RTX Annual Report 2011-12

RTX Annual Report 2011/12 1

CONTENTS DEAR SHAREHOLDER SUMMARY FINANCIAL HIGHLIGHTS PRIMARY ACTIVITY DESIGN SERVICES ENTERPRISE & VOIP ACTIVITIES AND FINANCES UNCERTAINTY INTELLECTUAL RESOURCES RESEARCH AND DEVELOPMENT CSR PROSPECTS CORPORATE GOVERNANCE SUPERVISORY BOARD EXECUTIVE BOARD STATEMENTS FINANCIAL STATEMENTS ADDRESSES TECHNICAL TERMS

ANNUAL REPORT 2011/12 Indhold

2 RTX Annual Report 2011/12 RTX Annual Report 2011/12 3 2 RTX Annual Report 2011/12 RTX Annual Report 2011/12 3

CONTENTS DEAR SHAREHOLDER SUMMARY FINANCIAL HIGHLIGHTS PRIMARY ACTIVITY DESIGN SERVICES ENTERPRISE & VOIP CONTENTS DEAR SHAREHOLDER SUMMARY FINANCIAL HIGHLIGHTS PRIMARY ACTIVITY DESIGN SERVICES ENTERPRISE & VOIP ACTIVITIES AND FINANCES UNCERTAINTY INTELLECTUAL RESOURCES RESEARCH AND DEVELOPMENT CSR PROSPECTS ACTIVITIES AND FINANCES UNCERTAINTY INTELLECTUAL RESOURCES RESEARCH AND DEVELOPMENT CSR PROSPECTS CORPORATE GOVERNANCE SUPERVISORY BOARD EXECUTIVE BOARD STATEMENTS FINANCIAL STATEMENTS ADDRESSES TECHNICAL TERMS CORPORATE GOVERNANCE SUPERVISORY BOARD EXECUTIVE BOARD STATEMENTS FINANCIAL STATEMENTS ADDRESSES TECHNICAL TERMS

CONTENTS

NOERRESUNDBY

MANAGEMENT’S REVIEW

4 DEAR SHAREHOLDER

5 SUMMARY FOR THE YEAR

8 FINANCIAL HIGHLIGHTS FOR THE GROUP

9 PRIMARY ACTIVITY SAN JOSÉ 11 DESIGN SERVICES

15 ENTERPRISE & VOIP

20 DEVELOPMENT IN ACTIVITIES AND FINANCES

23 UNCERTAINTY RELATING TO RECOGNITION AND MEASUREMENT HONG KONG 25 INTELLECTUAL CAPITAL RESOURCES

27 RESEARCH AND DEVELOPMENT ACTIVITIES

28 CORPORATE SOCIAL RESPONSIBILITY (CSR)

29 PROSPECTS FOR THE FINANCIAL YEAR 2012/13 RTX DESIGNS AND PRODUCES 30 STATUTORY REPORT ON CORPORATE GOVERNANCE ADVANCED WIRELESS SOLUTIONS 34 SUPERVISORY BOARD 35 EXECUTIVE BOARD FOR GLOBAL CLIENTS ACROSS A 37 STATEMENT BY THE MANAGEMENT ON THE ANNUAL REPORT 38 INDEPENDENT AUDITOR’S REPORT VARIETY OF MARKETS

FINANCIAL STATEMENTS

39 INCOME STATEMENT FOR 2011/2012

40 STATEMENT OF COMPREHENSIVE INCOME 2011/12

41 BALANCE SHEET 30 SEPTEMBER 2012 ASSETS

42 BALANCE SHEET 30 SEPTEMBER 2012 EQUITIES AND LIABILITIES

43 EQUITY STATEMENT FOR THE GROUP

44 EQUITY STATEMENT FOR THE PARENT 45 CASH FLOW STATEMENT 2011/2012 USA Denmark Asia Global 46 NOTES San José Design Services US sales of- Noerresundby RTX is headquartered in Hong Kong The strong Asian base of RTX is represented globally in all major 83 ADDRESSES fice is located in the heart of California’s Noerresundby. R&D, sales, projects and RTX. Approx. 50 employees work with markets via its own sales organization Silicon Valley, one of the country’s administration are situated here. RTX product development, supply chain or distributors. 84 TECHNICAL TERMS AND EXPLANATIONS major innovation centers, in close pro- benefit from Aalborg University’s wire- management and quality assurance ximity to many of RTX’s semiconductor less technology research and the areas of products, outsourcing, partners partners and major customers. cluster of communication and techno- and sub-suppliers. In addition, Hong logy companies. There are approx. 120 Kong houses sales & service support employees in Noerresundby. functions. Kære aktionær Sammenfatning for året

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DEAR SHAREHOLDER, SUMMARY FOR THE YEAR

The total revenue was lower than the changed from RTX Telecom A/S to RTX ced a negative revenue development previous financial year, but RTX gene- A/S. The name change reflects that of 18.9%. The business unit, being an rated positive results on EBIT level for RTX’s wireless technology is applied OEM/ODM supplier, was impacted by the financial year 2011/12. The general in more areas beyond those that are lower demand from their customers, economic climate impacted the growth telephony related, including healthcare, due to the weak economic climate. ”THE PAST YEAR HAS NOT BEEN WITHOUT in RTX, and consequently, in the interim home automation and machine to The gross margin was on par with report for the third quarter of 2011/12, machine automation. At the same time, the previous financial year, but due to CHALLENGES FOR RTX, BUT LOOKING FORWARD RTX had to adjust the Group prospects RTX’s two business units also changed the investments made in new product on revenue and result for the financial name to better reflect the core of their platforms the business unit generated a WE STAND IN FRONT OF HARVESTING ON THE year 2011/12. The gross margin impro- activity. RTX Technology was renamed negative result for the financial year. ved due to changes in the product mix to Design Services, and RTX Products INVESTMENTS THAT WE HAVE MADE OVER THE and the past years’ focus. The capacity was renamed to Enterprise & VoIP. FINANCIAL HIGHLIGHTS: costs were kept on par with 2010/11, • In the financial year 2011/12 RTX LATEST YEARS but depreciation and amortization Design Services, who is an R&D design achieved total revenue of DKK 191.3 increased as a consequence of the full partner of wireless solutions and a million compared to DKK 204.9 mil- Jesper Mailind, President & CEO year impact from amortization of the IP supplier of wireless modules and test lion in the previous financial year. DECT - SME VoIP platform. Given RTX’s systems, grew 17.7% in revenue com- Revenue thus decreased by 6.6%. strong solvency RTX decided to continue pared to the previous financial year. The realized revenue is lower than In the financial year 2011/12 RTX was based on IP telephony in the Enterprise RTX in contact with completely new investments in new technologies and The growth was driven both by existing the revenue prospects stated in the impacted by the general economic field. customer groups for sales of both de- product platforms during the financial and new engineering design customers, financial report 2010/11 which was a development, and the demand for sign projects and standard or customi- year, well aware that these investments and by a substantial growth within the revenue in the range of DKK 205-225 telephony products and accessories did At the beginning of the financial year zed wireless modules. would impact both EBIT and cash flow ODM business. The result for the test million for 2011/12. However, due not live up to our expectations. On the 2012/13 RTX stands with an almost for the year. The ground for future systems was on par with the year be- to lowered forecasts from a number other hand, the sales of wireless design finished complete renewal of the pro- The sales and distribution platform development and growth has thus been fore. The business unit achieved for the of the Group’s customers during the solutions and associated customer duct range both within the Enterprise has been strengthened and enlarged laid by both business units. financial year a result that was better summer 2012, RTX revised in the specific modules and components have telephony field and within solutions globally over the past year in both our than the previous financial year. interim report for the third quarter of developed well with our existing custo- to the SME business. The up-to-date business units, enabling us to better In order to better reflect the breadth of 2011/12 the revenue prospects to be mers, and we developed new customer products give RTX good opportunities to capitalize on the investments made in RTX’s offerings, as expert in designing Enterprise & VoIP, a supplier of ad- around DKK 190 million. relationships. further penetrate the attractive verticals the product portfolio and new techno- and developing wireless communica- vanced IP-telephony solutions for the in these markets, where there are no logies. In addition, we have continued tions solutions, the official name was Enterprise and SME market, experien- Looking forward we are cautiously opti- imminent alternatives. to improve business processes, risk mistic despite the continued uncertainty management and governance in order about the global economic develop- We have broadened our scope within to facilitate the daily operation. ment. The past years’ turnaround in the Wi-Fi area, among others by the REVENUE AND GROSS PROFIT EBIT AND PROFIT CASHFLOW FROM OPERATIONS RTX, combined with investments and cooperation initiated with Qualcomm Consequently, RTX stands in front of the strengthening of the business, Atheros. This cooperation is important executing on these opportunities in the million DKK million DKK million DKK makes RTX well prepared for the future. to RTX, as it gives us access to Wi-Fi coming years to the benefit of share- 225 135 20 50 RTX is positioned to take advantage technology with low power consump holders, stakeholders and employees. 220 130 10 40 of the growing market for wireless tion. In addition, the appointment of 215 125 0 communications, among others within RTX as an official “design partner” for The Supervisory Board proposes that 210 120 -10 30 the rapidly emerging area “The Internet Qualcomm Atheros is a considerable the shareholders at the Annual General 205 115 -20 20 of Things”, where different devices are recognition of our skills within compli- Meeting authorize the Company to ac- 200 110 -30 10 connected via the Internet. This applies cated wireless systems. Our presence quire treasury shares at a total nominal 195 105 -40 to both communications from wireless within the Wi-Fi area and the partners- value of up to 10% of the Company’s 190 100 -50 0 185 95 -60 sensors and communications solutions hip with Qualcomm Atheros will bring share capital. -10 180 90 -70 175 85 -80 -20 2008/09 2009/10 2010/11 2011/12 2008/09 2009/10 2010/11 2011/12 2008/09 2009/10 2010/11 2011/12

Net revenue Gross profit EBIT Profit Cashflow from operations 6 RTX Annual Report 2011/12 RTX Annual Report 2011/12 7 6 RTX Annual Report 2011/12 RTX Annual Report 2011/12 7

• The gross margin improved from and RTX therefore ended with a low • The Group’s equity amounted to DKK • Low power Wi-Fi and DECT ULE 57.9% in the last financial year to inventory in 2010/11. The launch of 156.3 million on 30 September 2012, standard modules were launched. 59.9% in 2011/12. a new Skype phone and the launch which is an increase of DKK 4.4 mil- The modules are IPv6 enabled and of the first handset for Alcatel were lion compared to the financial year offer the opportunity for internet • EBIT amounts to DKK 2.5 million, or in 2011/12 the main drivers behind 2010/11. connection. The modules address the 1.3%, compared to DKK 9.0 million, an increased inventory which also growing sensor market for “Internet or 4.4% for the previous financial increased the working capital. Even • The profit after tax amounted to DKK of Things”. year. The realized EBIT result is lower though RTX received external funding 1.9 million compared to DKK 3.9 mil- than the EBIT prospects stated in the of DKK 5.0 million concerning the lion in the previous financial year. • RTX signed up leading distributors, financial report for 2010/11 which Enterprise platform, the net cash among others Arrow Electronics and was an EBIT result in the range of flow for 2011/12 was impacted by THE KEY BUSINESS HIGHLIGHTS: CODICO, for selling the low power DKK 10-12 million for 2011/12. The the continued investments in own • RTX changed name to better reflect wireless modules and the design EBIT prospects were in the interim re- development. The net cash flow for the breadth of RTX’s offerings, as services offerings in North America port for the third quarter of 2011/12 the year was consequently negative expert in designing and developing and Europe. revised to a range of DKK 2-3 million. with DKK 18.8 million compared to a wireless communications solutions. positive cash flow of DKK 1.0 million The official name was changed from • A new Skype phone was launched of- • The capacity costs are on par with for the previous financial year. RTX Telecom A/S to RTX A/S. The fering HD Voice and enabling the user the previous year and contain signi- name change reflects that RTX’s wire- to make Skype calls without a PC. ficant investments in new technolo- • Development costs increased with less technology goes into more areas gies and new product platforms. DKK 11.5 million in 2011/12 to DKK beyond those that are telephony • RTX continued to improve business 37.2 million. The capitalized develop- related, including healthcare, home processes, risk management and • The operating cash flow amounts to ment costs for new technologies and automation and machine to machine governance. DKK -8.2 million compared to DKK new product platforms are DKK 12.5 automation. 17.0 million in the previous financial million compared to DKK 12.3 million year. The net cash flow was heavily the previous year. Amortization on • Qualcomm Atheros appointed RTX impacted by an increase in the work- development projects in 2011/12 as an authorized design partner. The ing capital. Some products were pha- amounted to DKK -3.7 million com- agreement enables Design Services sed out by the end of Q4 2010/11, pared to DKK -0.9 million in 2010/11. to design on Qualcomm Atheros’ Wi- Fi semiconductors and to offer low power Wi-Fi modules and customized solutions based on Qualcomm Athe- ros technology.

CAPITAL STRUCTURE CASH EQUIVALENTS AND • Enterprise & VoIP has established a INTEREST BEARING DEBT long-term cooperation with Alcatel million DKK million DKK Lucent concerning development and delivery of a new IP DECT product 300 80 70.7 71.4 66.9 program. The first handsets to Alcatel 60 250 47.7 Lucent were delivered on schedule in 40 June 2012. 200 20 150 • The Company’s IP DECT – VoIP system 0 was made interoperable with several 100 -20 -19.7 leading PBX systems and the global -24.3 -16.8 50 -40 distribution was substantially incre- -36.9 ased. The sales of the IP DECT – VoIP 0 -60 2008/09 2009/10 2010/11 2011/12 2008/09 2009/10 2010/11 2011/12 system grew satisfactorily during the year. Equity Long-term liabilities Current assets and cash Short-term liabilities Interest bearing debt Hovedtal Hovedaktivitet

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FINANCIAL HIGHLIGHTS FOR THE GROUP PRIMARY ACTIVITY

Amounts in millon DKK 2007/08 2008/091 2009/10 2010/11 2011/12

INCOME STATEMENT ITEMS Revenue 250.3 191.6 220.7 204.9 191.3 Gross profit 146.7 101.0 114.6 118.7 114.6 Operating profit/loss (EBIT) -21.0 -36.3 13.4 9.0 2.5 RTX was established in May 1993. Since funded project in RTX, leading to an of wireless modules with Wi-Fi and Net financials 2.8 -22.5 0.8 -1.3 0 June 2000 the Company’s shares have OEM/ODM product or a software pack- DECT radio technologies, and supplier Profit/loss before tax -18.2 -58.6 14.2 7.7 2.5 been listed on the NASDAQ OMX Co- age, for sale to a number of customers of test systems Profit/loss for the year from continuing operations -18.3 -58.6 13.9 6.3 1.9 penhagen Stock Exchange. RTX is head- globally. Profit/loss for the year from discontinued operations -7.4 -12.3 -29.0 -2.3 - quartered in Denmark and has facilities • Enterprise & VoIP, an ODM/OEM Profit/loss for the year -25.7 -70.9 -15.1 3.9 1.9 in Hong Kong and San Jose, USA. RTX’s customers and partners count supplier of advanced IP-telephony some of the most respected glo- solutions for the Enterprise and SME BALANCE SHEET ITEMS The business foundation of RTX is the bal brands such as Microsoft, Philips market Cash and current asset investments 99.5 70.6 71.4 66.9 47.7 solid knowledge and know-how in desig- Healthcare, Siemens, Alcatel Lucent, Total assets 311.1 253.4 231.6 233.1 212.4 ning advanced wireless short range radio Panasonic, NEC, Qualcomm Atheros, Each business unit has its own dedi- Equity 221.1 160.1 145.2 151.9 156.3 systems and products. The know-how is Dialog Semiconductor and Sennheiser. cated development department and Liabilities 90.0 93.3 86.4 81.2 56.0 primarily focused around solutions within focused sales and marketing function, the technology areas DECT, Wi-Fi™, CAT- BUSINESS UNITS as well as control of own supply chain. OTHER KEY FIGURES iq™, Bluetooth® and VoIP. The Group’s activities are organized in The products and components are pri- Development cost financed by RTX before capitalisation 11.2 10.6 16.7 25.7 37.2 two business units: marily sourced from a selected number Capitalized development cost - - 2.8 12.3 12.5 In recent years, the market for different of partners and suppliers, which have a Depreciation. amortisation and impairment 6.5 6.7 3.4 3.3 6.4 wireless applications has grown substan- • Design Services, an R&D design record of a long-standing cooperation Cash flows from operations -12.5 -7.6 45.8 17.0 -8.2 tially. The growth is expected to continue partner of wireless solutions, supplier with RTX. Cash flows from investments 1.6 -13.0 13.4 -11.2 -9.2 through broader adoption of home Cashflow from financing activities -1.9 -0.1 -2.3 -2.4 -1.4 automation, smart grid, healthcare and Investments in property. plant and equipment 1.5 1.2 0.3 0.8 1.2 machine to machine (M2M) communica- Increase/decrease in cash and cash equivalents -17.7 -33.7 27.9 1.0 -18.8 tions and IP-based telephony. RTX Core Expertise

KEY RATIOS RTX possesses a unique combination of Growth in net turnover (percentage) 20.7 -23.5 15.2 -7.2 -6.6 both software and hardware know-how. Profit margin (percentage) -8.4 -18.9 6.1 4.4 1.3 RTX takes projects from the concept Return on invested capital (percentage). continuing operations -13.5 -26.3 12.1 9.2 2.2 stage all the way through specification, Return on equity (percentage). continuing operations -10.7 -30.1 8.3 4.2 4.1 design, development, test and verifica- Equity ratio (percentage) 71.1 63.2 62.7 65.2 73.6 tion into a final product. In addition, RTX offers production services in Asia and EMPLOYMENT Europe of OEM and ODM products. RTX’s EXPERTS IN EXECUTES Average number of full-time employees 205 203 164 167 168 DEVELOPING THE FULL comprehensive view in the process from CUSTOMIZED VALUE ADDED Revenue per employee (DKK ‘000) 1,221 943 1,345 1,226 1,138 specification to a final product offers the SOLUTIONS BASED PROCESS FROM Operating profit/loss per employee (DKK ’000) -102 -179 82 54 15 customer the assurance of manufactu- ON LEADING IDEA TO rable solutions even if the customer has WIRELESS PRODUCTION SHARES (NUMBER OF SHARES IN THOUSANDS) only contracted for a part of the process. TECHNOLOGIES AND BEYOND Average number of shares in circulation 9,289 9,289 9,289 9,289 9,289 Average number of diluted shares2 9,292 9,289 9,289 9,793 10,235 RTX’s staff of highly experienced BUILT ON COMBINATION engineers and experts commands all TM SHARE DATA, DKK PER SHARE AT DKK 5 PARTNERSHIPS OF EUROPEAN relevant technical and professional WITH THE WORLD’S WIRELESS DESIGN Profit/loss for the year (EPS) -2.8 -7.6 -1.6 0.4 0.2 disciplines. In addition, RTX holds the LEADING CHIP WITH FAR EASERN Profit/loss for the year. diluted (DEPS) -2.8 -7.6 -1.6 0.4 0.2 necessary facilities, including EMC AND TECHNOLOGY MANUFACTURING COMPANIES EFFICIENCY Dividends 0 0 0 0 0 and acoustic laboratories to conduct Equity value 23.8 17.2 15.6 16.3 16.8 development work from the idea stage Listed price 25.9 7.6 13.7 11.7 11.3 through to a production ready design.

Note: The Group’s financial year runs from 1 October to 30 September. The design development work is either The stated key ratios have been calculated in accordance with ”Recommendations and Ratios 2010” issued by the Danish Association of Financial Analysts. based on customer request, and is thus 1 Comparative figures for 2008/09 have been restated regarding discontinued operations. customer financed, or is an internally 2 Including unexercised warrants Design services

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DESIGN SERVICES

MARKET AND CUSTOMERS or DECT ULE radio technologies. The Design Services has during the financial Design Services is an R&D design modules are typically designed into year worked on projects within audio, outsourcing partner providing advanced major brand owners’ products. In ad- home automation and healthcare. wireless solutions, standardized or dition, RTX offers to take projects from Services with radio technologies as customized wireless modules, and test the development stage into delivery of Bluetooth®, Wi-Fi™, DECT/CAT-iq™ systems to major global brand owners. a final ODM product, often in the form and proprietary TDMA were offered to The solutions are typically applied of a customized module for integration existing core customers. within medical equipment, sensor solu- in the customer’s final product. tions for home automation or indu- The ODM business developed very strial applications, wireless headsets, The test solutions combine Design satisfactorily with substantial growth intercom systems, professional audio, Services’ experience within complex wi- from both existing and new customers. gaming and machine to machine (M2M) reless system development with the un- Revenue is generated from module communications. derstanding of manufacturing electronic units for integration into the customer’s products, enabling Design Services to product. The ODM supplies typically Design Services has thorough techno- write test specifications as well as desig- follow an engineering design project, logical knowledge of design and system ning both standardized and customized where Design Services offers supply integration of wireless protocols, pro test solutions. Design Services offers a of fully tested and certified mounting- ducts and solutions within the techno- portfolio of dedicated measuring- and ready components. logies Wi-Fi™, DECT, CAT-iq™, Blueto- test instruments consisting of both RF- oth®, derivatives of these technologies, testers and automatized production test RTX was during the year appointed as and within proprietary TDMA systems equipment. In addition, Design Services an authorized design partner for Qual- and cellular systems. The business unit offers turnkey test solutions customized comm Atheros. This was an important has a longstanding close co-operation for the customers’ proprietary wireless milestone and a considerable recogni- with semiconductor suppliers providing systems as well as test set-up for labo- tion of RTX’s competencies and know- the above technologies in their ICs ratory and development use. how. The cooperation with Qualcomm (integrated circuits). Atheros has since the financial year THE YEAR UNDER REVIEW 2010/11 broadened RTX’s presence in In the engineering design services For the financial year 2011/12 Design the Wi-Fi field. The partnership with part of the business, Design Services Services generated revenue of DKK 86.0 Qualcomm Atheros gives RTX access to acts as system integrator between million, a growth of 17.7% compared the newest low power Wi-Fi technology the product owners, typically a major to the previous financial year, which which Design Services uses in design global company, and the IC supplier. The is highly satisfactory. All areas, the projects for customers, and in standar- system expertise is a key differentiator engineering design services, ODM, test dized and customized wireless modules. between RTX and its design services systems and royalty came in at higher To ensure a low risk and fast-to-market competitors. The projects typically levels than the year before, and espe- launch of these new products a Euro- focus on new products and/or on new cially the ODM products grew substan pean PCBA supplier has been qualified features in the customer’s product port- tially during the year. to compliment our current suppliers. Philips Healthcare folio, which are developed on the basis of Design Services’ innovative software The engineering design services, During the year Design Services con- Design Services has developed wireless TDMA solutions, combined with the possibi- covering customer paid development tinued the development of low power technology for the Intellivue MX40 system. lities that exist in the ICs. The projects projects, represent the main revenue for wireless technologies and platforms, The Intellivue MX40 is a small portable device are typically carried out as customer Design Services. Throughout the year, and introduced the low power wire- for continuous monitoring of patients. It paid development contracts based on a RTX continued work for a number of less modules RTX4100 Wi-Fi and RTX communicates with a dedicated wireless fixed NRE (Non-Recurring Engineering) long-standing customers where Design 1050/1055 DECT ULE. The modules infrastructure also enabled by RTX. Philips amount with milestone payments. Services plays the role as domain expert address wireless M2M communications Healthcare is one of the world’s largest maintaining the wireless platform for within home automation, healthcare companies in the healthcare technology In the wireless module area RTX of- the customer. In addition, new impor- or the industrial space, where there market. fers standardized low power wireless tant customers were developed during is a growing need for among other modules based on Wi-Fi, DECT (Voice) the year. sensor communication. The modules 12 RTX Annual Report 2011/12 RTX Annual Report 2011/12 13 12 RTX Annual Report 2011/12 RTX Annual Report 2011/12 13

the end of the financial year. RTX will However, the significant efforts in are thus prepared for connectivity to Market Wheel Design Services continue investments within low power expanding the sales and distribution various sensors such as temperature, technologies and will also put increased platforms, and the investments made humidity, pressure, light and movement. focus on battery technologies and in new technologies and platforms The modules are IPv6 enabled, which energy harvesting in the years to come. are expected to help Design Services means they are able to be accessed via compensate for a continued economic the internet, and can be accessed via a The activities undertaken by Design downturn. Design Services therefore number of cloud service providers. Services are highly dependent on the all in all expects to produce business customer’s ability and will to invest in results on level with 2011/12. The modules were introduced in June new technology, product pipeline and and October 2012 respectively and are product upgrades. These investments marketed in cooperation with well- are, in turn, dependent on the market established electronics distributors development, which are impacted by like Arrow Electronics and CODICO. In the global economic climate. addition, the sales force in the US and Europe has been strengthened during the year, and a US web store is up and DESIGN TESTERS running mainly to support the standard SERVICES module business.

