Annual Report • Sep 17, 2010
Annual Report
Open in ViewerOpens in native device viewer
English 09/2010
The HiRes Video Company ... Letter To The Shareholders
Dear Shareholders,
I am pleased to inform you that our revenues this year have again grown robustly by 20% to €54 million. The high export share of 73% and growth of our U.S. subsidiary are proof of the success with our international orientation. Despite the generally difficult economic situation in 2009, earnings after tax of €8.4 million reached a new high. Based on our very positive cash flow, we are proposing a dividend distribution of €1 per share, as we did last year.
This growth was made possible by the expansion of new sales regions and by the demand for the new MOBOTIX hemispheric camera technology, which completely monitors an entire room, and thus replaces several standard cameras. In June 2010, we reached a first time milestone of more than 10,000 cameras built and delivered in one month.
The transition to a new processor technology was completed and is now being used in all single lens cameras. The dual lens cameras will receive the new technology next. In addition to greater computing power, the advantage of the new platform is that all products, including the new door station, are now equipped with one identical electronic board. This simplifies purchasing logistics, reduces production costs and increases product quality.
The new IP-video door station T24, an in-house development, is scheduled for shipment in autumn 2010. MOBOTIX uses its existing hemispheric technology to enter a new, but closely related access-control and door-intercoms market. Accordingly, access-control functions were added. When the door is rung, an encrypted connection is established to a standard VoIP telephone, or PC that basically enables the intercom, and allows the door to be opened from any location in the world. The integration of iPhone and iPad plays a great role in this.
I am sure that we will continue with substantial growth in the current fiscal year and that our new products will have a large impact on that after their initial market launches. Our partners and customers are showing enormous interest in our new products. The new production hall will have 6,000 square meters of floor area and be ready for occupancy in March 2011.
Thank you for placing your trust in us!
Dr. Ralf Hinkel • CEO MOBOTIX AG
| Content | |
|---|---|
| Letter To The Shareholders | 1 |
| MOBOTIX At A Glance | 3 |
| Highlights 2009/10 | 4 |
| Company Profile | 5 |
| The MOBOTIX Concept | 6 |
| MOBOTIX Cameras In Operation Troughout The Globe | 8 |
| The MOBOTIX Technology | 10 |
| The MOBOTIX Storage Technology | 12 |
| MOBOTIX Shares | 14 |
| Report Of The Supervisory Board | 18 |
| Corporate Governance Report | 22 |
| Joint Declaration Of Compliance On The German Corporate Governance Code | 31 |
| Consolidated Management Report | 36 |
| Business And Market | 36 |
| Results Of Operations, Net Assets And Financial Position | 40 |
| Research And Development | 44 |
| Employees | 44 |
| Changes In The Management Board | 44 |
| Information Pursuant To Section 315 (4) Of The German Commercial Code (HGB) | 46 |
| Opportunities And Risks Of Future Development And Outlook | 52 |
| Consolidated Financial Statements | 60 |
| Consolidated Income Statement | 60 |
| Consolidated Statement of Comprehensive Income (Loss) | 60 |
| Consolidated Balance Sheet | 61 |
| Consolidated Cash Flow Statement | 62 |
| Consolidated Statement Of Changes In Equity | 63 |
| Notes To The Consolidated Financial Statements | 64 |
| Responsibility Statement | 109 |
| Independent Auditors' Report | 110 |
| Further Information | 112 |
The HiRes Video Company
| Fiscal Year (July 1 to June 30) | 2009/10 | 2008/09 | Delta % |
|---|---|---|---|
| Financial performance | EUR '000s | EUR '000s | |
| Total Output | 54,774 | 46,380 | + 18.1 |
| Revenue | 53,844 | 44,898 | + 19.9 |
| Thereof outside of Germany (in %) | 73.0 | 68.4 | |
| EBITDA | 14,057 | 12,041 | + 16.8 |
| EBITDA as % of total output | 25.7 | 26.0 | |
| EBIT | 12,147 | 10,609 | + 14.5 |
| EBIT as % of total output | 22.2 | 22.9 | |
| Profit before tax | 11,738 | 10,461 | + 12.2 |
| Return on revenue in % before tax | 21.8 | 23.3 | |
| Profit for the year | 8,361 | 7,538 | + 10.9 |
| Cash flow from operating activities | 9,832 | 7,564 | + 30.0 |
| Financial position | June 30, 2010 June 30, 2009 | ||
| Equity | 29,283 | 25,306 | + 15.7 |
| Equity-to-assets ratio in % | 62.4 | 61.1 | |
| Total assets | 46,936 | 41,402 | + 13.4 |
| Return on equity in % (1) | 30.6 | 33.3 | |
| Non-current assets | 19,598 | 17,369 | + 12.8 |
| Current assets | 27,339 | 24,034 | + 13.8 |
| Thereof cash and cash equivalents | 7,312 | 10,142 | - 27.9 |
| Employees | |||
| Number of employees (Reporting date) | 250(2) | 204(2) | + 22.5 |
| Revenue per employee | 267(3) | 245(4) | |
| EBIT per employee | 60(3) | 58(4) | |
| Key figures per share (in €) | |||
| Earnings per share (EPS) | 1.89 | 1.70 | + 0.19 |
| Dividend | 1.00(5) | 1.00 | + 0.0 |
| Cash flow as per DVFA/SG(6) | 2.33 | 2.02 | + 15.3 |
1) Based on an average Equity for the fiscal year.
2) Including trainees and temporary staff, 2 (prior year: 3) members of the Management Board; by headcount
3) Based on an average of 202 employees.
4) Based on an average of 183 employees
5) Proposal
6) Based on an average of 4.424m shares.
Total Output € 54.8m (+18.1%)
Revenue € 53.8m (+19.9%)
| July 2009: | Conversion of the DualDome (D24) product series to the new P3 processor platform. |
|---|---|
| : | The 10th anniversary of the MOBOTIX AG. |
| August 2009: | Successful product launch of the new Mx2wire media converter – converting a two wire cable to a network connection including power supply. |
| November 2009: | MOBOTIX reports on the continuation of successful business development in the first quarter – a further sales increase compared to the last year's quarter. |
| December 2009: | Conversion of the Allround (M24) product series to the new P3 processor platform. |
| January 2010: | Extension of the Allround (M24) product series with the hemispheric L11 lens (Fisheye) including 180° aperture angle. |
| February 2010: | MOBOTIX reports half-year figures with a continuos increase in sales despite the unchanged difficult economic environment. |
| March 2010: | The successful Q24 camera series enhanced with a special night version. |
| April 2010: | A successful trade fair appearance at the "Light+Building" with the presentation of the new IP video door station with its hemispheric camera, keypad and info module. |
| May 2010: | MOBOTIX reports its nine-month figures with a corporate growth just shy of 30%, and its export ratio climbing to 77%. |
| June 2010: | Development of the video management software MxEasy for the IP video door station. |
Prime Standard since March 31, 2008
As a publicly traded company, MOBOTIX AG sees itself as a software company with an in-house hardware development for digital, high-resolution and network-based videosecurity solutions.
Whether it is embassies, airports, gas-stations, highways or private homes, MOBOTIX video systems are found world-wide with over onehundred thousand units in operation on every continent. In addition to the actual IP video camera with megapixel resolution, MOBOTIX also produces interface components and video management software for operating entire security solutions. The system concept – a distinctive software solution and decentralized camera systems – significantly distinguishes MOBOTIX from its competitors with MOBOTIX first having made high-resolution, hemispheric systems cost-efficient. With over 250 employees, and a virtual 70% export share to date, MOBOTIX has attained a 8% global market share.
MOBOTIX has designed a decentralized system architecture that allows images to be analyzed in the camera, instead of a central PC.
Thus, the cameras detect movements in the image independently, store them in a database, and report the results via eMail or VoIP phone calls. This decentralized structure
HiRes Video Innovations
relieves the network, allows the central video management to make higher image rates possible and reduces the number of storage systems for recording high-resolution video sequences many times over.
The hemispheric camera technology developed at MOBOTIX permits the recording of an entire room from the ceiling or a wall – independent of the selected live image detail – using a single camera, so that other room areas can be viewed later during a search-analysis phase. Details of the hemispheric live image, resembling a fish-eye, are already transformed in the camera in such a way that the users believe they are using a panning camera.
The powerful innovative strength of MOBOTIX has enabled itself to be the first to introduce nearly all significant innovations in the IP camera sector market in the last ten years. For this reason, MOBOTIX is seen as the industry's technology leader. With growth rates at around 50%, MOBOTIX has continued to rapidly gain global market share since 1999.
www.mobotix.com
The German company MOBOTIX AG is known as the leading pioneer in network camera technology since its founding in 1999, and its decentralized concept has made high-resolution video systems cost efficient, Whether in embassies, airports, railway stations, ports, gas stations, hotels or on highways – over hundred thousand MOBOTIX video systems have been in operation on every continent for years.
In a short time, MOBOTIX has gained the second place in Europe and the fourth place worldwide in terms of market share. MOBOTIX has been producing solely megapixel cameras for years and, in this area, ranks as global market leader in high-resolution video systems.
The higher the resolution, the more accurate the detail in the image. With the old analog technology, a live image has no more than 0.4
megapixels and a recorded image generally 0.1 megapixels (CIF). One MOBOTIX camera with 3.1 megapixels, on the contrary, records around 30 times more detail. As a result, larger image areas with up to 360° allround views are possible, thus reducing the number of cameras needed and therefore the costs. For example, four lanes of a gas station can be recorded with one MOBOTIX camera instead of four conventional cameras.
Usually cameras only supply the images while the processing and recording is done later on a central PC using video management software. This traditional centralised structure has many limitations, since it requires a high network bandwidth and the PC processing power is not enough for several cameras. An HDTV MPEG4 film already puts considerable strain on a PC, how can it be expected to process dozens of high-resolution live cameras? Traditional centralized systems are therefore less suitable and unprofitable than high-resolution systems due to the high number of PCs needed.
MOBOTIX has redefined video. Whether on the Internet, in traffic management, building surveillance or banking environment, the MOBOTIX camera is connected to the network like a printer and live and recorded images can then be retrieved from any PC without installing any software.
The HiRes Video Company
Unlike with other systems, with the decentralized MOBOTIX concept a high-speed computer and, if requested, digital memory (SD card) is built into every camera for long-term recording. The PC now serves purely for viewing, not for analysis or recording. As a result, MOBOTIX cameras can record in response to an event even without the PC being switched on and digitally store the videos with sound.
MOBOTIX video solutions therefore require significantly:
therefore do not have to be constantly transported for analysis.
MOBOTIX cameras have no mechanical motors for lenses or for movement. Without any moving parts, they are therefore so robust that maintenance is reduced to a minimum. The unique temperature range from -30 to +60 °C (-22 to +140 °F) is achieved without heating or fan at only 3 watts. Since no PC hard disk is required for recording, there are no parts that wear out in the entire video system.
There are no software and licensing costs with MOBOTIX, because the software is always supplied with the camera; for an unlimited number of cameras and users. The software package supplied with the camera also includes professional control room software, like that used in football stadiums for example. Updates are supplied free of charge on the website. The system price for a weatherproof camera including lens, query software and day-to-day recording on the MicroSD card is under € 1,000.
The networking of cameras incl. power supply is encoded and occurs via a normal computer network and not via video cable. This has the advantage of connecting from anywhere in the world with glass, copper or even wireless access using affordable standard IT technology components.
The Vatican Apostolic Library holdings are amongst the most precious in the world. The origins of today's collection date back to 1447. The library's inventory consists of more than two million books and manuscripts. To safeguard these unique documents from misappropriation, 78 MOBOTIX systems, including several hemispheric cameras were installed. To protect the priceless art and literary collections, the highest quality of standards were the utmost important
factor in selecting a video surveillance system; this meant that crystal-clear, high-resolution images of the events in the rooms of the library were just as essential as the absolute
reliability and failure-resistant cameras used. An essential decision factor in favor of MOBOTIX was the possibility of guaranteeing the absolute safety of the folios, manuscripts, maps, etc. through the use of RFID technology. Should an attempt be made to remove one of the exhibit exemplars from the library without authorization – for example, the interaction between the RFID system and the MOBOTIX video security system would be immediately recognize the piece, and instantaneously trigger an alarm.
Located at just about one hour's drive from Berlin by car, the Tropical Islands Resort – the world's largest, self-sustaining, indoor tropical paradise, has been created on a 66,000 square meter interior area. A total of 13 MOBOTIX cameras offer a nice overview of the "South Sea" and the tropical village. However, the main reason for the installation was not to convey a "vacation feeling", but instead to satisfy the government requirements of various agencies and fulfill corporate guidelines for the monitoring of "hot spots". The MOBOTIX cameras enable the security staff to view wherever it may be necessary to record images, for example, the merchandising area, and cash-offices. MOBOTIX technology also safeguards the delivery doors, the access to the outdoor areas, as well as the server rooms.
The simple number plate recognition by the cameras makes it easy to gather statistical data to determine the regions from which the guests arrive, for example.
Airbus S.A.S., Commerzbank AG, Daimler AG, Deutsche Bahn Station & Service AG, Fraport AG, EON Wasserkraft, Le Méridien Parkhotel Frankfurt, Lübecker Hafen-Gesellschaft mbH, MAN Logistics, Max Planck Institute for Chemical Ecology, Schenker GmbH, Skoda Auto Deutschland GmbH, etc.
The HiRes Video Company
The harbor in Lavagna is one of the largest in the entire Mediterranean. Its 1,600 berths make it a destination for ships and yachts from all over the world. The requirement to integrate the harbor as part of the city while safeguarding the boats against theft and vandalism without limitations was not an easy task. However, 64 DualDome cameras, 3 Allround cameras and 12 hemispheric cameras from MOBOTIX provide an overview of the entire harbor area. In addition to image quality, the weather-resistant robust housings and the wide operating temperature range from -30 to +60 °C are the most important decision-making criteria in favor of the MOBOTIX solution. Personnel from the security staff and law enforcement authorities are the only ones permitted to have viewing access to the network cameras. The number of on-board thefts has been significantly reduced since the installation. Moreover, the video recording allowed four perpetrators to be identified and handed over to police authorities for unlawful appropriation.
The Donbass Arena is the first East European stadium built to meet UEFA regulations as an elite stadium, and has been selected as the main venue for the European Championships in 2012. Over 50,000 spectators can find seats at the immense arena. Not only are sport events well accommodated, but large venues, like concerts, have access to 53 fast-food outlets, 3 restaurants, 4 bars, a lounge bar, a Fan-Café, a fitness studio, the FC Schachtar Museum, and a merchandising shop. 528 MOBOTIX cameras
keep everything in sight, both inside, and outside the arena on its perimeter. No extra software was required while all the necessary applications were available via the camera, and
the license-free, professional video-management system, MxControlCenter. "We selected MOBOTIX cameras for a number of convincing reasons – the picture quality, the zoom on trouble-makers, and detailed image captures that I could immediately send to the police for identification" explained Sergey Burgula, Head of Security at Donbass Arena. "Ultimately, we want our guests to feel safe and enjoy their stay. That's why we chose the most advanced security technology" said Olexandr Atamanenko, the Stadium Manager.
Abu Dhabi Airport (United Arab Emirates), Bahrain Defense Hospital (Bahrain), EURO 2012 Soccer Stadium (Ukraine), Hudson River Park (New York), Italian Financial Services Authority (Milano), Republic Polytechnic (Singapore), Orange Mobile (Romania), Vatican Apostolic Library (Vatican City), etc.
The primary components of the hemispheric camera include a fisheye lens, a high-resolution image sensor and image correction software that is integrated into the camera. Using an ultra-wide angle fisheye lens, the camera captures a 180° hemispheric image of the room and projects it onto a high-resolution image sensor.
vPTZ 1 vPTZ 2 Hemispheric View Fisheye
When ceiling mounted, the image area of the hemispheric camera covers the entire room. The image in the hemisphere is convex, particularly near the image borders. These image sections are corrected for the viewer by the integrated distortion correction
software, allowing a view of the scene from the usual perspective.
The virtual PTZ feature allows you to enlarge or move image sections within the hemisphere, just like a PTZ camera yet, with MOBOTIX, this is achieved with no moving parts.
One or more image sections can be corrected for perspective in the hemispheric view, allowing you to monitor and record several
different areas of a room at the same time, something that a mechanical PTZ camera is not capable of doing.
Hemispheric cameras are extremely discreet because they manage their task with only one lens, which is generally focused on the entire room and not a specific object. MOBOTIX hemispheric cameras are without
mechanical moving parts and require low maintenance. In addition, they are silent when panning and focusing on a specific image area.
MOBOTIX ranks as the global market leader in high-resolution video systems with a market share of over 60%. Each camera includes a high-speed processor and digital memory (SD Card) for long-term recording (decentralized MOBOTIX concept).
The perspective of the hemispheric image can also be transformed into an ultra-wide angle panoramic view spanning 180° if
the camera is mounted on a wall, providing a wall-to-wall view of the room without
any blind spots. It offers a substantially better view of the scene, compared to other cameras, it also results in the need for fewer cameras overall. When ceiling mounted, one camera can also capture an entire room by two opposite panoramic views.
Using solutions featuring several individual cameras, moving objects will normally jump from one viewing area of a camera to another. This often produces a confusing situation for the viewer because objects may disappear from sight for a moment or even appear twice if the viewing areas overlap. This is not the case with hemispheric panoramic cameras. Objects remain in view at all times and the viewer can always keep good track of objects in the scene.
In contrast to a normal PTZ camera, which is always focused on one section of a room and only records that section, the virtual PTZ also allows you to pan to other areas at a later stage in the recording as the entire room can be recorded as a hemispheric image.
The Q24 enables a hemispheric 360° panorama view using only a single lens. One single camera can monitor all four corners of a room. The fisheye effect, which is typical for this lens, can be digitally compensated in the live image.
When it comes to future-proof video surveillance systems, it is not a matter of analog or digital but whether it is high-resolution or not. It is important to note that HiRes video only with decentralized network camera technology can be implemented at much lower cost than any other type of video surveillance system.
These days, video data is normally preprocessed and stored centrally on a PC with video management software or on a DVR. Video and audio streams from all installed cameras are directed to this central device. This system is comparable to a highway at rush hour: the more cameras there are, the faster a data jam on the PC or DVR occurs. This means that despite HiRes cameras, the data is generally not stored in high-resolution format.
MOBOTIX solves the PC storage bottleneck problem using a unique and yet amazingly effective method – through the camera itself. High-resolution video with lip synchronized sound is saved either remotely over the network or locally on flash memory devices (commercial MicroSD, SD or CF cards, USB memory).
Every single MOBOTIX camera can be configured to record internally or externally via the network. If necessary, a USB stick can be connected by cable directly to the camera, but on the other side of the wall, where it cannot be stolen.
The HiRes Video Company
Flash memory is a sophisticated form of semiconductor memory without mechanical moving parts and represents the storage medium of the future thanks to its reliability, ease of use and low cost.
MOBOTIX' own flash file system (MxFFS) prevents unauthorized persons from reading or transferring the internally stored data, even if the card is stolen.
The MOBOTIX system includes three important additional options that allow more data to be stored for a longer time:
By connecting external memory over the network (NAS), the system can be expanded without limitations even while it is running.
Long-term recording directly in the camera; the 32 GB provide space for about 180,000 single images (4 days at 30 frames/min.) or 2,000 one-minute video clips with sound. Old recordings can be overwritten automatically or deleted after a user-defined time.
USB MOBOTIX
MOBOTIX AG shares have been listed on the stock exchange since October 10, 2007 and on the Prime Standard segment of "Deutsche Börse AG" since March 31, 2008.
In the course of the year 2009 the global economy showed first signs of a slow recovery supported by massive economic stimulus plans of the leading industrialized nations. The prospects on a persistent economic recovery led after initial adjustments to advancing stock markets in the course of the first six months of 2010.
However, the emergence of the "Greece crisis" as well as the downgrading of Spain's and Portugal's rating by Standard & Poor's unsettled the markets again. Despite the prospects of a billion-euro aid package for Greece, fears of possible rejections of the financial markets and the strained budgets of several Euro-countries impacted the share prices negatively.
Spain's rating downgrade by Fitch put pressure on the Euro hence further burdening the stock markets. The €750 billion rescue package for the Euro by EU and IWF only led to a short-term stabilization of the capital markets. Discussions on the introduction of a financial transaction tax, as well as forbidding uncovered shortselling of government bonds, CDS and selected shares in Germany further unsettled investors.
