SUMMARY HIGHLIGHTS
Decisions by the Annual General Meeting
GeoSolutions acquisition
Daniel Harple as Executive Chairman
Investor negotiations about the new financing round needed by the Company
The Company´s new strategy focused on software applications, services and
solutions
Completion of the Company´s announced smart phone product program being
scrutinised
Decision to change Company name to GeoSentric Oyj
1. Highlights of the last quarter
Decisions by the Annual General Meeting
The Annual General Meeting of Benefon Oyj confirmed the income statement and the
balance sheet of the company from the financial period of year 2006, resolved
that the loss from the period shall be booked on the previous years' profit/loss
account and no dividend is paid and resolved to discharge from liability the
members of the Board and the CEO. The General Meeting resolved further that the
number of Board members is six and elected the following persons to the Board:
Peter Bamford, Brian Katzen, Jeffrey Crevoiserat, Juha Kiikeri, Simon Wilkinson
and Dan Harple. In its organizing meeting after the Annual General Meeting the
Board elected Mr. Peter Bamford as the Chairman of the Board. Related to his
election as the Chairman, Mr. Bamford was granted option rights of up to amount
of 7,500,000 at the share subscription price EUR 0.15 per share. The General
Meeting resolved further to keep the number of ordinary auditors at one and
re-elected Ernst & Young Oy as the ordinary auditor with Mr. Erkka Talvinko,
CPA, acting as the responsible auditor, and Mr. Veikko Soinio, CPA, as the
deputy auditor.
The Annual General Meeting approved the purchase of the entire share capital of
GeoSolutions B.V. through a share exchange in accordance with the proposal of
the Board. The Board was also authorized to decide on increasing the share
capital and issuing new shares, option rights and specific rights such that the
maximum amount of share capital increase is EUR 1,902,500 and number of issued
new investment series shares 190,250,000. The share capital can be increased by
means of using the premium fund or invested unrestricted equity fund for the
increase. The authorization entitles the Board to deviate from the pre-emptive
right of shareholders and also accept set-off or other consideration in kind as
a payment for the shares, option rights or specific rights. The shares can also
be issued without payment provided that there is an especially weighty financial
reason for this as required by the Companies Act. The Board has the right to
decide the terms of any issue by virtue of the authorization for all other
parts. The authorization is valid for two years from the date of the Annual
General Meeting. With the same, the previous authorization granted by the
Extraordinary General Meeting of February 1, 2007, was cancelled for the unused
part.
The Annual General Meeting approved the amendment of the management agreement
entered between the company and Octagon Consulting Limited in accordance with
the proposal of the Board to include also special projects such as mergers,
acquisitions and divisions.
GeoSolutions acquisition
On April 27, 2007, Benefon signed an Exchange Agreement to acquire shares of
GeoSolutions BV, a developer of location-based technologies, products, and
services for mobile and Internet-connected devices. This start-up firm employs
13 people and it did not have activities in 2006.
The acquisition was finalised in July 2007 when the shares issued in the
acquisition, realised as a share exchange, were listed for public trading at
Helsinki Exchanges. The principal contents of the acquisition are as detailed in
the following.
The first part of the purchase price agreed in the terms of the Share Exchange
Agreement entered into with GeoHolding B.V. was paid by issuing 21,000,000 new
investment series shares at the closing (“First Issue”). In the First Issue the
subscription price was EUR 0.14 per share, corresponding to EUR 2,940,000. The
subscription price for the shares issued in the First Issue were paid with
contribution in kind by transferring all outstanding shares of GeoSolutions
B.V., representing the whole authorised share capital of the company, to Benefon
Oyj as agreed in the Share Exchange Agreement.
In addition to the First Issue, in accordance with the Share Exchange Agreement,
the Board decided to issue a maximum of 9,000,000 new investment series shares
for subscription by GeoHolding without charge (“Second Issue”). These shares
will be offered upon meeting the conditions set forth in the Share Exchange
Agreement. If the conditions are not met within the agreed time period the
shares issued in the Second Issue shall be returned to Benefon without charge
and the purchase price shall be decreased by an amount corresponding to the
agreed value of such shares.
The shares in First and Second Issues were issued by the Board by virtue of the
authorisation granted to it by the Annual General Meeting of April 16, 2007.
Due to technical reasons, the shares were issued in two separate issues.
In addition to the aforementioned directed share issues and by virtue of the
mentioned authorisation, the Board of Directors issued at maximum 9,778,500
option rights to key personnel of GeoSolutions B.V., as agreed in the Share
Exchange Agreement, of which 10,250,000 option rights were available. The option
rights were offered for subscription by the senior management, members of the
board of directors and key employees of GeoSolutions B.V., according to the
terms and conditions of the option program. The share subscription price for the
option rights is EUR 0.14 per share and the share subscription period began on
April 27, 2007, and will end on April 7, 2014. The option rights are divided
into nine (9) series and the share subscription periods are different for
different series.
With the Second Issue, the Company's share capital may be increased by EUR 0.01
for each issued share by transferring a corresponding amount from the share
premium account into share capital. As a result, the Company's share capital may
be increased by EUR 90,000.00 and the share premium account correspondingly
decreased by EUR 90,000.00.
As a result of the First Issue, the share capital of the Company was increased
by EUR 210,000.00. As a result of the Second Issue the share capital increase
from the share premium fund may amount to EUR 90,000.00. The shares subscribed
for in the directed share issues represented 10,22 % and shares subscribed for
by virtue of the issued option rights represent at maximum 3,33 % of the
company's registered shares prior to the said increase in the share capital.
Subscription period for the option rights began on April 27, 2007, and will end
on April 27, 2012.
Daniel Harple as Executive Chairman
On June 28, 2007, the Company informed about resignations of the Board Chairman
Peter Bamford and Board member Simon Wilkinson and about election of Daniel
Harple as the Executive Chairman. Related with his resignation, the 7,500,000
option rights granted to Peter Bamford were cancelled.
