination 
or from an asset or liability, the initial recognition of which does not affect either taxable or accounting income. o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 37
2 Significant accounting policies (continued)
Taxation (continued)
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries except where 
the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will 
not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to apply in the periods when the timing differences are expected 
to reverse, based on tax rates and law enacted or substantively enacted at the statement of financial p osition date. 
Deferred tax is charged or credited in the statement of c omprehensive income, except when it relates to items credited 
or charged directly to shareholders’ equity, in which case the deferred tax is also dealt with in shareholders’ equity.
Provisions
provisions are recognised when the Group has a present obligation in respect of a past event, where it is more likely than 
not that an outflow of resources will be required to settle the obligation, and where the amount can be reliably estimated.
Financial instruments
The Group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial 
liability or an equity instrument in accordance with the substance of the contractual arrangement.
Financial assets and financial liabilities are recognised on the Group’s Statement of Financial Position when the Group 
becomes party to the contractual provisions of the instrument.
The particular recognition and measurement methods adopted for the Group’s financial instruments are disclosed below:
Fair value measurement hierarchy
IFRS 7 requires certain disclosures which require the classification of financial assets and financial liabilities measured at 
fair value using a fair value hierarchy that reflects the significance of the inputs used in making the fair value measurement 
(see note 3). the fair value hierarchy has the following levels:
(a) quoted prices (unadjusted) in active markets for identical assets or liabilities (l evel 1);
(b)  inputs other than quoted prices included within l evel 1 that are observable for the asset or liability, either directly 
(i.e. as prices) or indirectly (i.e. derived from prices) (l evel 2); and
(c) inputs for the asset or liability that are not based on observable market data (l evel 3).
Derivatives
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are also subsequently 
carried at fair value. Gains and losses are charged to financial income or costs in the Statement of Comprehensive Income. 
see note 21.
in the normal course of its business, the Group is exposed to currency risk. f orward foreign exchange contracts are 
derivative instruments and are used by the Group to manage its currency risks. 
Fair value determination
Whenever available, the fair value of a financial instrument is derived from quoted prices in an active market. For assets 
held, fair value is the bid price and for liabilities held it is the asking price. if there is no active market, fair value is established 
by using a valuation technique. Valuation techniques include the use of information from recent arm’s length market transactions 
between knowledgeable, willing parties, if available, reference to the current fair value of similar instruments and discounted 
cash flow analysis. The valuation technique used incorporates all factors that market participants would consider in setting 
a price and is consistent with accepted economic methodologies for pricing financial instruments.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all its 
liabilities. equity instruments issued by the company are recorded at the proceeds received, net of directly attributable 
issue costs.
Dividends
final dividends are recognised as a liability in the period in which they are approved by the c ompany’s shareholders. 
interim dividends are recognised when they are paid. 38 Synchronica plc Annual Report and Accounts 2009
notes foRminG p ARt of the finAnciAl st Atements continueD
foR the yeAR enDeD 31 DecembeR 2009
3 Critical accounting judgements and key sources of estimation uncertainty
Critical judgements in applying the Group’s accounting policies
In the process of applying the Group accounting policies, the following judgements have had the most significant effect 
on the amounts recognised in the financial statements:
Revenue recognition
In accordance with IAS 18, revenue, even when invoiced, is not recognised to the extent that significant obligations are 
retained by the Group, such as when customer support services remain to be performed. Revenue is recognised where 
the Group has transferred the significant risks and rewards of ownership to the customer and there is certainty that the 
economic benefits from the transaction will flow to the Group. For perpetual licence fees and other services recognition 
occurs when the customer has accepted the software or service. f or annual licence fees and annual support fees revenue 
is recognised over the period of the related obligation. 
Income taxes
the determination of the Group’s tax liabilities requires the interpretation of tax law. the Group obtains appropriate professional 
advice from its tax advisors in relation to all significant tax matters. The Directors believe that the judgements made in determining 
the Group’s tax liabilities are reasonable and appropriate, however, actual experience may differ and materially affect 
future tax charges. Claims for research and development tax credits are recognised when the cash flows are certain. 
Key accounting estimates and assumptions
Key assumptions concerning the future and other key sources of estimation uncertainty that have a significant risk of causing 
a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are as follows.
Business combination
Accounting estimates are applied in determining the initial fair value of goodwill, intellectual property rights and 
customer relationships. 
Impairment of intangible assets and property, plant and equipment
the Group tests goodwill at least annually for impairment, and whenever there is an indication that the asset may be impaired. 
All other intangible assets and property, plant and equipment are tested for impairment when indicators of impairment exist. 
impairment is determined with reference to the higher of fair value less costs to sell and value in use. Value in use is estimated 
using adjusted future cash flows. Significant assumptions are made in estimating future cash flows about future events 
including future market conditions and future growth rates. changes in these assumptions could affect the outcome of 
impairment reviews.
the recoverable amount of the above cash-generating unit has been determined from value in use calculations based on 
cash flow projections from the formally approved 2009 budgets and projections covering the years to 31 December 2014. 
Fair value of derivative instruments
the assumptions made to calculate the fair value of derivatives are set out in note 21. in calculating the fair value at the 
statement of financial p osition date, the company share price and liboR rates are assumed to remain at the rate ruling 
at the statement of financial p osition values until the end of the agreements. A change in share price in either direction 
of 1.0p from the year end price of 3.375p will lead to a change in value of £153,600. A change in liboR interest rate of 1% 
causes a change in value of £13,700. The discount rate used is based on the Group’s beta adjusted discount rate to reflect 
management’s assessment of specific risks related to the Company. The use of following discount rates would provide the 
following fair values:
Discount rate f air value £’000 
9.5%  557 
11.0%  551 
12.5%  545
Provisions
Provisions are recognised when management is satisfied that an outflow of economic benefits is probable and a reliable 
estimate can be made of the obligation.
in estimating the onerous lease provisions, the Group considers the likelihood of being able to sub-let properties and the 
probability of assignees going into liquidation and property reverting to the Group. o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 39
4 Financial risk management
Treasury management
Group treasury policies are reviewed and approved by the board. the objectives of Group treasury policies are to ensure 
that adequate financial resources are available for development of the business while at the same time managing financial 
risks. Derivative financial instruments are used to reduce financial risk exposures arising from the Group’s business 
activities and not for speculative purposes.
The Group’s treasury activities are managed by the Group finance function under the direction of the Chief Financial Officer. 
The Chief Financial Officer reports to the Board on the implementation of Group treasury policy.
