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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| F.T.S.-Formula | LSE:FTS | London | Ordinary Share | IL0010935257 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 15.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
Premium
TIDMFTS
RNS Number : 5774R
F.T.S-Formula Telecom Solutions Ltd
25 August 2010
F.T.S. - FORMULA TELECOM SOLUTIONS LTD.
AND ITS SUBSIDIARIES
(An Israeli Corporation)
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
AS OF JUNE 30, 2010
Chairman's Statement
I am pleased to report FTS' 2010 interim results for the six months to 30 June
2010.
FTS sells next generation charging, billing, customer care and policy control
software solutions for communications service providers. Our solutions enable
providers to address the key issues of today's communication market: customer
retention and revenue growth. By analyzing events from a business standpoint
rather than just billing them, FTS allows providers to better understand their
customer base and leverage business value from every event and interaction. FTS
deploys its full range of solutions to customers worldwide and has implemented
solutions in wireless, wire-line, broadband, WiMAX, cable and content markets.
The Company targets Tier-1 operators in developed markets with its online
charging and policy control solutions, as well as Tier-2 and Tier-3 operators in
both emerging and developed markets with its end-to-end, turnkey billing and
customer care solutions.
The telecoms market is evolving with the growth in both wireline and wireless
broadband (WiMAX, LTE) IP-based communication and continuing consolidation in
the market. In response to market changes, providers are restructuring their
businesses and aligning vendors to their future needs. This is both a challenge
and long-term opportunity for FTS. FTS predicted these transformations in the
industry and has been working aggressively to adapt the Company to the new
market environment, as well as developing new products and services that meet
the customers' ever-changing requirements.
Leap Billing is an end-to-end converged billing and customer care solution based
on telecom-specific business processes that reflect the industry's best
practices. The solution allows new business practices to be instantly
implemented and new services, bundles and promotions to be rolled out
immediately, without involving costly billing integration projects. In this way,
Leap Billing offers a long-term, viable solution to the ever-evolving needs of
telecom providers.
With the huge growth in data traffic - driven by a combination of new
data-centric devices (iPhone, Blackberry, Android-based handsets), content-rich
applications (YouTube, social media and others), lower subscription costs,
higher throughput, and straightforward access to applications and content,
operators are experiencing problematic network congestion.
FTS alleviates these issues with a single, common policy control application -
Leap Policy Control.
Leap Policy Control provides effective traffic and subscriber management
strategies that enable operators to create a new paradigm in operator-subscriber
relations.
Last year, FTS introduced "FTS express", a billing appliance with an
out-of-the-box functionality, specially tailored for smaller operators and
Greenfields (ISP, VoIP, WiMAX, LTE, IPTV and content providers) as well as for
niche services of larger service providers.
Developed on the premise that "no wall is too high", FTS express lays the
foundation for a full-blown advanced billing, customer care and policy control
solution that evolves as needs change. The product integrates seamlessly into
virtually any operator infrastructure, and ensures reliable and cost-effective
operation and shortest Time to Market (TTM) for launching new services. This
combination provides the service providers with the right tools for increasing
revenue and market share, improving its overall customers' experience and
staying competitive in today's challenging market.
Market's response is highly positive with strong feedback from industry
analysts, industry press, potential partners and customers, stressing the real
market need the Company is addressing and the superiority of the solutions it
presents. The Company anticipates its strong products and solutions portfolio,
combined with its marketing campaigns and sales efforts will result in market
interest in its products and lead to new bid proposals. It is expected that some
of these will materialize into contracts in the second half of 2010 and 2011,
although due to the global economic situation it might take longer than
initially expected.
Results
In the six months to 30 June 2010 total revenue was $10.393m (2009: $9.864m).
The increase of 5.4% was mainly due to progress in projects deployments compared
to longer implementation processes during the same period last year.
Gross profit for the six months to 30 June 2010 was $5.012m (2009: $4.641m).
Gross margin was 48% compare to 47% for the same period last year, in spite of
the impermanent losses occurred due to writing off intangible assets in the
amount of $1.144m. Without taking into account these impermanent losses, the
gross margin was 60%, mainly due to the progress in project deployments as well
as headcount reductions.
Research and development expenditure in the six months to 30 June 2010 was
$1.603m (2009: $1.440m), an increase of 11.32%. This increase was mainly due to
the capitalization of software development costs in the amount of $0.261m for
the same period in last year, offset by reduction of the headcount.
Sales and marketing costs in the six months to 30 June 2010 were $0.878m (2009:
$1.351m), a decrease of 35% mainly due to reduction of the headcount and cutting
costs.
General and administrative costs in the six months to 30 June 2010 were $2.427m
(2009: $1.881m), an increase of 29%. This increase was mainly due to provisions
for doubtful debt in the amount of $1.435m offset by adjustment of provision for
potential claim.
