do you see what we see
ubiquity software corporation plc
annual report and financial statements 2005
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ubiquity software corporation plc  annual report and financial statements 2005 ubiquity software develops and markets 
sipbased communications software  
for fixed and mobile service providers 
system integrators independent software 
vendors and oem partners worldwide
01	 highlights
02	 ubiquity 	 at	 a	 glance
annual report and financial statements
04	 chairman’ s 	 statement
06	 chief 	 executive’ s	 statement	 10	 chief 	 financial	 officer’ s	 statement
12	 board 	 of	 directors
13	 directors’ 	 report
15	 corporate 	 governance	 statement	 17	 directors’ 	 remuneration	 report
21	 statement 	 of	 directors’	 responsibilities
22	 independent 	 auditors’	 report
24	 consolidated 	 profit	 and	 loss	 account
25	 combined 	 statement	 of	 movement	 in	 shareholders’	 funds	 and	 reconciliation	 	 of	 movements	 on	 reserves
26	 consolidated 	 balance	 sheet
27	 company 	 balance	 sheet
28	 consolidated 	 cash	 flow	 statement
29	 notes 	 to	 the	 financial	 statements
42	 company 	 information
43	 financial 	 calendar
©	2006	ubiquity	software	corporation	plc	all	rights	reserved		ubiquity	is	a	 registered	trademark	of	ubiquity	software	corporation	plc	all	other	products	 company	names	logos	and	services	are	the	trademarks	of	the	respective	holders ubiquity software corporation plc  20 million

highlights
3 billion

 in 2005 contracts signed with bell canada 
and two tier1 us carriers since yearend 
two further contracts with tier1 global 
carriers won via our partners
 network equipment vendor agreements 
signed in 2005 include hp  nokia and 
huawei since yearend agreement signed 
with lucent and integration completed with 
microsoft connected services framework
n
n
 since the 2005 yearend signed a contract 
with tier1 uk carrier for the supply of 
ubiquity’s sip application server
 chris burke former cto of vodafone uk 
joined the board as nonexecutive 
chairman david seibel former chairman  
of accenture canada appointed as a  
nonexecutive director and as chairman  
of the audit committee
n
n
only 20 million have 
switched to voice over 
internet protocol
in the world today there are  
3 billion telephone users 
gatner group 2005 
gatner group 2005   ubiquity software corporation plc 
ubiquity sip 
application server
the telecoms 
industry
market
opportunity
the hundred year old 
telecommunications industry is 
undergoing a fundamental and 
highly disruptive transition 
antiquated voicecentric “circuit
switched” networks are giving way 
to digital internet protocol ip 
based packet networks that 
enable the swift efficient delivery 
of voice video and data services 
in a ubiquitous manner to end 
users anytime and anywhere this 
is reshaping the industry’s overall 
structure and opening the door 
to a new set of companies that 
bring an internetcentric approach 
to delivering innovation within 
the 21 trillion worldwide 
telecommunications industry
ubiquity’s awardwinning  
sip application server sip as  
is a javabased software platform 
that allows telecom service 
providers to develop and deploy 
nextgeneration converged 
communications services faster 
and more easily than using 
traditional methods
sip as brings the distributed 
open application development 
model of the internet to 
telecommunications this 
maximizes the ability of an 
application developer to reuse 
features and components from 
one service offering to another 
using open familiar application 
programming interfaces apis 
migrating internet development 
practices to the telecoms industry 
enables service providers and 
applications developers to create 
and rapidly deploy different 
sipbased applications across 
fixed and mobile networks
the yankee group forecasts  
the market for telecomgrade  
sipbased application servers will 
reach 47 billion by 2009 as they 
are deployed for a myriad of 
enhanced ip services as well as  
for service mediation and other 
application routing functions within 
the ip network yankee group also 
believes the opportunity for  
sipbased application servers will 
be fully exploited by the advent of 
ip multimedia subsystems within 
carrier ip core networks as well as 
the emergence of robust service 
delivery platforms within service 
provider’ s networks
ubiquity software develops and markets 
sipbased communications software for 
fixed and mobile service providers system 
integrators independent software 
vendors and oem partners worldwide
ubiquity at a glance  ubiquity software corporation plc
our partners
n apertio
n brooktrout
n convedia
n hp
n huawei
n microsoft
n lucent
n motorola
n movial
n nec
n newheights
n  newport 
networks
n nokia
n nortel
n qualphone
n siemens
n sun
n webdialogs
performance 
 scalability ubiquity software corporation plc annual report and financial statements 2005  ubiquity software corporation plc annual report and financial statements 2005
i became the chairman of 
ubiquity in may 2005 timed with 
the company’s flotation on aim 
having spent the last 22 years in 
the telecommunications industry 
in roles ranging from research  
and development through to 
chief technology officer of both 
a fixed line and mobile operator  
i feel adequately grounded  
to comment on the evolution  
of technology in the 
telecommunications industry  
it is my belief that ubiquity is 
uniquely positioned to take 
advantage of the next round  
of fundamental changes in the 
telecommunications industry 
these changes are generally 
characterised as the convergence 
of information technology and 
telecommunications technology 
this convergence will result in 
large open standard information 
technologybased architectures 
products and services which  
were previously dominated  
by proprietary and expensive 
technology solutions industry 
analysts project this spend to be 
over 30 billion in the next several 
years over time the ultimate 
customers will have better value 
variety and better designed and 
complementary families of 
products and services available  
to them 
the evolution to nextgeneration 
architectures and their resultant 
products and services will take 
place at different paces for 
different service providers the 
technology will also give rise to 
completely new service providers 
of which netzero and skype are 
outstanding examples one can 
see very ambitious evolutions in 
some of the traditional fixedline 
service providers and one can see 
service providers who have yet to 
come to grips with the changes 
enabled by this technology 
ubiquity provides a very complex 
and important part of the new 
architecture which facilitates the 
creation coordination and 
sharing of common resources  
for new products and services
you can best think of ubiquity’s 
offering as having two major 
elements first it has a superhigh
capacity server to run complex 
and valuable services for service 
providers services in the future will 
be written in a way that is much 
more consistent with rich web 
pages than monolithic vertically 
integrated software second 
ubiquity provides the tools and 
service creation environment to 
make the job of designing services 
particularly those which can or 
should interoperate with other 
services much easier and 
inherently faster early architecture 
wins and the selection of ubiquity 
as a partner by many of the large 
suppliers to the service providers’ 
space is a good indication of the 
respect and reputation that 
ubiquity continues to build
the board
leading to the preparation for the 
flotation there were a number  
of changes to the board of 
directors mostly driven by our 
appetite to comply with best 
practice recommendations  
i would like to thank those 
directors who left the board for 
their contribution during their 
this exciting evolution in the 
telecommunications industry provides 
a tremendous opportunity however it 
is not without challenges companies 
like ubiquity will have to both lead and 
serve this evolution
chairman’s statement
chris burke chairman of the board ubiquity software corporation plc annual report and financial statements 2005 ubiquity software corporation plc annual report and financial statements 2005   
tenure i would also like to 
welcome a new board member 
and a new company secretary 
who joined with me this year 
david seibel who brings a wealth 
of experience from his former 
position as chairman of accenture 
canada also joined the board as  
a nonexecutive director and is 
chairman of the audit committee
rafferty atha jackson a former 
associate general counsel from 
macromedia joined the company 
in 2004 as general counsel  
and was appointed to company 
secretary in may 2005 
the advisory board
we also have an advisory board 
this advisory board is chaired by 
patrick smith who brings 
significant experience to the role 
as a former executive board 
member of sprint us and sprint 
canada the composition of the 
advisory board is designed to be 
dynamic and fluid depending 
upon specific windows of strategic 
execution the advisory board 
pulls on various executives and 
skill sets from within the industry 
the mandate of the advisory 
board is to enhance shareholder 
value by providing executive 
management with support and 
advice from leaders in industry 
academia and professional 
societies with a focus on 
development of strategic business 
opportunities product strategy 
and brand
outlook
this exciting evolution in the 
telecommunications industry 
provides a tremendous 
opportunity however it is not 
without challenges companies 
like ubiquity will have to both lead 
and serve this evolution the 
threats to the service providers as 
we know them today are obvious 
and well documented but very 
difficult for them to address there 
are few parallels and precedents 
for this magnitude of change in 
this industry as such predicting 
the speed of reaction of the 
various fixed wireless and cable 
carriers across multiple 
geographies all with differing 
competitive challenges and 
evolving pricing strategies is very 
difficult we will therefore continue 
to carefully invest in line with our 
financial goal of matching revenue 
growth with required expenses to 
meet the demand of delivering to 
a growing customer base what is 
predictable and inevitable is that 
all of the various fixed wireless 
and cable carriers have started 
moving towards addressing this 
evolution i have every faith in the 
role ubiquity is to play and the 
value it brings across the spectrum 
of new service providers to  
megacarriers we have an 
excellent reputation in the industry 
a great and growing base of 
customers and a strong financial 
position that i believe will enable 
us to grow as we develop with  
the market we are very excited 
about our prospects 
chris burke
chairman
3 billion

in the world today there are  
3 billion telephone users only 
20 million have switched to 
voice over internet protocol
gatner group ubiquity software corporation plc annual report and financial statements 2005  ubiquity software corporation plc annual report and financial statements 2005
 00 in review
in 2005 our revenues grew 40 
year over year we captured several 
new key customers we developed 
or strengthened relationships  
with global channel partners 
we introduced prepackaged 
applications intended to drive 
commercial deployments of our  
sip application server and we 
prepared the company for growth 
by raising £20 million through the 
floatation on aim
during 2005 we were selected by a 
number of customers that we plan 
to leverage in order to accelerate 
our growth in the sip market in 
2006 and beyond first we 
announced a deployment with 
united online inc netzero an 
alternative service provider based 
in the us who is an early adopter of 
voice over internet protocol voip 
services second we won 
numerous trial engagements with 
the early adopter carriers that 
include 7 of the 12 industry 
recognised leading global carriers 
finally we signed contracts with 
bell canada and another two tier1 
us carriers and subsequent to the 
2005 yearend two further tier1 
global carriers via our partners 
these contracts currently represent 
relatively small amounts of revenue 
through the sale of licences for 
development and initial smallscale 
deployments i believe that these 
