VINYL GROUP LTD — Interim / Quarterly Report 2012

Feb 28, 2012

Appendix 4D Preliminary final report

Rule 4.2A.3

Appendix 4D

Half-year report

Introduced 010/1/2003 Amended 17/12/10

Name of entity: Mobilarm Limited

ABN: 15 106 513 580

1. Reporting period (“current period”): Previous corresponding period

Half-year ended 31 December 2011 Half-year ended 31 December 2010

2. Results for announcement to the market

			31	December	December	31 December
				2011		2010
				$A’000		$A’000
2.1	Revenue	up	838% to	$2,439		$260.1
2.2	Loss from ordinary activities after	up	30% to	($1,712)		($2,429)
	tax attributable to members
2.3	Net loss for the period attributable	up	30% to	($1,712)		($2,429)
	to members
			Amount	per	Franked amount
			share cents		per	share cents
2.4	Dividends
	Final		nil			nil
	Interim		nil			nil

• 2.5 Record date for determining entitlement to dividends: N/A

• 2.6 Brief explanation of figures (if necessary):

• See chapter 19 for defined terms.

17/12/10 – Appendix 4D

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Appendix 4D Preliminary final report

3. Net tangible assets

31 December 31 December 2011 2010 $/cents $/cents Net tangible asset backing per $0.00 $0.00 ordinary share

4. Details of entities over which control has been gained or lost

4.1 Name of the entity

N/A

4.2 Date of the gain or loss of control

N/A

• 4.3 Contribution to the reporting entity’s profit (where applicable)

N/A

5. Dividends

Amount per security

Nil

Total dividends paid on all securities during the financial year

Nil

• See chapter 19 for defined terms.

17/12/10 – Appendix 4D

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Appendix 4D Preliminary final report

7. Auditor’s review report

Note: The audit report or review must be provided as part of the report.

For all entities, if the accounts are subject to audit dispute or qualification, a description of the dispute or qualification.

This report is based on accounts to which one of the following applies:

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

Sign here: Date: 29 February 2012 Director Print name: Richard Allen

• See chapter 19 for defined terms.

17/12/10 – Appendix 4D

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REVIEW OF OPERATIONS

Mobilarm Limited (“the Company”) and its consolidated entities (“the Group”) have completed a dynamic six months in which it focused on sales growth. The Group achieved record orders for the first six months of $3,479,100. The half year orders represent a 498% increase over the prior corresponding period in FY2010. This translated into record revenues of $2,439,269 for the half year and leaves the Group with a healthy backlog to commence the second half of its 2012 financial year.

This allowed the Group to reduce its operating loss from $2,428,891 to $1,712,261 in the period. The Group was still completing the Entitlements offer and the integration of the Marine Rescue Technologies Ltd acquisition. Mobilarm Limited also moved facilities during the half year to reduce costs and expand our service capabilities for our customers.

The Group is currently focused on its goal of achieving profitable levels of operations and has already implemented various changes to its corporate structure to reduce its costs. We are also investing in the future of our product families to make sure that we have products that address our key industry markets in a global basis.

---

Ken Gaunt

Chief Executive Officer

Perth, Western Australia 29 February 2012

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DIRECTORS’ REPORT

The Directors present their half year report of the Group, being Mobilarm Ltd and it’s consolidated entities, for the half year ended 31 December 2011.

Directors

The directors of Mobilarm Limited in office at any time during the period and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

• Mr. Richard Allen - Independent Chairman

Mr. Ken Gaunt* - Chief Executive Officer

• Mr. Brenton Scott - Non-Executive Director**

• Mr. Lindsay Lyon - Chief Executive Officer (previously)*

• Mr. Christian Lange - Non Executive Director (previously)

Mr. David Marshall* - Non Executive Director

The directors have been in office since the start of the financial year to the date of this report, unless otherwise stated.

• Appointed as Non-Executive Director on 1 September 2011. Appointed as Chief Executive Officer on 6 January 2012.

• ** Appointed as Managing Director on 31 August 2011. Resigned as Managing Director on 6 January 2012. Continues to be NonExecutive Director.

• *** Resigned as Executive Director on 31 August 2011. Continued to be Chief Executive Officer until 5 January 2012, when he resigned.

• **** Resigned as Non-Executive Director on 31 August 2011.

• * Appointed as Non-Executive Director on 23 January 2012.