The Company's operating profit in the six months to 30 June 2010 was $0.079m
(2009: operating loss of US$0.031m).
The net financial expenses for the six months to 30 June 2010 were $0.661m
(2009: financial income of $0.259m). These expenses resulted from exchange rate
differences of approximately $0.520m and from interest paid on bank loans of
approximately $0.101m.
Net loss for the six months to 30 June 2010 was $2.071m (2009: net loss of
$0.076m).
Excluding all impermanent (one-time writing off CRM development costs
capitalization, tax assets and the one-time provision for doubtful debt), the
net profit for the six months to June 2010 was $1.113m compared to an EBITDA of
$1.01m for the same period last year
Outlook
The Telecom industry, as part of the global market, is experiencing a global
turbulence which creates challenges for BSS vendors. However, FTS has taken
positive steps to adjust its business to the needs of its customers, and
maintained a positive EBITDA of $2.139m, despite challenging market conditions.
We believe that the FTS management's extensive, ongoing efforts will result in
increased revenues and profitability in forthcoming years.
The Company is involved in a number of bid proposals which are at various stages
of the sales cycle. We expect some of these to crystallize into contracts in the
near future although it is difficult to predict the exact timing.
We also believe that our online charging and policy control solutions will
enable us to penetrate Tier-1 service providers in developed markets. We expect
to obtain growth in the future, based on our extensive pipeline and consolidated
roadmap of products and solutions.
Dan Goldstein
Chairman
F.T.S - FORMULA TELECOM SOLUTIONS LIMITED
(An Israeli Corporation)
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2010
TABLE OF CONTENTS
+-------------------------------------------------+-----------+
| | Page |
+-------------------------------------------------+-----------+
| FINANCIAL STATEMENTS: | |
+-------------------------------------------------+-----------+
| Interim Consolidated Statements of | 1 |
| Comprehensive Income (Loss) | |
+-------------------------------------------------+-----------+
| Interim Consolidated Statements of Changes in | 2-3 |
| Equity | |
+-------------------------------------------------+-----------+
| Interim Consolidated Statements of Financial | 4-5 |
| Position | |
+-------------------------------------------------+-----------+
| Interim Consolidated Statements of Cash Flows | 7-8 |
+-------------------------------------------------+-----------+
| Notes to Interim Consolidated Financial | 9-12 |
| Statements | |
+-------------------------------------------------+-----------+
| | |
+-------------------------------------------------+-----------+
The amounts are stated in U.S. dollars ($).
______________________
_____________
F.T.S - Formula Telecom Solutions Limited
Interim Consolidated Statements of Comprehensive Income (Loss)
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| | Six months ended | | Year |
| | June 30, | | ended |
| | | | December |
| | | | 31, |
+---------------------------------------+----------------------------------------+----------+--------------+
| | 2010 | | 2009 | | 2009 |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| | U.S. In thousands |
+---------------------------------------+------------------------------------------------------------------+
| | Unaudited | | Audited |
+---------------------------------------+----------------------------------------+----------+--------------+
| | | | | | |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| Revenues | 10,393 | | 9,864 | | 19,391 |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| Cost of sales | 4,237 | | 5,223 | | 11,089 |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| Impermanent | 1,144 | | - | | - |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| | | | | | |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| Gross profit | 5,012 | | 4,641 | | 8,302 |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| | | | | | |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| Research and development expenses | 1,603 | | 1,440 | | 3,232 |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| Sales and marketing costs | 878 | | 1,351 | | 2,564 |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| General and administrative expenses | 2,427 | | 1,881 | | 5,021 |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| Capital loss from realization of | 25 | | - | | - |
| fixed asset | | | | | |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| | | | | | |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| Profit (loss) from operations | 79 | | (31) | | (2,515) |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| Finance expense | (706) | | (120) | | (422) |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| Finance income | 45 | | 379 | | 958 |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| | | | | | |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| Profit (loss) before tax | (582) | | 228 | | (1,979) |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| | | | | | |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| Tax expense | 1,489 | | 304 | | 3,292 |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| | | | | | |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| Net Loss | (2,071) | | (76) | | (5,271) |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| | | | | | |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| Other comprehensive income (loss): | | | | | |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| Net unrecognized actuarial profit | - | | 5 | | - |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| Total comprehensive loss for the | (2,071) | | (71) | | (5,271) |
| period | | | | | |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| | | | | | |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| Earnings (loss) per share: | | | | | |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| Basic and diluted (dollars per share) | (0.0628) | | (0.0023) | | (0.1599) |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| | | | | | |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| | | | | | |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| Weighted average number of shares | | | | | |
| outstanding | | | | | |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| Basic and diluted | 32,956,012 | | 32,956,012 | | 32,956,012 |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
| | | | | | |
+---------------------------------------+--------------+----------+--------------+----------+--------------+
The accompanying notes form an integral part of the financial statements.