wins will form the foundation of  
our future revenues which will  
grow as multiple new and existing 
applications are deployed on our 
sip application server i also believe 
that through our hard work and 
continued efforts at moving our 
customers into widescale 
deployments we have earned the 
right to be recognised as a leader 
in the sip marketplace in 2006  
and beyond 
in addition to winning the 
architectural beachhead with 
specific carriers we have been 
successful in establishing 
partnerships with leading network 
equipment vendors nevs 
including hp  nokia lucent 
siemens and huawei and play an 
important role in their product 
portfolio with our open  
standardsbased sip platform  
we return value to these partners 
by way of the applications 
delivered on our platform which 
helps drive sales of their media 
servers gateways sessionborder 
controllers and other imsbased 
network elements these 
relationships provide incentives to 
work together on joint marketing 
and selling activities where both 
parties can be successful it is 
through these partnerships that  
a company of ubiquity’s size and 
scale is able to sell to and fulfil 
tier1 carrier requirements and we 
therefore value them very highly 
going forward our focus will be  
on helping our partners become 
even more effective in selling our 
products we intend to further 
leverage this sales model to 
accelerate our growth and further 
extend our global reach
we also enjoy the benefit of 
complementary technology 
partners such as hp and microsoft 
where our products are integrated 
into overall service delivery 
platforms these technologies are 
then used together to design 
chief executive’s statement 
we won numerous trial engagements with the early 
adopter carriers that include 7 of the 12 industry 
recognised leading global carriers additionally we 
signed contracts with bell canada and another two 
tier1 us carriers and subsequent to the 2005 yearend 
two further tier1 global carriers via our partners
ian mclaren president and chief executive ubiquity software corporation plc annual report and financial statements 2005 ubiquity software corporation plc annual report and financial statements 2005  develop and deliver specific 
solutions in a common repeatable 
framework recently we 
cohosted a “developer’s 
hothouse” with microsoft for 
british telecom where we helped 
developers from around the world 
conceptualise design develop 
and demonstrate several 
applications created on the 
ubiquity sip application server 
this was a compressed twoweek 
exercise that demonstrated  
the speed and flexibility of 
development using our rapid 
service creation environment 
additionally we have worked  
with microsoft to integrate our  
sip application server with their 
webservicesenabled connected 
services framework csf the 
resulting “i’m lost” application 
showcases our combined 
strengths by allowing a mobile 
subscriber to access an address  
in their remote outlook calendar 
map the location of the address 
and to get driving directions 
spoken to them via natural speech 
technology over their mobile 
phone this is just one example  
of how we intend to leverage our 
partners to help deliver new  
highvalue services to our carrier 
customers in the future
in 2005 we continued to invest in 
our sip application server platform 
mediation platform and 
applicationcreation environment 
we also invested in prepackaged 
application products that our 
customers can deploy quickly for 
a faster return on our investment 
with little or no professional 
services support currently there 
are an estimated 3 billion users of 
the public switched t elephone 
network pstn and less then 20 
million users of voip  representing 
a tremendous opportunity for 
carriers to capture new subscribers 
as they migrate to voip  
recognising this opportunity 
ubiquity has introduced voice plus 
a prepackaged consumer voip 
solution that allows carriers 
internet service providers isps 
and alternative carriers to 
participate and compete in this 
growing market voice plus is 
developed and deployed on our  
sip application server platform 
and is designed to make it easy 
for service providers to add new 
features and scale to millions  
of subscribers 
ip conferencing is another strategic 
application area for ubiquity as 
conferencing minutes of use are 
growing significantly legacy 
conferencing applications are not 
proving to serve mobile users well 
as they have difficulty capitalising 
on the advanced capabilities of the 
web speak conference director 
is a prepackaged application that 
takes advantage of the advanced 
multimedia capabilities of the  
sip application server speak 
offers a fullfeatured audio and 
web conferencing solution at a 
fraction of the cost of our 
competitors easytouse speak 
web collaboration tools allow 
moderators to share presentations 
web content applications and 
documents in real time with 
individuals and groups around  
the world this product is moving 
into deployment with two tier1 
carriers and has several other 
prospects in the near term
while ubiquity is well prepared 
to deliver and support the  
voice plus and speak solutions 
described above these 
applications are only two 
weapons in our strategy to 
grow our market position 
going forward 
“being familiar with ubiquity … and considering 
they have a lot of mindshare i have a feeling that 
they’ll probably do well and this signals more 
potential down the road”
ron gruia lead analyst emerging t echnology frost  sullivan ubiquity software corporation plc annual report and financial statements 2005  ubiquity software corporation plc annual report and financial statements 2005
chief executive’s statement continued
 00 outlook
the overall strategy for the 
company remains unchanged and 
clear to leverage our proven 
technical strengths and continue 
to do what we do best
 build on beachhead of customer 
wins design wins and trials by 
helping move our customers 
towards commercial 
deployments and adding new 
applications over time to 
aggressively drive subscriber 
growth on our platform
 foster and grow our 
relationship with our select 
channel partners to ensure their 
success with our platform
 embed our platform in carrier 
networks and enable isvs and 
third parties to develop new 
applications that drive higher 
utilisation of our platform and 
enable our customers to 
generate a greater return on 
investment
 manage our financial assets 
wisely to grow the company in 
line with future revenues
 in 2006 it is our plan to launch  
the ubiquity developer network 
udn udn will be a progressive 
developer ecosystem focused on 
bringing together carriers isvs 
application developers system 
integrators and network 
•
•
•
•
in an ongoing effort to improve 
our customer support services 
we are in the process of 
implementing a variety of 
exciting new tools
it is estimated that 
sipbased application 
servers will reach 
47 billion by 2009
yankee group 4  7 billion
 ubiquity software corporation plc annual report and financial statements 2005 ubiquity software corporation plc annual report and financial statements 2005  equipment vendors to help 
address the needs of the 
marketplace these needs will be 
articulated by our newly formed 
customer advisory council  
made up of carriers and service 
provider customers the goal  
of udn will be to facilitate the 
building and delivering of a  
wide range of applications by 
providing development tools 
access to carrier networks 
technical information support 
and advice aimed to take 
developers from concept through 
to deployment we are excited 
about our customer and key 
partners support for udn and 
believe it will be a key enabler to 
ubiquity’s future growth 
in summary i am pleased with 
what we have accomplished in 
2005 our growing customer base 
and market reputation sets us  
up well for the future while  
we cannot dictate the timing  
of the market’s fullscale move  
to ipbased networks i am 
confident that ubiquity and our 
technologies will be considered  
a “key” component of the next 
generation networks we will 
continue to focus on winning new 
customers through technology 
leadership and worldclass 
partnerships this will be done 
with a financial framework that 
balances revenue growth with 
expense management as we 
continue to match our success 
with the market as it matures  
in closing i would like to extend 
my appreciation to our investors 
customers and partners for their 
continued support trust and 
confidence i would also like to 
thank our dedicated employees 
for their passion and contributions 
toward making ubiquity a great 
company 
ian mclaren
chief executive officer
ubiquity selected for 
nextgeneration  
sipbased applications
“ubiquity’s application server and application  
creation environment allow us to significantly increase 
the velocity at which we can deliver leadingedge 
communications applications”
eugene roman group president  
bell canada systems  technology
case study bell canada ubiquity software corporation plc annual report and financial statements 2005 0 ubiquity software corporation plc annual report and financial statements 2005
profit and loss account
in 2005 we had another year of 
continued sound growth with 
turnover increasing 40 to £75m 
2004 £53m during the year we 
also saw significant increases in 
turnover in our two core operating 
regions with north america 
increasing to £47m representing 
growth of 133 2004 £20m and 
europe to £16m an increase of 
58 2004 £1m gross margin 
was also consistent against 
turnover remaining at 85 for the 
year 2004 85 in line with our 
business model going forward we 
will maintain focus on delivery of 
strong gross margins 
operating charges for the year 
which comprises distribution  
and administration expenses 
increased to £156m 2004 
£110m of which £63m was 
investment in research and 
development this represents an 
increased investment of 63 year 
on year 2004 £39m having 
established ubiquity as a leading 
technology company it will 
remain important to continue 
investment in research and 
development over forthcoming 
years all investment in research 
and development is written off to 
the profit and loss account in the 
year that it is incurred 
included in administration expenses 
is a nonrecurring exceptional cost 
of £06m relating to a bad debt 
provision since the yearend the 
customer has declared bankruptcy 
and ubiquity has filed the 
appropriate documentation with 
the administrator to make a claim 
against its outstanding receivable 
however the prospect of any 
recovery is remote
during the year we changed the 
basis for estimating income 
receivable in the form of research 
and development tax credits 
from recognition on a cash
received basis to accruing 
income for claims submitted and 
expected to be submitted based 
on the qualifying research and 
development costs incurred  
up to the balance sheet date  
as such the profit and loss 
account for 2005 reflects £19m  
of income from tax credits 
representing the actual and 
anticipated claims for financial 
years 2003 2004 and 2005 of 
this balance £06m had been 
received during the year and  
a further £06m was received  
after the yearend in line with 
continued investment in research 
and development we expect 
these tax credits to continue  
but they will start to reduce as  
a percentage of research and 
development investment as the 
investment focus moves away 
from innovative new product 
design towards product 
development which supports 
market penetration 
the overall loss for the financial 
year increased by 184 to £69m 
2004 £58m and the net cash 
outflow before financing and 
management of liquid resources 
was £82m which is an increase of 
156 over 2004 2004 £71m 
chief financial officer’s statement
in line with our business model  
going forward we will maintain focus  
on delivery of strong gross margins 
richard ralph chief financial officer ubiquity software corporation plc annual report and financial statements 2005 ubiquity software corporation plc annual report and financial statements 2005  treasury 
ubiquity’s strong cash position is 
largely due to the successful float 
of the company on aim in may 
2005 raising £186m in net cash 
proceeds at the yearend total 
cash and shortterm investments 
were £163m of which £53m was 
