globoplc.com · 2017-06-27 · Year Year ended ended 31December 31December Note 2010 2009 €’000...

Year Yearended ended

31 December 31 DecemberNote 2010 2009

€’000 €’000

Continuing Operations

Revenue 4 30,909 23,491

Cost of sales 5 (19,476) (15,198)

Gross Profit 11,433 8,293

Other operating income 6 731 276

Distribution expenses 7 (1,957) (1,081)

Administrative expenses 8 (4,015) (3,020)

Other operating expenses 6 (328) (95)

Operating Profit 5,864 4,373

Finance costs (net) 11 (1,230) (1,172)

Profit before Tax 4,634 3,201

Taxation 12 (243) (373)

Profit for the Year 4,391 2,828

Other comprehensive income:

Exchange differences on translating foreign operations 20 24

Write back of contingent consideration on acquisition of subsidiary 17 100 –

Other comprehensive income for the year, net of tax 120 24

Total Comprehensive Income for the Year 4,511 2,852

Profit attributable to:

Equity holders of the Company 4,351 2,820

Non-controlling interests 40 8

4,391 2,828

Total comprehensive income attributable to:

Equity holders of the Company 4,471 2,844

Non-controlling interests 40 8

4,511 2,852

Earnings per share for profit from continuing operationsattributable to the equity holders of the Company(€ per share):

Basic and diluted 13 0.028 0.020

Consolidated statement of comprehensive incomeFor the year ended 31 December 2010

The Accounting Policies and Notes on pages 49 to 93 form an integral part of these financial statements.

Consolidated balance sheetAt 31 December 2010

43


As at As at31 December 31 December

Note 2010 2009€’000 €’000

ASSETS

Non-Current AssetsProperty, plant and equipment 14 3,475 3,696Intangible assets 15 14,486 12,827Goodwill 17 742 842Deferred tax assets 18 402 429Other receivables 17 17Total Non-Current Assets 19,122 17,811

Current AssetsInventories and work in progress 19 5,495 2,730Trade receivables 20 21,305 18,798Other receivables 21 305 582Other current assets 22 10,765 7,661Cash and cash equivalents 23 2,895 3,113Total Current Assets 40,765 32,884

TOTAL ASSETS 59,887 50,695

EQUITY AND LIABILITIESShareholders’ EquityOrdinary shares 24 2,296 1,916Share premium 24 8,499 4,847Other reserves 25 5,788 5,832Reverse acquisition reserve 351 351Translation reserve (163) (183)Retained earnings 9,465 5,022

26,236 17,785Non-controlling interest in equity 51 11Total Equity – Capital and Reserves 26,287 17,796

Non-Current LiabilitiesBorrowings 26 3,569 2,699Retirement benefit obligations 27 212 180Finance lease liabilities 26 1,698 1,577Other liabilities 26 – 100Provisions for other liabilities and charges 27 64 92Taxes payable 29 236 –Total Non-Current Liabilities 5,779 4,648

Current LiabilitiesTrade and other payables 28 15,268 13,529Taxes payable 29 758 1,090Borrowings 26 9,721 10,114Finance lease liabilities 26 265 200Accrued liabilities and deferred income 30 1,809 3,318Total Current Liabilities 27,821 28,251

TOTAL EQUITY AND LIABILITIES 59,887 50,695

Approved and authorised for issue by the Board of Directors on 18 April 2011 and signed on its behalf by:

Costis PapadimitrakopoulosManaging Director

Company balance sheetAt 31 December 2010

Company Number: 05506731 As at As at31 December 31 December

Note 2010 2009€’000 €’000

ASSETS

Non-Current Assets

Investments in subsidiaries 16 4,855 4,612

Total Non-Current Assets 4,855 4,612

Current Assets

Other receivables 21 5,001 1,348

Cash and cash equivalents 23 – 8

Total Current Assets 5,001 1,356

TOTAL ASSETS 9,856 5,968

EQUITY AND LIABILITIES

Shareholders’ Equity

Ordinary shares 24 2,296 1,916

Share premium 7,799 4,146

Other reserves 25 1,634 1,678

Translation reserve (982) (1,146)

Retained losses (1,234) (816)

Total Equity – Capital & Reserves 9,513 5,778

Non-Current Liabilities

Taxes payable 29 39 –

Total Non-Current Liabilities 39 –

Current Liabilities

Trade and other payables 28 102 95

Taxes payable 29 83 66

Accrued liabilities 30 119 29

Total Current Liabilities 304 190

TOTAL EQUITY AND LIABILITIES 9,856 5,968

Approved and authorised for issue by the Board of Directors on 18 April 2011 and signed on its behalf by:

Costis PapadimitrakopoulosManaging Director


Attributable to equity holders of the Company

Reverse Non-

Share Share Other Acquisition Translation Retained controlling Total

Capital Premium Reserves Reserve Reserve Earnings Total Interest Equity

€’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000

GROUP

Balance at1 January 2009 1,781 3,879 5,839 351 (207) 2,201 13,844 3 13,847

Profit for the year – – – – – 2,821 2,821 8 2,829Currency translationdifferences – – – – 24 – 24 – 24

Total comprehensiveincome for the year – – – – 24 2,821 2,845 8 2,853Increase in capital 135 1,016 – – – – 1,151 – 1,151Share issue costs – (48) – – – – (48) – (48)Movement in the year – – (7) – – – (7) – (7)

Balance at31 December 2009 1,916 4,847 5,832 351 (183) 5,022 17,785 11 17,796

Balance at1 January 2010 1,916 4,847 5,832 351 (183) 5,022 17,785 11 17,796

Profit for the year – – – – – 4,351 4,351 40 4,391Currency translationdifferences – – – – 20 – 20 – 20Write back of deferredconsideration – – (100) – – 100 – – –

Total comprehensiveincome for the year – – (100) – 20 4,451 4,371 40 4,411Increase in capital 380 3,850 – – – – 4,230 – 4,230Share issue costs – (198) – – – – (198) – (198)Movement in the year – – 56 – – (8) 48 – 48

Balance at31 December 2010 2,296 8,499 5,788 351 (163) 9,465 26,236 51 26,287

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Statement of changes in equityFor the year ended 31 December 2010


Statement of changes in shareholders’ equityFor the year ended 31 December 2010

SharesShare Share to be Merger Translation Retained Total

Capital Premium issued Reserve Reserve Losses Equity€’000 €’000 €’000 €’000 €’000 €’000 €’000

COMPANY

Balance at 1 January 2009 1,781 3,178 185 1,500 (207) (406) 6,031Increase in capital 135 1,016 – – – – 1,151Share issue costs – (48) – – – – (48)Exchange differences – – (7) – (939) – (946)Total comprehensiveincome for the year – – – – – (410) (410)

Balance at 31 December 2009 1,916 4,146 178 1,500 (1,146) (816) 5,778

Balance at 1 January 2010 1,916 4,146 178 1,500 (1,146) (816) 5,778Increase in capital 380 3,850 – – – – 4,230Share issue costs – (197) – – – – (197)Movement in the year (note 25) – – (44) – – – (44)Exchange differences – – – – 164 – 164Total comprehensiveincome for the year – – – – – (418) (418)

Balance at 31 December 2010 2,296 7,799 134 1,500 (982) (1,234) 9,513


Consolidated cash flow statementFor the year ended 31 December 2010

47



€’000 €’000

Cash Flows from Operating Activities

Cash generated from operations 32 4,352 9,252

Interest paid 11 (1,279) (1,239)

Taxation (339) 163

Net Cash from Operating Activities 2,734 8,176

Cash Flow used in Investing Activities

Investment in start-up subsidiaries (42) –

Purchases of tangible and intangible assets 14, 15 (8,753) (9,208)

Proceeds from sale of tangible and intangible assets 1,106 –

Interest received 49 67

Net Cash used in Investing Activities (7,640) (9,141)

Cash Flows from Financing Activities

Proceeds from issue of share capital 24 4,230 1,143

Share issue expenses 24 (198) (48)

Proceeds from borrowings, net of repayments 1,031 23

Repayment of obligations under finance leases (367) (286)

Dividends paid to non-controlling interest (8) –

Net Cash from Financing Activities 4,688 832

Net Decrease in Cash and Cash Equivalents (218) (133)

Movement in Cash and Cash Equivalents

Cash and cash equivalents at the beginning of the year 3,113 3,245

Exchange gain on cash and cash equivalents – 1

Net decrease in cash and cash equivalents (218) (133)

Cash and Cash Equivalents at the End of the Year 23 2,895 3,113


Company cash flow statementFor the year ended 31 December 2010



€’000 €’000

Cash Flows from Operating Activities

Cash used in operations 32 (3,999) (1,095)

Net Cash used in Operating Activities (3,999) (1,095)

Cash Flow from Investing Activities

Investment in start-up subsidiaries (42) –

Net Cash Outflow from Investing Activities (42) –

Cash Flows from Financing Activities

Proceeds from issue of share capital 24 4,230 1,143

Share issue expenses 24 (197) (48)

Net Cash Inflow from Financing Activities 4,033 1,095

Net Decrease in Cash and Cash Equivalents (8) –

Movement in Cash and Cash Equivalents

Cash and cash equivalents at the beginning of the year 8 7

Exchange gain on cash and cash equivalents – 1

Net decrease in cash and cash equivalents (8) –

Cash and Cash Equivalents at the End of the Year 23 – 8


Notes to the financial statements

1. General Information

The Consolidated Financial Statements (“the Financial Statements”) of Globo plc (“the Company”) consists of the followingcompanies; Globo plc, Globo Technologies S.A., Profitel Communications S.A., Globo Mobile S.A., Globo IT and TelecomServices SRL, ReachFurther Communications Limited, Globo Holdings Ltd, Gylenhall Investments Ltd, Globo Services (CY) Ltd,Oumpalumpa Ltd and Globo Mobile Technologies International FZ – LLP (“the Group”).

The Parent Company, Globo plc, formerly Israeli Acquisitor 1 plc, was incorporated in July 2005 in the United Kingdom underthe Companies Act 1985 and was admitted to trading on the PLUS Market in September 2005. On 14 December 2007, theCompany changed its name from Israeli Acquisitor 1 plc to Globo plc and listed on the AIM Stock Market in London. Itsregistered office address is 3 Vaughan Avenue, Tonbridge, Kent, TN10 4EB.

2. (a) Globo Technologies S.A. and Profitel Communications S.A.

Globo Technologies S.A. is engaged in the provision of e-Business and Telecom Software Solutions and related professionalservices to the public and private sector, primarily in Greece. Globo Technologies S.A.’s registered office is located in Athens,at 37A Psaron Street & 78 Aristotelous Street, Chalandri, Greece. Globo Technologies S.A. is a private company, incorporatedin Greece in November 2000. Globo Technologies S.A. owns 100% of Profitel Communications S.A.

Profitel Communications S.A. provides business communication services. Profitel Communications S.A. purchases softwareapplications from Globo Technologies S.A. in the form of “Software as a Service” (S.a.a.S.) and, together with centralinfrastructure services, integrates them with third party telecom services. Profitel Communications S.A.’s registered office islocated in Athens, at 37A Psaron Street & 78 Aristotelous Street, Chalandri, Greece. Profitel Communications S.A. is a privatecompany, incorporated in Greece in October 2005.

Prior to 14 December 2007, Globo Technologies S.A. was the ultimate parent company of the Group. On 15 November 2007,Globo Technologies S.A. entered into an Acquisition Agreement with the shareholders of Globo plc, in the form of a bindingmemorandum of understanding under Greek law. This agreement was to acquire the entire issued share capital of GloboTechnologies S.A. by means of a contribution in kind by each shareholder of their shares in Globo Technologies S.A., inexchange for a total of 110,000,000 new ordinary shares in Globo plc, being the Consideration Shares. On 14 December 2007,Globo plc became the ultimate parent company of the Group through a share exchange and was admitted to the AIM StockMarket in London.

(b) Globo Mobile S.A. and Globo IT and Telecom Services SRL

Globo Mobile S.A. and Globo IT and Telecom Services SRL were formed on 18 November 2008 and 16 July 2008 respectively.

Globo Mobile S.A. executes the mobile global strategy of the Group, through the commercialisation of the CitronGO! andGO!Social service, together with services related to mobile projects, using its extensive network of partners and MobileNetwork Operators. Globo Mobile S.A.’s registered office is located in Athens, at 37A Psaron Street & 78 Aristotelous Street,Chalandri, Greece. Globo Technologies S.A. owns 100% of Globo Mobile S.A.

Globo IT and Telecom Services SRL is engaged in the provision of computer programming, consulting and related activities.Globo IT and Telecom Services SRL’s registered office is located in Sos. Bucuresti-Ploiesti No 1A, Bucharest Business Park,Intrarea A. et.1, Birou 125, sector 1 Bucuresti, Romania. Globo Technologies S.A. owns 99% and Profitel CommunicationsS.A. owns 1% of Globo IT and Telecom Services SRL.

(c) ReachFurther Communications Limited

35 per cent of the equity shares of ReachFurther Communications Limited were acquired on 31 December 2008. ReachFurtherCommunications Limited is a content/service aggregator/enabler with an extensive content/service portfolio that caters to theentire mobile and fixed telecommunications market and was established in 2004 by a team of telecommunicationsprofessionals with many years experience in the field of management and advisory of telecommunications operators inselected European & Middle Eastern countries.

ReachFurther Communications Limited’s registered office is located in 31 Evagorou Street, 4th Floor, Office 43, 1066 Nicosia,Cyprus. Globo Mobile S.A. owns 35% of ReachFurther Communications Limited.

