Westend ICT Financial Report 1 January - 31 December 2009 (IFRS)

- Net sales EUR 4.33 million (EUR 3.84 million)
- Operating result EUR 0.45 million (EUR -0.27 million)
- Result before taxes EUR 0.21 million (EUR -0.84 million)
- Equity ratio -95.1% (-94.3%), shareholders' equity/share EUR -0.03
(EUR -0.03)
- Earnings per share EUR 0.0016 (EUR -0.007)


STRUCTURE OF THE GROUP


During the financial period, the Westend ICT group consisted of the subsidiary operating in Finland, Documenta Oy, in which the group had 100% ownership, and the parent company Westend ICT Plc. The company has one segment and it has business operations only in Finland.

In its business operations, Westend ICT Plc focuses on developing its customers' business processes especially by means of document and workflow management systems and development of quality and customer relationship management, with the emphasis on the Finnish markets. The company will continue to use the operating model in which the operative functions have been centralized into the subsidiary/subsidiaries.


NET SALES

The Westend ICT group's net sales for the financial period were EUR 4.33 million (EUR 3.84 million).


RESULT DEVELOPMENT


The Westend ICT group's operating result for the financial period was EUR 0.45 million (EUR -0.27 million). The result for the financial period was EUR 0.21 million (EUR -0.84 million).

Other operating income includes income of EUR 0.24 million from the payment of an outstanding loan that had already been written off.

Other operating expenses of the financial period are decreased by the cancellation of a reservation of EUR 0.14 million. During the financial period, an unused part of a reservation, which was made in 2008 for covering the costs of the summons against the company, was cancelled. The summons received by the company in 2007 from the Helsinki District Court concerning the share issue of the year 2000 have been cancelled and the plaintiffs have dropped their claims in accordance with the settlements that have been agreed on.

The financial income of the financial period includes a registration of change in the market value of shares amounting to EUR 0.10 million; the GROUP Business Software AG shares have been valued at the share price on the last day of the financial period.

The financing costs of the financial period include an interest cost of EUR 0.17 million for a convertible loan (IAS 32).

The costs for employment benefits on the financial period were EUR 2.54 million (EUR 2.38 million), which equals to 59% of the net sales (62%).

At the end of the financial period, the group's equity is negative. The loss of share capital of the company has been registered in the Trade register on 20 September 2006.


THE NET SALES AND RESULT DEVELOPMENT OF THE SUBSIDIARY

Documenta Oy

Documenta Oy's net sales for the financial period 1 January–31 December 2009 were EUR 4.38 million (EUR 3.92 million). The operating result was EUR 0.53 million (EUR 0.35 million), which is 12.1% of the net sales.

During the financial period, Documenta Oy obtained several new customers from both public and private sectors.

Documenta Oy is a provider of electronic workflow and document management, quality management and work process intensification solutions. The company offers software, maintenance, operation service and integration solutions for companies and public administration. In addition to its own products, Documenta represents in Finland the Software Innovation ASA workflow and document management solutions and the Group Business Software AG companies' solutions for email archiving and customer relationship management. The CEO of the company is Asko Ojanen.


PARENT COMPANY

The increase in value of the subsidiary shares from EUR 0.4 million to EUR 2.4 million has been entered into the balance sheet of the parent company. The balance sheet of the parent company will be published at the same time as the financial report. The increase in value of the subsidiary shares does not affect the figures for the group.


SIGNIFICANT EVENTS IN THE FINANCIAL PERIOD

The company announced on 15 January 2009 that the Supreme Court had passed a judgment concerning the share issue and sales of Westend ICT Plc (former TJ Group Plc) in the year 2000.
The Supreme Court increased the corporate fine by EUR 50,000; thus, the corporate fine is EUR 100,000. The other parts of the decisions of the Helsinki Court of Appeal were not changed as regards the company. The corporate fine has already been entered into the result for 2008.

The company announced on 18 June 2009 that the Annual General Meeting resolved to adopt the accounts of the company for the accounting period of 1 January–31 December 2008 and granted the members of the Board of Directors and the Chief Executive Officer discharge from liability for the accounting period. The loss of the accounting period will be left in the company's profit and loss account. No dividend will be distributed.