The MOBOTIX share has proven to be an extremely lucrative investment since its IPO in October 2007. Measured by the performance of the issuing price, it has been one of the most successful IPO's of the last years, providing one of the highest increases in share value for the initial investors. An initial investor (IPO date 10/10/2007) realized an increased value of 103.2%. In contrast, all relevant indices posted considerable losses during the same period. The DAX, for example, lost almost 25.3% of its value as well as the technologyoriented TecDAX, which lost 27.0% during the same period. The German Entrepreneurial Index (GEX), on which the MOBOTIX shares have been listed since June 23, 2008, also showed significantly poorer performance since MOBOTIX AG's IPO, and lost 33.3%. The GEX tracks owner-managed German companies within the Prime Standard segment of the Frankfurt Stock Exchange – companies listed on Prime Standard segment may be listed for a
maximum of ten years and must be managed by their owners. To qualify as owner-managed, members of the management and supervisory boards, or their families must hold between 25% and 75% of the voting shares. Despite the global crisis mood, the MOBOTIX share outperformed the German DAX index as well as other German indices in the last fiscal year 2009/10. In the last fiscal year the MOBOTIX share reached its year high of EUR 31.70 on January 18, 2010, while its year's low of EUR 21.40 was reached on July 06, 2009/July 07, 2009. The closing price on the reporting date of June 30, 2010 was EUR 30.00. Accordingly, the MOBOTIX share won 43.2% of its value (including dividend) in the year under review.
Performance of the MOBOTIX share since IPO and in the year under review (12 months)
| MOBOTIX share | 103.2% | 43.2% |
|---|---|---|
| DAX | -25.3% | 24.1% |
| TecDAX | -27.0% | 17.2% |
| GEX | -33.3% | 24.6% |
Reporting Date 10.10.2007
MOBOTIX AG pursues a growth-oriented dividend policy that corresponds to corporate growth and the respective business situation. For fiscal year 2009/10, the Management Board proposes to distribute a dividend of €1.00 per share (previous year €1.00) to the annual general meeting.
At the end of the fiscal year 2009/10, MOBOTIX AG continues to have a very stable shareholder base that supports the long-term and sustained development of the Company. The shareholder structure of MOBOTIX AG is as follows:
Due to an internal restructuring and the associated transfer of 2,218,134 shares in MOBOTIX AG from Dr. Ralf Hinkel to the Dr. Ralf Hinkel Holding GmbH, Winnweiler in line with a formation by a non-cash capital contribution, the Dr. Ralf Hinkel Holding GmbH now holds 50.14% of the shares. Andreas Putsch holds 9.91% and Klaus Borchers 6.42%. The free float as defined by the Deutsche Börse Group is 33.53%.
Since MOBOTIX AG's IPO, the Management Board has regularly engaged in dialogue with investors, analysts and financial journalists. Special emphasis is placed on the continuous flow of information. The company fulfills the follow-up obligations of the Prime Standard segment of the Deutsche Börse Group.
In the last fiscal year 2009/10, MOBOTIX AG participated in various conferences, e.g. the German Equity Forum of the Deutsche Börse Group in November 2009 in Frankfurt. The response by investors and analysts in the financial community was extremely positive.
On September 30, 2009, MOBOTIX' annual general meeting was held at the company's headquarter. With approximately 139 shareholders, 81.19% of the authorized capital was represented. The constructive and interesting
questions as well as the very high agreement of over 99.74% for all proposals on the agenda clearly reflected the shareholders confidence in the company.
Since the fiscal year 2008/09, Hauck & Aufhäuser and GBC have now taken up coverage of MOBOTIX AG, in addition to the DZ Bank and the Equinet AG. Accordingly, market tracking and evaluation of the company is now assessed by four analysts continuously.
| High (January 18, 2010) | 31.70 EUR |
|---|---|
| Low (July 06, 2010/July 07, 2010) | 21.40 EUR |
| Closing price* | 30.00 EUR |
| Market capitalization* | 132.70m EUR |
| *as of reporting date June 30, 2010 |
PRIME STANDARD PRIME STANDARD
| WKN | 521830 |
|---|---|
| ISIN | DE0005218309 |
| Ticker symbol | MBQ |
| Bloomberg | MBQ:GR |
| Reuters Instrument Code | MBQGn.DE |
| Stock exchange segment | Regulated Market (Prime Standard) |
| Prime segment | Technology |
| Industry Group | Electronic Components & Hardware |
| Stock exchange | Frankfurt |
| Share capital | 4,423,814 EUR |
| No. of shares outstanding | 4,423,814 |
| Indexes | GEX, CDAX, Technology All Share, Prime All Share |
| Analyst Coverage | DZ Bank, Equinet AG, Hauck & Aufhäuser and GBC |
Despite the difficult environment especially in the first half of the year, MOBOTIX AG has continued to grow at an impressive rate for the fiscal year 2009/10. Important milestones were achieved in the development of new products and entering international markets. These included the development of major foreign markets in the USA and the Far East, the expansion of business in the hemispheric camera sector, and the presentation of the new door station at the Light & Building Trade Fair in preparation for its imminent market launch. Accordingly, the Supervisory Board was called upon in an advisory capacity to accompany Management in monitoring and auditing all activities for the past fiscal year with utmost diligence related to maintaining the legal and corporate responsibilities of the aforementioned expansion activities. The teamwork with the Management Board from the Supervisory Board's perspective was distinguished by close and trusted cooperation in all facets and interactions. We were involved directly and promptly in all decisions of a fundamental nature.
The Management Board met on a regular basis with the Supervisory Board to inform them extensively about the situation of the Company – in particular, the business trends, the status of financial and human resources, the ongoing and new investment projects, and issues relating to the corporate strategy. The Management Board also instructed the Supervisory Board on the most important key performance indicators outside of meetings. When necessary, the Supervisory Board approved resolutions proposed by the Management Board through teleconferences, or by means of circulation procedure preceded by thorough review and discussion. Throughout the year, the Supervisory Board confirmed the appropriateness of Management's activities. Transactions requiring approval were presented in a timely manner with sufficient opportunity to review the relevant information for subsequent resolutions. No conflicts of interest arose in this context on the Supervisory Board in fiscal year 2009/10.
The interim reports of the Management Board conveyed a fair presentation of the business and corresponded with the statements described in the 2009/10 financial reports. In addition, the Management Board
also informed the Supervisory Board about all important developments and pending decisions in regular and personal discussions between meetings.
For the year under review, the Supervisory Board did not exercise the option provided under § 111 (2) of the German Stock Corporation Act (AktG) to review the books and records of the Company, or appoint subject matter experts to perform special tasks. Thanks to detailed reporting on part of the Management Board, third-party expertise was unnecessary. The Supervisory Board has yet to form any committees to date since such committees would not contribute to increased efficiency due to the current size and structure of the Company.
The Supervisory Board convened in a total of six meetings in person and teleconferences in fiscal year 2009/10. When necessary the Supervisory Board occasionally met without the presence of the Management Board. All members were present at all meetings. The focus of discussions was primarily on the continued implementation of the growth strategy, the corporate planning, the Group's position, and the development of sales and earnings. In the meetings in the first half of the fiscal year on July 23, 2009, August 18, 2009 (two meetings), and November 11, 2009, the Supervisory Board focused on the approval of the annual plan for 2009/10, the key strategic and operational goals for fiscal year 2009/10, the audit and approval of the annual financial statements and consolidated financial statements for 2008/09.
Of crucial significance, through out the year, and especially at the meetings in the second half of the fiscal year on March 17, 2010 and June 14, 2010, were the strategic decisions, the continued development of the subsidiaries, and the expansion of the production facility in Langmeil.
The Board deliberated intensively on the status of product development, and on the lauchplans for new product innovations.
In the context of difficult challenges facing the Company's key markets, the Supervisory Board has been examining finance and liquidity planning, and on the whole the Company's response to the changing economic environment. The development of the subsidiary in the USA was continuously monitored with measures adopted for its
www.mobotix.com
future development. Planning of property use, upcoming investment projects, continuous expansion of growth capacity, and mediumterm planning along with planning related to the corresponding number of employees are just a few examples of other issues handled by the Supervisory Board. Another key area of deliberation was the updating of the risk management system.
In accordance with the resolution adopted at the regular shareholders' meeting in September 2009, the Supervisory Board appointed KPMG AG Wirtschaftsprüfungsgesellschaft, Saarbrücken office, as auditor of the individual financial statements of the parent company and the consolidated financial statements of the Group for fiscal year 2009/10. Prior to the appointment, a declaration of impartiality was obtained from the auditor and found to be unobjectionable. We defined risk management (especially for the USA), revenue recognition, and the evaluation of inventories and receivables as key audit topics in 2009/10.
The auditor reviewed the annual financial statements and the management report of MOBOTIX AG in accordance with German accounting principles (HGB) and the consolidated financial statements and group management report in accordance with IFRS for the period ending on June 30, 2010, and issued an unqualified auditor's certificate for each.
The accounting records provided by the Management Board for the financial statements were presented to the Supervisory Board for review. The Supervisory Board examined and discussed in detail: the individual and consolidated financial statements, the management reports for the parent company and the Group, the Management Board's proposal for the appropriation of profits, and the audit reports of the auditor. The auditor participated in these deliberations, was available for questions, and reported on important results of the audit.
Upon completion of its own review, the Supervisory Board confirmed the findings of the auditor and concluded that it had no objections. In its meeting on September 15, 2010, the Supervisory Board approved of the annual financial statements and consolidated financial statements of MOBOTIX AG prepared
The HiRes Video Company
by the Management Board. Accordingly, the annual financial statements have been adopted in accordance with § 172 of the German Stock Corporation Act.
Considering the outstanding results in fiscal year 2009/10 and the continuation of strong operational cash flow, the Supervisory Board concurs with the proposal of the Management Board to again distribute a dividend of EUR 1.00 per share, retain the remaining net profit from 2009/10, and submit an appropriate proposal for the appropriation of profits.
The Supervisory Board would like to thank all employees and management for the work they performed in fiscal year 2009/10. The fact that MOBOTIX AG was able to achieve high profitability accompanied by an exceptionally fast growth rate deserves our full recognition. We would like to wish management and our employees the best of success for the challenges we will share in the year ahead. Together, we have arrived at an excellent starting point to set lasting trends in high resolution surveillance technology on the strength of our leading market position. This key technology will also give us the opportunity to profit from additional potentials in fields such as
building automation. We are confident that our team will continue to take advantage of these possibilities and achieve enduring economic success in the future as well.
We also wish to sincerely thank our customers, partners, and shareholders for their confidence in MOBOTIX AG.
Winnweiler-Langmeil, September 15, 2010
On behalf of the Supervisory Board
Yours sincerely
Dr. Thomas Hoch
The Management Board and Supervisory Board of MOBOTIX AG are committed to ensuring that the Company is managed competently and responsibly. The guidelines laid down in the German Corporate Governance Code (Deutscher Corporate Governance Kodex, DCGK) constitute key parameters to our policy on corporate governance. Our actions are consequently guided by the standards of competent and responsible corporate management, and we ensure that our corporate governance policies are based on the principles of transparency and value creation.
Through the Company's public offering listed on the regulated market (Prime Standard) of the Frankfurt Stock Exchange on March 31, 2008, the Management Board and Supervisory Board of MOBOTIX AG are obligated to issue an annual Declaration of Compliance pursuant to Section 161 of the German Stock Corporation Act (Aktiengesetz, AktG) in which they demonstrate to what extent they have complied with, or intend to comply with, the recommendations made by the Government Commission for German Corporate Governance Code, which have been published by the German Federal Ministry of Justice in the official section of the electronic version of the German Federal Gazette, and which recommendations they have not applied or do not intend to apply. The Management Board and Supervisory Board of MOBOTIX AG therefore issued their annual Declaration of Compliance pursuant to Section 161 AktG on July 16, 2010; this declaration has also been published and made permanently available on the MOBOTIX AG website in the "Investors" section.
Furthermore, the Management Board and Supervisory Board have compiled a corporate governance report pursuant to Item 3.10 DCGK that includes the remuneration report pursuant to Item 4.2.5 DCGK. The Corporate Governance Report also contains the information required from the Corporate Governance Statement pursuant to Section 289a (2) Nos. 2 and 3 of the German Commercial Code (HGB).
The shareholders exercise their voting rights at the annual general meeting. Voting takes place on the basis of one share, one vote. The annual general meeting elects the members of the Supervisory Board and votes on whether to formally approve the actions of the Management Board and Supervisory Board. It votes on the appropriation of the Company's profits, on capital transactions, on the approval of intercompany agreements, on the remuneration paid to the Supervisory Board, and on amendments to the Company's Articles of Incorpora-
tion. The Company holds an annual general meeting, at which the Management Board and Supervisory Board report to shareholders on the previous financial year. The German Stock Corporation Act allows an extraordinary general meeting to be convened in exceptional cases.
In order to make it easier for shareholders to exercise their voting rights in accordance with the provisions of the Code, the Company offers shareholders that are either unable, or do not wish to exercise their voting rights in person, the option to have their vote cast at the annual general meeting by a proxy who votes in accordance with their instructions.
The Management Board of MOBOTIX AG currently consists of two members (Dr. Ralf Hinkel, Lutz Coelen). The co-founder of the Company, Mr. Klaus Borchers, was appointed as an interim member to the Management Board from July 16 to October 16, 2009 – the time span until the annual general meeting
during which the possibility of having only two members on the Management Board was created. The Management Board's responsibility is to lead and manage the Company.
The Management Board's main responsibility is principally to lead the company; this includes management of the MOBOTIX Group, the determination of the Company's strategy, and the implementation and monitoring of a risk management system. The Management Board is obligated to act in the Company's best interests, and to ensure that the value of the Company grows over time. The Management Board consults the Supervisory Board on the Company's strategy and provides it with regular updates on the implementation of this strategy as part of a continuous dialog. All members of the Management Board are involved in the Company's day-to-day business and bear operational responsibility.
In accordance with the DCGK, the Company's Articles of Incorporation stipulate certain specified types of material transactions conducted by the Management Board within the Company to be approved by the Supervisory Board.
The members of the Management Board have signed comprehensive non-competition agreements with MOBOTIX AG that apply for the Dr. Ralf Hinkel duration of their employment at the Company. Lutz Coelen
They are obligated to act on behalf of the Company in the Company's best interests. As a result, when making decisions, no member of the Management Board may pursue personal interests or exploit business opportunities for his or her personal gain that are due to the Company; members will immediately disclose any conflicts of interest to the Supervisory Board, and notify the other members of the Management Board to this fact. All transactions (business dealings and operations alike) between the Company – on the one hand, and the Management Board members and/ or related parties or related-party transactions – on the other, must comply to the standards applicable practices in the sector.
Furthermore, any secondary employment taken on by members of the Management Board – especially as members of the board or directorships to other companies - must first be approved by the Supervisory Board.
Contrary to the recommendations made by the DCGK, the Company took out a Directors' and Officers' (D&O) Liability Insurance policy without any deductible for the Management Board and Supervisory Board during the past fiscal year. After the introduction of the statutory regulation regarding a minimum deductible, the policy was taken out for the Management Board with the legally-required minimum deductible as of the current fiscal year.
Also contrary to the recommendations made by the DCGK, the Company's Articles of Incorporation do not impose any age limit on the members of the Management Board.
The Supervisory Board oversees the Management Board's leadership of the Company and provides Management with advice and support. The Supervisory Board is also responsible for amongst other things the appointment of members to the Management Board, the determination of remuneration paid to the Management Board, and the examination of the Company's annual financial statements. Supervisory Board consists of three members (Dr. Thomas Hoch, Professor Dr. Rainer Gerten and Ulrich Putsch). The Company is not subject to co-determination legislation.
The Company's Articles of Incorporation state that the Supervisory Board is allowed to form committees from its members. Yet, the Company currently deviates from the DCGK's recommendation for the Supervisory Board to form suitably qualified committees as well as an audit committee from amongst its members while the Supervisory Board currently consists of
only three members and, in the opinion of the Supervisory Board, it would be inappropriate at this point of time to form committees given the specific circumstances and the size of the Company – because all members of the Supervisory Board are expected to be engaged and occupied with all Company issues.
Furthermore, the Articles of Incorporation state that Dr. Ralf Hinkel - provided that he himself and/or a company, either controlled by him (Section 17 AktG), or under his management (Section 18 AktG) that in total holds more than 25% of the Company's shares - has the nontransferable right to appoint one individual as member of the Company's Supervisory Board. He can only exercise this right of appointment vis-à-vis the Company by issuing a personally signed declaration to both, the Management Board and the chairman of the Supervisory Board that states the name of the person to be appointed to the Supervisory Board. The newly appointed member thus immediately replaces an already similarly appointed Supervisory Board member who therewith will step down from his/her post. If no new member is dispatched to the Supervisory Board at the time of the exertion of appointments, then the new appointee will first join the Supervisory Board when the previously selected member resigns from his / her post, or is relieved of office during the annual general meeting, or whose term of office as a member has expired.
The term of appointment of the current Supervisory Board members ends at the end of the annual general meeting that votes on whether to formally approve their actions for the fourth financial year after the beginning of their term of appointment.
The work performed by the Supervisory Board is coordinated by its chairman or, if he or she is hindered, by a deputy. The relevant responsibilities and procedures - including the powers vested in the Supervisory Board chairman and his or her deputy as well as the rules governing conflicts of interest - are laid down in the Articles of Incorporation. The rules governing conflicts of interest and efficiency checks are laid down in the Supervisory Board's rules of procedure, which are due to be drafted in the current financial year.
The aim, in accordance with the Corporate Governance Code, for appointments to the Supervisory Board is to ensure a balanced representation in terms of experience, knowledge, age and gender. In the opinion of the Company's Management Board and Supervisory Board, this goal has been reached, also when taking into account the size of the board.
The members of the Supervisory Board are independent of the Management Board and maintain no business relations with the Company that might influence their independent judgment. There have been and continue to be no consultancy agreements or other contracts for work and services between Supervisory Board members and the Company. If, in exceptional cases, a member of the Supervisory Board performs a function for the Company other than that of Supervisory Board member, this must be approved by the Supervisory Board. The Supervisory Board's report to the annual general meeting provides information on any conflicts of interest that have arisen during the financial year concerned.
Contrary to the recommendations made by the DCGK, the Company's Articles of Incorporation do not impose an age limit on the members of the Supervisory Board.
The Management Board and Supervisory Board of MOBOTIX AG work continuously and very closely with each other in the interests of a sound and responsible corporate governance policy. They regularly consult each other on a timely basis in those areas recommended by the Code as well as in other respects. The Management Board uses an established procedure to report to the Supervisory Board on the Company's general situation, including its risk position.
Members of the Management Board usually attend the regular meetings of the Supervisory Board, which are held at least once every quarter. In certain cases, however, the Supervisory Board meets alone, as suggested by the Code. Extraordinary meetings and teleconferences are also held if required.
The following members of the Management Board and Supervisory Board held more than 3% of the shares issued by the Company (as of June 30, 2010):
| Management Board | Number of shares |
(%) |
|---|---|---|
| Dr. Ralf Hinkel Holding GmbH |
2,218,134 | 50.14 |
| Klaus Borchers* | 283,960 | 6.42 |
*(Member of the Management Board July 16, 2009 – October 16, 2009)
Shares were also held by Lutz Coelen of the Management Board (16,000 shares, or 0.36%). The Management Board held a total of 2,518,094 shares in MOBOTIX AG, which was 56.92 percent of the Company's share capital.
The members of the Supervisory Board who held shares in the Company were Dr. Thomas Hoch (1,000 shares, or 0.02%) and Professor
Dr. Rainer Gerten (20,800 shares, or 0.47%). The Supervisory Board therefore held a total of 0.49% of the shares in MOBOTIX AG as at June 30, 2010. Both boards together therefore held a total of 2,539,894 shares in MOBOTIX AG, or 57.41% of the Company's share capital, as at June 30, 2010.
During the period from July 1, 2009 to June 30, 2010, the following reportable purchases or sales of shares were effected by the members of the Management Board or Supervisory Board.
| Date of | Type of | Stock | Number of | Total | |||
|---|---|---|---|---|---|---|---|
| Name | Function | Transaction | Transaction | exchange | shares | Price € | Volume € |
| Lutz Coelen | CFO/CSO August 20, 2009 | Purchase | Xetra | 500 | 26.10 | 13,050 | |
| August 24, 2009 | Purchase | Xetra | 1,300 | 29.44 | 38,266 | ||
| Dr. Ralf Hinkel | CEO | May 31, 2010 | Disposal | Off-market | 2,218,134 | n/a | - |
| Dr. Ralf Hinkel Holding GmbH* |
May 31, 2010 | Addition | Off-market | 2,218,134 | n/a | - |
*The shares of Dr. Ralf Hinkel were transferred to the Dr. Ralf Hinkel Holding GmbH, Winnweiler, whose sole 100% shareholder is Dr. Ralf Hinkel, in line with a formation by a non-cash capital contribution. On July 29, 2010, the German Federal Financial Supervisory Authority (BaFin) granted an exemption from making a mandatory tender offer according to §37 of the Securities Acquisitions and Takeover Act (WpÜG).
