VINYL GROUP LTD — Annual Report 2011

Aug 30, 2011

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For immediate release

ASX CODE: MBO

Date: 31 August 2011

MBO Reports Record Orders and Revenues for FY2011

• FY2011 orders increased 115% over previous year

• FY2011 revenues increased 77% over the previous year

• Completed Entitlements Offer and acquisition of Marine Rescue Technologies Ltd

• Mobilarm now world’s largest man overboard safety company

• Strong growth outlook for FY2012 –growing sales pipeline and revenue base

Perth, Western Australia: Global marine safety equipment provider, Mobilarm Limited (ASX: MBO) (“The Company”) today reported full year results for the year ended 30 June 2011.Mobilarm reported an overall increase in orders to $1.3 million during the year, representing a 115% increase over the prior corresponding period. Revenues increased 77% from the previous year to $0.9 million and the Company decreased its operating loss by 34% to $4.1 million.

The Company funded the acquisition of UK-based Marine Rescue Technologies Ltd (“MRT”) through an Entitlements Offer to existing shareholders. The acquisition has provided Mobilarm an established presence and installed base in Europe and added Sea Marshall, one of the world’s leading safety equipment brands and the industry standard for oil & gas operators in the North Sea, to Mobilarm’s existing product line.

The Company now has multiple solutions to service a wide range of commercial marine markets worldwide, and continues to focus on well-defined customer segments to strengthen recurring revenues. MRT was immediately accretive, and contributed $0.2 million to Mobilarm’s annual sales, which is expected to grow significantly in FY2012.

The Company has increased the sales of its Crewsafe V100 man overboard locating device during the year, delivering to key customers in the oil & gas, commercial marine and commercial fishing markets. Mobilarm continued to grow its sales pipeline in these sectors.

The previous year has seen steady growth for Mobilarm and we are pleased to have strengthened our revenues and significantly built our order pipeline. Following the successful acquisition of MRT, Mobilarm has emerged as the world’s leading man overboard safety company with an expanding global presence and product offering.

The move beyond pilot and trial orders for our Crewsafe V100 device to increased, regular orders has bolstered our recurring revenue base and provided greater earnings visibility.

Mobilarm’s outlook remains strong and we expect to see continued revenue growth, reduced operating loss and to become cash flow positive in the current year.

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____ Lindsay Lyon Chief Executive Officer

Perth, Western Australia 31 August 2011

Mobilarm Ltd (MBO) Appendix 4E - 30 June 2011

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Appendix 4E

Full Year Report

30 June 2011

MOBILARM LIMITED

ACN 106 513 580

Results for announcement to the market

		June 2011	June 2011	June 2010
Financial Results	Movement	$		$
Revenue from ordinaryactivities	77%	941,701		530,704
Profit/(loss) from ordinary activities after tax attributable to members	34%	(4,094,955)		(6,208,022)
Netprofit/(loss)for theperiod attributable to members	34%	(4,094,955)		(6,208,022)
Dividends	Amount per Ordinary Security		Franked amount per security
2011 dividend	Nil			-
2010 dividend	Nil			-
Record date for determiningentitlements to interim dividends		N/A
Net Tangible Asset/(Liability) Backing		June 2011		June 2010
Net tangible asset/(liability)backing per ordinarysecurity		($0.01)		$0.00

Mobilarm Ltd (MBO) Appendix 4E - 30 June 2011

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MOBILARM LIMITED PRELIMINARY STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2011

Note Revenue Sale of goods Interest Rental income Other income (10) Changes in inventories of finished goods and work in progress Raw materials and consumables purchased Employee benefits Share based compensation expense Depreciation and amortisation Advertising Audit and tax Accountancy Freight and cartage External consultants and contractors Rental Travel and accommodation Allowance for doubtful debts Payroll tax Legal fees Telephone and internet charges Insurance Printing, postage and stationery Motor vehicles Finance costs Foreign exchange (loss)/gain Writedown of capitalised R&D costs Writedown of fixed assets Variation of convertible note terms Other expenses Loss before income tax Income tax benefit Loss after income tax from continuing operations	2011 $ 941,701 21,414 76,922 1,040,037 22,847 (205,992) (116,583) (2,523,379) (428,923) (303,118) (4,211) (85,726) (20,110) (20,599) (579,034) (285,609) (168,159) - (90,391) (240,913) (29,702) (36,027) (24,673) (3,828) (42,790) 237,482 (185,129) (39,556) - (537,074) (4,671,160) 576,205 (4,094,955)	2010 $ 530,704 13,642 66,556
		610,902
		4,108 62,965 (322,605) (2,264,724) (1,363,888) (415,562) (114,340) (140,479) (12,919) (16,768) (608,178) (207,426) (261,001) (10,659) (56,151) (385,010) (31,594) (67,661) (39,784) (651) (198,550) 69,534 (59,511) - (298,179) (437,567)
		(6,565,698) 357,676
		(6,208,022)