49


(d) Globo Holdings Ltd

Globo Holdings Ltd was incorporated in the British Virgin Islands on 23 April 2010 as a limited liability company.

The company was acquired by Globo Plc on 29 July 2010.

The principal activity of Globo Holdings Ltd is the holding of investments. Globo Holdings Ltd’s registered office is located inTortola, at Road Town, Nerine Chamber, Quastisky Building, British Virgin Islands. Globo Plc owns 100% of Globo HoldingsLtd.

(e) Gylenhall Investments Ltd

Gylenhall Investments Ltd was incorporated in Cyprus on 16 February 2008 as a limited liability company.

The company was acquired by Globo Holdings Ltd on 29 July 2010.

The principal activity of Gylenhall Investments Ltd is the holding of investments. Gylenhall Investment Ltd’s registered officeis located in Limassol, at Agias Fylaxeos & Zenonos Rossides 2, Cyprus. Globo Holdings Ltd owns 100% of GylenhallInvestments Ltd.

(f) Globo Services (CY) Limited

Globo Services (CY) Limited was incorporated in Cyprus on 14 June 2010 as a limited liability company.

The principal activity of Globo Services (CY) Limited is the provision of e-business and software products and related services.Globo Services (CY) Limited’s registered office is located in Nicosia, at the corner of Prodromos str.& Zinonos Kitieos, Cyprus.Globo Plc owns 100% of Globo Services (CY) Limited.

(g) Oumpalumpa Ltd

Oumpalumpa Ltd was incorporated in Cyprus on 18 February 2008 as a limited liability company. The company was acquiredby Globo Holdings Ltd on 29 July 2010.

The principal activity of Oumpalumpa Ltd is the holding of investments. Oumpalumpa Ltd’s registered office is located inLimassol, at Agias Fylaxeos & Zenonos Rossides 2, Cyprus.

Globo Holdings Ltd owns 100% of Oumpalumpa Ltd.

(h) Globo Mobile Technologies International FZ – LLC (“Globo Mobile Dubai”)

Globo Mobile Technologies International FZ – LLC was established on 17 August 2010.

Globo Mobile Dubai has been formed as a Free Zone Authority, under commercial license no.18609 issued by the Media FreeZone Authority. The principal activities of Globo Mobile Dubai are software developer, solution and support service provider,consultancy and customer service. Globo Mobile Dubai’s registered office is located in Dubai, at Al Thuraya Tower No1, OfficeNo 201, United Arab Emirates.

Oumpalumpa Ltd owns 66.66% and Gylenhall Investments Ltd owns 33.33% of Globo Mobile Dubai.

51

3. Summary of Significant Accounting Policies

The principal accounting policies adopted in the preparation of the Financial Statements are set out below. These policieshave been consistently applied to all the periods presented, unless otherwise stated.

(a) Basis of Preparation

The Financial Statements have been prepared in accordance with International Financial Reporting Standards as adopted bythe European Union (“IFRS”), IFRIC interpretations and the parts of the Companies Act 2006 applicable to companiesreporting under IFRS. The Financial Statements have been prepared under the historical cost convention.

The preparation of Financial Statements in conformity with IFRS requires the use of estimates and assumptions that affectthe reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financialinformation, including the reported amounts of revenues and expenses during the reporting period. Although these estimatesare based on management’s best knowledge of current events and actions, actual results may ultimately differ from thoseestimates.

Standards, amendments and interpretations effective in 2010

The following standards and amendments to existing standards have been published and are mandatory for the Group’saccounting periods beginning on or after 1 January 2010, but not currently relevant to the Group.

• IFRS 3 (revised), ‘Business combinations’ and consequential amendments to IAS 27, ‘Consolidated and separatefinancial statements’, IAS 28 ‘Investments in associates’ and IAS 31 ‘Interests in joint ventures’, are effectiveprospectively to business combinations for which the acquisition date is on or after the beginning of the first annualreporting period beginning on or after 1 July 2009.

• IFRS 3 (revised) continues to apply the acquisition method to business combinations but with some significant changescompared to IFRS 3. For example, all payments to purchase a business are recorded at fair value at the acquisition date,with contingent payments classified as debt subsequently re-measured through the statement of comprehensiveincome. All acquisition costs are expensed.

• Amendments to IFRS 1 “First-time Adoption of International Financial Reporting Standards” and IAS 27 “Consolidatedand Separate Financial Statements” addressed concerns that retrospectively determining the cost of an investment inseparate financial statements and applying the cost method in accordance with IAS 27 on first-time adoption of IFRSscannot, in some circumstances, be achieved without undue cost or effort. These amendments were effective for periodsbeginning on or after 1 July 2009. Further amendments to IFRS 1 addressed the retrospective application of IFRSs toparticular situations (oil and gas assets and leasing contracts), and are aimed at ensuring that entities applying IFRSswill not face undue cost or effort in the transition process.

• Amendments to IFRS 2 “Share-based Payment” clarified the accounting for group cash-settled share based paymenttransactions.

• IAS 27 (revised) requires the effects of all transactions with non-controlling interests to be recorded in equity if thereis no change in control and the transactions will no longer result in gains and losses. The standard also specifies theaccounting when control is lost. Any remaining interest in the entity is re-measured to fair value, and a gain or loss isrecognised in profit or loss.

• Amendments to IAS 39 “Financial Instruments: Recognition and Measurement” provided additional guidance on whatcan be designated as a hedged item. These amendments were effective for periods beginning on or after 1 July 2009.

• IFRIC 17 “Distributions of Non-cash Assets to Owners” standardised practice in the measurement of distributions ofnon-cash assets to owners. This interpretation was effective for periods beginning on or after 1 July 2009.

• IFRIC 18 “Transfers of Assets from Customers” clarified the requirements of IFRSs for agreements in which an entityreceives from a customer an item of property, plant and equipment that the entity must then use either to connect thecustomer to a network or to provide the customer with ongoing access to a supply of goods or services (such as a supplyof electricity, gas or water). This interpretation was effective for periods beginning on or after 1 July 2009.

Standards, amendments and interpretations issued but not yet effective and have not been adopted early bythe Group or Company

The following new standards, amendments and interpretations have been issued but are not effective for the financial yearcommencing 1 January 2010 and have not been adopted early.

• IFRS 9 “Financial Instruments” specifies how an entity should classify and measure financial instruments, including somehybrid contracts, with the aim of improving and simplifying the approach to classification and measurement comparedwith IAS 39. This standard is effective for periods beginning on or after 1 January 2013, subject to EU endorsement.The Directors are assessing the possible impact of this standard on the Group’s Financial Statements.

• A revised version of IAS 24 “Related Party Disclosures” simplifies the disclosure requirements for government-relatedentities and clarifies the definition of a related party. This revision is effective for periods beginning on or after 1 January2011.

• An amendment to IFRS 1 “First-time Adoption of International Financial Reporting Standards” relieves first-timeadopters of IFRSs from providing the additional disclosures introduced in March 2009 by “Improving Disclosures aboutFinancial Instruments” (Amendments to IFRS 7). This amendment is effective for periods beginning on or after 1 July2010.

• Further amendments to IFRS 1 replace references to a fixed date of 1 January 2004 with “the date of transition toIFRSs”, thus eliminating the need for companies adopting IFRSs for the first time to restate recognition transactionsthat occurred before the date of transition to IFRSs, and provide guidance on how an entity should resume presentingfinancial statements in accordance with IFRSs after a period when the entity was unable to comply with IFRSs becauseits functional currency was subject to severe hyperinflation. This amendment is effective for periods beginning on orafter 1 July 2011, subject to EU endorsement.

• Amendments to IFRS 7 “Financial Instruments: Disclosures” are designed to help users of financial statements evaluatethe risk exposures relating to transfers of financial assets and the effect of those risks on an entity’s financial position.These amendments are effective for periods beginning on or after 1 January 2011, subject to EU endorsement.

• Amendments to IAS 12 “Income Taxes” introduce a presumption that recovery of the carrying amount of an assetmeasured using the fair value model in IAS 40 “Investment Property” will normally be through sale. These amendmentsare effective for periods beginning on or after 1 January 2012, subject to EU endorsement.

• Amendments to IAS 32 “Financial Instruments: Presentation” address the accounting for rights issues that aredenominated in a currency other than the functional currency of the issuer. These amendments are effective for periodsbeginning on or after 1 February 2010.

• “Improvements to IFRSs” are collections of amendments to IFRSs resulting from the annual improvements project, amethod of making necessary, but non-urgent, amendments to IFRSs that will not be included as part of another majorproject. These improvements have various implementation dates; for May 2010 improvements, the earliest is effectivefor periods beginning on or after 1 July 2010, subject to EU endorsement.

• IFRIC 19 “Extinguishing Financial Liabilities with Equity Instruments” clarifies the treatment required when an entityrenegotiates the terms of a financial liability with its creditor, and the creditor agrees to accept the entity’s shares orother equity instruments to settle the financial liability fully or partially. This interpretation is effective for periodsbeginning on or after 1 July 2010.

• An amendment to IFRIC 14 “IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and theirInteraction”, on prepayments of a minimum funding requirement, applies in the limited circumstances when an entityis subject to minimum funding requirements and makes an early payment of contributions to cover those requirements.The amendment permits such an entity to treat the benefit of such an early payment as an asset. This amendment iseffective for periods beginning on or after 1 January 2011.


The impact on the Group’s Financial Statements of the future standards, amendments and interpretations is still under review,but the Group does not currently expect any of these changes to have a material impact on the results or the net assets ofthe Company or the Group.

(b) Basis of Consolidation

The Consolidated Financial Statements include the results of the Company and entities controlled by the Company (itssubsidiaries) forming the Group.

Subsidiaries are all entities over which the Company has the power to govern the financial and operating activities, generallyaccompanied by a shareholding equal to more than one half of the voting rights. The existence and effect of potential votingrights that are currently exercisable or convertible are considered when assessing whether the Company controls anotherentity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.

The purchase method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition ismeasured as the fair value of the assets given, equity instruments used and liabilities incurred or assumed at the date ofexchange. The consideration transferred includes the fair value of any asset or liability resulting from a contingentconsideration arrangement. Identifiable assets acquired and liabilities assumed are measured initially at their fair values atthe acquisition date. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assetsacquired is recorded as goodwill. In accounting for the acquisition of Globo Technologies S.A., the Company took advantageof Section 131 of the Companies Act 1985 and accounted for the transaction using merger relief.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted bythe Group.

Investments in subsidiaries are accounted for at cost less impairment. Cost is adjusted to reflect changes in considerationarising from contingent consideration amendments.

(c) Going Concern

The Financial Statements are prepared under the going concern assumption.

The Group’s business activities, together with the factors likely to affect its future development, performance and position areset out in the Chairman’s Statement and Chief Executive Officer’s Report. The financial position of the Group and Company,their cash flows, liquidity position and borrowing facilities are described in the Financial Review. In addition, notes 3 and 35to the Financial Statements include the Group’s and Company’s objectives, policies and processes for managing their capital;their financial risk management objectives; details of their financial instruments and exposure to credit risk, interest rate riskand liquidity risk.

During the year ended 31 December 2010, the Group relied on Greek banking facilities through short and long-termborrowings in order to meet working capital requirements and together with new funds raised from investors, continued withthe development of software platforms and international development. All loan repayments and banking covenants were fullymet. Collections of receivables from the Greek Government and the private sector continue to be slow, given the continuingdifficult economic climate in Greece. However, progress has been made during the year and since the year end to collect theoutstanding receivables. The Group’s international expansion has also progressed and continues to be a key part of theGroup’s overall strategy, reducing the Group’s reliance on the Greek marketplace.

As explained in the Report of the Directors and note 34, the Company raised £17.25 million before expenses since the yearend to support the working capital requirements of the Group, fund product development and further international expansion.Some of the funds have been utilised to repay certain bank borrowings ahead of schedule. The Group currently hasconsiderable financial resources, together with long-term contracts with a number of customers and suppliers, across differentproduct lines and geographic areas. As a consequence, the Directors believe that the Group is well placed to manage itsbusiness and financial risks successfully despite the current uncertain economic climate and competitive market conditions.

The Group’s forecasts and projections, taking into account reasonably possible changes in trading performance, show thatthe Group should be able to operate with the cash funds and existing bank borrowings.

53

The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existencefor the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the FinancialStatements.

(d) Measurement Currency

Items included in the Financial Statements are measured using the currency of the primary economic environment in whichthe entity operates (its “functional currency”). The Financial Statements are presented in Euros (€), which is the Group’sfunctional and presentation currency. The Financial Statements of the parent undertaking, whose functional currency ispounds sterling, have been translated and stated in Euros.

(e) Foreign Currency Translation

Transactions in currencies other than the Euro are accounted for at the exchange rates ruling at the date of the transaction.Monetary assets and liabilities in foreign currencies are retranslated at the rates of exchange ruling at the balance sheet date.Foreign exchange differences on retranslation and settlement are recognised in profit or loss.

The results and financial position of all the Group entities that have a functional currency different from the presentationcurrency are translated into the presentation currency as follows:

• Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balancesheet;

• Income and expenses for each statement of comprehensive income are translated at average exchange rates; and

• All resulting exchange differences are recognised in other comprehensive income.

(f) Property, Plant and Equipment

Property, plant and equipment, comprising land, property, vehicles and furniture and fittings, are recorded at historical costless depreciation and impairment losses.

Property, plant and equipment is depreciated on the straight line method over the expected useful life of the assets, asfollows:

Asset Useful life

Buildings 33 years

Leasehold improvements 6 years

Office furniture and fittings 6 years

Vehicles 9 years

Computer and telecom equipment 3-6 years

In accordance with IAS 16 land is not depreciated.