The Remuneration Report summarizes the principles applied for determining the remuneration of the Management Board of MOBOTIX AG, and explains both, the amount and the structure of the remuneration, paid to the Management Board. In addition, the Remuneration Report describes the principles applicable to, and the amount of, the remuneration of the Supervisory Board.
The remuneration paid to the members of the Management Board of MOBOTIX AG is set at an appropriate level by the Supervisory Board on the basis of an assessment of their performance, taking account of any remuneration received from other group companies. The main criteria used to assess the appropriateness of this remuneration are the responsibilities of the respective Management Board
member, his or her personal performance and the performance of the Management Board as well as the Company's financial position, its performance and its future prospects given its competitive environment.
The total remuneration paid to the members of the Management Board of MOBOTIX AG comprises monetary compensation and further entitlements that are listed below. Otherwise, there were no pension entitlements or entitlements in particular in the event of employment being terminated or any third-party payments or benefits that were either promised for work performed on the Management Board or were granted during the financial year.
The remuneration paid to the Management Board is reviewed on a regular basis and was last adjusted by a Supervisory Board resolution adopted on March 27, 2009.
This remuneration comprises fixed and variable components. The variable remuneration consists of a bonus of no more than 6% of the Company's net income for the year as defined by Section 275 of the German Commercial Code (HGB).
At present the Company does not offer monetary remuneration components of a speculative nature that provide long-term incentives, such as stock option plans, as recommended by the Code. It is being considered whether to adapt this in the future.
In addition, the members of the Management Board are given a luxury-class car commensurate with their position, which they may use for business and private travel. Furthermore, the Company has taken out accident insurance cover for occupational and day-to-day accidents as well as death for each member of the Management Board for the duration of their employment with the Company. The Company has also provided the members of the Management Board with D&O Insurance. A minimum deductible was introduced during the current fiscal year in accordance with statutory regulations. The Company has signed non-compete agreements with the members of the Management Board which apply for a period of one year after their employment contracts have expired. While this non-compete agreement is still in force, the Company is obliged to pay the respective Management Board member compensation amounting to 50% of the final remuneration paid under the terms of his or her employment contract.
Based on the resolution of the Annual General Meeting on October 6, 2008, we elect not to disclose the individual remuneration and other benefits granted to or received by the members of the Management Board in the single-entity and consolidated financial statements for the financial years 2008/09 until 2012/13, but not after October 6, 2013.
The table below shows the remuneration paid to the members of the Management Board in the 2009/10 financial year:
| EUR' 000s | Fixed* | Variable | Total |
|---|---|---|---|
| Management Board |
518 | 484 | 1,002 |
* Including benefits in kind
The remuneration of the members of the Management Board amounted to €1,002 thousand (2008/09: €1,281 thousand). This amount only comprises remuneration paid to Mr. Borchers proportional to his term as a member of the Management Board.
Each member of the Supervisory Board receives a fixed annual remuneration of €10,000 for his or her work, pursuant to Section 11 in the Articles of Incorporation. The chairman of the Supervisory Board receives twice this amount.
The Company has also taken out Directors' and Officers' (D&O) Liability Insurance for the members of the Supervisory Board at its own expense.
Contrary to the Code's recommendations, the members of the Supervisory Board of MOBOTIX AG do not currently receive any variable remuneration based on the Company's performance. However, variable remuneration is planned in future.
The table below shows the remuneration paid to the members of the Supervisory Board in the 2009/10 financial year:
| Supervisory Board | Total (fixed) EUR '000s |
|---|---|
| Dr. Thomas Hoch | 20 |
| Prof. Dr. Rainer Gerten | 10 |
| Ulrich Putsch | 10 |
| Total | 40 |
MOBOTIX AG attaches considerable importance to the timely and transparent disclosure of information to its relevant target groups.
MOBOTIX AG regularly informs shareholders, financial analysts, shareholder associations, the media and interested members of the public about the Company's situation and
material changes in its business. MOBOTIX notifies all shareholders and interested members of the public of all new facts at the same time that they are made available to financial analysts and institutional investors. MOBOTIX uses the internet as well as other communication channels to ensure that it provides timely information.
An overview of all material information published during the financial year concerned can be found on our website at www.mobotix.com.
way as soon as we have been notified of such changes pursuant to Section 21 of the German Securities Trading Act (Wertpapierhandelsgesetz, WpHG).
MOBOTIX AG prepares its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS). Its annual and quarterly reports inform shareholders and other interested parties about the Company's general situation. All reports are simultaneously made available to all interested parties on our website.
The Company has agreed with its auditors that the chairman of the Supervisory Board should be notified without delay of any grounds for exclusion or partiality arising during the audit unless they are immediately resolved.
Furthermore, the auditors must notify the Supervisory Board without delay of all findings and incidents of which they become aware in the course of the audit that are of significance for the remit of the Supervisory Board. The auditors must also notify the Supervisory Board or note accordingly in the audit report if, when conducting the audit, they become aware of facts that are incompatible with the Declaration of Compliance issued by the Management Board and Supervisory Board pursuant to Section 161 of the German Stock Corporation Act .
Section 161 of the German Stock Corporation Act (AktG) requires the Management Board and Supervisory Board to issue an annual declaration stating that the Company has complied with, or intends to comply with, the recommendations made by the German Government Commission on the German Corporate Governance Code, which have been published by the German Federal Ministry of Justice in the official section of the electronic version of the German Federal Gazette, and also stating which recommendations it has not applied or does not intend to apply. The following declaration refers to the Code version dated June 6, 2008 for the period until August 4, 2009 and to the version dated June 18, 2009 and published in the electronic version of the German Federal Gazette on August 5, 2009 for the period since August 5, 2009.
The Management Board and Supervisory Board of MOBOTIX AG hereby declare that the Company has complied with the recommendations made by the German Government Commission on the German Corporate Governance Code, with the following exceptions:
1. If the company takes out a Directors' and Officers' (D&O) Liability Insurance policy for the Management Board and Supervisory Board, a suitable deductible shall be agreed (Item 3.8 para. 2 of the German Corporate Governance Code).
In accordance with the legal provisions, the Company will comply with this recommendation with respect to the Management Board from the beginning of the fiscal year as of July 1, 2009 until June 30, 2010. However, no deductible has been agreed for the D&O insurance cover currently provided for the Supervisory Board, as it is not required by law. We believe that the agreement of a deductible for D&O insurance policies in the event of claims for damages does not encourage responsible behavior on the part of company directors. Moreover, the directors' legal responsibility for criminal acts involving gross negligence or breach of trust is not affected by the terms and conditions of any D&O insurance policy.
2. By-laws shall govern the work of the Management Board, in particular the allocation of duties among individual Management Board members, matters reserved for the Management Board as a whole, and the required majority for Management Board resolutions (unanimity or resolution by majority vote) (Item 4.2.1 para. 1 sentence 2 of the German Corporate Governance Code).
The Company does not comply with the recommendation. Although there is some form of allocation of duties between the Management Board, based on the relevant plan, there are, at the moment, no by-laws for the Management Board since the Company's articles of incorporation contain very comprehensive rules governing the work of the Management Board (including a catalogue of measures taken by the Management Board that require the consent of the Supervisory Board), and it has not yet been deemed necessary to introduce such by-laws. However, to comply with the recommendations of the Code, we intend to introduce corresponding by-laws in the near future.
3. The Supervisory Board must ensure that the variable compensation elements are in general based on a multi-year assessment. Both positive and negative developments shall be taken into account when determining
variable compensation components (Item 4.2.3 para. 2 sentence 3 and 4 of the German Corporate Governance Code).
Item 4.2.3 para. 2 of the German Corporate Governance Code reflects the legal situation since the Act on the Appropriateness of Management Board Compensation of July 31, 2009 went into effect. Accordingly, the Supervisory Board must ensure that the variable compensation elements are, in general, based on a multi-year assessment, and recommends in the fourth sentence that both positive and negative developments shall be taken into account when determining variable compensation components. As of the date of issue to this Declaration of Compliance, the existing employment contracts of the Management Board neither prescribe a multi-year assessment nor (later) consideration of positive and negative developments for variable compensation components already granted. The present deviation from the Code is due to new legal precedents for the provisioning of variable compensation components, where only future changes to existing contracts of the variable Management Board compensation are relevant, and not previously existing contracts of the Management Board. In the next regular arbitration round concerning the Management Board compensation in the event
of a change in the compensation structure, the Supervisory Board will, of course, comply with the new legal provisions for the determination of variable compensation components, and in doing so, decide if the Code recommendation for variable compensation components under discussion will be complied with in the future.
4. An age limit for members of the Management Board shall be specified (Item 5.1.2. para. 2 sentence 3 of the German Corporate Governance Code).
The Company does not comply with the recommendation. The Management Board and the Supervisory Board believe that a general age limit would unnecessarily restrict the search for suitably qualified and experienced candidates for the Management Board. Age is not a suitable criterion for excluding such candidates.
5. The Supervisory Board shall issue Terms of Reference (Item 5.1.3 of the German Corporate Governance Code).
The Company does not comply with the recommendation. At the moment, there are no terms of reference for the Supervisory Board as the Company's articles of incorporation contain very comprehensive rules governing the work of the Supervisory Board, and it has not yet been deemed necessary to introduce such
terms of reference. However, to comply with the recommendations of the Code, we intend to introduce corresponding terms of reference in the near future.
6. The Chairman of the Supervisory Board shall also chair the committees that handle contracts with members of the Management Board and prepare the Supervisory Board meetings (Item 5.2. para. 2 sentence 1 of the Corporate Governance Code).
The Company does not comply with the recommendation. Because the Supervisory Board of MOBOTIX AG consists of only three members, the Supervisory Board believes that the formation of suitably qualified committees would currently be inappropriate given the specific circumstances and the size of the Company.
7. Depending on the specifics of the enterprise and the number of its members, the Supervisory Board shall form committees with sufficient expertise. They serve to increase the efficiency of the Supervisory Board's work and the handling of complex issues. The respective committee chairmen report regularly to the Supervisory Board on the work of the committees (Item 5.3.1 of the German Corporate Governance Code).
The Company does not comply with the recommendation. Because the Supervisory Board of MOBOTIX AG consists of only three members, the Supervisory Board believes that the formation of suitably qualified committees would currently be inappropriate given the specific circumstances and the size of the Company because all members of the Supervisory Board are supposed to deal with all issues.
8. The Supervisory Board shall set up an Audit Committee which, in particular, handles issues of accounting, risk management and compliance, the necessary independence required of the auditor, the issuing of the audit mandate to the auditor, the determination of auditing focal points and the fee agreement. The chairman of the Audit Committee shall have specialist knowledge and experience in the application of accounting principles and internal control processes (Item 5.3.2 of the German Corporate Governance Code).
The Company does not comply with the recommendation. Because the Supervisory Board of MOBOTIX AG consists of only three members, the formation of suitably qualified committees would currently be inappropriate given the specific circumstances and the size of the Company. This also applies for an audit committee.
9. The Supervisory Board shall form a nomination committee composed exclusively of share-
holder representatives which proposes suitable candidates to the Supervisory Board for recommendation to the General Meeting (Item 5.3.3 of the German Corporate Governance Code).
The Company does not comply with the recommendation. Because the Supervisory Board of MOBOTIX AG consists of only three members, the formation of suitably qualified committees would currently be inappropriate given the specific circumstances and the size of the Company.
10.An age limit to be specified for the members of the Supervisory Board shall be taken into account (Item 5.4.1 sentence 2 of the German Corporate Governance Code).
The Company does not comply with the recommendation. As with the issue of an age limit for members of the Management Board, we believe the most important criteria for Supervisory Board candidates to be qualifications and experience. Moreover, an age limit would, in our opinion, inappropriately restrict the annual general meeting's right to appoint the members of the Supervisory Board.
11. Members of the Supervisory Board shall receive fixed as well as performance-related compensation (Item 5.4.6 para. 2 sentence 1 of the German Corporate Governance Code).
The Company did not comply with this recommendation in the year under review, as the Management Board and Supervisory Board were not convinced that the agreement of a variable, performance-related remuneration component would create any significant additional incentive for the Supervisory Board to approach its work with the due level of care and commitment. However, the Management Board and Supervisory Board have changed their position in this regard and will propose to change in the compensation structure for the Supervisory Board at general next meeting to provide a performance-related compensation component in addition to the fixed component.
MOBOTIX AG
Winnweiler-Langmeil, July 16, 2010
On behalf of the Management Board
Dr. Ralf Hinkel (Chief Executive Officer)
On behalf of the Supervisory Board
Dr. Thomas Hoch (Chairman of the Supervisory Board)
MOBOTIX AG sees itself as a software company with its in-house hardware development in the area of digital, high-resolution and network-based video security solutions. The Company focuses on the development of user-friendly, system solutions from a single source.
The Company's product portfolio includes the product lines M12 (DualNight Camera), M24 (Allround Camera), D12 (DualDome Camera), D24 (MonoDome Camera), V12 (Vandalism Camera), and Q24 (Hemispheric 360° Camera). The introduction of the first hemispheric camera (360° Panorama view) repre-
sented the most successful product launch in the history of MOBOTIX. In addition to its network cameras, MOBOTIX also offers the MxControlCenter, a complete video management solution, as a central control center software that is able to integrate cameras from other manufacturers, as well as MxEasy, a video management solution for the consumer
The HiRes Video Company
and semi-professional segment. The MOBOTIX video management solutions are offered free of charge. In addition, various accessories are available in the Company's product mix. During the past fiscal year, the first products were introduced in the new access control & communication product range. In particular, this includes the T24 door station with various accessories.
MOBOTIX T24
A significant development focus in the year under review was the conversion of the first product line to the new P3 processor technology, thereby doubling the camera's computing power. The switch to the new processor technology was made in order to use one single circuit board in four separate camera lines (mono camera lines). During the current calendar year, plans include converting the dual camera lines D12 and M12 to the same circuit board. Once the cameras are converted to the new circuit boards, they will be offered on the market as the D14 and M14 camera series, respectively. This systematic implementation of the platform strategy provide additional substantial savings potential in the years to come.
The MOBOTIX Group consists of MOBOTIX AG, Winnweiler-Langmeil, and MOBOTIX CORP, New York.
The transfer of the registered office from Kaiserlautern to Winnweiler-Langmeil took place on September 30, 2009. New products are manufactured and developed exclusively at the Winnweiler-Langmeil and Kaiserslautern locations. Winnweiler-Langmeil controls global sales.
The subsidiary MOBOTIX CORP, is exclusively a distribution company for the American market. MOBOTIX CORP is managed by Mr. Lutz Coelen (CEO and President). The MOBOTIX Group uses a number of operational key indicators to measure the Group's strategic growth and profitability objectives. These include sales figures for the individual sales regions and product groups as well as profitability indicators for the Company as a whole. The Company's performance is monitored and controlled through regular monitoring of trends in the individual sales regions. Other financial figures are also analyzed and evaluated. EBIT and EBITDA are the primary control parameters for the profitability of the MOBOTIX Group. These financial indicators are presented to the Management Board on a monthly basis as part of the internal reporting process, so that any necessary changes can be initiated promptly.
In Germany, the Company's most important market with an almost 27.0% share of total sales, the products are currently sold via MOBOTIX-certified Secure Partners, specialized IT-retailers or directly, e.g. via the Company's online store, to commercial and private customers. Most of MOBOTIX' international sales are made via distributors and their qualified systems integrators and resellers. The distributors are supported in this process by a number of locally-based Business Development Managers, who are employed directly by MOBOTIX AG.
Due to their extensive features, MOBOTIX camera systems are used in over 100,000 locations worldwide. In addition to numerous projects in public and private security in Germany, MOBOTIX AG was also able to gain numerous additional international reference projects during the past fiscal year. These included projects such as the surveillance of the president's parade on the national day in China, city surveillance in Ghent, Belgium,
The HiRes Video Company
and the protection of Prince Songkia University in Thailand. In the traffic surveillance branch, many German motorways were gained in Rhineland-Palatinate and in greater Stuttgart and Dresden, as well as the Gotthard motorway in Switzerland and the KPE tunnel in Singapore. Additional projects were realized with Telekom Italia (monitoring of communication exchanges), the Pimkie fashion chain in Spain, and various petrol station chains such as BFT, Hofer in Austria, and Lukoil in the Ukraine.
In the USA, the Company sells its products through its own sales subsidiary, MOBOTIX CORP. The MOBOTIX's growth is primarily occurring in the export markets with the export share rising to more than 73.0% in the past fiscal year (2009/10).
MOBOTIX operates in the market for video security systems. This market is generally referred to as the CCTV market. Today's market for video security systems includes both analog video security systems and network camera systems, as well as video management software and accessories. Combinations of analog and network camera systems are known as hybrid systems.
The relevant market segment for MOBOTIX in this respect is network cameras.
In a study made by the market research firm IMS Research, the authors presume that global sales in the market for network cameras will grow by an annual average of approximately 27.0% from 2009 to 2014. This assumption is based on its current study which was updated in July 2010.
As in many other industrial and service branches, the market environment is also developing positively in the short-term. The effects of the financial and economic crisis are noticeably diminishing and in many countries the first signs of a recovery are already recognizable, which is having a positive effect on project business. The extent to which the recovery will last is still unclear and is subject
Export Share 73.0%
to great uncertainty. In short term observations show that the anticipated growth rates in the network camera segment will continue to be strong in comparison to other branches. Reliable, sufficiently exact short-term forecasts are still not currently possible, however, due to the high level of uncertainty.
Corporate development during the past fiscal year was characterized by the gradual market recovery over the course of the year. The effects of the financial and economic crisis diminished continuously and gave way to a step-by-step market recovery and a growing willingness to invest on the part of the Company. In anticipation of a recovering macro-economic environment, the MOBOTIX Group invested in new personnel and marketing activities during the course of fiscal 2009/10. The EBIT margin (22.2% ; prior year: 22.9%) remained almost on last year's level despite these investments.
In fiscal year 2009/10, MOBOTIX Group revenue grew by 19.9% to €53.8 million (prior year: €44.9 million), and pretax earnings increased by 12.2% to €11.7 million. The growth in revenue during the second half of the fiscal year in comparison to the second half of the prior year was 30.7%, in contrast to 8.7% for the first half of the fiscal year. Total output (sales revenue, increase in finished goods and work in progress, and other own work capitalized) rose by €8.4 million to €54.8 million. EBITDA (25.7% of total output) came to €14.1 million (prior year: €12.0 million). EBIT (22.2% of total output) amounted to €12.1 million (prior year: €10.6 million). Net income for the period (return on sales 15.5%) climbed by 10.9% to €8.4 million (prior year: €7.5 million).
A large part of revenue growth continued to be achieved through increased sales of dome cameras, which rose by 31.8% from €18.3 million to €24.2 million. Sales revenues for fixed cameras grew by 11.2% to €26.8 million. The Q24 product line launched in June 2009 had a noticeable impact on revenue growth in fiscal year 2009/10. Once again, the export business was a growth driver. The export ratio amounted to 73.0% in 2009/10, compared to 68.4% in the prior year. In Germany, revenue rose from €14.2 million to €14.5 million (+2.4%), while in the rest of Europe (excluding Germany), revenue
The HiRes Video Company
climbed 16.2% to €23.3 million. In the rest of the world, revenue rose by 50.3% to €16.0 million, up from €10.6 million in the prior year. The material usage ratio (cost of materials in relation to total operating performance) remained virtually unchanged at 26.2% compared to the previous year.
The €2.5 million increase in staff costs due to new hires led to an increase in the personnel usage ratio (staff costs to total output) from 26.4% to 26.9%. New hires were carried out in particular in the development and marketing divisions.
Other operating expenses €12.3 million, (prior year: €10.8 million) increased by €1.5 million (+13.6%) mainly due to higher turnover-dependent distribution expenses (+€0.5 million), intensified advertising and marketing expenses (+€0.3 million), travelling, entertainment and vehicle expenses (+€0.2 million) as well as expenses for temporary staff (€0.2 million). With €4.6 million (prior year €4.3 million) advertising and marketing expenses represent the largest item among other operating expenses.
Interest income decreased by €0.2 million, due to the decrease in market interest rates.
The subsidiary MOBOTIX CORP reported a revenue increase of 48.7% (prior year: 53.2%), leading to net income for the year of USD 0.4 million (prior year: USD 0.5 million). This includes currency translation gains of USD 0.3 million (prior year: USD 0.3 million).