The test solution business showed Wireless modules modest growth over the previous year, MODULES with revenue generated from both During the last year Design Ser- existing and new customers. A contract vices has invested in the develop- for the multi-purpose test unit Smart ment of wireless OEM and ODM ATE2300 was signed with a larger module designs. The RTX4100 Low existing customer. A satisfactory sale of Power Wi-Fi module was announ- DECT and CAT-iq testers was achieved ced this summer. through the Asian distribution, driven by the increased demand to build DECT/ Furthermore, both a dedicated CAT-iq into home gateways. During the DECT HD-Voice module (RTX1040) financial year 2011/12 the RTX test and a couple of DECT ULE M2M solutions started supporting LabVIEW™, (RTX105x) modules have been which is a widespread user interface presented. across several market segments. The market wheel illustrates relevant customer segments for Design Services. The Due to the RTX specified and de- MARKET OPPORTUNITIES AND products are examples where Design Services offerings are integrated. veloped DECT ULE 6LowPAN stack OUTLOOK not only the Wi-Fi modules, but The world demand for wireless commu- also the DECT modules can now nication from sensors in a multitude be a part of the Internet of Things, of areas grows substantially in these of the wireless technologies Wi-Fi and Qualcomm Atheros brings RTX in con- enabling actuators and sensors to years. This concerns among others DECT, RTX is well positioned to benefit tact with new customer groups which be monitored and controlled via wireless sensors for home automation from this market development both as is expected to increase revenue from cloud services. and/or process controls to increase pro- what concerns new design contracts design projects and modules. Given the ductivity in industrial or medical-related and OEM/ODM business. time, however, it takes from a module applications. With the initiatives taken is “designed in” until a product is finally in the past couple of years, where RTX The new standard low power Wi-Fi launched, revenue impact from module has invested in low-energy versions modules and the cooperation with sales can only be expected towards Enterprise

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ENTERPRISE & VOIP

MARKET AND CUSTOMERS THE YEAR UNDER REVIEW Wi-Fi™ versions, and in combinations. Enterprise & VoIP develops and supplies The revenue for the financial year was The handset range will be customized professional wireless IP-telephony for DKK 103.2 million which was a drop of to meet each of the PBX customers’ PBX systems in the Enterprise and SME DKK 24.0 million from the previous year, specific needs and is designed to be markets. In addition, Enterprise & VoIP and the result did not meet the expec- backwards compatible with the custo- is a leading supplier of wireless phones tations. The lower revenue was caused mers’ existing solutions. for Skype telephony. by reduced sales to the ODM customers in the Enterprise segment and by lower The launch of the first product in the Enterprise & VoIP focuses on develop- sales in the category Other Wireless. new Enterprise range (8232 DECT) ment, production and marketing of The demand in the various geographi- to Alcatel Lucent was an important professional telephony equipment such cal markets was impacted by the low milestone in a long-term co-operation as wireless handsets, base stations and economic growth and the economic concerning development and delivery of repeaters for PBX systems and VoIP uncertainty. The VoIP sales developed a new IP DECT product program. solutions. The solutions are based on satisfactorily compared to the previous DECT, CAT-iq™ and Wi-Fi™ technology year. The lower sales in the Other The new Enterprise product program and address the market for IP-telepho- Wireless category was caused by a has also been adopted by RTX’s long- ny. The IP-telephony market is growing number of factors, including a delay in standing business partner NEC. NEC has as the IP based solutions replace the the launch of the new Skype phone, a since 2007 been selling RTX’s existing analog based telephony infrastructure. customer put on credit hold, and phase Enterprise handset range. The new The products are developed and sold on out of a number of old products. IP DECT based Enterprise series will OEM/ODM basis, mainly to a number of ensure NEC to have an updated product leading global suppliers of PBX products The capacity costs were at a higher program. The series are fully compatible (telephony switchboards and systems) level than the year before, driven by the with NEC’s PBX solutions. NEC will start or as private label products for regional investments in new product platforms. selling the first handsets in the new distributors. The result for the business unit for the range around the year-end 2012. year under review was negative. Enterprise & VoIP handles all tasks from The new IP DECT VoIP system, which idea to a final product. This includes During the year the business unit made was launched in the previous financial idea generation, specification, develop- significant investments in developing year, is designed for the SME busines- ment, supply chain, QA, marketing and an up-to-date product portfolio. In the ses. The system is highly flexible as it AIPHONE sales. Enterprise segment a part of these in- can be scaled from a few handsets and vestments were customer financed. The base stations up to connecting 200 RTX is supplying wireless technology to be used in The business unit has offices in Den- development of the new IP based wi- handsets and 40 base stations. The door phone systems made by Japanese market leader mark and in Hong Kong, and has a close reless handset range for the Enterprise system features HD Voice and offers AIPHONE. The technology is used for transferring video cooperation with a number of sub- segment was initiated on customer a substantially improved audio quality signals of the entrance wirelessly between room monitor suppliers in Asia. The Group’s technical requests in the financial year 2010/11. and seamless handover. RTX has during stations, allowing the residents to monitor who is at the know-how and software competencies The development will continue into the the year strengthened sales through a door before opening. in Denmark combined with mecha- financial year 2012/13. number of new distributor agreements. nical design, hardware development, In addition, the compatibility with dif- The systems are scalable and installed in different types procurement and supply chain in Hong The Enterprise handset range comprises ferent PBX systems for the IP DECT VoIP of homes, from single family homes, apartments and Kong and Asia gives Enterprise & VoIP several models and is IP based (Internet system has been further strengthened. multi-family homes with several entrances and with the a strong competitive position. The based telephony). The products repre- The products are now distributed to option of security personnel operating the system as business model combines innovation sent the latest technologies, including the most important markets. The sales well. at a high technical level with a low-cost Android with Touch technology and developed satisfactorily during the year structure and short time to market. special ruggedized versions. The hand- though many distributors were still in AIPHONE was established in Nagoya in 1948 and has sets will be available both in DECT and the launch phase. grown to become a global player on the intercom market. The company has subsidiaries in USA, France, Singapore, Hong Kong, Thailand and Vietnam. 16 RTX Annual Report 2011/12 RTX Annual Report 2011/12 17 16 RTX Annual Report 2011/12 RTX Annual Report 2011/12 17

The new Skype phone, RTX4088, was Market Wheel Enterprise & VoIP in Enterprise and in the VoIP segments. launched by the end of March. The The VoIP segment should moreover be- phone offers new features such as HD nefit from the distribution agreements audio and dual account. The RTX4088 and first launches that have happened phone can be used as both a Skype in the past 12 months. The investments phone and a normal PSTN phone, and in the new wireless IP based Enterprise the phone holds the possibility of two platform will continue throughout the Skype accounts in the same house- year to finalize the last handset models. hold. The phone replaced the former DUALphone 3088 model which was Though the basic market conditions launched in 2006. The actual launch of are favorable, and the updated product the RTX4088 phone was a bit later than portfolio is attractive and competitive, anticipated, but the sales in the second the Enterprise and the SME market for half of the year were satisfactory. telephony is and will continue to be influenced by the overall global economic During the last couple of years, major climate. With the up-to-date competi- investments have gone into renew- ENTERPRISE VOIP tive product portfolio and the investing the product portfolio within the ments made in better VoIP distribution, Enterprise, VoIP and Skype area. While Enterprise & VoIP is, however, expected the development of the new Enterprise to be able to compensate for the ge- range will continue throughout the OTHER neral market uncertainty. The business financial year 2012/13, the other areas WIRELESS results will be better than the previous will enter into maintenance mode. Con- financial year and the result is expected sequently, the development resources to be positive. have been reduced towards the end of the financial year 2011/12.

MARKET OPPORTUNITIES AND OUTLOOK In the Enterprise market there is an ongoing need for mobility solutions offering voice and messaging capabi- lity. Though on-site mobility needs in some office environments are ad- dressed towards cell phones or soft The market wheel illustrates relevant customer segments for Enterprise & VoIP. The phones with PBX connectivity there is a products are examples of the product portfolio in each segment. large remaining market for ruggedized wireless handsets, representing approx. 2.3 million handsets per year globally. Those handsets are mainly based on that Enterprise & VoIP addresses as an range and the multi-cell VoIP system for DECT, IP DECT or Wi-Fi. The market con- ODM/OEM supplier. The total market is small and medium-sized businesses, sists of verticals like healthcare, heavy expected to remain constant. RTX stands well positioned to grow its manufacturing, mining and the service market share. The business unit expects sector, who demand company specific With a competitive and updated product on this background, and based on ruggedized solutions. This is the market offering in terms of the new Enterprise contracts already entered, to grow both Aktiviteter og forhold

18 RTX Annual Report 2011/12 RTX Annual Report 2011/12 19 18 RTX Annual Report 2011/12 RTX Annual Report 2011/12 19

DEVELOPMENT IN ACTIVITIES AND FINANCES

FINANCIAL STATEMENTS 2011/12 processes in the beginning of the finan- VALUE OF OWN WORK TRANSFERRED The comments on the financial state- cial year 2011/12. TO ASSETS ments are, unless otherwise stated, The Group has continued last year’s in- based on the consolidated figures in the Gross profit/loss and gross margin vestments in own development project annual report for 2011/12 and com- RTX’s gross profit amounted to DKK in order to exploit the expected busi- pared with the corresponding consoli- 114.6 million, which is a decrease of ness opportunities further. The VoIP sy- dated figures for 2010/11. The Parent’s 3.5% compared to last year’s gross stem was launched in 2010/11 and to- financial development is not described profit of DKK 118.7 million. The gross wards the end of third quarter 2011/12 separately, as the Parent represents the margin however increased from 57.9% the group launched and supplied the main part of the Group. The develop- in 2010/11 to 59.9% in 2011/12. The first handsets in a new product program ment is described separately for the reason for the increase is a changed to one of the large global PBX sup- Parent if the development deviates from product mix as a larger share of the pliers. Due to the partial RTX financing the Group Group revenue and gross profit derives and time lags between the invest- from the business unit Design Services, ments and the customers’ payments, In the Group’s annual report the discon- which in general sells with a higher the capitalization of the development tinued operations are presented in gross margin than the business unit costs concerning the handset range accordance with IFRS 5, which means, Enterprise & VoIP. for the Enterprise market continued in among other things, that profit/loss 2011/12. Reimbursements of DKK 5.0 after tax from discontinued operations Other external expenses million from customers relating to the is shown separately in the Group’s and Other external expenses amounted to Enterprise platform were received in the Parent’s income statement, and DKK 30.6 million, which is a decrease of the 2011/12 financial year compared to that the related comparative figures DKK 5.0 million compared to 2010/11. DKK 0 million in 2010/11. The reimbur- have been restated. The main reason is that the Group sements received were offset directly in 2010/11 wrote down significant against the intangible assets. CONSOLIDATED INCOME STATEMENT dubious debtors. This has not been the Revenue case in 2011/12. Actually, a part of the The value of own work transferred to In 2011/12, the Group generated a write down last year was recovered in assets was DKK 12.5 million compared revenue of DKK 191.3 million, which is 2011/12 (ref. note 20). to DKK 12.3 million in 2010/11. a decrease of 6.6% compared to last year’s revenue of DKK 204.9 million. Staff costs Amortisation, depreciation and The achieved revenue was thus in line Staff costs amounted to DKK 87.7 mil- impairment NEC with the expectations stated in the lion, which is DKK 4.6 million more than The Group’s amortisation, depreciation Announcement for the third quarter last year’s staff costs of DKK 83.1mil- and impairment increased from DKK 3.3 Celebrity Cruises’ newest cruise ship may differ. Switching to the correct 2012. The realized revenue is however lion. Staff costs were increased to million in 2010/11 to DKK 6.4 million in Celebrity Silhouette sets sail with frequency band is done automatically. below the expectations stated in the strengthen the organization in Denmark 2011/12. Amortisation related to the NEC’s advanced IP DECT-based mobile financial statement 2010/11. The lower as well as Hong Kong, and to make the RTX development projects in 2011/12 communications onboard. RTX delivers a unique portfolio of revenue was mainly caused by reduced Group able to carry out the investments was DKK 3.8 million which was an dual band DECT handsets to NEC. sales to the ODM customers in the in new product platforms and techno- increase of DKK 2.9 million compared to NEC solutions provide reliable, secure Dual band handsets allow the cruise Enterprise segment, as the demand in logy. 2010/11. shipboard communications giving liners to cross the oceans without the various geographical markets was cruise ship guests mobile communica- interference to their communication impacted by the low economic growth The average number of employees Operating profit/loss (EBIT) tions even when they’re out of reach network. and the uncertainty about economic in the Group’s continuing operations Operating profit/loss (EBIT) was a profit of public cellular services. NEC was the recovery. increased from 163 in 2011/12 to 168 of DKK 2.5 million compared to a profit first company to introduce a unique NEC Corporation is a leader in the in 2011/12. The number of emplo- of DKK 9.0 million in the financial year Dual Band portfolio enabling ships to integration of IT and network tech- The development in the revenue in the yees at the end of the financial year 2010/11. The realized profit was in line use IP-DECT at different international nologies that benefit businesses and Parent company was due to a reorgani- increased from 164 in 2010/11 to 168 with the expectation announced in the ports where DECT frequency bands people around the world. zation and optimization of the business in 2011/12. interim report for third quarter 2011/12. 20 RTX Annual Report 2011/12 RTX Annual Report 2011/12 21 20 RTX Annual Report 2011/12 RTX Annual Report 2011/12 21

Net financials Profit/loss for the year from The Company’s holding of 144,584 MANAGEMENT AND EMPLOYEES January 2012 to December 2014 and is The net financial expense was DKK discontinued operations treasury shares was acquired in the As of 30 September 2012, the Group conditioned of the cash flow generated 0 million compared to an expense of The acitivity is discontinued. However financial years 2004/05 and 2006/07 employed 168 people, of whom approx. in the period 2011/12 until 2013/14. DKK 1.3 million in the financial year management is investigating if it is pos- in order to hedge the liabilities re- 45% are engineers and technical staff. 2010/11. sible to recover some of the outstan- lated to the share options granted by Of the 168 employees, 51 are em If the minimum criteria for the 3-year ding amount from the activities and a the Company to a limited number of ployed in Hong Kong, 3 in the US whe- target for an increase in the cash The exchange rate gain (net) amounts way to wind up the Brazilian subsidiary. executives. The Company has neither reas the remaining 114 are employed flow are not met, the warrants will be to DKK 0.2 million in 2011/12 com- acquired nor sold treasury shares in the at the head office in Noerresundby. The discontinued. The granted warrants will pared with loss of DKK 1.1 million The loss for the year from discontinued financial year 2011/12. number is slightly higher than last year give the employee a right, but not a the previous year. The major part of operations amounts to DKK 0 million due to the investments in new products duty to buy shares in RTX. the Group’s cash funds is invested in against a loss of DKK 2.3 million in the As a result of the recent years’ restruc- and technology platforms current asset investments and bank financial year 2010/11. turing of the business combined with Incentive schemes from before the deposits. the strong equity ratio the supervisory INCENTIVE SCHEMES FROM THE financial year 2010/11 Profit/loss for the year board intends to propose that the sha- FINANCIAL YEAR 2010/11 The Supervisory Board decided in 2005 The exhange rate gain (net) in the Total profit for 2011/12 amounted to reholders at the annual general meeting As in 2010/11 the Supervisory Board and 2006 to grant share options to a Parent was on par with last year. The DKK 1.9 million compared to a profit of authorize the company to acquire decided to grant a number of employe- limited number of executives and to the Parent has granted a loan of DKK 0.6 DKK 3.9 million last year. treasury shares at a total nominal value es and the Executive Board a long-term Executive Board. Overall, at 30 Septem- million to the subsidiary in Brazil, which of up to 10% of the company’s share incentive program, which purpose is ber 2011 RTX has granted share options similar to the handling last year was Earnings per share (EPS) capital. to attract, motivate and maintain the of nominally DKK 725,000, equivalent expensed. Earnings per share (EPS) from continu- best possible employees and managers to a total of 145,000 share options at ing operations amounted to DKK 0.2 CONSOLIDATED CASH FLOWS AND to develop the RTX Group during the DKK 5. Profit/loss before tax for the year compared to DKK 0.7 the year before. FINANCING FROM THE CONTINUING next number of years. The incentive from continued operations Earnings per share (EPS) from conti- OPERATIONS program is based on conditional war- In an ordinary process, the share op The profit before tax for 2011/12 nuing and discontinuing operations Cash flows from operations amounted rants and will depend on the cash flow tions can be exercised no earlier than amounts to DKK 1.9 million compared amounted to DKK 0.2 compared to DKK to negative DKK 8.2 million compared generation in the coming periods. The 36 months and no later than 84 months to a profit of DKK 3.9 million in the 0.4 the year before. to positive DKK 17.0 million in 2010/11. Supervisory Board will not take part in after the date of grant. Special condi- financial year 2010/11. The development is driven by changes the incentive program. tions have been agreed on exercise if CONSOLIDATED BALANCE SHEET in the working capital, which had a extraordinary conditions should occur in Tax on profit/loss for the year The Group’s balance sheet total negative impact on the cash flow with The Supervisory Board intends to let the the period of agreement, for instance Tax on the profit for the year was amounted to DKK 212.4 million at 30 DKK 12.5 million compared to positive warrants program be a running pro- the employee’s resignation. recognized at DKK 0.6 million compa- September 2012, which is a decrease DKK 8.0 million in 20110/11. The chan- gram, starting with 3 years. This means red to DKK 1.5 million last year. The of DKK 20.7 million compared to last ges in the working capital were driven that warrants are expected to be issued The exercise price of the share options tax on the profit concerns the Group’s year. The decrease in the balance sheet by the launch of the new Skype phone in three of each other successive years. is fixed as the average rate for a period activities in Hong Kong and withholding is composed by a decrease in short- and the launching of the first handset The Supervisory Board will each year of five trading days immediately up taxes in the Parent which are paid on term assets of DKK 23.5 million and an to Alcatel which has increased the stock decide on the actual allotments to be to the date of grant plus 5% per year the earnings from license- and royalty increase in long-term assets of DKK 2.8 level in 2011/12. given in order to support a long term commenced after the date of grant. agreements made with foreign compa- million. development. The total nominal value nies. Cash flows from investments, compris- of the warrants program is DKK 7.5 The granted share options account for During the year, the Group equity ing investments in intangible assets, million. approx. 1.5% of the Company’s share Similar to the financial year 2011/12 increased by DKK 4.4 million, from DKK property, plant and equipment and capital. the deferred tax asset has similar to the 151.9 million to DKK 156.3 million. The other non-current assets and current Warrants are granted and earned during financial year 2010/11 not been recog- equity ratio is 73.6% in 2011/12 com- asset investments, amounted to DKK 36 months and can be exercised no The Annual General Meeting adopted nized in the balance sheet for 2011/12, pared to 65.2% in 2010/11. -9.2 million compared to DKK -11.2 earlier than after publication of RTX’s the general guidelines on 28 January due to uncertainty regarding the use of million in 2010/11. Reimbursements of annual report for 2012/13. The first 2009 in pursuance of § 69 b of the deferred tax assets (ref. note 2). The Supervisory Board will recommend DKK 5.0 million from customers relating conditional allotment will thus cover Danish Public Companies Act relating to the Annual General Meeting on 25 to the Enterprise platform were received the period January 2011 to December to incentive programs for the Executive January 2013 that no dividend is paid in the 2011/12 The reimbursements 2013. The first conditional allotment will Board in RTX A/S. The guidelines are for the financial year 2011/12. received were offset directly against the depend on the achieved cashflow. The published at the Company’s website intangible assets. second allotment covers the period from www.rtx.dk. Usikkerhed