held in bank accounts with less 
than 7 days to maturity a further 
£110m was held in money market 
deposit accounts
ubiquity has operations outside  
of the united kingdom and as 
such is exposed to exchangerate 
movements to protect cash  
flows against high levels of  
exchangerate risk the group 
maintains the majority of its  
shortterm monetary assets in 
sterling and pursues a natural 
hedge between local currency 
receipts and payments wherever 
possible whenever possible 
once this natural hedge has been 
satisfied funds are held in sterling 
to minimise any foreign exchange 
risk arising from the consolidation 
of overseas operations at this 
point the group does not enter 
into any foreignexchange or 
derivative contracts to hedge 
foreign exchange exposures 
through 2005 the group’s 
treasury policy has been to 
maintain a minimum of £10m 
invested at fixed interest rates in 
order to provide protection 
against fluctuating interest rates 
balance sheet
at the yearend debtors had 
increased to £43m 2004 £28m 
of which approximately £21m 
relates to trade debtors and  
£13m relating to research  
and development tax credits 
creditors also increased to £22m 
at the end of 2005 2004 £17m 
and included £06m of deferred 
revenue which will be largely 
recognised during 2006 
richard ralph
chief financial officer
“each year internet telephony magazine bestows its product of 
the year awards on companies that have demonstrated 
excellence in technologies advancement and application 
refinements ubiquity software has confirmed that its sip 
application server has gone the extra mile to facilitate the 
creation and deployment of enhanced voip services”
rich t ehrani president and group publisher of tmc  
publisher of internet t elephony magazine ubiquity software corporation plc annual report and financial statements 2005  board of directors
  christopher burke 
nonexecutive chairman
chris joined the board in april 2005 he has spent 22 years in the telecoms industry since graduating from 
acadia university with a computer science degree until august 2004 chris was chief technology officer 
for vodafone uk and was responsible for all vodafone uk technology and product architecture design 
procurement development deployment support and operations prior to this chris was chief technology 
officer with energis a uk fixedline carrier as part of the executive team which led energis through its ipo
  ian mclaren 
chief executive officer 
and president
ian joined the board in 2001 prior to joining ubiquity ian held senior executive positions as vice president 
of marketing at digital equipment corporation dec president of international operations at mci 
systemhouse and most recently president and chief executive officer of crosskeys systems corporation 
ian is a canadian national and is a director on several boards including march networks corporation 
newheights software corporation and solace systems he also serves on two advisory boards
  michael doyle 
executive director and 
chief technology officer
michael cofounded the company in 1993 he has over 20 years of telecoms experience and is 
responsible for all technology functions of the group prior to joining ubiquity michael held various 
positions at gec telecommunications in the software engineering group working on system x he 
subsequently became lead network designer at a medical monitoring company which provided one of 
the first distributed healthcare information systems in the uk he is an acknowledged expert in the field 
of java performance and tuning michael was one of the cocreators of the sipstone consortia and holds 
an honours degree in computer science from university college london
  simon gibson obe 
chairman remuneration committee
simon cofounded the company in 1993 he is chief executive of wesley clover corporation a private 
holding company and venture capital fund with interests in technology the leisure industry and 
commercial real estate the fund specialises in early stage technology and internetworking startups 
simon also served as vice president of marketing and communications at newbridge networks 
corporation he currently sits on the boards of wesley clover corporation newport networks march 
networks corporation iqe and enfis
  david seibel 
chairman audit committee
david joined the board in april 2005 he is the former chairman of the board for accenture canada inc 
and retired as managing director and chairman of the geographic council for accenture in canada in 
september 2003 where he played a key role in the global accenture organisation as a member of its 
executive committee prior to joining accenture david was president of synerlogic in 1987
  randl shure 
nonexecutive director
randl joined the board in july 2000 prior to founding capvest limited randl was the head of  
bt capital partners europe which he joined in january 1997 after working for 12 years with bankers trust 
in investment banking in new york and london he is currently a director of punch taverns spirit group 
ip powerhouse young’s bluecrest and vaasan  vaasan randl has a ba in history from hamilton college 
and graduated cum laude with a jd from fordham law school ubiquity software corporation plc annual report and financial statements 2005 13
the directors present their annual report and the audited financial statements for the yearended  
31 december 2005
activities
the principal activity of the group during 2005 continued to be software development and distribution and 
related support and maintenance services the group operates throughout europe north america and asia
review of developments and future prospects
a review of the business of the group is set out in the chief financial officer’s statement on page 10 the chief 
executive’s statement on page 6 includes details of expected future developments in the business of the group 
and an indication of its activities in the field of research and development
in accordance with schedule 7 of the companies act 1985 the company’s and its subsidiaries’ undertaking 
use of financial instruments are disclosed in note 19 to the financial statements
dividends
the directors do not recommend the payment of a dividend 2004 £nil
directors
the directors who served during the year and the changes to date are as follows
s j gibson remuneration committee chairman
m doyle chief technology officer executive director
r shure remuneration and audit committee member
i mclaren chief executive officer president
c burke  nonexecutive chairman appointed 26 april 2005
d seibel  audit committee chairman appointed 26 april 2005
s paton   resigned 24 march 2005
h schulzerinne   resigned 24 march 2005
p n smith  resigned 26 april 2005
r maggs   resigned 15 may 2005
r humes   resigned 15 may 2005
directors’ interests 
the directors who held office at the beginning and the end of the financial year had the following interests in 
the shares of the group undertaking
      1 january 
      2005 
     31 december or on 
     2005 appointment 
     no no
s j gibson ordinary shares of 125p each  1908936 1508936
m doyle ordinary shares of 125p each  1852500 1372500
the shareholdings for 1 january 2005 are reported in a comparable basis with 31 december 2005 taking into 
account the share split from one 25p share to two 125p shares that was completed on 12 may 2005
no director held interests in other group companies during the yearended 31 december 2005 2004 none
directors’ share options
details of the directors’ share options are provided in the directors’ remuneration report on pages 17 to 20 
directors’ report ubiquity software corporation plc annual report and financial statements 2005 14 ubiquity software corporation plc annual report and financial statements 2005
supplier payment policy
the company’s policy which is also applied by the group is to settle terms of payment with suppliers when 
agreeing the terms of each transaction ensure that suppliers are made aware of the terms of payment and 
abide by the terms of payment trade creditors of the company at 31 december 2005 were equivalent to  
37 2004 34 days’ purchases based on the average daily amount invoiced by suppliers during the year
significant holdings
as at 7 march 2006 the company had been notified in accordance with sections 198 to 208 of the  
companies act 1985 of the following interests in the ordinary share capital of the company
     no of shares  holding
capvest equity partners lp     45811148 25
jk  b capital iii lp     19556338 107
alcatel barbados corporation     17 587 576 96
wesley clover corporation     12405632 68
britel fund nominees limited     8408059 46
mellon nominees uk limited     8090000 44
bank of new york nominees limited    7 500000 41
hsbc global custody nominee uk limited    7 383000 40
possfund nominees limited     6082241 33
employee consultation
the group places considerable value on the involvement of its employees and has continued to keep them 
informed on matters affecting them as employees and on the various factors affecting the performance of  
the group this is achieved through groupwide communication formal and informal meetings and the 
distribution of the annual financial statements to all employees in january 2006 a groupwide share scheme 
was incepted that is open to all employees and allows them to save a set amount per month over a three 
year period that can be exchanged for the option to purchase shares in the company at an agreed price  
below the yearend market value
auditors
deloitte  touche llp have indicated their willingness to continue in office as the company’s auditors and  
a resolution for their reappointment will be proposed at the forthcoming annual general meeting
annual general meeting
notice of the annual general meeting is set out in the circular to shareholders accompanying this  
annual report
approved by the board of directors
and signed on behalf of the board
r atha jackson
secretary
7 march 2006
 
directors’ report continued ubiquity software corporation plc annual report and financial statements 2005 ubiquity software corporation plc annual report and financial statements 2005 15
the board of directors recognises the value of ensuring good corporate governance although as an aim 
listed company ubiquity is not required to comply with the provisions of the combined code and does not 
comply with those provisions the board of directors is committed to applying the principles relevant to a 
company of its size the statement below describes the framework for corporate governance and internal 
controls that the directors have established 
the board and committees
the board of directors comprises a nonexecutive chairman three nonexecutive directors and two executive 
directors the positions of chairman and chief executive officer are separated and have clearly defined roles 
while none of the directors meets the code’s definition of independence the board considers that the current 
composition provides the right balance of experience and does not consider it necessary to appoint a senior 
independent director
the board of directors is collectively responsible for the overall success of the group and has a formal 
schedule of matters reserved for its approval the board calendar of meetings is set out at the beginning  
of the financial year and each board meeting is preceded by a clear agenda and any relevant information is 
provided to the board in advance of the meeting 
given the small size of the board and as permitted by the code the board has not appointed a nominations 
committee the board as a whole considers the appointment of all directors and chief officers the articles  
of association of the company require directors to submit themselves for reelection at the first annual 
general meeting following their appointment and every three years by rotation in accordance with good 
practice one third of directors will be submitted for reelection annually 
the audit committee
the audit committee comprises david seibel chairman randl shure and simon gibson the committee 
operates under written terms of reference and meets as often as required in order to discharge its duties  
but at a minimum of three times a year in accordance with the financial calendar the group chief executive 
officer and group chief financial officer are invited to attend all meetings as well as senior staff of the 