Office in Shanghai
In May 2007, the Company opened in Shanghai an office with a planned personnel
of 15. The task of the said new business unit is to adapt Benefon product range
for the local conditions, development of a range of personal navigation devices
for vehicular use, development of local software content and expansion of the
database of the Company´s Chinese language Internet solutions.
New TWIG service
Benefon announced on May 4, 2007, that it offers a free introductory TWIG Web
Finder service subscription with purchase of TWIG Locator GPS/GSM tracking
device. The TWIG Web Finder is a service for tracking vehicles and other mobile
assets as well as for securing persons. The location of mobile objects can be
seen on detailed street maps on three continents. The service enables users of
TWIG products also to receive locations on normal mobile phones as address
information. Further features include alarm reception, history functions,
sending of SMS messages and workstation operation from multiple sites. The TWIG
tracking solutions are made with easy use and competitive prices in mind. No
installations are required. Further credits and service extensions can be
conveniently purchased at the TWIG eShop.
Subsidiary in the Netherlands
Benefon announced on May 15, 2007, that related with the acquisition of
GeoSolutions B.V. in accordance with the terms of the share exchange agreement
entered into with GeoHolding B.V. on March 22nd, 2007, the Board of Benefon Oyj
has also decided to establish a subsidiary in the Netherlands, Benefon Solutions
B.V., for holding the GeoSolutions shares, and according to original transaction
plan transfer the GeoSolutions shares to Benefon Solutions. The transfer price
of the shares has been agreed to correspond to the original purchase price of
the shares paid by Benefon Oyj, which amount Benefon Oyj shall lend to Benefon
Solutions B.V. for paying the transfer price. As the amount of original purchase
price has not yet been determined finally the transfer price and the respective
loan are subject to further adjustments corresponding to the conditions set
forth in the share exchange agreement.
Company Strategic Focus
In June, the Company announced several strategic initiatives to leverage a
recent acquisition, to further expand and develop the company's current products
into an integrated portfolio and to position the company to take advantage of
the rapidly growing global market for mobile, web and Internet-connected devices
requiring location based services.
At the core of the strategy is the integration of the GeoSolutions platform
across the product portfolio. Benefon acquired GeoSolutions in April 2007 to
provide customers with high value applications and solutions to address market
demand for mobile social networking, personal navigation and smart mobile
services in the consumer market, mobile CRM, SFA, field and workflow management,
and asset tracking in commercial markets. The GeoSolutions technologies provide
the platform for the capture, usage, integration and management of
location-based data and content to consumer and commercial applications and
solutions.
Supportive of the strategic initiatives, the Company will receive an integrated
senior executive team, brought together from key people of prior successful
companies headed by Mr. Harple, co-founder of GeoSolutions and current Benefon
Executive Chairman.
Completion of the Company´s new smart phone product program being scrutinised
Related with the strategy focus detailed above, the Company is scrutinising the
conditions and position of completing the new smart phone product program
announced on February 21,2007, with relation to the acquired operation of
GeoSolutions evaluating among other things the possible synergy of the
aforementioned operations and the market situation. In the interim report
released by the Company on May 22, 2007, the Company informed that it is
reviewing its product program for 2008, which work is still ongoing and now
extended to cover also above mentioned program. The matter will be decided and
disclosed after resolving the results of the on-going financing negotiations.
Change of the Company name
As announced by the Company on June 28, 2007, the Board of the Company has
decided that the name of the Company will be changed into GeoSentric Oyj, and
that the Board will initiate measures, inter alia invite the general meeting, to
implement the name change. The reason for the name change is a desire to make
the name of the Company to better match with the new business according to the
Company´s renewed strategy.
Financing program
Agreement of terms of the Tranche 8 and raising the first part
Benefon announced on May 8, 2007, that the company and Octagon Solutions Limited
have agreed to the terms of the 8th tranche of financing, according to which the
share subscription price for the directed share issues under tranche 8 shall be
EUR 0.15 per share. In addition to new investment series shares the company
shall issue convertible bond loan at share subscription price of EUR 0,025 per
share. Each investment is also combined with issuance of agreed number of option
rights at share subscription price of EUR 0.15. The maximum number of new
investment series shares that may be issued under the tranche 8 is 50,000,000
along with 10,500,000 option rights. According to the terms of the financing the
8th tranche may amount up to 5 million euros and is to be raised in several
parts as separately agreed. According to the financing agreement, Octagon
Solutions shall have the first right to make the investments in tranche 8 up to
its maximum amount, or, at its option, to assign the investment right to third
party investors in accordance with the extended Financing Agreement.
The first part of the eighth tranche of the amount of 400,000 euros was raised
by issuing shares and convertible bond loan for a total amount of EUR 400,000 to
Killarney Partners. The maximum number of new investment series shares offered
for subscription was 2,400,000. The principal amount of convertible bond loan
was EUR 40.000 and each EUR 0.025 of the loan principal entitles its holder to
subscribe for one new investment series share. The maximum number of shares that
can be subscribed for by virtue of the loan was 1,600,000. As a part of the
directed offering Killarney Partners was also offered for subscription at
maximum 666,667 option rights entitling to subscribe for corresponding amount of
new investment series shares at share subscription price of EUR 0.15 per share
during the share subscription period from May 18, 2007 to May 31, 2011.
Of the share subscription price EUR 0.01 was booked into share capital and the
remainder in the invested unrestricted equity account. As a result of the share
issue, the Company's share capital may increase by a maximum of EUR 24,000.00
and as a result of convertible bond loan by a maximum of EUR 16,000.00. This
convertible loan was in entirety converted into shares in June 2007.
At maximum, the shares offered for subscription in the above described directed
offering represented 0.82 %, the convertible bond loan 0.55 % and the option
rights 0.23 % of the company's registered shares. The subscribed new shares were
listed for public trading at Helsinki Exchanges in July 2007.