Principal Activities

The principal activities of the company during the half year were the development, manufacturing and sale of a Man Overboard Safety Systems.

There were no other significant changes in the nature of the activities of the company during the half year.

Dividends

No dividends were paid or declared for the half year.

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Operations of the Company

The Company received orders of $3,479,100 in the half year ended 31 December 2011 (2010: $608,338), a 472% increase. That helped the Company increase revenue to $2,439,269 in the period as compared to $260,141 in the half year ended 31 December 2010, an increase of 838%, mostly due to the inclusion of the Marine Rescue Technologies Ltd (MRT) acquisition. The loss of the company after providing for income tax amounted for the half year ending 31 December 2011 to $1,712,261 (2010: Loss of $2,428,891). The decrease in the loss was due to the increased sales volumes.

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The Company’s operating expenses increased to $3,418,334 in the half year ended 31 December 2011 as compared to $2,676,804 in the half year ended 31 December 2010, an increase of 28%. The increase came from the addition of the MRT operation that was acquired in June 2011. This resulted in a net loss for the half year of $1,712,261 as compared to a loss of $2,428,891 in the half year ended 31 December 2010, a decrease of 29%.

Financial Position of the Company

The Company ended December 2011 with net assets of $3,093,024, compared to net assets of $3,165,167 at June 2010. The deterioration in financial condition is mostly due to a delay in shipping certain customer orders. The Company has $395,637 recorded as a liability for customer deposits on orders that will ship in the third quarter of financial year 2012.

On the asset side, the Company has decreased its non restricted current assets by $1,524,168 from June 2011 to December 2011, mostly due to the receipt of funds from the Entitlements Offer receivable that was used to paydown current liabilities and all term debt held by the Company as at 30 June 2011. Non-current assets increased by $96,204 due to a increase in the expenditure of our next generation Crewsafe product.

Business strategy for future financial years

The Company will continue to pursue its growth strategy of becoming the world’s largest provider of Man Overboard solutions and emergency beacons. The Company plans to increase market share through organic growth during the next financial year.

Further information on likely developments in the operations of the Company and the expected results of those operations in future financial years has not been included in this report because disclosure of the information would likely result in unreasonable prejudice to the Company.

Net Tangible Asset

The Company had a net tangible asset of $97,968 (December 2010: $250,976).The net tangible asset per weighted average share is $0.00 (2010: Asset of $0.00).

Changes in the State Of Affairs

There were no changes to the state of affairs of the company.

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Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

The auditor’s independence declaration is set out on page 5 and forms part of the directors’ report for the year ended 31 December 2011.

Significant events subsequent to balance date

Since the end of the half year, no events or circumstances have arisen that would require disclosure in the financial report.

Signed in accordance with a resolution of the Directors.

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---

Richard Allen Independent Chairman

Perth, Western Australia 29 February 2012

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Auditor’s Independence Declaration to the Directors of Mobilarm Limited

In relation to our audit of the financial report of Mobilarm Limited for the half-year ended 31 December 2011, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

Ernst & Young

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P McIver Partner Perth 29 February 2012

Liability limited by a scheme approved under Professional Standards Legislation

PM:MB:MOBILE013

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DIRECTORS’ DECLARATION

In the opinion of the directors of Mobilarm Limited (“the Company”):

In the opinion of the Directors:

• (a) The financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including:

• (i) giving a true and fair view of financial position of the consolidated entity as at 31 December 2011 and the performance for the half year ended on that date; and

• (ii) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001; and

• (b) Subject to the matter disclosed in Note 2 to the financial statements, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of the Directors

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---

Richard Allen Independent Chairman

Perth, Western Australia 29 February 2012

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STATEMENT OF COMPREHENSIVE INCOME

FOR THE HALF YEAR ENDED 31 DECEMBER 2011

	Consolidated 31 December 2011 31 December 2010 $ $	Consolidated 31 December 2011 31 December 2010 $ $
Revenue Sale of goods Interest Rental income Other income – fair value movement on contingent consideration 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 Accountancy Audit and tax 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) Variation of convertible note terms Other expenses Loss before income tax Income tax expense/(benefit) Loss for the period carried forward	2,439,269 5,751 19,465 2,464,485 79,963 (72,120) 830,532 1,672,605 153,845 182,547 5,322 8,195 57,476 22,718 221,023 141,981 170,092 26 50,839 88,765 24,216 25,106 54,229 18,438 127,321 67,748 - 405,805 (1,712,261) - (1,712,261)	260,141 10,599 37,990
		308,730
		- 60,817 - 1,194,802 393,798 221,956 2,454 16,380 16,094 9,223 289,920 146,707 63,161 - 47,753 36,563 14,295 11,986 13,234 2,681 3,320 (15,991) - 208,468
		(2,428,891) -
		(2,428,891)