Gains and losses on disposal, determined by comparing proceeds with the carrying amount of the respective assets, areincluded in operating profit.

All maintenance and repair costs are expensed as incurred. Furthermore, interest costs on borrowings not directly attributableto software development costs are not capitalised but are instead recognised in profit or loss during the period.

Where an indication of impairment exists, the carrying amount of any tangible asset is assessed and is written downimmediately to its recoverable amount.

(g) Intangible Assets

Intangible assets that are acquired or developed by the Group are carried at historical cost less accumulated amortisation andimpairment losses.


Licences

Research expenditure is recognised as an expense in the period in which it is incurred. Costs incurred on development projects(relating to the design and testing of new and improved products) are recognised as intangible assets when it is probablethat the project will be a success considering its commercial and technological feasibility, and only if the cost can be reliablymeasured. Other development expenditures are recognised as an expense, as they are incurred.

Costs incurred on development projects are recognised as intangible assets only if all of the following conditions are met:

• it is technically feasible to complete the product so that it will be available for use or sale;

• it is the intention to complete the intangible asset and use or sell it;

• there is an ability to use or sell the intangible asset;

• it can be demonstrated how the intangible asset will generate probable future economic benefits;

• adequate technical, financial and other resources to complete the development and to use or sell the intangible assetare available; and

• the expenditure attributable to the intangible asset during its development can be reliably measured.

Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Developmentcosts that have been capitalised are amortised from the commencement of the commercial availability of the product on astraight-line basis over its expected benefit period. Licenses are amortised over the shorter of the contract term of the licenseagreement and the useful life of the asset which does not exceed a four year period.

Computer Software Costs

Computer software costs generally represent costs incurred to purchase software programmes and packages that are usedboth internally and to develop and ultimately sell the Group’s products. Generally, costs associated with developing ormaintaining computer software programmes are recognised as an expense as incurred. However, costs that are directlyassociated with identifiable and unique software products controlled by the Group, which have probable economic benefitbeyond one year, are recognised as intangible assets. Direct costs include staff costs of the software development team aswell as the cost of subcontractors. All other overheads are expensed in the period in which they are incurred.

Expenditure which enhances or extends the performance of computer software programmes beyond their originalspecifications is recognised as a capital improvement and added to the original cost of the software. Computer softwaredevelopment costs recognised as assets are amortised using the straight-line method over their useful lives, not exceeding aperiod of four years.

Costs associated with the maintenance of existing computer software programmes are expensed as incurred.

Royalties

Royalties represent the cost of acquiring the rights to certain film content for utilisation within the Group’s products. The rightsacquired can be used over a two year term and accordingly the costs recognised as intangible assets are being amortisedover the same period.

All amortization costs for intangible assets are included in cost of sales.

(h) Impairment of Non-Current Assets other than goodwill

The carrying amount of property, plant and equipment and intangible assets other than goodwill, is reviewed at each balancesheet date to determine if there is any indication of impairment. An impairment loss is recognised in profit or loss when thecarrying amount exceeds the recoverable amount. The recoverable amount is the greater of net realisable value and value inuse. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separatelyidentifiable cash flows (cash generating units).

55

A previously recognised impairment loss will be reversed in so far as estimates change, but not to an amount higher than thecarrying amount that would have been determined had no impairment loss been recognised. A reversal of an impairment lossis recognised as income.

(i) Leases

A finance lease is one in which a significant portion of the risks and rewards of ownership are transferred to the lessee. Assetsobtained under finance leases and hire purchase contracts are capitalised in the balance sheet and are depreciated over theiruseful lives. The interest element of the rental obligations is charged to profit or loss over the period of the lease, andrepresents a constant proportion of the balance of capital repayments outstanding. Assets acquired under finance leases aredepreciated over the term of the lease.

The Group has finance leases relating to an office building, vehicles and computer and telecommunications equipment underwhich substantially all of the risks and rewards of ownership are the obligation of the lessee.

An operating lease is one in which a significant portion of the risks and rewards of ownership are retained by the lessor.Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the lease.

(j) Inventories and work in progress

Inventories are stated at the lower of their purchase or production cost and their corresponding net realisable value. Netrealisable value is the estimated re-sale value of the inventories, reduced by the cost of disposal. The cost of inventories isquantified on the basis of the weighted average method and is inclusive of the costs associated with their acquisition orproduction (in the case of internally produced goods) and the costs incurred in bringing them to their present location andcondition.

Expenses related to client projects which have been won but not yet contracted are classified as work in progress and includedin inventories.

(k) Trade Receivables

Trade receivables are carried at original invoice amount less an estimate made for doubtful receivables based on a review ofall outstanding amounts at the year-end. A provision for doubtful trade receivables is established when there is objectiveevidence that the Group will not be able to collect all amounts due according to the original terms of the receivables.

(l) Cash and Cash Equivalents

For the purposes of the cash flow statement, cash and cash equivalents comprise cash in hand and call deposits held withbanks.

(m) Share Capital

Ordinary shares are classified as equity.

Share premium is shown as an addition to the shareholders’ equity and represents the premium amount paid on the issue ofnew shares.

External costs directly attributable to the issue of new shares are shown as a deduction, net of tax, in equity from theproceeds.

(n) Borrowings

Borrowings, including transaction costs, are initially recognised as the net proceeds received. In subsequent periods,borrowings are stated at amortised cost using the effective interest method.

Interest costs are expensed as incurred.


(o) Trade Payables

Trade payables are not interest bearing and are stated at their nominal value, which is considered to be their fair value.

(p) Income Taxes

The tax expense represents the sum of the tax payable for the current period and deferred tax.

The tax payable in the current period is based on taxable profit for the period. Taxable profit differs from profit for the yearas reported in the statement of comprehensive income because it excludes items of income or expenditure which are taxableor deductible in other periods. It further excludes items that are never taxable or deductible. The Group’s liability for tax inthe current period is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets andliabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit, and isaccounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxabletemporary differences. Deferred tax assets are recognised to the extent that it is probable that taxable profits will be availableagainst which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporarydifference arises from goodwill or from the initial recognition (other than in a business combination) of other assets andliabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is nolonger probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset isrealised. Deferred tax is charged or credited in profit or loss, except when it relates to items charged or credited directly toequity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when they relateto income taxes levied by the same taxation authority and the Group intends to settle its current assets and liabilities on anet basis.

(q) Post Retirement Benefits

The Group’s obligation in respect of post retirement benefits is calculated by estimating the value of benefits that employeeshave earned in return for their service in the current and prior periods, based on the level of employee earnings in accordancewith Greek Labour Law.

The Group has established a provision for staff retirement indemnities based on an actuarial study. The actuarial study isperformed every year by an independent qualified firm. There is no requirement for the Group to contribute to any pensionplan.

(r) Government Grants

Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received andthe Group will comply with all attached conditions.

Government grants relating to expenses are recognised in profit or loss in order to match them with the costs they areintended to compensate.

Government grants in relation to the construction of intangible assets are initially treated as deferred income and recognisedas income over the life of the asset by way of a reduced amortisation charge.

(s) Provisions

Provisions are only recognised when the Group has a present legal or constructive obligation as a result of past events, it isprobable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount of theobligation can be made.

57

(t) Revenue Recognition

Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the goods are transferredto the buyer. Revenue from rendering of services is based on the stage of completion determined using the percentage ofcompletion method where revenue is matched with the costs incurred in reaching the stage of completion. The stage ofcompletion is determined by comparing the proportion that costs incurred for work performed to date bear to the budgetedtotal cost of the services to be performed. The Group recognises revenue when the amount of revenue can be reliablymeasured and it is probable that future economic benefits will flow to the entity. Amounts recoverable on such long-termcontracts are included in Other Current Assets.

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable forgoods and services provided in the normal course of business, net of discounts, VAT and other sales related taxes.

Interest income is recognised on the accruals basis taking into account the effective yield on the asset.

(u) Financial Instruments

Financial instruments are recognised in the Group’s balance sheet when the Group becomes a party to the contractualprovision of the instrument. Financial assets carried on the balance sheet include cash and cash equivalents, trade receivables,trade payables, and borrowings. The particular recognition methods adopted are disclosed in the individual policy statementsassociated with each item.

(v) Financial Risk Management

The Group’s activities expose it to a variety of financial market risks, including the effects of changes in debt and equitymarkets, foreign currency exchange rates and interest rates. The Group’s overall risk management focuses on theunpredictability of financial markets and seeks to minimise the potential adverse effects on its financial performance.

Foreign Exchange Risk

The Group currently operates predominantly in Greece and is exposed to minimal foreign exchange risks arising from variouscurrency exposures primarily with respect to certain suppliers’ balances.

Interest Rate Risk

The Group is exposed to interest rate risk as it borrows and places surplus cash at floating interest rates. Exposure to interestrate risk on borrowings and cash investments is monitored on an ongoing and proactive basis.

Credit Risk

The Group has significant concentrations of credit risk relating to its trade receivables.

The Group has policies in place to ensure that sales are made to customers with a high credit standing. Long-term and ongoing relationships with customers minimise the risk of bad debts.

Cash transactions are restricted to high quality local financial institutions where the overall credit risk is considered to beacceptable.

Liquidity Risk

The Group’s financing requirements have significantly increased due to investment in software development, engagements inPublic Sector Projects and other working capital requirements. The Group meets its financing needs through several creditlines established with local banks which are mainly based upon collateral such as customer contracts, invoices and post datedcheques received.

Fair Value Estimation

Management consider that the carrying amount of the Group’s financial assets and liabilities approximate to the fair value ateach balance sheet date.


(w) Segment Information

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-makers, who are responsible for allocating resources and assessing performance of the operating segments and makingstrategic decisions. The Group’s trading operations are currently principally within Greece.

(x) Goodwill

Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s interest in the fair value ofthe identifiable assets and liabilities of a subsidiary, associate or jointly controlled entity at the date of acquisition. Goodwillis recognised as an asset and reviewed for impairment at least annually. Any impairment is recognised immediately in thestatement of comprehensive income and is not subsequently reversed.

Under the reverse acquisition, goodwill represents the excess of the cost of the combination over the acquirer’s interest inthe net fair values of the legal parent. The fair value of the equity instruments of the legal subsidiary to effect the combinationwas not available therefore the fair value of all the issued equity instruments of the legal parent before the businesscombination was used as the basis for determining the cost of the combination.

(y) Share-Based Payments

The Group has applied the requirements of IFRS 2 “Share-based payments”. Equity-settled share-based payments aremeasured at fair value at the date of grant. The fair value is expensed on a straight-line basis over the vesting period, basedon the Group’s estimate of shares that will eventually vest. At each balance sheet date, the Group revises its estimate ofoptions that are expected to vest and recognises the impact of any revision to original estimates in profit or loss withcorresponding adjustments to shareholders equity.

The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings is treated as acapital contribution. The fair value of employee services received, measured by reference to the grant date fair value, isrecognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit toequity.

Where equity instruments are granted to persons other than Directors or employees, profit or loss is charged with the fairvalue of the goods and services received.

(z) Critical accounting estimates and judgements

i) Estimation of Contract Income

Estimated income receivable on contracts is judged by Management through the application of their experienceand knowledge of the industry in which the Group operates. Income for each individual contract is determinedaccording to the stage of completion determined by reference to the cost of services performed to date as apercentage of the total cost of services to be performed. Management consider that the cost of services performedunder each contract at any stage of completion when compared to total budgeted cost is an accurate measure ofthe work performed under those contracts. Total budgeted costs are continually reviewed throughout the contractfor accuracy and costs incurred are closely monitored against budget.

ii) Key Sources of Estimation Uncertainty

Provision for Bad Debts

Management carry out detailed reviews of receivables during the financial year. This review takes into account theage of the debt, credit history and information available about the financial strength of the client. If it isconsidered, based on the available evidence, more likely than not that the debt will not be recovered in full thena provision is made to write down the receivable to reflect the anticipated recovery. Details of the provision againstdoubtful debts are set out in note 20.

59

Share-Based Payments

The Group has made awards of options and warrants over its unissued share capital to certain Directors andemployees as part of their remuneration package.

The valuation of these options and warrants involves making a number of critical estimates relating to pricevolatility, future dividend yields, expected life of the options and forfeiture rates. These assumptions have beendescribed in more detail in note 24. A change to any of these assumptions would alter the valuation of the optionsand warrants.

Impairment of Goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating unitsto which goodwill has been allocated. The value in use calculation requires the entity to estimate future cash flowsexpected to arise from the cash generating unit and a suitable discount rate in order to calculate present value.

Deferred Taxation

The Group is subject to income taxes in a number of jurisdictions. Judgement is required in determining theprovision for such taxes. The Group recognises liabilities for anticipated tax issues based on estimates of whetheradditional taxes will be due. Where the final tax outcome of these matters is different from the amounts that wereinitially recorded, such differences will affect the current and deferred income tax assets and liabilities in the periodin which such determination is made.

A deferred tax asset of €1,574,000 (2009 – €868,000) has been recognised in respect of unutilised tax lossesarising from the Group’s tax credit claim in connection with research and development expenditure. In accordancewith Greek Tax Law, fifty per cent of eligible expenditure on scientific and technological research can be claimedfrom the General Secretariat for Research and Technology and, if accepted, deducted from Greek GAAP taxableprofits. If the tax credit claim in any one year exceeds the Greek GAAP tax liability, the tax credit can be carriedforward as tax losses and offset against future tax liabilities for a maximum period of 5 years. Any excess is notrefunded in cash. Should the claims submitted to the General Secretariat not be accepted in whole or in part orif insufficient future Greek taxable profits are generated within the required timescale, the Group may need torevise the carrying value of this asset.

