to 30
June
2015
ANNUAL
REPORT &
ACCOUNTS
Transense Group Structure
Two Trading Divisions
Leveraging the Company’s IP
and expertise
Transense Technologies is the parent Company. Holding
Group IP and providing technical and R&D resource
to the two trading divisions. Developer of wireless,
battery-less and battery based sensor systems using
Surface Acoustic Wave (SAW) and Radio Frequency (RF)
technologies.
www.transense.co.uk
1 Landscape Close
Weston on the Green
Bicester, Oxon,
OX25 3SX, UK
Tyre Management Solutions for the mining, commercial
vehicle and passenger car markets. A range of products
for remotely monitoring tyre temperatures, pressures,
tread depths and a variety of other key parameters to
extend the life of tyres, reduce fuel costs and improve
safety.
www.trans-logik.com
SAW
Trading division focused on commercialising the
Company’s torque, temperature and pressure
sensors. Supporting longer-term development
projects with existing partners as well as in other new
areas of opportunity, both in the automotive and
non-automotive fields.
www.sawsense.com
Welcome
Transense
Annual
Report &
Accounts
2015
The Transense Group consists
of two Trading Divisions. These
have been established to target
specific global markets where
the Group’s technology offers
significant advantages over
competing technologies and
products.
Transense Technologies PLC Annual Report & Accounts 2015 Page 2
Transense Technologies PLC Annual Report & Accounts 2015 Page 3
Contents
2
Transense Group Structure
4
Contents
6
Financial Highlights
7
Operational Highlights
8
Chairman’s Statement
10
CEO Report
14
Financial Report
16
Strategic Report
40
Statement of Corporate Governance
42
45
48
Remuneration Report
Directors’ Report
Statement of directors’ responsibilities in respect of the Strategic
Report, Directors’ Report and the Financial Statements
49
Independent Auditor’s report to the members of Transense
Technologies plc
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Company Balance Sheet
Statement of Changes in Equity
Consolidated and Company Cash Flow Statement
Notes to the Financial Statements
51
52
53
54
55
56
Developer
of wireless,
battery-less and
battery based
sensor systems
using Surface
Acoustic Wave
(SAW) and Radio
Frequency (RF)
technologies.
Transense Technologies PLC Annual Report & Accounts 2015 Page 4
Transense Technologies PLC Annual Report & Accounts 2015 Page 5
Financial Highlights
Operational Highlights
• Revenue* of £1.2m (FY14: £3.4m) in line with revised expectation
•
Increased iTrack market penetration in major geographic markets
• Overheads** fairly constant at £2.4m (FY14: £2.5m)
• Launched lease rental financing option for iTrack customers
• Adjusted EBITDA** loss of £1.6m (FY14: profit of £0.0m)
• Created wholly owned sales and service support centre for Latin American
• Loss before taxation** of £1.8m (FY14: £0.1m)
region
• Loss on discontinued activity (IntelliSAW) after taxation of £1.0m (FY14: £1.0m)
• Signed up new iTrack channel partner in Australia
• Net closing cash balance £0.5m (FY14: £3.1m)
• Post year end discussions are ongoing with potential new partners in the
• Post year-end fund raise of £2.5m (net of expenses) through placing and offer
USA and Japan
for subscription
* Excludes Discontinued Operations
** Excludes Discontinued Operations and bad debt charge of £357,000
• SawSense entered MoU with GE for multiple applications
• Discussions regarding the sale of IntelliSAW are ongoing
EBITDA is the Earnings Before Interest, Taxation, Depreciation & Amortisation, and is calculated by taking operating loss, and adding
back depreciation (£88,000), and amortisation (£160,000). Adjusted EBITDA is calculated by taking EBITDA, and adding back Bad debt
(£357,000) and adjusting discontinued depreciation (£21,000)
Overheads are calculated by taking other administrative expenses and deducting depreciation & amortisation
Transense Technologies PLC Annual Report & Accounts 2015 Page 6
Transense Technologies PLC Annual Report & Accounts 2015 Page 7
Chairman’s statement
2015
Transense is pleased to report results in line with the
revised expectations set out towards the end of a
challenging year for the Company. As previously stated,
these results were disappointing, with revenues reducing
significantly compared with the prior year. Whilst we
broadly maintained overheads at a steady level in order
to continue developing products and sales channels,
inevitably this led to an increase in operating losses and
depletion of our cash reserves.
effect on revenues for iTrack, which came after such
promising momentum had been generated in the prior
year.
We have now repositioned the sales proposition and
offer a lease rental solution for customers, allowing them
to achieve a short payback when lease rental costs are
measured against the savings in operating costs and
increased production yields that iTrack delivers.
Financial results and condition
Revenue from continuing activities reduced to £1.2m
from £3.4m in the prior year, and the loss before taxation
from continuing activities (before bad debt) was £1.8m
(FY14: £0.1m).
The total loss attributable to shareholders was £3.1m
(FY14: £1.0m) resulting in a loss per ordinary share of 1.06
pence (FY14: 0.38 pence). The board do not recommend
payment of a dividend.
Net cash balances at 30 June 2015 were £0.5m (30 June
2014: £3.1m).
In July 2015, we were encouraged by shareholder support
when the company raised £2.5m (net of attributable
expenses) by a placing and offer of ordinary shares at a
price of 1.5 pence each.
Accordingly, the Company now has access to adequate
financial resources to consider future investment in
further product development, opening of new sales
channels, and offering more flexible financing solutions
to customers. Our goal is to ensure that our existing
business activities become financially self-sufficient
in the near term, and that investment in longer term
projects with high levels of potential return is provided
from internal resources.
Market conditions
As we have previously reported, there was a sharp
downturn in demand for commodities and consequent
contraction in capital expenditure in the mining sector in
the early part of the financial year. This had an adverse
Throughout the year commodity prices have been falling
and this weakness has continued into the new financial
year , and the effect on mining companies has been well
documented. We continue to have confidence that gains
in productivity and reductions in overall operating costs
offered by iTrack provide a compelling case when the
marginal profitability of mining operations falls under
close scrutiny.
Our Translogik tyre related products are primarily
delivered into the automotive aftermarket through a
range of OEM tyre producers, channel partners, and
value added resellers. This sector has until recently
been relatively conservative in the adoption of new
technology, but there are signs of a more progressive
approach by a number of leading companies within our
current reach.
Meanwhile, our key markets for surface acoustic wave
(“SAW”) sensor technology in industrial, automotive and
green energy have shown steady growth, and our focus is
on gaining traction for market acceptance of new volume
applications in these areas.
Disposal of IntelliSAW
The Board remains in discussions regarding the possible
sale of the IntelliSAW business.
Board composition
Following seven years of service to the Company as
Chairman and then Deputy Chairman, David Kleeman
decided to step down from the Board on 31 December
2014. I would like to take this opportunity to thank David
for his contribution to the Company during his time as a
Director which was much appreciated and will be missed.
In July 2015, Nigel Rogers joined the board as Non-
Executive Deputy Chairman. Nigel began his career
as a Chartered Accountant, and has had many years
experience as CEO of AIM listed industrial companies. We
welcome him to the Board, and look forward to working
together on the development and implementation of our
commercial strategy.
Prospects
We anticipate that market conditions in mining will
continue to be challenging in the current financial year.
As a result our sales proposition into this sector is now
closely aligned with the pressing need to maximise
output and minimise costs. We have continued to
see successful implementation of our equipment in
response to these pressures as companies seek optimal
deployment of assets including mine trucks. Our initial
focus will be to increase penetration of geographical
markets in which we have an established presence,
namely Chile, Australia and Southern Africa. We believe,
however, that the strong relationships we are building
in these markets can act as a bridgehead into new
territories in which our current customers are already
active.
We also aim to build on the progress made with
the new probe products and the launch of our new
Passenger Car Audit System (PCAS) into the passenger
car tyre inspection market. Entry into this large new
market presents new opportunities and we believe
we are adopting the right strategy of partnering with
companies that already have a strong presence in this
market.
SAWSense’s many projects are progressing well, with
one particular industrial partner expected to launch
a commercial torque solution product in 2016. It is
anticipated that going forward, income received from
the commercialised torque project and other ongoing
engineering work should start to exceed the division’s
costs.
Overall, the board is satisfied with the progress made
in recent months having overcome some difficult
challenges. The company has developed valuable
technology, a growing reputation, and an enviable
customer base across multiple geographic and industry
sectors. With the financial resources now available, we
believe that the company is well placed to capitalise on
these exciting opportunities and we view the future with
renewed confidence.
David M Ford
Group Chairman
6th October 2015
We have now repositioned
the sales proposition and
offer a lease rental solution
for customers, allowing them
to achieve a short payback
when lease rental costs
are measured against the
savings in operating costs and
increased production yields
that iTrack delivers.
Transense Technologies PLC Annual Report & Accounts 2015 Page 8
Transense Technologies PLC Annual Report & Accounts 2015 Page 9
CEO’s Report
2015
After a difficult 2014 and early 2015 due to the continuing
downturn in the global mining industry, a key market
for Translogik’s iTrack Mining Tyre Monitoring System,
a positive market response to the systems new finance
lease and rental pricing models has resulted in the
aggregate sale or rental of 131 iTrack systems during
the last six months of the financial year and a further 47
ITrack systems due to be despatched in September.
Additionally, the emergence of a valuable new market
for the division’s range of tyre inspection probes in
the passenger car space, offers new opportunities for
updated versions of the tyre inspection probe, and a
complementary new software system built around it,
that we refer to as Passenger Car Audit System (PCAS).
Translogik
iTrack
Australia
The first success with the new iTrack pricing model
was a contract win through our Australian distributor,
Brownfield, to supply 23 iTrack mining tyre monitoring
systems for large haul trucks to the Glencore Ravensworth
mine and its entire fleet of Caterpillar 797 vehicles. It
is of additional significance that this win was achieved
after iTrack was selected as the preferred system against
those offered by Translogik’s competitors. This confirms
our belief that the iTrack system has several significant
advantages over competing products. Glencore is one
of the largest miners in Australia and we look forward to
their use of iTrack expanding further during the coming
years.
In August, Translogik secured a second contract in
Australia, with agreement to supply 47 iTrack systems
to the Saraji coal mine in the Bowen Basin, Queensland,
owned by the BHP Billiton Mitsubishi Alliance (BMA). The
contract includes the sale of equipment on a finance
lease. In addition to the sale there will be income from
service and rental for a minimum period of two years. The
important role of tyre monitoring as part of a total safety
and performance monitoring strategy within the mining
sector is an increasingly major focus in Australia as the
large mining companies seek to extract the maximum
possible productivity from their existing asset base.
Chile
In April we secured a contract to supply iTrack to the
entire fleet of 46 large haul trucks at the Spence copper
mine in Chile, owned by BHP Billiton. This deployment
was supported by Translogik’s new Chile based
technical sales staff. Chile is a key market for iTrack, with
over 2,000 large haul trucks currently operating. Having
local technical sales expertise available to provide rapid
customer support has been very important in building
strong client relationships with the major mining and
mine service companies and has been a significant
factor in closing this deal with BHP Billiton.
iTrack was deployed much more rapidly at the Spence
mine than we have seen achieved previously, with in
excess of forty trucks fitted in a month, as BHP were
keen to start gaining the proven benefits of ITrack. BHP
have several large mine fleets in the region and we
are hopeful that the productivity and safety benefits
provided by having real-time tyre data will open up
further opportunities for us.
Another large mine in Chile, maintained by Otraco, is
now operating more than 100 live iTrack systems. It
has taken approximately twelve months to deploy this
number of systems as vehicles are fitted as they come in
for maintenance and servicing. This mine is continuing
to expand and adding further large mine haul trucks.
Probes
As well as targeting the mining and commercial vehicle
tyre markets, Translogik is now directly addressing
the much larger passenger car tyre market through
a variety of new automated inspection systems that
use the Translogik tyre inspection probe as their key
component.
The Opti-Tread system developed by Translogik’s North
American partner, Squarerigger Software,
is being
marketed in the USA by Snap-on Equipment through its
John Bean brand. An initial order of 220 systems was
supplied to Snap-on Equipment to serve as product
demonstrators and initial inventory for its North American
sales network and early feedback is that the system has
been well received. However, follow-on orders have
not yet been received, although Squarerigger remain
confident that they will materialise later this year.
In May Translogik had its Wireless Tyre Inspection Probe
integrated into the new ‘Connected Workshop’ system
from Bosch Automotive Service Solutions. The system was
launched at the Automechanika Show in Germany. The
cloud-based, tablet driven system, has two components,
‘Entrance Check’ and ‘Connected Repair’, which are linked
to allow vehicle information and test results to be shared
across workshop equipment, workshop users and the
customer. The probe will be used at the ‘Entrance Check’
level, a 5-minute vehicle health check which includes
tread depth and tyre pressure measurements. The system
supports OEM and Aftermarket customers globally.