Balancing the pricing of previous investments of Ashland Partners LP
Related with the acceptance of the terms of the Tranche 8, the Board of the
Company decided to balance the pricing of previous investments by Ashland
Partners LP to correspond the pricing agreed to with the group of investors
participating the investments under the extended Financing Agreement and, to
correct an error in the original pricing, the Board also decided to issue a
maximum of 1,111,111 new investment series shares for subscription by Ashland
Partners LP without charge. With the same, the Company's share capital was
increased by EUR 0.01 for each share issued by transferring a correspondent
amount from the premium fund to share capital. As a result, the Company's share
capital was increased by EUR 11,111.11 and the premium fund correspondingly
decreased by EUR 11,111.11. The shares offered for subscription in the directed
share issue represent 0.38 % of the company's registered shares prior the
respective increase in share capital. The new shares subscribed for were listed
for public trading at Helsinki Exchanges in July 2007.
Set-off issue
Benefon today announced on May 23, 2007 that it has decided to arrange a
directed set off issue for a total maximum amount of EUR 1,134,181.20 to the
Company's certain creditors. The maximum number of new investment series shares
offered for subscription was 7,974,724 and subscription price was between EUR
0.12 and EUR 0.26 per share. Of the share subscription price EUR 0.01 was booked
to share capital and the remainder in invested unrestricted equity fund. As a
result of the share issue, the Company's share capital increased by EUR
79,747.24.
Raising the second part of the eighth financing tranche
Benefon announced on June 4, 2007, that the Board of Directors decided to raise
the second part of a maximum of 1,350,000 euros of the 8th financing tranche
according to terms announced on May 8, 2007, as follows.
The Board decided to issue shares and convertible bond loan for a total maximum
amount of EUR 1,350,000 to Tradewind Investment Services Ltd. and Biggles Ltd.
(“directed offering”). The maximum number of new investment series shares
offered for subscription was 8,100,000 and subscription price EUR 0.15 per
share. Of the shares at maximum 6,000,000 were offered for subscription to
Tradewind Investment Services Ltd. and at maximum 2,100,000 to Biggles Ltd.
The principal amount of convertible bond loan was EUR 135,000 and each EUR 0.025
of the loan principal entitled its holder to subscribe for one new investment
series share. Of the loan EUR 100,000 was offered for subscription to Tradewind
Investment Services Ltd. and EUR 35,000 to Biggles Ltd. The maximum number of
shares that can be subscribed for by virtue of the loan was 5,400,000.
As a part of the directed offering, Tradewind Investment Services Ltd. was also
offered for subscription at maximum 2,500,000 and Biggles Ltd. at maximum
875,000 option rights entitling to subscribe for corresponding amount of new
investment series shares at share subscription price of EUR 0.15 per share
during the share subscription period ending on June 30th, 2011.
Of the share subscription price EUR 0.01 is booked to share capital and the
remainder in invested unrestricted equity fund. As a result of share issue
company's share capital was increased by a maximum of EUR 81,000.00 and as a
result of shares subscribed by virtue of the convertible bond loan by a maximum
of EUR 54,000.00, and it may be increased as a result of share subscriptions by
virtue of the option rights by a maximum of EUR 33,750.00.
The shares subscribed for in the directed offering represented 2.58 %, those
subscribed for by virtue of the convertible bond loan 1.72 % and those possibly
subscribed for by virtue of the option rights 1.07 % of the company's registered
shares.
The subscribed new shares were listed for public trading at Helsinki Exchanges
also in July 2007.
Investor negotiations of the new financing arrangement
The Board of the Company has continued negotiations on the new financing round
informed in bulletin released on June 28, 2007 for securing the working capital
of the Company. If completed, the financing arrangement will have an influence
on the ownership of the company. The matter will be informed in more detail
after the negotiation has been finalized.
Offering option rights to certain Benefon key people
In June, the Board of Directors decided to issue at maximum 1,500,000 option
rights to certain key people of Benefon Oyj for subscription. Each option right
entitles its holder to subscribe for one (1) new investment series share at
subscription price of EUR 0.14. The option rights are divided into two series
with different share subscription period beginning times of July 11, 2007, or
June 1, 2009, depending on series. Share subscription period for all options
will end on December 31, 2012. The subscription period for option rights will
end on 31.12.2007. The issued option rights represented a maximum of 0.48 % of
the company's registered shares.
2. Developments after the end of the reporting period
After the end of the reporting period on July 24, 2007, the Company published
the prospectus approved by the Finnish Financial Supervision (”FSA”), prepared
for listing new shares at Helsinki Exchanges for public trading issued in the
share exchange of GeoSolutions acquisition, in the eighth financing tranche and
in the set-off issue. On the same day, the Company made public with market
bulletin prior undisclosed information included in the prospectus. The
Prospectus is available for downloading at the Company website www.benefon.com.
3. Operational Review
In the second quarter, focus points of the Company´s operations and product
development were continuing market launches of TWIG Discovery Pro and TWIG
Locator products and further upgrading of their functionalities, on one hand,
and integration of client applications for GeoSolutions´ GyPSii service into
Windows Mobile operating system and development of the GyPSii service portal, on
the other hand.
The development of the sales did not meet expectations due to intensified
competition and price erosion and, according to the re-focused strategy, the
Company decided to focus on services and service solutions where the
profitability is significantly better as compared to mobile devices and the
working capital fluctuations are easier manageable.
Accordingly, the Company has decided to focus the development resources on the
GeoSolutions´ Product family.
4. Outlook for the remainder of 2007
During 2007, the Company has established three operating units with businesses
based on exploitation of service potential offered by GSM networks, the Internet
and the GPS system, in one way or other.
The first unit is the traditional Internet-enabled GPS/GSM mobile handset
business, addressing specifically the B2B market but serving also up-segment
consumer markets where feasible.