external auditors although the committee reserves the right to ask any of these individuals to withdraw  
from the meeting the audit committee is responsible for monitoring the integrity of the financial systems 
reviewing the group’s management reports and financial statements and its internal financial controls this  
is achieved primarily through a review of the annual and interim financial statements and a review of the  
nature and scope of the external audit the committee is also responsible for reviewing and monitoring the 
external auditors’ independence and objectivity and proposing the appointment of the external auditors  
to the board the audit committee has also considered the need for an internal audit function but has 
resolved that due to the size of the group this is not required at present 
remuneration committee
the remuneration committee comprises simon gibson chairman randl shure and david seibel the  
report on directors’ remuneration provides a detailed description of the remuneration policy and the 
directors’ emoluments shareholdings and share options 
relations with shareholders
the board of directors seeks to ensure that shareholders are regularly informed about the group and its 
activities comprehensive annual and interim reports are issued to all shareholders and there is frequent 
dialogue with institutional investors including presentations following interim and annual results 
announcements 
further information about the group its strategy and overall performance can be found on the company’s 
website wwwubiquitysoftwarecom which includes copies of the company’s press releases 
corporate governance statement ubiquity software corporation plc annual report and financial statements 2005 16 ubiquity software corporation plc annual report and financial statements 2005
internal control
the board has overall responsibility for the group’s systems of internal control and the monitoring of its 
effectiveness although no system of internal control can provide absolute assurance against material 
misstatement or loss the group’s systems are designed to provide the directors with reasonable assurance 
that issues are identified on a timely basis and dealt with appropriately
 
the group has an established organisational structure with clearly defined lines of authority responsibility  
and accountability which is reviewed regularly group management are responsible for the identification and 
evaluation of key risks applicable to their areas of business 
the external auditors are engaged to express an opinion on the financial statements they review the  
systems of internal financial controls and data contained in the financial statements and discuss with 
management the reporting of operational results and the financial condition of the group to the extent 
necessary to express their audit opinion
going concern
the directors having made appropriate enquiries consider that the company and the group have sufficient 
resources to continue in operational existence for the foreseeable future and therefore it is appropriate that 
the going concern basis is adopted in preparing the financial statements 
corporate governance statement continued ubiquity software corporation plc annual report and financial statements 2005 ubiquity software corporation plc annual report and financial statements 2005 17
introduction
this report has been prepared in accordance with schedule 7s of the companies act 1985 the report 
describes how the board has applied the principles relating to directors’ remuneration as required by the  
act a resolution to approve the report will be proposed at the annual general meeting of the company at 
which the financial statements will be approved
the regulations require the auditors to report to the company’s members on the auditable part of the 
directors’ remuneration report and to state whether in their opinion that part of the report has been properly 
prepared in accordance with the companies act 1985 the report has therefore been divided into separate 
sections for audited and unaudited information
unaudited information
remuneration committee
the remuneration committee comprises simon gibson chairman david seibel and randl shure these 
directors were the only members of the committee during the year
the committee meets as often as is necessary in order for it to discharge its duties and is responsible  
for determining all aspects of remuneration for executive directors and other senior managers the  
fees of the executive directors are determined by the board as a whole no director or employee  
has a role in determining his own remuneration 
in determining the directors’ and executives’ remuneration for the year the committee consulted ian  
mclaren chief executive richard ralph chief financial officer and emma gardner group human 
resources director about its proposals
remuneration policy
the committee determines overall policy for executive remuneration it sets levels of remuneration to  
attract retain and motivate executive directors and other senior managers and in doing so takes into  
account the level of remuneration throughout the industry personal performance and independently 
compiled salary survey information employees throughout the group have performance reviews annually
the main elements of executive directors’ and senior managers’ remuneration are
a competitive base salary
an annual performance bonus
benefits in kind
share options
the group operates a discretionary bonus scheme the scheme applies to directors senior managers  
and certain other employees payments under the scheme to executive directors and senior managers  
are dependent on a combination of financial objectives and other individual targets 
permanent health insurance is in place for all employees of the company and other customary benefits such  
as company cars car allowances and life assurance are made available as appropriate 
the group has four share options schemes – the approved share option scheme the unapproved share  
option scheme the emi scheme and an employee share ownership scheme all employees are eligible to 
participate in these schemes full details of options granted under the schemes are given in note 15 to the 
financial statements 
•
•
•
•
directors’ remuneration report ubiquity software corporation plc annual report and financial statements 2005 18 ubiquity software corporation plc annual report and financial statements 2005
900
950
1000
1050
1100
1150
1200
listing
may 05
jun 05
jul 05
aug 05
sep 05
oct 05
nov 05
dec 05
ubiquity
aim all share index
directors’ service contracts
the service contracts of executive directors remain in force until terminated by either party ian mclaren’s 
contract is terminable by either party with the company not giving not less than six months’ written notice  
and ian mclaren providing not less than one months’ notice michael doyle’s contract is terminable by either 
party not giving less than six months’ notice
the service contracts of nonexecutive directors are for a fixed term of 12 months or until terminated by  
either party giving to the other not less than three months’ written notice 
performance graph
the following graph shows the company’s performance measured by total shareholder return compared 
with the performance of the aim all share index also measured by total shareholder return
the graph is based on the aim all share index as at month end dates refactored to coincide with  
shareholder returns from the date of ubiquity’s listing on aim
audited information
directors’ remuneration
the total amounts for directors’ remuneration were as follows
     2005 2004 
     £000 £000
emoluments     620 484
gains on exercise of share options     122 –
     742 484
directors’ remuneration report continued ubiquity software corporation plc annual report and financial statements 2005 ubiquity software corporation plc annual report and financial statements 2005 19
the individual directors’ emoluments can be analysed as follows
 basic directors’  taxable 2005 2004 
 salaries fees bonus benefits total total 
 £000 £000 £000 £000 £000 £000
executive      
i mclaren 232 – – – 232 273
m doyle 198 – 100 5 303 211
nonexecutive      
s j gibson – 15 – – 15 –
r maggs – – – – – –
r shure – 12 – – 12 –
s paton – – – – – –
r humes – – – – – –
h schulzerinne – – – – – –
p n smith – – – – – –
c burke – 40 – – 40 –
d seibel – 18 – – 18 –
aggregate emoluments 430 85 100 5 620 484
directors’ share options
aggregate emoluments above do not include any amounts for the value of options to acquire ordinary shares 
in the company granted to or held by the directors details of the options exercised during the year are as 
follows
     market price gains on 
    exercise at exercise exercise 
   number of price date 2005 
name of director  scheme options £ £ £
m doyle  unapproved 400000 0075 020 50000
m doyle  emi 80000 0100 037 21600
s j gibson  unapproved 400000 0075 020 50000
      121600 ubiquity software corporation plc annual report and financial statements 2005 20 ubiquity software corporation plc annual report and financial statements 2005
details of options for directors who served during the year are as follows
  1 january   31 december   
  2005 or date   2005 or date exercise   
  of appointment granted exercised of resignation price     exercise period
  no no no no £ from to
executive        
i mclaren ii 5000000 – – 5000000 0100 0903 0910
 ii 1000000 – – 1000000 0100 0406 0412
 iii – 252626 – 252626 0375 0309 1215
m doyle ii 400000 – 400000 – 0075 0497 0305
 ii 320000 – – 320000 0095 1100 1106
 ii 1923308 – – 1923308 0100 1202 0910
 i 999990 – – 999990 0100 0704 0910
 ii 240000 – 80000 160000 0100  0406 0412
 iv – 208895 – 208895 0375 0309 1215
nonexecutive      
s j gibson ii 400000 – 400000 – 0075 0497 0305
 ii 320000 – – 320000 0095 1100 1106
 ii 962386 – – 962386 0100 1202 0910
 ii 240000 – – 240000 0100 0406 0412
r maggs ii 64000 – – 64000 0095 0801 0809
h schulzerinne ii 30000 – – 30000 0100 1003 1010
p n smith ii 30000 – – 30000 0100 1003 1010
 ii 30000 – – 30000 0100 0405 0412
c burke ii – 700000 – 700000 0425 1106 1112
d seibel ii – 50000 – 50000 0425 1106 1112
i emi – no performance conditions attached time based vesting
ii unapproved scheme – no performance criteria attached time based vesting
iii unapproved scheme – vesting after three years on achievement of 90 of budgeted ebitda for each year
iv approved scheme – vesting after three years on achievement of 90 of budgeted ebitda for each year
 
share options at 1 january 2005 are reported on a comparable basis with 31 december 2005 taking into 
account the share split from one 25p share to two 125p shares which was completed on 12 may 2005
all share options have been granted for nil consideration bar the exercise price
the market price of the ordinary shares at 31 december 2005 was £0375 and the range during the year was 
£033 to £0425
approval
this report was approved by the board of directors on 7 march 2006 and signed on its behalf by
s j gibson
chairman of the remuneration committee
directors’ remuneration report continued ubiquity software corporation plc annual report and financial statements 2005 ubiquity software corporation plc annual report and financial statements 2005 21
united kingdom 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 as at the end of the 
financial year and of the profit or loss of the group for that period in preparing those financial statements  
the directors are required to
select suitable accounting policies and then apply them consistently
make judgements and estimates that are reasonable and prudent and
state whether applicable accounting standards have been followed 
the directors are responsible for keeping proper accounting records which disclose with reasonable accuracy 
at any time the financial position of the company and enable them to ensure that the financial statements 
comply with the companies act 1985 they are also responsible for the system of internal control for 
safeguarding the assets of the company and hence for taking reasonable steps for the prevention and 
detection of fraud and other irregularities
•
•
•
statement of directors’ responsibilities ubiquity software corporation plc annual report and financial statements 2005 22 ubiquity software corporation plc annual report and financial statements 2005
independent auditors’ report