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STATEMENT OF COMPREHENSIVE INCOME (CONTINUED)

FOR THE HALF YEAR ENDED 31 DECEMBER 2011

	31 December 2011 $	31 December 2010 $
Loss for the period brought forward Other comprehensive income Exchange difference on translation of foreign operation Total comprehensive loss for the period Basic earnings/(loss) per share (cents per share) Diluted earnings/(loss) per share (cents per share)	(1,712,261) (6,804) (1,719,065) (0.01) (0.01)	(2,428,891) -
		(2,428,891)
		(0.02)
		(0.02)

The statement of comprehensive income should be read in conjunction with the notes to the financial statements.

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STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2011

Note	Consolidated 31 December 2011 30 June 2011 $ $	Consolidated 31 December 2011 30 June 2011 $ $
CURRENT ASSETS Cash and cash equivalents Restricted cash Trade and other receivables 3 Inventories Other current assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Plant and equipment Intangible assets and goodwill 4 TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables 5 Customer deposits 5 Financial liability – Contingent Consideration 6 Other payable Interest bearing loans and borrowings 7 Provisions TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Provisions Interest Bearing loans and borrowings 7 Financial liability – Contingent Consideration 6 Deferred tax liability TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity 8 Accumulated Losses 9 Reserves TOTAL EQUITY	380,127 305,174 1,734,208 517,171 97,730 3,034,410 364,551 2,995,056 3,359,607 6,394,017 1,748,692 395,637 539,748 - 1,163 333,292 3,018,532 78,042 24,504 179,915 - 282,461 3,300,993 3,093,024 26,619,089 (23,750,400) 224,335 3,093,024	92,470 201,087 3,526,744 589,291 44,899
		4,454,491
		340,375 2,923,028
		3,263,403
		7,717,894
		2,018,000 - 599,721 62,500 1,236,446 319,861
		4,236,528
		57,971 29,833 199,907 28,488
		316,199
		4,552,727
		3,165,167
		24,990,901 (22,038,139) 212,405
		3,165,167

The statement of financial position should be read in conjunction with the notes to the financial statements.

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STATEMENT OF CASH FLOWS

FOR THE HALF YEAR ENDED 31 DECEMBER 2011

	Consolidated 31 December 2011 31 December 2010 $ $	Consolidated 31 December 2011 31 December 2010 $ $
CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Interest received Rental income & recoveries Interest costs R&D tax rebate NET CASH FLOWS USED IN OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Payments for plant and equipment Payment for research & development NET CASH FLOWS USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from / (Repayment of) borrowings – related parties Proceeds from share issues Costs of share issues NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES NET INCREASE/(DECREASE) IN CASH HELD CASH AT THE BEGINNING OF THE PERIOD CASH AT THE END OF THE PERIOD	2,727,962 (4,293,668) 5,750 21,412 (9,817) - (1,548,361) (12,850) (180,484) (193,334) (929,144) 3,108,496 (150,000) 2,029,352 287,657 92,470 380,127	547,426 (2,385,242) 10,593 47,889 (3,304) 324,685
		(1,457,953)
		(1,596) (256,727)
		(258,323)
		- 2,383,400 (184,285)
		2,199,115
		482,839
		106,411
		589,250

The statement of cash flows should be read in conjunction with the notes to the financial statements.

