Preliminary Results

Thursday 1 September 2011

MONITISE plc

Preliminary Results for the year ended 30 June 2011

BREAKTHROUGH YEAR FOR MONITISE

 PROFITS ACCELERATE IN LIVE OPERATIONS (1)

REVENUES DOUBLED AND ON TRACK TO DOUBLE AGAIN IN 2012

GROWING ORDER BOOK WITH £78M ($128M) SECURED

GLOBAL ALLIANCES STRENGTHENED WITH WORLD LEADING STRATEGIC PARTNERS

Monitise plc (LSE: MONI), the technology company delivering mobile banking, payments and commerce networks worldwide, announces its audited preliminary results for the year ended 30 June 2011.

Financial Highlights

·; Revenues of £14.0m ($23.0m) (2010: £6.0m ($9.9m)) (2)

o 133% year-on-year growth. Half-on-half revenues more than doubled from £4.3m in H2 2010 to £8.7m in H2 2011

o Platform development and integration revenues of £6.0m (2010: £1.4m), up fourfold on prior year, driving future user generated income streams

o User generated revenues of £6.3m (2010: £2.9m), more than doubled on prior year

·; Gross margin consistently strong and in excess of 60% target

·; Growing order book, including the recent five-year strategic contracts with Visa Inc. and RBS, hit £78m ($128m) as at 1 September 2011, six times the £13m order book at end-June 2010

·; Revenue growth in live operations (1) drove profitability, from an operating loss (3) of £2.5m in 2010 to an operating profit of £3.2m

·; Continued investment in line with strategy

·; Loss for the year of £14.5m (2010: £16.8m)

·; Loss per share 2.1p (2010: 3.7p)

·; Robust financial position. Debt free with 30 June 2011 cash balance, including short-term deposits, of £23.6m

·; Strong growth trajectory, with Group on track to double revenues again in 2012 and reach break-even in calendar 2013

Operational Highlights

The global opportunity for Monitise is far greater than even a year ago. We have achieved a step-change increase in our order book and this is creating substantial momentum for the business. Our live operations are profitable and growing, while we also continue to invest in the business opportunity globally.

·; Strong growth in live operations:

o Substantial increase in live transactions, with more than 10 million mobile banking transactions now processed per month. Value of mobile transfers and payments exceeding £160m per month (2010: £0.6m)

o Product set significantly expanded across international markets and functionality enhanced for core UK services through deepened integration with RBS Group

o In excess of 4.5m registered customers, more than double the level a year ago

o Monitise Americas has completed a very successful national roll-out for leading US tax service provider, H&R Block, which was a key contributor to significant growth in Monitise Americas' transaction volumes

·; World leading strategic partnerships substantially strengthened, including:

o New five-year agreement, announced June 2011, with Visa Inc., the world's leading payments technology company, to acceleratethe development of Visa Inc.'s mobile services globally

o Strategic agreement, announced February 2011, with Visa Europe, Europe's leading payment business, to develop and supply mobile payments services for Visa Europe's 4,600 member banks and financial institutions across 36 countries

o Five-year strategic agreement with RBS Group, announced August 2011, to broaden mobile banking and payments services across all banking divisions

·; Broadening of new investments and agreements worldwide in second-half as global demand for mobile banking, payments and commerce takes off:

o The Mobile Money Network, a mobile shopping joint venture formed between Monitise, Best Buy Europe and Carphone Warehouse founder Charles Dunstone with Sir Stuart Rose appointed MMN Non-Executive Chairman

o JETCO and PCCW partnerships established to facilitate launch in Hong Kong

o Full licence secured from Central Bank of Nigeria to provide Mobile money services in the country following successful mobile banking and payments pilot

o Joint venture formed in Indonesia with subsidiary of Astra, the country's largest conglomerate, with Permata already lined up as launch bank

Strengthening of Board and management team

·; New Non-Executive Director appointments:

o Elizabeth Buse, Group President, AP and CEMEA, for Visa Inc., appointed July 2010

o Tim Wade, independent non-executive director of Resolution Limited and Macquarie Bank International Limited, appointed January 2011

o Sushovan Hussain, Chief Financial Officer of Autonomy Corporation plc, appointed January 2011