The second is the services and solutions business unit created around the
Company´s newly acquired Geosolutions B.V., allowing the Company to sharpen its
focus within this market.
The third is the Benefon China unit addressing the Personal Navigation Devices
(PND) market of emerging, less saturated markets. The creation of Benefon China
allows the Company to enter the lucrative PND market within China, and the unit
serves as an in-country sales and support center for GyPSii products into China.
In the second half of 2007, the Company is streamlining its operations and has
expanded its sales organisation to secure the favourable development of the
current and future product sales and is putting measures in place to improve the
time needed for launch of new products. TWIG Discovery and TWIG Locator have
been launched in a number of Western European countries, and the TWIG Discovery
has also been launched in the U.S. Due to intensified competition and price
sensitivity, the delays occurred in the launch of Twig Discovery have decreased
its competitiveness in the marketplace. However, the Company expects to sell the
remaining stock of finished TWIG Discovery products. In June 2007, the Company
made a write-off of 1056 teuros for estimated amounts of excess material.
The Company via its acquisition of Geosolutions has entered into a new business
area. Geosolutions is engaged in the business of location aware software and
services. The Geosolutions technology provides Benefon with access to a core
proprietary search and mobile social networking solution. The acquisition
provided the Company with a product, the technology and an experienced team
which will allow the company to a) provide an integrated content rich location
services platform to its product line, b) exploit the business potential
provided by various existing social networks´ installed bases and, c) deliver an
integrated service solution for most network operators and mobile phone
manufacturers. On the other hand, the cost of GeoSolutions personnel has
increased the Company´s fixed costs.
Within marketing, the focus points are growing of sales volume and expansion of
markets and on intensified marketing efforts of network based services and
service solutions support applications, especially the launch of the GyPSii
service to network operators and service providers.
Production function concentrates in managing the rampdown of TWIG Discovery
material inventory and logistics pipeline.
5. Financial Review
Financial Performance in the period
The net sales of the company in Q2/2007 were 1140 teuros and in period
Q1+Q2/2007 2373 teuros. The comparable net sales in Q2/2006 were 2136 teuros and
in period Q1+Q2/2006 3260 teuros.
The operating profit in Q2/2007 was -5694 teuros and in period Q1+Q2/2007 -9817
teuros. The comparable operating profit in Q2/2006 was -919 teuros and in period
Q1+Q2/2006 -2126 teuros.
The total of the balance sheet at the end of Q2/2007 was 16892 teuros. The total
of the balance sheet at the end of the previous year 2006 was 17397 teuros and
at the end of the same period Q2/2006 in the previous year it was 15248 teuros.
The total shareholders´ equity at the end of Q2/2007 was 10679 teuros, or about
63% of the balance sheet, when at the end of the previous year 2006 it was 10421
teuros, or about 60%. At the end of the same period Q2/2006 in the previous year
it was 11219 teuros, or about 74%.
The book value of interest-carrying debt at the end of Q2/2007, including the
capital loans, was 1357 teuros. The total liabilities at the end of Q2/2007 were
6213 teuros, whereas they were 6976 teuros at the end of year 2006 and 4029
teuros at the end of the same quarter Q2/2006 in the previous year. Cash and
cash equivalents at the end of the period was 1281 teuros of which 373 teuros
were pledged.
The Company adopted the International Financial Reporting System (IFRS) during
financial year 2005 and the financial statements for the year 2005 and onwards,
including the interim reports, have been prepared according to IFRS.
Report on sufficient liquidity in period 07/2007-09/2008
The below cash flow statement assumes that sales targets set in financial
projections for financial years 2007 and 2008 are met. These projections are
highly dependent on timely deliveries and sales success of the Company's new
TWIG branded product range.
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| Cash Flow Statement 07/2007-09/2008 | million euros |
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| Cash flow from operations | -5.1 |
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| Share subscription payments | 6.5 |
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| Investments | -0.3 |
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| Change in cash | 1.1 |
--------------------------------------------------------------------------------
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| Cash in the beginning of the period | 1.3 |
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| Cash at the end of the period | 2.4 |
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6. Company information
Founded in 1988 in Finland by early mobile phone pioneers, Benefon is a leader
in development of businesses based on exploitation of the service potential
offered by GSM networks, the Internet and the GPS system. Benefon is at
forefront of innovation and research in this domain.
The number of personnel in quarter 2Q/2007 averaged 84, of whom 23 persons were
affected by alternate forced leaves.
Benefon share (BNFSV) is listed on the small cap -list of OMX Nordic Exchange in
Helsinki.