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STATEMENT OF CHANGES IN EQUITY

FOR THE HALF YEAR ENDED 31 DECEMBER 2011

	Issued Capital $	Accumulated Losses $	Share Based Payment Reserve $	Foreign Currency Translation Reserve $	Total Equity $
At 1 July 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 Costs of share issues Share based payments – Performance Shares Share based payments – Employee Stock Options As at 31 December 2010 At 1 July 2011 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 Costs of share issues Share based payments – Performance Shares Share based payments – Employee Stock Options As at 31 December 2011	18,488,563 - - - 2,383,400 (85,900) 367,778 - 21,153,841 24,990,901 - - - 1,742,955 (249,878) 135,111 - 26,619,089	(17,803,184) (2,428,891) - (2,428,891) - - - - (20,232,075) (22,038,139) (1,712,261) - (1,712,261) - - - - (23,750,400)	- - - - - - - 26,020 26,020 212,405 - - - - - - 18,734 231,139	- - - - - - - - - - - (6,804) (6,804) - - - - (6,804)
					685,379
					(2,428,891) -
					(2,428,891)
					2,383,400 (85,900) 367,778 26,020
					947,786
					3,165,167
					(1,712,261) (6,804)
					(1,719,065)
					1,742,955 (249,878) 135,111 18,734
					3,093,024

The statement of changes in equity should be read in conjunction with the notes to the financial statements.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2011

1 CORPORATE INFORMATION

The financial report of Mobilarm Limited (the “Company”) and its consolidated entities (“the Group”) for the half year ended 31 December 2011 was authorised for issue in accordance with a resolution of directors on 29 February 2012.

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.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

This general purpose condensed financial report for the half year ended 31 December 2011 has been prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001.

The half year report does not include all of the notes normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the entity as the full financial report.

It is recommended that the half year financial report be read in conjunction with the annual financial report for the year ended 30 June 2011 and considered together with any public announcements made by the Company during the half year ended 31 December 2011 in accordance with the continuous disclosure obligations of the ASX listing rules.

The half year report financial report has been prepared on a historical cost basis.

For the purpose of preparing the half year financial report, the half year has been treated as a discrete reporting period.

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

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 2011, the Group has adopted all the amending Standards and Interpretations, mandatory for annual periods beginning on or after 1 July 2011 including:

• AASB 124 Related Party Disclosures

The revised AASB 124 simplifies the definition of a related party, clarifying its intended meaning and eliminating inconsistencies from the definition.

• AASB 2009-12 Amendments to Australian Accounting Standards

This amendment made numerous editorial changes to a range of Standards and Interpretations:

AASB 5, AASB 8, AASB 108, AASB 110, AASB 112, AASB 119, AASB 133, AASB 137, AASB 139, AASB 1023, AASB 1031, Interpretations 2, 4, 16, 1039 & 1052

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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The amendments had no impact.

• AASB 2009-14 Amendments to Australian Interpretation – Prepayments of a Minimum Funding Requirement

The amendment requires entities to treat the benefit of such an early payment as a pension asset. Subsequently, the remaining surplus in the plan, if any, is subject to the same analysis as if no prepayment had been made. The amendment had no impact.

• AASB 1054 Australian Additional Disclosures

This standard relocates all Australian specific disclosures from other standards to one place. The amendment had no impact.

• AASB 2010-4 Further amendments to Australian Accounting Standards arising from the annual improvements project.

This amendment affected the following standards:

AASB 1, AASB 7, AASB 101, AASB 134 & Interpretation 13

The amendment has no impact.

• AASB 2010-5 Amendments to Australian Accounting Standards

The standard makes numerous editorial amendments to a range of Australian Accounting Standards and Interpretations, including amendments to reflect changes made to the text of IFRS by the IASB. These amendments have no major impact on the requirements of the amended pronouncements. The amendments affect the following standards:

AASB 1, AASB 3, AASB 4, AASB 5, AASB 101, AASB 107, AASB 112, AASB 118, AASB 119, AASB 121, AASB 132, AASB 133, AASB 134, AASB 137, AASB 139, AASB 140, AASB 1023, AASB 1038, Interpretations 112, 115, 127, 132 & 1042

The amendment has no impact.

• AASB 2010-6 Amendments to Australian Accounting Standards – Disclosures or Transfers of Financial Assets

The amendments increase the disclosure requirements for transactions involving transfers of financial assets. The amendment had no impact

• AASB 2011-1 Amendments to Australian Accounting Standards arising from the Trans-Tasman Convergence project

AASB 1, AASB 5, & AASB 107, AASB 108, AASB 121, AASB 132, AASB 134, Interpretations 2, 112 & 113. The amendment had no impact

The Group has not elected to early adopt any other new standards or amendments that are issued but not yet effective.

(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 Group has incurred a net loss after tax for the half year ended 31 December 2011 of $1,712,25101,583 (31 December 2010: $2,428,891) and experienced net cash outflows from operating activities of $1,548,362

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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(31 December 2010: $1,457,953). As 31 December 2011, the Group had net current assets of $15,878 (30 June 2011: $217,963).

