The Directors present their annual report and the audited
financial statements for the year ended 30 September 2003.
Activities
Intec Telecom Systems develops, markets and licences telecoms
Operations Support Systems software (OSS) and provides related
professional services such as implementation, consultancy and
training, on a global basis. The Company also offers its software
as an Application Service Provision (‘ASP’) or bureau service for
a number of customers. Intec’s target customers are providers
of communications and Internet services or large users of such
services.
Review of Developments and Future Prospects
The Group intends to continue with its present business strategy
of developing and selling software and services to communications
providers and related businesses. A full review of the business can
be found in the Chairman’s Statement and Chief Executive’s Review.
Results and Dividends
The results for the year are shown in the profit and loss account.
A full review of the results for the year can be found in the
Chief Executive’s Review and Finance Director’s Review. The Directors
do not recommend the payment of a dividend (2002: £nil).
Development Expenditure
The Group commits substantial resources to research and
development activities to ensure its products meet present and
future market expectations. The Group expenses development
expenditure as it is incurred. The development expenditure
expensed at cost in the year was £10,073,000 (2002:
£8,026,000).
Directors and Their Interests
The current Directors are disclosed here. Gordon Crawford
resigned as non-executive director on 30 September 2003 and
was replaced on the Board by Thomas Ivarson.
None of the Directors had a material interest in any contract
to which the Company or any subsidiary was a party during
the financial year. The interests of the Directors in the share
capital of the Company are shown in Table B of the Directors’
Remuneration Report.
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Share Capital
Details of the movements in share capital can be found in
note 21.
270,000 ordinary 1p shares are held by Intec Employee Share
Trust at a cost of £2.05 each. See
note 12 for more details.
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Substantial Shareholdings
So far as the Company is aware, apart from certain Directors’
interests that are disclosed in Table B, the only holdings of 3% or
more in the issued share capital of the Company at 30 September
2003 (being notifiable interests in accordance with Sections 198
to 208 of the Companies Act) are Mican Limited 41.37% and
General Atlantic Group 3.99%.
As reported in the 2002 annual report, the Board had been
notified that as a result of the fall in the company’s share price
during the second half of the 2002 calendar year, the security
given by Mican Limited by the pledge of its holdings in the
Company’s shares had become uncovered. The Board established
a committee comprising the independent Non-Executive Directors
to investigate the potential impact on the Company and oversee
the interests of shareholders as a whole in relation to this matter.
Mican Limited has informed the Company that loan repayments
and interest payments are current and that negotiations are at an
advanced stage with the lender regarding a potential
reorganisation of the loan.
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Policy on Payment of Creditors
It is the Group’s normal practice to make payments to suppliers
in accordance with agreed terms provided that the supplier has
performed in accordance with the relevant terms and conditions.
Trade creditors at 30 September 2003 represented, on average
31 days’ purchases (2002: 19 days) for the Group and 30 days’
purchases (2002: 5 days) for the Company.
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Charitable Contributions
The Group made charitable contributions of £7,511 during the
year (2002: £14,657). Neither the Company nor any of its
subsidiaries made any donation for political purposes in 2003
or 2002.
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Employment of Disabled Persons
It is Group policy to offer equal opportunities to disabled people,
and to continue wherever possible the employment of staff who
become disabled, and to offer retraining for purposes of career
development to disabled staff. These matters are detailed in the
Intec Staff Handbook.
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Involvement
The Group actively encourages all staff to share a commitment to
the success of the business and to its operation as a responsible
and ethical organisation. The Group supports both formal and
informal communication between Directors, managers and staff,
through regular individual reviews, quarterly staff briefings, a
private intranet, ‘Employee Relations Forums’ consistent with
the guidelines suggested by the EU, and monthly internal
newsletters. An annual, confidential survey of staff opinions is
also conducted. Staff have defined, confidential communications
channels and escalation procedures to deal with any grievances
or disciplinary matters. All new staff joining the Group receive
formal induction training, including awareness of their obligations
as employees of a listed company. Staff training needs are
reviewed regularly and training provided where appropriate.
A staff Share Options scheme is open to all employees, and a
large proportion of staff are now shareholders or option holders.
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Environmental Policy
It is the Group’s policy to support and encourage environmentally
sound business operations. Recognising that the Group’s own
operations have minimal direct environmental impact, our policy
is to:
| 1) |  | Meet all statutory obligations placed on us. |
| 2) | | Where sensible and practical, encourage working practices,
such as teleconferencing, teleworking and electronic
information exchange that reduce environmental impact. |
| 3) | | Re-cycle waste products wherever possible, encourage use of
environmentally friendly materials, and dispose safely of any
non-recyclable materials. |
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Subsidiaries and Branches Outside the UK
The Group has subsidiaries or offices in Australia, Brazil,
China, Denmark, France, Hong Kong, India, Italy, Lebanon,
Malaysia, Mexico, Portugal, South Africa, Spain, Sweden,
Taiwan and the USA.
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Annual General Meeting
The resolutions to be proposed at the annual general meeting,
together with explanatory notes, appear in the separate Notice of
Annual General Meeting sent to all shareholders. The proxy card
for registered shareholders is distributed with the Annual Report
and Accounts.
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Auditors
On 1 August 2003 Deloitte & Touche transferred their business to
Deloitte & Touche LLP, a limited liability partnership incorporated
under the Limited Liability Partnerships Act 2000. The Company’s
consent has been given to treating the appointment of Deloitte
& Touche as extending to Deloitte & Touche LLP with effect
from 1 August 2003 under the provisions of section 26(5) of
the Companies Act 1989. A resolution to re-appoint Deloitte
& Touche LLP will be proposed at the forthcoming Annual
General Meeting.
Approved by the Board of Directors
and signed on behalf of the Board
Jean Strudley FCCA
Secretary
24 November 2003
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Directors' Report