Benefon Oyj
Tomi Raita
CEO
BENEFON OY INTERIM REPORT 2Q/2007 (NOT AUDITED)
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| GROUP INCOME STATEMENT | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1000 EUR | | | | 2Q/200 | 1-2Q/2 | 2Q/200 | 1-2Q/2 | 2006 |
| | | | | 7 | 007 | 6 | 006 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | | | | 1140 | 2373 | 2136 | 3260 | 6959 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other operating income | | 26 | 26 | 13 | 14 | 25 |
--------------------------------------------------------------------------------
| Increase (+) / | | | | | | |
| decrease (-) in | | | | | | |
--------------------------------------------------------------------------------
| inventories of | | 324 | 118 | 7 | -3 | 2625 |
| finished products | | | | | | |
--------------------------------------------------------------------------------
| Production for own use | | 0 | 0 | 0 | 0 | 0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Use of raw materials and | -2138 | -2717 | -1436 | -2142 | -7190 |
| consumables | | | | | |
--------------------------------------------------------------------------------
| Total expense of | | -1922 | -3349 | -1199 | -2199 | -4915 |
| employees | | | | | | |
--------------------------------------------------------------------------------
| Depreciations | | | -1256 | -1959 | -21 | -44 | -563 |
--------------------------------------------------------------------------------
| Impairment loss | | | 0 | 0 | 0 | 0 | -872 |
--------------------------------------------------------------------------------
| Other operating | | -1868 | -4309 | -2208 | -3656 | -11775 |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| Capitalised R&D | | 0 | 0 | 1789 | 2644 | 4163 |
| expenses | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating result | | | -5694 | -9817 | -919 | -2126 | -11543 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial income | | | 5 | 18 | 34 | 49 | 145 |
--------------------------------------------------------------------------------
| Financial expenses | | | -29 | -319 | -25 | -106 | -162 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Result before | | | -5718 | -10118 | -910 | -2183 | -11560 |
| taxes | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income taxes | | | 127 | 127 | 0 | 0 | 0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Result of the | | | -5591 | -9991 | -910 | -2183 | -11560 |
| period | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, | | | | | | |
| eur | | | | | | |
--------------------------------------------------------------------------------
| Undiluted earnings per | | -0,02 | -0,04 | -0,01 | -0,01 | -0,05 |
| share | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Diluted earnings per share has not been computed because dilution effect |
| would improve the key figure. |
--------------------------------------------------------------------------------
| The interim financial statements have | | | | |
| not been audited. | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| GROUP BALANCE SHEET | | | | REPORTING | |
| | | | | PERIOD | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1000 EUR | | | | Note | | 30.6.2 | 30.6.2 | 31.12. |
| | | | | | | 007 | 006 | 2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ASSETS | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current assets | | | | | | | |
--------------------------------------------------------------------------------
| Property, plant and | | | | 235 | 264 | 244 |
| equipment | | | | | | |
--------------------------------------------------------------------------------
| Development costs | | | | | 1440 | 2644 | 2841 |
--------------------------------------------------------------------------------
| Goodwill | | | | | | 216 | 0 | 0 |
--------------------------------------------------------------------------------
| Other intangible | | | | 5532 | 23 | 32 |
| assets | | | | | | |
--------------------------------------------------------------------------------
| Other financial | | | | | 62 | 61 | 61 |
| assets | | | | | | | |
--------------------------------------------------------------------------------
| Deterred tax | | | | | 0 | 0 | 0 |
| assets | | | | | | | |
--------------------------------------------------------------------------------
| Total | | | | | | 7485 | 2992 | 3178 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | | | | | | |
--------------------------------------------------------------------------------
| Inventories | | | | | | 5080 | 1777 | 6194 |
--------------------------------------------------------------------------------
| Trade receivables and other | | | 2323 | 2378 | 4585 |
| receivables | | | | | |
--------------------------------------------------------------------------------
| Prepaid expenses | | | | | 723 | 2044 | 898 |
--------------------------------------------------------------------------------
| Cash and cash | | | | 1281 | 6057 | 2542 |
| equivalents | | | | | | |
--------------------------------------------------------------------------------
| Total | | | | | | 9407 | 12256 | 14219 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | | | | | 16892 | 15248 | 17397 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' | | | | | | | |
| equity | | | | | | | |
--------------------------------------------------------------------------------
| Share capital | | | 5 | | 3303 | 2206 | 2634 |
--------------------------------------------------------------------------------
| Share issue | | | | | 1224 | 0 | 400 |
--------------------------------------------------------------------------------
| Share premium account | | 5 | | 15925 | 15936 | 15936 |
--------------------------------------------------------------------------------
| Invested distributable equity | 5 | | 12927 | 0 | 4866 |
| account | | | | | |
--------------------------------------------------------------------------------
| Retained earnings | | | | | -22700 | -6923 | -13415 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total shareholders' | | | | 10679 | 11219 | 10421 |
| equity | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current | | | | | | | |
| liabilities | | | | | | | |
--------------------------------------------------------------------------------
| Deferred tax | | | | | 1403 | 0 | 0 |
--------------------------------------------------------------------------------
| Interest bearing | | | 7,8 | | 920 | 954 | 2319 |
| debt | | | | | | | |
--------------------------------------------------------------------------------
| Total | | | | | | 2323 | 954 | 2319 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current | | | | | | | |
| liabilities | | | | | | | |
--------------------------------------------------------------------------------
| Trade payables and other | | | 3296 | 3028 | 4500 |
| payables | | | | | |
--------------------------------------------------------------------------------
| Provisions | | | | | | 157 | 47 | 157 |
--------------------------------------------------------------------------------
| Interest bearing | | | 7,8 | | 437 | 0 | 0 |
| debt | | | | | | | |
--------------------------------------------------------------------------------
| Total | | | | | | 3890 | 3075 | 4657 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total liabilities | | | | | 6213 | 4029 | 6976 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total shareholders' equity and | | | 16892 | 15248 | 17397 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| GROUP CASH FLOW STATEMENT | | | REPORTING | |
| | | | PERIOD | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1000 EUR | | | | | | 1-2Q/2 | 1-2Q/2 | 2006 |
| | | | | | | 007 | 006 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from | | | | | | |
| operations | | | | | | |
--------------------------------------------------------------------------------
| Result of the | | | | | -9991 | -2183 | -11560 |
| period | | | | | | | |
--------------------------------------------------------------------------------
| Adjustments | | | | | 1898 | 147 | 4391 |
--------------------------------------------------------------------------------
| Changes in working | | | | | | |
| capital | | | | | | |