Subsequent to half year end the Company has undertaken the following:

• a reduction in corporate overheads from its Australian operations

• the Group completed a capital raising of $1,999,866 on 28 February 2012. The capital raising was announced on 29 September 2011 and ratified at the annual general meeting of shareholders on 29 November 2011. The funds were raised at a price of $0.05 per share with a free attaching option on 1 for 2 basis. The options are exercisable within two years of issue.

Notwithstanding the above, the ability of the Group 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 issue.

The directors have reviewed the business outlook and plans of the Group and believe that both of the above can be achieved.

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 Group is unable to continue as a going concern.

3 TRADE AND OTHER RECEIVABLES

	Consolidated 31 December 2011 30 June 2011 $ $	Consolidated 31 December 2011 30 June 2011 $ $
Trade debtors Less: allowance for impairment loss Sub-Total Goods and services tax Value added tax Sundry receivables Receivable from investor R & D Rebate Total	915,159 (7,769) 907,390 184,128 66,983 (498) - 576,205 1,734,208	1,032,848 (10,892)
		1,021,956 66,931 46,232 - 1,815,420 576,205
		3,526,744

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4 INTANGIBLE ASSETS AND GOODWILL

As at 31 December 2011 Cost Accumulated Amortisation Net Carrying Amount As at 30 June 2011 Cost Accumulated Amortisation Net Carrying Amount	Development Costs Intellectual Property	Goodwill	Patents & Licenses	Software Total
	$ $ 2,701,912 923,919 (1,630,951) (923,919)	$ 1,924,068 0	$ 67,235 (67,235)	$ $ 77,516 5,693,490 (77,489) (2,699,594)
	1,070,961 -	1,924,068	-	27 2,995,056
	$ $ 2,521,457 923,919 (1,529,880) (923,919)	$ 1,924,068 0	$ 67,235 (67,235)	$ $ 77,516 5,514,195 (70,133) (2,591,167)
	991,577 -	1,924,068	-	7,383 2,923,028

Development costs

Development costs have been capitalised at cost. The intangible asset has been assessed as having a finite life and is amortised using the straight line method over a period of 5 years. If an impairment indication arises, the recoverable amount is estimated and an impairment loss is recognised to the extent that the recoverable amount is lower than the carrying value.

Intellectual property

Intellectual property costs have been capitalised at cost. The intangible asset was assessed as having a finite life and has been fully amortised.

Patents and licenses costs

Patents and licenses costs have been capitalised at cost. These patents and licenses have been granted for a minimum of 5 years by the relevant government agency and have accordingly been amortised using the straight line method over this finite life. It was determined that the patents and licenses which were being carried had no future economic benefit to the Group. Therefore, these amounts have been fully amortised.

Goodwill

Goodwill has been capitalised at the amount of excess consideration paid over Marine Rescue Technology Limited’s (“MRT”) fair value of identifiable net assets acquired and liabilities assumed. The acquisition of MRT occurred on 9 June 2011.

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5 TRADE AND OTHER PAYABLES

	Consolidated 31 December 2011 30 June 2011 $ $	Consolidated 31 December 2011 30 June 2011 $ $
Trade creditors Other creditors and accruals Customer deposits	935,313 813,379 1,748,692 395,637 395,637	1,441,947 576,053
		2,018,000
		-
		-

Customer deposits represent prepayments from customers for orders that have not shipped as of the reporting date.

6 FINANCIAL LIABILITY – CONTINGENT CONSIDERATION

In relation to the acquisition of MRT on 9 June 2011, the purchase price included a contingent equity consideration component, in the form of shares in the Company. This contingent consideration will be granted via the issue of up to 11,423,261 ordinary shares, subject to the following terms:

• 75% of the maximum number of shares will be issued if 2012 gross revenue achieved is GBP£1,600,000 (approximately AUD$2,428,000); and

• 25% of the maximum number of shares will be issued if 2013 gross revenue achieved is GBP£2,000,000 (approximately AUD$3,035,000); and

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

• 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 GBP£3,066,000 (approximately AUD$4,653,000).

The foreign exchange rate as at 31 December 2011 was AUD$1.5177 for 1 GBP.

The contingent consideration has been recognised at fair value based on the share price of the Company at period end of $0.063 (30 June 2011 $0.070), and the maximum number of shares to be issued.