In March Translogik signed an exclusive agreement to
supply its tyre inspection probe to Rema Tip Top Holdings
UK Limited (‘Rema’) for use in Rema’s new passenger car
tyre inspection system, ‘Tip Top Tread’. Rema is part of the
larger Rema Tip Top AG group of companies that had 2013
turnover of EUR 728.6m. It has 5,253 employees in more
than 170 countries. The system is based on Translogik’s
proprietary tyre probe technology, provides a quick,
efficient and accurate wireless car tyre inspection system
to the tyre sales and fitment industry.
Rema’s exclusivity applies only to use of the probes in
conjunction with the Tip Top Tread system, which is
focused on the passenger car market and is contingent
upon achieving agreed, rising quarterly minimum levels
of UK sales totalling at least £1.1m in aggregate over the
next three years.
Rema have a powerful market position both in the UK and
in Europe. We believe their established sales network and
market expertise is capable of driving probe sales into
the car tyre market much faster than would otherwise be
achievable, and supports our strategy of diversifying into
the substantial passenger vehicle market.
Translogik recently launched its own Passenger Car Audit
System (PCAS). This system uses the the existing tyre
inspection probe in conjunction with our new proprietory
software system for desktop and iOS to offer a complete
rapid car tyre inspection system to the tyre retail and car
servicing market.
In April we secured a
contract to supply iTrack
to the entire fleet of 46
large haul trucks at the
Spence copper mine in
Chile, owned by BHP
Billiton.
Transense Technologies PLC Annual Report & Accounts 2015 Page 10
Transense Technologies PLC Annual Report & Accounts 2015 Page 11
CEO’s Report (continued)
2015
SAWSense
A major recent development, is the signing of a
memorandum of understanding with GE, a provider
of products to the global Power and Water, Oil and
Gas, Energy Management, Aviation, Healthcare,
and Transportation industries. It is developing
new instrumentation applications utilising its core
wireless, passive Surface Acoustic Wave (SAW)
measurement technology in association with
SAWSense. This development aligns the Transense
SAW technology expertise with GE’s proficiency in
large scale production and product delivery, to open
up new global opportunities.
Working with an industry leading developer of world-
class technology applications is exactly the right
platform for Transense’s SAW technology to enter
the commercial environment. We look forward to
working further with GE to strengthen their product
offerings, bringing the benefits of our technology to
the infrastructure markets GE serves.
Progress continues in partnership with one of the largest
European industrial electronic system manufacturers
on a SAW application as part of a condition monitoring
system. The project has been underway for two years
developing prototypes with SAWSense providing paid
engineering support. The customer has started the
industrialisation process with production expected to
follow in the first half of 2016. The customer has a global
interest in SAW technology for multiple applications.
The two existing automotive flexplate projects continue
to progress, and have recently been joined by a further
US based automotive OEM, taking the total number of
projects to three.
We have recently received initial EU funding (Horizon
2020) to assess the feasibility of torque sensors for
tidal power generation. Work continues on a diverse
range of applications of Transense’s SAW technology
for measuring torque (electric power assisted steering
and driveline), temperature and pressure with new
companies. This entails different periods of paid
engineering support and application development work
and the Board is hopeful that in a number of cases this
will lead in the medium term to industrialisation with
the consequential grant of intellectual property licences
by the Company, subject to the satisfactory conclusion
of commercial discussions in each case
Graham Storey
Group CEO
6th October 2015
Transense Technologies PLC Annual Report & Accounts 2015 Page 12
Transense Technologies PLC Annual Report & Accounts 2015 Page 13
Financial Report
2015
Results for the year
Revenue (excluding Discontinued Operations) reduced
by 63% compared with the prior year as core mining
markets contracted sharply during the summer of
2014. Approximately 69% of revenues in the prior year
were derived from the sale of iTrack equipment in
large individually significant contracts based on capital
expenditure by our customers. During the period under
review, equipment was also offered on more flexible
lease rental terms, which generated some £0.06m of
revenues in the current year. This arrangement involves
an
increased working capital commitment by the
company to fund the initial outlay, but offers the benefits
of accelerating market penetration and giving greater
visibility of future revenue streams.
Gross margins reduced from 74% in 2014 to 67% . The
reduction is due to the change in mix of Sales being
heavily weighted to iTrack Kit Sales as referred to above.
Going forward the mix will change further as the rental
income stream grows and as this income has no Cost of
Sales charge as the costs of rented kit is capitalised and
depreciated over the asset life (the depreciation charge
being included in Overheads).
As a result of the reduced level of activity, gross profit
reduced to £0.83m (FY14 £2.5m), and the board carefully
considered the approach to maintaining overhead
spend at previous levels in order to support product and
sales channel development. Overheads were generally
stable over the two years £2.4m (excluding discontinued
operations and bad debt charge) (FY14 £2.5m).
The resulting loss before taxation from continuing
activities and before bad debt amounted to £1.8m (FY14
£0.1m). Underlying adjusted EBITDA was a loss of £1.6m
(FY14 profit £0.0m), and it is the aim of the group to
generate underlying profits against this measure as soon
as practicable.
After taking account of the bad debt expense, taxation
and the loss on discontinued activity, the total loss
attributable to shareholders was £3.12m (FY14 £1.03m),
equivalent to 1.06 pence per share (FY14: 0.38 pence).
The loss attributable to shareholders from continuing
activities before the exceptional bad debt charge was
0.58 pence per share (FY14: 0.02 pence).
Taxation
The group had UK tax losses carried forward at 30 June
2015 of approximately £17.7m.
Certain elements of development expenditure
undertaken by the company are eligible for enhanced
Research and Development tax relief which generally
relates to salary costs of technical staff. As a result of
claims in 2014 and 2013 the Company has received Tax
Credits of £0.07m and £0.06m respectively.
Cash flow and financial position
There was a net cash outflow of £2.61m (FY14 £1.09m
inflow) during the year, most of which was the result of
losses set out above.
At 30 June 2015 the group had net cash balances of
£0.47m (FY14 £3.08m) and had embarked upon a
fundraising exercise resulting in the raising of £2.5m of
additional equity capital (net of attributable expenses)
in a placing and offer for subscription approved by the
shareholders on 27 July 2015.
The financial position of the group has been
strengthened significantly as a result of the successful
fund raising.
The financial results for the year ended 30 June 2015 may be summarised as follows:
Year
Revenue *
Gross Profit *
Gross margin % *
Loss before tax **
Loss from Discontinued
Operations
EBITDA Adjustments:
Net Interest
Depreciation *
Amortisation
EBITDA **
Share-based payments
Adjusted EBITDA **
Loss per Share
Adjusted Loss per Share **
Bad Debt Charge
2014/15
£000
2013/14
£000
1,248
839
67%
(1,770)
3,370
2,510
74%
(118)
(1,041)
(993)
(74)
67
160
(1,617)
8
(1,609)
1.06p
0.58p
357
(62)
42
162
24
8
32
0.38p
0.02p
0
* Excludes Discontinued Operations
** Excludes Discontinued Operations and bad debt charge
Depreciation on discontinued operations was £21,000
Transense Technologies PLC Annual Report & Accounts 2015 Page 14
Transense Technologies PLC Annual Report & Accounts 2015 Page 15
Strategic Report
2015
Transense Technologies PLC Annual Report & Accounts 2015 Page 16
Transense Technologies PLC Annual Report & Accounts 2015 Page 17
Corporate Information
Executive Directors
Graham Storey
Group CEO
Graham commenced work for
a courier business in the late
1980’s and quickly took over the
running of a subsidiary company
operating a Tropical Plant hire
business. Graham then effected
a management buy out of that
business and through both
organic growth and acquisitions,
he built up The Moyses Stevens
Group to become the biggest
commercial and retail florist in
the UK and personally held three
Royal Warrants.
Melvyn Segal FCA
Finance Director
Melvyn is a chartered accountant
and experienced company
Finance Director, having
previously held Finance Director
positions at various high growth
private and public businesses.
Prior to entering the commercial
sector Melvyn was a partner for
22 years at the accountancy firm
Arram Berlyn Gardner (ABG).
During his tenure at ABG the firm
grew from 3 partners and 20
staff to 7 partners and over 70
staff and was rated in the top 60
firms.
David M Ford
Chairman
David qualified as a solicitor
in 1980. He specialised in
Intellectual Property (IP) law.
In the late 1980’s he dealt with
the acquisition by his firm, Tarlo
Lyons, of the entire consumer
debt recovery department of
HSBC and negotiated a long
term contract to deal with all
branch consumer debt. In 1990
he became the firm’s first
Managing Partner. In 1993 he left
the firm to move into a general
business environment. Since
then he has been involved with a
variety of companies in various
industries in a non-executive
or semi-executive capacity. In
1998 he led the management
buyout of the consumer debt
recovery department of his old
firm, Tessera Group, and is still
a non-executive director of that
company.
The Board of Directors are ultimately responsible for the management of the Company’s
business strategy, optimising performance, investment objectives, approving significant
items of expenditure and consideration of significant financing and legal matters. The
Directors are responsible for overseeing and maintaining the relationship between the
Company, investors, partners and customers. The Company is currently led by a Board
consisting of three Executive Directors and two Non-executive Directors.
Non-Executive Directors
Nigel Rogers (Deputy Chairman) - Joined the company in July 2015
Rodney James Westhead - Joined the Company in April 2007
Company Secretary & Registered Office
Melvyn Segal - 1 Landscape Close, Weston on the Green, Oxon, OX25 3SX
Remuneration Committee - Nigel Rogers & Rodney Westhead
Audit Committee - Nigel Rogers & Rodney Westhead
Nomad & Broker
finnCap
60 New Broad Street
London
EC2M 1JJ
020 7220 0500
Bankers
HSBC Bank Plc
1 Sheep Street
Bicester
Oxon, OX26 7JA
Patent Agents
IP-Active.com Ltd
Patent and Trade Mark Attorneys
Birmingham Science Park Aston
Faraday Wharf
Holt Street
Birmingham,B7 4BB
www.ip-active.com
Auditor
KPMG LLP
Arlington Business Park
Theale
Reading, RG7 4SD
Company & Intellectual Property Lawyers
Charles Russell
8 - 10 New Fetter Lane
London, EC4A
Registrars
Neville Registrars Limited
Neville House
18 Laurel Lane
Halesowen
B63 3DA
0121 585 1131
www.nevilleregistrars.co.uk
Company Number - 01885075
Transense Technologies PLC Annual Report & Accounts 2015 Page 18
Transense Technologies PLC Annual Report & Accounts 2015 Page 19
VISION
MISSION
To deliver market
leading wireless,
battery-less torque,
temperature and
pressure measurement
solutions through the
use of our innovative
Surface Acoustic Wave
technology and sensor
expertise.
To allow our customers
and partners to provide
high quality products
and services that enable
increased efficiencies,
higher performance,
improved safety and
commercial success.
Group Business Model
• Maximise revenue from the commercialisation of Transense’s patented
technology in conjunction with licensees and partners
• Develop additional routes to market through wholly-owned trading
divisions and joint development agreements
•
Increase shareholder value
• Continue to develop new technology based on Transense’s core
competencies
Strategy
• Working with our licensees & partners to actively market our technology
• Aggressively targeting high margin market segments where our technology
has unique selling points. We have identified the mining, commercial
vehicle, aviation, heavy industrial and electrical sectors as fulfilling these
criteria
• Develop products leveraging our IP and expertise to exploit these identified
market opportunities
• Establishing joint ventures & strategic alliances
• Entering non-automotive markets
• Actively marketing our technology in emerging markets
• Providing engineering consultancy
Transense Technologies PLC Annual Report & Accounts 2015 Page 20
Transense Technologies PLC Annual Report & Accounts 2015 Page 21
Increase tyre life, Reduce fuel consumption & Improve safety
Tyre Management
solutions division.
Targeting the growing
need to maximise the
effective life of tyres
within the mining,
commercial vehicle
and passenger car tyre
markets.
Mining & Earthmoving
Large haul trucks
The large tyres used in the mining
and earthmoving industries are
extremely expensive. Consequently,
extending the life and efficiency of
these valuable assets is of critical
importance to mine owners and
operators. Translogik’s iTrack OTR
tyre monitoring system offers a
compelling solution for extending
tyre life, avoiding breakdowns,
increasing production, improving
fuel economy and keeping vehicles
and drivers safe. In addition, the
accurate, real-time data helps drive
operational efficiencies.
www.trans-logik.com/itrack
Commercial Vehicles
Heavy truck & LCV
The same operational cost
imperatives that exist within the
OTR tyre market also exist for
commercial vehicle operators
and owners. Maintaining their
vehicle tyres in optimum condition
allows fleets to reduce running
costs, minimise the occurence of
Passenger Cars
Tyre service providers
expensive tyre blowouts and meet
The Translogik tyre inspection probes are increasingly
the increasingly stringent legal
being used by passenger car tyre service centres. The
requirements that commercial
drivers for adoption in this market are similar, but in
vehicles are required to achieve
addition, the rapid, high precision tyre data collected for
around the world, in terms of
each tyre can be used to generate a visual audit report
minimum safe tyre condition. The
that allows the provider to better explain the vehicle’s tyre
Translogik tyre inspection probes
condition to its owner. This ensures that the full ‘story’ of
provide a quick, reliable and
the tyre is provided, for instance identifying issues such
efficient means of electronically
as uneven wear. This gives the customer higher levels
monitoring key tyre performance
of confidence which translates into higher sales for the
parameters.
operator.
www.trans-logik.com/
iprobe
www.trans-logik.com
Transense Technologies PLC Annual Report & Accounts 2015 Page 22
Transense Technologies PLC Annual Report & Accounts 2015 Page 23
iTrack provides a rugged and
reliable solution with a range
of features that allow mine
operators to track their vehicle’s
tyre temperature and pressure,
speed, braking and location in
real-time and receive early warning
of potential problems or hazards.