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UNCERTAINTY RELATING TO RECOGNITION AND MEASUREMENT

RTX has significant deferred tax assets as well as to changes in customer New technology platforms are often FINANCIAL RISKS Credit risks at the end of the financial year. As a preferences. developed in close co-operation with Currency risks The Group’s credit risks related to trade result of the unsatisfactory results rea well-reputed international chip vendors. During the past financial years ap- receivables are assessed on an ongoing lized by the Group in recent years, there The Group is using detailed project and To some extent, RTX is dependent on prox. 95% of RTX’s revenue derived basis. In 2010/11 the group entered may be significant uncertainty when it resource control tools, which enable the on-time delivery of the agreed tech- from customers outside Denmark. This an agreement with a credit insurance will be possible for the Group to use very fast reaction time on customer nology from the chip vendors. revenue is primarily invoiced in curren- company, and since 2010/11 the group the developed assets. As a result of this inquiries. cies other than Danish kroner (primarily has used credit insurance and bank uncertainty, the Group has chosen to Dependence on single customers EUR and USD). The main part of goods guarantees in order to secure the most recognize the deferred tax assets in the Project management Enterprises of the size of RTX may to purchased from sub-suppliers is paid in important outstanding amounts. The balance sheet at 30 September 2011 By focusing on project planning, the some extent become dependent on foreign currencies. As a consequence creditworthiness of all major customers at a net amount of DKK 0 million. The Group tries to ensure synergies bet- single customers. of the large international activity, the and partners is rated at an ongoing non-recognized deferred tax assets thus ween parallel development activities. Group’s cash flows are influenced by basis. amount to DKK 66.9 million at year- The progress of the individual develop- Ten of the largest customers account changes in exchange rates, and the end. The corresponding amount at 30 ment projects is supervised by achieve- for more than half of the turnover Group’s trade policy with its customers Cash September 2011 was DKK 67.5 million. ment of planned milestones. which is similar to 2010/11. As many of and suppliers are continuously adapted The Group’s cash at bank and in hand these are loyal customers, the Group is in order to match the currencies of its primarily consists of deposits in re- PARTICULAR RISKS The ability to attract and retain dependent on single customers to some purchase and sales as much as pos- spected banks and credit institutions. All investments in shares involve certain skilled employees extent. sible. Consequently, cash is not considered risks. The risk profile of RTX is partly a The employees represent RTX’s most to be subject to any special credit risk. reflection of the day-to-day operations important asset and are sometimes a Dependence on sub-suppliers Due to the exposure on exchange rates Bank deposits and bank debt carry a of the Group and partly a reflection of scarce resource. In order to develop The majority of the Group’s production RTX has chosen to consolidate the floating interest rate. the Group’s continued development. In and market its products, the Group is handled by sub-suppliers, primarily groups most important bank business the following, a number of risk factors will continue to rely on its ability to at- in Asia. The Group depends on these in a larger Danish bank. This should will be presented, which may impact tract, retain, motivate and train skilled sub-suppliers being able to produce and contribute to secure overview and on RTX’s future growth, operation, employees. deliver the planned volume at the time thereby reduce exchange rate exposure financial position and performance. The requested and in the required quality. in a macro environment characterized factors stated are not necessarily all The Group’s companies strive to be Significant changes may occur in sales by volatile exchange rates. the factors posing a risk to the Group, attractive workplaces for the employees and contribution margin if some of the but the factors which management by offering competitive employment sub-suppliers do not deliver at the time If assessed to be appropriate, RTX considers being of primary significance terms and developing a professional as requested and in the required quality. might enter into transactions to hedge to the Group. The listing of the risk well as a social working environment. its commercial currency risks in order to factors does not reflect their priority RTX is continuously in open and close reduce the currency exposure. or significance. The description of risks Development of technology contact with the sub-suppliers in order should be considered in the context of platforms to plan and monitor deliveries, quality Interest rate risks the annual report in general. Development of technology platforms management systems and production. The Group is primarily exposed to involves development projects launched interest rate risks through interest- BUSINESS RISKS at the Group’s own account in order to Limited protection of rights bearing assets and liabilities. The overall Rapid technological changes and provide RTX with new knowledge of and Today, RTX has applied for patents purpose of management of the interest new markets competence in new technologies. within selected key areas. There can be rate risk is to limit the negative effects The RTX Group continuously aims at no assurance that RTX’s practice to pro- of interest fluctuations on earnings identifying and developing technolo- A varying part of the Group’s develop- tect its intellectual property rights will and the balance sheet. Surplus cash is gical competence enabling the Group ment projects will continue to be at the be sufficient, or that the Group’s com- primarily invested in short-term solidly to offer technological solutions and Group’s own account. This will result petitors will not independently develop credit-rated cash bonds in Danish kro- products demanded by the customers. in current development costs in the similar technologies. If the Group does ner or in money market deposits. Moreover, the Group aims at currently short term, which should be regarded not succeed to sufficiently protect its predicting or reacting to the technologi- as investments in new technology and rights, this could have a negative effect cal development to the extent required markets. on the Group’s activities, financial performance and general financial position. Videnressourcer

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INTELLECTUAL CAPITAL RESOURCES

EMPLOYEES its presence in Hong Kong, the Group In order for RTX to maintain its position has access to international skills within DEVELOPMENT COSTS as an attractive sub-supplier of specia- development, logistics and quality assu- FINANCED BY RTX lized wireless development services and rance. The development organization is (BEFORE CAPITALIZATION) advanced IP products it is essential that ready for changes and makes it possible the employees of the Group have wide with short notice to transfer and ap- million DKK % knowledge of the engineering discipli- point engineers to technological areas, nes required to carry out high-technolo- which need activity and qualified staff. 40 24 gy development projects from definition The project management is still being 35 21 to delivery of wireless communications strengthened, and the technical skills 30 18 services and products. It is the qualifica- within software, baseband and RF are 25 15 tions of the employees that make RTX currently updated. 20 12 able to supply turnkey solutions, and 15 9 not only partial solutions. Through visits to educational 10 6 institutions and based on the Group’s 5 3 The Group is ready for changes and generally positive reputation among prepared for future growth, as the engineers within the industry, RTX aims 0 0 2008/09 2009/10 2010/11 2011/12 structure of the organization enables a at maintaining the reputation as an prompt integration of additional skilled attractive workplace for employees with Own R&D cost employees. Through RTX’s location the best professional skills and human Pct. of revenue GN ReSound near Aalborg University in Denmark and qualifications. RTX Design Services is providing R&D resources to the Danish hearing aid company GN ReSound. RTX acts as an extended R&D group developing hardware for a number of devices in the GN ReSound wireless acces- sory product line. This product line offers discrete hearing aid accessories helping the user to hear things that are outside the range of any hearing aid, making use of direct sound streaming with the 2.4 GHz wireless technology. Among the accessories is a remote control and a streaming device that allows audio from e.g. TV to be streamed directly to the hearing aid device using GN ReSound’s 2.4GHz system.

The R&D teams at GN ReSound and RTX are working closely together in the complete development process all the way from the product definition phase.

GN ReSound is part of the Danish GN group. GN ReSound is among the world’s leading companies. Forsknings- og udviklingsaktiviteter

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New handset to Alcatel RESEARCH AND DEVELOPMENT

RTX has started supply of DECT Hand- sets to Alcatel Lucent Enterprise. ACTIVITIES

Alcatel-Lucent provides solutions that enable service providers, enterprise and governments worldwide, to deliver voice, data and video communication services to end-users. The RTX does not perform basic research at have predominantly covered RTX’s part was DKK 28.4 million compared to DKK company has the most experienced a significant level. However, RTX has in- of the ultra low energy platform “ULE” 14.3 million last year (ref. note 8) global services team in the industry, creased investments in internal develop- (which receive public grants under and one of the largest research, tech- ment activities over the past couple of the EU Eurostars program, ref. note In the balance sheet own completed nology and innovation organizations years. These activities are focused on 8), investments into the test area and development projects and own develop- in the telecommunications industry. development of new technology and development of a Wi-Fi module which is ment projects in progress are booked product platforms. In addition, develop- developed in cooperation with Energy with a value of DKK 18.0 million. Last ment activities for ODM customers have Micro and Qualcomm Atheros. The year the value was DKK 14.2 million. shown an upward trend. module differs from existing solutions by having ultra low power consumption Reimbursements of DKK 5.0 million In the financial year 2011/12, the and unique customer functionality. from customers relating to the Enter- development costs incurred at the prise platform were received in the Group’s own account have affected The development costs contain salaries 2011/12 financial year compared to the income statement by DKK 28.4 and expenses directly related to the DKK 0 million in 2010/11. The reimbur- million compared to DKK 14.3 million Group’s internal development projects sements received were offset directly in the previous year. The majority of less any project income. In the financial against intangible assets. the increase in development costs is year, development costs of DKK 12.5 related to Enterprise & VoIP, driven by million have been capitalized and DKK Below is listed the realized revenue in the development of the IP DECT - SME 3.8 million has been amortized on the 2011/12 including the revenue expec- VoIP product, the new IP based wireless intangible asset related to the VoIP plat- tations for the coming 3 years’ period Enterprise handset range and the newly form. The expensed development cost related to the development projects Skype launched Skype telephone 4088. In after capitalization and amortization booked in the balance sheet. Design services, the development costs In 2012 Enterprise & VoIP launched the successor for the first Skype handset, the RTX DUALphone3088. Despite the global success of Skype digital telephony, there are only few Value of Expected revenue dedicated stand-alone Skype handsets intangible assets Revenue 2011/12 2012/13 - 2014/15 on the market. Product Platform (million DKK) (million DKK) (million DKK)

The RTX DUALphone4088 is an expan- VoIP 6.2 25.0 70-100 dable communications system with Enterprise 11.8 11.7 110-140 multi-line functionality for up to 4 handsets (including two Skype accounts). It The development costs incurred are expected to contribute positively to the revenue in the coming years. can handle up to two parallel calls (1 Skype and 1 fixed landline). The design of RTX DUALphone 4088 is suitable for the modern office or living room. The handset has been thoroughly tested and approved by Skype.

Skype has more than 40 million concurrent users at peak times and thus there is a growing demand for a user-friendly stand-alone phone. The phone is sold through a dedicated global network of distributors and retailers. CSR Forventninger

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CORPORATE SOCIAL PROSPECTS FOR THE FINANCIAL RESPONSIBILITY (CSR) YEAR 2012/13

SOCIAL RESPONSIBILITY The ability to attract and maintain knowledge sharing and co-operation, At the start of the financial year The management expects to create It is an integrated value in RTX to de- highly qualified employees is crucial for and the development processes have 2012/13 the global economic outlook a positive cash flow from the Ope- monstrate responsible behavior towards the Group’s competitiveness. Conse- since 2002 been ISO certified. remains uncertain. Both business units rating activities and investments in the stakeholders of the Group. This va- quently, the Group has a staff policy in RTX depends on the general econo- own development projects will decline lue is reflected in both the preparation which among others includes yearly LABOUR RIGHTS mic climate and the customers’ willing- significantly compared with 2011/12. and implementation of strategic targets appraisal interviews, as well as the No company in the RTX Group is a ness to invest, either in new technology The management expects to capitalize and action plans employee satisfaction is measured once member of any employers’ association, and product pipeline as what concerns DKK 2-3 million in 2012/13 related to a year in Denmark and Hong Kong. The but follows the industrial agreements. Design Services, and in new Enterprise the development task on the Enterprise RTX has only a few formulated policies results from this satisfaction survey Freedom of association applies for all telecom solutions as what concerns platform. within CSR, but will in the coming years is analyzed and reviewed by Group employees in RTX. Enterprise & VoIP. increase our focus in order to establish management and managers, with a The expectations are based on an procedures and policies for the Group’s subsequent summary presentation for ENVIRONMENT However, during the past years, RTX has unchanged exchange rate expectations work with social and environmental the employees. RTX wishes to show responsibility invested significantly in new technolo- compared to 2011/12. Expectations responsibility. In addition to comply towards the environment and to reduce gies and product platforms and has fo- to the future development are subject with Danish and International rules RTX A good working environment and a the consumption of water, heat and cused on expanding its sales platform. to uncertainty and risk. Most of the ac- will through monitoring and measuring high job satisfaction result in satisfied electricity. RTX has thus implemented RTX expects that these investments will tivities in the Group are customer-paid demonstrate the responsibility which employees, high efficiency, low staff electricity saving processes like ”Wake- start to payoff and compensate for the development tasks or sales on ODM/ is an ingrained value in the group but turnover and a low level of absence. on-LAN”, which ensures an energy- general economic uncertainty in the OEM basis, both business segments are not yet fully formalized via policies and These are all values that RTX can live saving setup in the company’s use of environment and RTX will be able to characterized by relatively short order measurements. up to. RTX strives to be a professionally IT hardware. On an ongoing basis RTX generate a result for the coming year horizons. Because of these and other managed company in all regards. works with energy reducing setup by which is slightly better than the result factors, e.g. macroeconomic aspects RTX supports the fundamental prin changing to energy saving light sources. for 2011/12. described above and the customers’ ciples of UN’s Global Compact on At the locations in Denmark and Hong financing possibilities, the actual human rights, employees’ rights, child Kong RTX offers its employees benefits RTX co-operates with a number of It is expected that Design Services will development may deviate from the labor, environment and anticorruption. and facilities that are in accordance customers, who are working on develo- be on par with the result for the finan- expectations. RTX requires that its suppliers respect with local conditions. RTX has for its ping energy-saving radio technologies. cial year 2011/12 and that Enterprise & and conform to the same principles. Danish premises obtained The Danish Consequently, one of these develop- VoIP will create a result slightly better Working Environment Service’s green ment projects is partly financed by Euro- than 2011/12. WORKING ENVIRONMENT smiley as a symbol of compliance with stars (www.eurostars-eureka.eu). RTX employed at the end of financial the environmental regulations on a Overall, management expects that year 2011/12 168 employees of which physical and psychical good working RTX co-operates with sub-suppliers the RTX Group will achieve a positive 114 were employed in Denmark, 51 in environment. RTX continuously works to reduce material consumption and development in revenue to a level bet- Hong Kong and 3 in the US. RTX strives with specific action plans concerning strain on the environment, just as RTX ween DKK 200-210 million in 2012/13. having an organization culture where the employees’ safety and well-being. encourages its sub-suppliers to use en- The operating profit (EBIT) is expected the employees are offered motivating vironmentally acceptable raw materials to be in the range of DKK 4-6 million freedom to act and good development RTX has a flat and dynamic organiza- and products. In addition, RTX requires and EBITDA in the range DKK 12-14 opportunities in a professional interna- tion with a high level of co-operation observation of directives settling the million. tional environment. between functions and business units. environment-friendly production and The management is currently working handling of electronic equipment (RoHS, on optimizing processes to ensure REACH and WEEE directives). Virksomhedelse

30 RTX Annual Report 2011/12 RTX Annual Report 2011/12 31 30 RTX Annual Report 2011/12 RTX Annual Report 2011/12 31

STATUTORY REPORT ON CORPORATE GOVERNANCE

This statutory corporate governance to be able to assess the circumstances posals for the nomination/replacement vidual members of the governing executive board receive from other are designed to effectively limit the risk report for RTX A/S covers the financial in publicly traded companies, transpa- of members of the supreme governing bodies and report such details to the companies in the group, and of errors and omissions in the financial period 1 October 2011 to 30 Septem- rency is important. Pursuant to these body to be submitted to the general supreme governing body, reporting. ber 2012. rules, the company must apply the meeting should be prepared in the light • oversee that the information in the recommendations adopted based on hereof. • consider proposals submitted by annual report on the remuneration of CONTROL ENVIRONMENT The supervisory Board and the Execu- the ‘comply-or-explain’ principle. relevant persons, including sharehol- the supreme governing body and the The internal control at RTX is based on tive Board of RTX strive to ensure that Comments: ders and members of the governing executive board is correct, true and the Company’s organizational struc- the group management structure and Generally, the management agrees on Supervisory Board of RTX regularly bodies, for candidates for executive sufficient. ture, decision making procedures, the control systems are appropriate the Principles of Corporate Governance discusses the necessary competencies positions, and powers and responsibilities. Internal and efficient. Management regularly and RTX do comply with a few excep- and act upon this assessment. When Comments: control is also based on procedures assesses - at least once a year – if this tions the Principles and recommen- shareholder elected board members are • identify and recommend to the su- Due to the size of the Group the task described in manuals and memos. is the case. dations. Below the exceptions are nominated for the Supervisory Board preme governing body candidates for is handled by the chairman of the su- Central functions like Group Finance explained. the profile and competencies for each the governing bodies. pervisory board including the chairman and IT are together with the Executive The basis on which the tasks for candidate is explained. The Supervisory of the Audit Committee. Board responsible for controlling and management is Danish company Act, Recommendation 4.1.4 Board must have competencies within Comments: monitoring compliance with relevant Danish Financial Statements Act, The Committee recommends that the international management including ex- Due to the size of the Group the task If necessary, an ad hoc committee with legislation and other financial reporting Securities trading act, NASDAQ OMX supreme governing body annually perience in management of technology is handled by the chairman of the a specific task can be established. requirements and controlling financial Copenhagen A/S in ‘Rules for issuers discuss the company’s activities to companies. In addition competencies supervisory board. reporting from subsidiaries. In 2009, of shares’, Articles of association and ensure diversity at management levels, within international business, business- Recommendation 5.11.2. RTX established an Audit Committee, best practice for companies like RTX. including equal opportunities for both to-business sale and accounting and If necessary, an ad hoc committee with The Committee recommends that the who evaluates and discusses significant Based on this a number of procedures sexes, and that the supreme governing finance must be represented in the a specific task can be established. chairman be in charge of the evalua- issues which might have an impact on are implemented and regularly main- body set measurable objectives in the Supervisory Board. In the convening to tion of the supreme governing body, the Company’s accounting and financial tained, to ensure a proactive and profi- management commentary in the an- the annual General meeting in RTX the Recommendation 5.10.8. that the outcome be discussed in the reporting. table management of the group. nual report and/or on the company’s background and qualifications for the The Committee recommends that the supreme governing body and that the website gives an account of both the nominated candidates are listed. supreme governing body establish a details of the procedure of self-evalu- The Group has established internal CORPORATE GOVERNANCE objectives and the progress made in remuneration committee with at least ation and the outcome be disclosed in control systems to ensure that the RECOMMENDATIONS achieving the objective. Recommendation 5.10.7. the following preparatory tasks: the annual report. internal and external financial reporting In 2005 the Danish Committee on The Committee recommends that the gives a true picture without significant Corporate Governance made a revision Comments: supreme governing body establishes a • make proposals, for the approval of Comments: misinformation. The Audit Committee of the Principles of Corporate Gover- At least annually the Supervisory Board nomination committee with at least the the supreme governing body prior to Due to the size of the Group the task and the Executive Board assess on an nance. In August 2011, the Committee of RTX discusses the composition and following preparatory tasks: approval at the general meeting, on is handled by the chairman of the ongoing basis substantial risks and on Corporate Governance published its structure of the Group Management the remuneration policy, including supervisory board. Internal controls in connection with the revised Recommendations on Corporate including requirements and qualifica- • describe the qualifications required the overall principles of incentive Group’s activities and their influence Governance, and the Stock Exchange tions as well as diversification of main the two governing bodies and for pay schemes, for members of the The Supervisory Board of RTX A/S has on the accounting process. Firstly, the has incorporated these recommenda nagement types and profiles. Based on a given position, state the expected supreme governing body and the prepared a report on corporate gover- control structures consist of an orga- tions in its Rules for issuers of shares. qualifications and match management time commitment for a position and executive board, nance for the 2011/12 financial year. nization with clearly defined roles that and leaders are appointed or recruited evaluate the balance of skills, know- The report is available at www.rtx.dk support an effective, and from an in- The revised Recommendations on Cor- regardless of gender, race, nationality ledge and experience available in the • make proposals to the supreme ternal control perspective, appropriate porate Governance of August 2011 are or religious beliefs. Due to the size of two governing bodies. governing body on remuneration for RISK MANAGEMENT AND CONTROL division of responsibility, and secondly, available on: RTX A/S the company do not at the members of the supreme governing SYSTEMS specific control activities that are moment have set measurable objec- • annually evaluate the structure, body and the executive board and The Supervisory Board and the Execu- intended to identify and reduce the risk www.corporategovernance.dk tives for this. size, composition and performance ensure that the remuneration is tive Board have the primary responsi- of errors in the financial reporting. The of the governing bodies and make consistent with the company’s remu- bility for RTX’s risk management and control activities are based on risk and The recommendations are aimed at Recommendation 5.1.1. recommendations to the supreme neration policy and the evaluation of internal control systems, including materiality assessment. On an ongoing Danish companies whose shares are The Committee recommends that the governing body with regard to any the performance of the persons con- compliance with applicable legislation basis, the management monitors com- admitted to trading on a regulated mar- supreme governing body annually changes, cerned. The committee should have and other financial reporting regu- pliance with relevant legislation and ket, as such companies have chosen specify the skills it must have to best information about the total amount lations. RTX’s risk management and other financial reporting requirements to be publicly traded companies. For perform its tasks and that the specifi- • annually evaluate the skills, know- of remuneration that members of internal control systems related to and reports to the Supervisory Board shareholders and other stakeholders cation be posted on the website. Pro- ledge and experience of the indi- the supreme governing body and the financial reporting, including IT and tax, and the Audit Committee. The Super- 32 RTX Annual Report 2011/12 RTX Annual Report 2011/12 33 32 RTX Annual Report 2011/12 RTX Annual Report 2011/12 33

visory Board and the Audit Committee Resolutions concerning amendments or on the same date the year before. In cutives as well as their close family are OTHER INFORMATION IN monitor the management’s response changes to the Articles of Association the financial year 2011/12, the highest obliged to inform the Company about ACCORDANCE WITH THE FINANCIAL to any control weakness, as well as the require two-thirds of the share capital closing price was DKK 14.40 and the their transactions with the Company’s STATEMENTS ACT § 107 A Company’s auditor reports to the Audit to be represented at the General Mee lowest DKK 11.00. shares for the purpose of subsequent • RTX has signed a few contracts Committee on an ongoing basis. On ting, and that the resolution is passed reporting to NASDAQ OMX Copenhagen concerning development and supply the recommendation of the Supervi- by two-thirds of the votes cast as well The market value of the Company’s A/S. In the internal rules, the Company agreements which can be renegoti- sory board is at the Annual General as of the voting share capital repre- shares amounted to approx. DKK 107 has also chosen to operate with an ated in case of change of control. Meeting elected a State Authorised sented at the General Meeting. million at 30 September 2012 compa- insider list containing approx. 125 Public Accountant Company, to handle red to approx. DKK 110 million at 30 persons, who through their relation • The Company’s CEO can terminate the interest by the shareholders and Where a proposal to amend the Articles September 2011. to the Company may possess internal his employment by giving 12 months’ the public. of Association related to the share- and share price-sensitive knowledge notice and the company can termi- holders’ right to receive dividend, the DIVIDENDS AND CAPITAL STRUCTURE of the Group’s conditions. Persons nate the employment by giving 12 CAPITAL POSITION tradability of the shares, redemption of RTX does not expect to pay dividends included in this insider list are only months’ notice. At 30 September 2011, the share capi- the share, exercise voting and unequal until the Group has obtained stability in allowed to trade in the Company’s tal of RTX had a nominal value of DKK splitting may be finally adopted at one its earnings. Once the required stability shares for a period of four weeks after 47,170,255 consisting of 9,434,051 General Meeting by a majority of 90% in earnings has been ensured, the Su- the Company’s announcement of its shares at DKK 5. All shares carry the of the votes cast as well as of the pervisory Board will assess the capital interim reports and annual reports. same rights, and the shares are not voting share capital represented at the base in relation to the business volume divided into classes. The following General Meeting and the Group’s investment plans. IR POLICY AND INVESTOR shareholders hold shares, which either Based on this, the Supervisory Board INFORMATION carry at least 5% of the share capital or RULES CONCERNING APPOINTMENT recommends the next Annual General RTX’s objective is to ensure an informa- have a nominal value of at least 5% of AND CHANGES IN THE SUPERVISORY Meeting not to pay dividends for the tion level to the stock market’s players the share capital. BOARD financial year 2011/12. for the purpose of creating a basis for All the board members elected at the fair pricing of the Company’s shares – OWNERSHIP Annual General Meeting are elected for In the recent financial years the a pricing which constantly reflects the Jens Hansen, one year at a time. All the employee Management in RTX has closed down a Group’s strategy, financial ability and Gistrup, Denmark 8.75% representatives are elected for four loss making business unit and inves expectations for the future. The flow of Susanne P. Elbæk, years at a time in accordance with ted significant in future product and information is to contribute to reducing Vadum, Denmark 7.22% current legislation. The age limit is technology platforms. The RTX financed the company specific risk related to in- Jens Toftgaard Petersen, 70. All the employee representatives investments have peaked with the vestments in the Company’s shares, so Svenstrup, Denmark 7.22% are elected for four years at a time financial year 2011/12. It is therefore that the Group’s cost of capital can be in accordance with current legislation the assessment that the demand reduced as much as possible. It is RTX’s TREASURY SHARES The most recent election of employees for capital needed in the turnaround policy that the Executive Board does RTX’s holding of treasury shares to the Board of Directors took place plan for RTX is declining when we are not participate in meetings with inve- amounts to nominally DKK 722,920, in June 2011 by written, secret, direct looking forward. The Board of Directors stors and analysts or makes statements equivalent to 144,584 shares. The sha- ballot. further intends to propose that the to the daily press for a period of three res were acquired in previous financial shareholders at the annual general weeks before the issue of financial re- years for DKK 8.9 million in connection Employee representatives have the meeting authorize the company to ac- ports. The Group also uses its website with share buy-back programs, which same rights, obligations and responsi- quire treasury shares at a total nominal www.rtx.dk as a tool for communica- were launched to hedge issued share bilities as the other board members. value of up to 10% of the company’s ting with the stock market. The website options. share capital in the period to the next contains further information about the INFORMATION TO THE STOCK general meeting. Group and its business areas. RULES CONCERNING CHANGES EXCHANGE TO THE COMPANY’S ARTICLES OF Since June 2000, the Company’s shares INSIDER RULES ASSOCIATION have been listed on NASDAQ OMX Co- The Group’s insider rules have been In accordance with the company law §§ penhagen A/S (ISIN DK0010267129). updated in accordance with amend- 106 and 107 the Articles of Associa- The closing price was DKK 11.30 at 30 ments to the Danish Securities Trading tion can be changed by a decision at September 2012, which is a decrease Act at 1 July 2008. The Executive the General meeting. of 3% compared to the closing price Board, the Supervisory Board and exe- Bestyrelse Direktion

34 RTX Annual Report 2011/12 RTX Annual Report 2011/12 35 34 RTX Annual Report 2011/12 RTX Annual Report 2011/12 35

SUPERVISORY BOARD EXECUTIVE BOARD

1 2 3 JESPER MAILIND Other directorships Born 1956 Chairman of the Supervisory Board of Education Graduate Diploma in CIMBRIA A/S, Denmark. Business Administration 1982. MBA Deputy Chairman of the Supervisory 1984. Board of ALECTIA A/S, Denmark. Title President & CEO of RTX A/S. Member of the Supervisory Board of KOMPAN A/S, Denmark.