	$
CURRENT At 1 July 2011 Fair value gain At 31 December 2011 NON-CURRENT At 1 July 2011 Fair value gain At 31 December 2011 Total	599,721 (59,973)
	539,748
	199,907 (19,992)
	179,915
	719,663

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7 INTEREST BEARING LOANS AND BORROWINGS

7 INTEREST BEARING LOANS AND BORROWINGS
	Consolidated 31 December 2011 30 June 2011 $ $
CURRENT Term debt Term debt from related party (i) Term debt from related party (i) Convertible note from related party (i) Finance Leases Total (a) Movement in Interest Bearing Liabilities and Borrowings Balance as at 1 July Interest on notes payables Repayment of notes payables Conversion of convertible loan to equity Balance as at 31 December 2011 (i) Refer to the annual financial report for the year ended 30 June 2011 for description of these related party transaction NON-CURRENT Finance Leases Total	- - - - - 1,163 1,163 1,236,446 43,861 (929,144) (350,000) 1,163 31 December 2011 $ 24,504 24,505	541,979 121,115 207,074 362,777
		1,232,945 3,501
		1,236,446
		30 June 2011 $ 29,833
		29,833

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8 CONTRIBUTED EQUITY

8 CONTRIBUTED EQUITY
	31 December 2011 $	30 June 2011 $
Issued and paid up capital 265,606,758 (30 June – 193,581,712) ordinary shares fully paid. Nil (30 June – 36,308,406) ordinary shares to be issued under the Entitlements Offer 6,333,334 (30 June – 13,000,000) Performance shares	25,988,570 - 630,519 26,619,089 No. of shares	22,680,074 1,815,420 495,407
		24,990,901
		$
Reconciliation of Contributed Equity Opening balance at 1 July 2010 Issue of ordinary shares Cost of share issue Conversion of Performance Shares Class A Closing balance at 31 December 2010 Opening balance at 1 January 2011 Issue of ordinary shares Cost of share issue Share based payments – Ordinary Shares Shares to be issued for Entitlements Offer Closing balance at 30 June 2011 Opening balance at 1 July 2011 Issue of ordinary shares Cost of share issue Conversion of Convertible Notes Closing balance at 31 December 2011	134,108,744 11,917,000 - 6,666,666 152,692,410 152,692,410 36,984,446 - 3,904,856 193,581,712 193,581,712 193,581,712 65,025,046 - 7,000,000 265,606,758	17,283,008 2,383,400 (85,900) 1,066,666
		20,647,174
		20,647,174 1,849,222 (12,799) 196,477
		22,680,074
		1,815,420
		24,495,494
		24,495,494 1,392,955 (249,879) 350,000
		25,988,570

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.

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8 CONTRIBUTED EQUITY (continued)

8 CONTRIBUTED EQUITY (continued)
	31 December 2011 Number $		30 June 2011 Number $
Performance Shares Movement in performance shares class A on issue Balance at beginning of period Share issue Share based payment expense for the period Conversion into ordinary shares Balance at end of the period Movement in performance shares class B on issue Balance at beginning of period Share issue Share based payment expense for the period Balance at end of the period Movement in performance shares class C on issue Balance at beginning of period Share issue Share based payment expense for the period Balance at end of the period Total performance shares	- - - - - 3,166,666 - - 3,166,666 3,166,668 - - 3,166,668 6,333,334	- - - - - 309,628 - 84,446 394,074 185,777 - 50,668 236,445 $630,519	6,666,666 - - (6,666,666) - 3,166,666 - - 3,166,666 3,166,668 - - 3,166,668 6,333,334	$888,889 - 177,777 (1,066,666)
				- 211,111- - 98,517
				309,628 105,555 - 80,222
				185,777
				$495,405

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. 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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9 ACCUMULATED LOSSES

9 ACCUMULATED LOSSES
	31 December 2011 $	30 June 2011 $
Accumulated losses at the beginning of the financial period Net loss for the year Accumulated losses at the end of the financial period 10 RESERVES	(22,038,139) (1,712,261) (23,750,400) 31 December 2011 $	(17,803,184) (4,234,955)
		(22,038,139)
		30 June 2011 $
Share Option Reserve Balance at the beginning of the financial period Share option expense amortised Balance at the end of the financial period Foreign Currency Translation Reserve Balance at the beginning of the financial period Share option expense amortised Balance at the end of the financial period	212,405 18,734 231,139 - (6,804) (6,804)	- 212,405
		212,405
		- -
		-

11 COMMITMENTS AND CONTINGENCIES

Operating lease commitments

The Company has entered into commercial leases as follows.