The Group’s business activities expose it to a variety of financial risks that include:
››  liquidity risk;
››  credit risk;
›› interest rate risk; and
›› currency risk.
the policies for managing these risks are described below:
Liquidity risk
The Group finances its operations through a combination of shareholders’ funding and cash generated from revenues. 
The Group’s treasury policy aims to ensure that there are sufficient funds available to meet the projected cash flow 
requirements in the business plan. Management monitors the Group’s liquidity on the basis of expected cash flow. 
Cash reports are produced and reviewed by senior management. Monthly cash flow statements are reviewed by 
management and annual cash flow budgets are produced and reviewed by the Board of Directors.
the Group’s principal source of funding is from its shareholders, the Group has no borrowings. 
Credit risk
the amounts of trade receivables presented in the statement of financial p osition are net of allowances for doubtful accounts 
estimated by management based on prior experience and their assessment of the current economic environment.
The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are high credit 
quality financial institutions.
Interest rate risk
The Group’s financial instruments that are exposed to interest rate risk are interest rate swaps plus cash and cash 
equivalents. The terms of the interest rate swaps are set out in note 21. The interest rate profile of these financial 
instruments is disclosed in note 24. the Group does not have any overdrafts or loans.
Currency risk
the Group is exposed to currency risk through movements in exchange rates on its purchases and sales that are not 
denominated in us Dollars. the Group uses forward foreign exchange contracts to hedge the currency risk associated 
with highly probable forecast transactions. the contracts are denominated primarily in us Dollars and euros. 
Fair value estimation
the fair values of cash and cash equivalents, receivables, payables and borrowings with a maturity of less than one year 
are assumed to approximate to their book values.
5 Revenue
          2009 2008 
          £’000 £’000
Revenue arising from:
licences         1,631 3,273
Related services         2,196 435
          3,827 3,708 40 Synchronica plc Annual Report and Accounts 2009
notes foRminG p ARt of the finAnciAl st Atements continueD
foR the yeAR enDeD 31 DecembeR 2009
6 Operating loss
          2009 2008 
          £’000 £’000
operating loss is arrived at after charging:
Depreciation of property, plant and equipment       134 218
l oss on disposal of property, plant and equipment      19 — 
Amortisation of intangible assets        413 297
impairment of customer relationships        35 415
operating lease rentals – land and buildings       187 155
Research and development         380 1,421
Auditors’ remuneration (see note 12)        218 103 
share-based payments         187 117
7 Employees
Average monthly number of employees in the Group, including executive Directors:
        the Group  the c ompany
        2009 2008 2009 2008 
        £’000 £’000 £’000 £’000
product development       39 35 3 3
sales, marketing and administration      35 38 25 27
        74 73 28 30
staff costs, including executive Directors: 
Wages and salaries       3,933 4,019 2,584 2,481
social security costs       466 446 139 201
share-based payments       187 117 187 117
        4,586 4,582 2,910 2,799
8 Directors’ remuneration
          2009 2008 
          £’000 £’000
Remuneration of the company’s Directors:
emoluments         525 569
highest paid Director’s emoluments        296 290
f urther details on Directors’ emoluments are given in the Directors’ remuneration report. o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 41
9 Segmental reporting
At present the Group’s activities are operated largely through a common infrastructure and support functions and therefore 
in the opinion of the Directors its activities constitute one operating segment through which it provides its services.
the Group reviews the operating performance of the business by revenue from each of its following sources:
          2009 2008 
          £’000 £’000
licence revenues         1,631 3,273
professional services         1,640 259
support maintenance and hosting services       556 176
          3,827 3,708
Gross profit                3,673 2,033
operating loss         (3,238) (6,510)
Net finance income                17 23
l oss before taxation         (3,221) (6,487)
the assets and liabilities of the Group cannot be allocated to the above segments. f or internal reporting purposes balance 
sheets are not split into segments.
The Group operates in six geographic areas. Revenue, profit before tax and non-current assets (excluding derivative 
financial instruments) by geographical segment are as follows:
                 Profit/(loss)    Non-current 
      Revenue  before tax  assets
      2009   2008  2009  2008 2009  2008 
      £000 £000 £000 £000 £000 £000 
         (restated)   (restated)
eastern europe      1,365  432  1,214  432 — —
Asia       611  71  611  71 — —
Western europe     534  285  531  285 — —
north America      521  2,562  521  887 — —
Africa       432  228  432  228 — —
central and latin America      364  130  364  130 — —
corporate      — —  (6,894)  (8,520)  5,244  4,397
Total      3,827  3,708 (3,221) (6,487)  5,244  4,397
10 Exceptional Items
          2009 2008 
          £’000 £’000
costs on closure of site         462 1,956
Abortive acquisition costs         193 —
exceptional bad debt         270 —
          925 1,956
Costs on closure of site are expenditure incurred in closing an office acquired by acquisition in 2008. The abortive acquisition 
costs relate to a transaction to acquire a technology company. the bad debt relates to an amount that cannot currently be 
paid due to the introduction of exchange controls at short notice. 42 Synchronica plc Annual Report and Accounts 2009
notes foRminG p ARt of the finAnciAl st Atements continueD
foR the yeAR enDeD 31 DecembeR 2009
11 Finance income and costs
          2009 2008 
          £’000 £’000
Finance income
interest received on bank deposits        22 31
f oreign exchange gains         33 426
Gain on fair value of interest rate swaps (see note 21)      37 61
          92 518
Finance costs
l oss on fair value of equity swaps (see note 21)       26 444
unwinding of discount in provisions        42 49
interest paid         7 2
          75 495
12 Auditors’ remuneration
          2009 2008 
          £’000 £’000
Services to the Company and its subsidiaries
Fees payable to the Company’s auditors for the audit of the financial statements        106 59
f ees payable to the company’s auditors and its associates for other services:
Audit of the financial statements of the Company’s subsidiaries pursuant to legislation      13 —
other services pursuant to legislation – regulatory reporting      — 7
other services relating to taxation        11 37
Services relating to corporate finance transactions          76 —
other services – ifRs reporting and accounting advice      12 —
          218 103
13 Taxation
          2009 2008 
          £’000 £’000 
           (restated)
Income tax (credit)/expense
uK research and development tax credit       (221) (266)
uK adjustment to provision for previous periods       — 10
overseas corporation tax charge/(credit)       74 3
overseas adjustment to provision in previous periods      67 (5)
          (80) (258)
Deferred tax (credit)/expense
o rigination and reversal of temporary differences       (64) (129)
taxation credit         (144) (387)
the uK research and development tax credit received represents the refund of tax due from research carried out in the year 
ended 31 December 2008 (2008: the tax credit was received in respect of the years ended 31 December 2006 and 2007).  o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 43
13 Taxation (continued)
the Group’s loss before tax differs from the theoretical amount that would arise using the weighted average tax rate 
applicable to results of the consolidated entities as follows:
          2009 2008 
          £’000 £’000 
           (restated)
l oss on ordinary activities before taxation       (3,221) (6,487)
theoretical tax at uK corporation tax rate 28% (2008: 28.5%)     (901) (1,849)
effects of:
– unrelieved tax losses         604 1,229
– impairment of intangible assets        10 486
– expenditure that is not tax deductible        278 10
– capital allowances less than/(in excess of) depreciation      59 91
– adjustments in respect of prior periods       67 5
– higher tax rates on overseas earnings        2 —
– research and development tax credit        (221) (266)
– share-based payments         22 36
Actual current taxation credit         (80) (258)
14 Loss of the parent company for the financial year
The loss for the financial year dealt within the accounts of the parent company was £4,637,000 (2008: £8,106,000).