This live data allows swift remedial
action to be taken, which can be
the difference between safe mine
operation and a major incident.
By ensuring the vehicle’s tyres are
operating within recommended
temperature and pressure limits,
iTrack brings increased levels of
safety to both the vehicle drivers
and the technicians that work
on them. From a commercial
perspective, by ensuring that tyres
are correctly inflated, tyre life is
extended and costly down-time
from repairs and intervention is
reduced, improving productivity.
The Translogik Off-the-Road (OTR) ‘iTrack’
Tyre Monitoring System provides fast, accurate,
reliable real-time data on the condition of vehicle
tyres, combined with live tracking of vehicle
location and status.
Making mines safer
& more productive
•
Increase productivity
• Avoid breakdowns
• Real-time temperature & pressure
monitoring
• Extend tyre life by up to 25%*
• Live GPS tracking of vehicle status
•
Improve fuel efficiency by up to 8%*
• User configurable alarms &
• Maximise haul speeds
automated alerts
• Reduce vehicle down-time
• Remote monitoring via web or
• Reduce tyre maintenance costs
mobile device
•
Improve driver & technician safety
• TKPH Calculations
Geo-Fencing
MobiTrack
Keep your employees and assets safe.
Translogik’s new mobile application for Android.
A Geo-fence is a predetermined area or
• Check tyre status quickly by the side of the
boundary that is set for a particular vehicle
fitted with iTrack. If the vehicle crosses that
vehicle with no need to gain access to the cab.
• Configure iTrack systems & update tyre
virtual boundary or geo-fence area, then the
positions.
tracking software can alert you. The system
• Settings such wheel layout/numbering,
allows for multiple concurrent geo-fence
vehicle registration, in-cab warning levels,
zones to be defined to ensure that vehicles
and enabling/disabling atmospheric pressure
are only operating in approved areas, further
compensation can be accessed through the
increasing the safety of the mine.
MobiTrack configuration.
Transense Technologies PLC Annual Report & Accounts 2015 Page 24
Transense Technologies PLC Annual Report & Accounts 2015 Page 25
iTrack Market
Opportuity
6580
NORTH AMERICA
Large Haul Truck
Populations by
Continent
6520
CENTRAL &
SOUTH AMERICA
5328
RUSSIA & CIS
5187
ASIA
1921
EUROPE &
MIDDLE EAST
4099
AFRICA
12242
AUSTRALASIA
DOLUPTATUR SEQUATIIS AUDIS MOSSE
There are over 40,000 large mine trucks in operation
around the world, which alone represents a potential
annual iTrack rental market of £140m. Including large
ancillary vehicles this number rises to 100,000.
iTrack data has allowed mines to run vehicles
20% faster on avaerage than before - a
significant gain for production.
Transense Technologies PLC Annual Report & Accounts 2015 Page 26
Transense Technologies PLC Annual Report & Accounts 2015 Page 27
Major iTrack partners & customers
iTrack is now used by some of the world’s largest mining
companies, and marketed and supported by mine service
providers with global reach.
Real time monitoring of the temperature and pressure of our
tyres allows us to manage our fleet of trucks in a way that
directly increases the productivity of the mine. We are also
able to reduce our costs by increasing tyre life and preventing
breakdowns such as thermal separations without actually
stopping the equipment. The rental option allows us these
benefits as an Operational Cost which was an important
factor in our choice of iTrack.
iTrack Operator in Chile.
Transense Technologies PLC Annual Report & Accounts 2015 Page 28
Transense Technologies PLC Annual Report & Accounts 2015 Page 29
Customer Integration
Translogik works closely with its global partners to integrate the
probes into their tyre management systems, providing technical
development support to some of the largest companies in the
tyre industry.
The ability to provide customers with accurate tyre data is
a significant value-add to retailers and service providers.
Translogik is seeing increased levels of interest in the
probes from the passenger car tyre market, which opens
up a significant new revenue stream.
Below are a few of the companies currently using the
probes.
Tyre Inspection Probes
Translogik’s range of tread depth & tyre pressure probes provide
fast, accurate, reliable data on the condition of tyres wirelessly
Key Features
• Wireless tyre pressure measurement
• Wireless tread depth measurement
• Accurate data capture via Bluetooth
• Rechargeable
• Lightweight
• Rugged Construction
60%*
Increase Tyre Life
By ensuring tyres are correctly inflated
using fast, accurate, wireless data provided
by Translogik’s solutions
Improve Safety
By ensuring that tyres are managed
correctly,and gaining early warning of
potential tyre failure, accidents caused by
blowouts or delaminations can be reduced.
Reduce Fuel Costs
By ensuring tyres are correctly inflated
using fast, accurate, wireless data provided
by Translogik’s solutions
* The average time saved carrying out an inspection
with a probe compared to a manual inspection
Transense Technologies PLC Annual Report & Accounts 2015 Page 30
Transense Technologies PLC Annual Report & Accounts 2015 Page 31
PCAS - Passenger Car Audit System
In around one minute
a technician is able
to use the PCAS
system to perform a
full inspection on a
4-wheel vehicle. The
data is automatically
transmitted via
Bluetooth to the
workstation ensuring
the data is accurate
and error-free, for
superb ease of use.
• Simplicity & clarity make it effective
• Provides clear customer understanding
• Promotes good procedure and best practice
•
Improves closing rates
• Rapid return on investment
• Digital data stored for easy re-marketing
Transense Technologies PLC Annual Report & Accounts 2015 Page 32
Transense Technologies PLC Annual Report & Accounts 2015 Page 33
SAW
SAWSense is focused on commercialising the Group’s valuable
intellectual property, in association with its partners and licensees, in
the automotive, industrial and motorsport markets.
Automotive
Multiple Applications
There is a global demand to improve
vehicle fuel efficiency which is driven
by decreasing oil reserves and the
desire to reduce greenhouse gasses.
Examples of how this can be achieved
is by direct control of driveline torque
rather than using mathematical models
and by replacing Hydraulic Power
Assisted Steering (HPAS) with Electric
Power Assisted steering (EPAS) which
is only applied when needed. Unlike
evolutionary changes, replacing one type
of sensor with another, driveline torque
sensing is considered a revolutionary
change by automotive manufacturers.
Torque driveline
EPAS
SAWSense is currently working
with several large multi-nationals
on automotive applications of the
Company’s technology. It has already
been made public that SAWSense is
working in partnership with General
Motors on a torque driveline project, but
as previously discussed this application
is seen by automotive manufacturers
as a revolutionary change and they
are cautious regarding the release
of information. However we can say
that we are working with several other
automotive manufacturers in the US
and Europe and are currently at various
stages of product validation.
There has been a transition in the
automotive industry for many years
moving away from HPAS towards the
use of EPAS. The benefit of using a SAW
based non-compliant sensor is that there
does not need to be major mechanical
or material modifications to the steering
shaft. SAW sensors are also unaffected by
magnetic fields. This is often a problem
if the sensor is placed close to an electric
motor. SAWSense are currently working on
an EPAS project which is hoped to begin
commercialisation in 2015.
18,000rpm
The speed the Transense
SAW sensor has to operate
at while attached to the drive
shaft in a McLaren F1 car
Image (right) shows a Transense
SAW wafer
Torque
Temperature
Pressure
Transense Technologies PLC Annual Report & Accounts 2015 Page 34
Transense Technologies PLC Annual Report & Accounts 2015 Page 35
SAW
The Inherent Benefits of SAW Sensor Technology
Surface Acoustic Wave (SAW) resonant sensor systems have
been the subject of development by Transense Technologies
over the past 15 years for a variety of measurement applications.
First it may be useful to review the basic technology and physical
characteristics of the system:
Non-automotive
Large diameter shaft
Industrial
Wind Turbine
Motorsport
Torque & TPMS
The initial focus of the Company
was automotive but following the
increasing interest in the technology for
non-automotive applications SAWSense
has re-developed and adapted Its torque
sensor technology for several niche
applications. One of the first projects
was to develop a sensor for use on large
diameter shafts. This was a European
FP7 funded project named “Intelwind”
and SAWSense were part of a consortium
of 9 companies. The project objective
was to develop a condition monitoring
system which included a torque
sensor for wind turbines. The product
developed under this project could also
be used be used for other large diameter
shaft applications such as marine and
static engines for power generation and
pumping.
As an alternative to exploring individual
markets SAWSense is currently
working with a major European
manufacturer who supplies product to
all of these applications. Our patented
SAW technology is currently being
industrialised by the customer with
commercialisation expected in 2015
There has also been interest from
European and North American
customers in our torque technology for
use in avionic applications. This has
necessitated further adaptation of the
technology for this harsh environment.
Combined with aggressive timescales
in avionic terms this has presented
yet another set of challenges for the
Transense engineering team.
Interest in the technology is increasing
in this niche market. TPMS systems
continue to be marketed by our
licensee Stack and their parent
company Autometer who are located
in the US. As part of the Joint
Development Agreement (JDA) with
McLaren signed in August 2011 and
following on from the success of the
KERS project, Transense is continuing
to manufacture torque sensor shafts
for Indycar. These torque sensors
are used across the Indycar grid to
marshal the engine output power.
The following Youtube link shows the
component and description of its use:
www.youtube.com/
watch?v=Oodd1zmkvzU
“There has also been interest from
European and North American customers
in our torque technology for use in avionic
applications”
SAW Technology:
SAW devices, as deployed by Transense,
are realised as crystalline quartz
substrates (dies) typically 6 x 4 mm by
350 microns thick. On each die up to
3 resonators, with natural frequencies
around 433MHz, are laid down in thin
film aluminium, using photo-lithographic
techniques. Each resonator comprises
a central inter-digitated transducer
(IDT) with a series of reflecting strips
distributed on either side. Overall
resonator dimensions are 2 to 3 mm long x
0.3 to 0.4 mm wide. The spacing between
individual features in the IDT and reflectors
is of the order of 2 microns so you need a
microscope to resolve the fine detail. SAW
resonators respond to both mechanical
and thermal strain by changing their
natural frequency of vibration.
In practice, Transense SAW dies are either
bonded directly to structural components
to sense local strains or packaged inside
small stainless steel buttons. The buttons,
typically 11 mm diameter by 3 mm thick,
are then either bonded or welded to
structural components. Because the
resonators would be adversely affected by
dust or contamination, it is preferable to
use hermetically sealed button packages
in most automotive or industrial sensing
applications.
The piezo-electric nature of crystalline
quartz means that an oscillatory electrical
input to the IDT will induce a mechanical
vibration (SAW) on the surface of the die.
Further, when the electrical input signal is
stopped, vibration of the SAW resonator at
its natural frequency persists for perhaps
20 micro seconds and a portion of that
mechanical energy will be converted, due
microstrip, which faces its partner on the
rotor, and is wired to the SIU. Electromag-
netic coupling allows transmit / receive
signals to pass between the couplers so
the SIU can interrogate the SAW sensor.
By mounting 3 resonators in specific
locations and directions on a single
SAW die, it is possible to determine both
mechanical strain and temperature
independently. The mechanical strains
may be directly converted, via traceable
calibration standards, into engineering
parameters, such as pressure or force
or torque, depending on the design of
the sensor button and its mounting
orientation on the structural component,
eg shaft or disk. The accurate sensing of
temperature, on the same die, enables
these parameters to be temperature
compensated over the range -40°C to
125°C and significantly higher for specialist
applications.
to the piezo-electric effect, back into an
electrical signal at the IDT.
Transense have developed SAW
Interrogation Units (SIU) comprising
patented electronic hardware and
embedded software. The SIU generates
a radio frequency (RF) pulse which is
transmitted to the IDT of the SAW sensor,
exciting the resonator into mechanical
vibration. When the interrogation signal
is paused, the SAW resonator “rings” at
its natural frequency. The returning (back
scattered) electrical signal is received by
the SIU, which analyses it determining the
natural frequency of the SAW sensor and
hence the surface strain on the die.
Interrogation can be via wired connections
or by non-contacting means - either a
broadcast radio signal or by use of RF
couplers. A coupler comprises a stator
and a rotor which may be a pair of disks
or a pair of co-axial cylinders. The rotor
is mounted directly to the structural
component and rotates with it. It carries
a 360° microstrip which is wired to the
SAW sensor. The stator is mounted to the
chassis side and, as its name suggests,
does not rotate. It too carries a 360°
www.transense.co.uk
Transense Technologies PLC Annual Report & Accounts 2015 Page 36
Transense Technologies PLC Annual Report & Accounts 2015 Page 37
SAW
Benefits of SAW Technology
The principal benefits of Transense
resonant SAW sensing systems are
the abilities to measure engineering
parameters such as torque, pressure
and temperature on rotating
components wirelessly and passively
- that is to say no power has to be
separately applied to the sensor as
it gets the energy to excite the SAW
and transmit its response from the
interrogating RF pulse.