4. Segment Information

The following segments are based on the management reports received by the Board of Directors (who are the chief operatingdecision makers) which are used to make strategic decisions. The Directors consider the business from a product perspective.The main segments are:

Third party goods: The Group resells third party goods, to its customers, mainly comprising hardware to complement asoftware project.

Software products and services: The main activity of the Group is to sell its own software products and services to its clientsboth in the private and public sector.

Telecom services (S.a.a.S.): The Group combines telecom services with its own software products that are then sold on a“software as a service” basis.

Mobile products and services: The new activity of the Group in the year ended 31 December 2010 is to sell its own mobilesoftware products and services to its clients (mobile network operators, value added service providers, handset manufacturersetc.).

Transactions between segments are recorded at cost.


The Directors assess the performance of the operating segments based on revenue from external customers and gross profit.The segment information provided to the Directors for the reportable segments for the year ended 31 December 2010 is asfollows:

MobileThird Software Telecom products Inter-party products & services & segment Segment

goods services (S.a.a.S.) services Total balances Total€’000 €’000 €’000 €’000 €’000 €’000 €’000

Total segment revenue 386 21,898 3,853 5,270 31,407 (498) 30,909Intersegment revenue (57) – (441) – (498) – –

Revenue from external customers 329 21,898 3,412 5,270 30,909 – –Inventory costs (247) – – – (247) – (247)Other expenses – (11,824) (1,131) (944) (13,899) 498 (13,401)Amortisation and impairment – (4,080) (652) (1,096) (5,828) – (5,828)Intersegment costs 57 439 2 – 498 – –

Gross Profit 139 6,433 1,631 3,230 11,433 – 11,433

Depreciation – 877 70 1 948 – 948Expenditure on tangiblefixed assets – 789 63 – 852 – 852Expenditure on intangiblefixed assets – 3,676 3,065 1,160 7,901 – 7,901Total assets 485 51,489 7,755 1,921 61,650 (7,418) 54,232Total liabilities 170 18,984 3,600 1,599 24,353 (7,418) 16,935

The segment information provided to the Directors for the year ended 31 December 2009 is as follows:

Third Software Telecom Inter-party products & services segment Segment

goods services (S.a.a.S.) Total balances Total€’000 €’000 €’000 €’000 €’000 €’000

Total segment revenue 3,626 18,833 2,922 25,381 (1,890) 23,491Intersegment revenue (130) (46) (1,714) (1,890) – –

Revenue from external customers 3,496 18,787 1,208 23,491 – –Inventory costs (2,255) – – (2,255) 14 (2,241)Other expenses – (10,158) (810) (10,968) 1,867 (9,101)Amortisation – (3,616) (240) (3,856) – (3,856)Intersegment costs 14 1,700 176 1,890 – –

Gross Profit 1,255 6,713 334 8,302 (9) 8,293

Depreciation – 675 50 725 – 725Expenditure on tangible fixed assets – 549 141 690 – 690Expenditure on intangible fixed assets – 6,591 1,776 8,367 – 8,367Total assets 633 40,061 4,785 45,479 (1,580) 43,899Total liabilities 786 12,010 2,559 15,355 (1,590) 13,765

61

A reconciliation of gross profit to profit before taxation is provided as follows:


31 December 31 December2010 2009

€’000 €’000

Gross profit for reportable segments 11,433 8,293

Other operating income 731 276

Distribution expenses (1,957) (1,081)

Administrative expenses (4,015) (3,020)

Other operating expenses (328) (95)

Finance costs (1,230) (1,172)

Profit before tax 4,634 3,201

Reportable segments’ assets are reconciled to total assets as follows:


2010 2009€’000 €’000

Segment assets for reportable segments 54,232 43,899

Unallocated:

Property, plant and equipment 1,782 1,797

Goodwill 742 842

Deferred tax 402 429

Other receivables 28 17

Trade receivables 32 582

Other current assets 19 16

Cash and cash equivalents 2,650 3,113

Total assets per balance sheet 59,887 50,695


Reportable segments’ liabilities are reconciled to total liabilities as follows:


2010 2009€’000 €’000

Segment liabilities for reportable segments 16,935 13,765

Unallocated:

Borrowings 13,290 12,813

Retirement benefit obligations 212 180

Finance lease liabilities 1,963 1,777

Accrued liabilities 142 3,082

Taxes payable 994 1,090

Provisions and other liabilities 64 192

Total liabilities per balance sheet 33,600 32,899

Revenue from external customers



€’000 €’000

Greece 24,734 23,383

South-eastern Europe 1,014 104

Western Europe 185 –

Eastern Europe 1,214 –

Central Europe 800 4

Africa 2,494 –

Latin America 290 –

Southeast Asia 113 –

Middle East 65 –

Total 30,909 23,491

Non-current assets


2010 2009€’000 €’000

Greece 19,039 17,627

Germany 79 179

Cyprus 4 5

Total 19,122 17,811

63

Information about major customers

Revenues of approximately €8.840 million (2009 – €2.010 million) are derived from a single external customer. Theserevenues are attributable to the software products and services segment.

Contract Revenue

Revenue from services is based on the stage of completion determined by reference to services performed to date as apercentage of total services to be performed. At 31 December 2010, the Group has recognized €15,876,525 (2009 –€13,976,273) of contract revenue, of which €6,323,000 (2009 – €4,595,076) had not been invoiced by the year end, basedon the completion ratio from the rendering of services in relation to projects with total budgeted revenue of €15,876,525(100% completion). Total costs incurred relating to these projects were €4,236,717 as at 31 December 2010.

5. Cost of Sales



€’000 €’000

Inventory costs 190 2,241

Content costs 172 309

Direct staff costs 575 724

Third party costs 12,313 7,738

Telecom provider costs 398 330

Amortisation and impairment of intangible assets 5,828 3,856

Total 19,476 15,198

6. Operating Income/Expenses

Other operating income is derived from:



€’000 €’000

Write back of deferred consideration (note 17) 100 –

Government grants 106 109

European Commission grants – 111

Exchange differences – 54

Profit on disposal of tangible and intangible fixed assets (net) 507 2

Other income 18 –

Total 731 276

In both periods above, the Group has recognised income from grants corresponding to the percentage completion of theassociated Government and European Commission subsidised investment programs. These grants have been received for theimplementation of several of the Group’s innovative investments in software products.


Other operating expenses are derived from:



€’000 €’000

Various operating expenses 233 95

Exchange differences 95 –

Total 328 95

7. Distribution Expenses



€’000 €’000

Sales and marketing staff costs 579 617

Travel and transportation costs 211 186

Promotion, exhibitions and other marketing costs 1,167 278

Total 1,957 1,081

8. Administrative Expenses



€’000 €’000

Administrative staff costs 617 553

Wages and expenses for contracted third parties 665 794

Share based payments (note 24) 56 –

Utilities and rents 346 340

Operating lease rentals 80 62

Taxes and custom duties 58 86

Provisions for impairment of receivables 987 182

Depreciation of non-current assets 985 803

Other 221 200

Total 4,015 3,020

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9. Auditors’ Remuneration



€’000 €’000

Fees payable to the Company’s auditor for the audit of theParent Company and Consolidated Financial Statements 31 20

Fees payable to the Company’s auditor for other servicesprovided to the Company and its subsidiaries:

Other services under legislative requirements 6 12

Tax services 3 7

Total 40 39

Fees payable to other auditors:

– audit of Company’s subsidiaries 29 24

– valuation and actuarial services 14 –

Total 43 24

10. Staff Costs



€’000 €’000

Wages and salaries 1,874 2,006

Social security costs 453 513

Share based payments 56 –

Staff retirement indemnities 34 32

Total 2,417 2,551

The Group has capitalised wages and social security costs of €488,063 in the year ended 31 December 2010 (year ended31 December 2009 – €626,425) as software development costs incurred in relation to the development of commercially viablee-business and mobile platforms. All other staff costs relating to research and development have been recognised in profit orloss.


The average monthly number of people employed by the Group is analysed as follows:



Number Number

Software development 17 17

Project development 21 29

Sales 14 15

Administration 18 18

70 79

Directors’ Remuneration



€’000 €’000

Salaries, fees and other benefits 349 493

The remuneration of the highest paid Director amounted to €94,136 (2009 – €182,131).

Salary Otherand fees benefits Total

2010 €’000 €’000 €’000

Gerasimos Bonanos 82 12 94

Gavin Burnell 46 – 46

Joseph Coughlin 35 – 35

Dimitrios Gryparis 72 6 78

Brett Miller 61 – 61

Costis Papadimitrakopoulos 21 15 36

317 33 350

Salary Otherand fees benefits Total

2009 €’000 €’000 €’000

Gerasimos Bonanos 83 13 96

Gavin Burnell 45 – 45

Joseph Coughlin 33 – 33

Dimitrios Gryparis 72 6 78

Brett Miller 59 – 59

Costis Papadimitrakopoulos 171 11 182

463 30 493

67

Share Options and Warrants Granted to Directors

Share options and warrants granted to the Directors who held office as at 31 December 2010 are set out below and furtherdescribed in note 24 to the Financial Statements. Options and warrants outstanding as at 31 December 2010 held by Directorswere as follows:

31 December 2010 31 December 2009Exercise Exercise

price priceDate of grant Number per share Number per share

Gerasimos Bonanos 14 December 2007 100,000 20p 100,000 20p

29 November 2010 500,000 12.5p – –

Gavin Burnell 15 July 2005 197,500 10p 197,500 10p

Dimitrios Gryparis 14 December 2007 100,000 20p 100,000 20p

29 November 2010 500,000 12.5p – –

Brett Miller 15 July 2005 197,500 10p 197,500 10p

14 December 2007 1,305,895 20p 1,305,895 20p

Costis Papadimitrakopoulos 14 December 2007 100,000 20p 100,000 20p

29 November 2010 1,500,000 12.5p – –

The mid-market price of the Company’s ordinary shares at 31 December 2010 was 11.35p (2009 – 9p). No Director-held shareoptions or warrants were forfeited, exercised or expired during the period.

11. Finance Costs (net)



€’000 €’000

Bank interest 1,165 1,116

Finance lease interest 114 123

Total 1,279 1,239

Interest receivable (49) (67)

Finance Costs (net) 1,230 1,172


12. Income Tax



€’000 €’000

Profit before tax per local statutory financial statements 1,505 957

Loss in other jurisdictions (417) (407)

IFRS adjustments 3,546 2,651

Profit before tax per IFRS financial statements 4,634 3,201

Tax at the nominal rate of 25% – (800)

Tax at the nominal rate of 24% (1,112) –

R&D relief (see below) 944 549

Losses carried forward (122) (122)

Gains not subject to tax 47 –

Tax charge (243) (373)

Current tax (216) (73)

Deferred tax (note 18) (27) (300)

Tax charge (243) (373)

Tax losses available to be carried forward by the parent Company at 31 December 2010 against future profits are estimatedto comprise trading losses of approximately £72,504 (2009 – £51,167) arising in the UK and £964,897 (2009 – £625,485)arising in Greece. A deferred tax asset amounting to approximately £18,851 (2009 – £14,327) has not been recognised inrespect of the Company’s accumulated UK losses and £192,979 (2009 – £150,117) in respect of the Company’s accumulatedlosses in Greece, as there is insufficient evidence that the asset will be recovered in the foreseeable future. Except for thetax credit claim in connection with research and development expenditure as described in note 3(z), there were no otherfactors that may affect future tax charges.

The Group has utilised tax relief incentives, provided by the Greek Government in order to incentivise Greek enterprises torealise investments. These incentives allow for special treatment on investments made by eligible companies.

a) Untaxed Reserves

“Untaxed reserves” are used to reduce the Group’s taxable profit according to the relevant investment percentage. Thispercentage is calculated on realised investments and usually varies from 50% to 60%. The result of this calculation is theuntaxed reserve, which is deducted from the taxable profit and is not subject to tax. This reserve is for re-investment intothe business. If the untaxed reserve is distributed to shareholders, the tax becomes payable. Otherwise it remains indefinitelyas a special reserve. The Group has utilised three development Greek laws, L. 1828/1989, L. 2601/1998 and L. 3220/2004.

b) Non-Taxable Discounts

The Group has implemented Greek Law 3296/2004 (ex. L. 2992/2002), to reduce its tax obligations by 50% for expensesrelated to research and development for software products. A tax credit of €1,015,000 (2009 – €1,112,300) has beenrecognised in respect of the Group’s tax credit claim for research and development expenditure. In accordance with GreekTax Law, 50% of eligible expenditure on scientific and technological research (such expenditure being capitalised withinintangible fixed assets) is eligible as a deduction from Greek GAAP taxable profits for a maximum period of five years.

69

13. Earnings per Share

Basic earnings per share are calculated by dividing the profit after tax attributable to equity holders by the weighted averagenumber of ordinary shares in issue during the year.



Profit attributable to equity holders of the Company (€000’s) 4,351 2,820

Weighted average number of ordinary shares in issue 153,421,537 134,570,873

Diluted earnings per share in the years ended 31 December 2010 and 31 December 2009 assumes that options and warrantsoutstanding at 31 December 2010 and 31 December 2009 were exercised at 1 January 2010 and 1 January 2009 respectively,for options and warrants where the exercise price was less than the average price of the ordinary shares during the period.A calculation is done to determine the number of shares that could have been acquired at fair value based on the monetaryvalue of the subscription rights to outstanding share options. The number of shares calculated above is compared with thenumber of shares that would have been issued assuming the exercise of the options and warrants plus, for the year ended31 December 2009, the issue of the shares as part of the deferred consideration for the acquisition of a subsidiaryundertaking. On this basis, the calculation of diluted earnings per share is based on the profit attributable to ordinaryshareholders divided by 153,468,784 shares (2009 – 135,511,474 shares).