Announced today:

o Brian McBride, former Managing Director of Amazon.com in the UK and former Managing Director T-Mobile (UK), joins the Board as a Non-Executive Director, effective from 1 September 2011

o Jan Verplancke leaves the Board after three years service

·; Executive Management Team

o Additional key hires have been made across the business in a number of areas to manage rapid growth

(1) Live operations segment comprises Monitise UK, Monitise Americas and Global Accounts (incl Visa Inc., Visa Europe, and Travelex)

(2) Foreign exchange rate for Sterling/US Dollar used in the preliminary results is $1.64

(3) Operating profit/loss adjusted to exclude share-based payments and prior year exceptional gain

Alastair Lukies, Group CEO, Monitise plc, said:

"This has been a breakthrough year for Monitise. We are a high growth company and a market leader in the mobile money space just as it hits its own tipping point. We have built a robust, secure, interoperable bank-grade technology platform that, combined with our world-leading product roadmap, is relevant in all parts of the globe.

"The breadth and strength of our global strategic alliances validate that our strategy is working worldwide across mobile banking, payments and commerce. Revenues are more than double those of the previous year and we are seeing accelerating profit growth across our live operations. We will continue to invest in the business, the Group is debt free and we are excited about the opportunities ahead."

Duncan McIntyre, Chairman, Monitise plc, added:

"The Board is delighted with these results and the performance of the team. It has been a year of growth across the business and across the globe.

"The Group is hitting key targets as our live operations now deliver profit, we deepen our partnerships with Visa Inc. and RBS Group, and form new partnerships with Visa Europe and Astra, among others.

"During the year our Board has been strengthened and, as well as welcoming our new Non-Executive Directors, I would like to thank Jan Verplancke for his contribution over the last three years.

"The business is increasingly well positioned to deliver ongoing value for our shareholders. Monitise is on track to breakeven in 2013 and we look to the future with confidence as our momentum continues."

Contacts:

Monitise plc

Alastair Lukies, CEO Tel: +44 (0) 20 7947 4300

John Brougham, CFO

Tom Spurgeon, Finance Director and Company Secretary

Gavin Haycock, Communications Director

[email protected]

Evolution Securities Limited

(NOMAD and Joint Broker) Tel: +44 (0) 20 7071 4300

Stuart Andrews

Tim Redfern

Canaccord Genuity Limited Tel: +44 (0) 20 7050 6500

(Joint Broker)

Simon Bridges

Financial Dynamics Tel: +44 (0) 20 7831 3113

Charles Palmer

Jon Snowball

About Monitise

Monitise plc (LSE: MONI.L) is a technology company delivering mobile banking, payments and commerce networks worldwide with the proven technology and expertise to enable financial institutions and other service providers to offer a wide range of services to their customers in developed and emerging markets.

With live services in the UK, the US, India and Africa, the company is working with international partners to extend trusted and secure mobile banking, payment and commerce services in territories worldwide, including Europe, Asia Pacific and Latin America. Monitise has a global alliance agreement with Visa Inc. and a strategic partnership with Visa Europe. Other leading partners and clients include FIS, RBS, NatWest, HSBC, Lloyds Banking Group, First Direct, U.S. Bank, Ulster Bank, Standard Chartered Bank, Travelex, Vocalink, Vodafone, Orange, O2, T-Mobile, 3 UK, Research In Motion, Best Buy Europe, The Carphone Warehouse, First Eastern, Astra, JETCO and PCCW mobile.

More information is available at www.monitisegroup.com

Chief Executive's Business Review

Overview

This has been a breakthrough year for Monitise as we achieved profitability in our live operations and deepened, broadened and entered new partnerships and agreements worldwide.

The order book has now hit £78m, more than six times the £13m booked at June 2010. Full year revenues were £14.0m ($23.0m), an increase of 133% from £6.0m ($9.9m) in 2010.

Monitise continues to perform well, with significant growth in development and integration revenue providing a broadening foundation for future growth in user generated revenues. Our continued investment to maximise opportunities from the growing global mobile money market is reflected in the loss for the full year of £14.5m (2010: £16.8m).