4 5 6

1 JENS ALDER 2 PETER THOSTRUP 3 JENS HANSEN Chairman, born 1957 Deputy Chairman, born 1960 Born 1958 COMPANY COMPANY AUDITOR Elected by the Annual General Meeting, Elected by the Annual General Meeting, Elected by the Annual General Meeting, RTX A/S Deloitte first time in 2010. first time in 2009. first time in 1994. Strømmen 6 State Authorised Public Accounting Company Term of office expires January 2013. Term of office expires January 2013. Term of office expires January 2013. 9400 Nørresundby Education M.Sc. in Engineering 1981. MBA Education M.Sc. in Economics and Finance Education M.Sc. in Engineering 1984. Denmark 1987. 1987. MBA 1986. Title Vice President, Strategic Technology, Title Independent Director. Title Executive Vice President, Finance and RTX A/S. VAT no. 17 00 21 47 Other directorships IT at DLH Group, Denmark. Other directorships Registered in Aalborg municipality ANNUAL GENERAL MEETING Chairman of the Supervisory Board of Indu- Other directorships CEO of JH Venture ApS, Denmark. strielle Werke, Basel, Switzerland. Member of the Supervisory Board of Noa Chairman of the Supervisory Board of Phone +45 9632 2300 The Annual General Meeting is held on Friday, 25 January 2013 at 3pm at Chairman of the Supervisory Board of Sanitas Noa ApS, Denmark. Futarque A/S, Denmark. Fax +45 9632 2310 the company’s premises Strømmen 6, 9400 Nørresundby, Denmark. Krankenversicherungen, Switzerland. E-mail [email protected] Member of the Supervisory Board of AG für Website www.rtx.dk die Neue Züricher Zeitung, Switzerland. Chairman of the Supervisory Board in BG Consulting Engineers, Lausanne, Switzerland Member of the Supervisory Board of CA Technologies, New York, USA

4 KARSTEN VANDRUP 5 JØRGEN DALBY-JAKOBSEN 6 RUNE STRØM JENSEN Born 1966 Born 1962 Born 1979 Elected by the Annual General Meeting, Elected by the employees, first time in Elected by the employees, first time in first time in 2009. 2003. 2011. Term of office expires January 2013. Term of office expires January 2015. Term of office expires January 2015. Education Bachelor of Engineering 1998. Education M.Sc. in Engineering 1987. Education M.Sc. in Engineering 2004. Title CEO of Lizard Technology ApS Title Senior Coordinator at RTX A/S. Title Senior Project Manager at RTX A/S. Other directorships Deputy Chairman of the Supervisory Board of Latvisoft SIA, Latvia. Påtegninger

36 RTX Annual Report 2011/12 RTX Annual Report 2011/12 37 36 RTX Annual Report 2011/12 RTX Annual Report 2011/12 37

STATEMENT BY THE MANAGEMENT ON THE ANNUAL REPORT

Company announcements and financial calendar We have today presented the financial ments provide a true and fair view of loss for the year and of the Group’s and statements of RTX A/S for the financial the Group’s and the Parent’s assets, the Parent’s financial position in general year 1 October 2011- 30 September liabilities and financial position at 30 as well as a description of the most PUBLISHED ANNOUNCEMENTS IN 2012 (UP TO AND INCLUDING 21 NOVEMBER 2012) 2012. The annual report has been September 2012 and of their financial material risks and uncertainties facing prepared in accordance with Interna- performance and cash flows for the the Group and the Parent. 05.01.2012 No. 01 Annual General Meeting of RTX to be held on 30 January 2012 tional Financial Reporting Standards financial year 1 October 2011 to 30 as adopted by the EU and additional September 2012. We recommend the financial statements 30.01.2012 No. 02 Interim report for the first quarter of 2011/12 Danish disclosure requirements for fi- for adoption at the Annual General nancial statements of listed companies. We also consider Management’s Review Meeting. 30.01.2012 No. 03 Annual General Meeting of RTX A/S to give a true and fair view of the In our opinion the consolidated financial development in the Group’s and the 09.02.2012 No. 04 Extraordinary General Meeting of RTX to be held on Tuesday 6 March 2012 statements and the financial state- Parent’s activities and finances, profit/

06.03.2012 No. 05 Extraordinary General Meeting of RTX A/S

14.05.2012 No. 06 Interim report for the second quarter of 2011/12

20.08.2012 No. 07 Interim report for the third quarter of 2011/12 Noerresundby, 21 November 2012

28.09.2012 No. 08 Financial calendar 2012/13 for RTX A/S EXECUTIVE BOARD 21.11.2012 No. 09 Annual report for 2011/12

FINANCIAL CALENDAR Jesper Mailind Expected financial announcements until 31 January 2014 President & CEO

21 November 2012 Annual report for 2011/12

25 January 2013 Annual General Meeting SUPERVISORY BOARD

25 January 2013 Interim report for the first quarter of 2012/13

13 May 2013 Interim report for the second quarter of 2012/13 Jens Alder Peter Thostrup Karsten Vandrup Chairman of the Board Deputy Chairman 23 August 2013 Interim report for the third quarter of 2012/13

4 December 2013 Annual report for 2012/13 Rune Strøm Jensen Jørgen Dalby-Jakobsen Jens Hansen January 2014 Annual General Meeting Employee Representative Employee Representative

NEWS AT THE WEBSITE Please visit www.rtx.dk for announcements, news and financial figures. Revisorpåtegning Resultatopgørelse

38 RTX Annual Report 2011/12 RTX Annual Report 2011/12 39 38 RTX Annual Report 2011/12 RTX Annual Report 2011/12 39

INCOME STATEMENT STATEMENT OF COMPREHENSIVE INCOME BALANCE SHEET EQUITY STATEMENT CASH FLOW STATEMENT NOTES

INDEPENDENT AUDITOR’S REPORT INCOME STATEMENT 2011/2012

GROUP PARENT Amounts in DKK ’000 Note 2011/12 2010/11 2011/12 2010/11

Revenue 3,4 191,264 204,887 191,095 106,162 Value of work transferred to assets 8 12,540 12,306 12,540 12,306 TO THE SHAREHOLDERS OF RTX on Auditing and additional requirements Opinion Report on the consolidated financial under Danish audit regulation. This requires In our opinion, the consolidated financial Cost of sales 5 -76,670 -86,179 -75,982 -14,320 statements and Parent financial that we comply with ethical requirements statements and parent financial statements Other external expenses 8,9 -30,558 -35,530 -50,099 -29,544 statements of RTX A/S and plan and perform the audit to obtain give a true and fair view of the Group’s and Staff costs 6,8 -87,733 -83,149 -70,690 -70,164 We have audited the consolidated financial reasonable assurance about whether the the Parent’s financial position at 30 Sep- Depreciation, amortisation and impairment 7,8 -6,353 -3,291 -5,802 -3,126 statements and parent financial state- consolidated financial statements and tember 2012, and of the results of their Operating profilt/loss (EBIT) 2,490 9,044 1,062 1,314 ments of RTX A/S for the financial year 1 parent financial statements are free from operations and cash flows for the financial October 2011 - 30 September 2012, which material misstatement. year 1 October 2011 - 30 September 2012 comprise the income statement, state- in accordance with International Financial Financial income 10 1,096 983 1,622 1,455 ment of comprehensive income, balance An audit involves performing procedures to Reporting Standards as adopted by the Financial expenses 11 -1,057 -2,285 -1,903 -1,625 sheet, statement of changes in equity, obtain audit evidence about the amounts EU and Danish disclosure requirements for Profit/loss before tax, continuing operations 2,529 7,742 781 1,144 cash flow statement and notes, including and disclosures in the consolidated financial listed companies. the accounting policies, for the Group as statements and parent financial state- Tax on profit/loss from continuing operations 12 -638 -1,481 -497 -390 well as for the Parent. The consolidated ments. The procedures selected depend Statement on the management Profit/loss from continuing operations 1,891 6,261 284 754 financial statements and parent financial on the auditor’s judgement, including commentary statements are prepared in accordance with the assessment of the risks of mate- Pursuant to the Danish Financial State- Profit/loss from discontinued operations 36 - -2,320 49 187 International Financial Reporting Standards rial misstatements of the consolidated ments Act, we have read the management as adopted by the EU and Danish disclosure financial statements and parent financial commentary. We have not performed any Profit/loss for the year 1,891 3,941 333 941 requirements for listed companies. statements, whether due to fraud or error. further procedures in addition to the audit In making those risk assessments, the of the consolidated financial statements Proposed distribution of profit/loss Management’s responsibility for the auditor considers internal control relevant and parent financial statements. Retained earnings 333 941 consolidated financial statements to the entity’s preparation of consolidated Proposed dividend - - and parent financial statements financial statements and parent financial On this basis, it is our opinion that the 333 -941 Management is responsible for the prepa- statements that give a true and fair view in information provided in the management

ration of consolidated financial statements order to design audit procedures that are commentary is consistent with the con- Earnings per share and parent financial statements that give appropriate in the circumstances, but not solidated financial statements and parent a true and fair view in accordance with for the purpose of expressing an opinion financial statements. Continuing and discontinued operations (DKK) 13 0.2 0.4 International Financial Reporting Standards on the effectiveness of the entity’s internal Continuing and discontinued operations, diluted (DKK) 13 0.2 0.4 as adopted by the EU and Danish disclosure control. An audit also includes evaluating Aalborg, 21 November 2012 Continuing operations (DKK) 13 0.2 0.7 requirements for listed companies and for the appropriateness of accounting policies Continuing and discontinued operations, diluted (DKK) 13 0.2 0.6 such internal control as Management deter- used and the reasonableness of accounting Deloitte mines is necessary to enable the prepara- estimates made by Management, as well as State Authorised Public Accounting Distribution of profit/loss for the continuing operations for the year tion and fair presentation of consolidated the overall presentation of the consolidated Company Shareholders of the parent 1,937 4,186 financial statements and parent financial financial statements and parent financial Minority interest -46 -245 statements that are free from material misstatements. statement, whether due to fraud or error. 1,891 3,941 We believe that the audit evidence we have Poul Erik Wagner Auditor’s responsibility obtained is sufficient and appropriate to State Authorised Public Accountant Our responsibility is to express an opinion provide a basis for our audit opinion. on the consolidated financial statements and parent financial statements based Our audit has not resulted in any qualifica- on our audit. We conducted our audit in tion. Torben Toft Kristensen accordance with International Standards State Authorised Public Accountant Totalindkomstopgørelse Balance

40 RTX Annual Report 2011/12 RTX Annual Report 2011/12 41 40 RTX Annual Report 2011/12 RTX Annual Report 2011/12 41

INCOME STATEMENT STATEMENT OF COMPREHENSIVE INCOME BALANCE SHEET EQUITY STATEMENT CASH FLOW STATEMENT NOTES INCOME STATEMENT STATEMENT OF COMPREHENSIVE INCOME BALANCE SHEET EQUITY STATEMENT CASH FLOW STATEMENT NOTES

STATEMENT OF COMPREHENSIVE INCOME BALANCE SHEET 30 SEPTEMBER 2012 2011/2012 – ASSETS

GROUP PARENT GROUP PARENT Amounts in DKK ’000 2011/12 2010/11 2011/12 2010/11 Amounts in DKK ’000 Note 2011/12 2010/11 2011/12 2010/11

Profit/loss for the year 1,891 3,941 333 941 Own completed development projects 14 8,181 9,747 8,181 9,747 Own development projects in progress 14 9,863 4,493 9,863 4,493 Exchange rate adjustments of foreign subsidiaries 1,827 1,613 - - Goodwill 14 7,797 7,797 - - Fair value adjustment of short-term current asset investments -472 5 -472 5 Total intangible assets 25,841 22,037 18,044 14,240 Other comprehensive income, net of tax 1,355 1,618 -472 5 Comprehensive income for the year 3,246 5,559 -139 946 Land and buildings 15 74,299 76,129 74,299 76,129 Plant and machinery 15 3 47 3 47 Other fixtures, tools and equipment 15 848 632 736 454 Leasehold improvements 15 733 430 - - Attributable to: Total tangible assets 75,883 77,238 75,038 76,630 Shareholders of the parent 3,228 5,684 Minority interest 18 -125 Investments in subsidiaries 16 - - 30,645 30,645 3,246 5,559 Other equity investments 17 - - - - Deposits 17 743 345 - - Deferred tax assets 18 - - - - Other long-term assets 743 345 30,645 30,645

Total long-term assets 102,467 99,620 123,727 121,515

Inventories 19 15,689 7,239 15,689 3,003

Trade receivables 20, 37 38,598 53,880 38,491 19,932 Contract development projects in progress 21 4,139 2,403 4,139 2,403 Receivables from subsidiaries 16 - - - - Income taxes 12 975 236 - 236 Other receivables 1,129 1,067 611 582 Accruals 1,699 1,768 1,699 1,361 Receivables 37 46,540 59,354 44,940 24,514

Short-term current asset investments 22 45,563 45,985 44,522 44,995

Cash at bank and in hand 23 2,105 20,868 621 11,039

Total short-term assets 109,897 133,446 105,772 83,551

Total assets 212,364 233,066 229,499 205,066 Egenkapitalopgørelse koncern

42 RTX Annual Report 2011/12 RTX Annual Report 2011/12 43 42 RTX Annual Report 2011/12 RTX Annual Report 2011/12 43

BALANCE SHEET 30 SEPTEMBER 2012 EQUITY STATEMENT FOR THE GROUP – EQUITY AND LIABILITIES

GROUP PARENT Amounts in DKK ’000 Note 2011/12 2010/11 2011/12 2010/11 Amounts in DKK ’000 Note Share Share Retained Minority Total capital premium earnings interest Share capital 24 47,170 47,170 47,170 47,170 Share premium account 301,166 301,166 301,166 301,166 Equity at 1 October 2010 47,170 301,166 -201,820 -1,312 145,204 Retained earnings -190,596 -195,025 -199,697 -200,759 Equity attributable to the shareholders of the parent company 157,740 153,311 148,639 147,577 Profit/loss for the year - - 4,186 -245 3,941 Minority interests -1,419 -1,437 - - Equity 156,321 151,874 148,639 147,577 Exchange rate adjustments of foreign subsidiaries - - 1,493 120 1,613 Fair value adjustment of short-term current asset investments - - 5 - 5 Mortgage debt 26 13,482 14,748 13,482 14,748 Other comprehensive income, net of tax - - 1,498 120 1,618 Deferred tax liabilities 18 - - - -

Provisions 27 1,335 1,373 1,335 1,373 Comprehensive income for the year - - 5,684 -125 5,559 Employee bonds 28 1,855 1,855 1,855 1,855

Long-term liabilities 16,672 17,976 16,672 17,976 Share-based remuneration 34 - - 1,111 - 1,111

Other transactions - - 1,111 - 1,111 Current portion of long-term mortgage debt 26 1,250 1,342 1,250 1,342

Bank debt 23 - - - -

Trade payables 13,985 29,658 13,861 3,617 Equity at 30 September 2011 47,170 301,166 -195,025 -1,437 151,874 Contract development projects in progress 21 1,316 3,864 1,316 3,864 Payables to subsidiaries 16 - - 27,309 7,022 Profit/loss for the year - - 1,937 -46 1,891 Income taxes 12 222 1,529 - - Provisions 27 2,873 7,226 2,873 7,226 Exchange rate adjustments of foreign subsidiaries - - 1,763 64 1,827 Other payables 29 19,725 19,597 17,579 16,442 Fair value adjustment Short-term liabilities 39,371 63,216 64,188 39,513 of short-term current asset investments - - -472 - -472

Other comprehensive income, net of tax - - 1,291 64 1,355 Total liabilities 56,043 81,192 80,860 57,489

Comprehensive income for the year - - 3,228 18 3,246 Total equity and liabilities 212,364 233,066 229,499 205,066 Share-based remuneration 34 - - 1,201 - 1,201 Other transactions - - 1,201 - 1,201

Equity at 30 September 2012 47,170 301,166 -190,596 -1,419 156,321 Egenkapitalopgørelse moderselskab Pengestrømsopgørelse

44 RTX Annual Report 2011/12 RTX Annual Report 2011/12 45 44 RTX Annual Report 2011/12 RTX Annual Report 2011/12 45

EQUITY STATEMENT FOR THE PARENT CASH FLOW STATEMENT 2011/2012

GROUP PARENT Amounts in DKK ’000 Note Share Share Retained Total Amounts in DKK ’000 Note 2011/12 2010/11 2011/12 2010/11 capital premium earnings Operation profit/loss (EBIT) from continuing operations 2,490 9,044 1,062 1,314 Equity at 1 October 2010 47,170 301,166 -202,816 145,520 Reversal of items with no effects on cash flow Profit/loss for the year - - 941 941 Depreciation, amortisation and impairment 6,353 3,291 5,802 3,126 Other items with no effects on cash flow 32 -2,121 -567 2,365 -7,234 Fair value adjustment of short-term current asset investments - - 167 167 Other comprehensive income, net of tax - - 167 167 Change in working capital Change in inventories -8,712 16,263 -14,581 7,553 Comprehensive income for the year - - 1,108 1,108 Change in receivables 14,343 -8,435 -22,958 9,985 Change in trade payables, etc. -18,180 138 28,781 -495 Share-based remuneration 34 - - 949 949 Cash flows from operating activities -5,827 19,734 471 14,249 Other transactions - - 949 949 Financial income received 10 1,096 983 1,622 1,455 Financial expenses paid 11 -1,057 -2,285 -1,903 -1,625 Equity at 30 September 2011 47,170 301,166 -200,759 147,577 Income taxes paid 12 -2,417 -1,481 -497 -390 Cash flows from operations -8,205 16,951 -307 13,689 Profit/loss for the year - - 333 333 Investments in own development projects -12,540 -12,306 -12,540 -12,306 Fair value adjustment of short-term current asset investments - - -472 -472 Acquisition of property, plant and equipment -1,235 -846 -1,235 -191 Other comprehensive income, net of tax - - -472 -472 Acquisition of other long-term assets -398 - - - Received reimbursements, development projects 4,973 - 4,973 - Comprehensive income for the year - - -139 -139 Proceeds from sale of long-term current asset investments (over 3 months) - 1,908 - 1,908 Cash flows from financing activities -9,200 -11,244 -8,802 -10,589 Share-based remuneration 34 - - 1,201 1,201 Other transactions - - 1,201 1,201 Repayment of long-term liabilities -1,358 -2,393 -1,358 -2,393 Cash flows from financing activities -1,358 -2,393 -1,358 -2,393 Equity at 30 September 2012 47,170 301,166 -199,697 148,639 Cash flows from discontinued operations 36 - -2,320 49 187 The share capital of DKK 47,170,255 consists of af 9,434,051 shares of DKK 5. The group holds 144,584 treasury shares at 30 September 2012 (144,584 shares at 30 September 2011) Increase/decrease in cash and cash equivalents -18,763 994 -10,418 894 There are no shares with special rights. Cash and cash equivalents at 1 October, net 20,868 19,874 11,039 10,145 Cash and cash equivalents at 30 September, net 23 2,105 20,868 621 11,039

Cash and cash equivalents at 30 September, net are composed as follows: Cash at bank and in hand 5,657 20,868 4,173 11,039 Bank debt -3,552 - -3,552 - Cash and cash equivalents at 30 September, net 2,105 20,868 621 11,039 Noteoversigt Noter