As a result, torque measurement in
automotive powertrains and electric
power assisted steering (EPAS) systems,
or pressure measurement in car or
truck tyres, or dynamic torque / force /
pressure / temperature measurement in
industrial applications, is straightforward
in principle.
Conventional strain sensing technologies,
eg. foil strain gauges applied to
components in order to sense torque,
require either direct wired connections
with slip rings to enable transmission
of power and signal across the rotary
/ stationary boundary, or on-board
electronics comprising typically a battery,
local signal conditioner and receive /
transmit radio components.
Even when the battery is replaced by a
kinetic energy harvesting device, there
still needs to be energy storage (small
rechargeable battery or capacitor) on the
component with attendant weight and
cost.
Further SAW benefits include:
Low Mass: a typical Torque or TPMS
button package weighs 2 grams. This is
very beneficial in motorsport applications
where every gram counts.
Small Size: enables the addition of one
or two buttons to existing components
such as shafts or disks with only minimal
intrusion or modification. Modern
automobile engines, transmissions and
drivelines are engineered to minimum size
and weight so that free space is always a
rare commodity.
No Special Material required for the
component: Again the structural materials
in modern automotive designs are
optimised for strength, fatigue life and
cost. The only requirement for an effective
SAW sensor is that the material be elastic,
ie. free from plastic deformation in use,
which is the normal specification for any
structural component.
No Sensitivity to Magnetic Fields: Many
automotive applications require that
torque sensing is required in proximity to
electric motors and solenoids. In addition
the earth’s magnetic field varies with
altitude and proximity to mountains.
Mechanically Rugged: In manufacturing
environments, components may be
knocked or dropped applying high shock
loads. In service, high speed rotation
involves very high centripetal forces often
thousands of “g”. Also in service significant
vibration levels may be present. SAW
sensors have demonstrated considerable
tolerance to these loadings.
Good Dynamics: SAW sensors can be
sampled at 2 kHz enabling for example,
torque measurement in engines and
powertrains every few degrees of shaft or
disk rotation (eg. every 3 degrees at 1000
rpm).
Good Measurement Accuracy: SAW torque
sensors can deliver better than 1% of
full scale accuracy over the temperature
range -40°C to +125°C together with low
hysteresis and drift.
Cost Effective: A typical Transense SAW
torque or TPMS button is an intrinsically
low cost device. It contains no electronic
components, just a stainless steel can and
a quartz die.
The above resonant SAW sensor system
benefits are not all achieved by the
competing torque sensing magneto-
elastic (M-E) technologies. In these
systems, a shaft is magnetised or has a
magnetic ring fitted tightly or deposited
thereon. Surrounding the shaft, a sense
coil detects changes in the magnetic
field within the shaft or ring from
which the torque in the shaft may be
determined.
M-E sensors are susceptible to unwanted
magnetic fields, however they can
be shielded. Where the shaft itself is
magnetised then there are special
material requirements. Mechanical
knocks can cause changes in the shaft’s
magnetisation. There are also practical
minimum coil size issues, axial lengths
are typically 30 - 50 mm. Achieving
low hysteresis and zero stability are
significant measurement challenges.
Conclusions:
This article has reviewed resonant SAW
sensing technology as developed and
applied by Transense Technologies plc.
In principle, RF pulses, circa 433MHz,
excite SAW resonators deposited on a
piezo-electric quartz die, which ring
at a natural frequencies determined
by the mechanical and thermal strain
applied to it by the component on
which it is mounted. The back scattered
RF signals can be analysed to measure
the frequencies and determine the
mechanical strain and temperature.
Resonant SAW sensing systems are
particularly relevant to measuring
dynamic engineering parameters,
especially on rotating components,
eg. pressure in tyres and torque in
powertrains.
There are a number of other benefits
including small size and mass, good
measurement performance over a wide
temperature range and dynamic band
and tolerance to extraneous loads and
stray magnetic fields.
Transense resonant SAW sensing
systems compare favourably with
competing strain sensing technologies.
Article written by Dr. Ray Lohr
Benefits of
SAW:
Low Mass
Small Size
Mechanically
Rugged
Transense Technologies PLC Annual Report & Accounts 2015 Page 38
Transense Technologies PLC Annual Report & Accounts 2015 Page 39
Graham Storey
Group CEO
6th October 2015
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Statement of corporate governance
The Company is quoted on the AIM Market of the London Stock Exchange and is therefore not
required to comply with the provisions of the UK Corporate Governance Code. Nevertheless, by
continuous review, the Company ensures that proper standards of corporate governance are in operation
and the principles of the Combined Code are followed so far as is practicable and appropriate given the
size and nature of the Company.
A statement of the Directors’ responsibilities in respect of the financial statements is set out on page 48.
Below is a brief description of the role of the Board and its Committees.
The Board
The Board, which presently consists of three executive and two non-executive Directors, meets regularly
throughout the year and receives timely information in a form and of a quality appropriate to enable it
to discharge its duties.
Non-executive Directors are not appointed for specified terms nor have an automatic right of
reappointment.
Directors are subject to election by shareholders at the first AGM after their appointment and to
retirement by rotation and re-election by shareholders in accordance with the Articles of Association
whereby one third of the Directors retire every year or, where there is not a multiple of three, the
number nearest to but not exceeding one third retire from office.
Audit and Risk Committee
The Audit and Risk Committee is under the Chairmanship of Rodney Westhead, with Nigel Rogers also
sitting. The Committee meets at least twice a year and has adopted terms of reference which give it
responsibility for reviewing a wide range of financial matters. The Committee advises the Board on the
appointment of external auditors and it discusses the nature and scope of their work.
Nomination Committee
Given its relatively small size, the Board as a whole fulfils the function of the Nomination committee.
Remuneration Committee
The policy on Directors’ remuneration is formulated by the Remuneration Committee, which consists of
Nigel Rogers as Chairman and Rodney Westhead. The Committee is responsible for determining the
contract terms, remuneration and other benefits of the executive Directors. The non-executive directors’
salaries are reviewed and set by the Board.
The report of the Remuneration Committee is set out on pages 42 to 44 below.
Accountability, Internal Control and Risk Management
The Directors consider that these financial statements, reports and supplementary information present a
fair and accurate assessment of the Company’s position and prospects.
40
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Statement of corporate governance (continued)
Going Concern
The financial report has been prepared on the going concern basis. The Group has made a loss for the
year of £3,120,000 (2014: Loss of £1,036,000). The Group has Accumulated Losses of £22,994,000
(2014: Accumulated Losses of £19,882,000). The balance of cash and cash equivalents at 30 June 2015
is £472,000 (2014: Cash and cash equivalents £3,082,000). During June and July 2015 the Company
embarked on a successful fundraising by way of a placing and offer for subscription. The fundraising
resulted in the introduction of new funds totalling £2.5m (net), which was received in July & August
2015.
The Group meets its day to day working capital requirements through existing cash reserves and does
not currently have an overdraft facility. The Directors have prepared cash flow forecasts for the period
to 31 December 2016. These forecasts indicate that the Group will continue to be able to operate within
its current cash resources for the foreseeable future.
Internal Financial Control
The Board is responsible for the Group’s system of internal control including financial, operational and
compliance controls and risk management, and for reviewing its effectiveness. The Board has
introduced procedures designed to meet the particular needs of the Group in managing the risks to which
it is exposed, consistent with the guidance provided by the Turnbull Committee. These procedures
include an annual review of the significant risks faced by the Group and an assessment of their potential
impact and likelihood of occurrence. The Board is satisfied with the effectiveness of internal controls
but, by their very nature, these procedures can only provide reasonable, but not absolute, assurance
against material misstatement or loss.
The Board has reviewed the need for an internal audit function. The Board has decided that, given the
nature of the Group’s business and assets and the overall size of the Group, the systems and procedures
currently employed provide sufficient assurance that a sound system of internal control, which
safeguards shareholders’ investment and the Group’s assets, is in place. An internal audit function is
therefore considered unnecessary.
41
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Remuneration report
Remuneration Policy
The remuneration policy is to ensure that all staff, including the executive Directors, are adequately
motivated and rewarded in relation to companies of similar size and type.
The salaries paid compare adequately with the salaries of Directors and senior executives in public
companies in similar development situations. Although a bonus scheme was in place during the year no
bonuses were awarded to the Directors.
The Remuneration Committee can also grant options over ordinary shares under its Enterprise
Management Incentive Option Schemes (EMI) and options granted outside Company schemes, but
approved by shareholders. These schemes potentially offer long term incentives to Directors and key
personnel.
In addition to the vote to be held on this Remuneration Report, shareholders will be given the
opportunity to question the Remuneration Committee Chairman, Nigel Rogers, on any aspect of the
Company’s remuneration policy.
The Board as a whole sets the remuneration of the non-executive Directors, which consists of fees for their
services in connection with Board and Board Committee meetings. The non-executive Directors are not
eligible for pension scheme membership, but they are eligible to participate in the Company’s
Unapproved Directors Share Option Scheme (UDSOS).
Each element of remuneration paid to all Directors is shown in detail below.
Base Salary and Benefits
The base salaries for the executive Directors are reviewed annually, but not necessarily increased, by
the Remuneration Committee. Salary increases based on performance may be made.
Salaries including board members were not changed during the year.
Executive Share Option Schemes
The Committee considers that potential for share ownership and participation in the growing value of the
Group increases the commitment and loyalty of Directors and senior executives.
Directors’ Pension Policy
All executive Directors are entitled to enter, and are members of, the Company’s defined contribution
pension scheme, to which the Company contributes the equivalent of 10% of their basic salary.
Executive Directors participate in the Company’s pension scheme on the same basis as other full time
employees, but did not choose to participate in the scheme during the year ended 30 June 2015.
42
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Remuneration report (continued)
Service contracts
The notice period required by either the Company or Graham Storey, David Ford or Melvyn Segal to
terminate their contracts is 12 months;
There is no notice period with respect to Rodney Westhead’s contract;
There is a 3 month notice period with respect to Nigel Rogers Contract;
If the Company terminates without notice, the individual is entitled to a payment in lieu of notice being the
value of the maximum notice period in his contract.
In the event of termination for unsatisfactory performance (if necessary decided by an independent
tribunal) or for reasons of misconduct, no compensation is payable.
Directors’ Emoluments
Information on Directors’ emoluments is as follows:
This table excludes the fair value of Directors’ share based payment options as defined by International
Financial Reporting Standard (IFRS) 2. Details of all options granted to Directors are shown on page 44.
Information on directors' emoluments is as follows:
Fees
£
Benefits
£
Pension
£
Total emoluments
12 Months
ended 30
June 2015
£
12 Months
ended 30
June 2014
£
Executive directors
G Storey
M Segal
D Ford
Non-executive directors
D Kleeman
R Westhead
Basic
Salary
£
158,400
106,250
109,050
-
-
-
3,598
1,843
2,750
-
-
-
12,600
10,000
-
Total 2015
Total 2014
386,300
10,000
8,191
367,937
21,667
7,232
160,215
91,822
110,632
21,667
12,500
-
-
-
-
-
-
-
161,998
108,093
111,800
10,000
12,600
404,491
396,836
43
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Remuneration report (continued)
Share based payment options have been granted under EMI for executive Directors and under the
Unapproved Directors Share Option Scheme (UDSOS) for Non Executives. The details of these are set
out below:
The options can only be exercised once the share price has met or exceeded the hurdle price at any point
since the date of grant of the option.
Directors’ interests in the UDSOS were:
G Storey
805,000
805,000
22/12/12
4p
9p
At 1 July
2014
At 30 June
2015
Earliest
exercise
date
Exercise
price per
share
Hurdle
price
per share
Directors’ interests in the EMI were:
G Storey
G Storey
D Ford
D Ford
M Segal
3,195,000
2,000,000
3,195,000
305,000
1,500,000
3,195,000
2,000,000
3,195,000
305,000
1,500,000
22/12/12
01/03/14
22/12/12
01/03/14
02/08/14
4p
4p
4p
4p
10.25p
9p
9p
9p
9p
20p
Share price performance
The share price performance is disclosed in the Directors’ Report on page 46.
On behalf of the Board
N F Rogers
Remuneration Committee
6th October 2015
44
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Directors’ report
The Directors present their annual report and audited financial statements for the year ended 30 June 2015.
Business activities, review of the business and future developments
Translogik, a trading division of Transense, was formed in April 2009 and the principal activities of this
division includes the provision of tyre management solutions for the truck and OTR markets, by
developing, manufacturing and selling of specialist Tyre probes and TPMS monitoring solutions and
associated technologies.
The Company continues the development of non-contact batteryless sensors and their electronic
interrogation systems for measuring pressure, temperature and torque in automotive applications and
extending that to various, non-automotive, industrial applications with regards the electronic interrogation.
These activities continue to be carried out by our SAWsense division.