Some 500m mobile banking users are predicted globally by 2015 (Yankee Group, June 2011) while Juniper Research (July 2011) forecasts that the total value of mobile payments for digital and physical goods, money transfers and NFC transactions will reach $670bn by 2015.

In this transformational year, our strategic partnership with Visa Inc. was strengthened by a new five-year Global Alliance Agreement; we entered a new strategic agreement with Visa Europe; deepened our existing strategic relationship with RBS; created a joint venture for mobile shopping with Best Buy Europe and Charles Dunstone; and entered a joint venture with Indonesia's Astra.

Monitise now has more than 4.5m registered customers, more than double the number of registered customers from a year ago.

The strength of our growing partnerships is a validation that our strategy is working worldwide, as we focus on working closely with banking and payments infrastructures to help them defend and extend their position at the heart of convergent commerce.

Live Operations

We continue to build a positive trajectory of growth across live operations.

Monitise UK

Monitise UK reached month-on-month cash break-even at the close of H1, in line with our published milestones.

Monitise UK provides services to banks covering more than 55% of the UK retail banking population and works to assist UK banks and financial institutions to defend and extend their role at the centre of the mobile payments infrastructure. We continue to pursue and deepen existing relationships with banks and target new opportunities across the UK.

Post year-end, Monitise strengthened its existing strategic relationship with RBS Group by entering a new five-year global strategic partnership. The new contract covers all RBS Group divisions, including RBS and NatWest UK Retail, Citizens Bank US, Ulster Bank and RBS Global Corporate and Business.

RBS and NatWest launched a new range of smartphone apps, developed by Monitise, in late May 2011. These included a new app built specifically for the iPad, the first banking app for an iPad from a high-street UK bank

Global Accounts

Global accounts represent the Group's products and services to Monitise's global cross-territory customers, including Visa Inc. and Visa Europe.

·; Visa Inc.

The long-term relationship we have with Visa Inc. as their strategic mobile partner, was further strengthened in June 2011 by a new five-year agreement worth a minimum of $50m. The agreement represented an important milestone in Monitise's evolution and marked a pivotal moment for the mobile money market globally, validating our strategy of becoming a leading and trusted enabler in the mobile money space.

The agreement is intended to enable Visa Inc., with 1.9 billion account holders worldwide, to mobilise existing Visa account holders in the US and in other key geographies, creating new mobile solutions that replicate the ease, reliability, and security of traditional Visa payments, via customised applications and through mobile web.

Visa recently announced one of their first major deployments as a result of our partnership, an end-to-end mobile solution for their debit and prepaid processing clients, which goes live this autumn.

·; Visa Europe

In February 2011, we took a significant step forward in our relationship with the Visa 'family' by entering a multi-year European Alliance Agreement with Visa Europe.

The partnership gives Visa Europe a licence to Monitise's world-leading mobile technology and access to Monitise's mobile development expertise as the chosen development engine for Visa Europe and their 4,600 member banks. Initially, this will include the development of Visa Europe's mobile platform for mobile alerts, account management and loyalty applications, together with mobile contactless payments, mobile e-commerce and person to person payments.

Our scale and investment in technology means we can now support banks in every market where Visa operates around the world.

Monitise Americas

In the US, we have a 49% equity stake in a joint venture, Monitise Americas, with our partner FIS, one of the world's top-ranked technology providers to the banking industry. FIS provides wide coverage of financial institutions throughout the US. Monitise Americas has agreements in place with more than 250 financial institutions, offering a wide range of services.

Monitise Americas enjoyed strong growth in consumer demand during the year, processing more than 25 million mobile transactions year-to-date in 2011, from five million transactions in 2010 and 142,000 in 2009.

Following two years of regional roll-out, H&R Block offered mobile SMS services to all their Emerald Prepaid Mastercard consumers for the 2010/11 tax season. The programme was highly successful, saw record consumer adoptions, and was a strong contributor to Monitise Americas' five-fold increase in transactional activity.

Monitise Americas cemented its partnership with US Bank, delivering mobile application support for the AccelaPay prepaid card programme, which received Paybefore's 'Best In Category' award in the 'Best Virtual or Mobile Prepaid Application' category at the 2011 Paybefore Awards.  Monitise Americas also received a 2010 Red Herring 100 Global Award, in recognition of commitment to the advancement of mobile finance and technology.