46 RTX Annual Report 2011/12 RTX Annual Report 2011/12 47 46 RTX Annual Report 2011/12 RTX Annual Report 2011/12 47

NOTES NOTES

1 Accounting principles applied 1. ACCOUNTING POLICIES 2 Significant accounting estimates, assumptions and uncertainties BASIC PRINCIPLES • IFRS 10 Consolidated Financial State- amended standard replace the former 3 Segment information The annual report of RTX for 2011/12, including both the consolidated finan- ments. The standard is effective for IAS 27 Consolidated and Separate Finan- 4 Revenue cial statements and the Parent financial financial years beginning on 1 January cial Statements. 5 Cost of sales statements, is presented in accordance with 2013 or later. The standard replaces IAS 6 Staff cost International Financial Reporting Standards 27 Consolidated and Separate Financial • IAS 28 Investments in Associates and 7 Depreciation, amortisation and impairment (IFRS) as adopted by the EU and additional Statements and establishes disclosure Joint Ventures. The standard is effective Danish disclosure requirements for annual 8 Development cost and preparation of the consolidated for financial years beginning on 1 January reports of listed companies, with reference financial statements. 2013 or later. The Standard sets out the 9 Fee to auditor to the disclosure requirements of listed accounting treatment of investments in 10 Financial income companies from NASDAQ OMX Copenhagen • IFRS 11 Joint Arrangements “joint activi- associates and establishes requirements 11 Financial expenses A/S and the Danish Executive Order on IFRS Adoption issued in accordance with the ties and joint entities (joint ventures)” for using the equity method for invest- 12 Tax on profit/loss for the year Danish Financial Statements Act. The standard is effective for financial ments in associates and joint ventures. 13 Earnings per share years beginning on 1 January 2013 or 14 Intangible assets This annual report also complies with the later. The standard replaces IAS 31 Inte- • Minor changes to various standards as 15 Tangible assets International Financial Reporting Standards rests in Joint Ventures and determines a result of IASB’s annual improvement issued by IASB. 16 Investments in subsidiaries the financial reporting for parties in a project from May 2012. joint venture. Management assesses that the future im- 17 Other long-term assets The consolidated financial statements plementation of other Standards and Inter- 18 Deferred tax and the separate financial statements are • IFRS 12 Disclosure of Interests in Other pretations which have not become effective presented in DKK, which is the presentation 19 Inventories can be implemented without any significant currency for the Group’s activities and the Entities. The standard is effective for 20 Trade receivables influence on the annual report. functional currency for the Parent company. financial years beginning on 1 January 21 Contract development projects in progress 2013 or later. The standard is applicable CONSOLIDATED FINANCIAL 22 Short-term current asset investment The annual report is presented based on to entities which have investments in STATEMENTS 23 Cash at bank and in hand historical cost prices, except items where a subsidiary, a joint venture, in an as- The consolidated financial statements IFRS require measurement at fair value. 24 Share capital sociated company or a non-consolidated include the Parent RTX and the enterprises Otherwise the accounting policies applied structured entity. (subsidiaries) that are controlled by the 25 Treasury shares are as described below. 26 Long-term liabilities Parent. Control is achieved by the Parent, • IFRS 13 on Fair Value Measurements. The either directly or indirectly, holding more 27 Provisions STANDARDS AND INTERPRETATIONS than 50% of the voting rights or in any EFFECTIVE FROM THE FINANCIAL standard is effective for financial years 28 Employee bonds other way possibly or actually exercising YEAR 2011/12 beginning on 1 January 2013 or later. controlling influence. 29 Other payables In the financial year 2011/12 the Group has The standard sets out the framework for 30 Operating lease commitments used all the new and changed standards measurement of fair value and disclo- RTX together with its subsidiaries is 31 Contingent liabilities, collateral and contractual obligations and interpretations which are relevant sures on fair value measurement in one referred to as the Group. to RTX, and which came into force with 32 Other items with no effects on cash flow single standard. effect for financial years from 1 October Basis of consolidation 33 Related parties 2010, and they have been implemented • IAS 1 Presentation of Financial State- The consolidated financial statements 34 Share-based remuneration in the preparation of the annual report for ments regarding amendments to the are prepared on the basis of the financial 35 Ownership 2011/12. These standards and interpreta- statements of RTX and its subsidiaries. The tions are: comprehensive income statement. The 36 Discontinued operations aim of the changes is to improve consi- financial statements used for consolidation 37 Financial risks and financial instruments stency and clarity in the presentation of have been prepared applying the Group’s accounting policies. 38 Events after the balance sheet date • Amendment to IFRS 7 Financial Instru- items of other comprehensive income. ments, information and presentation. On consolidation, intra-group income and The change results in changed disclosure • IAS 27 on separate parent company expenses, internal shareholdings, intra- requirements for derecognition of finan- financial statements. The standard is group accounts and dividends as well as cial instruments. effective for financial years beginning on profits and losses on transactions between 1 January 2013 or later. The standard the consolidated enterprises are eliminated. • IFRS 9 Classification and Measurement includes the accounting recognition of Financial Assets. The number of and measurement as well as disclosure Subsidiaries’ financial statement items categories of financial assets is reduced requirements for investments in sub- are recognized in full in the consolidated to two – amortized cost price model or sidiaries, joint ventures and associa- financial statements. Minority interests’ pro rata share of profit/loss forms part of the fair value model. The classification is de- tes, when an entity prepares separate Group’s profit or loss for the year and is a termined by type of business model and financial statements. Together with IFRS separate element of the Group’s equity. the characteristics of the instrument. 10 Consolidated Financial Statement the 48 RTX Annual Report 2011/12 RTX Annual Report 2011/12 49 48 RTX Annual Report 2011/12 RTX Annual Report 2011/12 49

NOTES NOTES

Business combinations effect at the payment date or the rate at the The fair value of the share options and the in the income statement when delivery is Cost of sales, etc Prepayment Scheme. Moreover, the items Newly acquired or newly established balance sheet date are recognized in the in- warrants is computed by using the Black & made and risk has passed to the buyer. Cost of sales etc comprises raw materials, comprise realized and unrealized gains and companies are recognized in the consoli- come statement as financial income or finan- Scholes model for valuation of European consumables, cost of sales, freight, losses on derivative financial instruments dated financial statements as from the date cial expenses. Non-monetary assets acquired call options with the parameters included Contract development projects and delivery customs and other direct external expenses which cannot be classified as hedging of acquisition or the date of establishment, in foreign currencies and measured on the in note 34. of services are recognized as revenue incurred to achieve revenue. transactions. respectively. The acquisition date is the basis of historical cost are translated applying when the project is performed or when date, where control of the company is actu- the exchange rate of the transaction date. INCOME TAXES the agreed services are delivered so that Consumed resources related to develop- Interest income and interest expenses are ally obtained. Companies sold or Non-monetary items that are restated at fair Tax for the year, consisting of current tax revenue corresponds to the selling price of ment projects financed by a third party are accrued based on the principal sum and the liquidated are included in the profit and loss value are translated using the exchange rate for the year and changes in deferred tax, is the work performed in the financial year expensed when consumed. effective interest rate. account until the date of sale or liquidation. at the date of restatement. recognized in the income statement by the (the percentage-of completion method), The date of sale is the date, where control portion attributable to the profit/loss for see below. Other external expenses Dividends from investments in other securi- of the company is actually transferred to a On recognition in the consolidated financial the year and classified directly as equity by Other external expenses comprise costs for ties and equity investments are recognized third-party. When acquiring new compa- statements of enterprises which present their the portion attributable to entries directly Revenue is measured at fair value of the premises, marketing and sale, administra- when a final right to these dividends has nies, where the Group obtains a controlling financial statements in a functional currency on equity. Exchange adjustments of defer- consideration received or receivable. If tion, bad debts, etc. been obtained. influence in the acquired company, the different from DKK, the income statements red tax are recognized as part of the year’s interest-free credit has been arranged for acquisition method is applied, by which are translated at the months’ average adjustments of deferred tax. payment of the consideration receivable Other external expenses also include BALANCE SHEET the newly acquired companies’ identifiable exchange rates. Balance sheet items are which is longer than the usual credit period, external costs for development projects Completed development projects at assets, the liabilities and the contingent translated using the exchange rates at the The current tax payable or receivable is re- the fair value of the consideration is deter- at own expense which do not meet the own expense liabilities are measured at fair value at the balance sheet date. Goodwill is considered as cognized in the balance sheet, stated as tax mined by discounting future payments. The criteria for recognition in the balance sheet. Development projects are recognized as acquisition date. belonging to the relevant entity acquired and calculated on this year’s taxable income, difference between fair value and nominal In addition, provisions for loss on contract intangible assets to the extent the product is translated using the exchange rate at the adjusted for prepaid tax. When calculating value of the consideration is recognized as development projects are included. or the process is likely to generate future The consideration paid for a company is balance sheet date. the current tax for the year, the tax rates in financial income in the income statement financial benefits to the Group, and the the fair value of the consideration paid for effect at the balance sheet date are used. by using the effective interest method. Own development projects development costs related to each asset the acquired company. Acquisition-related Exchange differences arising out of the Development cost financed by RTX is ab- can be measured reliably. costs are recognized in profit or loss in the translation of foreign enterprises’ balance The current Danish income tax is allocated Revenue is calculated net of VAT, duties, etc sorbed and financed by RTX in those cases periods in which the costs are incurred. sheet items and income statement items are among the jointly taxed Danish enterprises collected on behalf of a third party. where a project is initiated without a signed On initial recognition, development projects recognized directly in equity. Correspondingly, proportionally to their taxable income, i.e. contract with a third party about direct are measured at cost. The cost of develop- Positive differences (goodwill) between, exchange differences arising as a result of full allocation with a refund concerning tax Contract development projects financed financing of the customer project. ment projects comprises costs that are on the one hand, the consideration paid changes made directly in the foreign entity’s losses. by a third party directly attributable to the development for the acquired company, the value of equity are also recognized in equity. Other If the outcome of a contract development Development cost financed by RTX is projects. minority interests in the acquired company foreign exchange gains and losses are recog- Deferred tax is recognized applying the project can be estimated reliably, revenue is expensed in the profit and loss when and the acquisition-date fair value of nized in the income statement under financial liability method on all temporary diffe- recognized in the income statement based consumed. In those cases where it is highly Completed development projects are previously held equity interests, and, on the income or expenses. rences between the carrying amount and on the contract’s stage of completion at probable that the development projects can amortised on a straight-line basis using the other hand, the fair value of the acquired tax-based value of assets and liabilities. the balance sheet date (the percentage- be marketed as new products in a potential estimated useful lives of the assets. The assets, liabilities and contingent liabilities SHARE-BASED INCENTIVE SCHEMES of-completion method). The related cost is market and development cost is clearly period of amortisation is usually 3-5 years. are recognized as an asset under intangible Share-based incentive schemes in the form Deferred tax is calculated based on the expensed at the time of consumption. identified, the direct cost measured on the For development projects protected by intel- assets, and are tested for impairment at of share options and warrants where the planned use of each asset or the planned project can be transferred to assets, if there lectual property rights, the maximum period least once a year. If the carrying amount of employees may only choose to buy and winding-up of each liability, respectively. If the outcome of a contract development is a correlation between the cost and the of amortisation is the remaining duration of the asset exceeds the recoverable amount, subscribe for shares in the Parent, at an Deferred tax is measured by using the project cannot be estimated with sufficient expected future income. the relevant rights. the carrying amount of the asset is reduced agreed rate (equity-settled share-based tax rates and tax rules of the respective reliability, revenue is recognized at the to the lower recoverable amount. payment scheme), the fair value of the countries which are expected to apply when project costs incurred in the period to the Staff costs Development projects in progress recogni- rights is measured at the time of issue and deferred tax is expected to be released as extent these costs are likely to be recove- Staff costs comprise wages and salaries, zed in the balance sheet are not amortised FOREIGN CURRENCY TRANSLATION are recognized in the income statement un- current tax. red. share-based remuneration as well as social but tested for impairment at least once a The presentation currency of the Group and der staff costs for the period during which security costs, pension contributions etc for year. the Parent is Danish kroner (DKK). the employees achieve final right to the Deferred tax assets, including the tax base Costs of sales work and of securing con- the Company’s management and staff. share options and warrants, respectively. of tax loss carry-forwards, are recognized in tracts as well as financing costs are recogni- The Group’s services are primarily sold on The functional currency for the parent The set-off entry is recognized directly in the balance sheet at their estimated realized in the income statement as incurred. Staff costs also include wages and salaries markets with frequent changes or upgra- company is Danish kroner (DKK). equity. zable value, either as a set-off against de- etc relating to development projects at own ding of technologies. Consequently, the ferred tax liabilities or as net tax assets for Royalty expense which do not meet the criteria for Group’s commercial sales conditions may On initial recognition, transactions in curren- On initial recognition of the share options set-off in future positive taxable income. At Income from royalty is often conditional recognition in the balance sheet. change at short notice, and in particular ca- cies different from the enterprises’ functional and warrants an estimate is made regar- each balance sheet date, it is reassessed on future events, including the customer’s ses the market may be lost due to a specific currency are translated applying the exchange ding the number of rights for which the whether sufficient taxable income is likely sale of products containing technology Financial income and expenses technological development. Therefore, it is rate of the transaction date. employees are expected to acquire final to occur in future for the deferred tax asset developed by RTX. Royalty is therefore not These items comprise interest income and expected that only in special cases incurred right. Subsequently, adjustments are made to be used. recognized in the income statement until interest expenses, the interest portion of costs relating to the Group’s own develop- Monetary items denominated in foreign for changes to this estimate whereby final these future events have occurred. finance lease payments, foreign exchange ment projects will meet the requirements currencies that have not been settled at the recognition of the cost corresponds to the INCOME STATEMENT gains and losses on liabilities and transac- for capitalization. balance sheet date are translated using the actual number of acquired rights to share Revenue Public grants tions in foreign currency, amortisation exchange rate at the balance sheet date. options and warrants. Revenue from the sale of manufactured Public grants are recognized in the profit premium/allowance on financial assets Patents and licences Exchange differences that arise between the goods and goods for resale is recognized and loss when they are received. and liabilities etc as well as tax surcharge Acquired intellectual property rights in the rate at the transaction date and the one in and repayment under the Danish Tax form of patents and licences are measu- 50 RTX Annual Report 2011/12 RTX Annual Report 2011/12 51 50 RTX Annual Report 2011/12 RTX Annual Report 2011/12 51

NOTES NOTES

red at cost less accumulated amortisation. Property, plant and equipment are written been performed. Impairment of goodwill is, Receivables Financial assets measured at fair value balance sheet date according to a specific Patents are amortised on a straight-line down to the lower of recoverable amount however, not reversed. Receivables comprise trade receivables, are recognized at the trading date, and plan, and where the parties involved have basis over the remaining patent period, and and carrying amount. receivables from project contracts as well as changes in the fair value are recognized been informed about the overall plan. licenses are amortised over the term of the Other investments other receivables. Receivables are financial currently in the income statement under agreement. If the actual useful life is shor- Investments in subsidiaries in the Other investments are classified as “Finan- assets with fixed or determinable payments financial items. Mortgage debt ter than the remaining life and the term of Parent’s financial statement cial assets available for sale”, and on initial which are not listed at an active market and At the time of borrowing, mortgage debt is the agreement, respectively, amortisation is Investments in subsidiaries are measured recognition these are measured at fair value which are not derivatives. On initial recognition financial assets clas- measured at fair value which corresponds performed over the shorter useful life. at cost. equal to the cost on the trading day plus sified as available for sale are measured at to the proceeds after deduction of any any transaction costs. Listed shares and On initial recognition, receivables are fair value equal to the cost on the trading transaction costs incurred. Subsequently, Goodwill Impairment of property, plant and bonds are subsequently measured at fair measured at fair value and subsequently date. Subsequently, current asset invest- mortgage debt is measured at amorti- On initial recognition, goodwill is recog- equipment and intangible assets as well values on the balance sheet date (listed at amortised cost less write-down for bad ments are measured at fair value at the sed cost. This means that the difference nized and measured as the difference as investments in subsidiaries price). Other investments are measured at debts. Writedown is made on an individual balance sheet date equal to the quoted between the proceeds at the time of between cost of the enterprise acquired The carrying amounts of property, plant an approximate computed fair value or at basis by using a writedown account. market price. Unrealized capital gains and borrowing and the amount to be repaid is and the fair value of the assets, liabilities and equipment and intangible assets cost if an approximate fair value cannot be losses are recognized in equity until the recognized in the income statement as a and contingent liabilities acquired, see with determinable useful lives as well as computed reliably. If the carrying amount of Contract development projects in time of divestment. On realization the financial expense over the term of the loan description under consolidated financial the Parent’s investments in subsidiaries other investments exceeds the recoverable progress accumulated value adjustment recognized applying the effective interest method. statements. are tested on the balance sheet date to amount, writedown is made to this lower Contract development projects are mea- in equity is transferred to financial items in determine whether there are indications value. sured at selling price of the work performed the income statement. Lease commitments When goodwill is recognized, the amount of impairment. If there are indications of at the balance sheet date (percentage-of- Lease payments on operating leases are is allocated to the activities of the Group impairment, the recoverable amount of Fair value adjustments of financial assets completion) less on account invoicing and Treasury shares recognized on a straight-line basis in the generating separate payments (cash-ge- the asset is estimated to establish the available for sale are recognized directly in write-down for bad debt. Acquisition and selling prices of treasury income statement over the term of the nerating units). Determination of cash- need for impairment and the extent of the equity until the time of sale of the assets. shares as well as dividends on these are lease. The effective interest method is used generating units follows the management impairment losses, if any. For development Upon sale of the assets, accumulated gains The selling price is measured based on the recognized directly as equity under retained for recognition. structure and internal finance management projects in progress, intangible assets with and losses recognized in equity are trans- stage of completion on the balance sheet earnings. and reporting of the Group. determinable useful lives and goodwill, the ferred to the income statement. Interest date and the total estimated income from Other financial liabilities recoverable amount is estimated annually, and dividends on financial assets available each development project. Usually, the stage Provisions On initial recognition, other financial liabi- Goodwill is not amortised but tested for irrespective of whether there are indicati- for sale are recognized in the income state- of completion is estimated as the ratio Provisions are recognized when the Group lities, including bank loans, trade payables, impairment at least once a year. ons of impairment. ment under financial income. between the realized and the total budgeted has a legal or constructive obligation as a prepayments received from customers and consumption of time and material. result of events in this or previous financial debt to public authorities, etc are measured Property, plant and equipment If the individual asset does not generate Inventories years, and repayment of the liability is likely at fair value equal to received proceed less Property, plant and equipment are mea- cash independently of other assets, the Inventories are measured at the lower of If the outcome of a development project to result in a drain on the Group’s financial any incurred transaction costs. The liabili- sured at cost less accumulated deprecia- recoverable amount is estimated for the cost using the FIFO method and net reali- cannot be estimated reliably, the develop- resources. ties are subsequently measured at amor- tion and impairment losses. Land is not smallest cash-generating unit in which the zable value. ment project is measured at costs incurred tised cost by using the effective interest depreciated. asset is included. to the extent these can be recovered. Provisions are measured as the best esti- method so that the difference between the Cost of goods for resale, raw materials and mate of costs expected for the obligation to proceeds and the nominal value is recogni- Cost comprises the acquisition price, costs The recoverable amount is calculated as the consumables consists of purchase price When total project costs are likely to exceed be settled on the balance sheet date. Pro- zed in the income statement as a financial directly attributable to the acquisition as higher of the assets’ fair value less costs to plus landing costs. Cost of manufactured total project income for a development visions that are estimated to mature after expense over the borrowing period. well as preparation costs. For assets held sell and value in use. On calculation of va- goods and work in progress consists of project, the expected loss is immediately more than one year after the balance sheet under finance leases, cost is the lower of lue in use, the estimated future cash flows costs of raw materials, consumables and recognized as costs. date are measured at their present value. PRESENTING OF DISCONTINUED the asset’s fair value and present value of are discounted to present value by using a direct labour costs in production as well as OPERATIONS future lease payments. discount rate reflecting actual market as- allocated fixed and variable indirect produ- The individual development project in If goods are sold on approval, a provision Discontinued operations comprise enter- sessments of the timing value of money as ction costs. progress is recognized in the balance sheet is made for the mark-up on the goods prises and business areas which are either The basis of depreciation is cost less well as the particular risks related to the as- under receivables or liabilities, depending estimated to be returned as well as any sold or divested with a view to sale. estimated residual value after the end of sets, and for which no adjustment has been Variable indirect production costs include on whether net value is a receivable or a expenses related to the returns. useful life. made in the estimated future cash flows. indirect materials and payroll and are allo- liability. Profit/loss after tax from discontinued cated based on precalculations of the goods Guarantee commitments comprise commit- operations and value adjustments after Straight-line depreciation is made on the If the recoverable amount of the assets actually produced. Fixed indirect production Prepayments and accrued income ments to remedy defects and deficiencies tax of related assets and liabilities as well basis of the following estimated useful lives is estimated to be lower than carrying costs comprise costs of maintenance of and Prepayments and accrued income comprise on goods sold within the guarantee period. as profit/loss from sale are presented in of the assets: amount, carrying amount is written down to depreciation on machinery, factory buildings incurred costs relating to subsequent finan- The liabilities are computed based on histo- a separate line in the income statement. recoverable amount. and equipment applied for the manufac- cial years. Prepayments and accrued income rical experiences. Comparative figures are restated in accor- Buildings 25 to 50 years turing process as well as costs of factory are measured at cost. dance with this presentation. Plant and machinery 4 to 10 years Impairment losses are recognized in the administration and management. When total costs are likely to exceed total in- Other fixtures and fittings, income statement. In case of any subse- Short-term current asset investments come from a contract development project, a Cash flows from operations, investments tools and equipment, quent reversals of impairment losses, the The net realizable value of inventories is The Group’s portfolio of current asset provision is recognized equal to the total loss and financing activities of discontinued including IT equipment 3 to 7 years carrying amount of the assets is increased calculated as the estimated selling price investments recognized under short-term estimated to result from the relevant project. operations are disclosed in a note. Leasehold improvements 5 years to the adjusted estimate of the recovera- less completion costs and necessary selling assets primarily comprises listed bonds. The ble amount, however not exceeding the costs. item includes financial assets measured at In connection with planned restructurings CASH FLOW STATEMENT Depreciation methods, useful lives and resi- carrying amount which the asset would fair value through the income statement as of the Group, provisions are only made The cash flow statement shows cash flows dual amounts are reassessed annually. have had if the impairment loss had not well as financial assets available for sale. for obligations relating to restructurings from operations, investments and financing that were decided and commenced at the 52 RTX Annual Report 2011/12 RTX Annual Report 2011/12 53 52 RTX Annual Report 2011/12 RTX Annual Report 2011/12 53