Development costs of €0.5 million were capitalized in fiscal year 2009/10. Property, plant and equipment grew by €2.0 million (+12.6%) to €17.7 million, with new investments in property, plant and equipment totaling €3.6 million in the period under review. The investments primarily involved construction at the new Langmeil site as well as investments in technical systems. Investments in technical systems consist largely of investments in injection molding tools and IT equipment. Inventories grew by €1.7 million, or +29.5%, to €7.6 million due to switching of the production lines to a new processor technology, the expansion of the product range to include the Q24 product line, increased stock on hand due to possible delivery bottlenecks and the increase in business activity.
Revenue Rest Of World € 16.0m (+50.3%)
Due to the increased business volume, trade receivables increased to €6.5 million as of June 30, 2010 an increase of €1.5 million compared to the figure as of June 30, 2009.Other assets of €5.5 million (June 30, 2009: €2.7 million) comprise gold reserves with a carrying amount of €3.6 million, input tax claims of €0.6 million, and as of yet unpaid subsidy entitlements of €0.2 million.
The slight decline in cash and cash equivalents by €2.8 million (-27.9%) to €7.3 million was due to the dividend payment and net cash used for investing activities.
On the liabilities side, equity rose by €4.0 million as a result of the net income for the year. The increase in the equity-to-assets ratio from 61.1% to 62.4% accompanied by an increase in total assets of €5.5 million (+13.4%) is due to the net income for the year. Tax provisions increased by €0.8 million to €3.0 million, as a result of current tax liabilities. The decrease in liabilities to banks results from the scheduled repayment of loans. Trade payables as of the reporting date grew by €0.7 million to €3.2 million.
Other liabilities grew by €0.6 million to €2.1 million in comparison to June 30, 2009 mainly due to an increase of personnel liabilities. Based on the developments described above, the total assets of the MOBOTIX Group grew by €5.5 million (+13.4%) to €46.9 million as of June 30, 2010 compared to the previous year.
The HiRes Video Company
Cash flow from operating activities of the MOBOTIX Group was €9.8 million in fiscal year 2009/10, compared to €7.6 million in the prior-year period. Cash outflows for investments remained at the level of the previous year, at €7.1 million. Cash paid for capital expenditure on property, plant and equipment amounted to €3.6 million. Negative cash flow from financing activities amounted to €5.5 million, largely due to payment of the dividend for fiscal year 2008/09 in the amount of €4.4 million and disbursements for interest and principal payments in the amount of €1.1 million. In the corresponding prior-year period, the negative cash flow from financing activities had amounted to €0.6 million.
The various cash flows generated during the reporting period resulted in cash and cash equivalents of €7.3 million as of June 30, 2010. The Company's solvency was guaranteed at all times during fiscal year 2009/10. Because of the Company's credit standing, it continues to have a number of financing options available.
Non-current liabilities decreased by €2.5 million to €6.5 million compared to June 30, 2009. Non-current liabilities as a share of total
assets decreased from 21.6% to 13.8%. Current liabilities as of the reporting date correspond to 23.8% of total assets, compared to 17.2% in the prior year. There is no material risk of changes in interests rates for MOBOTIX AG at the present time. Existing third-party financing was acquired at fixed interest rates.
Liquidity management is based on short-term rolling liquidity forecasts as well as on medium and long-term integrated planning of results of operations, net assets, and financial position. Thanks to its comfortable liquidity position and excellent credit standing, the Company currently has no material liquidity risks.
The aim of finance management is to ensure sustainable liquidity. Minimum-risk implementation strategies are selected as part of this process.
The very positive development of the Group's net assets, financial position and results of operations fully reflect the expectations of the Management Board.
Cash Flow Margin 18.3%
Development activities were also further expanded during the fiscal year 2009/10. Until June 30, 2010, the MOBOTIX Group had 68 employees (by headcount) in its Development department. As in previous years, the primary development focus was on the creation of new hardware and software products as well as further optimization of the product functionality.
Expenditures for research and development totaled to €5.4 million. Development activities are essentially done only in-house. Outsourcing of development activities occurs only on a very small scale, and only in the area of tool design and PC board layout.
During the past fiscal year, one focus of development was the conversion of additional camera lines to more efficient P3 processor technology. The lines D24 and M24 were introduced into the market in this context. An additional focus was the development of T24, the IP-based door station, as well as additional accessories for the new access control & communication product range. Furthermore, the foundation was laid in development for additional product innovations in fiscal year 2009/10. These innovations are expected to be launched on the market in fiscal year 2010/11.
57 employees were hired during the past fiscal year. Until June 30, 2010, the MOBOTIX Group had 233 employees, compared to 190 employees (excluding trainees and temporary staff, including 2 (prior year: 3) members of the Management Board; by headcount) at the beginning of the fiscal year. Fiscal year 2010/11 will see additional staff increases, particularly in marketing, sales and development.
As of June 30, 2009, Horst Pfiffi resigned from the Management Board of MOBOTIX AG. The technology department that was managed by him was taken over by Klaus Borchers as an interim measure, from July 16 to October 16, 2009.
250 (Incl. Members of the Management Board, trainees and temporary staff)
During the period from July 1, 2009 to June 30, 2010, the following reportable purchases or sales of shares were effected by members of the Management Board or Supervisory Board.
In July 2010, a general contract was concluded with Goldbeck Süd GmbH, Hirschberg a.d. Bergstrasse. The contract covers the construc-
| Date of | Type of | Stock | Number | Total | |||
|---|---|---|---|---|---|---|---|
| Person | Function | Transaction | Transaction | exchange | of shares | Price € | Volume € |
| Lutz Coelen | CFO/CSO | August 20, 2009 | Purchase | Xetra | 500 | 26.10 | 13,050 |
| August 24, 2009 | Purchase | Xetra | 1,300 | 29.44 | 38,266 | ||
| Dr. Ralf Hinkel* | CEO | May 31, 2010 | Disposal | Off-market | 2,218,134 | n/a | - |
| Dr. Ralf Hinkel Holding GmbH* |
May 31, 2010 | Addition | Off-market | 2,218,134 | n/a | - |
*The shares of Dr. Ralf Hinkel were transferred to the Dr. Ralf Hinkel Holding GmbH, Winnweiler, whose sole 100% shareholder is Dr. Ralf Hinkel, in line with a formation by a non-cash capital contribution. On July 29, 2010, the German Federal Financial Supervisory Authority (BaFin) granted an exemption from making a mandatory tender offer according to §37 of the Securities Acquisitions and Takeover Act (WpÜG).
Main Aspects Of The Compensation System Information on compensation for the Management Board can be found in the remuneration report of the Corporate Governance Report, which forms an integral part of the Group Management Report.
tion of a production and assembly shop on the Company's land in Winnweiler. The total investment has a contract volume of approximately €5 million.
In addition, a share buyback program was started in July 2010. As of July 30, 2010, MOBOTIX AG had acquired 2,895 own shares as part of the share buyback program.
No further events of any significance occurred after the end of fiscal year 2009/10.
In response to the German Takeover Directive Implementation Act, Section 289 (4) and Section 315 (4) of the German Commercial Code (HGB) require publicly traded companies to provide takeover-relevant information on their capital structure, shareholders' rights and restrictions, shareholding ratios and governing bodies.
MOBOTIX AG states the following with regard to the required information:
1. The subscribed capital of MOBOTIX AG is €4,423,814 divided into 4,423,814 no-par bearer shares, each representing €1.00 of share capital. Each share entitles the bearer to one vote. As far as the Management Board of the Company is aware, there are no restrictions relating to the voting rights of the shares.
2. There are no restrictions on voting rights or transfer of shares.
3. Dr. Ralf Hinkel, CEO of MOBOTIX AG, indirectly holds 50.14% of the subscribed capital via Dr. Ralf Hinkel Holding GmbH, Winnweiler, Germany.
4. As long as Dr. Ralf Hinkel himself and/ or a company controlled by him (Section 17 of the Stock Corporation Act (AktG)) or under his direction (Section 18 AktG) holds a total of more than 25% of the Company's shares, Dr. Ralf Hinkel shall have the nontransferable right to appoint one member to the Supervisory Board of the Company. A resolution to transfer to Dr. Ralf Hinkel Holding GmbH the right of Dr. Hinkel to appoint members of the Supervisory Board is to be submitted to the 2010 annual general meeting, scheduled for the end of October 2010.
5. The Management Board is not aware of employees holding an investment in the Company's capital who do not directly exercise their control rights.
6. The regulations on the appointment and dismissal of Management Board members and amendments to the Articles of Incorporation are based upon the Stock Corporation Act and the Articles of Incorporation of MOBOTIX AG, which are published on the website in the Corporate Governance section.
Under Article 5 of MOBOTIX AG's Articles of Incorporation, the Management Board must comprise a minimum of two and a maximum of three persons. A resolution to remove this limit of three persons is to be submitted to the 2010 annual general meeting. The Supervisory Board is responsible for appointing and dismissing members of the Management Board.
The HiRes Video Company
The resolutions of the annual general meeting are adopted by a simple majority of the votes cast unless a larger majority is required by law or these articles of incorporation. Where the German Stock Corporation Act requires that a majority of the share capital represented at the annual general meeting must be cast in order to adopt a resolution, a simple majority of the share capital represented shall suffice as long as that is legally permissible.
Pursuant to Section 15 (1) of the Articles of Incorporation, an amendment to the Articles of Incorporation requires a simple majority of the votes cast unless a larger majority is required by the law or these articles of incorporation. Where the German Stock Corporation Act requires that a majority of the share capital represented at the annual general meeting must be cast in order to adopt a resolution, a simple majority of the share capital represented shall suffice as long as that is legally permissible. Pursuant to Section 15 (2) of MOBOTIX AG's Articles of Incorporation, the adoption of a resolution is permissible only, if in addition to the majority requirement pursuant to Section 15 (1) of the Articles of Incorporation, capital with voting rights present in the meeting of shareholders represents at least 60% of the share capital. If a proposed resolution for amendment of the Articles of Incorporation is not voted upon due to a lack of such presence, then the obligation for presence will not apply in a second meeting of shareholders.
7.1 The Management Board is authorized, subject to the consent of the Supervisory Board, to increase the subscribed capital of the company by way of an issue of up to 1,272,544 new no-par-value ordinary bearer shares for cash and/or non-cash contribution on one or more occasions in the period January 1, 2008 to November 30, 2011, subject to an overall total increase of €1,272,544 (authorized capital). Existing shareholders must be given preemptive rights, which can be granted to the shareholders in the form of indirect preemptive rights (Section 186 (5) AktG). However, the Management Board is authorized, subject to the consent of the Supervisory Board, to disapply the preemptive rights of existing shareholders,
(I) if the capital increase is made in return for cash contributions, and the proportional amount of share capital assigned to the new shares issued under exclusion of the subscription right pursuant to Section 186 (3) Sentence 4 AktG does not exceed a total of 10% of the
share capital, either at the time that this authorization takes effect or at the time that it is exercised, and the issue price of the new shares is not materially lower, within the meaning of Sections 203(1) and (2), 186 (3) Sentence 4 AktG, than the stock exchange price of the shares of the same class and features already being traded on the stock exchange at the time the issue price is finally determined. Shares to be counted against this maximum limit are those which were issued or are to be issued for the servicing of warrant-linked or convertible bonds or participation rights with conversion or option rights, so long as these bonds were issued in corresponding application of Section 186 (3) Sentence 4 AktG under exclusion of the subscription right. Furthermore, the Company's own shares to be counted against the maximum limit of 10% of the share capital are those that will be sold during the term of the subscribed capital under exclusion of the subscription right of shareholders pursuant to Sections 71 (1) No. 8 Sentence 5, 186 (3) Sentence 4 AktG;
(II) in the case of capital increases in return for contributions in kind, particularly the acquisition of companies, portions of companies, and shareholdings in companies;
(III) in order to issue employee shares to employees and pensioners of the Company and its affiliated companies;
(IV) for fractional amounts.
The Management Board is authorized, with the consent of the Supervisory Board, to stipulate additional details for the performance of the capital increase.
7.2 (I) The Management Board is also authorized, subject to maintaining the principle of equal treatment (Section 53a AktG), to acquire treasury shares up to a total of 10% of the company's existing capital stock in the period up to September 30, 2014. This authorization may be exercised in one transaction or in partial amounts on one or more occasions. The purchase of treasury shares may be carried out by other companies in the group or by third parties acting for the account of the company or the group companies.
(II) At the discretion of the Management Board, treasury shares may be purchased (i) on a stock exchange or (ii) by way of a public purchase offer addressed to all shareholders or a public solicitation of offers for sale from shareholders.
The HiRes Video Company
(III) The Management Board is authorized, subject to maintaining the principle of equal treatment (Section 53a AktG), to resell on a stock exchange treasury shares acquired under the above mentioned authorization or to offer such shares for subscription by shareholders on the basis of an offer addressed to all shareholders, subject to the preservation of preemptive rights. Trading with treasury shares is not permitted.
The Management Board is also authorized to use treasury shares acquired under the above mentioned authorization:
(a) subject to the consent of the Supervisory Board, to offer or transfer shares in the company to third parties as consideration as part of business combinations or as part of the acquisition of companies, parts of companies, equity investments or other assets,
(b) subject to the consent of the Supervisory Board, to sell shares in the company other than on a stock exchange or by means of an offer to all shareholders if these shares are sold for cash at a price that, at the time of the sale, is not significantly lower than the market price of the company's shares of the same type and with the same rights determined in the opening auction on the trading day concerned; in this case, the number of shares to be sold must not exceed a total of 10% of the company's registered capital stock at the time the shares are sold; this upper limit of 10% of the capital stock is subject to the deduction of the pro-rata amount of capital stock attributable to those shares in the company that are issued during the term of this authorization as part of a capital increase with the disapplication of preemptive rights pursuant to section 186 (3) sentence 4 AktG or issued to service options or convertible bonds, or profit-sharing rights with conversion rights or options, provided that these debt instruments are issued during the term of this authorization with the disapplication of preemptive rights in application of Section 186 (3) Sentence 4 AktG mutatis mutandis,
(c) to grant shares to employees of the company, members of the management, or to other employees of entities affiliated with the company within the meaning of Section 15 AktG if these persons are entitled to receive the shares on the basis of stock options granted to them under any future stock option programs,
(d) to grant employee shares to persons holding an employment contract with the company or with an entity affiliated with the company within the meaning of Article 15 AktG,
(e) to recall shares in connection with a simultaneous reduction in subscribed capital without the recall or its implementation requiring the approval of a further resolution at an annual general meeting; the Management Board may alternatively specify that there be no reduction in capital stock, but instead that the proportion of the remaining shares to capital stock be increased pursuant to Section 8 (3) AktG. In this case, the Management Board is authorized to adjust the number of shares stated in the articles of incorporation.
(IV) The Supervisory Board is authorized to use the treasury shares acquired under the above mentioned authorization:
(a) to grant shares to the members of the company's Management Board if the members of the Management Board are entitled to receive the shares on the basis of stock options granted to them under any future stock option programs,
(b) to grant shares to the members of the company's Management Board as share-based payments subject to the same terms and conditions afforded to employees under character (d) of item (III). The Supervisory Board is responsible for specifying the details of share-based payment for the Management Board.
(V) The preemptive rights of existing shareholders to the treasury shares are disapplied insofar as these shares are used in accordance with the above mentioned authorizations in (a) to (d) of item (III) and in item (IV). In addition, subject to the consent of the Supervisory Board, the Management Board may disapply preemptive rights for fractional amounts when treasury shares are sold as part of an offer to the company's shareholders.
8. No agreements within the meaning of Section 289 (4) No. 8 and 9 and Section 315 (4) No. 8 and 9 HGB exist.
On June 16, 2010, the loan granted to Dr. Ralf Hinkel amounting to €230 thousand which was due to expire on June 29, 2010 was renewed prior to maturity until June 29, 2011. The loan bears interest at a rate of 3.5% per annum.
In addition, Dr. Ralf Hinkel was granted another loan amounting to €476 thousand on June 14, 2010. The maturity of the loan is until October 28, 2010 (annual general meeting) but not later than December 31, 2010, and bears interest at a rate of 3.0% per annum.
During the period under review, no significant transactions with related parties occurred.
MOBOTIX possesses an extensive process control system. The aim of the control system is to detect potential deficiencies on various process levels, to trigger corresponding countermeasures and to safeguard and continuously improve the effectiveness of identifying and analyzing risks by regularly reviewing methods. The tasks of the control system are performed by members of management and employees located centrally in the organization department, who assume the sub-tasks of an internal audit.
The internal control system is a significant part of the Group's risk management. In addition to defined preventative and monitoring control mechanisms such as systematic and manual coordination processes, the basis of the internal control system is predefined approval processes, the separation of functions, and compliance with guidelines. The four-eyes principle plays a central role in this process. By consistently applying risk management principles and instructions, the majority of risks are already avoided or their effects are at least diminished.
Significant regulatory components are contained in the regulations on data protection, IFRS accounting and the Corporate Governance principles for listed entities. Topics such as risk management and guidelines for the drafting of contracts are also taken into account. Significant contracts with financial or legal features and procedures with extraordinary technical risks are carefully reviewed. Requests to approve such transactions are coordinated by the manager responsible, who coordinates the evaluation and decision process and if necessary prepares the respective documentation required as a basis for the final approval of the Management Board.
The aim of the internal control and risk management system with regard to the Group accounting process is to ensure that accounting takes place in a uniform manner and in accordance with legal requirements, generally accepted accounting principles and International Financial Reporting Standards (IFRS), and Group guidelines, ultimately providing the recipients of the consolidated financial statements with truthful and reliable information.
Portions of MOBOTIX AG's financial accounting are outsourced to an external service provider. That service provider is monitored by the
accounting department of MOBOTIX AG. The division of duties between the external service provider and the accounting department is clearly defined. In addition to its control function, the accounting department of MOBOTIX AG also performs all material closing entries in coordination with the CFO. The IFRS consolidated financial statements are also prepared exclusively by the accounting department of MOBOTIX AG. Uniform accounting procedures are safeguarded in particular by accounting guidelines applicable throughout the Group, compliance with which is monitored by the accounting department of MOBOTIX AG. MOBOTIX CORP prepares its financial statements locally on its own IT system, which is subject to clearly defined access regulations. Compliance with Group accounting guidelines and the orderly and timely performance of MOBOTIX CORP's accounting-related processes and systems is ensured by the accounting department of MOBOTIX AG or directly by the CFO of MOBOTIX AG.
Awareness of risks and the controls described above provide reasonable assurance that the consolidated financial statements are prepared in accordance with regulations and guidelines.
Compliance with guidelines is also monitored by the employees of the central organization department. The employees of this department report directly to the Management Board. They are available to provide advice to different department managers, enabling them to monitor the functionality of the internal control system as well. A significant part of such monitoring is the proper compliance and implementation of guidelines. Recommendations categorized by importance and possible adaptation requirements are reported directly to the heads of the units being reviewed as well as to the Management Board.
Current issues are taken up and investigated promptly in ad-hoc audits. If necessary, such audits can result in immediate process changes with the aim of continuously improving process quality. Follow-up audits are then carried out, in which the implementation of the process changes is reviewed. Any discrepancies are reported immediately to the Management Board.
At least once annually, the Supervisory Board reviews the effectiveness of the internal control and risk management systems.
The MOBOTIX Group has implemented an adequate risk management system to ensure that risks are detected and mitigated at an early stage. The Group's risk management system is intended to identify, monitor, and control any risks that occur. In addition to risks that could jeopardize the Company's continued existence as a going concern, the system also records activities, events, and developments that could significantly affect the future performance of the Company's business. As part of risk management, operational opportunities and risks are identified and managed over a period of one to three years. For strategic opportunities and risks, a correspondingly longer forecasting horizon is used.
Precautions are taken against typical business risks that could have a material influence on the Group's results of operations, net assets, or financial position.
Based upon the information currently available, the MOBOTIX Group is not at present faced with any significant specific risks that, in and of themselves, would be likely to jeopardize the continued existence of the MOBOTIX Group.
The Company continues to refine its internal structures in line with its growth and to adapt them to the scale of its business. The Company plans additional measures to strengthen and improve quality management, the internal control system, and risk management.
The HiRes Video Company
MOBOTIX products are in use today in a large number of professional applications due to the product's compact design and high temperature resistance, such as the public security
Original image by a MOBOTIX camera (library)
market (railway stations, airports, urban security, prisons, harbors, highways) and the mobile security market segment (police, railways, buses, goods transportation, logistics). The Management Board expects the Company to continue growing strongly in the coming fiscal years as it introduces new product families. Product innovations will continue to play a central role in this growth.