Investment in future operations

Monitise Asia Pacific

Our 50/50 joint venture with First Eastern Mobile Investments Limited (part of First Eastern Investment Group) is building momentum as it broadens our business in this fast-growing and dynamic region.

Following our year end, Monitise Asia Pacific entered a joint venture with a subsidiary of Astra, the largest conglomerate in Indonesia, that will see it develop cutting-edge new mobile services for Indonesia's huge population, both banked and unbanked. Permata, one of Indonesia's top-10 banks, has entered into a memorandum of understanding to be the launch bank for the new joint venture.

In Hong Kong, we have partnered with JETCO (Joint Electronic Teller Service Limited), to provide access to 32 banks in Hong Kong and Macau. PCCW mobile will be the launch mobile operator for mobile phone top-up services. PCCW mobile is the mobile communications services business of PCCW Limited, Hong Kong's premier telecommunications provider and a world-class player in Information and Communications Technologies. Our mobile payments service will be extended to other MNOs and service providers.

In China, Monitise Asia Pacific has signed MoUs with Handpay and China Rewards. We have made solid progress on these new partnerships and continue to work through necessary regulatory clearances as we look to move into the world's largest market.

Monitise India

Work is progressing on our launch into the India market of a new mobile payments platform via our 50/50 joint venture with Visa Inc. announced in June 2010. Transaction revenues are expected to commence later this year and further announcements are expected over coming months.

During the second half of the year, Monitise separately launched its first mobile money services in India with a range of smartphone and Java apps developed for Standard Chartered Bank, powered by our mobile banking technology platform.

Monitise Africa

Monitise was granted a provisional licence by the Central Bank of Nigeria in December 2010 and successfully launched a mobile payments pilot in four cities and 11 rural locations earlier this year.

In August 2011, the central bank granted Monitise a full Mobile Payments System Provider licence to operate mobile money services in the country. The platform can easily be configured to offer savings, pensions, loan repayments and insurance products by financial institutions.

We will continue to work closely with the Central Bank of Nigeria and our local partners to extend the services we offer and to enable anyone in Nigeria with a mobile handset to access a broad range of mobile financial services.

Mobile Money Network

In the UK, together with Best Buy Europe and with the personal backing of The Carphone Warehouse founder, Charles Dunstone, Monitise has created a new joint venture to form the 'Mobile Money Network' (MMN). Monitise holds 40% in the venture and is developing the technology platform. MMN has been set up as a new business developing mobile services that bring together a network of retailers, banks and advertisers in a simple, unified and innovative way to discover and buy goods and services using their mobile phone.

During the second half of the year, MMN announced that Sir Stuart Rose has been appointed Non-Executive Chairman with Lord Davies of Abersoch appointed as a Non-Executive Director. Lord Davies is former Minister of State for Trade Promotion and Investment and former Chairman of Standard Chartered plc.

The forthcoming rollout of MMN's first service, 'Simply Tap', is due in the autumn with pilot rollouts anticipated before then.

Investment in Technology Platform

Monitise continues to invest in line with our Group strategy, to drive growth and value. This investment spans future operations and business development including the Mobile Money Network, India and our Asia Pacific joint ventures. It also includes our ongoing investment in the development, maintenance and enhancement of our technology platform in order to maintain and extend our market leadership via flexible connectivity between the infrastructures of leading financial institutions and payment systems.

Board Appointments

Elizabeth Buse joined the Board in July 2010. She is a member of the Executive Team and the Group President, AP and CEMEA, for Visa Inc., overseeing Visa's global sales and client service functions across Asia-Pacific, Central Europe, the Middle East and Africa.

Tim Wade was appointed to the Board as a Non-Executive Director and Chairman of the Audit Committee in January 2011. Tim is an independent non-executive director of investment firm Resolution Limited and non-executive director of Macquarie Bank International Limited.

Sushovan Hussain, Chief Financial Officer of Autonomy Corporation plc, was appointed to the Board as a Non-Executive Director in January 2011, bringing with him a wealth of listed company experience as well as a strong track record in growing a technology business.