As permitted by section 408 of the companies Act 2006, no separate statement of c omprehensive income is presented 
in respect of the parent company.
15 Loss per ordinary share
basic loss per ordinary share is calculated by dividing the loss attributable to ordinary shareholders by the weighted 
average number of ordinary shares outstanding during the period.
        2009 2008 
        £’000 £’000
Numerator  
l osses used for calculation of basic and diluted eps    3,077 6,100
        Number number
Denominator
Weighted average number of ordinary shares used in basic eps   479,249,011 207,780,284
basic and diluted loss per share (pence)     (0.6)p (2.9)p
67,694,512 (2008: 19,813,205) shares, being the weighted average number of dilutive securities (options and warrants) 
have been excluded from the calculation of diluted loss per share because they would reduce loss per share. 44 Synchronica plc Annual Report and Accounts 2009
notes foRminG p ARt of the finAnciAl st Atements continueD
foR the yeAR enDeD 31 DecembeR 2009
16 Intangible assets
        Deferred 
      customer intellectual development collaboration  
     Goodwill  relationships  property expenditure  rights  software t otal 
the Group    £’000 £’000 £’000 £’000 £’000 £’000 £’000
Cost or valuation       
At 1 January 2008    — — 876 — — 89 965
Additions    — — 134 — — 11 145
Acquisitions    2,354 715 235 — — 12 3,316
Disposals    — — (116) — —  (62) (178)
At 1 January 2009 (as previously stated)  2,354 715 1,129 — — 50 4,248
prior year adjustment (note 33)   877 — — — — — 877
At 1 January 2009 (as restated)   3,231 715 1,129 — — 50 5,125
Additions    — — 32 1,120 153 17 1,322
At 31 December 2009    3,231 715 1,161 1,120 153 67 6,447
Amortisation       
At 1 January 2008    — — 331 — — 55 386
charged in year    — 30 234 — — 33 297
impairment    — 415 — — — — 415
Disposals    — — (116) — — (62) (178)
At 1 January 2009    — 445 449 — — 26 920
charged in year    — 128 222 55 — 8 413
impairment    — 35 — — — — 35
At 31 December 2009    — 608 671 55 — 34 1,368
Net book value       
At 1 January 2008    — — 545 — — 34 579
At 1 January 2009 (restated)    3,231 270 680 — — 24 4,205
At 31 December 2009    3,231 107 490 1,065 153 33 5,079
During the year customer relationships were impaired by £35,000 to reflect a customer written-off as a bad debt. In 2008 
£415,000 was impaired against a one off large contract. 
the Group conducts annual impairment tests on the carrying value of goodwill, based on the recoverable amount of the 
cash-generating unit (cGu) to which goodwill has been allocated. the Group has only one c Gu. the recoverable amount of 
the cGu is determined from value-in-use calculations. the key assumptions in the value in use calculations are the 
discount rate applied, the operating margin and the growth rate of net operating cash flows. The approved cash flow 
projections in the three financial years following the budget year reflect management’s expectation of the medium-term 
operating performance of the cGu and the prospects of the Group in the market.
››    The discount rate applied to the CGU represents a pre-tax rate that reflects the market assessment of the time value 
of money at the balance sheet date and the risks specific to the CGU. The discount rate applied to the CGU is 20%.
››  the operating margin assumed for the c Gu is primarily based on management’s assessment of operating margin 
and expected revenues.
››    Long-term growth rates of net operating cash flows are assumed equal to the growth rate in mobile consumer email. 
A growth rate of 30% has been applied based on industry expectations to 2014. o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 45
16 Intangible assets (continued)
        Deferred 
       intellectual development collaboration  
       property expenditure  rights  software t otal 
the c ompany      £’000 £’000 £’000 £’000 £’000
Cost or valuation     
At 1 January 2008      1,004 — — 65 1,069
Additions      135 — — 3 138
Disposals      (135) — — — (135)
At 1 January 2009      1,004 — — 68 1,072
Additions      32 1,120 153 14 1,319
Disposals      — — — — —
At 31 December 2009      1,036 1,120 153 82 2,391
Amortisation     
At 1 January 2008      462 — — 50 512
charged in year      220 — — 15 235
Disposals      (135) — — — (135)
At 1 January 2009       547 — — 65 612
charged in year      164 55 — 3 222
Disposals      — — — — —
At 31 December 2009      711 55 — 68 834
Net Book Value     
At 1 January 2008      542 — — 15 557
At 1 January 2009      457 — — 3 460
At 31 December 2009      325 1,065 153 14 1,557 46 Synchronica plc Annual Report and Accounts 2009
notes foRminG p ARt of the finAnciAl st Atements continueD
foR the yeAR enDeD 31 DecembeR 2009
17 Property, plant and equipment
          fixtures, 
                  Office  fittings and 
         equipment equipment total 
the Group        £’000 £’000 £’000
Cost or valuation
At 1 January 2008        194 31 225
Additions        157 10 167
Acquisitions        64 47 111 
Disposals        (7) — (7)
At 1 January 2009        408 88 496
Additions        125 1 126
Disposals        (86) (47) (133)
At 31 December 2009        447 42 489
Depreciation
At 1 January 2008        76 16 92
charged in year        159 59 218
Disposals        (6) — (6)
At 1 January 2009        229 75 304
charged in year        129 5 134
Disposals        (70) (44) (114)
At 31 December 2009        288 36 324
Net book value
At 1 January 2008        118 15 133
At 1 January 2009        179 13 192
At 31 December 2009        159 6 165
          fixtures, 
                  Office  fittings and 
         equipment equipment total 
the c ompany        £’000 £’000 £’000
Cost or valuation
At 1 January 2008        151 22 173
Additions        106 1 107
Disposals        — — —
At 1 January 2009        257 23 280
Additions        35 — 35
Disposals        (23) — (23)
At 31 December 2009        269 23 292
Depreciation
At 1 January 2008        56 12 68
charged in year        83 5 88 
Disposals        — — —
At 1 January 2009        139 17 156
charged in year        96 3 99
Disposals        (18) — (18)
At 31 December 2009        217 20 237
Net book value
At 1 January 2008        95 10 105
At 1 January 2009        118 6 124
At 31 December 2009        52 3 55 o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 47
18 Investments in subsidiaries
         As prior year  
         previously adjustment 
         stated (note 33) Restated  
the c ompany        £’000 £’000 £’000
Impaired cost
At 1 January 2008        77 — 77
Additions        3,031 (105) 2,926
impairment in year        (1,707) 105 (1,602)
At 1 January 2009        1,401 — 1,401 
impairment in year        (674) — (674)
At 31 December 2009        727 — 727
During the year the value of the investment in Axismobile limited was impaired by £0.674m (2008: £1.602m) as the value 
of the subsidiary’s assets was fair valued. the carrying value of the investment in Axismobile is recorded at a value in use 
of £0.454m using a discount rate of 20% on future cash inflow.