External market studies confirm the expectation of high growth rates over the coming years in the area of digital IP video monitoring systems despite negative events like the financial and economic crisis. Accordingly, the market environment can continue to be considered very attractive.
In the Company's view, the competitive situation has not changed to its disadvantage in recent months. It remains to be seen, however, to what extent the traditional providers of analog security systems will join the technological shift to digital systems, or whether they will withdraw from the market. MOBOTIX already has a market presence as a system provider offering not only a complete range of hardware and accessories, but also video software for control centers. MOBOTIX is differentiating itself from its competitors by acting as a onestop shop for complete projects while at the same time putting pressure on pure-play software providers by offering its own control center software free of charge, thereby reducing the overall project cost for customers.
The Management Board deems the procurement market risks to be within the customary range for the industry. In its view there is no material medium-term or long-term dependency on individual suppliers. The current tension on the procurement market, which is in particular characterized by increasing delivery times in the electronic components segment,
is accounted for through enhanced stock management for finished products and the components concerned. A short-term loss of critical suppliers, e.g. for processors, that could lead to significant disruptions of production is likewise considered very unlikely.
Thanks to the Company's comfortable liquidity position and excellent credit standing, the Company currently has no material financial risks. Currency risks exist primarily in connection with operations in the USA. The positive cash flow from the business in the USA covers MOBOTIX AG's purchasing requirements in the dollar zone. There is no material risk of changes in interest rates at the present time. Existing third-party financing was acquired at fixed interest rates. Bad debt risks are limited through an efficient credit management system, including dunning and collection, with very restrictive terms of payment.
The financial crisis and its repercussions on the real economy have shown an impact on the level of individual projects. This has resulted in delays in the implementation of planned projects. Furthermore, it became apparent that distributors have significantly reduced their inventories and accordingly their capital tied up in inventories. During the past six months a noticeable relaxation has been recognized in this regard. The extent to which the crisis will have additional short- and medium-term effects on business development (e.g. a potential double dip), or how quickly a sustainable recovery of the global markets will prevail, still cannot be evaluated conclusively.
Public perception of video monitoring has continued to develop in a very positive direction overall. The presence of video monitoring increases public perception of security and it is therefore finding increased public acceptance. There have been a growing number of political initiatives aimed at improving the quality of monitoring systems in public areas. A first example was the French video law of October 1, 2006. If standards continue to
change in favor of high-resolution systems in the public security area, then MOBOTIX can also benefit from this thanks to its position as an important manufacturer of such systems.
The Management Board therefore presumes that the Company's regulatory environment will have a significantly positive effect on its further growth.
In recent years, the MOBOTIX Group has seen significantly faster growth than the overall market with growth rates of up to 50%. The high growth momentum has resulted in an ongoing need for organizational adaptation. The Company counters the entailing fundamental risks with an ongoing adaptation of human resources, control systems and infrastructure.
Production and sale of technical products are always associated with warranty risks. These risks are reflected in appropriate provisions on the statement of financial position. The Company has also purchased product liability insurance to protect against possible losses and risks.
In order to match the anticipated robust growth, the construction of an additional production and assembly shop is planned during the current fiscal year. The Company's growth makes it likely that there will be additional investments in construction in the years to come.
Basically the Management Board presumes that along with the planned corporate growth, operating results will also continue to increase in line with current profitability. In this regard, the significant market potential in the US market, as well as other growth-related losses of MOBOTIX CORP commensurate with business development must be taken into account.
The Company sees no risks at the present time or in the future that would endanger the Company's continued existence or would have a material influence on its development. Technological innovation and further expansion of the distribution network are extremely important for the Group's sustained success.
Despite the financial crisis, the positive market environment with its continued forecasts of high growth rates will form the basis for the Company's successful development. Market growth will be driven by the switch from analog to digital technology. If this switch should happen sooner than expected, it could produce additional opportunities for the MOBOTIX Group. Factors that could lead to an acceleration include political initiatives such as the French video law that would improve the quality of security systems in the public sector.
The Management Board assumes that technological market drivers such as increasing image resolution in video systems and more complex security installations will favor the advantages of the decentralized technology approach. This has become particularly evident through the introduction of hemispheric technology (Q24). This would strengthen the MOBOTIX Group's competitive position and put pressure on the competition.
An accelerated macro-economic recovery can, from experience, of course also lead to supply bottlenecks on the procurement market and the resulting production bottlenecks. Such risks are in particular counteracted by increased warehousing of critical components and finished products.
In the opinion of the Management Board, increased publicity will provide new opportunities, e.g. to acquire new employees, sales partners, and customers.
MOBOTIX is represented throughout the world. A key factor for unlocking future growth potential today and in the future involves continuing to pursue targeted expansion of our partner network in order to broaden our sales structures. With its outstanding global market position – particularly in the subsegment of high-resolution network cameras – MOBOTIX is in a very good position to take advantage of the opportunities at hand.
In terms of regions, the Management Board sees key growth areas for the coming months in North America, South America and Asia.
The market introduction of the first hemispheric camera has so far been very successful with extremely positive feedback from distributors. The fact that the Company's main competitors cannot offer any comparable products shows MOBOTIX AG's innovative strength, and enables it to occupy a unique position in this product segment over the medium term. Moreover,
MOBOTIX plans to take advantage of additional product innovations in the coming months to reinforce its competitive position and create a foundation for developing new market segments.
In the first six months of the new fiscal year MOBOTIX will introduce the new T24 IP video door station. Forecasts for the fiscal year 2010/11 are made difficult due to the entry into a new product segment (access control & communication). All in all, the Management Board expects a growth of 30% for the fiscal year 2010/11, in which 23% of growth will be attributable to the video surveillance segment. With regards to profitability an EBIT margin of 18% is considered realistic. Due to the great interest in the new product segment the Management Board expects a continuing high growth in sales and EBIT for the coming year.
Pursuant to Article 289a HGB, MOBOTIX AG must issue a corporate governance statement.
The statement must contain the statement pursuant to Article 161 AktG, relevant information concerning corporate governance practices that are employed in addition to the legal requirements, a description of the function of the Management Board and SupervisoryBoard, and the composition and function of their committees.
The declaration of compliance with the German Corporate Governance Code can be found on our website (in German only), at: http://www.mobotix.com/ger_DE/Investors/ Corporate-Governance/Entsprechenserklärung
For information concerning significant, relevant corporate practices that surpass the legal requirements, as well as the function of the Management Board and Supervisory Board, please refer to the Corporate Governance Report, which will be available on the website in September.
Winnweiler-Langmeil, July 30, 2010
The Management Board
Dr. Ralf Hinkel
Lutz Coelen
| EUR '000s | see notes | July 1, 2009- June 30, 2010 |
July 1, 2008- June 30, 2009 |
|---|---|---|---|
| Revenue | (1) | 53,844 | 44,898 |
| Increase/Decrease in finished goods and work in progress | (2) | 373 | 663 |
| Other own work capitalized | (3) | 558 | 818 |
| Total output | 54,774 | 46,380 | |
| Cost of materials | (4) | -14,327 | -12,161 |
| Gross profit | 40,447 | 34,219 | |
| Staff costs | (5) | -14,721 | -12,220 |
| Depreciation and amortization | (6) | -1,910 | -1,432 |
| Other operating income | (7) | 576 | 823 |
| Other operating expenses | (8) | -12,245 | -10,782 |
| Operating profit | 12,147 | 10,609 | |
| P&L from invest. accounted for using the equity method | (9) | 0 | -32 |
| Other interest and similar income | (10) | 104 | 293 |
| Interest expense and similar charges | (10) | -513 | -408 |
| Profit before tax | 11,738 | 10,461 | |
| Income taxes | (11) | -3,377 | -2,923 |
| Profit for the year | 8,361 | 7,538 | |
| Profit attributable to shareholders of MOBOTIX AG | 8,361 | 7,538 | |
| Earnings per share (diluted/basic) | (12) | 1.89 | 1.70 |
| Consolidated Statement of Comprehensive Income (Loss) | July 1, 2009- June 30, 2010 |
July 1, 2008- June 30, 2009 |
|---|---|---|
| Profit for the year | 8,361 | 7,538 |
| Difference resulting from currency translation | 40 | -51 |
| Accumulated other comprehensive income (after tax) | 40 | -51 |
| Total comprehensive income of the period | 8,401 | 7,487 |
| Profit attributable to shareholders of MOBOTIX AG | 8,401 | 7,487 |
| EUR '000s | see notes | June 30, 2010 | June 30, 2009 |
|---|---|---|---|
| Intangible assets | (13) | 1,727 | 1,462 |
| Property, plant and equipment | (13) | 17,650 | 15,682 |
| Prepaid expenses | (18) | 97 | 115 |
| Deferred tax assets | (11) | 123 | 109 |
| Non-current assets | 19,598 | 17,369 | |
| Inventories | (14) | 7,579 | 5,851 |
| Trade receivables | (15) | 6,542 | 5,011 |
| Other assets | (16) | 5,526 | 2,694 |
| Cash and cash equivalents | (17) | 7,312 | 10,142 |
| Prepaid expenses | (18) | 379 | 336 |
| Current assets | 27,339 | 24,034 | |
| ASSETS | 46,936 | 41,402 | |
| Subscribed capital | 4,424 | 4,424 | |
| Capital reserves | 9,665 | 9,665 | |
| Accumulated other comprehensive income | 76 | 36 | |
| Profit or loss carried forward | 6,757 | 3,643 | |
| Profit for the year | 8,361 | 7,538 | |
| Equity | (19) | 29,283 | 25,306 |
| Liabilities to banks | (22) | 5,906 | 8,394 |
| Deferred tax liabilities | (11) | 591 | 567 |
| Non-current liabilities | 6,497 | 8,961 | |
| Tax provisions | (20) | 3,005 | 2,199 |
| Other provisions | (21) | 176 | 165 |
| Liabilities to banks | (22) | 2,614 | 714 |
| Trade payables | (23) | 3,245 | 2,498 |
| Other liabilities | (24) | 2,115 | 1,560 |
| Current liabilities | 11,156 | 7,136 | |
| EQUITY AND LIABILITIES | 46,936 | 41,402 |
| EUR '000s see notes |
July 1, 2009- June 30, 2010 |
July 1, 2008- June 30, 2009 |
|
|---|---|---|---|
| Profit before tax for the year | 11,738 | 10,461 | |
| + | Net interest income or expense (10) |
409 | 115 |
| + | Profit or loss from investments accounted for | ||
| using the equity method (9) |
0 | 32 | |
| + | Depreciation and amortization of property, plant and equipment, and intangible assets (6) |
1,910 | 1,432 |
| + | Interest received | 93 | 285 |
| + | Increase in other provisions (21) |
12 | 42 |
| + | Loss on disposal of non-current assets | 3 | 4 |
| + | Other non-cash expenses | 18 | 18 |
| Operating profit before changes in working capital | 14,183 | 12,389 | |
| - | Increase in inventories, trade receivables and other assets not attributable to investing or financing activities |
-3,587 | -2,633 |
| + | Increase trade payables and other liabilities not attributable to investing or financing activities |
1,296 | 741 |
| Cash flow from operating activities before tax | 12,394 | 10,497 | |
| - | Income tax paid | -2,561 | -2,933 |
| Cash flow from operating activities | 9,832 | 7,564 | |
| - | Cash paid for purchases of property, plant and equipment | -3,587 | -9,437 |
| - | Cash paid for purchases of intangible assets | -562 | -793 |
| + | Cash received from subsidies (13) |
33 | 2,222 |
| - | Purchases of current available-for-sale financial assets | -3,510 | -1,043 |
| + | Proceeds from sales of current available-for-sale financial assets | 476 | 1,699 |
| + | Cash received from disposals of property, plant and equipment | 6 | 30 |
| Cash flow from investing activities | -7,145 | -7,322 | |
| - | Dividends paid (19) |
-4,424 | -2,212 |
| - | Cash paid for the redemption of loans | -714 | -612 |
| + | Cash received from borrowings | 0 | 2,570 |
| - | Interest paid | -380 | -320 |
| Cash flow from financing activities | -5,518 | -574 | |
| Net change in cash and cash equivalents | -2,831 | -332 | |
| Effect of exchange rate and other changes on cash and cash equivalents | 1 | 0 | |
| Cash and cash equivalents at the beginning of the reporting period | 10,142 | 10,475 | |
| Cash and cash equivalents at the end of the reporting period (17) |
7,312 | 10,143 |
Material non-cash transactions: No material non-cash transactions occurred in the current fiscal year.
| EUR '000s | see notes | Subscribed capital |
Capital reserves |
Accumulated other comprehensive income |
Profit or loss carried forward |
Result for the year |
Total |
|---|---|---|---|---|---|---|---|
| Balance as of July 1, 2008 | 4,424 | 9,665 | 88 | 5,854 | 0 | 20,031 | |
| Dividend payment | -2,212 | -2,212 | |||||
| Currency translation | -51 | -51 | |||||
| Profit for the year | 7,538 | 7,538 | |||||
| Balance as of June 30, 2009 | 4,424 | 9,665 | 37 | 3,642 | 7,538 | 25,306 | |
| Balance as of July 1, 2009 | 4,424 | 9,665 | 37 | 11,180 | 0 | 25,306 | |
| Dividend payment | (19) | -4,424 | -4,424 | ||||
| Currency translation | 40 | 40 | |||||
| Profit for the year | 8,361 | 8,361 | |||||
| Balance as of June 30, 2010 | 4,424 | 9,665 | 76 | 6,756 | 8,361 | 29,283 |
Equity € 29.3m Equity-To-Assets Ratio 62.4%
MOBOTIX AG was established on June 21, 1999. Since September 30, 2009 the Company's registered office is in Winnweiler-Langmeil (Kaiserstrasse, 67722 Winnweiler-Langmeil, Germany).
MOBOTIX AG is a European technology leader and system provider in the production of highresolution digital, network-based video security systems, video management software and systems accessories. Its technology centers on its proprietary, internally manufactured, fully digital network cameras.
MOBOTIX products are sold worldwide primarily via distributors, qualified systems integrators and specialist retailers.
On October 10, 2007, MOBOTIX AG made an initial public offering with shares listed on the Entry Standard of the Frankfurt Stock Exchange (Deutsche Börse AG). Since March 31, 2008, the shares of MOBOTIX AG have been listed in the Prime Standard of the Frankfurt Stock Exchange (of "Deutsche Börse AG").
MOBOTIX AG maintains one subsidiary in the U.S. and one associate in the U.K..
The Management Board and the Supervisory Board have issued a Declaration of Compliance to the German Corporate Governance Code, as prescribed by Section 161 of the German Stock Corporation Act (Aktiengesetz, AktG), and have made this declaration available to the public on a permanent basis (in German only) on the company's website under www.mobotix.com.
The Company's fiscal year begins on July 1 and ends on June 30 of the following year. The consolidated financial statements are prepared in euros (EUR). Unless otherwise indicated, all amounts are stated in EUR thousands (EUR '000s). The translation of EUR into EUR thousands may give rise to rounding differences of plus or minus one unit (Euro or percent).
The consolidated financial statements of MOBOTIX AG have been prepared pursuant to Section 315a of the German Commercial Code (Handelsgesetzbuch, HGB) in accordance with the International Financial Reporting Standards (IFRS) and the related interpretations of the International Accounting Standards Board (IASB), as mandated by the European Union
pursuant to Regulation (EC) No. 1606/2002 of the European Parliament and of the Council on the application of international accounting standards.
All individual financial statements of the companies included in the consolidated financial statements have been prepared in accordance with applicable local law and have been adjusted to the IFRS as mandatory in the EU as well as to the accounting policies of the MOBOTIX Group. To this end, the financial statements prepared according to countryspecific regulations are adjusted to the uniform accounting policies used throughout the Group if they do not comply with IFRS as mandatory in the EU and the measurement differences are material. The same accounting policies as in the consolidated financial statements for the fiscal year 2008/09 were applied.
The income statement has been prepared according to the nature of expense method.
The Management of MOBOTIX AG authorized the consolidated financial statements for issue on July 30, 2010.
The following new or amended standards, which have already been published, but which have not yet been required to be applied, were not applied ahead of schedule:
• IFRIC 18 Transfers of Assets from Customers (mandatory for fiscal years beginning on or after November 1, 2009)
We expect that the first-time application of these standards and interpretations will not have a material impact on the presentation of the results of operations, net assets and financial position.
The following new standards, amendments of standards and interpretations to be applied for fiscal years beginning on or after July 1, 2009 have been applied:
IAS 32/IAS 1 Amendments Presentation of Financial Statements for Puttable Financial Instruments and Obligations Arising on Liquidation (mandatory for fiscal years beginning on or after January 1, 2009)
IAS 39 Financial Instruments: Recognition and Measurement: Eligible Hedged Items (mandatory for fiscal years beginning on or after July 1, 2009)
IFRS 8 Operating Segments (mandatory for fiscal years beginning on or after January 1, 2009)
IFRIC 9 Amendment to IFRIC 9 and IAS 39 Embedded Derivatives (mandatory for fiscal years beginning on or after January 1, 2009)
The first-time adoption did not have a material impact on the presentation of the results of operations, net assets, financial position and cash flows respectively.
Hemispheric IP Video Door Station in silver. Additional colors (white, dark gray and amber are available)
In the year 2003, the subsidiary MOBOTIX CORP, New York, USA (formerly MOBOTIX LLC, Columbia, South Carolina) was founded in order to penetrate the U.S. market. MOBOTIX CORP was fully included in the consolidated financial statements of MOBOTIX AG as of the opening balance sheet date. Due to the no longer significant influence, MOBOTIX AG Schweiz, will not be consolidated using the equity method since the reporting period ending December 31, 2009. MOBOTIX Ltd., Birmingham, United Kingdom, is not included in the consolidated financial statements as the company was not operating in the year under review.
The financial statements of the companies included in the consolidated financial statements of MOBOTIX AG were prepared in accordance with uniform accounting policies in accordance with IFRS as mandatory in the EU as of the balance sheet date of June 30, 2010.
MOBOTIX CORP was included in the consolidated financial statements as of July 1, 2005, i.e. the date of the opening balance sheet, in accordance with IFRS 1. Accordingly, the subsidiary's equity as of the date of the opening balance sheet was offset against the carrying amount of the equity investment at the parent company.
The investment in the associate, which was measured using the equity method, is recognized at the proportionate revalued equity. Intra-group profits from this company were insignificant in the years under review.
Intra-group receivables and liabilities as well as any income and expenses from intra-group transactions are offset. Intra-group transactions are based both on market prices and also on arm's length transfer prices. Intra-group profits between the consolidated companies are
| Shareholding | Equity as of | |||||
|---|---|---|---|---|---|---|
| Company | Registered office June 30, 2010 June 30, 2009 June 30, 2010 June 30, 2009 | |||||
| MOBOTIX CORP | New York, USA | 100.0% | 100.0% | 414 | -4 | USD** |
| MOBOTIX Ltd. | Birmingham, GB | 100.0% | 100.0% | 1 | 1 | GBP |
| MOBOTIX AG | Freienbach, CH | - | 50.0% | - | 1 | CHF** |
* Equity pursuant to local law ** in thousands
also eliminated as part of the consolidation process. Deferred taxes are documented for consolidation adjustments recognized in income in accordance with IAS 12.
Foreign currency transactions included in the separate financial statements, which were prepared in local currencies, are translated using the exchange rates applicable at the transaction date. Assets and liabilities denominated in foreign currencies are translated into the local currency at the closing rate, with any resulting gains or losses recognized in income.
The translation of financial statements prepared in a foreign currency is based on the functional currency concept in accordance with IAS 21 "The Effects of Changes in Foreign Exchange Rates." The relevant functional currencies of the foreign companies are identical with the respective local currency. All items on the statement of financial position, except equity, are translated at the middle rate on the
balance sheet date, while expense and income items are translated at average rates. Equity is translated at historical rates. Any resulting translation differences are recognized directly in equity. Foreign exchange differences arising in comparison to the prior year are also recognized directly in equity.
The currency translation differences of the material currencies of the MOBOTIX Group developed as follows:
| Currency translation | Average rates | ||||
|---|---|---|---|---|---|
| 1 EUR = | ISO-Code | 2009/10 | 2008/09 | 2009/10 | 2008/09 |
| Swiss franc | CHF | 1.476 | 1.538 | 1.324 | 1.525 |
| U.S. dollar | USD | 1.39 | 1.368 | 1.22 | 1.405 |
Revenue is generally recognized upon the delivery of goods to the customer, or when the goods are picked up by the courier. Revenue from the delivery of goods is recognized once the significant risks and rewards of ownership of the relevant goods have been transferred to the customer. Thereof, the Company retains neither the rights of control nor effective disposition over the goods sold. The amount of proceeds can be reliably determined and an inflow of economic benefits from the purchase is sufficiently probable. Revenue from services (primarily training) is only generated at a very insignificant amount in the MOBOTIX Group. It is recognized when the services are rendered.