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Loss after income tax from continuing operations Other comprehensive income Changes in value of available-for-sale investments, net of tax Total comprehensive loss for the period Basic earnings per share (cents per share) (6) Diluted earnings per share (cents per share) (6)	(4,094,955) - (4,094,955) ($0.03) ($0.03)	(6,208,022) -
		(6,208,022)
		($0.05)
		($0.05)

Mobilarm Ltd (MBO) Appendix 4E - 30 June 2011

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MOBILARM LIMITED PRELIMINARY STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2011

Note CURRENT ASSETS Cash assets Restricted cash Trade and other receivables Inventories Prepayments TOTAL CURRENT ASSETS NON-CURRENT ASSETS Plant and equipment Intangible assets (3) TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Other payable – shares to be issued IPO Other payable – shares to be issued Entitlements Offer (9) Other payable – shares to be issued MRT (10) Other payable – shares to be issued Loans (4),(9) Interest bearing loans and borrowings (4) Provisions TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Provisions Interest Bearing loans and borrowings Other payable – shares to be issued (10) Deferred tax liability TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS	2011 $ 92,470 201,087 3,480,512 589,291 44,899 4,408,259 340,375 2,923,028 3,263,403 7,671,662 2,057,378 - 1,815,420 599,721 62,500 1,236,446 234,251 6,005,716 57,971 29,833 199,907 28,488 316,199 6,321,915 1,349,747	2010 $ 106,411 1,024,400 609,741 34,049 52,485
		1,827,086
		81,997 716,239
		798,236
		2,625,322
		655,252 1,024,400 - - - 3,501 217,469
		1,900,622
		33,741 5,580 - -
		39,321
		1,939,943
		685,379

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EQUITY Contributed equity (5) Accumulated Losses Reserves (5) TOTAL EQUITY/(SHAREHOLDER DEFICIT)	23,175,481 (21,898,139) 72,405 1,349,747	18,488,563 (17,803,184) -
		685,379

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MOBILARM LIMITED PRELIMINARY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2011

As at 30 June 2009 Net loss for the period Other comprehensive income Total comprehensive loss for the period Transactions with owners in their capacity as owners Issue of equity Cost of Share issues Issuance of Shares in lieu of director fees payable Share based payments Ordinary Shares Share based payments Performance Shares Equity portion of convertible notes issued Conversion of convertible As at 30 June 2010 Net loss for the period Other comprehensive income Total comprehensive loss for the period Transactions with owners in their capacity as owners Issue of equity Cost of share issues Share based payments Ordinary Shares Share based payments Performance Shares Share based payments – Stock Options As at 30 June 2011	Issued Capital $ 9,192,597 - - - 3,546,502 (42,675) 80,657 170,333 1,205,555 - 4,335,594 18,488,563 - - 4,232,622 (98,699) 196,477 356,518 - 23,175,481	Accumulated Losses $ (11,595,162) (6,208,022) - (6,208,022) - - - - - - - (17,803,184) (4,094,955) (4,094,955) - - - - - (21,898,139)	Stock Option Reserve $ - - - - - - - - - - - - - - - - - - 72,405 72,405	Convertible Note Reserve $ 153,291 - - - - - - - - 230,001 (383,292) - - - - - - - - -	Total Equity $ (2,249,274)
					(6,208,022) -
					(6,208,022)
					3,546,502 (42,675) 80,657 170,333 1,205,555 230,001 3,952,302
					685,379
					(4,094,955)
					(4,094,955)
					4,232,622 (98,699) 196,477 356,518 72,405
					1,349,747

Mobilarm Ltd (MBO) Appendix 4E - 30 June 2011

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MOBILARM LIMITED PRELIMINARY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2011