The shares in Group undertakings, which are all 100% beneficially owned by the Company, comprise investments in the following:
         interest in 
              Capital and  Profit/(loss)  ordinary  
      incorporated reserves for the year shares
synchronica software Gmbh     Germany 496 (8) 100%
synchronica America limited     united Kingdom 50 21 100%
Axismobile limited     israel 279 276 100%
19 Trade and other receivables
        the Group  the c ompany
        2009 2008 2009 2008 
        £’000 £’000 £’000 £’000
trade receivables       785 743 735 702
l ess provision for impairment of trade receivables     — (21) — (21)
trade receivables (net)       785 722 735 681
Accrued income       345 — 345 —
other receivables       93 191 73 60
Total financial assets other than cash and 
cash equivalents classified as loans and receivables        1,223 913 1,153 741
Derivative financial instruments (see note 21)          351 530 351 530
Prepayments not classified as financial assets          85 275 68 79
trade and other receivables       1,659 1,718 1,572 1,350
20 Credit risk
As of 31 December 2009, trade receivables of £nil (2008: £21,000) were impaired. the amount of the provision was £nil 
(2008: £21,000). the impairment as at 31 December 2009 related to the assessment of the recoverability of individual 
trade receivables. the ageing of these receivables is as follows:
        the Group  the c ompany
        2009 2008 2009 2008 
        £’000 £’000 £’000 £’000
up to 3 months       — — — —
3 to 6 months       — — — —
over 6 months       — 21 — 21
        — 21 — 21 48 Synchronica plc Annual Report and Accounts 2009
notes foRminG p ARt of the finAnciAl st Atements continueD
foR the yeAR enDeD 31 DecembeR 2009
20 Credit risk (continued)
As of 31 December 2009, trade receivables of £333,000 (2008: £329,000) were past due but not impaired. these relate 
to a number of independent customers for whom there is no recent history of default. the ageing of these receivables is 
as follows:
        the Group  the c ompany
        2009 2008 2009 2008 
        £’000 £’000 £’000 £’000
up to 3 months       304 29 304 21
3 to 6 months       19 281 19 281
over 6 months       10 19 10 11
        333 329 333 313
the carrying amounts of the Group’s trade and other receivables are denominated in the following currencies:
        the Group  the c ompany
        2009 2008 2009 2008 
        £’000 £’000 £’000 £’000
us Dollar       636 982 586 660
Gb pound       — 669 — 669
euro       150 54 150 9
ch franc       15 13 15 11
        801 1,718 751 1,349
movement on the provision for impairment of trade receivables are as follows:
        the Group  the c ompany
        2009 2008 2009 2008 
        £’000 £’000 £’000 £’000
At 1 January        21 — 21 —
provision for impairment of receivables      306 97 265 97
Receivables written-off in the year as uncollectible    (327) (76) (286) (76)
unused amounts reversed       — — — —
At 31 December       — 21 — 21
The Group’s exposure to credit risk, by class of financial instrument, is shown in the table below:
        the Group  the c ompany
        2009 2008 2009 2008 
        £’000 £’000 £’000 £’000
Loans and receivables
trade receivables       785 722 734 681
other receivables       93 995 73 668
cash and cash equivalents       2,633 3,494 2,338 2,647
        3,511 5,211 3,145 3,996 o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 49
21 Derivative financial instruments
          2009 2008 
the Group and c ompany         £’000 £’000
current         351 530
non-current         194 465
          545 995
Financial assets measured at fair value
         f air value measurements using 
         l evel 1 l evel 2 l evel 3 
         £’000 £’000 £’000
1 January 2009        995 — —
net gains and losses recognised in other comprehensive income    11 — —
Amounts settled        (461) — —
31 December 2009        545 — —
the c ompany has previously entered into two derivative agreements. the c ompany issued shares in exchange for the right 
to receive the proceeds of monthly swap settlements. each settlement amount is determined by the company’s share price 
and by interest on the notional balance outstanding balance during that settlement period. until the settlement of each swap 
the company holds the risk and reward of market changes.
on 15 January 2008, the c ompany completed a placing of 30,000,000 ordinary 1p shares at a price of 6.25p. the c ompany 
also entered into its first derivative agreement, consisting of equity and interest rate swaps with a notional principal value 
of £1.875m. At the request of the company the settlement of swaps was delayed in november 2009, resuming in f ebruary 2010. 
18 of 24 swaps remain to be settled at 31 December 2009.
on 11 september 2008, the c ompany completed a placing of 21,666,666 ordinary 1p shares at a price of 3p. the c ompany 
also entered into the second derivative agreement, consisting of equity and interest rate swaps with a notional principal 
value of £0.65m. The final swaps of this agreement settled in September 2009.
SWAP commencing 15 January 2008
          31 December 31 December  
          2009  2008
company share price         3.375p 3.75p
interest rate receivable         (2.01)% (0.33)%
Discount rate         12.5% 12.5%
f air value (£’000)         545 565
t he notional principal of this derivative agreement is divided into 24 equal swaps. t he value of the swap settled in each period 
is determined by reference to the company’s share price, the equity swap, and to liboR (one month Gbp l ondon interbank 
borrowing Rate), the interest rate swap. the amount received in respect of each equity swap is based on the c ompany’s 
share price divided by the base price of 8.3333p multiplied by the principal being settled of £78,125. A change in share 
price of 0.1p from the base price will lead to a change in receipts of £938 per month. the settlement value of the interest 
rate swap to be deducted from the equity swap is arrived at by multiplying the outstanding notional principal amount over 
the period since the last settlement date by liboR minus 2.5% p.a.