There are no restrictions placed upon the lessee by entering into these leases.

Future minimum rentals payable under non-cancellable operating leases as at 31 December are as follows:

	31 December 2011 $	30 June 2011 $
Within one year After one year but not more than five years More than five years	134,212 267,712 - 401,924	5,873 - -
		5,873

12 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. 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.

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13 CONTINGENT LIABILITIES

As at reporting date there were no contingent liabilities.

14 RELATED PARTY TRANSACTIONS

(a) The following related party transactions occurred during the financial period:

Brenton Scott did not receive a salary, but a chairman/director fee of $110,000 was paid to Jayden Investment Trust. Mr Scott converted a convertible loan agreement with the Group for $350,000 after shareholder approval at the annual meeting on 29 November 2011. The loan carried an interest rate of 15% per annum and a borrowing fee of 2.5%. Mr. Scott received $34,928 in interest and fees during the half year ended 31 December 2011. Any other transactions throughout the year relate to reimbursements for expenses incurred by Mr. Scott or his related entities on behalf of the Group.

Christian Lange earned director’s fees of $10,000 during the half year ended 31 December 2011. Mr. Lange resigned from the board as of 31 August 2011.

Richard Allen earned chairman’s fees of $37,500 during the half year ended 31 December 2011, of which $18,750 were accrued as of 31 December 2011. Mr. Allen provided a $200,000 term loan to the Group. 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.

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

15 BUSINESS COMBINATIONS

Provisional accounting disclosed as at 30 June 2011 in relation to the acquisition of MRT on 9 June 2011, has been finalised during the period ended 31 December 2011. The balances have remained unchanged from the provisional accounting previously disclosed.

16 SUBSEQUENT EVENTS

Since the end of the half year the Company, no events or circumstances have arisen that would require disclosure in the financial report.

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To the members of Mobilarm Limited

Report on the 31 December 2011 Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Mobilarm Limited, which comprises the statement of financial position as at 31 December 2011, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the half-year end or from time to time during the half-year.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the directors determine are necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2011 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of Mobilarm Limited and the entities it controlled during the half-year, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We have given to the directors of the company a written Auditor’s Independence Declaration, a copy of which is included in the Directors’ Report.

Liability limited by a scheme approved under Professional Standards Legislation

PM:MB:MOBILE012

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Mobilarm Limited is not in accordance with the Corporations Act 2001 , including:

• a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2011 and of its performance for the half-year ended on that date; and

• b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

Inherent Uncertainty Regarding Continuation as a Going Concern

Without qualification to the conclusion expressed above, attention is drawn to the following matter. As a result of matters described in Note 2(c) – Going Concern to the financial report, there is significant uncertainty whether the consolidated entity will be able be able to pay its debts as and when they fall due and payable and realise its assets and extinguish its liabilities in the normal course of operations and at the amounts stated in the financial report. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the consolidated entity not continue as a going concern.

Ernst & Young

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Peter McIver Partner Perth 29 February 2012

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CORPORATE DIRECTORY

DIRECTORS

Mr. Richard Allen Independent Chairman Mr. Brenton Scott Executive Director Mr. Robert Ken Gaunt Chief Executive Officer Mr. David Marshall Non Executive Director

COMPANY SECRETARY

Mr. David McArthur Company Secretary

KEY PERSONNEL

Mr. Jorge Nigaglioni Chief Financial Officer

REGISTERED OFFICE

38 Guthrie Street Osborne Park WA 6017

PRINCIPLE PLACE OF BUSINESS

38 Guthrie Street Osborne Park WA 6017

CONTACT DETAILS

Web: www.mobilarm.com

Tel: (08) 9315-3511 Fax: (08) 9315-3611

SHARE REGISTRY

Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross WA 6153

LAWYERS TO THE COMPANY

Cowell Clarke Level 5, 63 Pirie Street, Adelaide SA 5000 Australia

AUDITORS

Ernst and Young 11 Mounts Bay Road Perth WA 6000

BANKERS

National Australia Bank

Mobilarm Limited ordinary shares are listed on the Australian Stock Exchange (ASX) under the ticker MBO.

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