to the members of ubiquity software corporation plc formerly ubiquity software corporation limited
we have audited the group and individual company financial statements the ‘financial statements’ of 
ubiquity software corporation plc for the yearended 31 december 2005 which comprise the consolidated 
profit and loss account the combined statement of movement in shareholders’ funds and reconciliation of 
movements on reserves the balance sheets the consolidated cash flow statement and the related notes 1  
to 21 these financial statements have been prepared under the accounting policies set out therein
this report is made solely to the company’s members as a body in accordance with section 235 of the 
companies act 1985 our audit work has been undertaken so that we might state to the company’s  
members those matters we are required to state to them in an auditors’ report and for no other purpose  
to the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the 
company and the company’s members as a body for our audit work for this report or for the opinions we 
have formed
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the annual report and the financial statements in accordance  
with applicable united kingdom law and united kingdom generally accepted accounting practice are set  
out in the statement of directors’ responsibilities
our responsibility is to audit the financial statements in accordance with relevant united kingdom legal and 
regulatory requirements and international standards on auditing uk and ireland
we report to you our opinion as to whether the financial statements give a true and fair view in accordance 
with the relevant framework and are properly prepared in accordance with the companies act 1985 we also 
report if in our opinion the directors’ report is not consistent with the financial statements if the company  
has not kept proper accounting records if we have not received all the information and explanations we 
require for our audit or if information specified by law regarding directors’ remuneration and transactions  
with the company and other members of the group is not disclosed we have also audited the information  
in the part of the directors’ remuneration report that is described as having been audited
we read the other information within the annual report and consider whether it is consistent with the  
audited financial statements the other information comprises only the chairman’s statement the chief 
executive’s statement the chief financial officer’s statement the director’s report and the corporate 
governance statement we consider the implications for our report if we become aware of any apparent 
misstatements or material inconsistencies with the financial statements our responsibilities do not extend  
to any other information
basis of audit opinion
we conducted our audit in accordance with international standards on auditing uk and ireland issued  
by the auditing practices board an audit includes examination on a test basis of evidence relevant to  
the amounts and disclosures in the financial statements it also includes an assessment of the significant 
estimates and judgements made by the directors in the preparation of the financial statements and of  
whether the accounting policies are appropriate to the circumstances of the company and the group 
consistently applied and adequately disclosed
we planned and performed our audit so as to obtain all the information and explanations which we 
considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the 
financial statements are free from material misstatement whether caused by fraud or other irregularity or  
error in forming our opinion we also evaluated the overall adequacy of the presentation of information in  
the financial statements ubiquity software corporation plc annual report and financial statements 2005 ubiquity software corporation plc annual report and financial statements 2005 23
opinion
in our opinion
 the financial statements give a true and fair view in accordance with united kingdom generally accepted 
accounting practice of the state of affairs of the group and the individual company as at 31 december 
2005 and of the loss of the group for the year then ended and
 the financial statements and the part of the directors’ remuneration report described as having been 
audited have been properly prepared in accordance with the companies act 1985
deloitte  touche llp
chartered accountants and registered auditors
cardiff united kingdom
7 march 2006 
•
• ubiquity software corporation plc annual report and financial statements 2005 24 ubiquity software corporation plc annual report and financial statements 2005
	 	 	 	 	 2005	 	 2004	 	 	 	 	 note	 £000	 £000
turnover	 	 	 	 2	 7461	 5315
	 	 	 	 	 cost	 of	 sales	 	 	 	 	 1141	 775
	 	 	 	 	 gross	 profit	 	 	 	 	 6320	 4540
	 	 	 	 	 distribution	 expenses	 	 	 	 	 3402	 2620
	 	 	 	 	 exceptional	 provision	 for	 doubtful	 debtors	 	 	 4	 558	 –
other	 administrative	 expenses	 	 	 	 	 11590	 8420
	 	 	 	 	 total	 administrative	 expenses	 	 	 	 	 12148	 8420
	 	 	 	 	 operating loss	 	 	 	 5	 9230	 6500
	 	 	 	 	 interest	 receivable	 and	 similar	 income	 	 	 6	 493	 92
	 	 	 	 	 loss on ordinary activities before taxation	 	 	 	 8737	 6408
tax	 credit	 on	 loss	 on	 ordinary	 activities	 	 	 7	 1862	 601
loss for the financial year 	 	 	 	 6875	 5807
	 	 	 	 	 loss per share pence	 	 	 	 8	 	 basic	 and	 diluted	 	 	 	 	 5p	 44p
	 	 	 	 	 all	 activities	 derive	 from	 continuing	 operations
there	 have	 been	 no	 recognised	 gains	 and	 losses	 for	 the	 current	 financial	 year	 or	 the	 prior	 financial	 year	 other	 than	 as	 stated	 in	 the	 profit	 and	 loss	 account	 and	 accordingly	 no	 separate	 statement	 of	 total	 recognised	 gains	 and	 losses	 is	 presented
consolidated profit and loss account
yearended 31 december 2005 ubiquity software corporation plc annual report and financial statements 2005 ubiquity software corporation plc annual report and financial statements 2005 25
	 	 issued	 share	 profit	 	 	 	 	 share	 premium	 and 	 loss	 total	 total	 	 	 capital	 account	 account	 2005	 2004	 	 	 £000	 £000	 £000	 £000	 £000
the group	 	 	 	 	 	 balance	 at	 1	 january	 	 	 9603	 25271	 29076	 5798	 8874
share	 option	 exercise	 	 66	 462	 –	 528	 –
share	 premium	 cancellation	 	 –	 25321	 25321	 –	 –
conversion	 of	 preference	 shares	 to	 	 	 ordinary	 shares	 	 8343	 8343	 –	 –	 –
new	 shares	 issued	 	 963	 19201	 –	 20164	 2731
loss	 for	 the	 financial	 year	 	 –	 –	 6875	 6875	 5807
balance	 at	 31	 december	 	 	 2289	 27 956	 10630	 19615	 5798
	 	 	 	 	 	 the company	 	 	 	 	 	 balance	 at	 1	 january	 	 	 9603	 25271	 20591	 14283	 17 542
share	 option	 exercise	 	 66	 462	 –	 528	 –
share	 premium	 cancellation	 	 –	 25321	 25321	 –	 –
conversion	 of	 preference	 shares	 to	 	 	 ordinary	 shares	 	 8343	 8343	 –	 –	 –
new	 shares	 issued	 	 963	 19201	 	 20164	 2731
loss	 for	 the	 financial	 year	 	 –	 –	 7 929	 7929	 5990
balance	 at	 31	 december	 	 	 2289	 27 956	 3199	 27046	 14283
	 combined statement of movement in shareholders’  
funds and reconciliation of movements on reserves
yearended 31 december 2005 ubiquity software corporation plc annual report and financial statements 2005 26 ubiquity software corporation plc annual report and financial statements 2005
	 	 	 	 	 2005	 	 2004	 	 	 	 	 note	 £000	 £000
fixed assets     
intangible	 assets	 	 	 	 9	 48	 –
tangible	 assets	 	 	 	 10	 1031	 1004
investments	 	 	 	 11	 316	 316
	 	 	 	 	 1395	 1320
	 	 	 	 	 current assets     
debtors	 	 	 	 12	 4257	 2755
current	 asset	 investments	 –	 shortterm	 deposits	 	 	 11037	 1573
cash	 at	 bank	 and	 in	 hand	 	 	 	 	 5295	 2017
	 	 	 	 	 20589	 6345
	 	 	 	 	 creditors amounts falling due within one year 	 	 13	 2219	 1717
net current assets	 	 	 	 	 18370	 4628
total assets less current liabilities	 	 	 	 	 19765	 5948
	 	 	 	 	 provisions for liabilities and charges	 	 	 14	 150	 150
net assets	 	 	 	 	 19615	 5798
	 	 	 	 	 	 	 	 	 	 capital and reserves	 	 	 	 	 called	 up	 share	 capital	 	 	 	 15	 2289	 9603
share	 premium	 account	 	 	 	 27956	 25271
profit	 and	 loss	 account	 	 	 	 10630	 29076
total shareholders’ funds	 	 	 	 	 19615	 5798
	 	 	 	 	 shareholders’ funds may be analysed as	 	 	 	 	 equity	 interests	 	 	 	 	 19615	 3472
nonequity	 interests	 	 	 	 	 –	 9270
	 	 	 	 	 19615	 5798
	 	 	 	 	 these	 financial	 statements	 were	 approved	 by	 the	 board	 of	 directors	 on	 7	 march	 2006
signed	 on	 behalf	 of	 the	 board	 of	 directors
i mclaren     
director	 	 	 	 	 	 consolidated balance sheet
31 december 2005 ubiquity software corporation plc annual report and financial statements 2005 ubiquity software corporation plc annual report and financial statements 2005 27
	 	 	 	 	 2005	 	 2004	 	 	 	 	 note	 £000	 £000
fixed assets	 	 	 	 	 intangible	 assets	 	 	 	 9	 48	 –
tangible	 assets	 	 	 	 10	 477	 531
investments	 	 	 	 11	 324	 324
	 	 	 	 	 849	 855
	 	 	 	 	 current assets	 	 	 	 	 debtors	 	 	 	 12	 11794	 11171
current	 asset	 investments	 	 	 	 	 11037	 1573
cash	 at	 bank	 and	 in	 hand	 	 	 	 	 4617	 1553
	 	 	 	 	 27448	 14297
	 	 	 	 	 creditors amounts falling due within one year  	 13	 1101	 719
net current assets	 	 	 	 	 26347	 13578
total assets less current liabilities	 	 	 	 	 27196	 14433
	 	 	 	 	 provisions for liabilities and charges	 	 	 14	 150	 150
net assets	 	 	 	 27046	 14283
	 	 	 	 	 capital and reserves	 	 	 	 	 called	 up	 share	 capital	 	 	 	 15	 2289	 9603
share	 premium	 account	 	 	 	 	 27956	 25271
profit	 and	 loss	 account	 	 	 	 3199	 20591
total equity shareholders’ funds	 	 	 	 	 27046	 14283
	 	 	 	 	 shareholders’ funds may be analysed as	 	 	 	 	 equity	 interests	 	 	 	 	 27046	 5013
nonequity	 interests	 	 	 	 	 –	 9270
	 	 	 	 27046	 14283
	 	 	 	 	 these	 financial	 statements	 were	 approved	 by	 the	 board	 of	 directors	 on	 7	 march	 2006
signed	 on	 behalf	 of	 the	 board	 of	 directors
i mclaren     
director	 	 	 	 	 	 company balance sheet
31 december 2005 ubiquity software corporation plc annual report and financial statements 2005 28 ubiquity software corporation plc annual report and financial statements 2005
	 	 	 	 	 2005	 	 2004	 	 	 	 	 note	 £000	 £000
net cash outflow from operating activities	 	 	 16	 8412	 6812
	 	 	 	 	 returns on investments and servicing of finance	 	 	 	 	 interest	 received	 	 	 	 	 337	 92
	 	 	 	 	 taxation	 	 	 	 	 	 receipt	 of	 research	 and	 development	 tax	 credit	 	 	 	 614	 601
	 	 	 	 	 capital expenditure and financial investment	 	 	 	 	 payments	 to	 acquire	 tangible	 fixed	 assets	 	 	 	 658	 952
payments	 to	 acquire	 intangible	 fixed	 assets	 	 	 	 51	 –
receipts	 from	 sale	 of	 tangible	 fixed	 assets	 	 	 	 –	 2
	 	 	 	 	 net cash outflow from capital expenditure and financial investment	 	 709	 950
	 	 	 	 	 net cash outflow before financing and management of liquid resources	 	 8170	 7 069
	 	 	 	 	 management of liquid resources	 	 	 	 	 increase	 in	 shortterm	 deposits	 	 	 	 	 9464	 1573
	 	 	 	 	 financing     
issue	 of	 ordinary	 share	 capital	 	 	 	 	 20692	 3
issue	 of	 preference	 share	 capital	 	 	 	 	 –	 2728
	 	 	 	 	 net cash inflow from financing	 	 	 	 	 	 20692	 2731
increasedecrease in cash in the year	 	 	 17 18	 3058	 5911
	 	 	 	 	 	 consolidated cash flow statement
yearended 31 december 2005 ubiquity software corporation plc annual report and financial statements 2005 ubiquity software corporation plc annual report and financial statements 2005 29
1 accounting policies
the	 financial	 statements	 are	 prepared	 in	 accordance	 with	 applicable	 united	 kingdom	 accounting	 standards	 the	 particular	 accounting	 policies	 adopted	 which	 have	 been	 applied	 consistently	 throughout	 the	 financial	 year	 and	 the	 prior	 financial	 year	 are	 described	 below
accounting convention
the	 financial	 statements	 are	 prepared	 under	 the	 historical	 cost	 convention
basis of consolidation
the	 consolidated	 financial	 statements	 incorporate	 the	 financial	 statements	 of	 the	 company	 and	 all	 its	 subsidiaries
no	 profit	 and	 loss	 account	 has	 been	 presented	 for	 the	 parent	 company	 as	 permitted	 by	 section	 230	 	 of	 the	 companies	 act	 1985	 the	 loss	 attributable	 to	 members	 of	 the	 company	 for	 the	 period	 is	 £7 929000	 2004	 £5990000
presentation of financial instruments