Fair value of the swaps is calculated by discounting the forecast cash flows by reference to the current share price and 
liboR on the reference date.
SWAP commencing 11 September 2008 settled in full
          31 December 31 December  
          2009  2008
company share price         3.375p 3.75p
interest rate payable         N/A 0.03%
Discount rate         12.5% 12.5%
f air value (£’000)         — 430 50 Synchronica plc Annual Report and Accounts 2009
notes foRminG p ARt of the finAnciAl st Atements continueD
foR the yeAR enDeD 31 DecembeR 2009
22 Trade and other payables
        the Group  the c ompany
        2009 2008 2009 2008 
        £’000 £’000 £’000 £’000
trade payables       677 743 636 613
Amounts due to Group undertakings      — — 1,524 1,632
Accruals       623 1,218 502 396
Total financial liabilities, excluding loans and borrowings,  
classified as financial liabilities measured at amortised cost       1,300 1,961 2,662 2,641
Deferred consideration       266 532 266 532
Deferred income       187 1,112 181 190
other taxation and social security taxes      158 243 126 147
trade and other payables       1,911 3,848 3,235 3,510
23 Liquidity risk
The following table analyses the Group’s financial liabilities which will be settled on a net basis into the relevant maturity 
groupings based on the remaining period on the statement of financial p osition to the contractual maturity date. the amounts 
disclosed in the table are the contractual undiscounted cash flows. Balances due within twelve months equal their carrying 
balances as the impact of discounts is not significant.
         l ess than between 3 more than 
         3 months and 6 months 6 months 
the Group        £’000 £’000 £’000
At 31 December 2009
financial liabilities measured at amortised cost      1,300 — —
At 31 December 2008
financial liabilities measured at amortised cost      1,961 — —
         l ess than between 3 more than 
         3 months and 6 months 6 months 
the c ompany        £’000 £’000 £’000
At 31 December 2009
financial liabilities measured at amortised cost      2,662 — —
At 31 December 2008
financial liabilities measured at amortised cost      2,641 — —
24 Interest rate profile
The following table sets out the carrying amount of the Group’s financial instruments that are exposed to interest rate risk 
as at 31 December 2009:
        Effective Carrying effective carrying 
        interest rate amount interest rate amount 
        2009 2009 2008 2008 
        % £’000 % £’000
Floating rate with maturity within one year
cash and cash equivalents – Group      0.3 1,046 2.9 3,454
cash and cash equivalents – company      0.0 806 3.5 2,647
Derivatives – Group       1.1 351 0.2 530
Derivatives – company       1.1 351 0.2 530
Floating rate with maturity after one year
Derivatives – Group       1.1 194 0.3 465
Derivatives – company       1.1 194 0.2 465 o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 51
25 Currency risk
the sterling equivalent of foreign currency assets/(liabilities) held at the year end is as follows: 
          2009 2008 
the Group         £’000 £’000
us Dollar         704 2,022
euros         774 (106)
other currencies         38 140
          1,516 2,056
the effect of a 5 cent movement in the value of sterling against the us Dollar in either direction at the statement of financial 
position date would, all other variables held constant, result in a movement in the loss for the year of £60,000 (2008: £145,000). 
the effect of a 5 cents movement in the value of sterling against the euro in either direction at the statement of financial 
position date would, all other variables held constant, result in a movement in the loss for the year of £44,000 (2008: £5,000).
          2009 2008 
the c ompany         £’000 £’000
us Dollar         505 1,447
euros         774 (508)
other currencies         38 11
          1,317 950
t he effect of a 5 cent movement in the value of sterling against the us Dollar at the statement of f inancial position date would, 
all other variables held constant, result in a movement in the loss for the year of £41,000 (2008: £104,000). the effect 
of a 5 cents movement in the value of sterling against the euro at the statement of financial p osition date would, all other 
variables held constant, result in a movement in the loss for the year of £44,000 (2008: £26,000). 
26 Operating lease commitments
the total values of minimum lease payments are due as follows:
          2009 2008 
the Group and c ompany         £’000 £’000
operating lease payments due:
– within 1 year         191 194
– between 2 and 5 years         594 290
– later than 5 years         — —
          785 484
27 Provision for liabilities and charges
          l egal 
         o bligations property total 
the Group        £’000 £’000 £’000
At 1 January 2009        1,067 479 1,546
unwinding of discount to the statement of c omprehensive income    — 42 42
provision in year        — 3 3
used during the year        — (111) (111)
Adjustment for movement in foreign currency      (117) — (117)
At 31 December 2009        950 413 1,363 52 Synchronica plc Annual Report and Accounts 2009
notes foRminG p ARt of the finAnciAl st Atements continueD
foR the yeAR enDeD 31 DecembeR 2009
27 Provision for liabilities and charges (continued)
        the Group  the c ompany
        2009 2008 2009 2008 
        £’000 £’000 £’000 £’000
current       1,027 1,135 77 68
non-current       336 411 336 411
        1,363 1,546 413 479
Property provisions include a provision for dilapidations at the Group’s previous offices. The legal obligations arise from 
the actions of Axismobile limited prior to its acquisition by synchronica in september 2008. management is in the process 
of negotiating a settlement with the other party. The timing of when this process will be completed and the final amount 
payable is uncertain. 
28 Deferred tax
Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 28% (2008: 28%)
Deferred tax assets have not been recognised in respect of all tax losses and other temporary differences giving rise 
to deferred tax asset. A potential deferred tax asset of £6,542,000 (2008: £5,740,000) in relation to unrelieved losses 
of £23,363,000 (2008: £20,500,000) has not been recognised due to the uncertainty of recoverability of this amount. 
the movement on the deferred tax liability is as follows:
          2009 2008 
          £’000 £’000 
the Group          (restated)
At 1 January          (140) —
Recognised in the consolidated statement of comprehensive income
tax expense         64 129 
          (76) 129
Arising on acquisition of subsidiary        — (269)
At 31 December         (76) (140)
29 Share capital and reserves
The Group and Company
o rdinary 1p shares
       Nominal  nominal  
      Number value number  value  
      of shares  £’000 of shares £’000 
      2009 2009 2008 2008
1 January      378,532,178 3,785 84,021,046 840
issued on acquisition of a subsidiary    — — 68,081,633 681
issued in exchange for debt on acquisition of a subsidiary  — — 6,608,067 66
Issue in exchange for derivative financial instruments    — — 51,666,666 517
other issues for cash during the year    198,921,813 1,990 168,154,766 1,681
31 December     577,453,991 5,775 378,532,178 3,785
During the year the company made the following issues of ordinary 1p shares:
Date  number of shares premium per share
22 January 2009 3,000,000 ordinary 1p shares 2p premium per share
6 f ebruary 2009 6,983,333 ordinary 1p shares 2p premium per share
7 July 2009 188,938,480 ordinary 1p shares 1.5p premium per share o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 53
29 Share capital and reserves (continued)
the following describes the nature and purpose of each reserve within equity:
Reserve  Description and purpose
share premium  Amount subscribed for share capital in excess of nominal value.
merger reserve   Amount subscribed for share capital in excess of nominal value, where the share capital 
is issued as consideration as part of a business combination.
translation reserve  Gains/losses arising on retranslating the net assets of operations into sterling.