Brian McBride appointed to the Board as a Non-Executive Director on 1 September, 2011. Brian was previously Managing Director of Amazon.com in the UK and Managing Director of T-Mobile (UK).

Jan Verplancke left the Board on 31 August, 2011, after three years service.

Executive management team appointments

Senior hires have been made across the Group in all key areas and internationally to manage the rapid growth of Monitise.

·; Ian Tandy, former Managing Director, Cahoot (Santander Bank) joined Monitise as Group Commercial Director in March 2011

·; Paul McCarthy, former Managing Director at Morse plc, joined Monitise as Global Sales Director in September 2010

·; Ed Addario, former CTO of COA Solutions and R&D Director at Alphameric, joined Monitise in February 2011 as Managing Director, Group Technology Services

·; John Echavarria, former Director of IT at Kaupthing Singer & Friedlander, joined Monitise in June 2011 as Managing Director, Service Delivery

·; Lam Wai Yee, the former COO of Asia Online and CEO of Infocom in the Philippines, joined Monitise in August 2010 as Managing Director of Monitise Hong Kong

·; Will Jones, former Head of Retail Transformation Implementation at RBS, appointed as General Manager, RBS, in July 2011 after joining Monitise a year earlier.

Strategy and Outlook

Our strategy is centred on being the mobile money technology platform of choice for banking and other financial institutions worldwide.

Having established our award-winning and proven, bank-grade technology we remain focused on continuing to invest in our business, developing new products for our clients and signing new strategic partnerships and agreements to further extend our global footprint. We remain committed to helping financial institutions defend and extend their position via anytime anywhere, mobile money management, innovative payments services and engaging, intuitive shopping experiences for the consumer on the move, irrespective of what mobile they choose to use.

Monitise continues to work with our partners on exciting new products which we expect to bring to market in the coming months and to make significant progress as we execute our strategy. The global opportunity for Monitise is far greater than even a year ago and this, combined with a step-change increase in our order book, is creating substantial momentum for the business that we will continue to invest in. We have built a well-funded, debt-free business that is making profits across our live operations.

With our growing order book, Monitise is very well placed to achieve our target of doubling revenues again in the current year and moving towards group break-even. With proven investments to date, Monitise continues to deliver value for stakeholders.

Alastair Lukies

Monitise Group Chief Executive Officer

Financial Review

The year to 30 June 2011 was transformational for Monitise:

·; Revenues more than doubled to £14m

·; Revenue growth in Live Operations drove a £5.7m turnaround in profitability, from an operating loss of £2.5m in 2010 into an operating profit of £3.2m

·; Orders received reached record levels, with a current order book as at 1 September 2011 of £78m, six times the level of the previous year end (2010: £13m)

·; Following the £31m (net) fund raising at the start of the year, the year-end cash balance including short-term investments, was a healthy £23.6m, debt free

The momentum has continued into the first two months of the new financial year:

·; We have won a five-year contract with RBS, announced a Joint Venture in Indonesia with Astra, the country`s largest conglomerate, and have been awarded a Mobile Payment System Provider licence to provide services in Nigeria.

·; Our growing order book means that we are very well placed to achieve our target of doubling revenues again in the current year. The order book covers £14m of revenues already contracted for 2012. In addition, subject to contract, we expect to generate £9m of revenues from other existing contractual arrangements, as well as generating further revenue from our new business pipeline.

Financial Performance

Financial Highlights

Revenues in the year grew by 133% from £6.0m to £14.0m. Development and integration services have increased from £1.4m to £6.0m driven by new business which in turn will lead to future growth in user generated revenues.

User generated revenues have increased by 123% from £2.9m to £6.3m year-on-year, and licence fees remained consistent at £1.7m.

Gross margins remained consistently strong and above our 60% target.

The growth in Live Operations continues to accelerate, with revenues more than doubled year-on-year (up 158%) generating increased operating profits each half year over the last two years, and moving from losses into profit:

Live Operations consist of Monitise UK, Monitise Americas and our Global Accounts.