The current members of the Board of Directors—Hannu Jokela, Jörg Ott and Mikko Salminen—were reselected as the members of the Board of Directors. No deputy members were selected for the Board of Directors. The Annual General Meeting decided that the members of the Board of Directors will be paid attendance allowance as follows: the Chairman of the Board of Directors will be paid 1,500 euros/month and the members of the Board of Directors 1,000 euros/month. In its first meeting, the Board of Directors decided that Mikko Salminen will continue as the Chairman of the Board.

Ernst & Young Oy, an auditing firm authorised by the Central Chamber of Commerce, with Juha Nenonen (CA) as the main responsible auditor, was elected as the auditor for the company.

The Annual General Meeting decided to change the terms of the company's convertible loan in accordance with the proposal of the Board of Directors. The terms of the convertible loan decided by the Annual General Meeting on 27 March 2003 and changed by the Annual General Meeting on 3 April 2008 (registered on 21 April 2008) will be changed to extend the loan period until 31 December 2010.

Additionally, the Annual General Meeting authorised the Board of Directors to negotiate with the subscribers of the loan and agree on changing the terms of the loan to improve the capital and financing situation of the company.

The summons received by the company in 2007 from the Helsinki District Court concerning the share issue of the year 2000 have been cancelled and the plaintiffs have dropped their claims in accordance with the settlements that have been agreed on. The costs of the settlements for the company were included in the reservation made for the financial period 2008. The unused part of the reservation, EUR 0.14 million, has been cancelled during the financial period.


THE CURRENT AUTHORISATIONS OF THE BOARD OF DIRECTORS

The Annual General Meeting on 18 June 2009 authorised the Board of Directors to grant new shares against payment or a receivable from the company in a share issue and to grant special rights in accordance with the Chapter 10, Section 1 of the Companies Act, including option rights, which give the right to subscribe shares against payment or a receivable from the company. The amount of new shares issued by the company and new shares subscribed on the basis of special rights can be 60,000,000 at the maximum.

The authorisation includes the right to grant shares or special rights entitling to shares in a directed issue, that is, to deviate from the shareholders' privilege on the basis of the prerequisites specified in the Companies Act. A directed share issue shall require a weighty financial reason on the part of the company, such as managing the company's capital, financing or implementing acquisitions or other business arrangements, implementing incentive systems targeted at the company's personnel, or other important financial reason for the company specified by the Board of Directors. On the basis of the authorisation, the Board of Directors shall have the right to decide on all other terms of the issuing of new shares or granting of the mentioned special rights, including the recipients of shares or special rights and the amount of compensation to be paid. The authorisation shall be valid until 31 December 2012. The authorisation has not been used so far.


FINANCING AND INVESTMENTS

The value of the Westend ICT group’s cash and liquid current assets totaled EUR 0.61 million (EUR 1.34 million) at the end of the financial period.

The cash flow for business operations for the financial period was EUR -0.11 million, which included interest payments of EUR 0.19 million, the cash flow for investments was EUR -0.15 million, and the cash flow for financing was EUR -0.47 million, which was used for paying off debts. The equity ratio of the group was -95.1% (-94.3%).

The Westend ICT group's sales receivables at the end of the financial period were EUR 1.77 million (EUR 1.46 million).

During the financial period, the group's gross investments totaled EUR 145 thousand (EUR 59 thousand), which equals to 3.3% (1.5%) of the net sales.


DEVELOPMENT COSTS

The product development expenses have been entered in accordance with the IAS 38 standard in such a way that the development expenses for entirely new products and new product versions including significant improvements have been activated, if their future accumulativeness can be reliably verified. Other product development expenses have been entered as costs in the profit and loss statement at the time they incurred. During the financial period, no product development expenses have been activated in the balance sheet, but all product development expenses have been entered as costs, EUR 352 thousand in total (EUR 153 thousand in total in 2008). Depreciation of activated product development costs totaled EUR 0.14 million during the financial period. At the end of the financial period, the company's balance sheet does not include any activated, depreciable product development costs.