Accumulated losses   cumulative net gains and losses recognised in the consolidated statement  
of comprehensive income.
30 Share warrants
Warrants over a total of 319,103 (2008: 401,103) ordinary shares were in issue as at 1 January 2009. During the year 
no warrants were exercised (2008: nil) and 319,103 (2008: 82,000) expired. During the year warrants to purchase 
38,850,000 ordinary shares at 2.5p each were issued.
    Number of    Number of  
number of   warrants  number of warrants 
warrants  Warrant 1 January Warrant warrants 31 December exercise last date  
2008   expired  2009  expired  issued 2009 price exercisable
82,000  (82,000) — — — — £0.49 23 July 2008
319,103  — 319,103 (319,103) — — £0.49 30 June 2009
—   — — — 38,850,000 38,850,000 £0.03 06 July 2013
401,103  (82,000) 319,103 (319,103) 38,850,000 38,850,000
The warrants issued during the year entitle the holder to subscribe for a specified number of ordinary shares in the Company. 
the warrants may only be exercised as follows:
››  before the fourth anniversary of the warrant (as stated above); and
››  on meeting vesting conditions required by 31 march 2011. Vesting conditions for 19,425,000 warrants require that the 
warrant holder sells 250,000 devices. the vesting conditions for a further 19,425,000 warrants requires 80% of service 
features to be place.
The Black-Scholes-Merton model is used to value warrants. The fair value of the warrants is fixed at the date the vesting 
conditions are satisfied. At 31 December 2009 the vesting conditions had not been satisfied. At 31 December 2009 the 
fair value of a warrant is 1.5p using the following assumptions:
exercise price  3p 
share price  3.25p 
expected volatility   87% 
life of warrant  1.75 years  
Risk free rate  3.41% 
Dividends  nil
the Directors had no interest in the warrants. 54 Synchronica plc Annual Report and Accounts 2009
notes foRminG p ARt of the finAnciAl st Atements continueD
foR the yeAR enDeD 31 DecembeR 2009
31 Share-based payments
Employee share options
share-based payment incentives have been granted to certain employees to acquire ordinary shares of 1p each under the 
synchronica Global share option plan and enterprise m anagement incentive plan (“option plans”). options were granted 
with an exercise price equal to the closing mid-market price as quoted by the l ondon stock exchange on the business day 
before the options were granted.
under the rules of the option plans options become exercisable after a minimum of one year from the date of grant to a 
maximum of five years from the date of grant. As a condition of exercise the Option Holder must make a payment to the 
company of the aggregate exercise price due. income tax, employee national insurance and their overseas equivalents 
may be due on the exercise of the options.
the rules of the option plans provide that options granted will lapse six months after an employee leaves the Group’s 
employment. however the Directors have authority to vary these provisions.
During the year options over a total of 40,799,240 ordinary shares were granted under the option plans.
        Risk free  
    number of exercise  life of interest rate  
    ordinary share price of expected options over the life of   
Date of grant   options  options volatility (years) the options f air value
02/05/2007   3,398,000 11.75p 25% 4.3 5.11% 3.5p
17/09/2007   3,931,506 8.00p 25% 4.3 4.68% 2.1p
03/09/2007   305,000 7.75p 25% 4.3 5.07% 2.3p
01/10/2007   70,000 7.25p 25% 4.3 5.00% 2.2p
22/02/2008   3,675,812 8.00p 89% 4.3 4.72% 4.7p
06/10/2008   17,814,000 3.75p 86% 4.3 4.33% 1.9p
13/08/2009   40,799,240  2.875p 88% 4.3 3.82% 1.9p
no dividends are expected on the underlying shares. the options have been valued using a black- scholes-merton model 
for valuation. in previous years the historical data for the company was limited, the expected volatility was determined 
by reference to comparable companies. the model assumes employees will exercise their options when the market price 
is 2.0 times (2008: 2.0) the exercise price and that the employee exit rate is 20% (2008: 20%). the options granted in 
the year are exercisable in three annual equal instalments from the date of the grant without any market based conditions. 
the interests of the Directors in the share options of the c ompany are as shown in the Remuneration Report.
At 31 December 2009, options over a total of 60,290,443 ordinary shares remained in issue:
       Weighted  Weighted 
       average  average 
      Number exercise number exercise 
      of options price of options price 
      2009 2009 2008 2008
outstanding at 1 January    27,861,203 8.6p 8,187,391 9.3p
Granted     40,799,240 2.875p 21,489,812 4.5p
exercised     — — — —
surrendered     (3,816,000) 4.0p — —
lapsed     (4,554,000) 10.5p (1,816,000) 10.4p
outstanding at 31 December    60,290,443 4.0p 27,861,203 8.6p
no share options were exercised during the year (2008: nil). options vest only when exercised. At 31 December 2009 there 
were 8,559,493 exercisable options in issue. o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 55
31 Share-based payments (continued)
       Weighted  Weighted 
       average  average 
       remaining  remaining 
      Number contractual  number contractual 
      of options life of options life 
exercise price     2009 2009 2008 2008
2.875p     40,199,240 9.6 years — —  
3.75p     2,975,812 8.8 years 3,675,812 9.8 years
8.00p     12,450,000 8.2 years 17,814,000 9.2 years
7.25p     70,000 7.8 years 70,000 8.8 years
7.75p     305,000 7.7 years 305,000 8.7 years
8.00p     1,991,506 7.7 years 2,271,506 8.7 years
11.8p     1,377,000 7.3 years 2,378,000 8.3 years
15.0p     450,000 6.6 years 650,000 7.6 years
27.0p     450,000 6.0 years 650,000 7.0 years
334.0p     3,394 5.4 years 28,394 6.4 years
48.8p     18,491 4.8 years 18,491 5.8 years
32 Prior period acquisition of AxisMobile Limited
As disclosed in last year’s financial statements, on 10 September 2008, the Group completed the acquisition of AxisMobile Limited 
(AML). During the year the fair value of deferred income reflected in the prior year was revised by £0.713m to reflect the 
actual stage of completion of the customer installations. in addition, costs of acquisition have been written-off to the statement 
of Comprehensive Income in accordance with the requirements of IFRS 3 (revised). Further adjustments include a reclassification 
of capital to be issued of £532,000 as a current liability and an adjustment to deferred tax for these amounts. the Group 
has adopted ifRs 3 (revised) in order to provide consistent accounting for this and future acquisitions. these changes have 
been treated as a prior year adjustment in these financial statements and the numbers restated accordingly. Had these 
amounts been finalised at the 2008 financial statements year end, the reported amounts would have differed to those 
previously reported as follows:
››  deferred income would have been £713,000 higher; 
››  goodwill would have been £608,000 higher; and
››  retained losses would be £105,000 higher.