This item mainly includes own development work capitalized as intangible assets. Own development work exclusively relates to staff costs.
Earnings per share are determined in accordance with IAS 33 "Earnings per Share." Basic earnings per share are calculated by dividing the Group's profit for the year by the average number of shares. There is no dilutive effect at MOBOTIX AG.
Intangible assets acquired for a consideration are capitalized in accordance with IAS 38 "Intangible Assets" if it is probable that the use of the asset results in a future economic benefit, and the cost of the asset can be reliably measured. The purchased intangible assets have without exemption a limited useful life. They are evaluated as acquisition costs and depreciated as a scheduled write-down. Financing costs that can be directly attributed to acquisition or production of a qualifying asset are capitalized as part of the purchase or production costs. The financing costs for qualifying assets that have been capitalized before July 1, 2009 are not capitalized as part of the purchase or production costs. Intangible assets are generally amortized using the straight-line method in accordance with their useful economic lives. Received investment grants are stated as an abatement of acquisition costs so long that these subsidies can be directly allocated to line items of intangible assets.
Amortization is primarily based on the following useful lives:
| Useful life | Years |
|---|---|
| Industrial property rights | 3 to 5 |
| IT software (operating and other systems) |
3 |
Research costs are not to be capitalized in accordance with IAS 38 "Intangible Assets." Development costs may only be capitalized if certain, clearly defined criteria are met. Accordingly, development costs must be capitalized when it is probable that the development activities will result in a future inflow of cash, the amount of which will cover not just the costs of production but also the corresponding development costs. In addition, the development project or the product or process to be developed must fulfill all further criteria as defined in IAS 38. Since July 1, 2007, MOBOTIX AG has fulfilled these criteria for some of its development projects. Accordingly, the Company capitalizes development costs for product development in the area of camera housings, electronics, and software at cost if the relevant expenses can be clearly allocated and it is certain that the products will be technically feasible and can be successfully marketed. The capitalized development costs comprise all costs directly attributable to the development process. Capitalized development costs are amortized over the expected product lifecycle of generally three years from the date of the production start.
All items of property, plant and equipment (except land and assets under construction) are subject to wear and tear and are measured at cost less depreciation. The cost includes purchase prices, transaction costs as well as subsequent expenditures less any purchase price deductions granted. The costs of production are determined on the basis of directly attributable individual unit costs as well as applicable proportionate overheads. Financing costs that can be directly attributed to the acquisition, construction or conversion of a qualifying asset are capitalized as part of cost. For qualifying assets that were capitalized before July 1, 2009, financing costs are not capitalized as part of cost.
Investment grants received are recognized as reductions of cost if such grants can be directly allocated to individual items of property, plant and equipment.
Items of property, plant and equipment are generally depreciated using the straightline method in accordance with their useful economic lives. Depreciable assets of property, plant and equipment are depreciated individually if they have different useful lives.
Depreciation is based on the following useful lives:
| Useful life | Years |
|---|---|
| Buildings, fixtures, outside facilities | 10 to 33 |
| Technical systems | 10 to 20 |
| Furniture | 10 |
| Electronic laboratory appliances | 3 to 10 |
| Injection molding tools | 3 to 5 |
| Testing equipment | 3 to 7 |
| IT equipment | 3 to 5 |
A shorter useful life applies if the asset can only be used for a shorter period of time for legal reasons.
Expenses for repairs and maintenance are recognized as an expense when incurred.
The carrying amounts of intangible assets that invariably have a limited useful life, and those of property, plant and equipment – are reviewed for impairment in accordance with IAS 36 "Impairment of Assets" – provided that there are indicators of impairment. An impairment loss is recognized when the recoverable amount of the asset – which is the higher of its fair value less costs to sell and its value in use – is lower than its carrying amount. If the reasons for the recognition of an earlier impairment loss no longer exist, then the impairment loss is reversed and the carrying amount increased up to amortized cost.
Government grants are recognized only when there is reasonable assurance that the Group complies with the conditions attached to them and the grants have been authorized. Subsidies received from the government for the purchase of tangible and intangible assets result in a reduction of cost. Grants for development costs are recognized as income insofar as the corresponding development projects are not capitalized.
The currently existing rental and lease agreements of the MOBOTIX Group are exclusively operating leases. A lease is classified as an operating lease when the lessor retains substantially all the risks and rewards of ownership of the leased assets. The leases refer to the lease agreements for the production and administrative building in Kaiserslautern, and lease agreements for operating and office equipment as well as for the vehicle fleet.
Investments in associates have been accounted for using the equity method. Accordingly, the costs of acquisition incurred on the purchase date have been adjusted by the future, pro-rata share in the profit or loss of the associate. Impairment losses were recognized when the recoverable amount falls below the carrying amount of the investment.
In accordance with IAS 12 "Income Taxes," deferred taxes are recognized for all temporary differences between the tax base and the carrying amounts in the financial statements. Deferred tax assets also include claims for tax reductions resulting from the anticipated use of loss carryforwards in subsequent years – the realization of which is deemed probable.
The basis for recognition is the tax rate applicable at the date of the reversal. Deferred tax assets and liabilities are not discounted. They are reported in the consolidated financial statements in accordance with IAS 12.74.
Inventories are measured at cost – with the costs of the purchase of raw materials and supplies being determined using average prices, and taking into account the net realizable value as of the balance sheet date. Work in progress and finished goods are measured at cost of conversion, also taking into account the net realizable value as of the balance sheet date. Costs of conversion include directly allocable individual unit costs and production overheads, assuming normal capacity utilization. Inventories are not qualifying assets, as no substantial period of time is necessary for their acquisition or conversion, so that no capitalization of financing costs is possible. The net realizable value represents the estimated selling price less the estimated costs necessary to make the sale. Write-downs are recognized for inventory risks in an appropriate and sufficient amount.
A financial instrument is any contract that simultaneously gives rise to a financial asset of one company and a financial liability or equity instrument of another company.
Financial assets include in particular cash and cash equivalents, trade receivables as well as other loans extended and receivables.
Receivables and other assets are recognized at their nominal amount or at amortized cost. Identifiable individual risks are provided for by appropriate valuation allowances. In accordance with IAS 39 "Financial Instruments: Recognition and Measurement," the Group regularly assesses whether there is objective evidence that a financial asset or group of financial assets may be impaired. Any impairment loss resulting from an impairment test is recognized in "Other operating expenses."
Cash and cash equivalents include cash accounts and short-term deposits at banks with a remaining term to maturity of not more than six months at the time of addition. They are measured at face value. Foreign currency balances are measured at the middle rate prevailing on the balance sheet date.
Ratable interest income generated from cash equivalents is recognized in income.
Financial liabilities such as trade payables or liabilities to banks are regularly associated with a claim to receive compensation in cash or other financial assets. Financial assets and financial liabilities are generally reported on a gross basis. They are only offset when there is currently a legally enforceable right to offset and there is an intention to settle on a net basis. Financial assets are measured initially at fair value.
Financial liabilities are measured initially at fair value using the "effective interest method" less any transaction costs directly attributable to borrowing. Financial liabilities are subsequently measured at amortized cost. The MOBOTIX Group does not have any liabilities held for trading.
In accordance with IAS 37 "Provisions, Contingent Liabilities and Contingent Assets," provisions are recognized in the statement of financial position for legal or constructive obligations as a result of past events when the outflow of resources required to settle the obligation is probable, and can be reliably estimated. The carrying amount of provisions is based on best estimates. Provisions are only recognized for legal or constructive obligations towards third parties and discounted where necessary.
The HiRes Video Company
Liabilities, including financial liabilities, are generally measured at amortized cost.
The preparation of the consolidated financial statements in accordance with IFRS requires the use of assumptions made by the management that have an influence on the measurement of assets and liabilities, the disclosure of contingent assets and liabilities as of the balance sheet date, and the reported income and expenses during the fiscal year. These estimates may differ from the actual development. The preparation of the current consolidated financial statements was subject in particular to the estimates with regard to the capitalization of intangible assets (in particular development costs), the useful lives of intangible assets (in particular for development costs) and property, plant and equipment, as well as the measurement of other provisions and the realizability of existing tax loss carryforwards. Further estimates were made for the calculation of valuation allowances on trade receivables as well as for the measurement of inventories. Actual values may vary in specific cases from the assumptions and estimates made. Changes in assumptions or estimates are recognized in profit or loss once new information becomes available.
The statement of cash flow shows the changes that have occurred in the balance of the Group's cash and cash equivalents during the reporting periods in the form of cash inflows and cash outflows. In accordance with IAS 7 "Statement of Cash Flow," a distinction is made between cash flows from operational, and investment activities, and finance activities. Cash and cash equivalents include balances, with banks and cash on hand. Cash and cash equivalents are not subject to any restrictions.
Please see the segment information in Section 7 for a breakdown of revenue by region and product.
Changes in inventories comprise increases and decreases in the amount of finished goods and work in progress.
Other own work capitalized reported in the fiscal year 2009/10 comprises in particular development costs capitalized in the amount of € 490 thousand (June 30, 2009: € 770 thousand). This item also includes internally generated testing equipment and product racks.
| EUR '000s | July 1, 2009- June 30, 2010 |
July 1, 2008- June 30, 2009 |
|---|---|---|
| Cost of raw materials, supply and merchandise |
14,205 | 12,005 |
| Cost of purchased services | 122 | 156 |
| Total | 14,327 | 12,161 |
Cost of materials comprises any materials used for the production of cameras. This item also comprises, to a small extent, expenses for purchased services, which include expenses for outsourced manufacturing and development activities.
| EUR '000s | July 1, 2009- June 30, 2010 |
July 1, 2008- June 30, 2009 |
|---|---|---|
| Wages and salaries | 11,948 | 10,151 |
| Commissions, trade fair bonuses |
69 | 103 |
| Other | 894 | 424 |
| Wages and salaries | 12,911 | 10,679 |
| Social security contributions |
1,705 | 1,484 |
| Pension benefits | 9 | 8 |
| Other | 95 | 48 |
| Social security | 1,810 | 1,540 |
| Total | 14,721 | 12,220 |
In fiscal year 2009/10, the employer's contributions to social security included expenses for a defined contribution plan (Deutsche Rentenversicherung) in the amount of €817 thousand (prior year: €702 thousand), of which €6 thousand (prior year: €6 thousand) referred to related parties.
In fiscal year 2009/10, the Company employed 212 persons (2008/09: 181) on average (excluding Management Board members, trainees and temporary staff).
The following groups of employees were employed by the Company in the year under review:
| Group of employees | 2009/10 | 2008/09 |
|---|---|---|
| Full-time employees | 202 | 173 |
| Part-time employees | 10 | 8 |
| EUR '000s | July 1, 2009- June 30, 2010 |
July 1, 2008- June 30, 2010 |
|---|---|---|
| Amortization of intangible assets |
297 | 268 |
| Depreciation of property, plant and equipment |
1,613 | 1,164 |
| Total | 1,910 | 1,432 |
Amortization of capitalized development costs amounted to €200 thousand in the fiscal year ending June 30, 2010. We refer to Note (13) for an overview of amortization, depreciation and impairment.
| July 1, 2009- June 30, |
July 1, 2008- June 30, |
|
|---|---|---|
| EUR '000s | 2010 | 2009 |
| Income from employees | 199 | 89 |
| Income from exchange differences |
289 | 318 |
| Income from the disposal of non-current assets |
2 | 14 |
| Government grants | 0 | 374 |
| Other | 87 | 28 |
| Total | 576 | 823 |
Income from employees results from amounts reimbursed by employees for their private use of company cars as well as meals. In the previous year, government grants in the form of two low-interest innovation loans from Kreditanstalt für Wiederaufbau (KfW Development Bank) for the financing of the development activities of MOBOTIX AG have been granted. Measurement of the loans at fair value on the date of acquisition resulted in an interest rate advantage of €430 thousand. Of that amount, €374 thousand was received and recognized in profit or loss and €56 thousand was deducted from the corresponding capitalized development costs.
| July 1, 2009- |
July 1, 2008- |
|
|---|---|---|
| June 30, | June 30, | |
| EUR '000s | 2010 | 2009 |
| Advertising and marketing expenses |
4,583 | 4,264 |
| Shipping costs | 1,948 | 1,439 |
| Other administrative costs |
1,247 | 920 |
| Travel & entertainment expenses |
1,154 | 982 |
| Occupancy, operating and office equipment |
966 | 941 |
| Vehicle expenses | 563 | 496 |
| Legal & consulting fees, expenses for trade mark rights as well as being public costs |
438 | 561 |
| Expenses for temporary staff |
373 | 176 |
| Expenses from exchange differences |
92 | 60 |
| Other | 881 | 943 |
| Total | 12,245 | 10,782 |
The at-equity result of minus €32 thousand Euro from the preceding year resulted from the impairment loss on the stake in MOBOTIX AG, Freienbach, Switzerland at fair value. The write-down to fair value reflected the uncertain situation of the company at that time.
Interest and similar income primarily includes interest income from demand deposits and short-term time deposits at banks as well as income from a granted loan.
| EUR '000s | July 1, 2009- June 30, 2010 |
July 1, 2008- June 30, 2009 |
|---|---|---|
| Interest on borrowings | -511 | -408 |
| Other | -2 | 0 |
| Interest expenses | -513 | -408 |
| Interest income from banks |
102 | 272 |
| Other interest income | 2 | 21 |
| Interest income | 104 | 293 |
| Total | -409 | -115 |
Interest expenses arise, among other things, from the loans taken out for the new construction of the production and administrative building, as well as for other existing loans. Interest on loans and the other interest items can be allocated to financial assets and financial liabilities of the "financial liabilities measured at amortized cost" or "loans and receivables" category.
The income taxes on revenue and earnings in Germany and USA are stated as current, deferred or paid in previous year. MOBOTIX
AG is liable for an average municipal trade tax of 12.5% on the income from the business. The corporate tax rate comes to 15% plus a solidarity surcharge of 5.5% on the corporate tax. The Group's tax rate increased from 27.9% to 28.8%.
The following table shows the reconciliation of the income taxes derived from profit before tax to income taxes reported in the financial statements:
| July 1, 2009- June 30, |
July 1, 2008- June 30, |
|
|---|---|---|
| EUR '000s | 2010 | 2009 |
| Profit before tax | 11,738 | 10,461 |
| Income taxes derived from profit before tax |
3,327 | 3,028 |
| Profits set off against accumulated losses / loss carryforwards not capitalized |
-93 | -111 |
| Effects from difference in tax rate USA |
70 | 0 |
| Other non deductible expenses |
32 | 43 |
| Taxes from previous years |
50 | -36 |
| Adjustments from tax rate changes |
0 | -8 |
| Other | -9 | 8 |
| Reported income taxes |
3,377 | 2,923 |
Income taxes can be broken down as follows:
The HiRes Video Company
| EUR '000s | July 1, 2009- June 30, 2010 |
July 1, 2008- June 30, 2009 |
|---|---|---|
| Current taxes | 3,317 | 2,715 |
| Deferred taxes | 10 | 244 |
| Taxes from previous years |
50 | -36 |
| Total | 3,377 | 2,923 |
In accordance with IAS 12 "Income Taxes," deferred taxes were recognized on temporary differences between the IFRS statement of financial position and the tax base. The amount reported on deferred tax assets and liabilities according to items of the statement of financial position as of June 30, 2010 are as follows:
| Deferred tax assets | Deferred tax liabilities | |||
|---|---|---|---|---|
| EUR '000s | June 30, 2010 | June 30, 2009 | June 30, 2010 | June 30, 2009 |
| Development costs | 0 | 0 | 473 | 403 |
| Property, plant and equipment | 7 | 6 | 4 | 1 |
| Inventories | 123 | 109 | 19 | 36 |
| Trade receivables | 0 | 0 | 15 | 13 |
| Liabilities to banks | 38 | 23 | 90 | 109 |
| Provisions | 0 | 0 | 34 | 34 |
| Total deferred taxes on temporary differences |
168 | 138 | 636 | 596 |
| Offset | -45 | -29 | -45 | -29 |
| Amount reported on the the statement of financial position |
123 | 109 | 591 | 567 |
Earnings per share are calculated by dividing the profit for the year attributable to shareholders of MOBOTIX AG by the weighted number of shares outstanding.
| EUR '000s | 2009/10 | 2008/09 |
|---|---|---|
| Profit attributable to shareholders of MOBOTIX AG (in EUR '000s) | 8,361 | 7,538 |
| Number of shares outstanding as of July 1 (in thousand) | 4,424 | 4,424 |
| Number of shares outstanding as of June 30 (in thousand) | 4,424 | 4,424 |
| Weighted average of shares (in thousand) | 4,424 | 4,424 |
| Basic / diluted earnings per share (in EUR) | 1.89 | 1.70 |
Dilutive effects on earnings at MOBOTIX AG do not exist.
As of July 30, 2010, MOBOTIX AG had acquired 2,895 own shares as part of the share buyback program that began in July 2010.
Profit For The Year € 8.4m (10.9%)
Earning Per Share € 1.89
The following table shows the changes of the individual items of non-current assets based on total cost.
| Balance | Balance | |||||
|---|---|---|---|---|---|---|
| as of July | Reclassifi | Exchange | as of June | |||
| EUR '000s | 1, 2009 | Additions Disposals | cations | differences | 30, 2010 | |
| Intangible assets | ||||||
| Development costs | 1,561 | 490 | 0 | 0 | 0 | 2,051 |
| Software and industrial property rights |
762 | 72 | 0 | 0 | 0 | 834 |
| Total intangible assets | 2,323 | 562 | 0 | 0 | 0 | 2,884 |
| Land and buildings including buildings on thirdparty land |
11,893 | 1,215 | 0 | -147 | 0 | 12,961 |
| Machinery | 4,675 | 535 | 12 | 293 | 0 | 5,491 |
| Other plant and equipment | 3,231 | 817 | 14 | 0 | 11 | 4,045 |
| Advance payments and construction in progress |
339 | 1,020 | 0 | -146 | 0 | 1,231 |
| Total property, plant and equipment |
20,138 | 3,587 | 26 | 0 | 11 | 23,710 |
| Accumulated depreciation, amortization and impairment |
||||||
| Development costs | 237 | 200 | 0 | 0 | 0 | 437 |
| Software and industrial property rights |
624 | 97 | 0 | 0 | 0 | 721 |
| Total intangible assets | 861 | 297 | 0 | 0 | 0 | 1,158 |
| Land and buildings including buildings on thirdparty land |
440 | 408 | 0 | 0 | 0 | 848 |
| Machinery | 2,688 | 725 | 8 | 0 | 0 | 3,405 |
| Other plant and equipment | 1,224 | 480 | 9 | 0 | 8 | 1,703 |
| Advance payments and construction in progress |
104 | 0 | 0 | 0 | 0 | 104 |
| Total property, plant and equipment |
4,456 | 1,613 | 17 | 0 | 8 | 6,060 |
| Net carrying amounts | ||||||
| Development costs | 1,324 | 1,614 | ||||
| Software and industrial property rights |
138 | 112 | ||||
| Total intangible assets | 1,462 | 1,727 | ||||
| Land and buildings including buildings on thirdparty land |
11,453 | 12,113 | ||||
| Machinery | 1,987 | 2,088 | ||||
| Other plant and equipment | 2,007 | 2,342 | ||||
| Advance payments and construction in progress |
235 | 1,109 | ||||
| Total property, plant and equipment |
15,682 | 17,650 |
| Balance | Balance | |||||
|---|---|---|---|---|---|---|
| EUR '000s | as of July 1, 2008 |
Additions | Disposals | Reclassifi cations |
Exchange differences |
as of June 30, 2009 |
| Intangible assets | ||||||
| Development costs | 847 | 714 | 0 | 0 | 0 | 1,561 |
| Software and industrial property rights |
739 | 23 | 0 | 0 | 0 | 762 |
| Total intangible assets | 1,586 | 737 | 0 | 0 | 0 | 2,323 |
| Land and buildings including buildings on thirdparty land |
1,586 | 9 | 0 | 10,298 | 0 | 11,893 |
| Machinery | 3,865 | 197 | 33 | 646 | 0 | 4,675 |
| Other plant and equipment | 1,766 | 575 | 24 | 908 | 6 | 3,231 |
| Advance payments and construction in progress |
6,077 | 6,114 | 0 | -11,852 | 0 | 339 |
| Total property, plant and equipment |
13,294 | 6,895 | 57 | 0 | 6 | 20,138 |
| Accumulated depreciation, amortization and impairment |
||||||
| Development costs | 81 | 156 | 0 | 0 | 0 | 237 |
| Software and industrial property rights |
512 | 112 | 0 | 0 | 0 | 624 |
| Total intangible assets | 593 | 268 | 0 | 0 | 0 | 861 |
| Land and buildings including buildings on thirdparty land |
244 | 196 | 0 | 0 | 0 | 440 |
| Machinery | 2,047 | 657 | 16 | 0 | 0 | 2,688 |
| Other plant and equipment | 916 | 311 | 7 | 0 | 4 | 1,224 |
| Advance payments and construction in progress |
104 | 0 | 0 | 0 | 0 | 104 |
| Total property, plant and equipment |
3,311 | 1,165 | 23 | 0 | 4 | 4,456 |
| Net carrying amounts | ||||||
| Development costs | 766 | 1,324 | ||||
| Software and industrial property rights |
227 | 138 | ||||
| Total intangible assets | 993 | 1,462 | ||||
| Land and buildings including buildings on thirdparty land |
1,342 | 11,453 | ||||
| Machinery | 1,818 | 1,987 | ||||
| Other plant and equipment | 850 | 2,007 | ||||
| Advance payments and construction in progress |
5,973 | 235 | ||||
| Total property, plant and | 9,983 | 15,682 |
equipment
In the fiscal year 2009/10, expenses for research and development amounted to €5,430 thousand (prior year: €4,337 thousand), of which development costs for camera housings, electronics and software projects in the amount of €490 thousand (prior year: €770 thousand) were capitalized. The capitalized development costs comprise all costs directly attributable to the development process. In the fiscal year 2009/10, amortization expenses amounted to €200 thousand (previous year : €156 thousand. The development projects are amortized on a straight-line basis over a period of three years.