Following the formation of IntelliSAW, a trading division of Transense, the principal activities of the
group were further extended to include the provisions of electrical switchgear management.
A review of the Company’s business and research and development activities for the year together with
developments since the year end and for the future is included in the Chairman’s and CEO’s and
Statements on pages 8 to 13.
Results and Dividends
The results for the year ended 30 June 2015 show a loss of £3,120,000 (30 June 2014: £1,036,000 loss).
The Directors do not recommend the payment of a dividend (30 June 2014: £nil).
Directors
The present Directors are listed on pages 18 and 19.
There are no contracts of significance in which the Directors had a material interest during the year.
Substantial Shareholdings
At 30 June 2015, the following substantial shareholdings of 3% or more of the Company’s share capital
have been notified to the Company:
John Peter Lobbenberg
TD Direct Investing Nominees (Europe) Limited
Hargreaves Landsdown (Nominees) Limited
Nortrust Nominees Limited*
Rock (Nominees) Limited
Barclayshare Nominees Limited
HSDL Nominees Limited
Octopus Investments Nominees Limited
Lynchwood Nominees Limited
Ordinary shares
of 1p each
40,115,689
26,869,419
25,733,630
20,000,560
18,235,008
16,819,541
12,821,728
11,475,086
9,565,333
%
13.6
9.1
8.7
6.8
6.2
5.7
4.3
3.9
3.2
* Legal & General Investment Management Limited holds 20,000,000 of the Nortrust Nominees holding.
45
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Directors’ report (continued)
Directors’ interests
The number of shares in the Company in which the current Directors were deemed to be interested at the
beginning and end of the period, all of which are beneficially held, were as follows:
G Storey
R J Westhead
D Ford
M Segal
Share price
Ordinary shares of 1p each
30 June 2015
1 July 2014
3,934,353
282,777
277,777
1,144,444
3,934,353
282,777
277,777
1,144,444
The mid price of the shares in the Company at 30 June 2015 was 1.55p (30 June 2014: 6.25p) and the
range during the period was 0.90p to 6.50p (30 June 2014: 5.25p to 10.12p).
Share based payment option schemes
The Remuneration Committee is responsible for the operation and administration of the C o mp a n y ’s
UDSOS and EMI Schemes. In an increasingly competitive market the Committee regards the provision of
options as an important incentive for other members of staff as well as Directors.
Details of share based payment options granted to Directors are disclosed in the Remuneration Report on
page 44.
Financial Instruments
The Directors adopt a low risk financial objective. The financial instruments are denominated in sterling,
euros and US dollars and the Group does not trade in derivative instruments, (see note 26 to the financial
statements).
Indemnification of Directors
Qualifying third party indemnity provisions (as defined in Section 413 of the Companies Act 2006) are in
force for the benefit of the Directors who held office during 2014/15.
Policy and practice on payment of suppliers
The Group’s policy is to settle the terms of payment with suppliers when agreeing the terms of each
transaction and then abide by these terms. At 30 June 2015 trade creditors represented 33 days’ purchases
(30 June 2014: 59 days).
Disclosure of information to auditor
The Directors who hold office at the date of approval of this Directors’ report confirm that, so far as
they are aware, there is no relevant audit information of which the Company’s auditor is unaware; and
each Director has taken all the steps that he ought to have taken as a Director to make himself aware of
any relevant audit information and to establish that the Company’s auditor is aware of that information.
46
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Directors’ report (continued)
Auditors
In accordance with Section 489 of the Companies Act 2006, a resolution to appoint KPMG LLP as
auditors of the Company is to be proposed at the forthcoming Annual General Meeting.
By order of the board
D M Ford G Storey
Chairman CEO
6th October 2015
1 Landscape Close
Weston on the Green
Oxon
OX25 3SX
47
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Statement of directors’ responsibilities in respect of the Strategic Report,
Directors’ Report and the Financial Statements
The directors are responsible for preparing the Strategic Report, the Directors’ Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare group and parent company financial statements for
each financial year. As required by the AIM Rules of the London Stock Exchange they are
required to prepare the group financial statements in accordance with IFRSs as adopted by the EU
and applicable law and have elected to prepare the parent company financial statements on the
same basis.
Under company law the directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the group and parent company
and of their profit or loss for that period. In preparing each of the group and parent company
financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether they have been prepared in accordance with IFRSs as adopted by the EU; and
prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the group and the parent company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show
and explain the parent company’s transactions and disclose with reasonable accuracy at any time
the financial position of the parent company and enable them to ensure that its financial statements
comply with the Companies Act 2006. They have general responsibility for taking such steps as
are reasonably open to them to safeguard the assets of the group and to prevent and detect fraud
and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial
information included on the company’s website. Legislation in the UK governing the preparation
and dissemination of financial statements may differ from legislation in other jurisdictions.
48
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
KPMG LLP
Arlington Business Park
Theale
Reading
RG7 4SD
United Kingdom
Independent Auditor’s report to the members of Transense Technologies plc
We have audited the financial statements of Transense Technologies plc for the year ended 30
June 2015 set out on pages 51 to 80. The financial reporting framework that has been applied in
their preparation is applicable law and International Financial Reporting Standards (IFRSs) as
adopted by the EU and, as regards the parent company financial statements, as applied in
accordance with the provisions of the Companies Act 2006.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3
of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might
state to the company’s members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company and the company’s members, as a body,
for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the Directors’ Responsibilities Statement set out on page 48, the
directors are responsible for the preparation of the financial statements and for being satisfied that
they give a true and fair view. Our responsibility is to audit, and express an opinion on, the
financial statements in accordance with applicable law and International Standards on Auditing
(UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s
Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the Financial
Reporting Council’s website at www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion:
the financial statements give a true and fair view of the state of the group’s and of the parent
company’s affairs as at 30 June 2015 and of the group’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs as
adopted by the EU;
the parent company financial statements have been properly prepared in accordance with
IFRSs as adopted by the EU and as applied in accordance with the provisions of the Companies
Act 2006; and
the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and the Directors’ Report for the
financial year for which the financial statements are prepared is consistent with the financial
statements.
49
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Independent Auditor’s report to the members of Transense Technologies plc
(Continued)
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006
requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate
for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and
returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Peter Selvey (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
Arlington Business Park
Theale
RG7 4SD
7th October 2015
50
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2015
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Year ended
30 June
Year ended
30 June
2015
2014
2014
Restated*
Restated*
2015
£000
Note
4
£000
1,248
(409)
839
Continuing operations
Revenue
Cost of sales
Gross profit
Administrative expenses
Bad debt
Other administrative expenses
Operating loss
Financial income
Loss before taxation
Taxation
Loss from continuing operations
Discontinued operations
Loss from discontinued operation
Loss for the year
Basic and fully diluted loss per share
(pence)
(357)
(2,683)
(8)
(2,682)
(3,040)
(2,201)
74
(2,127)
48
(2,079)
(1,041)
(3,120)
(1.06)
10
11
5
25
*see note 5
There are no other recognised income or expenses in either period.
Notes to the financial statements are from pages 56 to 80.
£000
3,370
(860)
2,510
(2,690)
(180)
62
(118)
75
(43)
(993)
(1,036)
(0.38)
51
Consolidated Balance Sheet
at 30 June 2015
Non current assets
Property, plant and equipment
Intangible assets
Current assets
Inventories
Corporation tax
Trade and other receivables
Cash and cash equivalents
Assets held for sale
Total assets
Current liabilities
Trade and other payables
Current tax liabilities
Liabilities held for sale
Total liabilities
Net assets
Equity
Issued share capital
Shares to be issued
Share premium
Warrant reserve
Accumulated loss
Total equity
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Year ended
30 June
Year ended
30 June
2015
£000
316
806
584
45
1,323
472
2,424
307
(418)
(48)
(466)
(79)
2015
£000
2014
£000
2014
£000
153
906
1,122
1,059
738
136
2,087
3,082
6,043
-
(638)
(44)
(682)
-
6,043
7,102
(682)
6,420
9,724
249
16,329
-
(19,882)
6,420
2,731
3,853
(545)
3,308
9,779
-
16,523
-
(22,994)
3,308
Note
12
14
17
18
20
6
21
6
23
29
These financial statements were approved by the board of directors on 6th October 2015 and were signed on its
behalf by:
D M Ford
Chairman
G Storey
CEO
Company registered number: 1885075
Notes to the financial statements are from pages 56 to 80.
52
Company Balance Sheet
at 30 June 2015
Non current assets
Property, plant and equipment
Intangible assets
Investments
Current assets
Inventories
Corporation tax
Trade and other receivables
Cash and cash equivalents
Assets held for sale
Total assets
Current liabilities
Trade and other payables
Current tax liabilities
Liabilities held for sale
Total liabilities
Net assets
Equity
Issued share capital
Shares to be issued
Share premium
Warrant reserve
Accumulated loss
Total equity
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Year ended
30 June
Year ended
30 June
2015
£000
291
806
3
584
45
1,309
415
2,353
249
(408)
(40)
(448)
(102)
2015
£000
2014
£000
2014
£000
123
903
3
1,100
1,029
738
136
2,087
3,017
5,978
-
(643)
(43)
(686)
-
5,978
7,007
(686)
6,321
9,724
249
16,329
-
(19,981)
6,321
2,602
3,702
(550)
3,152
9,779
-
16,523
-
(23,150)
3,152
Note
13
15
16
17
18
20
6
21
6
23
29
These financial statements were approved by the board of directors on 6th October 2015 and were signed on its
behalf by:
D M Ford
Chairman
G Storey
CEO
Company registered number: 1885075
Notes to the financial statements are from pages 56 to 80.
53
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Statement of Changes in Equity
Group
Share
Capital
£000
Share
premium
£000
Shares to
be issued
£000
Warrant
reserve
£000
Cumulative
losses
£000
Total
equity
£000
Balance at 1 July 2013
Loss for the year
Shares and warrants issued
and share premium
Transfer between reserves
Share based payments
9,102
-
622
-
-
13,144
-
3,185
-
-
-
-
249
-
-
378
-
-
(378)
-
(19,232)
(1,036)
-
378
8
3,392
(1,036)
4,056
-
8
Balance at 30 June 2014
9,724
16,329
249
-
(19,882)
6,420
Loss for the year
Shares and warrants issued
and share premium
Transfer between reserves
Share based payments
-
-
55
-
-
-
194
-
Balance at 30 June 2015
9,779
16,523
-
-
(249)
-
-
-
-
-
-
-
(3,120)
(3,120)
-
-
8
-
-
8
(22,994)
3,308
Company
Share
Capital
£000
Share
premium
£000
Shares to
be issued
£000
Warrant
reserve
£000
Cumulative
losses
£000
Total
equity
£000
Balance at 1 July 2013
Loss for the year
Shares and warrants issued
and share premium
Transfer between reserves
Share based payments
9,102
-
622
-
-
13,144
-
3,185
-
-
-
-
249
-
-
378
-
-
(378)
-
(19,291)
(1,076)
-
378
8
3,333
(1,076)
4,056
-
8
Balance at 30 June 2014
9,724
16,329
249
-
(19,981)
6,321
Loss for the year
Shares and warrants issued
and share premium
Transfer between reserves
Share based payments
-
-
55
-
-
-
194
-
-
-
(249)
-
Balance at 30 June 2015
9,779
16,523
-
-
-
-
-
-
(3,177)
(3,177)
-
-
8
-
-
8
(23,150)
3,152
54
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Consolidated and Company Cash Flow Statement
For the year ended 30 June 2015
Note
Group
Company
Loss before taxation
Adjustments for:
Financial income
Depreciation
Amortisation of intangible assets
Share based payment
(Loss)/profit on discontinued operation
Operating cash flows before movements in
working capital
Decrease/(increase) in receivables
(Decrease)/increase in payables
Decrease /(Increase) in inventories
10
12,13
14,15
22
5
18
21
17
Year ended
30
June 2015
Year ended
30 June
2014
£000
(2,127)
Restated*
£000
(118)
(74)
88
160
8
(62)
58
162
8
(1,041)
(993)
Year
ended 30
June 2015
Year ended
30 June
2014
Restated*
£000
£000
(3,267)
(1,181)
(74)
67
160
8
42
(62)
42
162
8
30
(2,986)
(945)
(3,064)
(1,001)
764
(216)
154
(1,647)
150
(423)
778
(238)
154
(1,647)
158
(423)
Cash used in operations
(2,284)
(2,865)
(2,370)
(2,913)
Taxation recovered
139
(7)
139
(8)
Net cash used in operations
(2,145)
(2,872)
(2,231)
(2,921)
10
12,13
14,15
6
23
Investing activities
Interest received
Acquisitions of property, plant and equipment
Acquisitions of intangible assets
Assets/Liabilities held for sale
Net cash used in investing activities
Financing activities
Proceeds from issue of equity share capital
and warrants
Net cash from financing activities
Net (decrease)/increase in cash and cash
equivalents
Cash and equivalents at the beginning of
year
74
(251)
(60)
(228)
(465)
62
(74)
(79)
-
(91)
-
-
4,056
4,056
74
(235)
(63)
(147)
(371)
62
(70)
(79)
-
(87)
-
-
4,056
4,056
(2,610)
1,093
(2,602)
1,048
3,082
1,989
3,017
1,969
Cash and equivalents at the end of year
20
472
3,082
415
3,017
*see note 5
55
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Notes to the Financial Statements
1
General Information
Transense Technologies plc (the “Company”) is a company incorporated in the United Kingdom under the
Companies Act 2006. The address of the registered office is given on page 2. The consolidated financial statements
of the Company as at and for the year ended 30 June 2015 comprise the Company and its subsidiaries (together
referred to as “the Group” and individually as “Group entities”). The nature of the Group’s operations and its
principal activities are discussed in the business review on page 45.