NOTES NOTES

2. MATERIAL ACCOUNTING ESTIMATES, ASSUMPTIONS AND UNCERTAINTIES Several financial statement items cannot Development projects be measured with certainty but only be In those cases where RTX has signed a estimated. Such estimates comprise as- contract, where RTX (fully or partial) will sessments made on the basis of the latest finance the development cost in order information available at the time of the to win the following supply agreement, as well as cash and cash equivalents at the Furthermore, cash flows in the form of consist of strategic business units selling dif- financial reporting. It may be necessary to management assesses that it is highly beginning and the end of the financial year. lease payments made on assets held under ferent products and services. Each business change previous estimates due to changes probable that the development project can finance leases are recognized. unit is operated relatively independently in the matters on which the estimates were be marketed in a potential market. In con- Cash flows from acquisition and divestment and uses separate marketing strategies. based or due to additional information, nection with the capitalization of develop- of enterprises are shown separately under Cash flows from financing activities com- further experience or subsequent events. ment costs, the expected useful life of the cash flows from investing activities. prise changes in the Parent’s share capital The segments’ measure of profit or loss is product is to be determined. Management and related costs as well as the raising result before tax. Segment income and ex- MATERIAL ACCOUNTING ESTIMATES has assessed that the amortization period Cash flows from operations are presented and repayment of loans, instalments on penses comprise those items, which can be In relation to the practical application of the is usually 3-4 years. using the indirect method and calculated as interest-bearing debt, purchase and sale of directly allocated to the individual segment. accounting policies described, Management the operating profit/loss adjusted for non-cash treasury shares, and payment of dividends. The measure of the segments’ assets is a performs material accounting estimates and The development projects amount to DKK operating items and working capital changes total comprising completed development assessments which may have a signifi- 18.0 million as at 30 September 2012 less financial income and financial expenses as Cash comprise both cash and short-term cur- projects, development projects in progress cant impact on the annual report’s assets (DKK14.2 million as at 30 September well as income taxes paid in the financial year. rent asset investments with insignificant price and trade receivables. Non allocated items and liabilities at the ba-lance sheet date. 2011). risk less overdraft facilities included as an in- relates to the administrative functions in Management bases its estimates on histo- Cash flows from investments comprise tegral part of the Group’s cash management. the Group. rical experiences as well as a number of Inventories payments in connection with acquisition assumptions which are assessed as being A specific assessment of the need for and divestment of enterprises and financial SEGMENT INFORMATION RTX has two reportable segments: Design reasonable under the given circumstances. write-downs for obsolescence of invento- assets as well as acquisition, development, RTX’ reportable segments are determined on Services and Enterprise & VoIP. RTX Network The result thereof forms the basis for the ries is made based on an assessment of improvement and sale of intangible as- the basis of the internal financial repor- Systems is classified as a discontinued ope- reported carrying amounts of assets and li- the future sales potential including service sets and property, plant and equipment. ting to Group Management. The segments ration. The segments are further described abilities as well as the reported income and requirements. in the Management’s review. expenses which are not directly disclosed in other documentation. The actually realised The inventories amount to DKK 15.7 million results may deviate from these estimated as at 30 September 2012 (DKK 7.2 million RATIO DEFINITIONS AND CALCULATION FORMULAS recognized at the balance sheet date. as at 30 September 2011). Earnings per Share (EPS) and Diluted Ear- The other ratios have been calculated in Society of Financial Analysts, unless other- nings per Share (DEPS) are calculated in accordance with “Recommendations & wise indicated. Management has performed the following Trade receivables from product sale and accordance with IAS 33. Financial Ratios 2010” issued by the Danish material accounting estimates which have services had significant influence on the annual Specific estimates of trade receivables are Operating profit/loss1) Profit/loss before financial income and expenses report. made on an assessment of the customer’s historical ability to pay and the current 1) 2) Growth in net turnover (Net turnover in year n - net turnover in year n - 1) * 100 / Net turnover in year n – 1 Deferred tax assets situation. Profit margin1) Operating profit/loss * 100 / Net turnover RTX recognises deferred tax assets if it is probable that sufficient taxable income The trade receivables amount to DKK 38.6 Return on invested capital Operating profit/loss before amortisation (EBITA) * 100 / exists in future to use the temporary diffe- million as at 30 September 2012 (DKK 53.9 (ROIC including goodwill) 1) Average invested capital including goodwill rences between the tax values and the car- million as at 30 September 2011). rying amounts of assets and liabilities and Return on equity Profit/loss from ordinary activities after tax and minority interests * 100 / Average equity unused tax loss carry-forwards. Manage- Equity ratio 2) Equity at year-end * 100 / Total assets at year-end ment has made a three-year estimate over the future taxable income in the Group. Earnings per share (EPS) Profit/loss from ordinary activities after tax and minority interests / This estimate is included in the assessment Average number of shares in circulation each at a nominal value of DKK 5 as to whether the deferred tax assets may Diluted earnings per share (DEPS) Profit/loss from ordinary activities after tax and minority interests / be recognized at the balance sheet date. Average number of diluted shares each at a nominal value of DKK 5 Based on the revised projections in third quarter 2011/12 an continued volatility in 1) 2) Cash flow from operations per share Cash flow from operations / the macroeconoc environment manage- Average number of shares in circulation each at a nominal value of DKK 5 ment assesses that the deferred tax asset Equity value per share 2) Equity excluding minority interests at year-end / Number of shares in circulation at year-end should continue to be unrecognized. The value of unrecognized tax assets amounts Dividends per share Total dividends paid / Average number of issued shares each at a nominal value of DKK 5 to DKK 66.9 million as at 30 September 2012 (DKK 67.5 million as at 30 September 1) Key ratios have been calculated on the basis of items comprising the Group’s continuing operations. 2011). 2) Not defined by the Danish Association of Financial Analysts. Computation of earnings per share and diluted earnings per share is specified in note 13. 54 RTX Annual Report 2011/12 RTX Annual Report 2011/12 55 54 RTX Annual Report 2011/12 RTX Annual Report 2011/12 55

NOTES NOTES

3 SEGMENT INFORMATION GROUP PARENT The management reporting to the Supervisory Board of the parent company in RTX is based on the continued operations which are De- Amounts in DKK ’000 2011/12 2010/11 2011/12 2010/11 sign Services and Enterprise & VoIP. Design Services is an R&D design partner in wireless solutions and supplier of test systems. Enterprise & VoIP is a supplier of advanced IP telephone solutions to the Enterprise and the SME market. 4 REVENUE For a presentation of the events within the segments in the financial year 2011/12 and the development in the segments compared to The revenue in the Group from external customers is specified below. 2010/11, is referred to Management’s report.

Segment information relating to business segments in the Group Denmark 12,027 12,330 12,025 10,716 2011/12 Other Europe 109,143 122,046 109,132 32,151 Amounts in DKK ’000 Design Enterprise Not Elimi- Group Asia nad Australia 19,231 25,229 19,075 32,864 Services & VoIP allocated nations North and South America 46,857 43,833 46,857 30,431 items Africa 4,006 1,449 4,006 - Revenue to external customers 86,023 103,147 2,094 - 191,264 Total 191,264 204,887 191,095 106,162 External segment revenue 86,023 103,147 2,094 - 191,264 Revenue distributed to geographic area according to the customer’s Depreciation, amortisation and impairment 106 -4,313 -2,146 - -6,353 geographical location, Operating profit/loss (EBIT) 7,687 -5,148 -49 - 2,490 Revenue by type of income Intangible assets - 25,841 - - 25,841 Development projects 54,952 62,263 54,952 59,361 Tangible assets 201 883 74,799 - 75,883 Royalty 3,842 3,313 3,842 3,313 Other long-term assets - 743 - - 743 Sale of products etc. 128,786 139,311 128,774 15,656 Inventory 2,700 12,989 - - 15,689 Trade receivables 14,196 24,402 - - 38,598 Other services 3,684 - 3,527 27,832 Contract development projects in progress 4,139 - - - 4,139 Total 191,264 204,887 191,095 106,162 Tax - - 975 - 975 Other receivables - - 1,129 - 1,129 Accruels - - 1,699 - 1,699 5 COST OF SALES Short-term current asset investments - - 47,668 - 47,668 Cost of sales 75,174 83,338 73,189 12,909 Total 21,236 64,858 126,270 - 212,364 Write-down of inventories 263 655 263 655

2010/11 Other unit costs 1,233 2,186 2,530 756 Amounts in DKK ’000 Design Enterprise Not Elimi- Group Total 76,670 86,179 75,982 14,320 Services & VoIP allocated nations items

Revenue to external customers 72,971 127,529 4,387 - 204,887 6 STAFF COSTS Internal revenue 174 7,359 - -7,533 - Staff costs related to the continuing operations External segment revenue 73,145 134,888 4,387 -7,533 204,887 Remuneration of the Board of Directors 1,050 1,050 1,050 1,050 Wages and salaries 82,097 77,705 65,599 65,306 Depreciation, amortisation and impairment -178 -1,048 -2,065 - -3,291 Defined contribution pension plans 3,001 2,760 2,552 2,430 Operating profit/loss (EBIT) 1,141 11,242 -3,339 - 9,044 Other social security costs, etc. 987 936 891 842

Intangible assets - 22,037 - - 22,037 Share-based remuneration, see note 34 1,201 1,111 1,201 949 Tangible assets 501 608 76,129 - 77,238 Public grants related to staff costs -681 -480 -681 -480 Other long-term assets - 345 - - 345 Other staff costs 78 67 78 67 Inventory 2,500 4,739 - - 7,239 Total 87,733 83,149 70,690 70,164 Trade receivables 19,932 33,948 - - 53,880

Contract development projects in progress 2,403 - - - 2,403 Number of full-time employees at 30 September 168 164 114 112 Tax - - 236 - 236 Other receivables - - 1,067 - 1,067 Number of full-time employees at 30 September, continued operations 168 164 114 112 Accruels - - 1,768 - 1,768 Average number of full-time employees 168 167 116 115 Short-term current asset investments - - 66,853 - 66,853 Average number of full-time employees, continued operations 168 163 116 112 Total 25,336 61,677 146,053 - 233,066

Not allocated revenue is mainly rental income. Except tax and deposits all other assets are related to the parent activities in Denmark. In the financial year one customer represents a turnover of 15.1% of the Groups total turnover in the continued business (In2010/11 the turnover to the same customer represented 18.7%) Transactions between segments are conducted on an arm’s length basis. 56 RTX Annual Report 2011/12 RTX Annual Report 2011/12 57 56 RTX Annual Report 2011/12 RTX Annual Report 2011/12 57

NOTES NOTES

6 STAFF COSTS (CONTINUED) GROUP PARENT Remuneration to the Board of Directors, the Board of Management and other key management employees. Amounts in DKK ’000 2011/12 2010/11 2011/12 2010/11 GROUP Amounts in DKK ’000 2011/12 2010/11 7 DEPRECIATION, AMORTISATION AND IMPAIRMENT Amortisation of intangible assets 3,763 886 3,763 886 Supervisory Executive Other Supervisory Executive Other Impairment of intangible assets - - - - Board Board management Board Board management Depreciation of property, plant and equipment 2,755 2,503 2,204 2,338 employees employees Profit/loss from sale of plant and equipment, net -165 -98 -165 -98 Total 6,353 3,291 5,802 3,126 Wages, salaries and fees 1,050 1,920 3,396 1,050 1,920 3,300 Bonus - - 370 - 576 - 8 DEVELOPMENT COSTS Pensions - - 86 - - 82 Own development cost incurred before capitalisation 37,225 25,731 37,225 25,731 Severance pay - - - - - 1,398 Value of work transferred to assets (capitalized) -12,540 -12,306 -12,540 -12,306 Total amortisation and impairment losses on development projects 3,763 886 3,763 886 Total 1,050 1,920 3,852 1,050 2,496 4,780 Development cost recognised in the profit and loss account 28,448 14,311 28,448 14,311 Share-based payment - 181 294 - 102 164

Total remuneration 1,050 2,101 4,146 1,050 2,598 4,944 Development costs are recognised as follows: Other external expenses 5,744 2,482 5,744 2,482 PARENT Staff costs 31,481 23,249 31,481 23,249 Value of work transferred to assets -12,540 -12,306 -12,540 -12,306 Amortisation and impairment losses on development projects 3,763 886 3,763 886 Wages, salaries and fees 1,050 1,920 1,956 1,050 1,920 1,021 Total 28,448 14,311 28,448 14,311 Bonus - - 370 - 576 - Included in the value of own development cost incurred before capitalisation Pensions - - 86 - - 45 is the value of received publics grants from EU amounting to DKK 0.9 million. Severance pay - - - - - 1,398 (2010/11 DKK 1.2 million). Total 1,050 1,920 2,412 1,050 2,496 2,464 Share-based payment - 181 294 - 102 87 9 FEES TO AUDITORS ELECTED BY THE ANNUAL GENERAL MEETING Total remuneration 1,050 2,101 2,706 1,050 2,598 2,551 Total fees to Deloitte can be specified as follows: Statutory audit 484 556 375 453 On dismissal by the Company the Executive Board shall be entitled to a salary in the period of notice and severance pay totalling up to Other auditing and assurance services 19 12 19 12 12 months’ salary, equal to approx. DKK 1.9 million. (DKK 1.9 million in 2010/11). Tax advisory services 126 142 126 142 The Group has entered into defined contribution pension plans with a significant number of the Group’s employees. Other services 97 114 97 114 The Group has not entered into defined benefit pension., Total 726 824 617 721 Defined contribution pension plans require the employer to pay a certain amount to a pension provider or the like, though the company bears no risk as regards future development in interest, inflation, mortality, disability, etc regarding the amount to be paid to the emplo- 10 FINANCIAL INCOME yee. Interest income from financial assets 721 764 721 764 Interest income from banks etc. 4 10 4 10 Staff cost related to the discontinuing operations Other financial income 64 - 55 - GROUP PARENT Total interest income 789 774 780 774 Amounts in DKK ’000 2011/12 2010/11 2011/12 2010/11 Exchange rate gains (net) 179 - 714 681 Other financial income 128 209 128 - Wages and salaries - 1,036 - 789 Total 1,096 983 1,622 1,455 Defined contribution pension plans - 80 - 80 Other social security costs, etc. - 67 - 10 11 FINANCIAL EXPENSES Total - 1,183 - 879 Interest costs to banks, etc. 477 571 477 571 Interest costs to subsidiaries - - 295 - Total interest costs 477 571 772 571 Exchange rate loss (net) - 1,051 - - Other financial costs 580 663 527 420 Financial costs transferred to discontinuing operations - - 604 634 Total 1,057 2,285 1,903 1,625 58 RTX Annual Report 2011/12 RTX Annual Report 2011/12 59 58 RTX Annual Report 2011/12 RTX Annual Report 2011/12 59

NOTES NOTES

GROUP PARENT GROUP Amounts in DKK ’000 2011/12 2010/11 2011/12 2010/11 Amounts in DKK ’000 2011/12 2010/11

12 TAX ON PROFIT/LOSS FOR THE YEAR 13 EARNINGS PER SHARE Current tax on profit/loss for the year -638 -1,481 -261 -390 1,000 shares Change in deferred tax -682 -3,624 -682 -3,624 Average number of shares 9,434 9,434 Average number of treasury shares -145 -145 Change resulting from valuation of deferred tax assets Average number of shares in circulation 9,289 9,289 at recoverable amount 682 5,817 682 5,817 Average diluted effect on outstanding warrants 946 504

Average diluted number of shares 10,235 9,793 Adjustment concerning previous years Current tax - - -236 - Profit/loss for the year from continuing and discontinued operations, DKK ’000 1,891 3,941 Deferred tax - -2,193 - -2,193 Profit/loss for the year from continuing operations, DKK ’000 1,891 6,261 Total -638 -1,481 -497 -390 Profit/loss for the year from discontinued operations, DKK ’000 - -2,320

Earning per share from continuing and discontinued operations (DKK) 0.2 0.4 Tax on profit/loss for the year can be specified as follows: Diluted earnings per share from continuing and discontinued operations (DKK) 0.2 0.4 Income tax rate in Denmark 25 25 25 25 Earnings per share from continuing operations (DKK) 0.2 0.7 Disallowable expenses less non-taxable income Diluted earnings per share from continuing operations (DKK) 0.2 0.6 and other adjustments - - - - Earnings per share from discontinued operations (DKK) - -0.2 Adjustment resulting from valuation of deferred tax assets Diluted earnings per share from discontinued operations (DKK) - -0.2 at recoverable amount -25 -25 -25 -25

Tax on profit/loss for the year and the effective tax rate are GROUP PARENT materially affected by the valuation of deferred tax assets Amounts in DKK ’000 Own Acquired Goodwill Own Acquired at recoverable amount. development licence development licence projects rights projects rights Taxed paid/reveived during the year 2,670 626 261 626 14 INTANGIBLE ASSETS Income taxes, net Cost at 1 October 2010 10,725 3,598 8,269 10,512 3,598 Income taxes on 1 October, net -1,293 -441 236 - Disposals -213 - - - - Current tax on profit/loss for the year -402 -1,481 -261 -390 External additions 421 - - 421 - Internal additions 11,885 - - 11,885 - Tax paid during the year Cost at 30 September 2011 22,818 3,598 8,269 22,818 3,598

Current year 2,670 626 261 626 Amortisation and impairment at 1 October 2010 -7,905 -3,598 -472 -7,692 -3,598 Previous years, net 14 3 - - Amortisation for the year -886 - - -886 - Reversed amortisation on disposal 213 - - - - Adjustment of current tax concerning previous years, net -236 - -236 - Amortisation and impairment at 30 September 2011 -8,578 -3,598 -472 -8,578 -3,598 Current tax of changes in equity - - - - Income taxes at 30 September, net 753 -1,293 - 236 Carrying amount at 30 September 2011 14,240 - 7,797 14,240 -

Cost at 1 October 2011 22,818 3,598 8,269 22,818 3,598 Which can be specified as follows: Disposals - - - - - Income tax receivable 975 236 - 236 External additions - - - - - Income tax payable -222 -1,529 - - Internal additions 12,540 - - 12,540 - Total 753 -1,293 - 236 Reimbursements -4,973 - - -4,973 - Cost at 30 September 2012 30,385 3,598 8,269 30,385 3,598

Amortisation and impairment at 1 October 2011 -8,578 -3,598 -472 -8,578 -3,598 Amortisation for the year -3,763 - - -3,763 - Reversed amortisation on disposals - - - - - Amortisation and impairment at 30 September 2012 -12,341 -3,598 -472 -12,341 -3,598

Carrying amount at 30 September 2012 18,044 - 7,797 18,044 - 60 RTX Annual Report 2011/12 RTX Annual Report 2011/12 61 60 RTX Annual Report 2011/12 RTX Annual Report 2011/12 61

NOTES NOTES

14 INTANGIBLE ASSETS (CONTINUED) GROUP Goodwill Amounts in DKK ’000 Land and Plant Other fixtures, Leasehold Goodwill arisen in relation to business combinations is distributed at the time of acquisition to the cash flow units which are expected to buildings and tools and improve- obtain financial advantages from the acquisition. machinery equipment ments The carrying amount of goodwill is distributed as follows on the respective cash flow generating unit, Enterprise & VoIP: 15 TANGIBLE ASSETS

PARENT Cost at 1 October 2010 95,632 18,076 14,126 503 Foreign exchange adjustments - 3 6 3 Amounts in DKK ’000 2011/12 2010/11 Additions - - 510 447 RTX Hong Kong, Ltd. 7,797 7,797 Disposals - -641 -442 - Cost at 30 September 2011 95,632 17,438 14,200 953 Goodwill is as a minimum tested once a year for impairment and more frequently if there are indications of impairment. The recoverable amount for the individual cash flow generating units to which the goodwill amounts have been distributed are stated Depreciation and impairment at 1 October 2010 -17,673 -17,934 -13,519 -421 based on computation of the units’ present value of expected cash flows. The most material uncertainties are connected with the deter- Foreign exchange adjustments - -3 -8 -6 mination of the discount factors and growth rates as well as expected changes in sales prices and production costs in the budget periods. Depreciation for the year -1,830 -54 -523 -96 Reversal relating to disposals - 600 482 - The determined discount factors reflect market evaluations of the timing value of money, reflected in risk free interest and the specific Depreciation and impairment at 30 September 2011 -19,503 -17,391 -13,568 -523 risks connected to the individual cash flow generating unit. The pre tax discount factors used in the calculation is 10 % (after tax 8%) (in 2010/11 10%). Carrying amount at 30 September 2011 76,129 47 632 430

The determined growth rates are based on internal strategy plans and forecast for the coming 3 years. Cost at 1 October 2011 95,632 17,438 14,200 953 Estimated changes in selling prices and production costs are based on historical experiences as well as expectations for future changes in Foreign exchange adjustments - 23 64 - the market. The prognoses are based on a specific business evaluation of the expected sales prices and production costs. The changes in Additions - - 612 754 sales prices and costs are substantially equivalent to the ones used in the calculations 2010/11. Disposals - - -1,210 -953 Cost at 30 September 2012 95,632 17,461 13,666 754 For the purpose of computing the cash flow generating units’ present value of expected cash flows, the cash flows stated in the most recent management approved budgets for the next financial year are used as well as strategy plans. For financial year beyond budget periods (terminal period) a growth rate of 1% is applied. Depreciation and impairment at 1 October 2011 -19,503 -17,391 -13,568 -523 Foreign exchange adjustments - -24 -54 - Other intangible assets Depreciation for the year -1,830 -43 -406 -476 Apart from goodwill, all intangible assets are regarded as having determinable useful lives over which the assets are amortised, see de- Reversal relating to disposals - - 1,210 978 scription included under accounting policies. Depreciation and impairment at 30 September 2012 -21,333 -17,458 -12,818 -21

The assessment of the recoverable amount of own development projects in progress is based on net present value calculations for Carrying amount at 30 September 2012 74,299 3 848 733 development projects. Net present value calculations are based on the expected cash flow from the assets in management approved budgets over expected lifetime of the projects, and a discount rate before tax at 10% (in 2010/11 10%). The Group’s land and buildings are situated in Denmark, and at 1 October 2011 the total value according to the public real estate assessment amounts to DKK 71.0 million (1 October 2010: DKK 71.0 million). Over the recent financial years RTX has chosen to capitalize those development costs used for specific investments in new products and technology platforms. It is assesed that development of these investments are essential for Enterprise & VoIP going forward. 62 RTX Annual Report 2011/12 RTX Annual Report 2011/12 63 62 RTX Annual Report 2011/12 RTX Annual Report 2011/12 63

NOTES NOTES

PARENT PARENT Amounts in DKK ’000 Land and Plant Other fixtures, Amounts in DKK ’000 2011/12 2010/11 buildings and tools and machinery equipment 16 INVESTMENTS IN SUBSIDIARIES Cost at 1 October 34,165 34,165 15 TANGIBLE ASSETS (CONTINUED) Disposals relating to sale of subsidiary - - Cost at 1 October 2010 95,632 17,633 12,570 Adjustment of previous acquisition price - - Additions - - 408 Capital increase upon cash investment and acquisition of equity investments - - Disposals - -641 -22 Cost at 30 September 34,165 34,165 Cost at 30 September 2011 95,632 16,992 12,956

Value adjustment at 1 October -3,520 -3,520 Depreciation and impairment at 1 October 2010 -17,673 -17,491 -12,345 Disposals relating to sale of subsidiary - - Depreciation for the year -1,830 -54 -454 Reversal relating to disposals - - Reversal relating to disposals - 600 297 Impairment for the year - - Depreciation and impairment at 30 September 2011 -19,503 -16,945 -12,502 Value adjustment at 30 September -3,520 -3,520

Carrying amount at 30 September 2011 76,129 47 454 Carrying amount at 30 September 30,645 30,645

Cost at 1 October 2011 95,632 16,992 12,956 Investments in subsidiaries comprise the following enterprises at 30 September 2012: Additions - - 612 Disposals - - -1,210 Name and registered office Nominel Ownership Receivable Equity Profit for Cost at 30 September 2012 95,632 16,992 12,358 share from the Parent DKK ’000 the year capital DKK ’000 DKK ’000 Depreciation and impairment at 1 October 2011 -19,503 -16,945 -12,502 Depreciation for the year -1,830 -44 -330 RTX America, Inc., USA T.USD 500 100% 3,310 3,353 392 Reversal relating to disposals - - 1,210 RTX Hong Kong Ltd., Hong Kong T.HKD 1,110 100% 22,346 26,186 1,025 Depreciation and impairment at 30 September 2012 -21,333 -16,989 -11,622 RTX Telecomunicações Ltda., Brazil T.BRL 1,226 90% 1,653 -14,192 -463 Total 27,309 15,347 954 Carrying amount at 30 September 2012 74,299 3 736 Which can be specified as follows:

The Parent’s land and buildings are situated in Denmark, and at 1 October 2011 the total value according to the public real estate Receivables from subsidiaries - assessment amounts to DKK 71.0 million (1 October 2010: DKK 71.0 million). Payables to subsidiaries 27,309 Total 27,309

Subsidiaries’ addresses and time for establishing: RTX America Inc,, San Jose, Californien, USA established in March 2004. RTX Hong Kong Ltd,, Hong Kong, purchased in January 2006. RTX Telecomunicações Ltda,, São Paulo, Brasilien established in July 2008.