Details of the restated fair value of the net assets acquired, purchase consideration and goodwill are as follows:
Purchase consideration
           £’000
cash paid          83
share consideration          2,127
Debt          532
Total purchase consideration          2,742
Fair value of net identifiable liabilities                  489
Goodwill          3,231 56 Synchronica plc Annual Report and Accounts 2009
notes foRminG p ARt of the finAnciAl st Atements continueD
foR the yeAR enDeD 31 DecembeR 2009
32 Prior period acquisition of AxisMobile Limited (continued)
Axis acquisition
          carrying values f air 
          pre-acquisition value 
          £’000 £’000
intangible assets         12 2,637
property, plant and equipment        111 111
Receivables         628 196
cash and cash equivalents         17 17
payables         (1,338) (1,338)
provision         (882) (882)
Deferred income         (248) (961)
Deferred tax         — (269)
net assets acquired         (1,700) (489)
Goodwill          3,231
Consideration          2,742
33 Prior year adjustment 
(1) the Group has adopted ifRs 3 early in order to provide a consistent approach to this and future acquisitions.
(2)   The fair value of AxisMobile Limited has been amended to reflect the stage of completion of customer installations (see note 32).
(3)  t he effect of deferred tax on the acquisition of Axismobile l imited was not accounted for in the 2008 accounts. t he Directors 
had not previously felt that the year end balance was material. this was revised on the review of the fair value position.
(4) the merger reserve has been separated from the share premium account to comply with the 2006 c ompanies Act 2006.
        Revision 
       Adoption of of 2008 Deferred 
      As ifRs3 acquisition tax on  creation 
      previously (revised) fair value acquisition of merger As 
      stated  (1)  (2)  (3)  (4)  restated 
Group      £’000 £’000 £’000 £’000 £’000 £’000
Effect on Statement of Financial Position      
intangible assets     3,328 (105) 713 269 — 4,205
Deferred income     (399) — (713) — — (1,112)
Deferred tax liability     — — — (140) — (140)
Deferred consideration     — (532) — — — (532)
other net assets     2,202 — — — — 2,202
net assets     5,131 (637) — 129 — 4,623
capital to be issued     532 (532) — — — —
Accumulated losses     (18,462) (105) — 129 — (18,438)
share premium account     19,361 — — — (1,578) 17,783
merger reserve     — — — — 1,578 1,578
other equity reserves     3,700 — — — — 3,700
equity     5,131 (637) — 129 — 4,623
comparatives have not been shown for 2007 as they have not been restated. the prior year adjustments only effect 2008.  o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 57
33 Prior year adjustment (continued)
         Revision 
        Adoption of of 2008 Deferred 
        ifRs3 acquisition tax on 
        (revised) fair value acquisition  
        (1)  (2)  (3)  effect 
        £’000 £’000 £’000 £’000
Effect on consolidated statement of comprehensive income     
other administrative expenses       (105) — — (105)
taxation       — — 129 129
        (105) — 129 24
34 Related party transactions 
The Group
Key management compensation is disclosed in Directors’ emoluments in note 8.
The Company
Balances owed to subsidiaries are shown in note 22 to the financial statements. The outstanding balances are unsecured 
and bear no interest. they are due for settlement in accordance with the Group’s normal trade terms.
sales by the subsidiaries to the c ompany were as follows:
          2009 2008 
          £’000 £’000
synchronica software Gmbh         2,057 1,699
synchronica America limited         410 299
Axismobile limited         346 723
f unds are transferred within the Group, dependent on the operational needs of individual companies. the Directors do not 
consider it meaningful to set out the gross amounts of transfers between individual companies.
35 Events after the balance sheet date
on 7 April 2010, the c ompany raised £2.0m before expenses of additional share capital. the c ompany placed 80,000,000 
ordinary shares of 1p each at a price of 2.5p per share. synchronica has entered into an equity based swap to retain much 
of the economic value of the shares issued. settlement of the swap over the next 24 months will release the credit support 
posted by the company, in addition the swap settlement will be an amount determined by reference price to the synchronica 
share price. As such a change in share price of 0.25p from the base level of 3.3333p per share will lead to a change in receipts 
from the swap of £6,250 per month. in addition the company issued 8,000,000 ordinary shares in lieu of fees for setting 
up the equity swap. in addition the company issued 8,510,204 ordinary shares in accordance with the provisions of the 
agreement to purchase the shares of Axismobile limited in 2008. 
on 21 April 2010, the c ompany raised £2,790,000 before expenses by placing 111,600,000 ordinary shares. the c ompany 
also entered into an asset purchase agreement with colibria As of norway. the assets purchased from c olibria include their 
instant messaging and presence service (imps) business (see note 36). t he assets include intellectual property rights, software, 
a patent, customer contracts, reseller contracts, consultancy contracts and shares in a filipino subsidiary. in addition c olibria 
granted a worldwide royalty free licence to synchronica in respect of certain software in addition to the software described 
above. in consideration for these assets synchronica made a payment of eur700,000 and issued of 54,054,054 ordinary 
shares initially and will issue up to 72,072,072 ordinary shares in october 2010 if all conditions are met. 58 Synchronica plc Annual Report and Accounts 2009
notes foRminG p ARt of the finAnciAl st Atements continueD
foR the yeAR enDeD 31 DecembeR 2009
36 Colibria acquisition
on 21 April 2010, after the balance sheet date, the Group acquired the imps business of colibria As (see note 35).