Since the year end, the Company issued 115 million ordinary shares together with warrants to subscribe for 1,449,988ordinary shares of 1p each, exercisable at 15p each which may result in the dilution of the earnings per share in the future.


14. Property, Plant and Equipment

Group

Officefurniture,

fittings andLand Property Vehicles equipment Total

€’000 €’000 €’000 €’000 €’000

Cost

As at 1 January 2009 736 986 97 3,978 5,797

Additions – – – 760 760

Disposals – – – (4) (4)

As at 31 December 2009 736 986 97 4,734 6,553

Additions – – – 852 852

Disposals – – (2) (296) (298)

As at 31 December 2010 736 986 95 5,290 7,107

Accumulated Depreciation

As at 1 January 2009 – (139) (12) (1,904) (2,055)

Charge for the year – (34) (11) (758) (803)

Disposals – – – 1 1

As at 31 December 2009 – (173) (23) (2,661) (2,857)

Charge for the year – (28) (9) (948) (985)

Disposals – – 1 209 210

As at 31 December 2010 – (201) (31) (3,400) (3,632)

Net Book Value at1 January 2009 736 847 85 2,074 3,742

Net Book Value at31 December 2009 736 813 74 2,073 3,696

Net Book Value at31 December 2010 736 785 64 1,890 3,475

During the year ended 31 December 2006, the Group acquired its own premises in Chalandri, Athens. The total purchaseprice of the premises was €1,588,000 which was financed through a finance lease provided by Cyprus Bank.

71

The net book value and depreciation charge of each class of asset treated as held under finance leases is as follows:

Officefurniture,

fittings andLand Property Vehicles equipment Total

€’000 €’000 €’000 €’000 €’000

Net book value at 31 December 2009 736 772 70 231 1,809

Net book value at 31 December 2010 736 759 60 443 1,998

Depreciation charge for the year – 13 10 322 345

15. Intangible Assets

Group

Software Licences Royalties Total€’000 €’000 €’000 €’000

Cost

As at 1 January 2009 4,394 14,319 – 18,713

Additions 2,384 5,695 370 8,449

Disposals (1) – – (1)

As at 31 December 2009 6,777 20,014 370 27,161

Additions 3,444 4,457 – 7,901

Disposals (1,298) – – (1,298)

As at 31 December 2010 8,923 24,471 370 33,764

Accumulated Amortisation

As at 1 January 2009 (1,821) (8,657) – (10,478)

Amortisation for the year (1,165) (2,569) (122) (3,856)

As at 31 December 2009 (2,986) (11,226) (122) (14,334)

Amortisation for the year (1,777) (3,731) (220) (5,728)

Disposals 784 – – 784

As at 31 December 2010 (3,979) (14,957) (342) (19,278)

Net Book Value at 1 January 2009 2,573 5,662 – 8,235

Net Book Value at 31 December 2009 3,791 8,788 248 12,827

Net Book Value at 31 December 2010 4,944 9,514 28 14,486


Licences include development costs comprising the direct staff costs of the software development team incurred in thedevelopment of software products and third party development costs of software libraries and modules, incorporated into theGroup’s products.

The Group will continue to capitalise costs incurred on newly developed software products as well as on existing productswhich will be subject to further upgrading and development, until the products are ready for use and sale.

All intangible assets except royalties are internally generated.

16. Investment in Subsidiary Undertakings

Company

Shares in Group Undertakings


€’000 €’000

At the beginning of the year 4,612 5,577

Investment in start-up subsidiaries 42 –

Exchange differences 145 (965)

Capital contribution relating to share-based payments 56 –

At the end of the year 4,855 4,612

Details of Subsidiary Undertakings

Proportionof equity Proportion

Country of shares held of equityincorporation directly shares held

Name and residence Nature of business by Company by Group

Globo Technologies S.A. Greece e-Business andtelecom software solutions 100% 0%

Profitel Communications S.A. Greece Business communication services 0% 100%

Globo Mobile S.A. Greece Mobile software solutions andservices 0% 100%

Globo IT and Telecom Services SRL Romania Computer programming,consultancy and related activities 0% 100%

ReachFurther Communications Limited Cyprus Content/service aggregator forthe entire mobile and fixedtelecommunication markets 0% 35%

Globo Holdings Limited BVI Holding of investments 100% 0%

Globo Services (CY) Limited Cyprus e-Business andsoftware solutions 100% 0%

Gylenhall Investments Limited Cyprus Holding of investments 0% 100%

Oumpalumpa Limited Cyprus Holding of investments 0% 100%

Globo Mobile Technologies UAE Software developers, serviceInternational FZ-LLC provider, consultancy and

related activities 0% 100%

73

Investments in subsidiaries are recorded at cost, which is the fair value of consideration paid.

The capital contribution relating to share-based payments relates to share options granted by the Company to employees ofsubsidiary undertakings in the Group.

Despite owning 35% of the share capital of ReachFurther Communications Limited, the company is accounted for as asubsidiary undertaking as Globo Plc has the power to govern the financial and operating policies of the entity and the powerto appoint and remove the members of the Board of Directors under the acquisition agreement.

17. Goodwill

Goodwill€’000

Group

As at 1 January 2009 842

Additions –

As at 31 December 2009 842

Impairment (100)


Goodwill from Acquisition of Profitel Communications S.A.

On 29 June 2007, Globo Technologies S.A. acquired a 100% interest in Profitel Communications S.A. for an aggregateconsideration of €115,000. Goodwill is recorded in the consolidated balance sheet as the excess of the cost of acquisition(€115,000) over the 100% interest in the fair value of the identifiable assets (€508,266) and liabilities (€460,417) of ProfitelCommunications S.A.

The fair value of the assets and liabilities acquired and their carrying amounts immediately prior to the acquisition, were asfollows:

Fair value Book value€’000 €’000

Property, land and equipment 23 23

Intangible assets 213 213

Long-term assets 6 6

Inventory 35 35

Receivables 179 179

Cash & cash equivalents 52 52

Trade and other payables (460) (460)

48 48

The intangible assets that are presented in the table consist of software systems that are specially developed for ProfitelCommunications S.A. i.e. ERP/Accounting system, CRM, Telecom Billing and Web Customer Access Area. These systems aremajor components for the functionality of the subsidiary and its business development. Profitel Communications S.A. has noother intangible assets in its possession.


Details of net assets acquired and goodwill were as follows:

€’000

Net assets acquired 48

Goodwill 67

Consideration 115

Reverse Acquisition of Globo plc

On 14 December 2007, Globo plc acquired 100% of Globo Technologies S.A. The nature of the acquisition was a reversetakeover as set out in note 2.

Details of net assets acquired and goodwill are as follows:

Book and fairvalue of

Globo plc’sassets acquired

€’000

Cash and cash equivalents 1,225

Trade and other payables (113)

Accrued liabilities (202)

910

Goodwill 127

Consideration 1,037

In the absence of a reliable valuation of Globo Technologies S.A., the cost of the combination was calculated using the fairvalue of all the issued equity instruments of Globo plc at the date of acquisition.

The goodwill is considered to be attributable to the benefits to be derived from the parent company as a listed entity.

Goodwill from Acquisition of ReachFurther Communications Limited

On 31 December 2008, the Group acquired 35% of the equity share capital of ReachFurther Communications Limited for anaggregate consideration of €650,000. The aggregate consideration included €200,000 to be satisfied 50% in cash and 50%in shares of Globo Plc dependent upon ReachFurther Communications Limited achieving certain profitability targets during2009 and 2010. Goodwill is recorded in the consolidated balance sheet as the excess of the cost of acquisition (€650,000)over the 35% interest in the fair value of the identifiable assets (€171,118) and liabilities (€166,401) of ReachFurtherCommunications Limited.

ReachFurther Communications Limited failed to achieve the profitability targets during 2009 and 2010 as set out in theacquisition agreement. Consequently, the aggregate deferred consideration has been fully reversed during the year. Thereversal of the liability payable in cash of €100,000 has been included within other operating income. The reversal of theliability payable in Globo Plc shares of €100,000 has been included within other comprehensive income. Following the reversal,the carrying value of goodwill has been reviewed and an impairment charge of €100,000 has been included in ‘cost of sales’in the Statement of Comprehensive Income.

75

The fair value of the assets and liabilities acquired and their carrying amounts immediately prior to the acquisition, were asfollows:

Fair value Book value€’000 €’000

Receivables 111 111

Other current assets 27 27

Cash and cash equivalents 33 33

Trade and other payables (166) (166)

5 5

Minority interests (65%) (3) (3)

2 2

Details of net assets acquired and goodwill are as follows:

€’000

Net assets acquired 2

Goodwill 648

Consideration 650

Annual test for impairment

In accordance with the requirements of IAS 36, the Group tested the goodwill attributable to each of its reporting units forimpairment as of 31 December 2010 and, except for the impairment loss of €100,000 for ReachFurther CommunicationsLimited recognised during the year ended 31 December 2010, concluded that its goodwill was not further impaired. Fair valuewas estimated using discounted cash flow methodologies and market comparable information. The Group tests goodwill forimpairment annually in connection with its strategic planning process.

Goodwill is allocated to the Group’s cash generating units (“CGUs”) by reference to each of the acquisitions, as identifiedabove. The Directors’ calculations when carrying out the impairment review on the goodwill relating to ReachFurtherCommunications Limited used pre-tax operating cash flow projections based on financial budgets approved by management,covering a two year period. Cash flows beyond the two year period are extrapolated using a growth rate of 10% per annumfor a three year period, with an assumption of no growth in the years thereafter, for a total period of ten years. A discountrate of 10% has been applied to the cash flows.

Management have determined the budgeted operating cash flows based on past performance and expectations of marketdevelopment, consistent with expectations in the industry. The value in use calculated exceeds the carrying amount by€10,000.

The value in use calculation is sensitive to changes in the assumptions for growth rate and discount rate. If the growth rate,as applied to the value in use calculations explained above, did not meet the expected rate of 10% per annum, goodwill wouldbecome equal to the value in use calculation at a growth rate of 9.5% per annum, assuming all other assumptions remainedconstant. Goodwill would also be eliminated if the discount rate applied changed to 11%.


18. Deferred Income Taxes

Deferred income taxes are calculated in full on temporary differences under the liability method using a principal tax rate in2010 of 20% (2009 – 24%).

The movement of the deferred income tax account is as follows:


€’000 €’000

At the beginning of the year 429 729

Charged to profit or loss (note 12) (27) (300)

At the end of the year 402 429

At Effect of Movement At1 January change in in the 31 December

2010 tax rate year 2010€’000 €’000 €’000 €’000

Deferred Tax Liabilities

Tangible assets (4) 1 – (3)

Intangible assets – capitalised costs (92) 18 (308) (382)

IAS 11 contracts implementation (1,149) 230 (346) (1,265)

Prepayments and accrued income – – (103) (103)

Provisions (13) 3 10 –

Subtotal (1,258) 252 (747) (1,753)

Deferred Tax Assets

Intangible assets – capitalised costs 639 (128) (301) 210

Finance leases 9 (2) – 7

Inventory 9 (2) – 7

Receivables 28 (6) 194 216

Staff indemnities – – 1 1

Deferred income 92 (18) 32 106

Unused tax losses 868 (174) 880 1,574

Trade and other payables 42 (8) – 34

Subtotal 1,687 (338) 806 2,155

Deferred Tax Assets (net) 429 (86) 59 402

77

At Movement At1 January in the 31 December

2009 year 2009€’000 €’000 €’000

Deferred Tax Liabilities

Tangible assets (4) – (4)

Intangible assets – capitalised costs – (92) (92)

IAS 11 contracts implementation (1,212) 63 (1,149)

Grants recognised (18) 18 –

Provisions – (13) (13)

Subtotal (1,234) (24) (1,258)

Deferred Tax Assets

Intangible assets – capitalised costs 1,149 (510) 639

Finance leases 13 (4) 9

Inventory 9 – 9

Receivables 21 7 28

Staff indemnities 2 (2) –

Deferred income 135 (43) 92

Unused tax losses 632 236 868

Trade and other payables 2 40 42

Subtotal 1,963 (276) 1,687

Deferred Tax Assets (net) 729 (300) 429

The Greek tax rate will be reformed from 24% to 20% within 2011. The effect of the change on the tax rate on the openingassets and liabilities as at 1 January 2010 is shown separately in the table above.

Deferred income tax assets and liabilities are offset in accordance with the legally enforceable right to set off current taxassets against current tax liabilities and because the deferred income taxes relate to the same fiscal authority.

19. Inventories and work in progress

Group


2010 2009€’000 €’000

Products 2 2

Traded goods 203 205

Work in progress 5,321 2,558

Total 5,526 2,765

Less: provisions (for obsolete goods) (31) (35)

5,495 2,730

Work in progress relates to projects in the development stage which had not been finished at the year end.


20. Trade Receivables and Advance Payments

Group


2010 2009€’000 €’000

Trade receivables 7,974 10,194

Post dated cheques received 9,729 7,643

Less: provision for impairment of receivables (1,084) (112)

Trade receivables – net 16,619 17,725

Advance payments to subcontractors and suppliers 4,853 1,240

Less: provision for impairment of advance payments (167) (167)

21,305 18,798

Trade receivables comprise customer receivables in credit and post dated cheques received. The Group retains all risksassociated with post dated cheques received until the funds clear the bank on the presentation date. Included in the Group’strade receivables balance are debtors with a carrying amount of €2,544,395 (2009 – €1,609,082) which are past due at thereporting date for which the Group has not provided as there has not been a significant change in credit quality and theamounts are still considered recoverable.