--------------------------------------------------------------------------------
| Change of trade and other | | | 2437 | -2287 | -3343 |
| receivables | | | | | |
--------------------------------------------------------------------------------
| Change of | | | | | 1114 | -495 | -4912 |
| inventories | | | | | | | |
--------------------------------------------------------------------------------
| Change of trade and other | | | -70 | 958 | 2540 |
| liabilities | | | | | |
--------------------------------------------------------------------------------
| Paid interest | | | | | -1 | -24 | -62 |
--------------------------------------------------------------------------------
| Received interest | | | | 12 | 40 | 140 |
| payments | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from | | | | -4601 | -3844 | -12806 |
| operations, net | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from | | | | -117 | -2816 | -4393 |
| investments, net | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from | | | | | | |
| financing | | | | | | |
--------------------------------------------------------------------------------
| Proceeds from issue of share | | | 2993 | 11676 | 16476 |
| capital | | | | | |
--------------------------------------------------------------------------------
| Transaction expenses of share | | | -144 | -296 | -1022 |
| issues | | | | | |
--------------------------------------------------------------------------------
| Proceeds from long-term | | | 0 | 0 | 1225 |
| borrowings, equity | | | | | |
--------------------------------------------------------------------------------
| Proceeds from long-term borrowings, | | 608 | 0 | 1725 |
| liabilities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from | | | | 3457 | 11380 | 18404 |
| financing, net | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in cash | | | | | -1261 | 4720 | 1205 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash in the beginning of the | | | 2542 | 1337 | 1337 |
| period | | | | | |
--------------------------------------------------------------------------------
| Cash at the end of the | | | | 1281 | 6057 | 2542 |
| period | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| GROUP STATEMENT OF CHANGES IN SHAREHOLDERS' | | | |
| EQUITY | | | |
--------------------------------------------------------------------------------
| | | | | | Share | Inv. | | |
| | | | | | | distri | | |
| | | | | | | b. | | |
--------------------------------------------------------------------------------
| | | | Share | Share | premiu | equity | Accrue | |
| | | | | | m | | d | |
--------------------------------------------------------------------------------
| | | | capita | issue | accoun | accoun | result | Total |
| | | | l | | t | t | | |
--------------------------------------------------------------------------------
| | | | (1000e | (1000e | (1000e | (1000e | (1000e | (1000e |
| | | | ur) | ur) | ur) | ur) | ur) | ur) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity | 1313 | 0 | 1211 | 0 | -4855 | -2331 |
| 31.12.2005 | | | | | | |
--------------------------------------------------------------------------------
| Share issue, cash | | 556 | 0 | 11120 | 0 | 0 | 11676 |
--------------------------------------------------------------------------------
| Share issue, offset | | | | | | |
| with capital, | | | | | | |
--------------------------------------------------------------------------------
| loans and trade | 227 | 0 | 4407 | 0 | 0 | 4634 |
| receivables | | | | | | |
--------------------------------------------------------------------------------
| Conversion of | | | | | | |
| convertible bonds | | | | | | |
--------------------------------------------------------------------------------
| into shares | | 110 | 0 | 425 | 0 | 0 | 535 |
--------------------------------------------------------------------------------
| Share issue | | 0 | 0 | -1227 | 0 | 0 | -1227 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Booked equity from | | | | | | |
| stock options | | | | | | |
--------------------------------------------------------------------------------
| to key personnel and | 0 | 0 | 0 | 0 | 115 | 115 |
| partners | | | | | | |
--------------------------------------------------------------------------------
| Result of the | | 0 | 0 | 0 | 0 | -2183 | -2183 |
| period | | | | | | | |
--------------------------------------------------------------------------------
| Shareholders' equity | 2206 | 0 | 15936 | 0 | -6923 | 11219 |
| 30.06.2006 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity | 2634 | 400 | 15936 | 4866 | -13415 | 10421 |
| 31.12.2006 | | | | | | |
--------------------------------------------------------------------------------
| Share issue, cash | | 189 | -400 | 0 | 3153 | 0 | 2942 |
--------------------------------------------------------------------------------
| Share issue, dept | | 1134 | | | | 1134 |
| set-off | | | | | | |
--------------------------------------------------------------------------------
| Share issue, share | 11 | | -11 | | | 0 |
| premium acc. | | | | | | |
--------------------------------------------------------------------------------
| Share exchange, | 210 | 90 | | 3900 | | 4200 |
| GeoSolutions | | | | | | |
--------------------------------------------------------------------------------
| Conversion of | | | | | | 0 |
| convertible | | | | | | |
--------------------------------------------------------------------------------
| bonds into shares | | 259 | 0 | 0 | 1778 | 0 | 2037 |
--------------------------------------------------------------------------------
| Booked expense of | 0 | 0 | 0 | -770 | 0 | -770 |
| share issues | | | | | | |
--------------------------------------------------------------------------------
| Stock options to key | | | | | | |
| personnel | | | | | | |
--------------------------------------------------------------------------------
| and partners | | 0 | 0 | 0 | 0 | 706 | 706 |
--------------------------------------------------------------------------------
| Result of the | | 0 | 0 | 0 | 0 | -9991 | -9991 |
| period | | | | | | | |
--------------------------------------------------------------------------------
| Shareholders' equity | 3303 | 1224 | 15925 | 12927 | -22700 | 10679 |
| 30.06.2007 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| KEY FIGURES | | | REPORTING | | | |
| | | | PERIOD | | | |
--------------------------------------------------------------------------------
| | | | | 2Q/200 | 1-2Q/2 | 2Q/200 | 1-2Q/2 | 2006 |
| | | | | 7 | 007 | 6 | 006 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales, 1000 | | | 1140 | 2373 | 2136 | 3260 | 6959 |
| EUR | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating result, 1000 | | -5694 | -9817 | -919 | -2126 | -11543 |
| EUR | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Result before taxes, | | -5718 | -10118 | -910 | -2183 | -11560 |
| 1000 EUR | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross investments, | | 6215 | 6266 | 1945 | 2816 | 4393 |
| 1000 EUR | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average personnel | | | 84 | 84 | 82 | 79 | 82 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, | | -0,02 | -0,04 | -0,01 | -0,01 | -0,05 |
| EUR | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity per share, | | | 0,03 | 0,03 | 0,04 | 0,04 | 0,04 |
| EUR | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Weighted average number of | | | | | |
| shares | | | | | |
--------------------------------------------------------------------------------
| in period 1000 pcs | | | 303072 | 284939 | 198723 | 198867 | 213490 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Number of shares | | | | | | | |
--------------------------------------------------------------------------------
| at the end of the | | 330299 | 330299 | 220576 | 220576 | 263416 |
| period, 1000 pcs | | | | | | |
--------------------------------------------------------------------------------
1. BASIC INFORMATION ABOUT THE COMPANY
Benefon Oyj ("Group") is a provider of navigation devices intended for personal
and professional use, and that of services enabling navigation, tracking and
locating by means of personal mobile devices.