F.T.S - Formula Telecom Solutions Limited
Interim Consolidated Statements of Changes in Equity
For the six months ended June 30, 2010:
+---------------------------+---------+----------+--------------+----------+-----------------+----------+---------------+----------+-----------------+
| | Share | | Additional | | Retained | | Treasury | | Total |
| |capital | | paid in | | earnings | | share | | |
| | | | capital | | | | reserves | | |
+---------------------------+---------+----------+--------------+----------+-----------------+----------+---------------+----------+-----------------+
| | U.S. In thousands |
+---------------------------+------------------------------------------------------------------------------------------------------------------------+
| | Unaudited |
+---------------------------+------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+-----------------+----------+---------------+----------+-----------------+
| Balance at January 1, | 1 | | 10,084 | | 2,738 | | (463) | | 12,360 |
| 2010 (Audited) | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+-----------------+----------+---------------+----------+-----------------+
| | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+-----------------+----------+---------------+----------+-----------------+
| Changes during the six | | | | | | | | | |
| months | | | | | | | | | |
| ended June 30, 2010: | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+-----------------+----------+---------------+----------+-----------------+
| Loss for the period | - | | - | | (2,071) | | - | | (2,071) |
+---------------------------+---------+----------+--------------+----------+-----------------+----------+---------------+----------+-----------------+
| | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+-----------------+----------+---------------+----------+-----------------+
| | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+-----------------+----------+---------------+----------+-----------------+
| Balance at June 30, 2010 | 1 | | 10,084 | | 667 | | (463) | | 10,289 |
+---------------------------+---------+----------+--------------+----------+-----------------+----------+---------------+----------+-----------------+
| | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+-----------------+----------+---------------+----------+-----------------+
For the six months ended June 30, 2009:
+---------------------------+---------+----------+--------------+----------+----------------+----------+---------------+----------+----------------+
| | Share | | Additional | | Retained | | Treasury | | Total |
| |capital | | paid in | | earnings | | share | | |
| | | | capital | | | | reserves | | |
+---------------------------+---------+----------+--------------+----------+----------------+----------+---------------+----------+----------------+
| | U.S. In thousands |
+---------------------------+----------------------------------------------------------------------------------------------------------------------+
| | Unaudited |
+---------------------------+----------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+----------------+----------+---------------+----------+----------------+
| Balance at January 1, | 1 | | 10,082 | | 12,191 | | (463) | | 21,811 |
| 2009 (Audited) | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+----------------+----------+---------------+----------+----------------+
| | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+----------------+----------+---------------+----------+----------------+
| Changes during the six | | | | | | | | | |
| months | | | | | | | | | |
| ended June 30, 2009: | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+----------------+----------+---------------+----------+----------------+
| Loss for the period | - | | - | | (76) | | - | | (76) |
+---------------------------+---------+----------+--------------+----------+----------------+----------+---------------+----------+----------------+
| | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+----------------+----------+---------------+----------+----------------+
| Issuance of employees' | - | | 2 | | - | | - | | 2 |
| stock options | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+----------------+----------+---------------+----------+----------------+
| | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+----------------+----------+---------------+----------+----------------+
| Balance at June 30, 2009 | 1 | | 10,084 | | 12,115 | | (463) | | 21,737 |
+---------------------------+---------+----------+--------------+----------+----------------+----------+---------------+----------+----------------+
| | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+----------------+----------+---------------+----------+----------------+
The accompanying notes form an integral part of the financial statements.
F.T.S - Formula Telecom Solutions Limited
Interim Consolidated Statements of Changes in Equity
For the year ended December 31, 2009:
+---------------------------+---------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| | Share | | Additional | | Retained | | Treasury | | Total |
| |capital | | paid in | | earnings | | share | | |
| | | | capital | | | | reserves | | |
+---------------------------+---------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| | U.S. In thousands |
+---------------------------+---------------------------------------------------------------------------------------------------------------------+
| | Audited |
+---------------------------+---------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| Balance at January 1, | 1 | | 10,082 | | 12,191 | | (463) | | 21,811 |
| 2009 | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| Changes in equity for | | | | | | | | | |
| 2009: | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| Loss for the year | - | | - | | (5,271) | | - | | (5,271) |
+---------------------------+---------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| Dividends | - | | - | | (4,182) | | - | | (4,182) |
+---------------------------+---------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| Issuance of employees' | - | | | | - | | - | | 2 |
| stock options | | | 2 | | | | | | |
+---------------------------+---------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| Balance at December 31, | 1 | | | | 2,738 | | (463) | | 12,360 |
| 2009 | | | 10,084 | | | | | | |
+---------------------------+---------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| | | | | | | | | | |
+---------------------------+---------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
The accompanying notes form an integral part of the financial statements.