Note CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Interest received Payment for research & development R&D tax rebate Rental income & recoveries Interest and other borrowing costs paid NET CASH FLOWS USED IN OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Payments for plant and equipment Purchase of intangible assets Acquisition of business (10) NET CASH FLOWS USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings – related parties Lease and hire purchase repayments Proceeds from issue of term loan Proceeds from issue of convertible notes Proceeds from share issues Costs of share issue NET CASH FLOWS PROVIDED BY FINANCING NET INCREASE/(DECREASE) IN CASH HELD CASH AT THE BEGINNING OF THE FINANCIAL YEAR CASH AT THE END OF THE FINANCIAL YEAR	2011 $ 919,915 (4,070,011) 21,378 (401,012) 312,158 90,714 (17,306) (3,144,164) (8,113) - (1,674,390) (1,682,503) 540,000 - 510,000 - 4,062,512 (98,699) 5,013,813 187,146 106,411 293,557	2010 $ 257,100 (4,256,288) 13,642 (680,496) 288,098 66,556 (198,550)
		(4,509,938)
		(21,042) (5,808) -
		(26,850)
		266,667 (39,556) - 808,000 3,546,500 (42,675)
		4,538,936
		2,148 104,263
		106,411

Mobilarm Ltd (MBO) Appendix 4E - 30 June 2011

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NOTES TO THE PRELIMINARY FINAL REPORT (UNAUDITED) FOR THE YEAR ENDED 30 JUNE 2010

1 CORPORATE INFORMATION

Mobilarm Limited is a Company limited by shares incorporated and domiciled in Australia. The nature of the operations and principal activities of the Company are described in the Director’s Report.

The Company owns two subsidiary companies as follows:

Name	Country of Incorporation
Marine Rescue Technologies Ltd	United Kingdom
Mobilarm, Inc.	United States of America

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Preparation

The preliminary final report has been prepared in accordance with the Australian Securities Exchange Listing Rules as set out in Appendix 4E and in accordance with the measurement and recognition (but not disclosure) requirements of the Australian Accounting Standards, Corporations Act 2001 and other pronouncements of the Australian Accounting Standards.

As such, this preliminary final report does not include all the notes of the type included in an annual financial report and accordingly, should be read in conjunction with the annual report for the year ended 30 June 2010 and with any public announcement made by Mobilarm Limited during the reporting period in accordance with the disclosure requirements of the Corporations Act 2001.

The accounting policies and methods of computation are the same as those adopted in the most recent annual financial report.

Apart from the changes in accounting policies below, the accounting policies and methods of computation are the same as those adopted in the annual financial report for the year ended 30 June 2010.

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The financial report is presented in Australian Dollars and all values are rounded to the nearest dollar.

b) New and amending Accounting Standards and Interpretations

Since 1 July 2010, the Group has adopted all the amending Standards and Interpretations, mandatory for annual periods beginning on or after 1 July 2010 including:

AASB 101 Presentation of Financial Statements

The revised standard stipulates that the terms of a liability that could at any time result in its settlement by the issuance of equity instruments at the option of the counterparty do not affect its classification as current or non-current.

AASB 107 Statement of Cash Flows

The revised standard states that only expenditures that result in a recognised asset can be classified as a cash flow from investing activities. This has resulted in a reclassification of capitalised research and development from operating to investing activities, for the periods presented.

AASB 117 Leases

The revised standard removes specific guidance on classifying land as a lease so that only the general guidance remains.

AASB 132 Financial Instruments: Presentation

The revised standard amends the definition of a financial liability to classify certain rights (and certain options or warrants) as equity instruments if they satisfy certain conditions.

AASB 136 Impairment

The revised standard clarifies that the largest unit permitted for allocating goodwill acquired in a business combination is the operating segment defined in AASB 8 before aggregation for reporting purposes.

Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments

The interpretation clarifies that equity instruments issued to a creditor to extinguish a financial liability are “consideration paid”. As a result, the financial liability is derecognised and the equity instruments issued are treated as consideration paid to extinguish that liability.

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AASB 2010-3 Amendments to Australian Accounting Standards Arising from the Annual

improvements Project

This amendment affected the following standards:

AASB 3 Business Combinations;

AASB 7 Financial Instruments: Disclosures;

AASB 121 The Effects of Changes in Foreign Exchange Rates; AASB 128 Investments in Associates;

AASB 131 Investments in Joint Ventures;

AASB 132 Financial Instruments: Presentation; and

AASB 139 Financial Instruments: Recognition and Measurement.

Adoption of these Standards and Interpretations did not have any material effect on the financial position or performance of the Company.

The Company has not early adopted any standards or interpretations.

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c) Going Concern

This report has been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and settlement of liabilities in the normal course of business.