The item "land and buildings on thirdparty land" primarily includes the new construction of the production and administrative buildings at the Company's location in Winnweiler-Langmeil.
The item "machinery" mainly includes capitalized costs for tools. The tools are physically located at the Company's suppliers. In addition, the item comprises in particular IT equipment, electronic laboratory appliances, testing equipment, and production facilities.
The item "operating and office equipment" primarily consists of fittings for trade fairs, furniture and fixtures as well as operating equipment and production facilities.
As of June 30, 2010 MOBOTIX AG has received a subsidy allocation of €2,199 thousand for the new production and administration building in the amount. On June 30, 2010, a subsidy entitlement of €244 thousand (prior year: €277 thousand) was capitalized for outstanding subsidy allocation. The capitalized grant was deducted from non-current assets pursuant to IAS 20.27.
Inventories are composed of the following:
| EUR '000s | June 30, 2010 |
June 30, 2009 |
|---|---|---|
| Raw materials and supplies |
3,964 | 2,427 |
| Work in progress | 1,405 | 1,980 |
| Finished goods | 2,210 | 1,378 |
| Advance payments | 0 | 65 |
| Total | 7,579 | 5,851 |
The inventories of raw materials and supplies consist of products that were purchased from other companies and integrated into the Company's own products or further processed otherwise, i.e. in particular printed circuit boards, housings, and sensors.
Work in progress relates to the inventory of pre-fabricated components and cameras in production as of the balance sheet date.
Finished goods mainly relate to finished cameras and accessories.
In the fiscal year 2009/10, the Company recognized write-downs to the lower net realizable value.
The carrying amount of inventories shown at net realizable value is €0 thousand (prior year: €31 thousand). Write-downs to net realizable value amounted to €1,218 thousand (June prior year: €1,066 thousand), of which €592 thousand (prior year: €480 thousand) related to raw materials and supplies, €169 thousand (prior year: €109 thousand) to work in progress, and €457 thousand (prior year: €477 thousand) to finished goods.
The inherent default risk associated with trade receivables is monitored and limited by the Management Board based on clearly defined requirements. Impairment losses that are based on the individual default risk existed in the amount of €260 thousand (June 30, 2009: €317 thousand).
As in the previous years, all trade receivables had terms of less than one year. The market values of trade receivables largely correspond to their carrying amounts.
| EUR '000s | June 30, 2010 |
June 30, 2009 |
|---|---|---|
| Trade receivables, gross |
6,802 | 5,328 |
| Specific valuation allowances |
-260 | -317 |
| Total | 6,542 | 5,011 |
The balance of the specific valuation allowances changed as follows in the fiscal years 2009/10 and 2008/09:
| Specific valuation | |
|---|---|
| EUR '000s | allowances |
| Balance as of July 1, 2008 |
53 |
| Exchange differences | -1 |
| Reversals | -10 |
| Utilization | -27 |
| Additions | 302 |
| Balance as of June 30, 2009 / July 1, 2009 |
317 |
| Exchange differences | 6 |
| Reversals | -52 |
| Utilization | -150 |
| Additions | 139 |
| Balance as of June 30, 2010 |
260 |
As of June 30, 2010 and 2009, the maturity structure of trade receivables and receivables from associates was as follows (all amounts in EUR thousand):
| June 30, | June 30, | |
|---|---|---|
| EUR '000s | 2010 | 2009 |
| Carrying amount |
6,542 | 5,011 |
| neither impaired nor past due |
4,903 | 4,024 |
| not impaired, past due in the following time bands |
||
| < 31 days | 1,415 | 785 |
| 31-90 days | 196 | 162 |
| 91-180 days | 7 | 15 |
| > 181 days | 3 | 25 |
| Receivables subject to impairment (gross) |
278 | 320 |
There are no indications for trade receivables that are neither impaired nor past due, and those that are not impaired, but past due to suggest that the liable parties will no be able to meet their obligations. The accumulation of specific valuation allowances are recognized after a detailed analysis of individual cases based on the customer's creditworthiness.
Other assets are composed of the following:
| EUR '000s | June 30, 2010 |
June 30, 2009 |
|---|---|---|
| Gold reserve | 3,602 | 1,043 |
| Loans granted | 706 | 230 |
| VAT receivables | 604 | 788 |
| Investment grants | 244 | 277 |
| Claims for damages | 154 | 143 |
| Rent deposits | 44 | 50 |
| Receivables from employees |
25 | 31 |
| Other items | 146 | 132 |
| Total | 5,526 | 2,694 |
As in previous years, all other assets had terms of less than one year. With the exception of the gold reserve the market value of the other assets largely corresponds to their carrying amount. The gold reserves market value as of the balance sheet date amounts to €4,423 thousand.
Cash includes cash on hand, balances with banks, and term deposits with a maturity of up to six months.
| EUR '000s | June 30, 2010 |
June 30, 2009 |
|---|---|---|
| Cash on hand | 5 | 4 |
| Bank balances | 6,307 | 8,639 |
| Term deposits | 1,000 | 1,500 |
| Total | 7,312 | 10,142 |
Prepaid expenses primarily include accrued expenses for prepaid rent and special lease payments.
| EUR '000s | June 30, 2010 |
June 30, 2009 |
|---|---|---|
| Prepaid rent for production building |
115 | 133 |
| Trade fair costs | 94 | 106 |
| Other | 267 | 212 |
| Total | 476 | 451 |
The prepaid rent for the production building in Kaiserslautern is reported on an accrual basis and is divided into a long-term and a shortterm portion.
Subscribed capital corresponds to the share capital of MOBOTIX AG as of the relevant balance sheet date.
As of the balance sheet date, the Company had 4,423,814 common shares (June 30, 2009: 4,423,814). The no-par value shares have a proportional interest in the share capital of €1.00 per share. The share capital is fully paid in.
The Management Board is authorized, subject to the consent of the Supervisory Board, to increase the Company's share capital on one or more occasions between January 1, 2008 and November 30, 2011 by up to a total of €1,273 thousand by issuing up to 1,272,544 new no-par value bearer shares against cash contributions or contributions in kind (authorized capital).
By resolution of the annual general meeting held on September 30, 2009, the Management Board is authorized to acquire treasury shares of the Company until September 30, 2014. The shares to be acquired based on this authorization combined with other shares of the Company, which the Company has already acquired or still possesses, may not exceed more than 10% of the Company's share capital at the time of the resolution or its exercise accordingly 442,381 shares.
The acquisition can be implemented as a purchase on the stock exchange, or through a public purchase offer to all shareholders. If the number of tendered shares in a public purchase offer exceeds the total number of shares envisaged for acquisition by the Company, the acquisition can be implemented under exclusion of the tender rights of the shareholders on a pro-rata basis related to the number of shares tendered, in order to simplify the purchase process.
This simplification – likewise under exclusion of the tender rights to the shareholders – also allows the possibility to accept small numbers of tendered shares up to 100 per shareholder on a preferential basis.
Furthermore, the Management Board is authorized, with the consent of the Supervisory Board, to use the treasury shares acquired in accordance with the authorization also for purposes for which the subscription right of the shareholders is ruled out.
The capital reserve consists of share premiums of various capital increases.
Accumulated other comprehensive income includes the differences from currency translation recognized directly in equity.
The profit or loss carried forward comprises the accrued, retained profits.
The annual general meeting of MOBOTIX AG, Winnweiler-Langmeil, of September 30, 2009 has decided to pay out a dividend amounting to €4,424 thousand. This corresponds to a dividend of €1.00 per share. The payment was executed on September 30, 2009.
Capital management at the MOBOTIX Group focuses on long-term capital appreciation for the benefit of shareholders, employees, and customers. The main objective of this approach is to generate high profitability and high growth rates. Capital management also focuses on the participation of shareholders in the successful development of the company by using an appropriate dividend policy.
MOBOTIX AG is not subject to statutory capital requirements.
The tax provisions of €3,005 thousand (June 30, 2009: €2,199 thousand) include provisions for municipal trade tax, corporation tax, and the solidarity surcharge for 2009 and 2010.
In accordance with IAS 37 "Provisions, Contingent Liabilities and Contingent Assets," provisions are recognized for legal and constructive obligations as a result of past events when the outflow of resources required to settle the obligation is probable and can be reliably estimated.
Provisions for warranties are recognized for warranty obligations specified by law in connection with the Company's products. Recognition of provisions for warranties is based on historical experience. We expect utilization of the provisions for warranties to occur within the next two years according to the legal warranty obligations.
| EUR '000s | Balance as of July 1, 2009 |
Utilization | Additions | Balance as of June 30, 2010 |
|---|---|---|---|---|
| Warranties | 109 | 55 | 92 | 146 |
| Other | 55 | 55 | 30 | 30 |
| Other provisions | 164 | 110 | 122 | 176 |
The liabilities to banks have the following terms to maturity:
| EUR '000s | Balance as of June 30, 2010 |
Up to 1 year | 1 to 5 years | More than 5 years |
|---|---|---|---|---|
| Loan from Deutsche Bank | 3,237 | 450 | 1,800 | 987 |
| Loan from Commerzbank | 2,505 | 120 | 480 | 1,905 |
| Promissory note loan from Commerzbank |
2,000 | 2,000 | 0 | 0 |
| Loan from Sparkasse Donnersberg |
778 | 44 | 178 | 556 |
| Total | 8,520 | 2,614 | 2,458 | 3,448 |
| EUR '000s | Balance as of June 30, 2009 |
Up to 1 year | 1 to 5 years | More than 5 years |
|---|---|---|---|---|
| Loan from Deutsche Bank | 3,616 | 450 | 1,800 | 1,366 |
| Loan from Commerzbank | 2,570 | 120 | 480 | 1,970 |
| Promissory note loan from Commerzbank |
2,000 | 0 | 2,000 | 0 |
| Loan from Sparkasse Donnersberg |
823 | 44 | 178 | 601 |
| Loan from Kreissparkasse Kaiserslautern |
100 | 100 | 0 | 0 |
| Total | 9,109 | 714 | 4,458 | 3,937 |
The term of the Commerzbank promissory note loan ends on December 15, 2010 and bears interest at the rate of 5.65% per annum.
The loan from Sparkasse Donnersberg in the original amount of €845 thousand has a term of 20 years and was intended to be used for the purchase of land for the new company site. The loan bears interest at the rate of 5.5% per annum.
The loans from Investitions- und Strukturbank (ISB) Rheinland-Pfalz GmbH in the original amount of €2,000 thousand and from KfW Bankengruppe (KfW) in the original amount of €2,500 thousand, both of which were extended by Deutsche Bank, have a term of ten years each and are intended to be used to finance the construction of the new production building. The loans are promo-
tional loans and bear effective interest rates of 4.19% (ISB) and 4.55% (KfW), respectively. In order to determine the fair value of the loans, we used a reference interest rate of 5.5% for discounting purposes. The promotional contributions included in the loans in the amount of €258 thousand were offset against property, plant and equipment.
The innovation loans originally totaling €3,000 thousand broken down into an outside capital tranche of €1,200 thousand and an equity tranche of €1,800 thousand from KfW Bankengruppe (KfW), which were extended by Commerzbank have a term of 10 years each and are intended to be used to finance development costs. The loans are promotional loans and bear effective interest rates of 2.35% and 3.25% respectively. In order to determine the fair value of the loans, we used a reference interest rate of 3.6% and 5.6% respectively for discounting purposes. €56 thousand of the promotional contributions included in the loans in the amount of €430 thousand was offset against capitalized development costs and €374 thousand was received and recognized in profit and loss in the previous year.
The loan from Deutsche Bank, the loan from Sparkasse Donnersberg and the loan from Commerzbank (outside capital tranche) are secured by way of registered land charges amounting to €6,545 thousand on the production and administrative building in Winnweiler-Langmeil, Germany. The carrying amount of the collateral property amounts to €12,093 thousand as of the balance sheet date.
The fair value of liabilities to banks essentially corresponds to the carrying amount.
The following table shows the contractually agreed (undiscounted) interest and principal payments of nonderivative financial liabilities:
| Carrying amount |
Cashflows | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| June 30, 2010 |
2011 | 2012-2014 | 2015-2019 | 2020 ff. | |||||
| EUR '000s | Interest Principal | Interest | Principal | Interest | Principal | Interest | Principal | ||
| Non-current liabilities to banks |
5,906 | 213 | 0 | 580 | 1,843 | 497 | 4,322 | 94 | 379 |
| Current liabilities to banks | 2,614 | 76 | 2,614 | ||||||
| Trade payables | 3,245 | 3,245 | |||||||
| Other non-interest-bearing liabilities |
1,781 | 1,781 |
| Carrying amount |
Cashflows | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| June 30, 2009 |
2010 | 2011-2013 | 2014-2018 | 2019 ff. | |||||
| EUR '000s | Interest Principal | Interest Principal | Interest | Principal | Interest | Principal | |||
| Non-current liabilities to banks |
8,394 | 346 | 0 | 696 | 3,843 | 634 | 4,172 | 131 | 1,143 |
| Current liabilities to banks | 714 | 24 | 714 | ||||||
| Trade payables | 2,498 | 2,498 | |||||||
| Other non-interest-bearing liabilities |
1,507 | 1,507 |
The following table shows the classification of the individual assets and liabilities to the measurement categories in accordance with IAS 39 and the classes in accordance with IFRS 7:
| Measurement category in accordance with IAS 39 |
Carrying amount as of June 30, 2010 |
Class in accordance with IFRS 7 |
|
|---|---|---|---|
| Asset | |||
| Cash and cash equivalents | n.a. | 7,312 | Cash |
| Trade receivables | LaR | 6,542 | Trade receivables |
| Other financial assets | |||
| Loans to shareholders | LaR | 706 | Other financial assets and liabilites |
| Miscellaneous financial assets | LaR | 614 | Other financial assets and liabilites |
| Liabilities | |||
| Non-current liabilities to banks | FLAC | 5,906 | Liabilities to banks |
| Current liabilities to banks | FLAC | 2,614 | Liabilities to banks |
| Trade payables | FLAC | 3,245 | Trade payables |
| Other financial liabilities | |||
| Liabilities from wages and salaries | FLAC | 1,523 | Other financial assets and liabilites |
| Miscellaneous other financial liabilities | FLAC | 258 | Other financial assets and liabilites |
LaR: loans and receivables
FLAC: financial liabilities measured at amortised cost
| Measurement category in |
Carrying amount as of |
||
|---|---|---|---|
| accordance with IAS 39 |
June 30, 2009 |
Class in accordance with IFRS 7 |
|
| Asset | |||
| Cash and cash equivalents | n.a. | 10,142 | Cash |
| Trade receivables | LaR | 5,011 | Trade receivables |
| Other financial assets | |||
| Loans to shareholders | LaR | 230 | Other financial assets and liabilites |
| Miscellaneous financial assets | LaR | 634 | Other financial assets and liabilites |
| Liabilities | |||
| Non-current liabilities to banks | FLAC | 8,394 | Liabilities to banks |
| Current liabilities to banks | FLAC | 714 | Liabilities to banks |
| Trade payables | FLAC | 2,498 | Trade payables |
| Other financial liabilities | |||
| Liabilities from wages and salaries | FLAC | 1,237 | Other financial assets and liabilites |
| Miscellaneous other financial liabilities | FLAC | 270 | Other financial assets and liabilites |
LaR: loans and receivables
FLAC: financial liabilities measured at amorttised cost
The carrying amounts of cash, trade receivables, trade payables as well as other financial assets and liabilities mainly correspond to their fair value. The fair values have been determined by the corresponding active market value at that time. The maximum exposure to credit risk corresponds to the carrying amounts. The measurement of trade receivables led to a net loss of €89 thousand in the "loans and receivables" category.
The MOBOTIX Group is subject to various financial risks as a result of its business model. The control and limitation of these risks is ensured through risk management, which pursues a central currency and liquidity management approach. The main financial decisions are directly made by the Management Board.
Financial risks mainly consist of liquidity risks, currency risks, gold price risks, interest rate risks, and default risks.
Liquidity management is based on shortterm rolling liquidity forecasts as well as on medium and long-term integrated planning of results of operations, net assets, and financial position. In view of the large liquidity position and the high creditworthiness of the Group, there are currently no material liquidity risks. Excess liquidity is invested in risk-free, fixedincome financial instruments, especially overnight deposits. Financings directly connected with the financing of the new location are collateralized through land charges. There is no further collateral provided for existing financial liabilities.
Invoices are denominated in EUR, with the exception of product sales in the U.S. This means that the currency risk is directly borne by the customers of MOBOTIX AG and does not lead to exchange losses at MOBOTIX AG. Accordingly, currency risks exist primarily in connection with the U.S. operations. Currency risks are hedged, in some cases due to in essence closed positions, where values or cash flows from receivables from MOBOTIX CORP and from the purchase of goods in the U.S. dollar zone match in terms of timing and amount. However, the positive cash flow from U.S. operations currently exceeds the purchase requirements of MOBOTIX AG in the U.S. dollar zone as a result of the positive business trend in the U.S. We have not yet decided to use derivatives for reasons of volume.
The interest rate risk to which MOBOTIX AG is exposed is currently insignificant. Existing third-party financing was acquired at fixed interest rates. The weighted average nominal interest rate of the loans is 3.9% (June 30, 2009: 3.9%).
The default risk of non-derivative financial instruments is managed through an active receivables management, including dunning and collection processes. Credit terms are granted according to uniform guidelines applicable throughout the Group on a very restrictive basis, taking into account
appropriate assessments of the relevant customers' creditworthiness. New customers in foreign countries are generally required to make advance payments for their first orders.
As in the previous years, trade payables had terms of less than one year.
The market values of trade payables largely correspond to their carrying amounts.
As in the previous years, the other liabilities had terms of less than one year. The market value of the other liabilities largely corresponds to their carrying amount.
| EUR '000s | June 30, 2010 | June 30, 2009 |
|---|---|---|
| Liabilities from wages and salaries | 798 | 658 |
| Bonuses and commissions | 725 | 579 |
| Liabilities from wage and church tax | 282 | 0 |
| Debtors with credit balances | 36 | 54 |
| Remuneration of the Supervisory Board | 50 | 50 |
| Liabilities for social security | 19 | 25 |
| Advance payments received | 34 | 28 |
| Other | 172 | 166 |
| Total | 2,115 | 1,560 |
As the in previous year, there were no contingencies in the year under review.
The MOBOTIX Group has other financial obligations amounting to €10,550 thousand. These relate to purchase obligations under supply agreements (June 30, 2010: €7,635 thousand; prior year: €3,965 thousand) and obligations from rental and lease agreements (June 30, 2010: €2,915 thousand; prior year: €1,467 thousand).