These financial statements are presented in pounds sterling because that is the currency of the primary economic
environment in which the Group operates.
2
Basis of preparation
Both the Parent Company financial statements and the Group financial statements have been prepared and approved
by the directors in accordance with International Financial Reporting Standards as adopted by the EU (“Adopted
IFRSs”). On publishing the Parent Company financial statements here together with the Group financial statements,
the Company is taking advantage of the exemption in s408 of the Companies Act 2006 not to present its individual
statement of comprehensive income and related notes that form a part of these approved financial statements.
Going Concern
The financial statements have been prepared on a going concern basis, which the Directors believe to be
appropriate for the reason below.
At 30 June 2015, the Group had net assets of £ 3.3 million and a positive cash balance of £ 0.5 million.
The Group meets its day to day working capital requirements through existing cash reserves and does not
currently have an overdraft facility. The Directors have prepared cash flow forecasts for the period to 31
December 2016. These forecasts indicate that the Group will continue to be able to operate within its current cash
resources for the foreseeable future and reflects the June and July 2015 fundraising which introduced new funds
net of fees £2.5m into the company.
3
Accounting policies
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods
presented in these consolidated financial statements.
There were no new standards, amendments to standards or interpretations that were mandatory for the first time for
the financial year beginning 1 July 2014 that resulted in any material impact on the Groups 2015 consolidated
financial statements.
The following Adopted IFRSs have been issued but have not been applied in these financial statements. Their
adoption is not expected to have a material effect on the financial statements unless otherwise indicated:
●
●
●
IFRS 9 Financial Instruments (effective date to be confirmed).
IFRS 14 Regulatory Deferral Accounts (effective date to be confirmed).
IFRS 15 Revenue from Contract with Customers (effective date to be confirmed).
● Defined Benefit Plans: Employee Contributions – Amendments to IAS 19 (effective date to be confirmed).
● Accounting for Acquisitions of Interests in Joint Operations – Amendments to IFRS 11 (effective date to be confirmed).
● Clarification of Acceptable Methods of Depreciation and Amortisation – Amendments to IAS 16 and IAS 38 (effective date
to be confirmed).
● Agriculture: Bearer Plants – Amendments to IAS 16 and IAS 41 (effective date to be confirmed).
● Equity Method in Separate Financial Statements – Amendments to IAS 27 (effective date to be confirmed).
●
Sale or Contribution of Assets between and Investor and its Associate or Joint Venture – Amendments to IFRS 10 and IAS
28 (effective date to be confirmed).
56
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Notes (continued)
3
Accounting policies (continued)
Significant accounting judgements and sources of estimation uncertainty
The accounting policy descriptions set out areas where management make certain judgements and estimations. The
key areas that might have a significant risk of causing material adjustment within the next financial year are as
follows:
● Management have considered the basis of preparation as disclosed in note 2.
● Estimations focus on areas such as carrying values, values in use and estimated lives of intangible assets;
● Determining when intangible assets are impaired is a judgement which requires an estimate of the value in use of
the asset based on management’s best estimate of the future cash flows that the assets are expected to generate.
This requires significant judgement as there are limited historic cash flows to base the future cash flows on.
Discussions are held within the Company between the relevant technical, commercial and finance employees on
the expected future cash flows of patents in individual territories; and
● Judgement is applied when patent costs are reviewed in particular relating to patents in territories that were not
integral to the future business plans.
Measurement convention
The financial statements are prepared on the historical cost basis. Non-current assets and disposal groups held for
sale are stated at the lower of previous carrying amount and fair value less costs to sell.
Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the
financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the
Group takes into consideration potential voting rights that are currently exercisable. The acquisition date is the date
on which control is transferred to the acquirer. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until the date that control ceases.
Revenue recognition
Revenue is recognised to the extent that economic benefits will flow to the Group and the revenue can be reliably
measured:
● Royalty income is recognised in the year in which the royalties have been earned;
● Engineering support income, being payments for support work to assist third parties in the development of the
Group’s technology for their own use, is recognised when the work is completed and invoiced; and
● Product sales to customers are recognised on customer acceptance of the goods.
Revenue represents sales to external customers at invoiced amounts net of VAT and other sales related taxes.
Segment reporting
As referred to in the Chairman’s statement the Company is in discussions with a preferred bidder with respect to the
sale of IntelliSAW, and as a result the Group now has two reportable segments being the unique trading divisions,
SAWsense and Translogik, which make use of technology developed by the Transense group to measure and record
temperature, pressure and torque.
The business revenues include royalties, engineering support and sale of product in relation to this technology.
Information regarding the Group’s segments is included in the primary statements and notes to the financial
statements. Revenue and EBITDA are the Group’s key focus and in turn is the main performance measure adopted
by management.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any provision for impairment.
57
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Notes (continued)
3
Accounting policies (continued)
Depreciation of property, plant and equipment
Depreciation is charged to the statement of comprehensive income on a straight line basis over the estimated useful
lives of each part of an item of property, plant and equipment. The estimated useful lives are as follows:
Plant and Equipment 3 – 5 years; and
Motor Vehicles 4 years
The assets’ estimated residual values and useful lives are reviewed, and adjusted if appropriate, at each balance
sheet date.
Research and development
All new expenditure on research and development activities is recognised as an expense in the year in which it is
incurred.
Historic expenditure on development activities has been capitalised and is being amortised over 10 years on a
straight line basis.
Patent fees
Externally acquired patent fees are capitalised at cost and treated as an intangible asset. Amortisation is charged to
administrative expenses in the statement of comprehensive income over the period to which the patent relates which
is generally 15 to 20 years.
In the event that a patent is superseded and the original intellectual property is embedded in a new patent, the costs
of that patent and the later patents are regarded as the costs of the original patent and amortised over the life of the
new patent.
Any impairment in value is recognised immediately in the statement of comprehensive income.
Intangible assets and goodwill
All business combinations are accounted for by applying the purchase method. Goodwill represents amounts arising
on acquisition of subsidiaries and is the difference between the cost of the acquisition and the net fair value of the
identifiable assets, liabilities and contingent liabilities acquired. Identifiable intangibles are those which can be sold
separately or which arise from legal rights regardless of whether those rights are separable.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units
and is not amortised but is tested annually for impairment.
Impairment of tangible and intangible assets excluding goodwill
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the
asset’s recoverable amount is estimated.
The recoverable amount of an asset is the greater of its net selling price and its value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. Where the asset does not
generate cash flows that are largely independent from other assets, the recoverable amount is assessed by reference
to the cash generating unit to which the asset belongs.
Whenever the carrying amount of an asset, or its cash generating unit, exceeds its recoverable amount, an
impairment loss is recognised as an expense in the statement of comprehensive income.
Non-current asset investments
Investments classified as available for sale are measured at value through other comprehensive income.
An impairment loss in respect of an investment in an equity instrument classified as available for sale is not reversed
through profit and loss. If the fair value of a debt instrument classified as available for sale increases and the
increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss,
the impairment loss is reversed through profit and loss.
58
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Notes (continued)
3
Accounting policies (continued)
Investments in subsidiary undertakings
In the company’s financial statements, investments in subsidiary undertakings are stated at cost unless, in the
opinion of the directors, there has been an impairment to their value in which case they are immediately written
down to their estimated recoverable amount.
Pension costs
Contributions to the Company’s defined contribution scheme are charged to the statement of comprehensive income
in the year to which they relate.
Operating lease agreements
Rental payments under operating leases are charged to the statement of comprehensive income on a straight line
basis over the term of the lease.
Current taxation
The tax currently payable is based on taxable profit for the year. Taxable profit may differ from the net profit shown
in the statement of comprehensive income because it excludes income or expenses that are taxable or deductible in
other years and furthermore it might exclude other items that are never taxable or deductible.
Current tax is provided at amounts expected to be paid or recovered using tax rates and laws enacted or substantially
enacted at the balance sheet date.
Deferred taxation
Deferred tax is provided in full, using the liability method. It represents the tax payable on temporary differences
between the carrying amounts of assets and liabilities in the financial statements as compared to corresponding tax
values used in the computation of taxable profit.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against
which the asset can be utilised.
Deferred tax assets and liabilities are measured using tax rates enacted or substantially enacted at the balance sheet
date.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits.
Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are
included as a component of cash and cash equivalents for the purposes only of the statement of cash flows.
Foreign currencies
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
consolidation, are translated to the Group’s presentational currency Sterling at foreign exchange rates ruling at the
balance sheet date. The revenues and expenses of foreign operations are translated at an average rate for the year
where this rate approximates to the foreign exchange rates ruling at the dates of the transactions. Exchange
differences arising from this translation of foreign operations are reported as an item of other comprehensive income
and accumulated in the translation reserve or non-controlling interest, as the case may be.
Share-based payment transactions
The Company issues equity settled share based payments to certain employees. Equity settled share based payments
are measured at fair value at the date of grant. The fair value so determined is expensed on a straight-line basis over
the vesting period, based on the Company’s estimate of shares that will eventually vest. The amount recognized as
an expense is adjusted to reflect the actual number of share options that vest except where forfeiture is due only to
share prices not achieving the threshold for vesting.
The fair value of services received in return for share options granted is measured by reference to the fair value of
the share options. The estimate of the fair value of the services received is measured based on the Black-Scholes
Option Pricing Model. This model takes into account the following variables: exercise price, share price at date of
grant, expected term, expected share price volatility, risk free interest rate and expected dividend yield. Expected
volatility is estimated by considering historic average share price volatility.
59
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Notes (continued)
3
Accounting policies (continued)
Warrants
Fair value is measured using a Black-Scholes-Merton option pricing model. The key assumptions used in the model
have been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions
and behavioural considerations.
Provisions
Provisions are recognised when the Group has a present obligation as result of a past event, and it is probable that
the Group will be required to settle that obligation. Provisions are measured at the Directors’ best estimate of the
expenditure. Provisions are discounted if the effect of doing so is material. A pre-tax rate that reflects risks
specific to the liability is applied to the expected cash flows.
Trade receivables
Trade and other receivables are recognised initially at fair value. Subsequent to initial recognition they are measured
at amortised cost using the effective interest method, less any impairment losses.
Trade payables
Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are measured at
amortised cost using the effective interest method.
Loans receivable
Loans receivable are stated at their nominal value, less any impairment if the loan is not considered fully
recoverable.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is based on the first-in first-out principle and
includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs in
bringing them to their existing location and condition. In the case of manufactured inventories and work in progress,
cost includes an appropriate share of overheads based on normal operating capacity.
Lessor accounting
Leases in which a significant portion of the risks and rewards of ownership are transferred to the lessee are classified
as finance leases. Revenue is recognised at the point of sale and interest is recognised in the income statement over
the term of the lease.
60
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Notes (continued)
4
Revenue and segmental reporting
The tables below sets out the Group’s revenue split and operating segments.
Revenue
Sale of goods
Royalties
Engineering support income
Total revenues
North America
United Kingdom & Europe
Rest of the World
Segments
Year ended 30 June 2015
Sales
Gross Profit
Allocated Overheads
Contribution
Group Overheads
Loss from discontinued operations
Loss before taxation
Taxation
Loss for the year
Year ended
30 June 2015
£000
927
19
302
Year ended 30
June 2014
£000
3,124
-
246
1,248
3,370
Year ended 30
June 2015
£000
316
301
631
Year ended 30
June 2014
£000
382
532
2,456
1,248
3,370
Translogik
£000
922
Saw Sense
£000
326
Total
£000
1,248
562
(578)
277
(644)
839
(1,222)
(16)
(367)
(383)
(1,743)
(1,042)
(3,168)
48
(3,120)
61
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Notes (continued)
4
Revenue and segmental reporting (continued)
Segments (continued)
Year ended 30 June 2014
Sales
Gross Profit
Allocated Overheads
Contribution
Group Overheads
Loss from discontinued operation
Loss before taxation
Taxation
Loss for the year
Translogik
Saw Sense
£000
3,031
2,245
(612)
1,633
Total
£000
3,370
2,510
(1,244)
£000
339
265
(632)
(367)
1,266
(1,384)
(993)
(1,111)
75
(1,036)
During the year ended 30 June 2015 there was 1 (year ended 30 June 2014: 2) customers whose turnover accounted
for more than 10% of the Group’s total revenue as follows:
Year ended 30 June 2015
Customer A
Year ended 30 June 2014
Customer A
Customer B
Turnover
£000
391
Percentage of
total
31%
Turnover
£000
992
928
Percentage of
total
29%
28%
All non-current assets are held in the UK except for property, plant and equipment of £44,000 (year ended 30 June
2014: £53,000) which is held in the United States of America and China.