Due the size of the companies, RTX America Inc. and RTX Telecomunicações Ltda. are not audited.

With effect from 2008 the Parent set up a subsidiary in Brazil, RTX Telecomunicações Ltda., with an ownership interest of 82% at 30 September 2008. The remaining 18% of the company was owned by two Danish citizens resident in Brazil. During 2008/09 one of the minority shareholders sold his ownership interest to the Parent and the share capital of the subsidiary was also increased. On 30 Sep- tember 2012 RTX’ ownership interest amounts to 90%.

In relation to the discontinued operations there has been an impairment loss on 604 thousands DKK in RTX on the debt from RTX Telecomunicações Ltda. towards the parent company (note 36). In 2010/11 the similar amount was 634 thousands DKK. 64 RTX Annual Report 2011/12 RTX Annual Report 2011/12 65 64 RTX Annual Report 2011/12 RTX Annual Report 2011/12 65

NOTES NOTES

GROUP PARENT GROUP PARENT Amounts in DKK ’000 2011/12 2010/11 2011/12 2010/11 Amounts in DKK ’000 2011/12 2010/11 2011/12 2010/11

17 OTHER LONG-TERM ASSETS 18 DEFERRED TAX Other equity investments Deferred tax, net at 1 October - - - - Cost at 1 October 13,028 13,028 - - Foreign exchange adjustment - - - - Additions for the year - - - - Change in deferred tax on profit/loss for the year, asset -682 -3,624 -682 -3,624 Disposals for the year - - - - Adjustment of deferred tax concerning previous years - -2,193 - -2,193 Cost at 30 September 13,028 13,028 - - Write-down to recoverable amount 682 5,817 682 5,817 Deferred tax, net at 30 September - - - - Value adjustment at 1 October -13,028 -13,028 - - Additions for the year - - - - Specificationof deferred tax: Disposals for the year - - - - Intangible assets 24,167 24,220 24,167 24,220 Value adjustment at 30 September -13,028 -13,028 - - Property, plant and equipment 10,701 10,191 10,701 10,191 Inventories 1,571 1,098 1,571 1,098 Carrying amount at 30 September - - - - Receivables 11,756 11,894 11,756 11,894 Other short-term assets, etc - - - - The values includes equity investments in Junto Telecom, Brazil, Long-term liabilities 813 1,905 813 1,905 which is a part of the discontinued operations. Tax loss carryforwards 17,859 18,241 17,859 18,241 The equity investment in Junto Telecom is one element in the attempt to Short-term liabilities - - - - recover outstanding amounts from the discontinued business segment Non-recognised deferred tax assets -66,867 -67,549 -66,867 -67,549 Network Systems. Total - - - -

Which can be specified as follows: Deposits Deferred tax assets - - - - Cost at 1 October 345 345 - - Deferred tax liabilities - - - - Value adjustment - - - - Total - - - - Additions for the year 398 27 - - Disposals for the year - -27 - - The tax value of deferred tax assets, which are not recognized, amounts Cost at 30 September 743 345 - - to DKK 66.9 million (DKK 67.5 million in 2010/11) and concerns tax losses and other timing differences. Due to significant uncertainty regar- Carrying amount at 30 September 743 345 - - ding the use of these tax assets, they are not recognized in the balance sheet. Deposits are not depreciated. 19 INVENTORIES Raw materials and consumables 4,597 3,394 4,597 893 Other long-term assets, besides investments in unlisted shares, are measured at fair market value at the balance sheet date. Unlisted Finished goods 11,092 3,845 11,092 2,110 shares are measured at cost if fair market value cannot be stated reliably. If the carrying amounts of other long-term assets exceed their Total inventories 15,689 7,239 15,689 3,003 recoverable amount, the assets are written down to this lower value. Deposits are measured at cost. The addition in 2011/12 relates to a new lease for RTX Hong Kong Ltd. at the end of the financial year Write-down of inventories 263 655 263 655 2011/12.

As a significant proportion of the production is outsourced to suppliers and this production is carried out with insubstantial use of RTX resources, there are no longer included indirect production costs in the stock value 2011/12 (DKK 0 million in 2010/11). 66 RTX Annual Report 2011/12 RTX Annual Report 2011/12 67 66 RTX Annual Report 2011/12 RTX Annual Report 2011/12 67

NOTES NOTES

GROUP PARENT GROUP PARENT Amounts in DKK ’000 2011/12 2010/11 2011/12 2010/11 Amounts in DKK ’000 2011/12 2010/11 2011/12 2010/11

20 TRADE RECEIVABLES 21 CONTRACT DEVELPMENT PROJECTS IN PROGRESS Receivables, gross 88,799 105,389 85,633 67,606 Market value of development projects in progress 25,722 35,717 25,722 35,717 Write-down for expected losses -50,201 -51,509 -47,142 -47,674 Invoiced on account -22,899 -37,178 -22,899 -37,178 Carrying amount at 30 September 38,598 53,880 38,491 19,932 Contract development projects in progress, net 2,823 -1,461 2,823 -1,461

which are recognised in the balance sheet as follows: Write-down for the year -1,308 5,251 -532 1,608 Receivables 4,139 2,403 4,139 2,403 Short-term liabilities -1,316 -3,864 -1,316 -3,864 Provisions are made for bad debts based on an individual assessment of Contract development projects in progress, net 2,823 -1,461 2,823 -1,461 the risks of loss, and the carrying amounts of receivables are recognized

at amortised cost. Claims in the Group have been written down to net Retained payments for work performed - - - - realisable value based on an individual assessment.

Total volume of orders, etc 38,679 46,941 38,679 46,941 A provisions account is used to reduce the carrying amount of receivab- Of this market value of performed work is recognised as income -25,722 -35,717 -25,722 -35,717 les whose value is reduced due to risk of loss. Write-down is stated on a Market value of non-performed work at the balance sheet date 12,957 11,224 12,957 11,224 specific assessment of the respective customers’ financial position and economic development. Market value of non-performed work at the balance sheet date in % of total volume of orders, etc 33% 24% 33% 24% Provisions account at 1 October 51,509 46,258 47,674 46,066 Losses recorded for the year - - - - Carrying amount of contract development projects in progress approxi Reversed provisions -1,636 - -750 - mately equals fair market value. Bad debt provisions for the year 328 5,251 218 1,608 22 SHORT-TERM CURRENT ASSET INVESTMENTS Provisions account at 30 September 50,201 51,509 47,142 47,674 Cost at 1 October 47,440 49,424 46,492 48,476 Additions for the year - 11,915 - 11,915 Included in the provision is the write down on the customer Atlas Value adjustment of disposals - -316 - -338 Telecom with DKK 33.3 millions. The write down was expensed in 2006/07. Disposals for the year - -13,583 - -13,561 Cost at 30 September 47,440 47,440 46,492 46,492 Atlas Telecom is subject to an insolvency procedure in Romania (not bankrupt), and as long as the outcome of this procedure is not final, the receivable and the related write-down is maintained. Value adjustment at 1 October -1,455 -1,430 -1,497 -1,467 Value adjustments for the year -422 -25 -473 -30 Value adjustment at 30 September -1,877 -1,455 -1,970 -1,497

Carrying amount at 30 September 45,563 45,985 44,522 44,995

Fair value adjustments until the time of disposal of the assets are recognized directly in other comprehensive income.

Short-term current asset investments consist of listed Danish mortgage bonds and bonds issued by the Ship Credit Fund with an Average maturity of (years) 5.5 6.5 5.5 6.5 Average effective rate of interest of 1.1% 1.7% 1.1% 1.7%

Bonds terminate within the following periods from the balance sheet date: Less than one year - - - - Between one and two years 11,989 12,039 11,989 12,039 Between two and three years - - - - Between three and four years 1,041 990 - - Between four and five years - - - - After five years 32,533 32,956 32,533 32,956 Total 45,563 45,985 44,522 44,995 68 RTX Annual Report 2011/12 RTX Annual Report 2011/12 69 68 RTX Annual Report 2011/12 RTX Annual Report 2011/12 69

NOTES NOTES

GROUP PARENT GROUP PARENT Amounts in DKK ’000 2011/12 2010/11 2011/12 2010/11 Amounts in DKK ’000 2011/12 2010/11 2011/12 2010/11

23 CASH AT BANK AND IN HAND 26 LONG-TERM LIABILITIES Cash and bank deposits 5,657 20,868 4,173 11,039 Mortgage loans as well as other hedged loans maturing 2012 – 2025 Short-term bank debt (overdraft account) -3,552 - -3,552 - and a weighted average interest rate of 0.98% 14,732 16,090 14,732 16,090 Total 2,105 20,868 621 11,039 Total 14,732 16,090 14,732 16,090

24 SHARE CAPITAL The debt must be paid within the following periods from the balance sheet date: Development in share capital: Less than one year 1,250 1,318 1,250 1,318 Share capital at 1 October 47,170 47,170 Between one and two years 1,263 1,183 1,263 1,183 Share capital at 30 September 47,170 47,170 Between two and three years 1,275 1,204 1,275 1,204 Between three and four years 1,288 1,225 1,288 1,225 Number of shares at DKK 5 at 30 September amounts to 9,434,051 9,434,051 Between four and five years 1,300 1,246 1,300 1,246 After five years 8,356 9,914 8,356 9,914 25 TREASURY SHARES Total 14,732 16,090 14,732 16,090 PARENT PARENT Amounts in DKK ’000 2011/12 2010/11 Long-term liabilities are recognised in the balance sheet as follows:

Number of % of share Number of % of share Short-term liabilities 1,250 1,342 1,250 1,342 shares at capital shares at capital Long-term liabilities 13,482 14,748 13,482 14,748 DKK 5 DKK 5 Total 14,732 16,090 14,732 16,090

Shareholding at 1 October 144,584 1.5% 144,584 1.5% Debt is broken down by currency as follows: Shareholding at 30 September 144,584 1.5% 144,584 1.5% DKK 9,373 10,196 9,373 10,196 EUR 5,359 5,894 5,359 5,894 Market value of shareholding at 30 September, DKK ’000 1,639 1,692 Total 14,732 16,090 14,732 16,090

The Supervisory Board was authorised to acquire treasury shares of a total face value of 10% of the Company’s share capital up to 28 Of the long-term liabilities there are: January 2011. The Company’s holding of 144,584 shares was acquired for the purpose of partial hedging of the liabilities relating to the Debt with fluctuating interest rate 9,373 10,040 9,373 10,040 share options granted by the Company to the Executive Board and a limited number of key employees, see note 34. Debt with fixed interest rate 5,359 6,050 5,359 6,050 Total 14,732 16,090 14,732 16,090

Effective rate of interest per annum in local currency: Below 4% 14,732 15,935 14,732 15,935 Between 4% and 6% - 155 - 155 Total 14,732 16,090 14,732 16,090

Adjustment of above loans to market value at 30 September 2012 would result in a cost of DKK 0.4 million (a cost of DKK 0.4 million at 30 September 2011).

Of long-term liabilities, DKK 0.0 million relates to assets held under finance lease (DKK 0.0 million at 30 September 2011). 70 RTX Annual Report 2011/12 RTX Annual Report 2011/12 71 70 RTX Annual Report 2011/12 RTX Annual Report 2011/12 71

NOTES NOTES

GROUP PARENT GROUP PARENT Amounts in DKK ’000 2011/12 2010/11 2011/12 2010/11 Amounts in DKK ’000 2011/12 2010/11 2011/12 2010/11

27 PROVISIONS 29 OTHER PAYABLES Provision for losses on projects in progress and completed projects Wages and salaries, personal income taxes, social security Provisions at 1 October 2,000 2,000 2,000 2,000 costs, holiday pay, etc. 3,813 2,798 3,245 2,798 Reversed during the year -2,000 - -2,000 - Holiday allowance 7,889 7,666 7,889 7,666 Provisions at 30 September - 2,000 - 2,000 Other costs payable 8,023 9,133 6,445 5,978 Total 19,725 19,597 17,579 16,442 Provision for guarantee obligations Provisions at 1 October 980 788 980 788 Carrying amount of due items concerning wages and salaries, perso- Provisions made during the year 725 559 725 559 nal income taxes, social security costs, holiday pay, as well as other Employed during the year -748 -367 -748 -367 expenses due, etc equals the fair market value of the liabilities. Reversed during the year - - - - Provisions at 30 September 957 980 957 980 The holiday pay obligation represents the Group’s obligation to pay salary during holiday periods which at the balance sheet date the Provisions for other liabilities employees have earned the right to hold in subsequent financial years. Provisions at 1 October 4,138 3,971 4,138 3,971 Provisions made during the year 491 1,998 491 1,998 30 OPERATING LEASE COMMITMENTS Employed during the year -1,998 -1,831 -1,998 -1,831 For the years 2011-2015, operating leases have been concluded for Reversed during the year - - - - lease of premises, etc. Provisions at 30 September 2,631 4,138 2,631 4,138 The Group’s rental obligations of the leasehold amount to DKK 4.5 million (DKK 1.4 million at 30 September 2011).

Provisions for discontinued operations Provisions at 1 October 1,481 2,390 1,481 2,390 Rent and lease payments (minimum lease payments) relating to operating lease contracts, including rental obligations, fall due as follows: Provisions made during the year - - - - Less than 1 year 1,832 1,435 388 302 Employed during the year -861 -909 -861 -909 Between 1 and 5 years 3,398 707 287 485 Reversed during the year - - - - Provisions at 30 September 620 1,481 620 1,481 More than 5 years - - - - Total 5,230 2,142 675 787 Total provisions at 30 September 4,208 8,599 4,208 8,599 The Group’s costs of rent/leasing amounted to DKK 1.6 million in 2011/12 and DKK 1.3 million in 2010/11. Provisions are recognised in the balance sheet as follows: The amounts are recognised in the income statement. Short-term liabilities (less than 1 year) 2,873 7,226 2,873 7,226 Long-term liabilities (between 1 and 2 years) 1,335 1,373 1,335 1,373 Total 4,208 8,599 4,208 8,599

Loss on work in progress relates to likely losses on contract development projects in progress of which the agreed market values do not exceed the expected cost price of the total contract expenses.

The guarantee obligations are prepared based on previous years’ experiences. The expenses are expected to be paid in the period 1 October 2012 - 30 September 2014.

Other obligations are primarily related to obligations for employees dismissed and disemployed, obligations in connection with potential patent actions.

Provisions for discontinued operation used in 2011/12 is related to running the subsidiary in Brazil and legal cost related to trying to recover written-down outstandings in Brazil.

28 EMPLOYEE BONDS The Parent has issued employee bonds to the employees. The bonds will be redeemed in 2015 and interests are paid according to the Danish minimum interest rate plus 1%. 72 RTX Annual Report 2011/12 RTX Annual Report 2011/12 73 72 RTX Annual Report 2011/12 RTX Annual Report 2011/12 73

NOTES NOTES

GROUP PARENT 33 RELATED PARTIES Amounts in DKK ’000 2011/12 2010/11 2011/12 2010/11 Transaction between related parties Related parties with significant interest in RTX include the Company’s Supervisory Board, Executive Board and executives as well as these 31 CONTINGENT LIABILITIES, COLLATERAL AND persons’ nearest family members. Related parties also comprise large shareholders in the Parent and companies in which the above CONTRACTUAL OBLIGATIONS group of persons have material interests. Contingent liabilities The Group’s banks have provided bank guarantees and letters of credit In addition, related parties comprise Group enterprises. at a total amount of DKK 10.5 million, of which DKK 10.5 million relates to the Parent and DKK 0.0 million relates to Group enterprises. An overview of Group enterprises is disclosed in note 16. At 30 September 2011 the corresponding amounts were DKK 19.7 million and DKK 0.0 million. Supervisory Board and Executive Board Bank guarantees and letters of credit have been provided to some of Management’s remuneration and share-based remuneration are stated in note 6 and note 34. the Group’s suppliers.

Subsidiaries In addition to this, the Group has not incurred any guarantee commitments and has not undertaken any guarantees and supply obligations In 2011/12 trade, etc between RTX A/S and related parties amounted to DKK 30.4 million other than obligations and guarantees relating to the services and (2010/11: DKK 40.8 million). products developed and sold by the Group. The transactions for the Parent can be calculated as follows: Collateral SUBSIDIARIES Mortgage debt with an outstanding debt of 14,732 16,090 14,732 16,090 Amounts in DKK ’000 2011/12 2010/11 is secured by mortgaged property with related plant and machinery Carrying amount of mortgaged properties 74,299 76,129 74,299 76,129 Sale of products - 915 As security for the subsidiaries’ bank facilities Purchase of products 4,350 6,747 RTX A/S has deposited current asset Sale of services - 27,832 with a total carrying amount of 27,426 42,471 27,426 42,471 Purchase of services 26,078 5,345 Receivables from subsidiaries - - RTX has provided payment guarantees, etc of DKK 9.2 million to some Payables to subsidiaries 27,309 7,022 of the subsidiaries’ cooperative partners. At 30 September 2011 the amount was DKK 8.8 million. There has been no transactions between the subsidiaries in 2011/12.

Contractual obligations Transactions with subsidiaries are eliminated in the consolidated financial statements in accordance with the applied accounting policies. As part of the Group’s business the usual customer and supplier agreements etc have been concluded, letters of intent have been issued to cooperative partners, and moreover, agreements have been entered into Interest income and interest expenses concerning subsidiaries are disclosed in notes 10 and 11. The Parent’s guarantees towards subsi- on normal business terms. diaries in relation to agreed credit lines are stated in note 31.

32 OTHER ITEMS WITH NO EFFECTS ON CASH FLOW In addition, intra-Group balances with subsidiaries comprise money lending as well as ordinary business balances regarding purchase and sale of goods and services. Change in write-down to net realisable value of short-term assets 1,046 -1,123 5,035 -7,633 Change in provisions -4,368 -555 -3,871 -550 The Parent has not received dividend from subsidiaries in 2011/12 or in 2010/11. Share-based remuneration 1,201 1,111 1,201 949 Total -2,121 -567 2,365 -7,234 SIA Vigrid Invest, which is considered as a related party to member of the board Karsten Vandrup, received in the financial year 2011/12 consultancy fee equivalent to DKK 0.2 million (2010/11 : DKK 0.3 million ) for a consultancy task for RTX.

During the year no transactions were performed between RTX and the Supervisory Board, the Executive Board, executives, large shareholders or other related parties, apart from payment of normal management’s remuneration, see note 6. 74 RTX Annual Report 2011/12 RTX Annual Report 2011/12 75 74 RTX Annual Report 2011/12 RTX Annual Report 2011/12 75

NOTES NOTES

34 SHARE-BASED REMUNERATION 34 SHARE-BASED REMUNERATION (CONTINUED) Warrants program from 2010/11 (Group and Parent): Option programme established before 2009/10 (Group and Parent) Since 2011/11 the Supervisory Board of RTX implemented a warrant-based programme, based on conditinoal warrants for the Executive RTX has granted a total of 145,000 share options at DKK 5 to a limited number of executives. Board and a group of key employees in RTX. The unexercised granted share options can be specified as follows: The Supervisory Board will not take part in the incentive programme. Time of issue Number of share Exercise price Exercise period The Supervisory Board intends to let the warrants programme be a running programme, starting with 3 years. options at DKK 5 per share The Supervisory Board will each year decide on the actual allotments to be given in order to create a long-term development in RTX. The total nominal value of the incentive programme is DKK 7.5 mio. May 2005 120,000 73.75 – 79.65 10.12.2009 – 24.05.2012 September 2006 25,000 78.00 – 87.75 10.12.2009 – 31.08.2013 Warrants are granted and earned during af period of 36 month and can be excercised no earlier than after publication of RTX’s annual 145,000 report for 2012/13. The first conditional allotment will thus cover the period January 2011 to December 2013. The first conditional allotment will depend on The granted share options account for approx. 1.5% of the Company’s share capital. the achieved cash flow. If the minimum criteria for the 3-year target for an increase in the cash flow are not met, the warrants will be discontinued. The granted warrants will give the employee a right, but not a duty to buy shares in RTX. Excercise price, vesting period and obligations The granted warrants can be exercised 4 weeks after interim reports. The exercise price of share options is fixed as the average rate for a period of five trading days immediately up to the time of issue plus 5% per year commenced after the time of issue.

Earned warrants in RTX A/S: In an ordinary process the share options can be exercised no earlier than 36 months after the time of issue and must be exercised no later than 84 months after the time of issue. Special conditions have been agreed regarding exercise if extraordinary conditions should Executive Other Other Number Exercise Exercise period occur in the period of agreement, for instance the employee’s resignation. Board management employees of shares price employees RTX’s holding of treasury shares is planned to be used to fulfil the Group’s obligations related to the granted unexercised share options.

Outstanding warrants Changes for the year and unexercised share options at 30 September 2011 and 30 September 2012 can be specified as follows: Granted warrants 2010/11 132,000 168,000 204,000 504,000 1,37 Jan. 2013- Jan. 2015 Granted warrants 2011/12 99,000 186,000 157,000 442,000 12,17 Jan. 2014 - Jan. 2016 Executive Other Other Retired Total Outstanding 30 September 2012 231 ,000 354,000 361,000 946,000 Board management employees employees employees

Market value of unexercised warrants 30 September 2012 DKK 4.5 million (30 September 2011: DKK 3.0 million). Unexercised share options at 1 October 2010 - 22,500 67,500 55,000 145,000 The average maturity on outstanding warrants is 18 months per 30 September 2012. Changed categorisation - -15,000 -52,500 67,500 - Unexercised share options 30 September 2011 - 7,500 15,000 122,500 145,000 The recognition according to the Black-Scholes option pricing formula is based on the following conditions:

Unexercised share options at 1 October 2011 - 7,500 15,000 122,500 145,000 Warrants granted in Changed categorisation - - - - - Unexercised share options 30 September 2012 - 7,500 15,000 122,500 145,000 2011/12 2010/11

Price per share 11.80 12.50 Market value of unexercised share options per 30.09.2012, T.DKK - - - - - Volatility 0.44 0.64 Market value of unexercised share options per 30.09.2011, T.DKK - - - - - Expected dividend - - Risk-free interest rate 1.10 2.80 At the time of issue the fair market value of the share options was stated as follows: The expected maturity (year) 3.00 3.00 Granted in May 2005, DKK ‘000 2,738 Market value per warrant is calculated to 3.50 5.80 Granted in September 2006, DKK ‘000 824

GROUP PARENT The market value of all unexercised share options at 30 September 2012 is calculated at DKK 0 thousands on the basis of the Black- Amounts in DKK ’000 2011/12 2010/11 2011/12 2010/11 Scholes model for valuation of warrants and share options.