F.T.S - Formula Telecom Solutions Limited
Interim Consolidated Statement of Financial Position
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| | | 30.6.2010 | | 30.6.2009 | | 31.12.2009 |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| | | U.S. In thousands |
+------------------------------------------+----------+------------------------------------------------------------------------+
| | | Unaudited | | Audited |
+------------------------------------------+----------+--------------------------------------------+----------+----------------+
| | | | | | | |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| ASSETS | | | | | | |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Non-current assets: | | | | | | |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Property and equipment, net | | 543 | | 780 | | 653 |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Intangible assets | | 4,429 | | 7,006 | | 6,343 |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Rental deposits | | 22 | | 46 | | 57 |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Non-current tax assets | | - | | 1,936 | | 584 |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Deferred tax assets | | - | | 2,417 | | 785 |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| | | | | | | |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Total non-current assets | | 4,994 | | 12,185 | | 8,422 |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| | | | | | | |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| | | | | | | |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Current assets: | | | | | | |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Other receivables and prepaid expenses | | 559 | | 809 | | 624 |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Trade receivables, net | | 4,663 | | 5,345 | | 5,142 |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Financial assets through profit and loss | | 6,381 | | 5,607 | | 5,048 |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Cash and cash equivalents | | 5,341 | | 12,029 | | 8,616 |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| | | | | | | |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Total current assets | | 16,944 | | 23,790 | | 19,430 |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| | | | | | | |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| TOTAL ASSETS | | 21,938 | | 35,975 | | 27,852 |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| | | | | | | |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| LIABILITIES | | | | | | |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Non-current liabilities: | | | | | | |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Employee benefits, net | | 440 | | 517 | | 498 |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| | | | | | | |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Current Liabilities: | | | | | | |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Other payables | | 1,942 | | 3,150 | | 3,256 |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Trade payables | | 1,912 | | 2,630 | | 2,417 |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Customer advances and deferred revenue | | 1,794 | | 1,928 | | 3,063 |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Loans and borrowings | | 5,561 | | 6,013 | | 6,258 |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| | | | | | | |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Total current liabilities | | 11,209 | | 13,721 | | 14,994 |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| | | | | | | |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| | | | | | | |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| Total liabilities | | 11,649 | | 14,238 | | 15,492 |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| | | | | | | |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| | | | | | | |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| TOTAL NET ASSETS | | 10,289 | | 21,737 | | 12,360 |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
| | | | | | | |
+------------------------------------------+----------+----------------+----------+----------------+----------+----------------+
The accompanying notes form an integral part of the financial statements.
F.T.S - Formula Telecom Solutions Limited
Interim Consolidated Statement of Financial Position
+------------------------------------------+-------------+----------+-------------+----------+----------------+
| | 30.6.2010 | | 30.6.2009 | | 31.12.2009 |
+------------------------------------------+-------------+----------+-------------+----------+----------------+
| | U.S. In thousands |
+------------------------------------------+------------------------------------------------------------------+
| | Unaudited | | Audited |
+------------------------------------------+--------------------------------------+----------+----------------+
| | | | | | |
+------------------------------------------+-------------+----------+-------------+----------+----------------+
| Capital and reserves attributable to | | | | | |
| equity holders of the company | | | | | |
+------------------------------------------+-------------+----------+-------------+----------+----------------+
| Share capital | 1 | | 1 | | 1 |
+------------------------------------------+-------------+----------+-------------+----------+----------------+
| Additional paid-in capital | 10,084 | | 10,084 | | 10,084 |
+------------------------------------------+-------------+----------+-------------+----------+----------------+
| Treasury share reserve | (463) | | (463) | | (463) |
+------------------------------------------+-------------+----------+-------------+----------+----------------+
| Retained earnings | 667 | | 12,115 | | 2,738 |
+------------------------------------------+-------------+----------+-------------+----------+----------------+
| | | | | | |
+------------------------------------------+-------------+----------+-------------+----------+----------------+
| TOTAL EQUITY | 10,289 | | 21,737 | | 12,360 |
+------------------------------------------+-------------+----------+-------------+----------+----------------+
| | | | | | |
+------------------------------------------+-------------+----------+-------------+----------+----------------+
The financial statements on pages 2 to 12 were approved by the Board of
Directors on August 24, 2010, and were signed on it's behalf by:
+-------------------+----------+--------------+----------------+-----------------+
| August 24, 2010 | | | | |
+-------------------+----------+--------------+----------------+-----------------+
| Date of approval | | Dan | Alon Raz | Amos Sivan |
| | | Goldstein | | |
+-------------------+----------+--------------+----------------+-----------------+
| of financial | | Chairman | Chief | Active Vice |
| statements | |of the Board | Financial | Chairman |
| | | | Officer | |
+-------------------+----------+--------------+----------------+-----------------+
The accompanying notes form an integral part of the financial statements.