The Company has incurred a net loss after tax for the year ended 30 June 2011 of $4,094,955 (2010: $6,208,022) and experienced net cash outflows from operating activities of $3,144,164 (2010: $4,509,938). As 30 June 2011, the Company had net assets of $1,349,747 (2010: $685,379).

Notwithstanding the above, the ability of the Company to continue as a going concern is reliant on:

• increased cash flows from operations, and/ or

• the raising of funds through a debt or equity issues.

The directors have reviewed the business outlook and plans of the company and believe that both of the above can be achieved. The recent acquisition of Marine Rescue Technologies Ltd as well as the continued work with the United States Navy on the Crewsafe V200 device is part of the continued growth strategy.

Should the entity not achieve the matters set out above, there is significant uncertainty whether the entity will continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at amounts stated in the financial report.

The financial report does not include any adjustments that may be necessary if the Company is unable to continue as a going concern.

3 INTANGIBLE ASSETS

INTANGIBLE ASSETS
Intangible assets net of amortisation Development Cost Goodwill Other Total	June 2011 June 2010 $ $ 990,417 701,581 1,924,068 - 8,543 14,658
	2,923,028 716,239

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4 INTEREST BEARING LOANS AND BORROWINGS

CURRENT

CURRENT Term debt (a) Term debt from related party (b) Term debt from related party (c) Convertible note from related party (d) Finance leases NON CURRENT Finance leases	June 2011 June 2010 $ $ 541,979 - 121,115 - 207,074 - 362,777 -
	1,232,945 -
	3,501 3,501
	1,236,446 3,501
	29 833 5,580

The Company entered into various interest bearing loans for working capital purposes. The terms of each loan are described below.

• (a) The Company entered into two term loans for $400,000 and $100,000, respectively. The loans carry an interest rate of 15% per annum and a borrowing fee of 7.50% ($30,000 and $7,500, respectively) and 2.5 ordinary shares of the Company per dollar borrowed (1,000,000 and 250,000, respectively). The shares appear on the balance sheet as shares to be issued at 5 cents for a value of $62,500. These loans were repaid on 25 July 2011.

• (b) The Company entered into a GBP₤74,067 (approximately AUD $111,994) term loan with the sellers of MRT. The loan carries an interest rate of 10% per annum if paid in 30 day, 15% if paid in 60 days and 20% if paid beyond 60 days. This loan was repaid on 5 August 2011.

• (c) The Company entered into a $200,000 term loan with its Chairman. The loan carries an interest rate of 15% per annum if paid within 30 days and 18% if paid after 30 days. The loan also has a borrowing fee of $4,500. This loan was repaid on 25 July 2011.

• (d) The Company entered into a convertible note agreement with an executive director for $350,000. The loan carries an interest rate of 15% per annum and a borrowing fee of 2.5%. The conversion is at the option of the note holder and converts into equity at 5 cents per ordinary share.

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5 CONTRIBUTED EQUITY

Ordinary shares (a) Performance shares (b) Contributed equity (a) Ordinary Shares Movement in ordinary shares on issue Balance at beginning of year Consolidation of capital Issuance of equity Cost of share issues Issuance of Shares in lieu of director fees payable Share based payments - Ordinary Shares Conversion of Convertible Notes Conversion of performance shares class A Balance at end of the year	June June Number 134,108,744 - 48,901,446 - - 3,904,856 - 6,666,666	2011 June $ 22,680,073 495,408 23,175,481 2011 June $ Number 17,283,008 264,425,398 - (176,283,599) 4,232,622 17,641,568 (98,699) - - 537,712 196,477 871,666 - 26,915,999 1,066,666	2010 $ 17,283,008 1,205,555
			18,488,563
			2010 $ 9,192,597 3,546,502 (42,675) 80,657 170,333 4,335,594
	193,581,712	22,680,074 134,108,744	17,283,008

Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholder meetings.