The Group sells products in 30 countries.
The parent company of the Group is Benefon Oyj. Its registered domicile is Salo,
Finland, with street address Meriniitynkatu 11, 24100 Salo, Finland, and mail
address PO.Box 84, FIN-24101 Salo, Finland.
Copy of the Group financial statements FY2006 is available at the internet
address www.benefon.com or at the company head office at address Meriniitynkatu
11, FIN-24100 Salo, Finland.
2. ACCOUNTING PRINCIPLES FOR THE FINANCIAL STATEMENTS
Foundation:
The group interim report has been prepared in accordance with the International
Financial Reporting Standards ("IFRS"), and it has been prepared according to
the accounting standard IAS 34.
Interim reports. An interim report shall be read together with the financial
statements for year 2006.
Principles of preparation:
The utilised principles of preparation are identical with those utilised by the
Group in financial statements for FY 2006.
IASB has published new standards and interpretations and changes in existing
standards, application of which is mandatory on 1.1.2007, and which the group
has not adopted earlier voluntarily. The group has adopted the following
standards (and their amendments) and interpretations from 1.1.2007 onwards:
IAS 1, Presentation of financial statements, amendments in sections 124A-C.
IFRS 7, Financing instruments: Notes.
IFRS 8, Business segments. The Company provides an assessment about segment
reporting in context of the business acquisition.
IFRIC 11, Group and Treasury Share transactions.
IFRIC 12, Service Concession Arrangements. Its new interpretation is not
applicable to Group´s industry.
New standards, interpretations or amendments have not had significance or
essential effect to information in the interim report.
3. SEGMENT INFORMATION
The primary reported segments of the group comprise business segments. Number of
distinct segments at the moment is one: mobile telematics equipment. Its share
of net sales, result and assets was almost 100% in the reporting period and in
the prior period.
It is likely that around the acquired GeoSolutions and the established
China-unit will be formed reported segments. Net assets of GeoSolutions are
about 5 Meur but the company is still in early stage of products and services
commercialisation and its effect in the net sales of year 2007 is estimated to
be small.
4. ACQUISITIONS
Benefon Oyj has on 2.5.2007 acquired the entire share stock of the Dutch firm
GeoSolutions BV. The acquisition was realised as a share exchange in which the
Company issued 21,000,000 new shares and, upon the terms of the share exchange
agreement having been met, will issue 9,000,000 more new investment series
shares of the Company. In the interim report, it has been assumed that also the
latter part will be realised.
--------------------------------------------------------------------------------
| | | | | | | 1000 | | |
| | | | | | | EUR | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Acquisition cost to | | | | | | |
| Benefon: | | | | | | |
--------------------------------------------------------------------------------
| Share issued as | | | | 4200 | | |
| payment | | | | | | |
--------------------------------------------------------------------------------
| Transaction | | | | | 486 | | |
| costs | | | | | | | |
--------------------------------------------------------------------------------
| Total | | | | | | 4686 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets and liabilities at fair value | | | | |
| accorrding to IFRS: | | | | |
--------------------------------------------------------------------------------
| IPR | | | | | | 6000 | | |
--------------------------------------------------------------------------------
| Goodw | | | | | | 216 | | |
| ill | | | | | | | | |
--------------------------------------------------------------------------------
| Deferred tax | | | | | -1530 | | |
| liability | | | | | | | |
--------------------------------------------------------------------------------
| Acquired net assets at | | | | 4686 | | |
| fair value | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net assedts of the acquired company at | | | | |
| fair value: | | | | |
--------------------------------------------------------------------------------
| IPR | | | | | | 6000 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 5 SHAREHOLDERS'S | | | | | | |
| EQUITY | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | Share | Inv. | |
| | | | | | | | distri | |
| | | | | | | | b. | |
--------------------------------------------------------------------------------
| | | | | Number | Share | premiu | equity | |
| | | | | of | | m | | |
--------------------------------------------------------------------------------
| | | | | shares | capita | accoun | accoun | Total |
| | | | | | l | t | t | |
--------------------------------------------------------------------------------
| | | | | (1000) | (1000e | (1000e | (1000e | (1000e |
| | | | | | ur) | ur) | ur) | ur) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 31.12.2006 | | | 263416 | 2634 | 15936 | 4867 | 23437 |
--------------------------------------------------------------------------------
| Share issue | | | 1667 | 16 | | 334 | 350 |
| 1.2.2007 | | | | | | | |
--------------------------------------------------------------------------------
| Share conversion of CBL2007A | 556 | 6 | | 44 | 50 |
| 22.3.2007 | | | | | |
--------------------------------------------------------------------------------
| Share issue | | | 4703 | 47 | | 940 | 987 |
| 22.3.2007 | | | | | | | |
--------------------------------------------------------------------------------
| Share conversion of CBL2007B | 21071 | 211 | | 1604 | 1815 |
| 22.3.2007 | | | | | |
--------------------------------------------------------------------------------
| Share issue | | | 2045 | 21 | | 409 | 430 |
| 10.4.2007 | | | | | | | |
--------------------------------------------------------------------------------
| Share Exchange 25.5.2007, | 21000 | 210 | | 3900 | 4110 |
| GeoSolutions | | | | | |
--------------------------------------------------------------------------------
| Share issue | | | 2400 | 24 | | 336 | 360 |
| 28.5.2007 | | | | | | | |
--------------------------------------------------------------------------------
| Share capital increase | | 1111 | 11 | -11 | | 0 |
| 28.5.2007 | | | | | | |
--------------------------------------------------------------------------------
| Share conversion CBL2007D | 2630 | 26 | | 105 | 131 |
| 28.5.2007 | | | | | |
--------------------------------------------------------------------------------
| Share conversion CBL2007E | 1600 | 16 | | 24 | 40 |
| 13.6.2007 | | | | | |
--------------------------------------------------------------------------------
| Share issue | | | 8100 | 81 | | 1134 | 1215 |
| 13.6.2007 | | | | | | | |
--------------------------------------------------------------------------------
| Costs of share issues | | | | | -770 | -770 |
| 30.06.2007 | | | | | | |
--------------------------------------------------------------------------------
| | | | | 330299 | 3303 | 15925 | 12927 | 32155 |
--------------------------------------------------------------------------------
Maximum number of shares in the Company, as stipulated in the articles of
association, is 1000 million. The share carries no nominal value but the book
parity value at the moment is 0.01 euros per share. Maximum share capital is 50
million euros. All outstanding shares are fully paid.