F.T.S - Formula Telecom Solutions Limited
Interim Consolidated Statements of Cash Flows
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| | | Six months ended | | Year |
| | | June 30, | | ended |
| | | | | December |
| | | | | 31, |
+------------------------------------------+----------+------------------------------------+----------+-----------------+
| | | 2010 | | 2009 | | 2009 |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| | | U.S. In thousands |
+------------------------------------------+----------+-----------------------------------------------------------------+
| | | Unaudited | | Audited |
+------------------------------------------+----------+------------------------------------+----------+-----------------+
| | | | | | | |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| Cash flows from operating activities: | | | | | | |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| Net loss | | (2,071) | | (76) | | (5,271) |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| | | | | | | |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| Adjustments for: | | | | | | |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| Depreciation and amortization | | 907 | | 1,041 | | 2,106 |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| Impermanent losses on intangible assets | | 1,144 | | - | | - |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| Loss from disposal of property, plant | | 25 | | - | | - |
| and equipment | | | | | | |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| Tax expense | | 1,489 | | 304 | | 3,292 |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| Employees' stock options | | - | | 2 | | 2 |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| Financial expense (Income) (exchange due | | 339 | | - | | (131) |
| to cash and cash | | | | | | |
| equivalents) | | | | | | |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| Loss (Gain) in financial assets through | | 3 | | (272) | | (726) |
| profit and loss | | | | | | |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| | | | | | | |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| | | | | | | |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| Cash flows from activities before | | | | | | |
| changes | | | | | | |
| In working capital and provisions: | | | | | | |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| Decrease in trade receivables | | 479 | | 273 | | 476 |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| Decrease in other receivables prepaid | | 65 | | 189 | | 374 |
| expenses | | | | | | |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| Decrease (Increase) in rental deposits | | 35 | | (1) | | (12) |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| Decrease in trade payables | | (503) | | (1,884) | | (1,982) |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| Increase (decrease) in other payables | | (1,314) | | (6) | | 100 |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| Increase (decrease) in employee benefits | | (58) | | 14 | | (5) |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| Decrease in customer advances and | | (1,269) | | (1,465) | | (330) |
| deferred revenues | | | | | | |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| Income tax received | | 17 | | 17 | | 13 |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| | | | | | | |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| Net cash used in operating activities | | (712) | | (1,864) | | (2,094) |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
| | | | | | | |
+------------------------------------------+----------+-----------+----------+-------------+----------+-----------------+
The accompanying notes form an integral part of the financial statements.
F.T.S - Formula Telecom Solutions Limited
Interim Consolidated Statements of Cash Flows
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| | | Six months ended | | Year |
| | | June 30, | | ended |
| | | | | December |
| | | | | 31, |
+------------------------------------------+----------+----------------------------------------------+----------+-----------------+
| | | 2010 | | 2009 | | 2009 |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| | | U.S. In thousands |
+------------------------------------------+----------+---------------------------------------------------------------------------+
| | | Unaudited | | Audited |
+------------------------------------------+----------+----------------------------------------------+----------+-----------------+
| | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| Cash flows from operating activities | | (712) | | (1,864) | | (2,094) |
| brought forward | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| Investing Activities: | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| Capitalization of software development | | - | | (261) | | (498) |
| costs | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| Purchase of financial assets through | | (1,336) | | (1,086) | | (73) |
| profit and loss, net | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| Purchase of property and equipment | | (58) | | (259) | | (420) |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| Proceeds from sale of property and | | 4 | | - | | 8 |
| equipment | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| Net cash used in investing activities | | (1,390) | | (1,606) | | (983) |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| Financing Activities: | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| Tax withhold paid to ITA due to dividend | | (137) | | - | | - |
| paid in previous year | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| Dividends paid to the company's | | - | | - | | (4,182) |
| shareholders | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| Short-term bank borrowing, net | | (595) | | 1,088 | | 1,334 |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| Interest (paid) received | | (102) | | (95) | | (96) |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| Net cash (used in) provided by financing | | (834) | | 993 | | (2,944) |
| activities | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| Net decrease in cash and cash | | (2,936) | | (2,477) | | (6,021) |
| equivalents | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| Cash and cash equivalents at beginning | | 8,616 | | 14,506 | | 14,506 |
| of period | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| Effect of exchange rate changes on cash | | (339) | | - | | 131 |
| and cash | | | | | | |
| equivalents | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| Cash and cash equivalents at end of | | 5,341 | | 12,029 | | 8,616 |
| period | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
| | | | | | | |
+------------------------------------------+----------+-----------------+----------+-----------------+----------+-----------------+
+-------------------------------------------+-----------+----------+-------------+----------+-----------+
| | Six months ended | | Year |
| | June 30, | | ended |
| | | | December |
| | | | 31, |
+-------------------------------------------+------------------------------------+----------+-----------+
| | 2010 | | 2009 | | 2009 |
+-------------------------------------------+-----------+----------+-------------+----------+-----------+
| | U.S. In thousands |
+-------------------------------------------+-----------------------------------------------------------+
| | Unaudited | | Audited |
+-------------------------------------------+------------------------------------+----------+-----------+
| | | | | | |
+-------------------------------------------+-----------+----------+-------------+----------+-----------+
| Non-cash activities: | | | | | |
+-------------------------------------------+-----------+----------+-------------+----------+-----------+
| Purchase of property and equipment | 1 | | 103 | | 3 |
| against trade payables | | | | | |
+-------------------------------------------+-----------+----------+-------------+----------+-----------+
| | | | | | |
+-------------------------------------------+-----------+----------+-------------+----------+-----------+
The accompanying notes form an integral part of the financial statements.