The following amounts related to the warrantsprogram is recognized as a part of the staff cost 848 640 848 500 The fair market values for share options stated at the time of issue are recognised as staff costs proportionally in the income statement over the period until the time of exercise. In financial year 2011/12 DKK 353 thousand is expensed (2010/11: DKK 471 thousand) 76 RTX Annual Report 2011/12 RTX Annual Report 2011/12 77 76 RTX Annual Report 2011/12 RTX Annual Report 2011/12 77

NOTES NOTES

34 SHARE-BASED REMUNERATION (CONTINUED) 36 DISCONTINUED OPERATIONS Total sharebased remuneration The activities in Network Systems are discontinued. The management in RTX still investigates the possibilities to recover a part of the out- GROUP PARENT standing amount from the activities, including a solution for the Brazilian subsidiary. Amounts in DKK ’000 2011/12 2010/11 2011/12 2010/11 The discontinued operations related to the segment RTX Network Systems have affected the income statement and the cash flow state- Warrants programme 848 640 848 500 ment as stated below. Options programme 353 471 353 449 Share-based remuneration expensed as staff cost 1,201 1,111 1,201 949 GROUP Amounts in DKK ’000 2011/12 2010/11 35 OWNERSHIP Shareholders Revenue - 1,931 At 30 September 2012, there were approximately 3,800 registered shareholders. These registered shareholders hold shares equivalent to Cost of sales - -1,226 approximately 69% of the share capital. Other external expenses - -1,849 The following shareholders hold shares which either carry at least 5% of the voting rights of the share capital or have a nominal value of Staff costs - -1,183 at least 5% of the share capital: Jens Hansen, Gistrup, Denmark 8.75% Restructuring cost releated to discontinued operations - - Susanne P. Elbæk, Vadum, Denmark 7.22% Depreciation, amortisation and impairment - 7 Jens Toftgaard Petersen, Svenstrup, Denmark 7.22% Operating profit/loss (EBIT) - -2,320

At 30 September 2012, members of the Executive Board and other management had the following personal shareholding, warrants and Financial income - - share options in RTX: Financial expenses - -

Number of Number of Number of Profit/loss before tax - -2,320 shares warrants share options Tax on profit/loss - - 2011/12 2010/11 2011/12 2010/11 2011/12 2010/11 Profit/loss from discontinued operations - -2,320

Supervisory Board 828,306 828,306 - - - - Restucturing cost related to the discontinued operations in RTX Network Systems Executive Board 19,435 19,435 231,000 132,000 - - Cost of sales - - Other management employees - - 354,000 168,000 - - Other external expenses - - Total 847,741 847,741 585,000 300,000 - - Staff costs - -

The Supervisory Board and Executive Board hold the following shares in RTX A/S: Depreciation, amortisation and impairment - - Total restructuring cost - - Number of shares at DKK 5 30.09.2011 Purchased Sold 30.09.2012 Marketvalue during during 30.09.2012 Restructuring cost is mainly related to impairment to fair value of short-term assets the year the year million DKK related to the discontinued operations. Supervisory Board Jens Alder - - - - - The discontinued operations has the following impact on cash flow statement Jørgen Dalby-Jakobsen 2,181 - - 2,181 - Cash flows from operations - -2,320 Jens Hansen 825,625 - - 825,625 9.4 Cash flows from investments - - Rune Strøm Jensen 500 - - 500 - Peter Thostrup - - - - - Cash flows from financing activities - - Karsten Vandrup - - - - - Total - -2,320 Total 828,306 - - 828,306 9.4 Related to the running operations of RTX Telecomunicações Ltda. in 2011/12 have utilized credit lines with a face value of DKK 0.6 Executive Board millions from the Parent company. The credit line is written down to DKK 0 millions in Parent company (in 2010/11 DKK 0.6 mio.) as a Jesper Mailind 19,435 - 19,435 0.2 consequence of the decision not to continue RTX Network Systems. Total 19,435 - - 19,435 0.2

Total shares 847,741 - - 847,741 9.6

The calculated market value is based on the share prices listed at the end of the financial year. The Supervisory Board does not have any unexercised warrants or share options by 30 September 2012 (by 30 September 2011: 0). The Executive Board has unexercised warrants with a face value of DKK 1.1 million (0.6 million DKK by 30 September 2011). 78 RTX Annual Report 2011/12 RTX Annual Report 2011/12 79 78 RTX Annual Report 2011/12 RTX Annual Report 2011/12 79

NOTES NOTES

37 FINANCIAL RISKS AND FINANCIAL INSTRUMENTS 37 FINANCIAL RISKS AND FINANCIAL INSTRUMENTS (CONTINUED) GROUP PARENT Amounts in DKK ’000 2011/12 2010/11 2011/12 2010/11 Liquidity risks The Group ensures sufficient cash resources by a combination of cash control, investment in short-term current asset investments and by Trade receivables 38,598 53,880 38,491 19,932 the establishment of credit facilities. Receivables from subsidiaries - - - - Other receivables 1,129 1,067 611 582 The Group’s cash at bank and in hand primarily consists of deposits in reputable banks and credit institutions. Cash at bank and in hand 2,105 20,868 621 11,039 Bank deposits, bank debt and most of the Group’s mortgage debt carry a floating rate. Total loans and receivables 41,832 75,815 39,723 31,553 In order to reduce the risk on deposits, RTX only places deposits in banks with a high credit worthiness and investments in short-term Investments in subsidiaries - - - - bonds. Current asset investments 45,563 45,985 44,522 44,995 Financial assets, measured at fair value - - - - The maturity dates on the financial liabilities are specified in the notes for each of the liability category. Total assets with fair value recognized in the profit and loss 45,563 45,985 44,522 44,995 The liquidity reserve is composed by cash holdings, short term bonds and unused credit facilities.

Assets with fair value recognised in the profit and loss is valuated at The liquidity reserve is composed as below: the official listed price 30 September on the stock exchange GROUP Amounts in DKK ’000 2011/12 2010/11 Payables to subsidiaries - - 27,309 7,022 Mortgage debt 14,732 16,090 14,732 16,090 Short-term current asset investments 45,563 45,985 Bank debt - - - - Cash at bank and in hand 2,105 20,868 Trade payables 13,985 29,658 13,861 3,617 Unused credit facilities 15,000 15,000 Other payables 19,725 19,597 17,579 16,442 Total 62,668 81,853 Financial liabilities measured at amortised cost 48,442 65,345 73,481 43,171 Credit risks

The fair value of listed bonds is listed prices of the bonds (level 1 in the fair value hierarchy). The Group’s credit risks are related to trade receivables and assessed on an ongoing basis. By experience, a relatively large credit risk may occur from time to time as a large part of receivables often relates to a relatively small number of counterparties and customers. Financial risk management policy As a consequence of its operations, investments and financing, RTX is exposed to changes in the level of interest and exchange rates. The Parent manages the financial risks of the Group centrally and also coordinates the cash management of the Group, including finan- The level of risk related to the trade receivables is highly correlated with the financial status of the debtor. Therefore, RTX uses credit cing and investment of surplus liquidity. The Group uses derivatives to some extent. It is the Group’s policy not to conduct active specula- ratings, credit insurance and bank gurantees to secure the outstanding amounts. tion in financial risks. Sales on credit to the customer who represent 10 % of the Group turnover in 2011/12 is covered by a credit insurance.

The Group’s financial management is directed towards management and reduction of financial risks which are a direct consequence of Overdue amounts which are not written down distributes as follows: the Group’s operations, investments and financing. The objective is that the Group’s financial management will contribute to increasing the predictability of the financial performance, including reducing and delaying the impact of foreign exchange rate fluctuations on the income statement. GROUP PARENT Amounts in DKK ’000 2011/12 2010/11 2011/12 2010/11

Amounts not due 31,495 36,151 31,495 12,480 Amounts due with up to 30 days 4,769 15,546 4,761 5,417 Due between 30 and 90 days 725 1,905 725 1,761 Due between 90 and 120 days 104 278 104 274 Due with more than 120 days 1,505 - 1,406 - Total 38,598 53,880 38,491 19,932

A significant part of overdues not written down relates to a customer honouring a repayment plan. 80 RTX Annual Report 2011/12 RTX Annual Report 2011/12 81 80 RTX Annual Report 2011/12 RTX Annual Report 2011/12 81

NOTES NOTES

37 FINANCIAL RISKS AND FINANCIAL INSTRUMENTS (CONTINUED) 37 FINANCIAL RISKS AND FINANCIAL INSTRUMENTS (CONTINUED) Currency risks Interest rate risks The Group is exposed to exchange rate fluctuations as the individual Group enterprises make investments, conduct purchase and sales The Group is primarily exposed to interest rate risks through interest-bearing assets and liabilities. The overall objective of controlling the transactions and have receivables and payables in foreign currencies. The Group’s revenue to customers outside Denmark has been more interest rate risk is to reduce the negative impacts of interest rate fluctuations on earnings and the balance sheet. than 90% of total revenue over the past few years. Moreover, the major part of the Group’s purchase of products, etc from subsuppliers is settled in foreign currencies. Specification of the maturity dates of the Group’s financial assets and liabilities:

The Group conducts commercial hedging transactions, to the extent considered appropriate, to lower any currency exposure. Amounts in DKK ’000 Within Between After Of this Average one year two and five years carrying term Currency risks from assets and liabilities five years a fixed rate years The Group uses hedging instruments from time to time such as forward contracts to hedge recognized and unrecognized transactions. Hedging of recognized assets and liabilities primarily includes short-term current asset investments, loans and receivables as well as fi- Bonds 11,989 1,041 32,533 - 5.5 nancial liabilities. The fair market value of the derivatives is recognized under other payables and set off in the income statement against Bank deposit 5,657 - - - - foreign exchange adjustments of the assets and liabilities hedged. Mortgage debt -1,250 -5,126 -8,356 - 11.8 Employee bonds - -1,855 - -1,855 - Specification of the Group’s risks in foreign currencies: Bank debt -3,552 - - - - GROUP Total 30 September 2012 12,844 -5,940 24,177 -1,855 Cash and Receivables Liabilities Unsecured current asset net Bonds - 13,029 32,956 - 6.4 investments position Bank deposit 20,868 - - - - Mortgage debt -1,318 -4,858 -9,914 -155 12.9 EUR 1,342 74,418 5,930 69,830 Employee bonds - -1,855 - -1,855 - USD 11,297 51,071 30,385 31,983 Total 30 September 2011 19,550 6,316 23,042 -2,010 Other currencies 217 220 956 -519 Total 30 September 2011 12,856 125,709 37,271 101,294 The Group’s bank deposit is deposited in accounts on demand terms or fixed-term deposit accounts with a term of up to nine months.

EUR 947 17,925 5,606 13,266 Fluctuations in the interest rate level affect the Group’s bond portfolios, bank deposits, bank debt as well as mortgage debt. An increase USD 3,062 19,001 11,449 10,614 in the interest rate level of 1 percentage point per annum compared to the interest rate level at the balance sheet date would have had a Other currencies 1,246 1,194 955 1,485 positive impact of DKK 0.5 million (30 September 2010: DKK 0.5 million) on the Group’s income statement and equity. A corresponding Total 30 September 2012 5,255 38,120 18,010 25,365 drop in the interest rate level will result in a corresponding negative effect on the income statement and equity.

The Group’s most important currency exposure relates to sale in EUR and USD. Due to Denmark’s fixed-rate policy vis-à-vis EUR, currency Moreover, an increase in the interest rate level of 1 percentage point per annum on the interest rate level at the balance sheet date will risks in relation to EUR are not hedged. As for the Group’s financial assets and liabilities recognized in the balance sheet, a change in the result in a negative fair market value adjustment of the Group’s bond portfolios of DKK 1.5 million (30 September 2011: DKK 1.9 million), exchange rate of USD of 10% in upward direction would result in an increase in the Group’s financial performance and equity of DKK 1.0 which is recognized directly on equity. A corresponding drop in the interest rate level will result in a corresponding positive fair market million (at 30 September 2011: DKK 3.2 million) before tax. value adjustment, which is recognised directly on equity. A decline in the exchange rate of 10% would have the same impact with an opposite sign. Capital structure The Group’s capital structure is characterized by a considerable equity share. The business conditions of the Telecom industry are characterized by a high degree of uncertainty, which requires the presence of substantial equity, among other things to implement large and long-term development projects at the Group’s own expense, for instance in connection with the set-up of technology platforms or by cultivating new business areas and markets.

The Group’s equity share amounted to 73.6% at the end of the financial year 2011/12 compared to 65.2% at the end of 2010/11. Adresser

82 RTX Annual Report 2011/12 RTX Annual Report 2011/12 83 82 RTX Annual Report 2011/12 RTX Annual Report 2011/12 83

INCOME STATEMENT STATEMENT OF COMPREHENSIVE INCOME BALANCE SHEET EQUITY STATEMENT CASH FLOW STATEMENT NOTES

NOTES ADDRESSES

37 FINANCIAL RISKS AND FINANCIAL INSTRUMENTS (CONTINUED) Financial gearing Head Office Subsidiaries The Company’s Board of Directors reviews the Group’s capital structure on an ongoing basis when the Group presents interim reports and RTX A/S RTX HONG KONG LTD. RTX AMERICA, INC. annual reports. As part of this review, the Supervisory Board reviews the Group’s cost of capital and the risks related to the various types Strømmen 6 11/F. CAC Tower, 2025 Gateway place, Suite 202 of capital. 9400 Nørresundby 8/F Corporation Square San Jose, CA 95110 Danmark 8 Lam Lok Street, Kowloon Bay USA The financial gearing in the Group, calculated as the ratio of interest bearing net debt to equity, can be calculated at the balance sheet Hong Kong date as follows: Phone: +45 9632 2300 Fax: +45 9632 2310 Phone: +852 2487 3718 Phone: +1 (408) 441-8600 GROUP Fax: +852 2480 6121 Fax: +1 (408) 441-8611 Amounts in DKK ’000 2011/12 2010/11 VAT no.: 17 00 21 47 www.rtx.hk www.rtx.dk Mortgage debt 14,732 16,090 www.rtx.dk Employee bonds 1,855 1,855 Bank debt - - Income taxes payable 222 1,529 Income taxes receivable -975 -236 Short-term current asset investments -45,563 -45,985 Cash at bank and in hand -2,105 -20,868 Interest-bearing net debt -31,834 -47,615

Equity 156,321 151,874

Financial gearing 0.20 0.31

Breach of loan agreement terms The Group has not neglected or been in breach of loan agreement terms in the financial year or the comparative year.

38 EVENTS AFTER THE BALANCE SHEET DATE After the balance sheet date no material events with effect for the annual report have occurred. Fagudtryk

84 RTX Annual Report 2011/12 RTX Annual Report 2011/12 85 84 RTX Annual Report 2011/12 RTX Annual Report 2011/12 85

TECHNICAL TERMS AND EXPLANATIONS

TERM EXPLANATION TERM EXPLANATION

Baseband Baseband is a general term for part of the physical components of a wireless communication product. Typically, this would include the control circuitry (microprocessor), the power supply, amplifiers, etc. IP Internet Protocol (IP) is a method or protocol for sending data over the Internet. IP networks are package linked Bluetooth™ Bluetooth is a technology primarily intended as replacement for cables over short distances (typically 10-100 networks where data is divided into packages of varying sizes. Voice can also be transferred via an IP network metres). Bluetooth is mainly used for mobile telephones, so the user can, for example, speak through a mobile (Voice over IP) and an application using this is called IP Telephony. telephone via a wireless Bluetooth headset, and it will be easy to exchange business cards between the two mobile telephones. Bluetooth can also be used for a number of other applications, such as wireless connection IP is also used as an abbreviation for ownership of intellectually generated properties, ”Intellectual Property”. Is between a mobile telephone and a laptop or connection between an MP3 music player and a stereo headset. also abbreviated as IPR, “Intellectual Property Rights”. The two most widely distributed versions of Bluetooth (versions 1.1 and 1.2) have a maximum transfer speed of M2M The term Machine To Machine (M2M) stands for machines communicating with each other via a network (wit- 723.2 kbit/s. Enhanced Data Rates (EDR) are introduced in Bluetooth version 2.0, and the data transfer speed in hout human intervention). this version reaches a maximum of 3 Mbit/s. ODM Original Design Manufacturer (ODM) is a business model involving the development of a product according to the ™ ™ ™ CAT-iq CAT-iq is an abbreviation of Cordless Advanced Technology – internet and quality. The CAT-iq standard supports customer’s product requirement specification. In the typical ODM model, the ODM supplier designs, develops and ™ new and existing consumer products within wireless communication. CAT-iq is based on the already existing manufactures the complete product. For instance, based on detailed product requirement specifications from a DECT technology and connects broadband and telephony. customer, RTX Telecom has designed a Wireless Telephone Line Extender, including the development and hand- The cellular market The cellular market is a term used to cover all mobile telephony technologies and consists mainly of mobile ling of the manufacturing of the product. telephone customers and subscribers, manufacturers and operators. OEM An Original Equipment Manufacturer (OEM) is a manufacturing company developing and manufacturing standar- DCT2.4 GHz / WDCT DCT2.4 GHz (Digital Cordless Telecommunications) or WDCT (World Digital Cordless Telecommunication) is a dized products or modules, which are incorporated into end products using the reseller’s brand name. There is licence-free technology that makes it possible to speak wirelessly via an ordinary telephone connection. Unlike a low degree of customisation of the OEM product compared to an ODM offering. The customer only performs a DECT, DCT2.4 GHz can be used all over the world. DCT2.4 GHz has mainly been targeted to the North American few alterations to the final product, usually only a brand name and packaging. market as the common DECT frequencies have not been allocated to DECT in this area until 2005 (see also US- PABX Once upon a time, telephone calls had to be connected manually by the switchboard operator. Such a system DECT). was known as a PBX, or Private Branch Exchange. These days, such connections are established automatically, DECT DECT (Digital Enhanced Cordless Telecommunications) is a technology that makes it possible to talk wirelessly and so the term Private Automatic Branch Exchange (PABX), i.e. an automated switchboard, is used. via an ordinary telephone connection at a range of up to 300 metres. This was originally a European standard, Repeater A repeater is a unit which transmits the data it receives. A repeater is primarily used to extend on the coverage developed by ETSI (European Telecommunications Standards Institute) but it has subsequently also been adopted area for a wireless technology (for instance, a DECT repeater can extend the DECT telephones’ coverage area). in a number of non-European countries. Many predicted that DECT would die quickly after the introduction of Skype™ Skype™ is a programme allowing telephone conversations via the Internet. Calls to other Skype™ users are free Bluetooth and W-LAN at the end of the 90’s, however, the truth is that today DECT is still a strong technology of charge as well as calls to ordinary telephone numbers and mobiles all over the world are at a low rate (via Sky- which is also used in other contexts than wireless telephones – an example is the wireless controller for Xbox peOut and SkypeIn). 360™. Softphone A softphone is a programme allowing telephone conversations via the Internet. One of the best known softpho- DPRS DPRS stands for DECT Packet Radio Service. It is a wireless technology that can transmit and receive data based nes is Skype™. Calls to other softphone users are therefore free of charge as well as it is typically possible to on DECT technology. DPRS allows the user to send and receive e-mails on a laptop PC wirelessly. The range is make calls to ordinary telephone and mobile phone numbers all over the world at a low rate. 50–300 metres, and the speed up to 552 kbit/s, giving sufficient bandwidth for most ADSL connections. DPRS is TLE TLE is the abbreviation of Telephone Line Extender which is a wireless telephone line extender. A TLE can facili- in many ways similar to GPRS which is used on the GSM network for package linked data. tate the use of “Pay-Per-View” functions and proceed the use of other interactive services available for users of GSM GSM (Global System for Mobile communication) is the most commonly used mobile telephone system throughout digital satellite receivers and set-top boxes. the world. It is primarily used for voice communication and is defined as a second generation technology (2G). Turnkey design Turnkey design refers to a finished product ready to produce. As the word implies, the customer only needs to GSM can, however, also transfer data and enable Internet use from a laptop via a GSM mobile telephone. Short “turn a key” to launch the product. text messages can also be sent and received with a mobile telephone, using SMS (Short Message Service), and now it is also possible to send images and video clips via MMS (Multimedia Messaging Service). US-DECT (DECT 6.0) US-DECT is the 1.9 GHz DECT band which is the American counterpart to the European DECT system. US-DECT is also called DECT 6.0. GSM/GPRS GSM (Global System for Mobile communication) combined with GPRS (General Packet Radio Services) is known all over the world as 2.5 generation (2.5 G) GSM network. The GSM/GPRS network is one step towards the 3G VoIP VoIP or “Voice over Internet Protocol” is a method or protocol employed to transfer speech via the Internet. network and is suitable for supporting multimedia facilities because of the high data transmission speed. W-LAN A Wireless Local Area Network (W-LAN) is a wireless LAN allowing several mobile users access to connect to the HD Voice HD Voice stands for wideband voice, meaning sound quality with an increased band with compared to ordinary same network of the company or at home (and thereby share the same resources on the network – for instance a telephony audio. printer).

IEEE 802.11 IEEE 802.11, also known as Wi-Fi™, is a group of Wireless LAN/WLAN standards developed by task force 11 in IEEE The different W-LAN standards are mainly specified by the Institute of Electrical and Electronics Engineers (IEEE) LAN/MAN Standards Committee (IEEE 802). The expression 802.11x is also used to indicate corrections to the stan- and are therefore called IEEE802.11 (subsequently called 802.11). The technology was primarily developed dards. as replacement of the wired network and is also primarily intended for transmission of data – just like the IP Internet telephony Internet telephony is in short telephony via the Internet and not via the conventional telephone connections. As protocol. 802.11 is an open standard and consists of a number of different standards. Some of the best known opposed to conventional telephony where each connection occupies the entire connection, Internet telephony are 802.11a, 802.11b and 802.11g, though 802.11n begins to arrive on the scene. 802.11a is located on the 5 enables more users to share the same connection, just as lots of cars can use the same motorway. For instance GHz frequency area whereas 802.11b and 802.11g are located in the 2.4 GHz frequency area – 802.11n can be this means that several households in an apartment block can use the same broadband connection and that located within both frequency areas. each individual household can cancel their ordinary telephone subscription and use Internet telephony instead. Wi-Fi Wi-Fi is a standard for wireless transferring between computer and other units, i.e. wireless data net (for instan- Moreover, it is possible to be on the phone free of charge or very cheap via the Internet. ce WLAN) based on IEEE802.11 specifications. A Wi-Fi approval assures that units from different manufacturers are able to communicate. 86 RTX Annual Report 2011/12

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