          carrying values provisional 
          pre-acquisition fair values 
          £’000 £’000
intangible assets         — 5,218
property, plant and equipment         40  40
Receivables          87  87
cash          48  48
payables         (60)  (60)
Defined benefit pension plan                  (88)   (88)
Deferred tax         —  (1,461)
          27  3,784
consideration paid:   
cash           631
o rdinary shares (2.5p)           3,153
            3,784
the fair value of the shares issued was determined by reference to their quoted market price of 2.5p at the date of acquisition. o VeRVieW coRpoRA te Go VeRnAnce finAnciAl stAtements business ReVieW
Synchronica plc Annual Report and Accounts 2009 59
notice of GeneRAl meetinG
synchRonicA plc
(ReGisteReD in enGlAnD AnD W Ales unDeR comp Any numbeR 03276547)
notice is hereby given that the Annual General meeting of synchronica plc (the “company”) will be held at the company’s 
registered office, Mount Pleasant House, Lonsdale Gardens, Tunbridge Wells, Kent TN1 1NY on 28 July 2010 at 9.30am to 
consider and, if thought fit, pass the following resolutions 1–6 as ordinary resolutions and resolution 7 as a special resolution:
Ordinary resolutions
1.    To receive, consider and adopt the financial statements for the year ended 31 December 2009 together with the Report 
of the Directors and the Auditors’ Report on those accounts. 
2. to receive, consider and adopt the Directors’ Remuneration Report for the year ended 31 December 2009.
3.  to re-elect mr michael Jackson, non-executive Director of the c ompany, who retires having been appointed to the board 
since the last Annual General meeting. 
4.    To re-elect Mr Carsten Brinkschulte, Chief Executive Officer and Director of the Company, who retires by rotation. 
5.    To re-appoint BDO LLP as auditors of the Company to hold office from the conclusion of this meeting until the conclusion 
of the next general meeting at which the accounts are laid before the company and to authorise the Directors to 
determine their remuneration.
6.  f or the purposes of section 551 of the companies Act 2006 (the “Act”) the Directors are hereby generally and 
unconditionally authorised, in accordance with the Articles of Association of the company (the “Articles”), to allot 
relevant securities of a nominal amount of £1,839,149 (being the “section 551 Amount” for the purposes of Article 7) 
for the five year period expiring on 28 July 2015 (being the “prescribed period” for the purposes of Article 7) upon the 
terms set out in Article 7. 
Special resolution
7.  subject to and conditionally upon the passing of resolution 6, the Directors be and they are hereby empowered, pursuant 
to section 570 of the Act and in accordance with Article 7, to allot equity securities for cash during the prescribed period 
referred to in resolution 6 up to an aggregate nominal amount of £1,679,238 (being the “section 561(1) Amount” for 
the purposes of Article 7) upon the terms set out in Article 7. 
by o rder of the board 
Arthur Phillips Registered Office:
company secretary mount pleasant house
  l onsdale Gardens
  tunbridge Wells 
  Kent tn1 1ny 60 Synchronica plc Annual Report and Accounts 2009
Notes:
1.  A member entitled to attend and vote at the above mentioned meeting is entitled to appoint one or more proxies to exercise all or any of his/her rights 
to attend, speak and vote at the meeting on a show of hands or on a poll and any adjournment(s) thereof. A member may appoint more than one proxy 
in relation to the meeting, provided that each proxy is appointed to exercise the rights attaching to a different share or shares held by him/her. A proxy 
need not be a member of the company. 
2.  A form of proxy is enclosed. please read carefully the instructions on how to complete the form. f or a proxy to be effective, it must be deposited together 
with the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power of attorney or other authority, 
at the offices of the Company, Mount Pleasant House, Lonsdale Gardens, Tunbridge Wells, Kent TN1 1NY so as to be received not later than 9.30am on 
26 July 2010 or, in the case of a poll to be taken more than 48 hours after it is demanded, up to 24 hours before the time appointed for the taking of 
the poll or, in the case of a poll to be taken less than 48 hours after it is demanded, at the time at which the poll was demanded. 
3. the appointment of a proxy does not preclude a member from subsequently attending and voting at the meeting in person if he or she so wishes.
4.  A vote withheld option has been included on the proxy form. the legal effect of choosing the vote withheld option on any resolution is that the member 
concerned will be treated not to have voted on the relevant resolution. t he number of votes in respect of which votes are withheld will however be counted 
and recorded but disregarded in calculating the votes for or against a resolution.
5.  Any person to whom this notice is sent who is a person nominated under section 146 of the companies Act 2006 to enjoy information rights (a “nominated 
person”) may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or to have someone 
else appointed) as a proxy for the meeting. if a nominated person has no such proxy appointment right or does not wish to exercise it, he/she may, under 
any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.
6.  the rights of shareholders set out above in relation to the appointment of proxies do not apply to nominated p ersons. such rights can only be exercised 
by shareholders of the company.
7.  copies of contracts of service and appointment of the Directors with the company or with any of its subsidiary undertakings are available for inspection 
at the registered office of the Company during normal business hours (Saturdays and public holidays excepted) and will be available for inspection at the 
place of the meeting for 30 minutes prior to and throughout the meeting.
8.    In accordance with Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only those shareholders registered in the 
register of members of the company as at 09.30 am on 26 July 2010 or, in the event that the meeting is adjourned, in such register 48 hours before the time 
of the adjourned meeting, shall be entitled to attend or vote at the meeting in respect of the number of shares registered in their names at the relevant 
time. changes after the relevant time will be disregarded in determining the rights of any person to attend or vote at the meeting.
9.  A member of the company which is a corporation may authorise a person or persons to act as its representative(s) at the AGm. in accordance with the 
provisions of the companies Act 2006 (as amended by the companies (shareholders’ Rights) Regulations 2009), each such representative may exercise 
(on behalf of the corporation) the same powers as the corporation could exercise if it were an individual member of the company, provided that they do 
not do so in relation to the same shares. it is therefore no longer necessary to nominate a designated corporate representative.
10.  pursuant to section 319A of the companies Act 2006, the company must cause to be answered at the AGm any question relating to the business being 
dealt with at the AGm which is put by a member attending the meeting, except in certain circumstances, including if it is undesirable in the interests 
of the Company or the good order of the meeting that the question be answered or if to do so would involve the disclosure of confidential information.
11.  in accordance with section 311A of the companies Act 2006, the contents of this notice of meeting, details of the total number of shares in respect 
of which members are entitled to exercise voting rights at the AGm and, if applicable, any members’ statements, members’ resolutions or members’ 
matters of business received by the company after the date of this notice will be available on the company’s website.
notice of GeneRAl meetinG continueD
synchRonicA plc
(ReGisteReD in enGlAnD AnD W Ales unDeR comp Any numbeR 03276547)  Synchronica plc
Mount Pleasant House 
Lonsdale Gardens 
Royal Tunbridge Wells 
TN1 1NY 
United Kingdom
www.synchronica.com