F.T.S - Formula Telecom Solutions Limited
Notes to Interim Consolidated Financial Statements
NOTE 1 - ACCOUNTING POLICIES:
A. General:
F.T.S. - Formula Telecom Solutions Ltd (the "Company") was founded in January
1997 under the law of the state of Israel.
The Company is a global provider of convergent telecom management solutions for
mobile, fixed-line and advanced services operators. The Company provides a range
of versatile solutions to the market, which include convergent real-time prepaid
and postpaid billing and Customer Relationship Management ("CRM") order
management, infrastructure management, Electronic Bill Presentation software, as
well as call center implementations.
The Company operates in one operating segment.
B. Assets and Liabilities in foreign currencies
Henceforth are the details of the foreign currencies of the main currencies and
the percentage changes in the reporting period:
+---------------------------------------+---------+----------+---------+-----------+
| | Six months ended | Year |
| | June 30, | ended |
| | | December |
| | | 31, |
+---------------------------------------+------------------------------+-----------+
| | 2010 | | 2009 | 2009 |
+---------------------------------------+---------+----------+---------+-----------+
| | | | | |
+---------------------------------------+---------+----------+---------+-----------+
| NIS | 0.258 | | 0.255 | 0.265 |
+---------------------------------------+---------+----------+---------+-----------+
| Euro | 1.227 | | 1.412 | 1.441 |
+---------------------------------------+---------+----------+---------+-----------+
+---------------------------------------+---------+----------+---------+-----------+
| | Six months ended | Year |
| | June 30, | ended |
| | | December |
| | | 31, |
+---------------------------------------+------------------------------+-----------+
| | 2010 | | 2009 | 2009 |
+---------------------------------------+---------+----------+---------+-----------+
| | % | | % | % |
+---------------------------------------+---------+----------+---------+-----------+
| NIS | 2.64 | | (3.04) | 0.76 |
+---------------------------------------+---------+----------+---------+-----------+
| Euro |(14.85) | | 1.364 | 3.445 |
+---------------------------------------+---------+----------+---------+-----------+
Note 2 - Significant Accounting Policies:
The interim consolidated financial statements have been prepared in accordance
with generally accepted accounting principles for the preparation of financial
statements for interim periods, as prescribed in International Financial
Reporting Standard IAS 34 ("Interim Financial Reporting").
The significant accounting policies applied in the annual financial statements
of the Company as of December 31, 2009 are applied consistently in these interim
consolidated financial statements, except for the impact of the adoption of the
Standards and Interpretations described below.
- IFRS 3 (Revised) - Business Combinations and IAS 27 (Revised) -
Consolidated and Separate Financial Statements:
These standards have been applied prospectively from 1 January 2010. The
implementation of these standards will affect future acquisitions and
transactions with non-controlling interests.
Note 2 - Significant Accounting POLICIES (Cont.):
The principal changes following the adoption of the Standards are:
(a) IFRS 3 previously prescribes that goodwill, as opposed to the acquirer's
other identifiable assets and liabilities, should be measured as the excess of
the cost of the acquisition over the acquirer's share in the fair value of the
identifiable assets, net on the acquisition date. According to the Revised
Standards, goodwill can be measured at its full fair value and not only based on
the acquired part, this in respect of each business combination transaction
measured separately
(b) A contingent consideration in a business combination is measured at fair
value and changes in the fair value of the contingent consideration, which do
not represent adjustments to the acquisition cost in the measurement period,
should not be simultaneously recognized as goodwill adjustment. Normally, the
contingent consideration is considered a financial derivative within the scope
of IAS 39 and will be presented at fair value through profit or loss.
(c) Direct acquisition costs attributed to a business combination transaction
is recognized in the comprehensive income statement as incurred as opposed to
the previous requirement of carrying them as part of the consideration of the
cost of the business combination, which has been removed.