(b) Performance Shares (i) Movement in performance shares class A on issue Balance at beginning of year Share issue Share based payment expense for the year Conversion of performance shares class A Balance at end of the year (ii) Movement in performance shares class B on issue Balance at beginning of year Share issue Share based payment expense for the year Balance at end of the year	June 2011 June 2010 Number $ Number $ 6,666,666 888,889 - - - - 6,666,666 - - 177,777 - 888,889 -6,666,666 (1,066,666) - -
	- - 6,666,666 888,889
	June 2011 June 2010 Number $ Number $ 3,166,666 211,111 - - - - 3,166,666 - - 98,519 - 211,111
	3,166,666 309,630 3,166,666 211,111

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(iii) Movement in performance shares class C on issue Balance at beginning of year Share issue Share based payment expense for the year Balance at end of the year Total Performance Shares	June 2011 June 2010 Number $ Number $ 3,166,668 105,556 - - - - 3,166,668 - - 80,222 - 105,555
	3,166,668 185,778 3,166,668 105,555
	6,333,334 495,408 13,000,000 1,205,555

Performance class A shares convert to ordinary shares on a 1 for 1 basis upon obtaining ASX conditional listing. The Company obtained conditional listing on 25 August 2010 and the shares have now been converted. The Company amortised the shares from their issuance date through the milestone date.

Performance class B shares convert to ordinary shares on a 1 for 1 basis upon the Company reaching a market capitalisation of $65 million dollars based on the five day weighted average share price on the ASX. The Company has amortised the Performance shares class B based upon the Company’s financial plans to reach that milestone.

Performance class C shares convert to ordinary shares on a 1 for 1 basis upon the Company reaching a market capitalisation of $100 million dollars based on the five day weighted average share price on the ASX. The Company has amortised the Performance shares class C based upon the Company’s financial plans to reach that milestone.

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(c) Options Movement in options on issue Balance at beginning of year Options issued – Capital Raising (i) Options issued – Employee Stock Option Plan (ii) Balance at end of the year	June 2011 June 2010 Number $ Number $ 3,448,000 - - - 3,168,000 - 3,448,000 - 3,308,333 72,405 - -
	9,924,333 72,405 3,448,000 -

All options were issued as a free attaching option as part of the Company’s capital raises in 2011 and 2010 or as part of the employee stock option plan.

The options issued under the employee stock option plan are detailed as follows:

Grant Date Expiry Date Strike Price 22-Dec-2010 22-Dec-2015 $0.193 20-Jan-2011 15-Oct-2015 $0.193 09-Jun-2011 09-Jun-2016 $0.072 Balance at end of the year	Amount 2,725,000 83,333 500,000
	3,308,333

• The original strike price for these options was $0.20. The terms of these employee options provide for the exercise price of the options to be adjusted in accordance with the formula set out in ASX Listing Rule 6.22.2 following an Entitlement Offer. The Company adjusted the strike price as part of the Entitlements Offer completed.

6 EARNINGS PER SHARE

EARNINGS PER SHARE Weighted average number of ordinary shares outstanding during the year used in the calculation of basic earnings per share Weighted average number of ordinary shares outstanding during the year used in the calculation of diluted earnings per share Basic earnings/(loss) per share (cents per share) Diluted earnings/(loss) per share (cents per share)	June 2011 June 2010 Number Number 155,392,998 116,899,114
	162,892,998 123,565,780
	($0.03) ($0.05)
	($0.03) ($0.05)

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7 SEGMENT INFORMATION

The company operates solely in the development, manufacturing and sale of man overboard safety systems. The Company operates in three geographical locations being Australia, the United Kingdom and the United States of America. The Company manages its operations internally as one segment under the management of the CEO. The accounting policies applied for internal reports are consistent with the policies used to prepare the financial statements.

8 CONTINGENT LIABILITIES

As at reporting date there were no contingent liabilities.

9 SUBSEQUENT EVENTS

The Company completed its shortfall offer related to its Entitlements Offer for $1,815,420 on 25 July 2011. The Company issued 36,308,406 ordinary shares as part of this transaction. The Company also issued 15,000,000 share options as part of this transaction. The options have a three year expiry and the exercise price is as follows:

Date of Exercise	Exercise Price
Within 365 days of issue	$0.10
Within 366-730 days of issue	$0.15
Within 731-1095 days of issue	$0.20

The Company also completed a private placement for $500,000 on 15 August 2011 and issued 10,000,000 shares for this transaction.

The Company also issued 1,250,000 shares as part of its borrowing agreements for a total of $62,500. The transaction was completed on 1 July 2011.Other than the transactions listed above, the Directors are not aware of any matter or circumstance that has significantly or may significantly affect the operations of the company or the results of those operations, or the state of affairs of the company in subsequent financial years.