the	 company	 has	 adopted	 financial	 reporting	 standard	 25	 during	 2005	 the	 transitional	 provisions	 include	 an	 exemption	 from	 restating	 comparative	 information	 in	 the	 first	 year	 of	 adoption	 had	 frs	 25	 been	 applied	 retrospectively	 to	 the	 results	 for	 the	 yearended	 31	 december	 2004	 convertible	 preference	 shares	 with	 a	 nominal	 value	 of	 £9270000	 would	 have	 been	 reclassified	 to	 include	 a	 proportion	 as	 a	 liability	 and	 a	 proportion	 representing	 the	 value	 of	 the	 conversion	 feature	 as	 equity	 the	 preference	 shares	 were	 all	 converted	 to	 ordinary	 shares	 in	 may	 2005	 and	 accordingly	 the	 adoption	 of	 frs	 25	 has	 no	 impact	 at	 31	 december	 2005
turnover
turnover	 represents	 amounts	 derived	 from	 the	 group’s	 principal	 activity	 being	 that	 of	 software	 development	 exclusive	 of	 value	 added	 tax	 revenue	 is	 recognised	 for	 each	 of	 the	 group’s	 revenue	 streams	 as	 follows
revenue stream recognition
trials	 the	 provision	 of	 software	 for	 a	 specified	 period	 on 	 delivery
software	 platform	 sales	 licences	 for	 live	 deployment	 on 	 delivery
support	 and	 upgrades	 for	 a	 contracted	 period	 of	 time	 spread 	 over	 the	 specified	 period
professional	 services	 and	 training	 on	 provision	 of	 the	 service
longterm	 software	 developments	 over	 the	 period	 of	 the	 contract	 in	 proportion	 	 	 to	 the	 amount	 of	 work	 done
in	 the	 case	 of	 minimum	 commitment	 reseller	 agreements	 where	 the	 level	 of	 actual	 sales	 does	 not	 reach	 the	 minimum	 annual	 level	 the	 minimum	 annual	 revenue	 provided	 for	 in	 the	 agreement	 is	 recognised	 evenly	 over	 the	 period	 covered	 by	 the	 agreement
tangible fixed assets
tangible	 fixed	 assets	 are	 stated	 at	 cost	 net	 of	 depreciation	 and	 any	 provision	 for	 impairment	 depreciation	 is	 provided	 on	 all	 tangible	 fixed	 assets	 at	 rates	 calculated	 to	 write	 off	 the	 cost	 less	 estimated	 residual	 value	 of	 each	 asset	 on	 a	 straightline	 basis	 over	 its	 expected	 useful	 life	 as	 follows
fixtures	 and	 fittings	 –	 25
computer	 equipment	 –	 50
intangible fixed assets
intangible	 fixed	 assets	 are	 stated	 at	 cost	 net	 of	 depreciation	 and	 any	 provision	 for	 impairment	 depreciation	 is	 provided	 on	 all	 intangible	 fixed	 assets	 at	 rates	 calculated	 to	 write	 off	 the	 cost	 less	 estimated	 residual	 value	 of	 each	 asset	 on	 a	 straightline	 basis	 over	 its	 expected	 useful	 life	 as	 follows
trademarks	 –	 25
notes to the financial statements
yearended 31 december 2005 ubiquity software corporation plc annual report and financial statements 2005 30 ubiquity software corporation plc annual report and financial statements 2005
1 accounting policies continued
investments
investments	 held	 as	 fixed	 assets	 are	 stated	 at	 cost	 less	 provision	 for	 impairment
taxation
current	 tax	 is	 provided	 at	 amounts	 expected	 to	 be	 paid	 or	 recovered	 using	 the	 tax	 rates	 and	 laws	 that	 have	 been	 enacted	 or	 substantively	 enacted	 at	 the	 balance	 sheet	 date	 deferred	 taxation	 is	 provided	 in	 full	 on	 timing	 differences	 that	 result	 in	 an	 obligation	 at	 the	 balance	 sheet	 	 date	 to	 pay	 more	 tax	 or	 a	 right	 to	 pay	 less	 tax	 at	 a	 future	 date	 at	 rates	 expected	 to	 apply	 when	 they	 	 crystallise	 based	 on	 current	 tax	 rates	 and	 law	 timing	 differences	 arise	 from	 the	 inclusion	 of	 items	 of	 income	 and	 expenditure	 in	 taxation	 computations	 in	 periods	 different	 from	 those	 in	 which	 they	 are	 included	 in	 the	 financial	 statements
deferred	 tax	 assets	 are	 recognised	 to	 the	 extent	 that	 it	 is	 regarded	 as	 more	 likely	 than	 not	 that	 they	 will	 be	 recovered	 deferred	 tax	 assets	 and	 liabilities	 are	 not	 discounted
leases
rentals	 under	 operating	 leases	 are	 charged	 to	 profit	 and	 loss	 in	 equal	 amounts	 over	 the	 lease	 term	 a	 provision	 has	 been	 recognised	 for	 onerous	 lease	 based	 on	 the	 expected	 lease	 payments	 which	 will	 not	 be	 recovered	 by	 a	 sublease	 of	 the	 property
research and development
research	 and	 development	 expenditure	 is	 charged	 to	 the	 profit	 and	 loss	 account	 as	 incurred
foreign currency
transactions	 denominated	 in	 foreign	 currencies	 are	 translated	 into	 the	 functional	 currency	 at	 the	 rates	 ruling	 	 at	 the	 date	 of	 the	 transaction	 foreign	 currency	 balances	 are	 translated	 at	 the	 rate	 ruling	 at	 the	 balance	 sheet	 date	 these	 translation	 differences	 are	 dealt	 with	 in	 the	 profit	 and	 loss	 account
the	 foreign	 subsidiaries	 are	 translated	 using	 the	 temporal	 method	 under	 ssap	 20
the	 balance	 sheets	 of	 the	 foreign	 subsidiaries	 are	 translated	 into	 sterling	 at	 the	 closing	 rates	 of	 exchange	 for	 each	 period	 whilst	 the	 profit	 and	 loss	 accounts	 are	 translated	 into	 sterling	 at	 the	 average	 rates	 of	 exchange	 	 for	 the	 period	 the	 resulting	 translation	 differences	 are	 taken	 to	 the	 consolidated	 profit	 and	 loss	 account
2 analysis of turnover loss before taxation and net assets
the	 turnover	 loss	 before	 taxation	 and	 net	 assets	 are	 attributable	 to	 the	 group’s	 principal	 activity
the	 geographical	 analysis	 by	 destination	 of	 the	 group’s	 turnover	 is	 as	 follows
	 	 	 	 	 2005	 2004	 	 	 	 	 	 £000	 £000
united	 kingdom	 	 	 	 	 1563	 992
north	 america	 	 	 	 	 4714	 2027
asia	 pacific	 	 	 	 	 1184	 2296
	 	 	 	 	 7461	 5315
	 	 	 	 	 	 notes to the financial statements continued ubiquity software corporation plc annual report and financial statements 2005 ubiquity software corporation plc annual report and financial statements 2005 31
2 analysis of turnover loss before taxation and net assets continued
the	 geographical	 analysis	 by	 origin	 is	 as	 follows
	 	 	 	 	 2005	 2004	 	 	 	 	 	 £000	 £000
turnover	 	 	 	 	 united	 kingdom	 	 	 	 	 3150	 992
north	 america	 	 	 	 	 4311	 4323
	 	 	 	 	 7461	 5315
	 	 	 	 	 loss before taxation	 	 	 	 	 united	 kingdom	 	 	 	 4114	 4849
north	 america	 	 	 	 	 4623	 1559
	 	 	 	 	 8737	 6408
	 	 	 	 	 net assets	 	 	 	 	 united	 kingdom	 	 	 	 17594	 4012
north	 america	 	 	 	 	 2021	 1786
	 	 	 	 	 19615	 5798
3 information regarding directors and employees	 	 	 	 the	 the the	 the	 	 	 	 group	 group company	 company 	 	 	 	 2005	 2004	 2005	 2004	 	 	 	 £000	 £000 £000	 £000
staff	 costs	 during	 the	 year	 including	 directors	 	 	 	 wages	 and	 salaries	 	 	 9563	 6792 4662	 3367
social	 security	 costs	 	 	 925	 648 544	 387
	 	 	 10488	 7 440 5206	 3754
	 	 	 	 the	 average	 monthly	 number	 of	 employees	 during	 the	 year	 was	 as	 follows
	 	 	 	 no	 no no	 no
selling	 and	 distribution	 	 	 44	 39 17	 12
service	 	 	 5	 15 –	 4
administration	 	 	 21	 14 11	 10
research	 and	 development	 	 	 116	 68 73	 54
	 	 	 186	 136 101	 80
	 	 	 	 	 information	 regarding	 directors’	 remuneration	 is	 given	 in	 the	 directors’	 remuneration	 report	 on	 pages	 17	 to	 20
	 4 exceptional items
	 	 	 	 	 2005	 2004	 	 	 	 	 	 £000	 £000
exceptional	 provision	 for	 doubtful	 debtors	 	 	 	 558	 –
the	 exceptional	 provision	 for	 doubtful	 debtors	 relates	 to	 one	 customer	 known	 to	 be	 in	 financial	 difficulties	 as	 at	 the	 yearend	 and	 which	 has	 subsequently	 declared	 bankruptcy	 the	 provision	 specifically	 relates	 to	 revenue	 recognised	 during	 the	 current	 year ubiquity software corporation plc annual report and financial statements 2005 32 ubiquity software corporation plc annual report and financial statements 2005
5 operating loss
	 	 	 	 	 2005	 2004	 	 	 	 	 	 £000	 £000
operating loss is after chargingcrediting     
depreciation	 of	 tangible	 assets	 	 	 	 	 631	 271 	 amortisation	 of	 intangible	 assets	 	 	 	 	 3	 –
rentals	 under	 operating	 leases	 	 	 	 	 	 –	 plant	 and	 machinery	 	 	 	 	 13	 12	 	 –	 other	 	 	 	 	 535	 347
loss	 on	 disposal	 of	 fixed	 assets	 	 	 	 	 –	 11
auditors’	 remuneration	 	 	 	 	 	 –	 as	 auditors	 group	 and	 company	 	 	 	 54	 8
	 –	 taxation	 and	 advisory	 	 	 	 134	 94
foreign	 exchange	 gainslosses	 	 	 	 	 220	 372
research	 and	 development	 costs	 	 	 	 	 6303	 3856
in	 addition	 to	 the	 above	 fees	 charged	 through	 the	 profit	 and	 loss	 account	 fees	 of	 £185000	 were	 paid	 to	 the	 auditors	 during	 the	 yearended	 31	 december	 2005	 in	 their	 capacity	 as	 reporting	 accountants	 and	 for	 other	 advice	 in	 connection	 with	 the	 share	 issue	 in	 may	 2005	 these	 amounts	 were	 recorded	 as	 a	 deduction	 from	 the	 proceeds	 of	 the	 share	 issue	 and	 were	 not	 charged	 to	 the	 profit	 and	 loss	 account
6 interest receivable and similar income
	 	 	 	 	 2005	 2004	 	 	 	 	 	 £000	 £000
interest	 on	 bank	 deposits	 	 	 	 	 486	 89
interest	 on	 research	 and	 development	 tax	 credit	 	 	 	 7	 3
	 	 	 	 	 493	 92
7 tax credit on loss on ordinary activities
	 	 	 	 	 2005	 2004	 	 	 	 	 	 £000	 £000
current taxation   
united	 kingdom	 corporation	 tax	 	 	 current	 tax	 on	 income	 for	 the	 year	 at	 30	 2004	 30	 	 	 	 –	 –
rd	 tax	 credit	 in	 respect	 of	 current	 year	 	 	 	 588	 –
rd	 tax	 credit	 in	 respect	 of	 2004	 	 	 	 	 656	 –
rd	 tax	 credit	 in	 respect	 of	 2003	 2002	 	 	 	 618	 601
total current tax 	 	 	 	 	 1862	 601
	 	 	 notes to the financial statements continued ubiquity software corporation plc annual report and financial statements 2005 ubiquity software corporation plc annual report and financial statements 2005 33
7 tax credit on loss on ordinary activities continued
the	 difference	 between	 the	 total	 current	 tax	 shown	 above	 and	 the	 amount	 calculated	 by	 applying	 the	 standard	 rate	 of	 uk	 corporation	 tax	 to	 the	 loss	 before	 tax	 is	 as	 follows
	 	 	 	 	 2005	 2004	 	 	 	 	 	 £000	 £000
loss	 on	 ordinary	 activities	 before	 tax	 	 	 	 8737	 6408
tax	 on	 loss	 on	 ordinary	 activities	 before	 tax	 at	 30	 2004	 30	 	 	 2621	 1922
	 	 	 	 	 factors affecting credit for the year	 	 	 	 expenses	 not	 deductible	 for	 tax	 purposes	 	 	 	 48	 22
capital	 allowances	 in	 excess	 of	 depreciation	 	 	 	 92	 20
tax	 losses	 carried	 forward	 	 	 	 2481	 1880
rd	 tax	 credit	 current	 year	 	 	 	 588	 –
rd	 tax	 credit	 in	 respect	 of	 2004	 	 	 	 	 656	 –
rd	 tax	 credit	 in	 respect	 of	 2003	 2002	 	 	 	 618	 601
current tax credit for year	 	 	 	 	 1862	 601
	 	 	 	 	 as	 described	 in	 the	 chief	 financial	 officer’s	 statement	 the	 basis	 for	 estimating	 the	 income	 receivable	 from	 research	 and	 development	 tax	 credits	 from	 recognition	 on	 a	 cash	 received	 basis	 to	 accruing	 income	 for	 	 claims	 submitted	 and	 expected	 to	 be	 submitted	 based	 on	 qualifying	 research	 and	 development	 costs	 incurred	 up	 to	 the	 balance	 sheet	 date
factors that may affect the future tax charge
a	 deferred	 tax	 asset	 has	 not	 been	 recognised	 in	 respect	 of	 timing	 differences	 relating	 to	 trading	 losses	 	 carried	 forward	 and	 accelerated	 depreciation	 as	 there	 is	 currently	 insufficient	 evidence	 that	 the	 asset	 	 will	 be	 recovered	 in	 the	 short	 term	 the	 amount	 of	 the	 asset	 not	 recognised	 is	 approximately	 £5200000	 	 2004	 £3300000	 the	 asset	 would	 be	 recovered	 if	 sufficient	 trading	 profits	 were	 to	 arise	 in	 the	 future
8 loss per share 
	 	 	 	 	 2005	 2004	 	 	 	 	 	 £000	 £000
retained	 loss	 for	 the	 year	 	 	 	 	 6875	 5807
	 	 	 	 	 	 	 	 	 	 no	 no
weighted	 average	 number	 of	 shares	 	 	 125505609	 13301260
	 	 	 loss	 per	 share	 	 	 	 	 5p	 44p
diluted	 loss	 per	 share	 is	 calculated	 by	 adjusting	 the	 weighted	 average	 number	 of	 ordinary	 shares	 in	 issue	 on	 the	 assumption	 of	 the	 conversion	 of	 all	 dilutive	 potential	 ordinary	 shares	 diluted	 loss	 per	 share	 is	 the	 same	 	 as	 basic	 since	 for	 a	 lossmaking	 period	 this	 would	 assume	 the	 exercise	 of	 the	 outofthemoney	 options	 	 which	 would	 be	 irrational ubiquity software corporation plc annual report and financial statements 2005 34 ubiquity software corporation plc annual report and financial statements 2005
9 intangible fixed assets 
	 	 	 	 	 	 trademarks 	 	 	 	 	 	 	 £000
group and company
cost
at	 1	 january	 2005	 	 	 	 	 	 –
additions	 	 	 	 	 	 51
at	 31	 december	 2005	 	 	 	 	 	 51
accumulated amortisation
at	 1	 january	 2005	 	 	 	 	 	 –