(d) A minority transaction, whether a sale or an acquisition, will be accounted
for as an equity transaction and will therefore not be recognized in the
statement of income or have any effect on the amount of goodwill, respectively.
(e) A subsidiary's losses, although resulting in the subsidiary's deficiency, is
allocated between the parent company and non-controlling interests, even if the
non-controlling interests has not guaranteed or has no contractual obligation of
sustaining the subsidiary or carrying out another investment.
(f) On the loss of control of a subsidiary, the remaining investment in the
subsidiary, if any, is revalued to fair value against gain and loss from the
sale and this fair value will represent the cost basis for the purpose of
subsequent treatment.
The Company believes that the effect of the revised Standards on its reported
results or financial position is not expected to be material.
- Amendments to IFRS 2 - Group Cash-settled Share-based Payment
Transactions
In June 2009 the International Accounting Standards Board amended IFRS 2 to
clarify its scope and the accounting for group cash-settled share-based payment
transactions in the separate or individual financial statements of the entity
receiving the goods or services when that entity has no obligation to settle the
share based payment transaction. The amendments also incorporate the guidance
contained in the following Interpretations:
- IFRIC 8 Scope of IFRS 2
- IFRIC 11 IFRS 2-Group and Treasury Share Transactions.
The implementation of Amendments to IFRS 2 has no impact on the reported results
or financial position of the company.
Note 2 - Significant Accounting POLICIES (Cont.):
- Improvements to International Financial Reporting Standards 2009
- IAS 7 - Statement of Cash Flows: Explicitly states that only expenditure
that results in recognizing an asset can be classified as a cash flow from
investing activities.
- IAS 36 - Impairment of Assets: The amendment to IAS 36 defines the required
accounting unit to which goodwill will be allocated for impairment testing of
goodwill. Pursuant to the amendment, the largest unit permitted for impairment
testing of goodwill acquired in a business combination is an operating segment
as defined in IFRS 8, "Operating Segments" before the aggregation for reporting
purposes.
The initial adoption of these Standards did not have any material effect on the
consolidated financial statements.
The following new standards, new interpretations and amendments to standards and
interpretations have been issued but are not effective for the financial year
beginning 1 January 2010 and have not been early adopted:
- IFRS 9, 'Financial instruments', In November 2009, the IASB issued IFRS 9,
"Financial Instruments", which represents the first phase of a project to
replace IAS 39, "Financial Instruments: Recognition and Measurement". IFRS 9
focuses mainly on the classification and measurement of financial assets and it
applies to all financial assets within the scope of IAS 39.
- According to IFRS 9, upon initial recognition, all the financial assets
(including hybrid contracts with financial asset hosts) will be measured at fair
value. In subsequent periods, debt instruments can be measured at amortized cost
if both of the following conditions are met:
- The asset is held within a business model whose objective is to hold assets
in order to collect the contractual cash flows.
- The contractual terms of the financial asset give rise on specified dates
to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
- Subsequent measurement of all other debt instruments and financial assets
will be at fair value.
- Financial assets that are equity instruments will be measured in subsequent
periods at fair value and the changes will be recognized in the statement of
income or in other comprehensive income (loss), in accordance with the election
of the accounting policy on an instrument-by-instrument basis. Nevertheless, if
the equity instruments are held for trading, they must be measured at fair value
through profit or loss. This election is final and irrevocable. When an entity
changes its business model for managing financial assets it shall reclassify all
affected financial assets. In all other circumstances, reclassification of
financial instruments is not permitted.
- The Standard will be effective starting January 1, 2013. Earlier
application is permitted. Early adoption will be made with a retrospective
restatement of comparative figures, subject to the reliefs set out in the
Standard.
Note 2 - Significant Accounting POLICIES (Cont.):
IFRS 9, 'Financial instruments' (Cont.):
- The Company is evaluating the possible effect of the adoption of the new
Standard on the consolidated financial statements but is presently unable to
assess such effect, if any.
- Revised IAS 24, 'Related party disclosures', issued in November 2009. It
supersedes IAS 24, 'Related party disclosures', issued in 2003. The revised IAS
24 is required to be applied from 1 January 2011. Earlier application, in whole
or in part, is permitted.
- 'Classification of rights issues' (Amendment to IAS 32), issued in October
2009. For rights issues offered for a fixed amount of foreign currency, current
practice appears to require such issues to be accounted for as derivative
liabilities. The amendment states that if such rights are issued pro rata to all
the entity's existing shareholders in the same class for a fixed amount of
currency, they should be classified as equity regardless of the currency in
which the exercise price is denominated. The amendment should be applied for
annual periods beginning on or after 1 February 2010. Earlier application is
permitted.