Ageing of past due but not impaired trade receivables


2010 2009Past due but not impaired €’000 €’000

Up to Up to Up to Up to Up to Up to3 months 9 months 1 year 3 months 9 months 1 year

Trade receivables from customers 4,645 668 2,559 1,294 1,635 1,675Trade receivables from post dated cheques 5,090 3,657 – 59 – –

9,735 4,325 2,559 1,353 1,635 1,675

Movement on the Group provision for impairment of trade receivables is as follows:


2010 2009€’000 €’000

At 1 January 279 91

Trade receivables provided for as uncollectible – 188

Write-back of provisions no longer required (9) –

Post dated cheques receivable provided for 981 –

At 31 December 1,251 279

The individually impaired receivables relate to customers who are perceived to be in financial difficulty and the amounts arenot considered recoverable.

79

All of the Group’s financial assets are classified as trade and other receivables. The carrying amount of the Group’s tradereceivables are denominated in the following currencies. Other receivables are denominated in Euros.


2010 2009€’000 €’000

UK Pound 15 6

Euros 21,522 19,374

US Dollars 73 –

21,610 19,380

The maximum exposure to credit risk at the reporting date is the carrying value reported above.

21. Other Receivables

Group


2010 2009€’000 €’000

Other debtors 121 41

Claims from Government 184 541

305 582

Company


2010 2009€’000 €’000

VAT recoverable 7 4

Receivables from related parties 4,967 1,326

Other receivables 8 2

Prepayments 19 16

5,001 1,348

22. Other Current Assets

Group


2010 2009€’000 €’000

Prepayments 3,676 3,030

Amounts recoverable on long-term contracts 7,089 4,631

10,765 7,661


23. Cash and Cash Equivalents

Group


2010 2009€’000 €’000

Cash at bank 2,849 3,019

Cash in hand 46 94

2,895 3,113

Cash and cash equivalents include €774,894 (2009 – €1,073,051) consisting of guarantees held in connection with certainpublic sector contracts. The expiration date of the guarantees is 2012.

Company


2010 2009€’000 €’000

Cash at bank – 8

24. Share Capital

Company

Ordinary shares of 1p each Redeemable shares of 1p eachNominal Nominal

Number value Number value€ €

Authorised

At 1 January 2009 300,000,000 3,000,000 4,000,000 40,000

At 31 December 2009 300,000,000 3,000,000 4,000,000 40,000

At 31 December 2010 300,000,000 3,000,000 4,000,000 40,000

Allotted, Called up and Fully Paid

Ordinary sharesNominal

Number value€’000

At 1 January 2009 – shares of 1p each 130,589,530 1,781

New shares issued 11,944,029 135

At 31 December 2009 – shares of 1p each 142,533,559 1,916

New shares issued 32,464,196 380

At 31 December 2010 – shares of 1p each 174,997,755 2,296

81

On 2 June 2010 the Company issued 7,672,530 ordinary shares of 1p each at 8.5p per share fully paid. On 8 October 2010the Company issued 24,791,666 ordinary shares of 1p each at 12p per share fully paid.

Redeemable shares rank pari passu with the ordinary shares save that they are redeemable at par at the option of theCompany at any time. The holders of ordinary shares and redeemable shares are entitled, pari passu amongst themselves,to the profits of the Company available for distribution to be distributed according to the amounts paid up on such ordinaryshares or redeemable shares.

On 5 August 2009 the Company issued 11,944,029 ordinary shares of 1p each at 8.5p per share fully paid.

Details of a further share issue since the year end are given in note 34.

Group

Ordinary ShareNumber of shares premium

shares €’000 €’000

At 1 January 2009 130,589,530 1,781 3,879

New shares issued (net of expenses) 11,944,029 135 968

At 31 December 2009 142,533,559 1,916 4,847

New shares issued (net of expenses) 32,464,196 380 3,652

At 31 December 2010 174,997,755 2,296 8,499

Share Options and Warrants

On 15 July 2005, the Company issued 2,000,000 warrants to Ruegg & Co Limited and 1,500,000 warrants each to GavinBurnell and Amir Raveh. On 5 September 2005, Ruegg & Co Limited assigned 750,000 of its warrants to Thomas YatesBenyon. On 12 February 2007, Amir Raveh assigned 475,000 of his warrants to Brett Miller. Both Brett Miller and Gavin Burnellwere non-executive Directors of the Company. Following the share consolidation on 13 December 2007, the 5,000,000warrants exercisable at 1p each became 500,000 warrants exercisable at 10p each. On 1 July 2009 Ruegg & Co Limitedassigned its 125,000 warrants to Brett Miller.

Fair valueExercise at grant

Name Date granted Number price Expiry date date£ £

Gavin Burnell 15 July 2005 197,500 0.10 13 September 2011 0.021Brett Miller 15 July 2005 197,500 0.10 13 September 2011 0.021Amir Raveh 15 July 2005 30,000 0.10 2 September 2010 0.021Thomas Yates Benyon 15 July 2005 75,000 0.10 2 September 2010 0.021

500,000

The expiry date of the warrants held by Gavin Burnell and Brett Miller was extended from the original expiry date of2 September 2010. Warrants over 105,000 ordinary shares expired during the year.


Warrants Issued on Admission to AIM

On 15 November 2007, conditional upon and with effect from admission to AIM, the Company granted Ruegg & Co Limitedwarrants to subscribe for 1,305,895 ordinary shares. On 1 July 2009 these were assigned to Brett Miller. The exercise pricefor these warrants is 20p per ordinary share effective from the date of grant. The final exercise date is 14 December 2012.

On 15 November 2007, conditional upon and with effect from admission to AIM, the Company granted NCB StockbrokersLimited warrants to subscribe for 652,947 ordinary shares. The exercise price for these warrants was 20p per ordinary shareeffective from the date of grant until the third anniversary of admission to AIM. These warrants expired during the year.

Share Options Plan

The Company has one share option scheme. The Globo plc Share Option Plan (Part I) applies to employees of the Group andThe Globo plc Share Option Plan (Part II) applies to employees and non-employees of the Group. The maximum number ofordinary shares to be made available under the Option Plan shall not exceed 5% of the Company’s issued ordinary sharecapital. The Company granted options to subscribe for 2,110,000 ordinary shares on 14 December 2007 of which 200,000have subsequently lapsed. The exercise price for these options is 20p per ordinary share effective from one year from thedate of grant. The final exercise date is 14 December 2012. There are no performance conditions.

Disclosures for Share Options and Warrants

Year ended Year ended31 December 2010 31 December 2009

No. of Weighted No. of Weightedoptions average options average

and warrants price and warrants price(in pence) (in pence)

Outstanding at beginning of year 4,348,842 18.9 4,428,842 18.9

Granted during the year 5,250,000 12.5 – –

Lapsed during the year (807,947) 18.7 (80,000) –

Outstanding at end of year 8,790,895 15.1 4,348,842 18.9

Exercisable at end of year 3,540,895 18.9 4,348,842 18.9

The warrants and options outstanding at 31 December 2010 had a weighted average remaining contractual life of 3.66 years(2009 – 2.55 years).

On 26 November 2010 the Company issued 5,250,000 share options under the Globo plc Share Option Plan. The options areexercisable at 12.5p per share during a 4 year period commencing 26 November 2011.

Share Options and Warrants

The Group is required to recognise an expense for all share based payments. The fair value of the warrants and options hasbeen measured by use of the Black-Scholes pricing model. For all other warrants and options, the expected volatility wasdetermined by calculating the historical volatility of the Company’s share price since its admission to the PLUS market.

83

The significant inputs into the model were as follows:

15 December 14 December 14 December 26 November2007 2007 2007 2010

Shares under option 1,305,895 652,947 1,970,000 5,250,000

Share price at grant date (pence) 15.2p 15.2p 15.2p 12.3p

Exercise price 20p 20p 20p 12.5p

Exercisable from (years) Nil 1 1 1

Option life (years) 5 4 5 5

Risk free rate 4.27% 4.27% 4.27% 1.88%

Expected volatility 14.39% 14.39% 14.39% 55.34%

Expected dividend Nil Nil Nil Nil

Fair value per option granted 1.56p 1.12p 1.56p 5.33p

Forfeiture rate Nil Nil Nil Nil

All balances stated above have been adjusted where applicable for the share consolidation on 13 December 2007. The totalfair value has been spread over the relevant vesting periods and has resulted in a charge to profit or loss for the year ended31 December 2010 of €55,639 (2009 – €Nil). This amount has been included in administrative expenses.

25. Other reserves

Group

Reserves are analysed as follows:

Financial SharesOrdinary Untaxed means Other Merger to bereserves reserves reserves reserves reserve issued Total

€’000 €’000 €’000 €’000 €’000 €’000 €’000

Balance at 1 January 2009 179 3,530 (46) 490 1,500 186 5,839

Changes within the year

Exchange differences – – – (7) – – (7)

Balance at 31 December 2009 179 3,530 (46) 483 1,500 186 5,832

Balance at 1 January 2010 179 3,530 (46) 483 1,500 186 5,832Changes within the yearShare based payment charge – – – – – 56 56Write back of deferred consideration(note 17) – – – – – (100) (100)

Balance at 31 December 2010 179 3,530 (46) 483 1,500 142 5,788


CompanyReserves are analysed as follows:

SharesMerger to bereserve issued Total

€’000 €’000 €’000

Balance at 1 January 2009 1,500 185 1,685


Exchange differences – (7) (7)

Balance at 31 December 2009 1,500 178 1,678

Balance at 1 January 2010 1,500 178 1,678


Share based payment charge – 56 56

Write back of deferred consideration (note 17) – (100) (100)

Balance at 31 December 2010 1,500 134 1,634

In accordance with the provisions of Greek company law the “ordinary reserve” has been created through a compulsorytransfer of an amount equal to 5 per cent of the annual profit after tax, until such time as the reserve reaches the equivalentof one third of the share capital of Globo Technologies S.A. The “ordinary reserve” can be distributed only upon the dissolutionof Globo Technologies S.A. but can be utilised to offset accumulated losses.

The “untaxed reserves” have been created in the periods from 2002 onwards, as a result of tax legislation. This permits theindefinite deferral of tax on otherwise taxable profits, as a form of an investment incentive, on the condition that the saidprofits are reinvested into the business. Tax deferred in this way is crystallised on the disposal of the assets acquired, withina period of 5 years from their acquisition, or whenever the untaxed reserves are distributed. The tax liability that willcrystallise on the distribution of these reserves, estimated, as at 31 December 2010 is €847,790 (31 December 2009 –€882,827) and shall be recognised as and when a decision to distribute these reserves, in full or in part, is taken.

The “financial means reserve” has been created as a result of the loss from selling the shares of subsidiary company 3nSoldS.A. at a lower value than that at which it was acquired. This reserve will remain for an indefinite period until the loss isrecovered by profits from selling shares or at the dissolution of Globo Technologies S.A. (at which time it will be offset withany “ordinary reserve” in existence at the time).

The “other reserves” are undistributed post tax profits which can be used to increase the share capital of Globo TechnologiesS.A. or can be distributed to the shareholders at any time without any tax obligation. The use of this reserve is subject to thedecision of a general meeting.

In accounting for the acquisition of Globo Technologies S.A., the Company took advantage of Section 131 of the CompaniesAct 1985 and accounted for the transaction using merger relief.

26. Borrowings

Group

Loans have been provided to the Group by Greek banks and are denominated in Euros. The amounts payable within one yearof the balance sheet date are reported as short-term loans while the amounts repayable at a subsequent stage, are reportedas long-term loans.

Furthermore, the Group used arrangements which have been treated as finance leases for the acquisition of its premises inChalandri, Athens, as well as for IT and telecommunications equipment for the required infrastructure. The finance leasespayable within one year are included in short-term loans. Finance leases payable thereafter are reported as non-currentfinance lease liabilities.

85

The loans of the Group are analysed as follows:


2010 2009€’000 €’000

Current Liabilities

Short-term loan financing 8,568 9,347

Long-term loans payable within one year 1,153 767

Finance lease liabilities payable within one year 265 200

Total Current Borrowings 9,986 10,314

Non-Current Liabilities

Long-term loans 3,569 2,699

Finance lease liabilities 1,698 1,577

Deferred consideration for acquisition of subsidiary undertaking – 100

Total Non-Current Borrowings 5,267 4,376

Total Borrowings 15,253 14,690

Maturity analysis


2010 2009€’000 €’000

A. Long-Term Loans

Payments analysed as:

a. within 1 year 1,153 767

b. between 2-5 years 3,569 2,699

c. More than 5 years – –

Total 4,722 3,466

B. Finance Lease Liabilities

Payments analysed as:

a. within 1 year 265 200

b. between 2-5 years 501 310

c. More than 5 years 1,197 1,267

Total 1,963 1,777

During 2008, the Group was issued a bond for €3,000,000 from the National Bank of Greece, of which €2,000,000 was usedfor the repayment of a previous corporate bond loan from the same bank and the remaining €1,000,000 was used as a


restructuring tool for short-term borrowings. The facility was based upon 960 bonds of €3,125 each. The bonds are repayable(with interest) in 8 instalments of €312,500 each on 10 July 2008 and 10 January 2009 and on each of those anniversarydates until 2013 with 1 final instalment of €500,000 on 10 July 2013. The Interest Rate is Euribor + 2.00% spread over thecourse of the loan. In addition, the Group issued a bond of €500,000 to EFG Eurobank with a coupon payment at 2013. Theinterest rate is 5.85%. The Group has been financed by Emporiki Bank with a long-term loan of €400,000 repayable inquarterly instalments of €25,000 each ending at 2011. Both loans were used as a restructuring tool for short-term borrowings.The interest rate is Euribor + 2.25% spread over the course of the loan. In November 2010, the Group was financed byNational Bank of Greece totalling €2,117,168 (Globo €1,822,168, Profitel €295,000), guaranteed by the Greek Government.The loan was used as a restructuring tool for short-term borrowings and as a financing tool for the Group’s investments, andit is repayable in 8 semi-annual instalments of €261,250 each, ending on 30 April 2014.