6. OPTION RIGHTS
In the reporting period, 9,778,500 new option rights according to IFRS 2 have
been issued to key personnel of GeoSolutions and 1,500,000 option rights to
other key persons of Benefon. Share subscription price with these options is
0.14 euros.
Option expense booked in the period according to IFRS 2. Received service is
compensated as options. In cost booking the counter item is shareholders´
equity.
--------------------------------------------------------------------------------
| 1000 | | | | | | 1-2Q/2 | 1-2Q/2 | 2006 |
| EUR | | | | | | 007 | 006 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Options issued in 2005 | | | | 56 | 114 | 58 |
--------------------------------------------------------------------------------
| Options issued in 2006 | | | | 82 | 0 | 2942 |
--------------------------------------------------------------------------------
| Options issued in 2007 | | | | 568 | 0 | 0 |
--------------------------------------------------------------------------------
| Total | | | | | | 706 | 114 | 3000 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 7. DEBTS WITH NOMINAL INTEREST | | | | | |
--------------------------------------------------------------------------------
| | | | | Nomina | | | | |
| | | | | l | | | | |
--------------------------------------------------------------------------------
| 1000 | | | | loan value | 2Q/200 | 2Q/200 | 2006 |
| EUR | | | | | 7 | 6 | |
--------------------------------------------------------------------------------
| | | | | 2Q/200 | | | | |
| | | | | 7 | | | | |
--------------------------------------------------------------------------------
| Non-current | | | | | | | |
| loans: | | | | | | | |
--------------------------------------------------------------------------------
| CBL 2004A | | | 955 | | 920 | 954 | 898 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current | | | | | | | |
| loans: | | | | | | | |
--------------------------------------------------------------------------------
| CBL 2007C | | | 302 | | 302 | 0 | 0 |
--------------------------------------------------------------------------------
| CBL 2007F | | | 135 | | 135 | 0 | 0 |
--------------------------------------------------------------------------------
| | | | | | | 437 | 0 | 0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 8. DEBTS WITH NO NOMINAL | | | | | |
| INTERESTS | | | | | |
--------------------------------------------------------------------------------
| | | | | Nomina | | | | |
| | | | | l | | | | |
--------------------------------------------------------------------------------
| 1000 | | | | loan | | 2Q/200 | 2Q/200 | 2006 |
| EUR | | | | value | | 7 | 6 | |
--------------------------------------------------------------------------------
| | | | | 2Q/200 | | | | |
| | | | | 7 | | | | |
--------------------------------------------------------------------------------
| Non-current | | | | | | | |
| loans: | | | | | | | |
--------------------------------------------------------------------------------
| Interest-free loan 1450 teur, | 1450 | | 0 | 0 | 703 |
| year 2006 | | | | | |
--------------------------------------------------------------------------------
| Interest-free loan 1500 teur, | 1500 | | 0 | 0 | 718 |
| year 2006 | | | | | |
--------------------------------------------------------------------------------
| Total | | | | | | 0 | 0 | 1421 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest-free loans, year 2006, with nominal value of 1450 | | |
| teur and 1500 teur. | | |
--------------------------------------------------------------------------------
| In March 2007, these loans were converted into convertible | | |
| loan 2007B. | | |
--------------------------------------------------------------------------------
| Convertible loan 2007B was converted into shares | | | |
| in April 2007. | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 9. COLLATERAL COMMITMENTS AND CONTINGENCIES | REPORTING | |
| | PERIOD | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1000 | | | | | | 2Q/200 | 2Q/200 | 2006 |
| EUR | | | | | | 7 | 6 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Contingent liabilities | | | | | | |
| relating | | | | | | |
--------------------------------------------------------------------------------
| to chattel | | | | | 1711 | 1667 | 1689 |
| mortgage | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Collateral for own | | | | | | |
| liabilities: | | | | | | |
--------------------------------------------------------------------------------
| Chattel mortgage as collateral for | | 12068 | 12068 | 12068 |
| contingent liabilities | | | | |
--------------------------------------------------------------------------------
| Pledgeg non-current financial | | | 42 | 41 | 41 |
| assets | | | | | |
--------------------------------------------------------------------------------
| Pledgeg current | | | | 373 | 358 | 373 |
| financial assets | | | | | | |
--------------------------------------------------------------------------------
10. RELATED PARTY TRANSACTIONS
Inner circle transactions have been presented in the financial statements for
year 2006. No essential changes have taken place in the reporting period.
Interest free loans with a nominal capital of 2950 teuros, raised from Luben
Limited in year 2006, were converted in March 2007 into convertible loan 2007B,
which was converted into shares in April 2007.
11. EVENTS AFTER THE END OF THE PERIOD
Market bulletins on 24.7.2007
Benefon Oyj published the listing prospectus for new shares issued in share. On
the same day, the Company issued a separate bulletin with prior un-published
information included in the listing prospectus.