NOTE 3 - SEGMENTS:
Segment information:
The Company operates in four principal geographic segments: Europe, Asia, Africa
and United States. Revenue and cost of sale are attributed to geographic region
based on the location of the customers.
It is impossible to reliably allocate assets, liabilities, depreciations and
non-cash expenses to each segment because the Company develops and gives
services to customers on a worldwide basis.
+-------------------------+---------------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| Six months ended June | Europe | | Asia | | Africa | | United | | Total |
| 30, 2010 (Unaudited) | | | | | | | States | | |
+-------------------------+---------------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| | 2010 | | 2010 | | 2010 | | 2010 | | 2010 |
+-------------------------+---------------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| | $'000 | | $'000 | | $'000 | | $'000 | | $'000 |
+-------------------------+---------------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| | | | | | | | | | |
+-------------------------+---------------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| Revenue | | | | | | | | | |
+-------------------------+---------------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| External | 2,898 | | 377 | | 2,753 | | 4,365 | | 10,393 |
+-------------------------+---------------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| Total | 2,898 | | 377 | | 2,753 | | 4,365 | | 10,393 |
+-------------------------+---------------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| Results | | | | | | | | | |
+-------------------------+---------------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| Segment Profit (loss) | (387) | | (49) | | (371) | | 1,369 | | 562 |
| before tax | | | | | | | | | |
+-------------------------+---------------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| Impairment of | | | | | | | | | (1,144) |
| Intangible assets | | | | | | | | | |
+-------------------------+---------------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
| Total Profit (loss) | | | | | | | | | (582) |
| before tax | | | | | | | | | |
+-------------------------+---------------+----------+--------------+----------+---------------+----------+---------------+----------+----------------+
+-------------------------+---------------+----------+---------------+----------+---------------+----------+---------------+----------+---------------+
| Six months ended June | Europe | | Asia | | Africa | | United | | Total |
| 30, 2009 (Unaudited) | | | | | | | States | | |
+-------------------------+---------------+----------+---------------+----------+---------------+----------+---------------+----------+---------------+
| | 2009 | | 2009 | | 2009 | | 2009 | | 2009 |
+-------------------------+---------------+----------+---------------+----------+---------------+----------+---------------+----------+---------------+
| | $'000 | | $'000 | | $'000 | | $'000 | | $'000 |
+-------------------------+---------------+----------+---------------+----------+---------------+----------+---------------+----------+---------------+
| Revenue | | | | | | | | | |
+-------------------------+---------------+----------+---------------+----------+---------------+----------+---------------+----------+---------------+
| External | 3,741 | | 1,205 | | 1,461 | | 3,457 | | 9,864 |
+-------------------------+---------------+----------+---------------+----------+---------------+----------+---------------+----------+---------------+
| Total | 3,741 | | 1,205 | | 1,461 | | 3,457 | | 9,864 |
+-------------------------+---------------+----------+---------------+----------+---------------+----------+---------------+----------+---------------+
| Results | | | | | | | | | |
+-------------------------+---------------+----------+---------------+----------+---------------+----------+---------------+----------+---------------+
| Segment Profit (loss) | (533) | | (175) | | (211) | | 1,148 | | 229 |
| before tax | | | | | | | | | |
+-------------------------+---------------+----------+---------------+----------+---------------+----------+---------------+----------+---------------+
NOTE 4 - SIGNIFICANT EVENTS:
- Lawsuits:
Pursuant to note 26 sub-sections 3 in the consolidated financial statement as of
December 31, 2009:
On August 2010, Parties have reached and signed a settlement agreement
("Settlement") with Maarachot Drachim (Highway 6) ("Customer") for the final and
conclusive settlement of the dispute, pursuant to which Customer shall pay FTS a
sum of 150,000 NIS ("Payment") within 15 days as of validation of the agreement
by the arbitrator (amounts forfeited by Customer shall remain with Customer).
The Payment made and the above settlement resolves and ends the dispute and does
not constitute any admission of either party. Subject to the fulfilment of the
Parties obligation pursuant to the settlement the Parties irrevocably release
acquit and definitively discharge each other from and against any and all
claims, demands, allegations, of any kind whatsoever, which each now has or may
have against the other arising out of or in connection with the dispute and/or
any related issue. The Arbitrator is expected to confirm and validate the
Settlement and grant it with effect of a court ruling.
- Impermanent losses on intangible assets:
Due to the financial results of the Company and the changes in the CRM Telecom
market, the Company examined whether to continue in this field and decided to
freeze the CRM development activity and concentrate on improving its results by
focusing on selling its legacy solutions. As a result, the Company wrote off the
balance of the capitalized R&D in the amount of $1,144 thousands.
- Deferred tax assets and Non-current tax assets:
In light of the continuing losses, the company decided to write off all of its
tax assets, totalling in the amount $1,489 thousands.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BLGDIGXDBGGS
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