charge	 for	 the	 year	 	 	 	 	 	 3
at	 31	 december	 2005	 	 	 	 	 	 3
net book value
at	 31	 december	 2005	 	 	 	 	 	 48
at	 31	 december	 2004	 	 	 	 	 	 –
10 tangible fixed assets
	 	 	 	 	 fixtures	 computer	 	 	 	 	 	 and 	 fittings	 equipment	 total	 	 	 	 	 £000	 £000	 £000
the group
cost
at	 1	 january	 2005	 	 	 	 838	 1618	 2456
additions	 	 	 	 185	 473	 658
at	 31	 december	 2005	 	 	 	 1023	 2091	 3114
accumulated depreciation
at	 1	 january	 2005	 	 	 	 333	 1119	 1452
charge	 for	 the	 year	 	 	 	 174	 457	 631
at	 31	 december	 2005	 	 	 	 507	 1576	 2083
net book value
at	 31	 december	 2005	 	 	 	 516	 515	 1031
at	 31	 december	 2004	 	 	 	 505	 499	 1004
notes to the financial statements continued ubiquity software corporation plc annual report and financial statements 2005 ubiquity software corporation plc annual report and financial statements 2005 35
10 tangible fixed assets continued
	 	 	 	 	 fixtures	 computer	 	 	 	 	 	 and 	 fittings	 equipment	 total	 	 	 	 	 £000	 £000	 £000
the company
cost
at	 1	 january	 2005	 	 	 	 581	 1066	 1647
additions	 	 	 	 77	 177	 254
at	 31	 december	 2005	 	 	 	 658	 1243	 1901
accumulated depreciation
at	 1	 january	 2005	 	 	 	 261	 855	 1116
charge	 for	 the	 year	 	 	 	 114	 194	 308
at	 31	 december	 2005	 	 	 	 375	 1049	 1424
net book value
at	 31	 december	 2005	 	 	 	 283	 194	 477
at	 31	 december	 2004	 	 	 	 320	 211	 531
11 investments
	 	 	 	 	 the	 	 the	 	 	 	 	 	 group	 company 	 	 	 	 	 	 £000	 £000
cost and net book value
subsidiaries	 	 	 	 	 –	 8
investments	 	 	 	 	 316	 316
at	 31	 december	 2005	 and	 31	 december	 2004	 	 	 	 316	 324
	 	 	 of	 voting	 	 	 country	 of	 shares	 	 company	 name	 incorporation	 held	 type	 of	 share
investments
newheights	 software	 corporation	 canada	 6	 	 common	 shares	 	 	 	 without	 par	 value
the	 principal	 activity	 of	 newheights	 software	 corporation	 is	 the	 developing	 marketing	 and	 implementing	 of	 integrated	 webconvergence	 software	 solutions
subsidiaries
uscl	 corporation	 canada	 100	 1 	 class	 a	 common	 shares
ubiquity	 software	 inc	 usa	 100	 1 	 cent	 common	 shares
the	 principal	 activity	 of	 the	 subsidiaries	 is	 that	 of	 software	 development	 and	 distribution ubiquity software corporation plc annual report and financial statements 2005 36 ubiquity software corporation plc annual report and financial statements 2005
12 debtors 
	 	 	 the	 the the	 the	 	 	 	 group	 group company	 company 	 	 	 	 2005	 2004	 2005	 2004	 	 	 	 £000	 £000 £000	 £000
trade	 debtors	 	 	 2062	 1539 660	 691
called	 up	 share	 capital	 unpaid	 	 	 1	 – 1	 –
amounts	 owed	 by	 subsidiary	 undertaking	 	 –	 –	 9393	 10265
other	 debtors	 and	 prepayments	 	 	 2194	 1216 1740	 215
	 	 	 4257	 2755 11794	 11171
13 creditors amounts falling due within one year
	 	 	 the	 the the	 the	 	 	 	 group	 group company	 company 	 	 	 	 2005	 2004	 2005	 2004	 	 	 	 £000	 £000 £000	 £000
trade	 creditors	 	 	 726	 408 413	 232
other	 taxation	 and	 social	 security	 	 	 231	 145 166	 130
deferred	 income	 	 	 587	 663 97	 175
accruals	 	 	 675	 501 425	 182
	 	 	 2219	 1717 1101	 719
14 provisions for liabilities and charges
	 	 	 	 	 	 onerous 	 	 	 	 	 	 	 lease	 	 	 	 	 	 	 provision 	 	 	 	 	 	 	 £000
group and company
at	 1	 january	 2005	 	 	 	 	 	 150
utilised	 in	 the	 year	 	 	 	 	 	 75
charge	 to	 the	 profit	 and	 loss	 account	 in	 the	 year	 	 	 	 	 75
at	 31	 december	 2005	 	 	 	 	 	 150
the	 onerous	 lease	 provision	 has	 been	 created	 in	 respect	 of	 leased	 property	 which	 the	 company	 vacated	 during	 2004	 and	 for	 which	 it	 retains	 an	 obligation	 to	 pay	 the	 rentals	 under	 the	 lease	 the	 property	 was	 vacant	 	 at	 31	 december	 2005	 however	 the	 company	 is	 actively	 seeking	 a	 tenant	 to	 take	 over	 the	 lease	 the	 provision	 represents	 the	 current	 estimate	 of	 the	 rental	 obligations	 which	 will	 be	 paid	 over	 the	 remaining	 term	 of	 the	 lease
notes to the financial statements continued ubiquity software corporation plc annual report and financial statements 2005 ubiquity software corporation plc annual report and financial statements 2005 37
15 called up share capital
	 	 	 	 	 2005	 2004	 	 	 	 	 	 £000	 £000
authorised
500000000	 ordinary	 shares	 of	 125p	 2004	 38000000	 ordinary	 shares	 of	 25p	 each	 6250	 950
cancelled	 preference	 shares	 2004	 18600000	 preference	 shares	 of	 50p	 	 –	 9300
	 	 	 	 	 6250	 10250
called up and allotted
183088125	 ordinary	 shares	 of	 125p	 2004	 13321260	 of	 25p	 each	 	 2289	 333
cancelled	 preference	 shares	 2004	 18540237	 preference	 shares	 of	 50p	 	 –	 9270
	 	 	 	 	 2289	 9603
at	 an	 extraordinary	 general	 meeting	 on	 24	 march	 2005	 approval	 was	 given	 conditional	 upon	 the	 proposed	 admission	 of	 the	 whole	 of	 the	 company’s	 ordinary	 share	 capital	 issued	 and	 to	 be	 issued	 to	 trading	 on	 aim	 for	 a	 reorganisation	 of	 the	 company’s	 share	 capital	 under	 which	 each	 existing	 ordinary	 share	 would	 be	 subdivided	 into	 two	 ordinary	 shares	 at	 125p	 each	 the	 meeting	 also	 approved	 the	 reregistration	 of	 the	 company	 as	 a	 public	 limited	 company	 and	 the	 reregistration	 took	 place	 on	 12	 may	 2005
on	 the	 reregistration	 of	 the	 company	 all	 convertible	 preference	 shares	 were	 converted	 into	 ordinary	 shares	 at	 the	 rate	 of	 two	 ordinary	 shares	 for	 one	 convertible	 preference	 share	 ordinary	 shares	 with	 a	 par	 value	 of	 £927 000	 were	 created	 and	 the	 remaining	 balance	 of	 the	 preference	 share	 nominal	 value	 of	 £8343000	 was	 recorded	 as	 share	 premium	 the	 ordinary	 shares	 that	 resulted	 from	 this	 conversion	 rank	 pari	 passu	 in	 all	 respects	 with	 the	 other	 ordinary	 shares	 in	 issue	 at	 the	 date	 of	 conversion
the	 following	 share	 warrants	 in	 the	 ordinary	 shares	 of	 the	 company	 were	 outstanding	 at	 31	 december
	 	 	 2004	 exercised	 lapsed	 2005	 exercise	 exercise 	 	 	 	 no	 no	 no	 no	 price	 period
	 	 	 1065236	 –	 1065236	 –	 625p	 up 	 to	 1107
	 	 	 19188276	 16425765	 2762511	 –	 10p	 up 	 to	 1107
	 	 	 20253512	 16425765	 3827 747	 –	 	 on	 12	 may	 2005	 16425765	 ordinary	 shares	 of	 125p	 were	 issued	 for	 cash	 consideration	 of	 £1642576	 on	 exercise	 of	 share	 warrants	 all	 other	 share	 warrants	 were	 waived	 on	 the	 reregistration	 of	 the	 company	 on	 the	 same	 day	 60606061	 shares	 were	 issued	 for	 cash	 consideration	 of	 £20000000	 issue	 costs	 were	 £1478000
the	 following	 options	 in	 the	 shares	 of	 the	 company	 were	 outstanding	 at	 31	 december	 2005
	 	 2004	 exercised	 granted	 2005	 exercise	 exercise 	 	 	 no	 no	 no	 no	 price	 period
	 	 900000	 800000	 –	 100000	 7 5p	 0498–0706
	 	 1648000	 260000	 –	 1388000	 95p	 0100–0807
	 	 23743874	 4103040	 –	 19640834	 10p	 0498–1012
	 	 815000	 68000	 3254000	 4001000	 425p	 1106–1112
	 	 –	 –	 3766987	 3766987	 37 5p	 1206–1215
	 	 27 106874	 5231040	 7 020987	 28896821	 	 for	 comparative	 purposes	 the	 2004	 share	 options	 have	 been	 reported	 in	 a	 consistent	 manner	 with	 the	 share	 split	 that	 was	 effected	 on	 12	 may	 2005 ubiquity software corporation plc annual report and financial statements 2005 38 ubiquity software corporation plc annual report and financial statements 2005
15 called up share capital continued
in	 april	 2005	 3254000	 options	 to	 purchase	 125p	 ordinary	 shares	 in	 the	 company	 were	 granted	 at	 an	 	 exercise	 price	 of	 425p	 on	 the	 reregistration	 of	 the	 company	 all	 options	 were	 reorganised	 in	 line	 with	 the	 ordinary	 shares	 of	 the	 company	 at	 this	 time	 all	 unvested	 options	 vested	 for	 a	 period	 of	 three	 months	 and	 then	 reverted	 to	 the	 original	 time	 vesting	 periods
on	 27	 december	 2005	 3766987	 options	 to	 purchase	 125p	 ordinary	 shares	 in	 the	 company	 were	 granted	 	 at	 an	 exercise	 price	 of	 37 5p
during	 the	 year	 5231040	 options	 were	 exercised	 for	 cash	 consideration	 of	 £527 384
16 reconciliation of operating loss to net cash outflow from operating activities 
	 	 	 	 	 2005	 2004	 	 	 	 	 	 £000	 £000
operating	 loss	 	 	 	 	 9230	 6500
depreciation	 and	 amortisation	 charges	 	 	 	 634	 271
loss	 on	 disposal	 of	 tangible	 fixed	 assets	 	 	 	 	 –	 11
increase	 in	 debtors	 	 	 	 	 98	 1785
increase	 in	 creditors	 	 	 	 	 502	 819
foreign	 exchange	 gainslosses	 	 	 	 	 220	 372
net	 cash	 outflow	 from	 operating	 activities	 	 	 	 	 8412	 6812
17 reconciliation of net cash flow to movement in net funds  
	 	 	 	 	 2005	 2004	 	 	 	 	 	 £000	 £000
increasedecrease	 in	 cash	 in	 the	 year	 	 	 	 3058	 5911
increase	 in	 shortterm	 deposits	 	 	 	 	 9464	 1573
foreign	 exchange	 movements	 	 	 	 	 220	 372
movement	 in	 net	 fundsdeficit	 in	 the	 year	 	 	 	 12742	 4710
net	 funds	 at	 1	 january	 	 	 	 3590	 8300
net	 funds	 at	 31	 december	 	 	 	 	 16332	 3590
18 analysis of net funds
	 	 	 at	 	 foreign	 at	 	 	 	 1 	 january	 cash	 exchange	 31 	 december	 	 	 	 2005	 flow	 movements	 2005	 	 	 	 £000	 £000	 £000	 £000
cash	 at	 bank	 and	 in	 hand	 	 	 2017	 3058	 220	 5295
current	 asset	 investments	 	 	 1573	 9464	 –	 11037
net	 funds	 	 	 3590	 12522	 220	 16332
notes to the financial statements continued ubiquity software corporation plc annual report and financial statements 2005 ubiquity software corporation plc annual report and financial statements 2005 39
19 financial instruments
the	 chief	 financial	 officer’s	 statement	 on	 page	 10	 provides	 an	 explanation	 of	 the	 role	 of	 financial	 instruments	 during	 the	 period	 in	 creating	 or	 changing	 the	 risks	 the	 group	 faces	 in	 its	 activities	 the	 explanation	 summarises	 the	 objectives	 and	 policies	 for	 holding	 or	 issuing	 financial	 instruments	 and	 similar	 contracts	 and	 the	 strategies	 for	 achieving	 those	 objectives	 that	 have	 been	 followed	 during	 the	 period
the	 numerical	 disclosures	 in	 this	 note	 deal	 with	 financial	 assets	 and	 financial	 liabilities	 as	 defined	 in	 financial	 reporting	 standard	 13	 frs	 13	 ‘derivatives	 and	 other	 financial	 instruments	 disclosures’	 certain	 financial	 assets	 such	 as	 investments	 in	 subsidiary	 and	 associated	 companies	 are	 excluded	 from	 the	 scope	 of	 these	 disclosures
as	 permitted	 by	 frs	 13	 shortterm	 debtors	 and	 creditors	 have	 been	 excluded	 from	 the	 disclosures	 other	 	 than	 the	 currency	 disclosures
interest rate profile
the	 interest	 rate	 profile	 of	 the	 group’s	 financial	 assets	 at	 31	 december	 2005	 was	 as	 follows
    floating fixed non interest 
   total rate rate bearing 
   2005 2005 2005 2005 
   £000 £000 £000 £000
sterling	 	 	 14157 4157 10000 –
euro	 	 	 245 – 224 21
us	 dollar	 	 	 1421 598 823 –
canadian	 dollar	 	 	 509 509 – –
total	 	 	 16332 5264 11047 21
as	 at	 31	 december	 2005	 the	 weighted	 average	 floating	 interest	 rate	 yield	 across	 the	 group	 was	 425	 and	 	 the	 weighted	 average	 fixed	 interest	 rate	 yield	 across	 the	 group	 was	 432
the	 profile	 as	 at	 31	 december	 2004	 for	 comparison	 purposes	 was	 as	 follows
	 	 	 	 floating	 fixed	 non 	 interest	 	 	 	 total	 rate	 rate	 bearing 	 	 	 	 2004	 2004	 2004	 2004	 	 	 	 £000	 £000	 £000	 £000
sterling	 	 	 26	 26	 –	 –
euro	 	 	 73	 –	 –	 73
us	 dollar	 	 	 3292	 1719	 1573	 –
canadian	 dollar	 	 	 199	 199	 –	 –
total	 	 	 3590	 1944	 1573	 73 ubiquity software corporation plc annual report and financial statements 2005 40 ubiquity software corporation plc annual report and financial statements 2005
19 financial instruments continued
currency exposures
as	 explained	 on	 page	 10	 in	 the	 chief	 financial	 officer’s	 statement	 the	 group’s	 objectives	 in	 managing	 currency	 exposure	 arising	 from	 its	 overseas	 trade	 and	 operations	 are	 to	 minimise	 its	 exposure	 by	 firstly	 maintaining	 the	 majority	 of	 it’s	 shortterm	 monetary	 assets	 in	 sterling	 and	 secondly	 by	 pursuing	 a	 natural	 hedge	 between	 local	 currency	 receipts	 and	 payables	 whenever	 possible
the	 group	 consolidates	 foreign	 subsidiaries	 using	 the	 temporal	 method	 gains	 and	 losses	 arising	 from	 these	 structural	 currency	 exposures	 are	 recognised	 in	 the	 profit	 and	 loss	 account