The agreements have terms of up to eight years and are partly subject to renewal options. The main portion (June 30, 2010: €2,256 thousand; June 30, 2009: €1,234 thousand) of the other financial obligations results from the lease in relation to the production building at Luxemburger Strasse 6 in Kaiserslautern and the rental agreement for the New York office. The minimum term of the lease agreement expires on May 1, 2016 and the rental agreement for the New York office expires on January 31, 2018. The vehicle leases include mileage-based contingent rents.
Within the framework of the rental and lease agreements, payments in the amount of €506 thousand (2008/09: €570 thousand) were recognized as an expense in the fiscal year under review. Contingent rents did not have to be paid in the year under review. The leasing payments shown for vehicles also comprise payments for components of the agreement that are not part of the leasing relationship.
The sum of future minimum lease payments from non-cancelable rental agreements and operating leases by maturity is as follows:
| EUR '000s | June 30, 2010 |
June 30, 2009 |
|---|---|---|
| Maturity | ||
| up to 1 year | 627 | 319 |
| from 1 year to 5 years | 1,675 | 817 |
| more than 5 years | 613 | 331 |
| Total | 2,915 | 1,467 |
The contractual relationship with the general contractor for the new building in Langmeil was terminated extraordinarily before completion. In the meantime, the general contractor has submitted his final invoice in the amount of €2,262 thousand (net). MOBOTIX disputes this invoice, as counterclaims from contractual penalties, defects and deficiencies are
present in at least the same amount. Court proceedings are not pending at the present time. According to the Management Board's risk assessment, the situation was taken into account in the financial statements by recognizing an asset in property, plant and equipment and carrying a corresponding liability. Consequently, no cash outflow arose from the unrecognized final payment.
The following expenses were incurred for the auditors of MOBOTIX AG, KPMG AG Wirtschaftsprüfungsgesellschaft, in accordance with Section 314 (1) No. 9 of HGB (German Commercial Code):
| Fees | 2009/10 EUR '000s |
2008/09 EUR '000s |
|---|---|---|
| Audit of financial statements |
||
| From provisions | 53 | 50 |
| Other audit services | ||
| Invoiced | 26 | 24 |
| Tax advice | ||
| Invoiced | 5 | 0 |
| Total | 84 | 74 |
In accordance with IAS 24 "Related party disclosures," relations with persons or companies that control MOBOTIX AG or are subject to control by MOBOTIX AG have to be disclosed unless such parties are already included in the consolidated financial statements as a consolidated company. Control is deemed to exist when a shareholder holds more than one half of the voting power of MOBOTIX AG or has the power to direct, by statute or agreement, the financial and operating policies of the management of MOBOTIX AG or its subsidiaries.
Disclosure is also required, in accordance with IAS 24 "Related party disclosures," of transactions with associates as well as transactions with persons who exercise significant influence over MOBOTIX AG or its subsidiaries in making financial and operating decisions, including close family members or intermediate companies. Significant influence over the financial and operating policies of MOBOTIX AG may result from a shareholding in MOBOTIX AG of 20% or more, or from the membership in the Management Board or Supervisory Board of MOBOTIX AG or in the executive boards of one of its subsidiaries.
On June 16, 2010, the loan granted to Dr. Ralf Hinkel amounting to €230 thousand which was due to expire on June 29, 2010 was renewed prior to maturity until June 29, 2011. The loan bears interest at a rate of 3.5% per annum.
In addition, Dr. Ralf Hinkel was granted another loan amounting to €476 thousand on June 14, 2010. The maturity of the loan is until October 28, 2010 (annual general meeting), but not later than December 31, 2010, and bears interest at a rate of 3.0% per annum.
MOBOTIX AG has not entered into any further material transactions with persons or companies that exercise a significant influence over the Company in making financial and operating decisions, including their close family members.
All related party transactions, without exception, can be allocated to the Company's ordinary activities.
| Number of shares June 30, 2010 |
Share in subscribed capital in% |
|
|---|---|---|
| Management Board |
||
| Dr. Ralf Hinkel (CEO)* | 2,218,134 | 50.14 |
| Lutz Coelen (CFO, CSO) |
16,000 | 0.36 |
| Klaus Borchers (CTO July 16 until October 16, 2009) |
283,960 | 6.42 |
| Supervisory Board | ||
| Dr. Thomas Hoch (Chairman) |
1,000 | 0.02 |
| Prof. Dr. Rainer Gerten | 20,800 | 0.47 |
| Ulrich Putsch | 0 | 0.00 |
*The shares are held indirectly via the Dr. Ralf Hinkel Holding GmbH, Winnweiler-Langmeil.
Ulrich Putsch is a family member related to the shareholder Andreas Putsch, who holds approx. 9.91% of the share capital of MOBOTIX AG.
Each member of the Supervisory Board receives fixed annual remuneration of €10,000 for his or her work. The Chairman of the Supervisory Board receives twice this amount.
The remuneration of the members of the Management Board amounted to €1,002 thousand (2008/09: €1,281 thousand) and consists entirely of short-term benefits to members of the Management Board.
Pursuant to the shareholders' resolution of October 6, 2008, no individualized disclosure of the remuneration and other promised or received benefits of the members of the Management Board will be made in the annual financial statements and the consolidated financial statements for fiscal years 2008/09 through 2012/13 but no longer than until October 6, 2013.
The bonus for one fiscal year will be paid only in the following fiscal year upon the approval of the financial statements for the past fiscal year. The bonus for the fiscal year 2009/10 is expected to amount to €480 thousand. Bonuses paid for the previous year amounted to €650 thousand.
In the case of disability due to ill health or accident, the remuneration of the members of the Management Board will continue to be paid for a period of six months unless the employment contract ends earlier.
In addition, the members of the Management Board are given a luxury-class car commensurate with their position, which they may use for business and private travel. The Management Board members shall pay taxes incurred for the non-cash benefits from the private use of the company car. The company car has to be returned to the Company upon the end of the relevant employment contract.
In addition, the Company has taken out accident insurance policies for each member of the Management Board for the period of the employment contracts to cover occupational and private accidents. The amount covered for Mr. Coelen is €250,000 and for Dr. Hinkel €2.5 million. The sum payable upon death amounts
The HiRes Video Company
to €500,000 for Mr. Coelen, and €2.5 million for Dr. Hinkel. Either the relevant member of the Management Board or the legal heirs are entitled to the insurance benefits. The Company has also provided the members of the Management Board with Directors' and Officers' (D&O) Insurance, for which there is no deductible for the fiscal year 2009/10. Any wage taxes payable for the insurance premiums are paid by the relevant members of the Management Board.
The Declaration of Compliance as required by Section 161 of the Stock Corporation Act was issued by the Management Board most recently on July 16, 2010 for the previous 12-month-period. A summary of the Company's corporate governance practices can be found in the annual report and on the website (www. mobotix.com). The Declaration of Compliance has been made permanently available on the Company's website (in German only).
The statement of cash flows was prepared in accordance with IAS 7 "Statement of Cash Flows." The cash flows from operating activities, investing activities, and financing activities are stated separately. The cash flows from investing activities and financing activities are determined on the basis of payments, while the cash flows from operating activities are derived using the indirect method.
Cash and cash equivalents include balances with banks and cash on hand. Cash and cash equivalents are not subject to any restrictions.
Revenue by product line is broken down as follows:
| Revenue in EUR '000s | July 1, 2009- June 30, 2010 |
July 1, 2008- June 30, 2009 |
|---|---|---|
| Fixed Cams | 26,767 | 24,064 |
| Dome Cams | 24,161 | 18,335 |
| Other | 2,916 | 2,499 |
| Total | 53,844 | 44,898 |
Revenue by region is broken down as follows:
| Revenue in EUR '000s | July 1, 2009- June 30, 2010 |
July 1, 2008- June 30, 2009 |
|---|---|---|
| Germany | 14,541 | 14,201 |
| Rest of Europe | 23,303 | 20,051 |
| Other | 16,000 | 10,646 |
| Total | 53,844 | 44,898 |
No definable business segments exist within MOBOTIX AG, the operating results of which are regularly reviewed by the Management Board with regard to decisions concerning the allocation of resources to those business segments or the measurement of their profitability. Due to internal structures and its size, resource allocation management within the MOBOTIX Group takes place based on sales revenues, primarily according to regions, but also according to product lines. Profitability ratios or earnings statements are only prepared on the level of the entire company. Thus, no separate financial information is calculated for definable business segments. In this respect, no reportable segments exist in terms of IFRS 8.
However, sales revenues are shown below according to product lines and geographical regions, in order to provide better insight into the sales activities of the Group.
The Company's product categories are broken down as detailed below:
The fixed cams category includes the M12, M24 and V12 models.
The M12 is usually equipped with two image sensors and a passive infrared sensor. This camera series also comes with a microphone and a speaker for audio communication. If there is no DSL connection, the M12 can be easily connected to the Internet via its integrated ISDN connection that can be used to transmit data over the Internet and to forward voice messages and alarm alerts to telephones, for example. IP telephony based on the VoIP SIP standard is also available directly from the camera. Various camera modules can be used so that a Wide-Angle lens can be combined with a Telephoto lens. The M12 Day/ Night model is equipped with a light-sensitive black-and-white sensor for use at night and a color sensor that provides sharp color images in daylight. Switching between lenses is purely electronic without mechanical parts.
The M24 is the mono version of the M12, which features all the functionality of the M12, except for the passive infrared sensor and ISDN connection. Audio communication is available via the integrated microphone and speaker. All telephony functionality is based on the VoIP SIP standard.
The V12 vandalism-protected camera has been specially designed for use in locations with a high risk of vandalism, such as prisons. It is encased in a housing made from 3mm-thick stainless steel. It is also protected by a 6mm-thick cover and is triangular in shape so that it can be mounted in the corner of a room and fixed in place using heavy-duty dowels. To illuminate the room when it is dark the V12 is equipped with integrated, remote-controlled IR lighting with 20 infrared LEDs.
The dome cams category includes the D12, D24, Q24 and T24 models.
The D12 is a dome camera that features two manually adjustable modules. It is based on the same hardware as the M12. Unlike the M12, the D12 camera modules can be individually positioned in any direction when mounted. This makes it possible, for example, to position a Wide-Angle lens in one direction and a Telephoto lens in another direction. Each Super-Wide-Angle lens covers a 90-degree horizontal viewing angle. When both are used in each camera module, the camera can monitor an area with a 180-degree Panorama view. The integrated software in the camera enables the two generated images to be shown either separately, or combined in a single image.
The D24 is a dome camera that features a manually adjustable module and offers all the software functionality of the other camera series. Although it is not equipped with an infrared sensor, microphone or speaker, these can be externally retrofitted. In locations with a high risk of vandalism, the robust D24 models can be given extra protection in the form of the optional Vandalism Set, which includes a 3mm-thick polycarbonate dome and an additional stainless steel cover.
The Q24 model is an ultra-compact IP-Dome camera that features a 360° Allround view. The camera line allows a hemispherical allround view for complete room coverage, digital, continuous zooming and panning as well as event-driven, complete-room recording directly in the camera. In addition, the camera features all the software functionality of the other camera series. The speaker and microphone are integrated into the camera. The range of accessories includes, for example, a vandalism housing and an in-ceiling set.
The HiRes Video Company
T24 is an IP video door station based on the international video telephony standard VoIP/ SIP and H.264. The camera is based on the same technology platform as the Q24 product line. Plans exist to deliver the camera module with additional components such as keypads and infomodules beginning in the 2010/11 fiscal year. In addition to the hemispherical allround view of the entire doorstep area, the T24 enables global video and voice access to the door station. The individual management of access authorization uses PIN code or RFID transponder with the ability to leave and retrieve voice messages, as well as recording either permanently or event-driven (including sound) on built-in memory.
MOBOTIX offers the appropriate accessories for all camera series to enable the cameras to be properly mounted and to protect their cables and leads. Various installation kits for mounting cameras on surfaces and walls or integrating them into suspended ceilings are supplied for each model. Housing technology accessories, and accessories for building alarm and security solutions are also offered. MOBOTIX AG also generates a small amount of revenue from training seminars.
Internal reports are submitted to the Management Board. Only revenue is reported for each product category and region.
No single customer generates more than 10% of total revenue.
MOBOTIX IP Video Door Station T24
Dr. Ralf Hinkel, Graduate in Computer Sciences, Höringen (CEO)
Lutz Coelen, Graduate in Business Administration, Herrsching am Ammersee (CFO/CSO)
Klaus Borchers, Hardware Developer, Otterbach (CTO), from July 16, 2009 until October 16, 2009
Dr. Thomas Hoch, Graduate in Business Informatics, Executive, Dreieich-Sprendlingen (Chairman)
Ulrich Putsch, Graduate Engineer, Independent Gentleman Rockenhausen
Prof. Dr. Rainer Gerten, Graduate in Computer Sciences, Professor, Neuhofen
In the fiscal year 2009/10 the members of the Supervisory Board were additionally represented in the following supervisory and advisory boards:
Sysgo AG, Mainz (Member of the Supervisory Board)
Ice Age Ice AG, Maintal (Chairman of the Supervisory Board)
iTAC Software AG, Montabaur (Member of the Supervisory Board)
Toplink GmbH, Darmstadt (Chairman of the Advisory Council)
Palladio Systeme GmbH, Worms (Chairman of the Advisory Council)
Secude AG, Emmetten (Board member, since November 2009)
Secude IT Security GmbH, Darmstadt (Chairman of the Advisory Council, since August 2009)
Pure Carbon AG, Zurich (Chairman of the Board, until June 2010)
Pure Klimaschutz AG, St. Gallen (Board member, until June 2010)
BRAIN Biotechnology Research and Information Network AG, Zwingenberg (Chairman of the Supervisory Board)
Igr AG, Rockenhausen (Chairman of the Supervisory Board)
SimonsVoss Technologies AG, Unterföhring (Member of Supervisory Board, until May 2010)
In July 2010, a general contract was concluded with Goldbeck Süd GmbH, Hirschberg a.d. Bergstrasse. The contract covers the construction of a production and assembly shop on the Company's land in Winnweiler. The total investment has a contract volume of approximately € 5 million.
No further events of any significance occurred after the end of fiscal year 2009/10.
Winnweiler-Langmeil, July 30, 2010
The Management Board
Dr. Ralf Hinkel • CEO MOBOTIX AG
Lutz Coelen • CFO/CSO MOBOTIX AG
To the best of our knowledge, we hereby affirm that, pursuant to the generally accepted accounting principles for the annual reporting, the financial statements give a true and fair view of the net assets, financial position and the results of operations of the Group, that the Annual Report presents the development of the Group´s business, including its performance and situation, in such a way that it is a true and fair reflection, and that it describes the major risks and opportunities inherent in the development of the Company during the next financial year.
Winnweiler-Langmeil, July 30, 2010
The Management Board
Dr. Ralf Hinkel • CEO MOBOTIX AG
Lutz Coelen • CFO/CSO MOBOTIX AG
We have audited the consolidated financial statements prepared by MOBOTIX AG comprising a statement of financial position, an income statement, a statement of comprehensive income, a statement of cash flows, a statement of changes in equity and the notes, together with the group management report for the business year from 1 July 2009 to 30 June 2010.
The preparation of the consolidated financial statements and the group management report in accordance with IFRSs, as adopted by the EU, and the additional requirements of German commercial law pursuant to § 315a Abs. 1 HGB [Handelsgesetzbuch "German Commercial Code"] are the responsibility of the parent company's management. Our responsibility is to express an opinion on the consolidated financial statements and on the group management report based on our audit.
We conducted our audit of the consolidated financial statements in accordance with § [Article] 317 HGB [Handelsgesetzbuch "German Commercial Code"] and German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the consolidated financial statements in accordance with the applicable financial reporting framework and in the group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated financial statements and the group management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the annual financial statements of those entities included in consolidation, the determination of entities to be included in consolidation, the accounting and consolidation principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements
and group management report. We believe that our audit provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the consolidated financial statements comply with IFRSs, as adopted by the EU, the additional requirements of German commercial law pursuant to § 315a Abs. 1 HGB and give a true and fair view of the net assets, financial position and results of operations of the Group in accordance with these requirements. The group management report is consistent with the consolidated financial statements and as a whole provides a suitable view of the Group's position and suitably presents the opportunities and risks of future development.
Saarbrücken, July 30, 2010
KPMG AG Wirtschaftsprüfungsgesellschaft
Geis-Sändig Palm
Auditor Auditor
| CCD | Image sensor Charged Coupled Device; a light sensitive hardware component |
|---|---|
| CIF | Common Intermediate Format, an image compression format |
| CMOS image sensor | Complementary Metal Oxide Semiconductor - a light sensitive hardware component |
| CPU | Central Processing Unit |
| DVR | Digital Video Recorder |
| Fixdome | Camera without any mechanical moving parts, inside a dome housing |
| HDTV | High Definition TV |
| HiRes | High Resolution |
| IP network | Data network based on Internet protocols |
| IP standard | Standardized network protocol |
| JPEG format | A lossy image data format which reduces the file size by compressing the same or similar image content. |
| LAN | Local Area Network; local network |
| Control center computer | The computer at a central control center that enables the information supplied by the camera to be handled |
| Megapixel | Image size of more than 1 million pixels |
| MPEG format | Video format for creating data streams for streaming images, defined by the Motion Picture Experts Group |
| SD Card | SD Memory Card (short for Secure Digital Memory Card) is a digital memory device that works according to the principle of flash memory, such as a USB stick |
| TCP/IP protocol | Transmission Control Protocol/Internet Protocol |
| Video server | Central storage unit for video images or video streams |
| VoIP | Voice over IP; standard for voice transmission via IP networks |
| EBITDA | Earnings before interest, taxes, depreciation and amortization |
|---|---|
| EBITDA margin | EBITDA divided by total output multiplied by 100 (the higher the percentage, the higher the financial performance) |
| EBIT | Earnings before interest and taxes |
| EBIT margin | EBIT divided by total output multiplied by 100 (the higher the percentage, the higher the financial performance) |
| Total output | Revenue plus/minus changes in inventories plus other own work capitalized |
| Gross profit | Total output less cost of materials |
| Dividend yield | Dividend divided by share price multiplied by 100 |
| Equity-to-assets ratio | Equity as reported on the balance sheet divided by total assets multiplied by 100 (the higher the figure, the lower the debt-to-equity ratio) |
| Free float | Shares of a public listed company that are freely available to the investing public |
| Market capitalization | Number of shares multiplied by share price |
This financial report contains MOBOTIX AG statements and information which relate to future periods. Such future-oriented statements may be recognised from wording such as plan, expect, intend, endeavour, will, estimate, assume, aim at or similar such terms. Statements of this kind have been made on the basis of current circumstances and current expectations and may differ considerably from the actual development both to positive and negative effect. The following factors, amongst others, may give rise to uncertainties: changes to the overall economic situation both nationally and internationally, changes to the underlying political situation, the introduction of new products or technologies by other companies, changes to investment activities in the customer markets important to MOBOTIX AG, changes to exchange rates and interest rates, integration of acquired companies along with other factors. MOBOTIX AG does not accept any obligation over and above existing legal obligations to correct or update future-oriented statements.
This is an English translation of the German original. Only the German version is binding. The financial reports from MOBOTIX AG are available as pdf files on the homepage (www.mobotix.com).
| Annual Report 2009/2010 | September 15, 2010 |
|---|---|
| Annual General Meeting 2009/10, Langmeil | October 28, 2010 |
| 3 Months Report 2010/11 | November 22, 2010 |
| German Equity Forum Fall 2010 | November 22, 2010 |
| 6 Months Report 2010/11 | February 16, 2011 |
| 9 Months Report 2010/11 | Mai 16, 2011 |
| Annual General Meeting 2010/2011 | October 2011 |
| Lutz Coelen | MOBOTIX AG |
|---|---|
| CFO and CSO | Investor Relations |
| Phone: +49 6302 9816-111 | Kaiserstrasse |
| Fax: +49 6302 9816-190 | 67722 Langmeil |
| E-mail: [email protected] | E-mail: [email protected] |
Investor Relations Manager Telefon: +49 6302 9816-111 Fax: +49 6302 9816-190 E-Mail: [email protected]
| MOBOTIX AG |
|---|
| Investor Relations |
| Kaiserstrasse |
| 67722 Langmeil |
MOBOTIX AG Security-Vision-Systems Kaiserstrasse D-67722 Langmeil, Germany Tel.: +49 6302 9816-111 Fax: +49 6302 9816-190 E-Mail: [email protected] www.mobotix.com
... the HiRes Video Company
MOBOTIX AG Security-Vision-Systems Kaiserstrasse D-67722 Langmeil, Germany Tel: +49 6302 9816-0 Fax: +49 6302 9816-190 E-Mail: [email protected] www.mobotix.com
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.