As announced previously, Monitise UK reached month-on-month cash break-even in H1 in line with our published milestones, and is reporting an operating profit of £1.4m for the year. Considerable growth has been recorded within Global Accounts with revenues increasing fourfold, recording an operating profit of £1.7m, and Monitise Americas has made a small operating profit in the year.

In line with our strategy, we are continuing to invest to create value from the burgeoning market opportunities in mobile banking, mobile payments and mobile shopping. We are investing in:

·; Future Operations, which covers our business development activity and includes our Joint Ventures in India and Asia Pacific and our new Joint Venture, Mobile Money Network, set up in the year to address mobile shopping opportunities in the UK. Net operating spend in this area was £6.8m in the year, £4.0m higher than in 2010, reflecting the growing market opportunities.

·; Our technology platform, with £6.8m (2010:£4.9m) spent to maintain and extend our market leading position

·; The strength and depth of our management team and staff to ensure that we continue to win new business and successfully manage exponential growth. Spend in the year on central functions was £5.3m (2010 £4.1m).

The Group has reported an operating loss, excluding share based payments and prior year exceptional gain, of £15.7m (2010: £14.3m) with H1 accounting for £7.9m of this loss (2010 H1: £6.9m) and H2 of £7.8m (2010 H2: £7.4m). A more detailed financial breakdown of the operating segments in Monitise is shown in note 2.

In line with the requirements of IFRS 2, we have recognised a non-cash charge of £1.7m for share-based payments (2010: £3.8m).

Statutory operating loss for the Group was £17.5m (2010: £17.1m), and loss for the year was £14.5m (2010: £16.8m).

Tax

As a result of the move to profitability in our UK Live Operation, we have recognised a deferred tax asset for historic losses to be utilised, resulting in a tax credit of £1.9m. Details can be found in note 6.

Loss Per Share

The basic and diluted loss per share was 2.1p (2010: loss 3.7p). Details can be found in note 4.

Cash Flow and Funds

£31.0m (net) was raised in July 2010 through a subscription and placing agreement for new shares.

The cash outflow from operating activities, including the Group's share of joint venture activities, was £13.3m (2010: £13.9m), with a reducing trend in H2 at £5.7m against £7.6m in H1.

The cash outflow from capital expenditure was £7.0m (2010: £1.1m) with the increase in spend primarily driven by capitalised development costs critical in securing long-term revenues from our newly signed strategic contracts.

The Group remains debt free.

Treasury Activities and Policies

The Board formulates the Group's treasury policy objectives and policies which are designed to manage the Group's financial risk and secure cost-effective funding for the Group's operations.

These objectives include the requirement to minimise risk on investment funds but maintain flexibility. The majority of funds are currently held in a mix of term deposits. Other financial instruments are comprised principally of trade receivables and payables arising from the Group's operating activities.

Hedging of known future foreign cash investments or income flows will be undertaken, as deemed appropriate, to mitigate the Group's exposure to foreign exchange risk going forward. It is and will continue to be the Group's policy that no speculative trading in derivatives shall be undertaken.

John Brougham, Chief Financial Officer

Consolidated Statement of Comprehensive Incomefor the year ended 30 June 2011

* Total administrative expenses after share based payments for the year ended 30 June 2011 is £22,480,000 (2010: £19,368,000)

Consolidated Statement of Financial Positionas at 30 June 2011

Consolidated Statement of Changes in Equity

Consolidated Cash Flow Statementfor the year ended 30 June 2011

1. Basis of Preparation

The financial information presented in this Preliminary Announcement is extracted from, and is consistent with, the Group's audited financial statements for the year ended 30 June 2011.

The preliminary announcement for the year ended 30 June 2011 was approved by the Board of Directors on 31 August 2011. The financial information set out above does not constitute the Company's statutory accounts for the year ended 30 June 2011 or 2010 but is derived from those accounts. Statutory accounts for 2011 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts; their report was unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

The Group's results have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.

2. Segmental Information

Monitise's operating segments are being reported based on how the Group is structured, and the financial information provided to the Board of Directors. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly share based payment charges, goodwill, certain other intangible assets, cash, corporate expenses and assets, and tax (as described as 'Corporate' below).