62
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Notes (continued)
5
Discontinued operation
During the year the board made the strategic decision to sell the IntelliSAW business, and as referred to in the Chairman’s
statement the Company are in discussions with a preferred bidder, consequently the comparative consolidated statement of
comprehensive income has been re-presented to show the discontinued operation separately from continuing operations.
Results of Discontinued operation
Revenue
Expenses
Loss for the year
Year ended
Year ended
30 June
2015
£000
389
(1,430)
30 June
2014
£000
233
(1,226)
(1,041)
(993)
Cash flows from (used in) discontinued operations
(Debt)/cash used in operating activities
(Debt)/cash used in investing activities
(Debt)/cash from financing activities
Group
2015
£000
(1,041)
-
-
2014
£000
(993)
-
-
(Debt)/cash from discontinued operations
(1,041)
(993)
Company
2015
£000
2014
£000
42
-
-
42
30
-
-
30
6
Assets held for sale
Assets classified as held for sale
Inventories
Trade and other receivables
Liabilities classified as held for sale
Trade and other payables
Group
Year ended 30
June 2015
170
137
Company
Year ended 30
June 2015
170
79
307
249
Group
Year ended 30
June 2015
79
79
Company
102
102
63
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Year ended 30
June 2015
£000
Year ended 30
June 2014
£000
88
160
129
58
162
100
Year ended 30
June 2015
£000
Year ended 30
June 2014
£000
35
30
Notes (continued)
7
Expenses and auditor’s remuneration
Included in the loss are the following:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Operating lease rentals payable – Land & Building
Auditors’ remuneration for the Group and Company:
Audit of these financial statements
8
Staff numbers and costs
The average number of persons employed by the Group (including directors) during the year, analysed by category,
was as follows:
Management and technical
Administration
Non-executive directors
The aggregate payroll costs of these persons were as follows:
Wages and salaries
Share based payments (note 22)
Social security costs
Contributions to defined contribution pension plans
Number of employees
Year ended 30
June 2015
Year ended 30
June 2014
25
5
2
32
25
4
2
31
Year ended 30
June 2015
£000
Year ended 30
June 2014
£000
1,968
8
194
16
2,186
1,865
8
175
17
2,065
64
Notes (continued)
9
Directors’ remuneration
Directors’ emoluments
Directors benefits
Employers national insurance
Share based payments (note 22)
Fees payable for consulting services
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Year ended 30
June 2015
£000
Year ended 30
June 2014
£000
386
8
49
-
10
368
7
47
3
22
The aggregate of emoluments and amounts receivable under long term incentive schemes of the highest paid director
was £161,998 (2014: £160,215). No company pension contributions were made to a money purchase scheme on his
behalf (2014: nil). During the year, the highest paid director did not receive any additional share options awards. The
highest paid director did not exercise share options under long term incentive schemes and no shares were received
or receivable by the director in respect of qualifying services under a long term incentive scheme (2014: Nil).
Retirement benefits are accruing to the following number of directors under:
Money purchase schemes
The number of directors who exercised share options was
The number of directors in respect of whose services shares were received or receivable
under long term incentive schemes was
10
Finance income and expense
Recognised in profit or loss
Finance income
Interest income on cash on deposit
Year ended 30
June 2015
Year ended 30
June 2014
Number of directors
-
-
-
-
-
-
Year ended 30
June 2015
£000
Year ended 30
June 2014
£000
65
9
56
6
Total finance income
74
62
65
Notes (continued)
11
Taxation
Recognised in the statement of comprehensive income
Current tax expense
Current year
Adjustment for previous year
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Year ended 30
June 2015
£000
Year ended 30
June 2014
£000
45
3
62
13
Tax credit in statement of comprehensive income
48
75
Reconciliation of effective tax rate
Loss for the year
Total tax credit
Loss before tax
Tax using UK Corporation tax rate of 20.75% (2014: 22.5%)
Non deductible expenses
Current year losses for which no deferred tax asset was recognised
Research and development credit
Losses surrendered for research and development credit
Total tax credit
Deferred tax
A deferred tax asset has not been recognised in respect of the following items:
Tax Losses
Year ended
30 June
2015
£000
(3,120)
(48)
Year ended
30 June 2014
£000
(1,036)
(75)
(3,168)
(1,111)
657
(59)
(550)
48
(48)
250
(75)
(105)
75
(70)
48
75
3,671
3,671
3,312
3,312
66
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Notes (continued)
11
Taxation (continued)
Reductions in the UK corporation tax rate from 23% to 21% (effective from 1 April 2014) and to 20% (effective
from 1 April 2015) have been enacted. This will reduce the company’s future current tax charge accordingly.
Deferred tax has been calculated at the rate of 20% substantively enacted at the balance sheet date. The effect of
this change is that profits arising in 2015 are taxable at a rate of approximately 20.75%. The deferred tax asset as at
30 June 2013 has been calculated based on the rate of 21% substantively enacted at the balance sheet date.
The Group has tax losses, subject to agreement by HM Revenue and Customs, in the sum of £17,692,000 (2014:
£14,847,000), which are available for offset against future profits of the same trade. There is no expiry date for tax
losses. An appropriate asset will be recognised when the Group can demonstrate a reasonable expectation of
sufficient taxable profits to utilise the temporary differences.
The June 2015 Budget announced that the rate will further reduce to 19% by 2017 and a further reduction to 18% by
2020. These further reductions in the main UK corporation tax rate have yet to be enacted.
As a result the effective tax rate used to calculate the current tax for the period ended 30 June 2015 was 20.75%
(2014:22.5%).
67
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Notes (continued)
12
Property, plant and equipment – Group
Plant and
Equipment
£000
Fixtures and
Fittings Motor Vehicles
£000
£000
Total
£000
Cost
Balance at 1 July 2013
Additions
Disposal
Currency adjustment on non UK assets
Balance at 30 June 2014
Balance at 1 July 2014
Additions
Disposal
Currency adjustment on non UK assets
Balance at 30 June 2015
Depreciation and impairment
Balance at 1 July 2013
Depreciation charge for the period
Disposal
Currency adjustment on non UK assets
Balance at 30 June 2014
Balance at 1 July 2014
Depreciation charge for the period
Disposal
Currency adjustment on non UK assets
Balance at 30 June 2015
Net book value
At 1 July 2013
At 1 July 2014
At 30 June 2015
573
45
(20)
(7)
591
591
113
-
7
711
436
54
(9)
(3)
478
478
52
-
5
535
137
113
176
-
34
-
-
34
34
136
-
-
170
-
2
-
-
2
2
34
-
-
36
-
32
134
11
10
(11)
-
10
10
-
-
-
10
11
2
(11)
-
2
2
2
-
-
4
-
8
6
584
89
(31)
(7)
635
635
249
-
7
891
447
58
(20)
(3)
482
482
88
-
5
575
137
153
316
68
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Notes (continued)
13
Property, plant and equipment – Company
Plant and
Equipment
£000
Fixtures and
Fittings Motor Vehicles
£000
£000
Cost
Balance at 1 July 2013
Additions
Disposal
Balance at 30 June 2014
Balance at 1 July 2014
Additions
Disposal
Balance at 30 June 2015
Depreciation and impairment
Balance at 1 July 2013
Depreciation charge for the period
Disposal
Balance at 30 June 2014
Balance at 1 July 2014
Depreciation charge for the period
Disposal
Balance at 30 June 2015
Net book value
At 1 July 2013
At 1 July 2014
At 30 June 2015
501
45
(20)
526
526
110
-
636
406
39
(9)
436
436
47
-
483
95
90
153
-
26
-
26
26
125
-
151
-
1
-
1
1
18
-
19
-
25
132
11
10
(11)
10
10
-
-
10
11
2
(11)
2
2
2
-
4
-
8
6
Total
£000
512
81
(31)
562
562
235
-
797
417
42
(20)
439
439
67
-
506
95
123
291
69
Notes (continued)
14
Intangible assets – Group
Cost
Balance at 1 July 2013
Additions
Balance at 30 June 2014
Balance at 1 July 2014
Additions
Adjustment
Balance at 30 June 2015
Amortisation and impairment
Balance at 1 July 2013
Amortisation for the period
Balance at 30 June 2014
Balance at 1 July 2014
Amortisation for the period
Balance at 30 June 2015
Net book value
At 1 July 2013
At 1 July 2014
At 30 June 2015
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Patents rights
and
trademarks
£000
1,356
79
Development
costs
£000
1,079
-
Total
£000
2,485
79
1,435
1,079
2,564
1,435
63
(3)
1,079
-
-
2,564
63
(3)
1,495
1,079
2,624
885
54
939
939
52
991
471
496
504
611
108
719
719
108
827
468
360
252
1,496
162
1,658
1,658
160
1,818
989
906
806
Goodwill
£000
50
-
50
50
-
-
50
-
-
-
-
-
-
50
50
50
Amortisation and impairment charge
The amortisation is recognised in the following line items in the statement of comprehensive income:
Administrative expenses
2015
£000
160
160
2014
£000
162
162
70
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Notes (continued)
14
Intangible assets – Group (continued)
Impairment testing
Impairment testing has been performed over the total balance of intangible assets which are allocated to the one cash
generating unit of the Group, that of the development and sales of SAW technology.
The recoverable amount of goodwill and intangible assets is determined from value-in-use calculations, which use
budgeted cash flows for year one and cash flow projections for years 2 to 5, an average growth rate of 8% has been
applied to these. For cash flow after year 5 and up to the useful life of the intangible assets, a steady state based on
year 5 cash flow has been assumed.
The key assumptions forming inputs to cash flows are revenues and margins. The forecasts have been discounted at
a pre-tax discount rate of 10%.
15
Intangible assets – Company
Cost
Balance at 1 July 2013
Additions
Balance at 30 June 2014
Balance at 1 July 2014
Additions
Goodwill
£000
50
-
50
50
Patents rights
and
Trademarks
£000
1,356
76
Development
costs
£000
1,079
-
Total
£000
2,485
76
1,432
1,079
2,561
1,432
63
1,079
-
2,561
63
Balance at 30 June 2015
50
1,495
1,079
2,624
Amortisation and impairment
Balance at 1 July 2013
Amortisation for the year
Balance at 30 June 2014
Balance at 1 July 2014
Amortisation for the year
Balance at 30 June 2015
Net book value
At 1 July 2013
At 1 July 2014
At 30 June 2015
-
-
-
-
-
-
50
50
50
885
54
939
939
52
991
471
493
504
611
108
719
719
108
1,496
162
1,658
1,658
160
827
1,818
468
360
252
989
903
806
71
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Notes (continued)
15
Intangible assets – Company (continued)
Amortisation and impairment charge
The amortisation and impairment charge has been charged to the parent company loss for the period.
Other operating expenses
Year ended 30
June 2015
£000
Year ended 30
June 2014
£000
160
160
162
162
16
Investments in subsidiaries
The Group and Company have the following investments in subsidiaries:
Country of
Incorporation
Status
Class of
shares held
Translogik RFID Ltd
Dormant
UK
IntelliSAW Inc.
Trading
USA
Translogik Ltd (Formerly Cranwick Ltd)
Dormant
UK
Transense K.K.
Dormant
Japan
Transense Technologies Chile SPA
Trading
Chile
Transense Electronics Technology
(Shanghai) Co. Ltd
Dormant
China
Ordinary
Shares
Ordinary
Shares
Ordinary
Shares
Ordinary
Shares
Ordinary
Shares
Ordinary
Shares
Ownership
2015
2014
100%
100%
100%
100%
100%
100%
100%
100%
100%
N/A
100%
N/A
During the year a new subsidiary Transense Technologies Chile SPA was set up to service the Chilean market.
The investments are included in the Company balance sheet at £3,000. (2014: £3,000).
Transense KK
Company
Year ended 30
June 2015
£000
Year ended 30
June 2014
£000
3
3
3
3
72
Notes (continued)
17
Inventories
Raw materials
Finished goods
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Group
30 June 2015
£000
30 June 2014
£000
Company
30 June 2015
£000
30 June 2014
£000
174
410
584
311
427
738
174
410
584
311
427
738
Raw materials, consumables and changes in finished goods and work in progress recognised as cost of sales in the
year ended 30 June 2015 amounted to £639,000 (2014: £ 987,000). The write-down of inventories to net realisable
value amounted to £nil (2013: £nil).
18
Trade and other receivables
Trade receivables
Amounts due from group undertakings
Other receivables
Prepayments
Group
30 June 2015
£000
30 June 2014
£000
Company
30 June 2015
£000
30 June 2014
£000
1,097
-
94
132
1,323
1,611
-
424
52
2,087
1,085
-
92
132
1,309
1,611
-
424
52
2,087
Included in the Trade receivables are funds that are expected to be received in greater than 12 months – £628,000
(2014 : £763,000). There is a bad debt provision of £75,000 (2014 : £10,000) and the gross value of trade
receivables is £1,302,000 (2014 : 1,621,000).
