VINYL GROUP LTD — Interim / Quarterly Report 2011

Jan 24, 2011

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ASX ANNOUNCEMENT AND MEDIA RELEASE

ASX CODE: MBO

Date: 25 January 2011

MBO well placed for growth with solid first half performance

• HY2011 orders of $608,000 (exceeding FY2010 full year orders of $603,000)

• Second phase of contract with US Navy successfully completed – contract now at critical stage

• Strengthened presence in the oil & gas sector with new project for BHP Billiton

• Continued focus on managing overhead cost base whilst in ramp-up phase

• MBO assessing a number of growth opportunities – organic and potential acquisitions

Global commercial marine safety provider Mobilarm Limited (ASX: MBO) today reported orders for the half year FY2011 of $608,000, which exceeds total orders of $603,000 for all of FY2010. This order amount represents a 395% increase over the previous corresponding period in FY2010.

While revenue growth is still in the very early stages, MBO secured a number of new orders during the first half of FY2011 that will continue to fast-track growth in FY2011. Revenues for the first half of FY2011 increased by 441% over the previous corresponding period in FY2010.

Operationally, MBO performed well during the first half and is well placed to continue to grow revenue and its sales pipeline across a number of key sectors that it is targeting.

As reported on 5 January 2011, the United States Naval Sea Systems Command (NAVSEA) confirmed its support for MBO’s V200 Submariner VHF Locator Beacon development project by exercising its option to purchase an additional US$300,000 worth of test units and engineering services. Sea trials are planned to take place in June 2011 when NAVSEA will undertake a largescale sea and air demonstration involving multiple vessels and aircraft from the US Navy fleet and US Coast Guard.

The Company also secured a new contract to supply its VHF Locator Beacons to the Bristow Helicopters Australia, the sole contractor to BHP Billiton Petroleum for offshore personnel transfers by helicopter in Australia. Mobilarm will initially supply 50 of its innovative V100 VHF beacons to Bristow for integration into the RFD Beaufort Mark 28 life jackets to be worn by all BHP Billiton Petroleum personnel during transfers to offshore platforms.

Mobilarm Chief Executive Officer Lindsay Lyon commented: “The first half order performance is pleasing. It is, however, important to recognise that we are still in the very early stages of growth with our sales and marketing efforts only now just in the ramp-up phase.

“We have had three key developments during the first half which position us well for the year ahead and beyond. We now have much greater visibility and growth potential in the oil and gas sector through our new contract with Bristow, regulatory approval of man overboard beacons is taking place in a growing number of markets, and we have been successful in moving to a critical phase in our ongoing partnership with the US Navy’s NAVSEA division.

“We have also continued to focus on managing down overhead costs where possible, and this will remain an ongoing focus for MBO’s team as we expand our operations, product portfolio and geographical footprint.”

Mr. Lyon said MBO is currently pursuing a number of growth opportunities in the oil and gas, commercial fishing and defence sectors.

“We are continuing to build our pipeline of orders and new business opportunities in a number of markets. We have several tenders pending in the oil and gas sector, and we are assessing acquisition opportunities that will strengthen our market presence and expand our operations globally.

“Mobilarm is in good shape and well positioned for growth.”

• Ends –

Appendix 4C: Quarterly report for entities admitted on the basis of commitments follows

MOBILARM MEDIA ANNOUNCEMENT

2

Appendix 4C Quarterly report for entities admitted on the basis of commitments

Rule 4.7B

Appendix 4C

Quarterly report for entities admitted on the basis of commitments

Introduced 31/3/2000. Amended 30/9/2001

Name of entity
Mobilarm Limited
ABN 15 106 513 580	Quarter ended (“current quarter”)
15 106 513 580	31 December 2010

Consolidated statement of cash flows

	Consolidated statement of cash flows
	Cash flows related to operating activities 1.1 Receipts from customers 1.2 Payments for (a) staff costs (b) advertising & marketing (c) research & development (d) leased assets (e) Other working capital 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes (paid)/received 1.7 Rental recoveries 1.7 Purchases of inventory Net operating cash flows	Current quarter $	Year to date (6 months) $
		140,310 (587,308) (52,585) (141,647) - (485,678) - 8,512 - 324,685 23,485 (146,257)	547,426 (1,166,055) (91,972) (256,727) - (837,293) - 10,593 (3,304) 324,685 47,889 (287,422)
		(916,483)	(1,712,180)

• See chapter 19 for defined terms.

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

	Current quarter $	Year to date (1 Year) $
1.8 Net operating cash flows (carried forward)	(916,483)	(1,712,180)
Cash flows related to investing activities 1.9 Payment for acquisition of: (a) business ( item 5) (b) equity investments (c) intellectual property (d) physical non-current assets (e) other non-current assets 1.10 Proceeds from disposal of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non-current assets (e) other non-current assets 1.11 Loans to other entities 1.12 Loans repaid by other entities 1.13 Other (provide details if material) Net investing cash flows 1.14 Total operating and investing cash flows	- - - - - - - - - - - - -	- - - (1,596) - - - - - - - - -
	-	(1,596)
	(916,483)	(1,713,776)
Cash flows related to financing activities 1.15 Proceeds from issues of shares, options, etc. 1.16 Proceeds from sale of forfeited shares 1.17 Proceeds from borrowings 1.18 Repayment of borrowings 1.19 Dividends paid 1.20 Share issue expenses Net financing cash flows	- - - - - (184,285)	2,383,400 - 10,000 (10,000) - (184,285)
	(184,285)	2,199,115
Net increase (decrease) in cash held 1.21 Cash at beginning of quarter/year to date 1.22 Exchange rate adjustments to item 1.20 1.23 Cash at end of quarter	(1,100,768) 1,692,518 -	485,339 106,411 -
	591,750	591,750

• See chapter 19 for defined terms.

Appendix 4C Page 2

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.24 1.25	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.11	Current quarter $A
		132,381
		-
1.26	Explanation necessaryfor an understandingof the transactions
	Payments were for salaries and director fees

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

Nil

• 2.2 Details of outlays made by other entities to establish or increase their share in businesses in which the reporting entity has an interest

Nil

Financing facilities available

Add notes as necessary for an understanding of the position. (See AASB 1026 paragraph 12.2).

3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A	Amount used $A
	-	-
	5,000,000	-

Financing facilities available relates to the $6m Equity Drawdown Facility with Equity Partners Funds SPC as announced to the ASX on 16 September 2010, which is subject to shareholder ratification at the annual shareholders meeting on 26 November 2010.

• See chapter 19 for defined terms.

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A	Previous quarter $A
4.1 Cash on hand and at bank 4.2 Deposits at call 4.3 Bank overdraft 4.4 Deposits securing guarantees	426,750	1,692,518
	-	-
	-	-
	165,000	-
Total: cash at end of quarter(item 1.22)	591,750	1,692,518

Acquisitions and disposals of business entities

5.1 Name of entity 5.2 Place of incorporation or registration 5.3 Consideration for acquisition or disposal 5.4 Total net assets 5.5 Nature of business	Acquisitions (Item 1.9(a))	Disposals (Item 1.10(a))
	Nil	Nil

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act (except to the extent that information is not required because of note 2) or other standards acceptable to ASX.

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

Sign here: Company secretary

Date: 25 January 2011

Print name: David McArthur

• See chapter 19 for defined terms.

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2. The definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report except for any additional disclosure requirements requested by AASB 107 that are not already itemised in the report.

3. Accounting Standards. ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

4. See chapter 19 for defined terms.

Appendix 4C Page 5

30/9/2001