the	 table	 below	 shows	 the	 group’s	 currency	 exposures	 in	 other	 words	 those	 transactional	 exposures	 described	 above	 that	 give	 rise	 to	 the	 net	 currency	 gains	 and	 losses	 recognised	 in	 the	 profit	 and	 loss	 account	 such	 exposures	 comprise	 monetary	 assets	 and	 monetary	 liabilities	 of	 the	 group	 that	 are	 not	 denominated	 in	 the	 operating	 or	 ‘functional’	 currency	 of	 the	 group	 as	 at	 31	 december	 2005	 these	 exposures	 were	 as	 follows	 net foreign currency monetary assetsliabilities 
	 	 	 euro	 us	 	 canadian 	 	 total	 currency	 	 	 £000	 £000	 £000	 £000
cash	 and	 shortterm	 investments	 	 	 244	 1421	 510	 2175
other	 current	 assets	 	 	 433	 950	 570	 1953
other	 current	 liabilities	 	 	 5	 227	 97	 329
for	 comparative	 purposes	 as	 at	 31	 december	 2004	 these	 exposures	 were	 as	 follows
net foreign currency monetary assetsliabilities
	 	 	 euro	 us	 	 canadian 	 	 total	 currency	 	 	 £000	 £000	 £000	 £000
cash	 and	 shortterm	 investments	 	 	 73	 3292	 199	 3564
other	 current	 assets	 	 	 195	 934	 1	 1130
other	 current	 liabilities	 	 	 –	 134	 64	 198
as	 at	 31	 december	 2005	 the	 group	 held	 no	 currency	 swaps	 forward	 contracts	 or	 other	 derivatives	 to	 	 manage	 these	 currency	 exposures
as	 at	 31	 december	 2004	 the	 group	 had	 an	 outstanding	 financial	 commitment	 under	 a	 forward	 exchange	 contract	 to	 purchase	 us1500000	 for	 £778776	 the	 contract	 matured	 on	 4	 january	 2005
notes to the financial statements continued ubiquity software corporation plc annual report and financial statements 2005 ubiquity software corporation plc annual report and financial statements 2005 41
20 financial commitments
operating lease commitments
at	 31	 december	 2005	 the	 group	 was	 committed	 to	 making	 the	 following	 payments	 during	 the	 next	 year	 in	 relation	 to	 operating	 leases
	 	 	 	 land 	 and	 motor	 	 	 	 	 	 buildings	 vehicles	 total	 	 	 	 	 £000	 £000	 £000
leases which expire
between	 two	 and	 five	 years	 	 	 	 613	 15	 628
after	 five	 years	 	 	 	 73	 –	 73
	 	 	 	 686	 15	 701
at	 31	 december	 2004	 the	 company	 was	 committed	 to	 making	 the	 following	 payments	 during	 the	 next	 year	 	 in	 relation	 to	 operating	 leases
	 	 	 	 land 	 and	 motor	 	 	 	 	 	 buildings	 vehicles	 total	 	 	 	 	 £000	 £000	 £000
leases which expire
between	 two	 and	 five	 years	 	 	 	 292	 15	 307
after	 five	 years	 	 	 	 73	 –	 73
	 	 	 	 365	 15	 380
21 related party transactions
at	 31	 december	 2005	 bellnet	 corporation	 owned	 7 27	 of	 the	 share	 capital	 of	 the	 company	 2004	 132	 during	 2005	 the	 company	 made	 sales	 to	 bellnet	 corporation	 of	 £930006	 2004	 £2057 399	 under	 a	 minimum	 commitment	 reseller	 agreement	 of	 the	 revenue	 recognised	 a	 provision	 of	 £558000	 was	 made	 	 due	 to	 nonreceipt	 of	 the	 final	 payment	 due	 under	 the	 above	 minimum	 commitment	 reseller	 agreement	 bellnet	 corporation	 disposed	 of	 its	 shares	 in	 ubiquity	 after	 31	 december	 2005
celtic	 house	 investment	 partners	 limited	 owned	 68	 of	 the	 share	 capital	 of	 the	 company	 2004	 123	 during	 2005	 the	 company	 reimbursed	 celtic	 house	 investment	 partners	 £14583	 2004	 £nil	 in	 relation	 to	 	 the	 provision	 of	 directors’	 services	 for	 s	 j	 gibson	 after	 the	 yearend	 celtic	 house	 investment	 partners	 	 limited	 transferred	 its	 interest	 in	 ubiquity	 to	 wesley	 clover	 corporation
the	 company	 has	 applied	 the	 exemption	 granted	 by	 financial	 reporting	 standard	 8	 not	 to	 disclose	 related	 party	 transactions	 with	 group	 companies	 where	 90	 or	 more	 of	 the	 voting	 rights	 of	 the	 subsidiary	 company	 are	 controlled	 within	 the	 group ubiquity software corporation plc annual report and financial statements 2005 42 ubiquity software corporation plc annual report and financial statements 2005
company information
company registration
2719723
company secretary
rafferty	 atha	 jackson
registered office
building	 3
eastern	 business	 park
wern	 fawr	 lane
st	 mellons
cardiff	 cf3	 5ea
	 nominated adviser  broker
evolution	 securities	 limited
100	 wood	 street
london	 ec2v	 7an
	 auditors
deloitte	 	 touche	 llp
blenheim	 house
fitzalan	 court
cardiff	 cf24	 0ts					 solicitors
osborne	 clarke
1	 london	 wall
london	 ec2y	 5eb
principal bankers
hsbc	 plc
114	 st	 mary	 street
cardiff		 cf10	 1lf
registrars
computershare	 investor	 services	 plc
the	 pavilions
bridgwater	 road
bristol	 bs99	 1xz ubiquity software corporation plc annual report and financial statements 2005 ubiquity software corporation plc annual report and financial statements 2005 43
financial calendar
2005 results –	 8	 march	 2006	 agm	 –	 2	 may	 2006	 interim	 –	 september	 2006	 yearend	 –	 31	 december	 2006	 •
•
•
• ubiquity software corporation plc annual report and financial statements 2005 44
notes ubiquity software develops and markets 
sipbased communications software  
for fixed and mobile service providers 
system integrators independent software 
vendors and oem partners worldwide
01	 highlights
02	 ubiquity 	 at	 a	 glance
annual report and financial statements
04	 chairman’ s 	 statement
06	 chief 	 executive’ s	 statement	 10	 chief 	 financial	 officer’ s	 statement
12	 board 	 of	 directors
13	 directors’ 	 report
15	 corporate 	 governance	 statement	 17	 directors’ 	 remuneration	 report
21	 statement 	 of	 directors’	 responsibilities
22	 independent 	 auditors’	 report
24	 consolidated 	 profit	 and	 loss	 account
25	 combined 	 statement	 of	 movement	 in	 shareholders’	 funds	 and	 reconciliation	 	 of	 movements	 on	 reserves
26	 consolidated 	 balance	 sheet
27	 company 	 balance	 sheet
28	 consolidated 	 cash	 flow	 statement
29	 notes 	 to	 the	 financial	 statements
42	 company 	 information
43	 financial 	 calendar
©	2006	ubiquity	software	corporation	plc	all	rights	reserved		ubiquity	is	a	 registered	trademark	of	ubiquity	software	corporation	plc	all	other	products	 company	names	logos	and	services	are	the	trademarks	of	the	respective	holders do you see what we see
ubiquity software corporation plc
annual report and financial statements 2005
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ubiquity software corporation plc  annual report and financial statements 2005


Summary:
 ubiquity software corporation plc annual report and financial statements 2005  ubiquity software corporation plc annual report and financial statements 2005
i became the chairman of 
ubiquity in may 2005 timed with 
the company’s flotation on aim 
having spent the last 22 years in 
the telecommunications industry 
in roles ranging from research  
and development through to 
chief technology officer of both 
a fixed line and mobile operator  
i feel adequately grounded  
to comment on the evolution  
of technology in the 
telecommunications industry  
it is my belief that ubiquity is 
uniquely positioned to take 
advantage of the next round  
of fundamental changes in the 
telecommunications industry 
these changes are generally 
characterised as the convergence 
of information technology and 
telecommunications technology 
this convergence will result in 
large open standard information 
technologybased architectures 
products and services which  
were previously dominated  
by proprietary and expensive 
technology solutions industry 
analysts project this spend to be 
over 30 billion in the next several 
years over time the ultimate 
customers will have better value 
variety and better designed and 
complementary families of 
products and services available  
to them 
the evolution to nextgeneration 
architectures and their resultant 
products and services will take 
place at different paces for 
different service providers the 
technology will also give rise to 
completely new service providers 
of which netzero and skype are 
outstanding examples one can 
see very ambitious evolutions in 
some of the traditional fixedline 
service providers and one can see 
service providers who have yet to 
come to grips with the changes 
enabled by this technology 
ubiquity provides a very complex 
and important part of the new 
architecture which facilitates the 
creation coordination and 
sharing of common resources  
for new products and services
you can best think of ubiquity’s 
offering as having two major 
elements first it has a superhigh
capacity server to run complex 
and valuable services for service 
providers services in the future will 
be written in a way that is much 
more consistent with rich web 
pages than monolithic vertically 
integrated software second 
ubiquity provides the tools and 
service creation environment to 
make the job of designing services 
particularly those which can or 
should interoperate with other 
services much easier and 
inherently faster early architecture 
wins and the selection of ubiquity 
as a partner by many of the large 
suppliers to the service providers’ 
space is a good indication of the 
respect and reputation that 
ubiquity continues to build
the board
leading to the preparation for the 
flotation there were a number  
of changes to the board of 
directors mostly driven by our 
appetite to comply with best 
practice recommendations  
i would like to thank those 
directors who left the board for 
their contribution during their 
this exciting evolution in the 
telecommunications industry provides 
a tremendous opportunity however it 
is not without challenges companies 
like ubiquity will have to both lead and 
serve this evolution
chairman’s statement
chris burke chairman of the board ubiquity software corporation plc annual report and financial statements 2005 ubiquity software corporation plc annual report and financial statements 2005   
tenure i would also like to 
welcome a new board member 
and a new company secretary 
who joined with me this year 
david seibel who brings a wealth 
of experience from his former 
position as chairman of accenture 
canada also joined the board as  
a nonexecutive director and is 
chairman of the audit committee
rafferty atha jackson a former 
associate general counsel from 
macromedia joined the company 
in 2004 as general counsel  
and was appointed to company 
secretary in may 2005 
the advisory board
we also have an advisory board 
this advisory board is chaired by 
patrick smith who brings 
significant experience to the role 
as a former executive board 
member of sprint us and sprint 
canada the composition of the 
advisory board is designed to be 
dynamic and fluid depending 
upon specific windows of strategic 
execution the advisory board 
pulls on various executives and 
skill sets from within the industry 
the mandate of the advisory 
board is to enhance shareholder 
value by providing executive 
management with support and 
advice from leaders in industry 
academia and professional 
societies with a focus on 
development of strategic business 
opportunities product strategy 
and brand
outlook
this exciting evolution in the 
telecommunications industry 
provides a tremendous 
opportunity however it is not 
without challenges companies 
like ubiquity will have to both lead 
and serve this evolution the 
threats to the service providers as 
we know them today are obvious 
and well documented but very 
difficult for them to address there 
are few parallels and precedents 
for this magnitude of change in 
this industry as such predicting 
the speed of reaction of the 
various fixed wireless and cable 
carriers across multiple 
geographies all with differing 
competitive challenges and 
evolving pricing strategies is very 
difficult we will therefore continue 
to carefully invest in line with our 
financial goal of matching revenue 
growth with required expenses to 
meet the demand of delivering to 
a growing customer base what is 
predictable and inevitable is that 
all of the various fixed wireless 
and cable carriers have started 
moving towards addressing this 
evolution i have every faith in the 
role ubiquity is to play and the 
value it brings across the spectrum 
of new service providers to  
megacarriers we have an 
excellent reputation in the industry 
a great and growing base of 
customers and a strong financial 
position that i believe will enable 
us to grow as we develop with  
the market we are very excited 
about our prospects 
chris burke
chairman
3 billion

in the world today there are  
3 billion telephone users only 
20 million have switched to 
voice over internet protocol
gatner group