EVENTS IN THE IMMEDIATE CIRCLE

During the financial period, purchases from persons belonging to the immediate circle amounted to EUR 72 thousand (EUR 72 thousand in 2008).


PERSONNEL

At the end of the financial period, the group had 41 (38) employees. The group employed an average of 41 (38) persons during the financial period.
MANAGEMENT, BOARD OF DIRECTORS, AND AUDITORS OF THE COMPANY


The Board of Directors of Westend ICT Plc consists of the Chairman of the Board Mikko Salminen and permanent members Hannu Jokela and Jörg Ott.

The auditor selected by the Annual General Meeting is Ernst Young Oy Authorised Public Accounting Firm with Juha Nenonen (CA) as the principal accountant.

SHARES, SHARE CAPITAL, AND SHAREHOLDERS

Westend ICT Plc's share capital on 31 December 2009 was EUR 2,569,853.92, and the total number of shares was 128,492,696. The counter value of a share is EUR 0.02. Shareholders' equity/share was EUR -0.03. At the end of the financial period, the equities of the group and the parent company were negative. The loss of share capital of the parent company has been registered in the Trade register on 20 September 2006.

At the end of the financial period, the company had 13,180 shareholders.


THE SHARE HOLDING AND WARRANTS OF THE BOARD OF DIRECTORS AND THE MANAGEMENT

According to the share register maintained by Euroclear Finland Oy, on 31 December 2009, the permanent members of the Westend ICT's Board of Directors and the CEO owned a total of 7,000 company shares, that is, 0.01 percent of the company's share capital and votes. They do not have any warrants.

The company does not have existing warrant programs.

The company complies to and adapts the Guidelines for Insiders drawn up by NASDAQ OMX Helsinki Oy.


CORPORATE GOVERNANCE

The company will issue the Corporate Governance Statement for 2009, in accordance with the Recommendation 51 of the Finnish Corporate Governance Code, as a statement separate from the Annual Report.

The Corporate Governance of Westend ICT as a whole is available at the company's internet site at: www.westendict.fi/sijoittajat/hallintoperiaatteet.


DISTRIBUTION OF DIVIDEND

The company's Board of Directors will propose to the Annual General Meeting that no dividend be paid for the financial period and that the company's result be booked against retained earnings. The company does not have distributable assets.


NEAR-TERM OUTLOOK


The goal for 2010 is to increase the company's net sales and to achieve a positive operating result in the annual level.


Forecasting the result of the financial period is difficult as the changes in the price of the Group Business Software AG shares, registered in other financial assets and listed in the stock exchange, have had and will continue to have a major effect on the financial income/costs and thereby on the result of the financial period.

The interim report of the Westend ICT group for 1 January-31 March 2010 will be published on 20 April 2010.

Espoo, 11 February 2010

The Board of Directors of Westend ICT
Mikko Salminen, Chairman of the Board
Hannu Jokela
Jörg Ott

CONTACT:
Westend ICT Plc
CEO Hannu Jokela
Tel. +358 207 91 6700

DISTRIBUTION:
NASDAQ OMX Helsinki
Main media
www.westendict.com

The figures in the financial report have not been audited.

In addition to the accounts of the parent company, the financial report of the Westend ICT group consolidates the accounts of Documenta Oy.

This financial report has been prepared in accordance with the IAS 34 Interim Financial Reporting standard and the principles and calculation methods used in the latest financial report, except that the group has on 1 January 2009 adopted the changes in standards and interpretations published by IASB and mentioned below.

As of 1 January 2009, the group has observed the following new IFRS rules: IFRS 8 Operating segments and IAS 1 Presentation of financial statements. Otherwise, the principles presented in the financial report 2008 have been observed.
The implementation of IFRS 8 has not affected reporting. The implementation of IAS 1 has affected slightly the presentation of the profit and loss statement and calculation of the change in equity.

The formulas for calculating figures have remained the same and they have been presented in the financial report for 2008.


The enclosed attachment includes also figures. Westend ICT Plc financial report_2009