19
Trade leases and unearned finance income
Gross investment in lease
Unearned finance income
Minimum lease payments
Less than one year
Between one and five
More than five years
Group and Company
30 June 2015
£000
30 June 2014
£000
972
(73)
899
1,013
(108)
905
Group and Company
30 June 2015
Gross
investment in
lease
£000
304
668
-
972
30 June 2015
Minimum lease
payments
30 June 2014
Gross investment
in lease
30 June 2014
Minimum lease
payments
£000
258
641
-
899
£000
240
773
-
1,013
£000
186
719
-
905
73
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Notes (continued)
20
Cash and cash equivalents
Group
30 June 2015
£000
30 June 2014
£000
Company
30 June 2015
£000
30 June 2014
£000
Cash and cash equivalents per balance sheet
Cash and cash equivalents per cash flow
statements
472
472
3,082
3,082
415
415
3,017
3,017
21
Trade and other payables
Current
Trade payables
Amounts due to group undertakings
Non-trade payables and accrued expenses
Group
Year ended 30
June 2015
£000
Year ended 30
June 2014
£000
Company
Year ended 30
June 2015
£000
Year ended 30
June 2014
£000
148
-
270
418
311
-
327
638
144
-
264
408
293
49
301
643
22
Employee benefits
Defined contribution plans
The Group operates a defined contribution pension plan.
The total expense relating to these plans in the year ended 30 June 2015 was £16,000 (year ended 30 June 2014:
£17,000).
Share-based payments – Group and Company
The Group and Company has two share option plans, the Unapproved Discretionary Share Option Scheme and
Enterprise Management Share Option scheme the principal provisions of which are summarised below:
Options to subscribe for Ordinary Shares of the Company may be granted (at the discretion of the Board) to selected
employees or directors of the Company. No consideration is payable for the grant of an option. Options are not
transferable or assignable.
The fair value of share options granted is recognised as an employee expense, within administrative expenses, with a
corresponding increase in reserves. All options are settled by the physical delivery of shares.
The fair value of services rendered in return for share-based payments granted is measured by reference to the fair
value of those share-based payments. The estimate of the fair value of services received is measured with reference
to the Black-Scholes options pricing model. The Black-Scholes model takes into account the exercise price, share
price at grant date, expected term and expected share price volatility. The volatility level depends on the date of
grant and for the current live options has varied from 59.2% to 108.0%. (2014: 59.2% to 108.0%). The risk free
interest rate adopted was 0.65% (2014: 0.65 %) and an expected dividend yield of nil pence (2014: nil). The key
variable is share price volatility.
74
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Notes (continued)
Employee benefits (continued)
22
Unapproved Discretionary Share Option Scheme
At 30 June 2015 the following share options remained outstanding under the Company’s Unapproved Discretionary
Share Option Scheme. The new Share Options granted on 27 October 2014 were in respect of an US employee.
.
Number of Options
1 July 2014
Granted
Cancelled/
Expired
Exercised
805,000
-
-
7,612,354
250,000
(1,158,118)
-
-
30 June 2015
805,000
6,704,236
Option Price
Date of
Grant
Date of Exercise
First
Last
04.00p
07.50p
22.12.11
22.12.12
15.08.13
15.08.13
22.12.17
06.03.22
The assumptions used in the valuation of the current share options are as follows, the value attributable to the older
options has been accounted in earlier periods:
Date of grant
Estimated
fair value
Share price
Option
price
Expected
volatility
Expected Life
– Years
Risk free
rate
Expected
dividends
27.10.14
£0.0115
£0.0625
£0.0750
72.26%
1.50
0.65%
Nil
%
%
%
Enterprise Management Incentive Option Scheme
At 30 June 2015, the following shares remained outstanding under an Enterprise Management Incentive Option
Scheme.
Number of Options
1 July 2014
Granted Cancelled
Exercised
30 June 2015
Option Price
Date of
Grant
Date of Exercise
First
Last
13,390,000
1,000,000
1,000,000
1,500,000
800,000
250,000
250,000
2,305,000
-
-
-
-
-
-
-
-
(150,000)
-
-
-
-
-
(250,000)
-
-
-
-
-
-
-
-
-
13,240,000
1,000,000
1,000,000
1,500,000
800,000
250,000
-
2,305,000
04.00p
07.05p
06.25p
10.25p
07.25p
07.25p
07.25p
04.00p
22.12.11
22.12.12
22.12.17
05.03.12
10.05.12
02.08.12
09.07.13
13.01.14
13.01.14
05.02.14
05.03.13
25.12.12
02.08.13
09.07.16
13.01.17
13.01.15
01.03.14
05.03.22
10.05.22
02.08.22
09.07.23
13.01.24
13.01.24
31.01.18
75
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Notes (continued)
22
Employee benefits (continued)
The assumptions used in the valuation of the share options are as follows:
Date of grant
Estimated
fair value
Share price
Option
Price
Expected
volatility
Expected Life
- Years
Risk free
rate
Expected
dividends
%
%
%
02.08.12
09.07.13
13.01.14
13.01.14
05.02.14
£0.0307
£0.0262
£0.0147
£0.0147
£0.1425
£0.1025
94.20%
£0.0725
£0.0725
108.00%
£0.0550
£0.0725
£0.0550
£0.0725
90.20%
90.20%
1.50
3.00
3.00
3.00
0.65%
0.65%
0.65%
0.65%
Nil
Nil
Nil
Nil
No P&L Charge as these options were a like for like replacement of original options issued 22.12.2011
23
Share Capital
Issued Share Capital
On issue at 1 July 2014
Issued for cash Ordinary Shares at £0.01 on 2
July 2013
Issued for cash Ordinary Shares at £0.01 on 11
July 2013
Issued for cash Ordinary Shares at £0.01 on 12
July 2013
Issued for cash Ordinary Shares at £0.01 on 31
July 2013
Employee options exercised for Ordinary Shares
at £0.01
Warrents exercised for Ordinary Shares at £0.01
to 30 June 2014
Issued for cash Ordinary Shares at £0.01 on
9 July 2014
Ordinary shares of 1 pence Deferred shares of 9 pence
30 June 2015 30 June 2014 30 June 2015 30 June 2014
290,131,984
-
227,950,718
16,133,330
75,807,138
75,807,138
-
-
-
-
-
14,000,000
8,651,998
100,000
1,390,000
21,905,938
5,539,110
-
-
-
On issue at 30 June 2015– fully paid
295,671,094
290,131,984
75,807,138
75,807,138
Allotted, called up and fully paid
Ordinary shares of £0.01 each
Deferred shares of £0.09 each
Shares classified as liabilities
Shares classified in shareholders’ funds
30 June 2015
30 June 2014
£000
2,956
6,823
9,779
9,779
9,779
£000
2,901
6,823
9,724
-
9,724
9,724
76
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Notes (continued)
23
Share Capital (continued)
Each Ordinary Share resulting from the Share Re-organisation has the same rights (including voting and dividend
rights and rights on a return of capital) as each Existing Ordinary Share.
The Deferred Shares have very limited rights which are deferred to the Ordinary Shares and effectively carry no
value as a result. Accordingly, the holders of the Deferred Shares are not entitled to receive notice of, attend or vote
at general meetings of the Company, nor are they entitled to receive any dividends or any payment on a return of
capital until at least £10,000,000 has been paid on each Ordinary Share. No application was made for the Deferred
Shares to be admitted to trading on AIM. The Company was given power to arrange for all the Deferred Shares to
be transferred to a custodian or to be purchased for nominal consideration only without the prior sanction of the
holders of the Deferred Shares. No share certificates for the Deferred Shares were issued.
24
Operating leases
Non-cancellable operating lease rentals are payable as follows:
Less than one year
Between one and five
More than five years
Group and Company
Land &
Buildings
30 June 2015
£000
Other Lease
30 June 2015
£000
Land & Buildings
30 June 2014
£000
Other Lease
30 June 2014
£000
122
449
221
792
-
-
-
-
63
252
300
615
-
-
-
-
The operating lease relates to the lease of premises which is used by the Group and Company. During the period
£114,000 was recognised as an expense in the statement of comprehensive income in respect of operating leases
(year ended 30 June 2014: £179,000).
25
Basic and fully diluted loss per share
Basic loss per share is calculated by dividing the loss after taxation of £3,120,000 (2014: £ 1,036,000) by the
weighted average number of ordinary shares in issue during the year of 295,534,513 (2014: 274,953,352).
Unexercised options and warrants over the ordinary shares are not included in the calculation of diluted loss per
share.
77
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Notes (continued)
26
Financial instruments
Financial risk management overview
The Group has exposure to the following risks, to varying degrees, from its use of financial instruments:
● Credit risk;
● Liquidity risk; and
● Market risk.
This note presents information about the Group’s exposure to liquidity and market risks, the companies’ objectives,
policies and processes for measuring and managing risk, and the companies’ management of capital.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to the Group’s reputation. The Group has a cash balance at period end totalling £472,000
(2014: £3,082,000). Note 2 describes the potential uncertainties relating to the liquidity risk. The Group has no
external borrowing and finances its operations by raising equity finance on the Alternative Investment Market
(AIM).
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, equity price and interest rate
risk will affect the Group's income or the value of its holdings of financial instruments.
Foreign exchange rate risk is insignificant as substantially all sales are denominated in sterling the Group’s
functional currency.
At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:
Variable rate instruments
Financial assets
30 June 2015
30 June 2014
£’000
151
1,293
£’000
896
3,199
The fair values of the Group’s financial instruments are measured using inputs other than quoted prices that are
directly or indirectly observable
There were no funds held in non-accessible saving accounts at the year end date (2014: £1,000,000).
There was £972,000 of trade finance lease assets held on the balance sheet at the year end date. (2014: £1,013,000)
Financial Assets and Liabilities
The carrying value and fair value for each of the trade and other payables, trade leases and unearned finance
income and trade and other receivables are the same.
Cash flow sensitivity analysis for variable rate instruments
Due to the current unprecedented low rates of interest a change of 100 basis points in interest rates at the reporting
date would not have created any material change in the profit or loss for 2015 or 2014.
The directors consider that the Group’s exposure to interest rates is low (2014: low). Cash is invested in deposits
with UK high street banks. Low and falling interest rates will reduce returns on these balances.
This note is in relation to the company’s compliance with IFRS 7.
78
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Notes (continued)
26
Financial instruments (continued)
Management of capital
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. In order to do this the group may issue new shares in the future.
There were no changes to the Group’s approach to capital management during the year. The Group is not subject to
externally imposed capital requirements.
27
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations.
Financial instruments that may subject the Group to credit risk consist of cash, cash equivalents, unsecured loan
stock receivables and trade and other receivables. The maximum credit exposure was £1,302,000 (2014:
£1,621,000) which is the respective carrying amounts (which is not significantly different to their fair value and
contractual cash flow). There were no material financial assets that were past due at the period end.
At 30 June 2015 the Group’s cash was divided between current accounts £151,000 (2014: £903,000) and £321,000
in fixed rate monthly deposits (2014: £2,186,000) with a weighted average interest rate for the year of 0.25% (2014:
0.25%). Cash and cash equivalents are held only in high street banks.
The Group offers trade credit to customers, who are well established and major companies, in the normal course of
business. The Group operates stringent credit control procedures on potential customers before allowing credit.
The Group continually monitors its position with, and the credit quality of, the financial institutions, which are
counterparts to its financial instruments, and does not anticipate non-performance or that there is a concentration of
credit risk. Credit risk is considered to be low given the cash position of the Group and that there is a low exposure
level in the trade and other receivables.
28
Contingencies and commitments
Group
The Group had no capital commitments or contingent liabilities as at 30 June 2015 (2014: £nil).
Company
The Company has no capital commitments or contingencies as at 30 June 2015 (2014: £nil).
29
Warrants
412,434 warrants were outstanding as of 30 June 2015 and these are exercisable at a price of 7.5p per share and will
expire on 6 June 2016.
79
Transense Technologies plc
Directors’ report and financial statements
For the year ended 30 June 2015
Notes (continued)
30
Related parties
Group
Transactions with key management personnel who are defined as the Directors of the Company and their immediate
relatives control 1per cent of the voting shares of the Company.
The compensation of key management personnel (being the directors) is as follows:
Key management emoluments including social security costs
Social security costs
Company contributions to money purchase pension plans
Compensation for loss of office
Share related awards
Company
Other related party transactions
Group and Company
Year ended 30
June 2015
Year ended 30
June 2014
£000
162
21
-
-
183
£000
160
22
-
-
-
182
IntelliSAW Inc
IntelliSAW Inc
Sales to
Administrative
expenses
incurred from
Year ended 30
June 2015
Year ended 30
June 2014
Year ended 30
June 2015
Year ended 30
June 2014
£000
£000
-
-
-
-
£000
1,254
1,254
£000
1,056
1,056
Receivables
outstanding
Year ended 30
June 2015
£000
Year ended 30
June 2014
£000
Payables
outstanding
Year ended 30
June 2015
£000
Year ended 30
June 2014
£000
-
-
-
-
74
74
49
49
80