Security

All facilities from banks and local financial institutions are secured with various customer invoices and post dated cheques.The Group is charged interest until the invoices or post dated cheques are settled by the customers. In addition, the Grouphas also secured major customer contracts in exchange for 60-70% of the contract value. Furthermore, the ownership of theleased building and equipment belongs to the lease companies as collateral for the leasing facilities until the date of expirationof the leasing facilities.

For all loans obtained from the above agreements, the Group retains all credit risk associated with the pledged receivablesuntil they are fully recovered.

Mr Costis Papadimitrakopoulos has personally co-guaranteed all borrowings of the Group, including all finance and operatingleases.

27. Provisions and Retirement Benefit Obligations

The subsidiaries are required, under Greek Law, to make a payment to employees upon unfair dismissal or upon attainingnormal retirement age. The amount payable depends on the employees’ monthly earnings and a multiple which depends onthe length of service.

The payment on unfair dismissal is based on the following table:

Employment time Retirement benefit in monthly wages

Up to 2 months 0

From 2 months up to 1 year 1

From 1 year up to 4 years 2

From 4 years up to 6 years 3



From 10 years up to 28 years The number of employment years less 4

In order to define the Group’s retirement benefit obligation to its employees an actuarial study was carried out for the year2010 and the following assumptions were used to perform the calculations:

• Mortality based upon the Greek actuarial company (E.A.E.) figures as at 1990.

• Interest cost based on the interest rate of government bonds and set to 5%.

• Current service cost based on standard wages.

• Age of retirement as set by the Social Security Insurance Institution (IKA).

• An assumption that no unfair dismissal before retirement would occur.

87

• Assumptions of yearly increases in wages of 4.0%.

The latest actuarial study is dated 10 January 2011.

Group

The amounts recognised in the balance sheet are determined as follows:


2010 2009€’000 €’000

Retirement Benefit Obligations 212 180

Provisions

Provisions for tax obligations 64 92

276 272

Movements in provisions are as follows:

€’000


Additional provision 77



Additional provision in relation to retirement benefit obligations 32

Amount released in the year in relation to provisions for tax obligations (28)


28. Trade and other payables

Group


2010 2009€’000 €’000

Trade payables 4,522 6,769

Post dated cheques 8,632 6,000

Advance payment from customers 2,114 760

15,268 13,529


Company


2010 2009€’000 €’000

Trade payables 102 95

102 95

The Group’s financial liabilities are carried at amortised cost and are denominated in the following currencies:


2010 2009€’000 €’000

UK pound 102 95

Euros 15,125 13,428

US dollars 30 2

Other currencies 11 4

15,268 13,529

29. Taxes Payable

Group


2010 2009€’000 €’000

VAT payable 1 474

Personnel tax 175 200

Third parties taxes 114 269

Income taxes 73 –

Prior years’ tax payable 392 47

Other taxes payable 3 100

Current Liabilities 758 1,090

Prior years’ tax payable 236 –

Non-Current Liabilities 236 –

89

Company


2010 2009€’000 €’000

Social security and other taxes 83 66

Current Liabilities 83 66

Social security and other taxes 39 –

Non-Current Liabilities 39 –

30. Accrued Liabilities and Deferred Income

Group


2010 2009€’000 €’000

Social security 298 203

Deferred income from grants 37 142

Deferred income 90 2,451

Amounts due to shareholders and related parties 420 –

Other payables and accrued expenses 964 522

1,809 3,318

Company


2010 2009€’000 €’000

Other payables and accrued expenses 119 29

119 29

31. Related Party Transactions

For the purposes of these Financial Statements, parties are considered to be related if one party has the ability to control theother party or exercise significant influence over the other party in making financial or operational decisions as defined byIAS 24 “Related Party Disclosures”. In considering each possible related party relationship, attention is directed to thesubstance of the relationship, not merely the legal form.

Transactions between the Company and its related parties are disclosed below:

i. Directors’ Remuneration

In the year ended 31 December 2010 the total remuneration of the Directors was €350,477 (year ended 31 December 2009– €493,705).


ii. Transactions with Directors

During the year Mr Costis Papadimitrakopoulos provided the Group with a loan of €898,747, of which €650,000 had beenrepaid at the year end. The balance of €248,747 is included within current liabilities, as amounts due to shareholders andrelated parties. The loan was unsecured and interest free and has been fully repaid since the year end.

iii. Managers’ Remuneration

In the year ended 31 December 2010 the total remuneration of the key management personnel was €501,524 (year ended31 December 2009 – €592,151).

The Group is not committed to any post-employment benefits, other long-term benefits or termination benefits for any of itsDirectors, managers or employees.

iv. Guarantees Received

Mr Costis Papadimitrakopoulos has personally co-guaranteed all borrowings of the Group, including all finance and operatingleases.

v. Transactions with Related Companies

a. Profitel Communications S.A. (“Profitel”)

On 29 June 2007, Globo Technologies S.A. acquired the entire issued share capital of Profitel. In 2010, Globo TechnologiesS.A. realized sales to Profitel for goods and Wiplus service amounting to €56,589 (2009 – €165,984). Additionally GloboTechnologies S.A. has bought telephony, internet bandwidth services, Wiplus network services as well as related supportcommunication services from Profitel at a total value of €1,035,688 (2009 – €1,713,932). The outstanding debtor balancedue to Profitel from Globo Technologies S.A. at 31 December 2010 was €Nil (2009 – €209,203). The outstanding creditorbalance from Profitel to Globo Technologies S.A. at 31 December 2010 was €82,372 (2009 – €1,164,616).

b. 3nSold S.A.

Mr Costis Papadimitrakopoulos and his wife hold 27.5% of 3nSold S.A. (“3nSold”). In 2010, no transactions have occurredbetween the Group and 3nSold S.A. (2009 – €371,100). The outstanding debtor balance at 31 December 2010 was €10,991(2009 – €14,555). The outstanding creditor balance at 31 December 2010 was €Nil (2009 – €2,150).

c. Globo Mobile S.A.

On 30 November 2008 Globo Technologies S.A. formed Globo Mobile S.A., a company which operates the new mobileproducts and services of the Group. On 31 December 2008, Globo Mobile S.A. acquired a 35% equity interest in ReachFurtherCommunications Limited, a Cyprus-based mobile value-added service provider and content aggregator. For the purposes ofthe above acquisition, Globo Technologies S.A. provided finance of €450,000 to Globo Mobile S.A.

d. Globo Technologies S.A.

On 31 December 2010 the balance due to Globo Plc from Globo Technologies S.A. was €4,970,730 (2009 – €1,215,605).Funds raised by Globo Plc during the year, net of expenses, totalling €4,032,624 were paid to Globo Technologies S.A. inorder to fund product development and working capital requirements. Globo Technologies S.A. paid administrative andoperating costs of €368,798 on behalf of Globo Plc during the year. Globo Plc charged Globo Technologies S.A. €25,000 duringthe year for support services (2009 – €10,000).

e. ReachFurther Communications Ltd (“ReachFurther”)

In 2010 the Group received consulting services from ReachFurther at a total value of €42,843 (2009 – €Nil). Additionally,ReachFurther has bought telephony services from Profitel during the year for a total value of €1,921 (2009 – €Nil). There areno outstanding debtor or creditor balances at 31 December 2010.

vi. Transactions with shareholders

During the year a shareholder provided the Group with a loan of €670,000, of which €500,000 had been repaid at the yearend. The balance of €170,000 is included within current liabilities, as amounts due to related parties and shareholders. Theloan was unsecured and interest free and has been fully repaid since the year end.

91

Controlling Party

The Directors believe that there is no ultimate controlling party.

32. Cash Generated from Operations

Group



€’000 €’000

Profit for the period before tax 4,634 3,201

Adjustments for:

(Profit)/loss on disposal of tangible/intangible assets (507) 3

Depreciation of property, plant and equipment 14 987 803

Amortisation of intangible assets 15 5,728 3,856

Movement in provisions 5 77

Share-based payments 56 –

Finance costs (net) 11 1,232 1,172

Adjustments for changes in working capital

Increase in inventory and work in progress (2,766) (985)

Increase in trade receivables (2,257) (5,006)

Increase in current assets and other receivables (3,103) (2,169)

Increase in trade and other payables 343 8,300

Cash Generated from Operations 4,352 9,252

Company


31 December 31 December2010 2009€’000 €’000

Operating loss (418) (409)

Adjustments for changes in working capital

Increase in trade and other receivables (3,733) (822)

Increase in trade and other payables 152 136

Cash used in Operations (3,999) (1,095)


33. Commitments and Contingencies

i) Operating Lease Commitments

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:


2010 2009€’000 €’000

Within one year 189 57

Between 2 and 5 years 25 81

214 138

ii) Unaudited Tax Years

The Group has not had its tax computations assessed by the taxation authorities for the financial years 2009 and 2010.

iii) Guarantees & Liens

At 31 December 2010, the Group had pledged €7,894,554 of post dated cheques received as security against short andlong-term borrowings to several Greek Banks (2009 – €6,191,368).

Additionally the Group has assigned its claims against several public and private clients’ contracts to a total value of€2,816,224 at 31 December 2010 for security against short and long-term borrowings to several Greek Banks (2009 –€7,177,971).

34. Post Balance Sheet Events

On 27 January 2011 and 23 February 2011 the Company issued 20,270,160 and 94,729,840 ordinary shares of 1p eachrespectively at 15p per share fully paid, raising a total of £17.25 million before expenses. As part of the placing agreement,the Company has issued warrants to subscribe for 1,449,988 ordinary shares of 1p each, exercisable at 15p each, to itsnominated advisor.

On 22 February 2011, at the Mobile World Congress in Barcelona, the Group launched GO!Enterprise Server, an enterprisesoftware application that enables employees to access company applications, files and emails using any mobile deviceincluding smart phones across any network. Full commercial roll-out is expected to begin in the second half of 2011.

35. Capital Management Policies

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating with its banksand suppliers in order to support the expansion of the business and maximise shareholder value. The Group manages itscapital structure according to economic conditions and makes adjustments to it in light of changes to those conditions.Furthermore the Group is continuously reviewing its working and investment capital needs in order to secure cash flows andfinancing facilities to support them. The Group is using cash resources and short-term debt to finance its public sectorcontracts and other working capital requirements and long-term debt and equity to finance its product development andinfrastructure needs. In situations where new capital requirements are imposed by new projects that the Group is aiming toengage, careful planning is undertaken to ensure optimum spending within the project’s resources and within existing and/ornew financing facilities. The Group met all banking and loan covenants during the year.

36. Retained Loss for the Year

The Company has taken advantage of section 408 of the Companies Act 2006 and has not included its own statement ofcomprehensive income in these Financial Statements. The loss of the Company for the year was €417,824 (2009 – loss€410,014) which is dealt with in the Financial Statements of the Company.

93

Notice is given that the Annual General Meeting of Globo plc will be held at 11.00am on Friday 17 June 2011 at the officesof Daniel Stewart & Company PLC, Becket House, 36 Old Jewry, London EC2R 8DD to consider the following resolutions ofwhich resolutions 1 to 5 will be proposed as ordinary resolutions and resolutions 6 and 7 will be proposed as specialresolutions.

1. To receive the annual report and audited accounts for the year ended 31 December 2010.

2. To re-elect Mr J Coughlin as a director.

3. To re-elect Mr K Papadimitrakopoulos as a director.

4. To re-appoint Littlejohn LLP as auditors to the Company to hold office until the conclusion of the next general meetingat which accounts are laid before the members and to authorise the directors to determine their remuneration.

5. THAT in substitution for any existing such authority, the directors be and are hereby generally and unconditionallyauthorised under section 551 of the Companies Act 2006 (the Act) to allot relevant securities of the Company (withinthe meaning of that section) up to an aggregate nominal amount of £871,935 such authority (unless previously revokedor varied) to expire on 16 June 2016 save that the Company may before such expiry make an offer or agreement whichwould or might require relevant securities to be allotted after such expiry and the directors may allot relevant securitiesunder such an offer or agreement as if the authority conferred hereby had not expired.