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10 BUSINESS COMBINATIONS

Acquisition of Marine Rescue Technologies Ltd

On 9 June 2011, Mobilarm Limited acquired Marine Rescue Technologies Ltd (MRT), a leader in the design and manufacture of man overboard technology in Europe. Mobilarm acquired 100% of the issued capital of MRT for GBP£1,723,000 (approximately AUD $2,653,790).The purchase price was split into an initial cash payment of GBP £1,189,000 (approximately AUD $1,831,316) and a deferred share based compensation of GBP£534,000 (approximately AUD $822,475). The deferred share compensation will be granted via the issue of up to 11,423,261 ordinary shares subject to the following:

• 75% of the maximum number of shares will be issued if 2012 gross revenue achieved is GBP£1,600,000 (approximately AUD $2,464,000), and

• 25% of the maximum number of shares will be issued if 2013 gross revenue achieved is GBP£2,000,000 (approximately AUD $3,080,000).

• Any excess over the target in each year can be applied to a shortfall in the other year.

• Any shortfall against the target is a reduction in the number of shares to be issued. The minimum target needed to earn any deferred shares is approximately GBP£3,066,000 (approximately AUD $4,722,000).

The foreign exchange rate as at 9 June 2011 was $1.5402 for 1 GBP.

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ASSETS Cash assets Trade and other receivables Inventories Plant and equipment Intangible assets Other assets TOTAL ASSETS LIABILITIES Trade and other payables Tax liabilities Intercompany account TOTAL CURRENT LIABILITIES Fair value of identified assets Goodwill arising in transaction Cash paid Deferred share compensation (current) Deferred share compensation (non current)	Marine Rescue Technologies Limited Provisional fair value at acquisition date on Carrying value $ $ $16,178 $16,178 $467,144 $467,144 $477,434 $477,434 $336,532 $336,532 $245,138 $245,138 $33,733 $33,732 $1,576,159 $1,576,159 $785,265 $785,265 $115,009 $115,009 $55,542 $55,542 $955,816 $955,816 $620,343 $2,033,447 $2,653,790 $1,831,315 $616,856 $205,619 $2,653,790	Marine Rescue Technologies Limited Provisional fair value at acquisition date on Carrying value $ $ $16,178 $16,178 $467,144 $467,144 $477,434 $477,434 $336,532 $336,532 $245,138 $245,138 $33,733 $33,732 $1,576,159 $1,576,159 $785,265 $785,265 $115,009 $115,009 $55,542 $55,542 $955,816 $955,816 $620,343 $2,033,447 $2,653,790 $1,831,315 $616,856 $205,619 $2,653,790
		$1,576,159
		$785,265 $115,009 $55,542
		$955,816

From the date of acquisition on 9 June 2011, MRT has contributed revenue and a loss before tax (excluding corporate overheads) of $204,674 and $30,489, respectively. Mobilarm Limited wrote down the value of inventories subsequent to the acquisition date as the future benefit of the stock is beyond 12 months. The total impact of these adjustments was $111,038. If those adjustments were not made, MRT would have had a net profit before tax of $80,549 from the date of acquisition.

Had the acquisition of MRT occurred at the beginning of the reporting period, the consolidated statement of comprehensive income would have included revenue and loss of $3,170,965 and $3,632,920, respectively. The costs of acquisition have been expensed and are included in the consolidated statement of comprehensive income.

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Management believes the goodwill reflects the synergies between Mobilarm and MRT. Management believes that it is probable that it MRT will reach the deferred milestones and as such has recognized the liability for the deferred compensation as at the completion date. The fair value of the deferred compensation was adjusted as at 30 June 2011 to reflect the current value of the Company’s share price. The resulting fair value adjustment of $22,847 is recognized as other income and reduces the value of the deferred compensation to $799,628.

11 ANNUAL MEETING

The annual meeting will be held as follows:

Place to be advised Date to be advised Time to be advised Approximate date the annual report will be available 31 October 2011

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12 COMPLIANCE ESTATEMENT

1. This report has been prepared in accordance with AASB Standards, other AASB authoritative pronouncements and Urgent Issues Group Consensus Views or other standards acceptable to ASX (see note 12).

Identify other standards used:

1. This report, and the accounts upon which the report is based (if separate), use the same accounting policies.

2. This report does give a true and fair view of the matters disclosed

3. This report is based on accounts to which one of the following applies (Tick one)

	The accounts have been audited		The accounts have been subject to review.
	The accounts are in the process of being audited or subject to review.		The accounts have not yet been audited or reviewed.

1. The entity has formally constituted audit committee.

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• ---

David McArthur Company Secretary 31 August 2011

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