Operating segments are as follows:

Live Operations, including both territory deployments and development contracts, consist of:

Monitise UK which provides the group's products and services to the UK.

Monitise Americas which represents Monitise Group's 49% proportion of the trading statement and statement of financial position of the joint venture entity Monitise Americas LLC. This segment also includes Monitise Group's share of the annual licence fee charged to Monitise Americas.

Global accounts which represents the group's products and services to Monitise's global cross-territory customers, including Visa Inc, Travelex and Visa Europe.

Investment in future operations segment represents the group's operations which are not yet live operations covering both pre-sales and start-up period. The segment includes both revenues (e.g. initial licences and development and integration services prior to deployment) and costs. In 2011, the segment includes the joint ventures in the Indian and Asia Pacific regions as well as Mobile Money Network Limited, investment to host new operational platforms, and new business development activity.

Investment in technology platform segment comprises the ongoing development, enhancement and maintenance costs of the core Monitise technology platform. The division is responsible for the continued availability and improvement of the product across all other segments.

3. Reconciliation of Net Loss to Net Cash Utilised by Operating Activities

4. Loss per Share

Basic and Diluted

Basic loss per share is calculated by dividing the loss attributable to owners of the Company by the weighted average number of Ordinary shares in issue during the year. As the Group is loss-making, any share options in issue are considered to be "anti-dilutive". As such, there is no separate calculation for diluted earnings per share.

Reconciliations of the loss and weighted average number of shares used in the calculation are set out below.

5. Intangible Assets

6. Deferred Tax

As at 30 June 2011, the Group has recognised a deferred tax asset in respect to unutilised tax losses for Monitise Europe Limited as follows:

The following are the deferred tax liabilities recognised by the Group, and movements thereon during the current and prior year:

7. Principal Risks and Uncertainties

The Board has identified the principal risks and uncertainties which it believes may have an impact on the Group and its operations.

Principal Risks and Uncertainties

In line with groups of a similar size, the Group is managed by a limited number of key personnel, including Executive Directors and senior management, who have significant experience within the Group and the wider IT or communications sectors and who may be difficult to replace. Executive remuneration plans, incorporating long term incentives, have been implemented to mitigate this risk. There has also been a programme of bringing in new executive talent into the Group in the year to mitigate this risk.

The Group is reliant on a number of key relationships with banking, payment processors and mobile operator partners for provision of the Group's services to the marketplace. A key element of the Group's strategy is to continue to build and maintain strong relationships with all key partners including engagement at senior level. This is facilitated through the engagement of both the Monitise Board and senior external advisors. Account management plans are implemented for all key partners.

The marketplace for the Group's services is characterised by rapid technological changes, frequent introductions of new services and products and evolving industry standards. Monitise will continue to enhance its current products and develop new products in response to changes in technology, industry standards or customer preferences in order to maintain its competitive position.

The delivery of software that is fit-for-purpose and the operation of a managed service that meets all customer requirements is critical for success as the Group continues to mature. The Group is structured and operated in such a way to minimise risks when delivering new software to ensure development is tightly managed. The Group maintains maximum compatibility across regions, ensuring that the Group can leverage services in multiple territories in a cost effective manner.

A key risk remains the ability to operate within projected capital constraints, to forecast effectively and to manage costs within plan in an environment of rapid growth. A number of controls operate to ensure this risk is minimised, including the development and approval of an annual budget based on realistic assumptions. A rolling forecast is also maintained, and progress against budget is monitored regularly together with detailed trend analysis of revenue flows and consumer uptake. Providing early warnings of adverse variances against plan enables decisions to be made on flexing the plan through active management of costs or consideration of other options.

Given the rapid escalation of activity there is a risk that the focus on key deliverables is not maintained and existing resources are not prioritised appropriately. Focus on key deliverables is led from Board level and managed through a clearly defined organisational structure including the Group Executive Board, which has been put in place to ensure clear areas of responsibility and lines of reporting so that the allocation of resources can be agreed as appropriate. New business development opportunities are monitored closely and a focus is placed on succession planning to ensure as much strength in depth to cover all key functional areas as practical, to ensure that no one individual is irreplaceable. The organisational structure is continuously under review.