Special Resolutions

6. THAT, subject to the passing of resolution 5 above, the directors be and are hereby empowered under section 570 ofthe Companies Act 2006 (the Act) to allot equity securities (within the meaning of section 560 of the Act) under theauthority conferred by resolution 5 above as if section 561(1) of the Act did not apply to any such allotments providedthat this power shall be limited to:

(a) the grant of options under the Globo Share Option Plan (Parts I and II) (the “Plan”), to employees, directors,management and consultants of the Company and its subsidiaries from time to time (the “Group”), and the issueof ordinary shares upon the exercise of such options, provided that the number of ordinary shares in respect ofwhich such options may be granted under the Plan shall not, when added to the number of ordinary shares issuedor capable of being issued by way of subscription on the exercise of options granted by the Company in any tenyear period under:

(i) the Plan; or

(ii) any other share plan approved by the Company in general meeting or adopted by the board of directors ofthe Company after the adoption of the Plan which provides for the acquisition of shares by or on behalf ofemployees, directors, contractors or consultants of the Group (but excluding any options which have lapsedor been surrendered and options granted before the adoption of the Plan)

exceed 5% of the ordinary shares in issue from time to time;

(b) the allotment of equity securities in connection with an invitation or offer of equity securities to the holders ofordinary shares in the capital of the Company (excluding any shares held by the Company as treasury shares (asdefined in section 724(5) of the Act)) on a fixed record date in proportion (as nearly as practicable) to theirrespective holdings of such shares or in accordance with the rights attached to such shares (but subject to suchexclusions or other arrangements as the directors may deem necessary or expedient in relation to fractionalentitlements or as a result of legal or practical problems under the laws of, or the requirements of any regulatorybody or any stock exchange in, any territory or otherwise howsoever);

(c) the allotment (other than under paragraphs (a) and (b) above) of additional equity securities up to an aggregatenominal value of £145,322;

Notice of annual general meeting

and so that such power (unless previously revoked or varied) shall expire at the end of next year’s annual generalmeeting, (or if earlier at the close of business on 30 June 2012) provided that the directors may, before the powerexpires, make an offer or enter into an agreement which would or might require equity securities to be allotted aftersuch power expires.

7. THAT, the Company be generally and unconditionally authorised to make market purchases (as defined in theCompanies Act 2006) of ordinary shares of 1 penny each in the capital of the Company (“ordinary shares”) on suchterms and in such manner as the directors may from time to time determine, provided that:

(a) the maximum number of ordinary shares authorised to be purchased shall be 43,596,786;

(b) the minimum price which may be paid for an ordinary share is 1 penny;

(c) the maximum price which may be paid for an ordinary share is an amount equal to 105% of the average of themiddle market quotations for an ordinary share (as derived from the Daily Official List) for the five business daysimmediately preceding the date on which the ordinary share is contracted to be purchased;

(d) the minimum and maximum prices per ordinary share referred to in sub-paragraphs (b) and (c) of this resolutionare in each case exclusive of any expenses payable by the Company;

(e) the authority conferred by this resolution shall expire at the end of next year’s annual general meeting (or if earlierat the close of business on 30 June 2012) unless such authority is varied, revoked or renewed prior to such timeby the Company in general meeting by special resolution; and

(f) the Company may make a contract to purchase ordinary shares under the authority hereby conferred prior to theexpiry of such authority which will or may be completed wholly or partly after the expiration of such authority.

By order of the Board

L E YoungSecretary

Registered Office:3 Vaughan AvenueTonbridgeKent TN10 4EB

25 May 2011

95

Notes

Appointment of proxies

1. As a member of the Company, you are entitled to appoint a proxy to exercise all or any of your rights to attend, speakand vote at the meeting and you should have received a proxy form with this notice of meeting. You can only appointa proxy using the procedures set out in these notes and the notes to the proxy form.

2. A proxy does not need to be a member of the Company but must attend the meeting to represent you. Details of howto appoint the Chairman of the meeting or another person as your proxy using the proxy form are set out in the notesto the proxy form. If you wish your proxy to speak on your behalf at the meeting you will need to appoint your ownchoice of proxy (not the Chairman) and give your instructions directly to them.

3. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares.You may not appoint more than one proxy to exercise rights attached to a single share. To appoint more than oneproxy, please contact the registrars of the Company, Share Registrars Limited on 01252 821390.

4. If you do not give your proxy an indication of how to vote on any resolution, they will vote or abstain from voting attheir discretion. Your proxy will vote (or abstain from voting) as they think fit on any other matter which is put beforethe meeting. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation ofvotes for or against the resolution.

5. The notes to the proxy form explain how to direct your proxy how to vote on each resolution or withhold their vote.

To appoint a proxy using the proxy form, the form must be completed and signed. It must then be sent or delivered tothe Company’s registrars, Share Registrars Limited, Suite E, 1st floor, 9 Lion and Lamb Yard, Farnham, Surrey GU9 7LL.Alternatively it can be sent by fax to 01252 719232; or scanned and sent by email to [email protected] proxy form must be received by Share Registrars Limited no later than 11.00am on Wednesday 15 June 2011.

In the case of a member which is a company, the proxy form must be executed under its common seal or signed onits behalf by an officer of the company or an attorney for the company. Any power of attorney or other authority underwhich the proxy form is signed (or a duly certified copy of such power or authority) must be submitted with the proxyform.

Appointment of proxy by joint members

6. In the case of joint shareholders, where more than one of them purports to appoint a proxy, only the appointmentsubmitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of thejoint holders appear in the Company’s register of members in respect of the joint holding (the first-named being themost senior).

Changing proxy instructions

7. To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note thatthe cut-off time for receipt of proxy appointments (see above) also applies in relation to amended instructions; anyamended proxy appointment received after the relevant cut-off time will be disregarded.

Where you have appointed a proxy using a hard-copy proxy form and would like to change the instructions usinganother hard-copy proxy form, please contact Share Registrars Limited on 01252 821390.

If you submit more than one valid proxy appointment, the one received last before the latest time for the receipt ofproxies will have effect.

Notice of annual general meeting

Termination of proxy appointments

8. In order to revoke a proxy instruction you will need to inform the Company by sending a signed hard copy notice clearlystating your intention to revoke your proxy appointment, to: Share Registrars Limited, Suite E, 1st floor, 9 Lion andLamb Yard, Farnham, Surrey GU9 7LL or by fax to 01252 719232. In the case of a member which is a company, therevocation notice must be executed under its common seal or signed on its behalf by an officer of the company or anattorney for the company. Any power of attorney or any other authority under which the revocation notice is signed (ora duly certified copy of such power or authority) must be submitted with the revocation notice. In either case, therevocation notice must be received by Share Registrars Limited no later than 11.00am on Wednesday 15 June 2011.

If you attempt to revoke your proxy appointment but the revocation is received after the time specified then, subjectto the paragraph directly below, your proxy appointment will remain valid.

Appointment of a proxy does not prevent you from attending the meeting and voting in person. If you have appointeda proxy and attend the meeting in person, your proxy appointment will automatically be terminated.

Communication

9. Except as provided above, members who have general queries about the meeting should contact Share RegistrarsLimited on 01252 821390 or by email to [email protected] (no other methods of communication willbe accepted).

You may not use any electronic address provided either:

• in this notice of annual general meeting; or

• any related documents (including the proxy form),

to communicate with the Company for any purposes other than those expressly stated.

Issued shares and total voting rights

10. As at 18 May 2011, the Company’s issued share capital comprised 290,645,243 ordinary shares of 1p each. Eachordinary share carries the right to one vote at an Annual General Meeting of the Company and, therefore, the totalnumber of voting rights in the Company as at 18 May 2011 was 290,645,243.

97

The 2011 annual general meeting will be held at 11.00am on Friday 17 June at the offices of Daniel Stewart & Company PLC,Becket House, 36 Old Jewry, London EC2R 8DD. The notice of meeting is set out on pages 94 and 95 of this document anda form of proxy is on page 99.

Details of the business to be considered at the meeting are given below.

Authority of directors to allot shares (Resolutions 5 and 6)

Under UK law, directors are not permitted to allot new shares (or to grant rights over shares) unless they are authorised todo so by shareholders. In addition, directors require specific authority from shareholders before allotting new shares (orgranting rights over shares) for cash without first offering them to existing shareholders in proportion to their holdings.Resolution 5 gives the directors the necessary authority for a period of five years from the date when the resolution is passedto allot securities up to an aggregate nominal amount of £871,935.

Resolution 6 empowers the directors, until the earlier of 30 June 2012 and next year’s AGM, to allot such securities for cashotherwise than on a pro-rata basis to existing shareholders, up to a maximum of 14,532,262 ordinary shares of 1p each,equivalent to 5% of the issued share capital as at 18 May 2011. The resolution also gives the directors power to allot sharesunder the terms of the Company’s share option plans. It is intended to renew this authority and power at each annual generalmeeting.

Authority for the Company to purchase its own shares (Resolution 7)

Resolution 7 authorises the Company, until the earlier of 30 June 2012 and next year’s AGM, to purchase in the market upto a maximum of 43,596,786 ordinary shares (equivalent to approximately 15% of the issued share capital of the Companyas at 18 May 2011) for cancellation at a minimum price of 1p per share and a maximum price per share of an amount equalto 105 percent of the average of the middle market quotations for an ordinary share (as derived from the Daily Official List)for the five business days immediately before the date of purchase.

The Companies Act 2006 allows the Company to hold any repurchased shares in treasury, instead of cancelling themimmediately. If the Company buys back its own shares and holds them in treasury it may then deal with some or all of themin several ways. It may sell them for cash; transfer them under the provisions of an employee share scheme; cancel them;or continue to hold them in treasury. Holding shares in treasury in this way would allow the Company to reissue them quicklyand cost effectively, giving increased flexibility to the management of its capital base. Dividends are not paid on shares heldin treasury, nor do they carry voting rights while they remain there. The directors intend to decide at the time of any sharebuyback, whether to cancel the shares immediately or to hold them in treasury, depending on the interests of the Companyand its shareholders as a whole, at the time. The Company does not currently hold any shares in treasury.

The proposal should not be taken as an indication that the Company will purchase shares at any particular price or indeed atall, and the directors will only consider making purchases if they believe that such purchases would result in an increase inearnings per share and are in the best interests of shareholders. It is intended to renew this authority at each annual generalmeeting.

Annual general meeting explanation of business

99

Please insert full name I/We(please use block capitals)

and address of(please use block capitals)

being (a) member(s) of GLOBO PLC (the ‘Company’) hereby appoint the Chairman of the meeting or (see notes 1 and 2)

(please use block capitals)

as my/our proxy to attend and vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held at the officesof Daniel Stewart & Company PLC, Becket House, 36 Old Jewry, London EC2R 8DD on Friday 17 June 2011 at 11.00am and at anyadjournment thereof.

I/We request such proxy to vote on the following resolutions as indicated below (see note 3).

Resolutions For Against Withheld

1. To receive the report and accounts

2. To re-elect Mr J Coughlin as a director

3. To re-elect Mr K Papadimitrakopoulos as a director

4. To reappoint the auditors and authorise the directors to determine their fees

5. To authorise the directors to allot relevant securities

6. To disapply pre-emption rights

7. To authorise the company to buy back its shares

Signature (see note 4)

Joint holders (if any) (Note 9)

Name Name

Name Name

Notes

1. If you wish to appoint someone other than the chairman as your proxy, please insert their name and address, and strike out and initial the words ‘the chairman of themeeting or’. A proxy need not be a member of the Company. Appointing a proxy will not prevent you from personally attending and voting at the meeting (in substitutionfor your proxy vote) if you subsequently decide to do so. If no name is entered on this form, the return of this form, duly signed, will authorise the chairman of themeeting to act as your proxy.

2. You may appoint more than one proxy provided that each proxy is appointed to exercise the rights attached to different shares. You may not appoint more than oneproxy to exercise rights attached to a single share. To appoint more than one proxy, please return a separate form in relation to each proxy, clearly indicating next tothe name of each proxy the number and class of shares in respect of which they are appointed. If you submit more than one valid proxy appointment in respect of thesame shares, the appointment received last before the latest time for the receipt of proxies will take precedence.

3. To direct your proxy how to vote on the resolutions, please mark the appropriate box next to each resolution with an X. If no voting instruction is given, your proxy willvote or abstain from voting as they see fit in their absolute discretion in relation to each/resolution and any other matter which is put before the meeting.

4. In the case of:

4.1 an individual, this proxy form must be signed by the relevant member appointing the proxy or a duly appointed attorney on behalf of such member; and

4.2 a corporation, this proxy form must be executed under its common seal or signed on its behalf by an officer of the company or a duly appointed attorney for thecompany.

5. To appoint a proxy using this form, the form must be:

5.1 completed and signed;

5.2 sent or delivered to the Registrars of the Company, Share Registrars, at Suite E First Floor 9 Lion and Lamb Yard Farnham Surrey, GU9 7LL; and

5.3 received by the Registrars no later than 48 hours before the time appointed for the meeting, or adjourned meeting, at which it is to be used.

6. Any power of attorney or any other authority under which this proxy form is signed (or a duly certified copy of such power or authority) must be included with the proxyform.

7. Any alteration to this proxy form must be initialled by the person by whose hand it is signed or executed.

8. If, after returning a duly completed proxy form, you wish to revoke your proxy appointment you must sign and date a notice clearly stating your intention to revokethat proxy appointment and deposit it at the office of the Company’s registrars before the time appointed for the meeting.

9. In the case of joint holders:

9.1 where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted; and

9.2 the vote of the most senior holder who tenders a vote (whether in person or by proxy) shall be accepted to the exclusion of the votes of all other’ joint holders;

9.3 Seniority is determined by the order in which the names of the joint holders appear in the Company’s register of members in respect of the joint holding (the first-named being the most senior).

10. As permitted by regulation 41 of the Uncertificated Securities Regulations 2001, only those persons whose names are entered on the register of members of the Companyat 6.00 pm on 15 June 2011 shall be entitled to attend and vote in respect of the number of shares registered in their names at that time. Changes to entries on theregister of members after that time shall be disregarded in determining the rights of any person to attend and/or vote at the meeting.

Form of proxy

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Business ReplyLicence NumberRSKT- LXUZ -ZYKU

Share Registrars Ltd9 Lion & Lamb YardFARNHAMGU9 7LL

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