Registered number 01885075
Annual report and financial
statements
For the year ended 30 June 2020
1
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Contents
Directors and advisers
Highlights
Chairman’s statement
Strategic Report
Corporate Governance Statement
Remuneration report
Directors’ report
Statement of Directors’ responsibilities in respect of the Strategic Report, Directors’ Report,
Remuneration Report and the Financial Statements
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
3
4
5
9
13
16
19
22
23
28
29
30
31
32
33
2
Directors and advisers
Directors
N F Rogers (Executive Chairman) (2)
M Segal (Chief Financial Officer)
R J Westhead (1, 2, 3)
1 Non-executive
2 Member of the Audit and Risk Committee
3 Member of the Remuneration Committee
Company Secretary and Registered Office
M Segal
1 Landscape Close
Weston-on-the-Green
Bicester
Oxfordshire
OX25 3SX
Auditor
Cooper Parry Group Limited
Park View
One Central Boulevard
Blythe Valley Park
Solihull
B90 8BG
Bankers
HSBC Bank plc
1 Sheep Street
Bicester
Oxon OX26 7JA
Nominated Adviser & Broker
Allenby Capital Limited
5 St Helen’s place
London
EC3A 6AB
Registrars
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen
B62 8HD
Registration Number 01885075
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
3
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Commercial Highlights
• Transense complete licence agreement with Bridgestone Corporation for iTrack IP
•
iTrack operating business transferred to Bridgestone and royalty income to commence in July
2020
• Breakthrough deal – reduces risk profile by moving Transense towards financial self-sufficiency
• US Army & GE Aviation Improved Turbine Engine Program (“ITEP”); three critical design reviews
completed on schedule, with first engine to test due in third quarter 2021
• New TLGX Series of tyre inspection tools launched
• New leadership and management focus in both SAW and Translogik
Financial Highlights
• Transfer of iTrack operating business and assets to Bridgestone realises net cash of £1.04m (after
repayment of loans, but before costs). Transaction eliminates future net trading losses on
discontinued activities, which amounted to £1.45m in year ended 30 June 2020
• Revenues from continuing operations in line with prior year at £0.60m (2019: £0.60m)
• EBITDA loss from continuing operations reduced to £0.68m (2019: £0.70m).
• Net loss after taxation from continuing operations of £1.09m (2019: £0.84m)
• Net loss after taxation for the year of £2.54m (2019: £1.47m)
• Cash and cash equivalents at year end of £1.19m (2019: £2.65m)
Post period end highlights
•
iTrack royalty, SAW and Translogik probe all showing signs of growth
• Breakeven in unaudited Q1 FY21 profit before tax v £0.60m loss in Q1 FY20, future profitability
now visible
• Formed Commercial Advisory Panel for SAW to provide sector insights
• Proposals to change capital structure at AGM to facilitate future distributions
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Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Chairman’s statement
I am very pleased to report the final results of the Company for the year ended 30 June 2020, following
my appointment as Chairman in February 2020, and subsequently as Executive Chairman in June 2020.
It has been an exciting year for Transense. The completion of the licensing of existing and future iTrack
technology to ATMS Technology Limited (“ATMS”), a subsidiary of Bridgestone Corporation, Japan
(“Bridgestone”) towards the end of the year marked the delivery of a transformation in the company’s
prospects. This will put Transense in the unprecedented position of being financially self-sufficient and
will in turn facilitate increased management focus on the commercialisation of our Surface Acoustic Wave
(“SAW”) technology, and development of our tyre probe business, Translogik.
We are determined to take this opportunity to deliver further commercial success with SAW. We fully
recognise the trend towards more highly automated machinery and robotics and the continuous need to
improve the efficiency, diagnostics and control of equipment and vehicles and by doing so achieving global
targets for emissions reduction.
We believe that our patented SAW sensor technology can help our customers to achieve these goals,
through the accurate non-contact measurement of torque and other key parameters in their products and
systems that has been rigorously tested in the most demanding of environments and applications.
Strategy
The business strategy of the Group continues to be the development of innovative sensing solutions
across a range of applications, which are commercialised either through the launch of products and
services to customers or by forming strategic alliances with partner organisations. Value is realised
through a combination of commercial income, royalties, licensing income and capital gains on disposals.
In recent years, the Company has devoted significant time and financial resources into the development
of the iTrack system, a comprehensive tyre monitoring system used by mine operators to help optimise
operations for increased productivity and profitability. In August 2019, the Company entered into a Joint
Collaboration Agreement with Bridgestone, to offer the iTrack system exclusively to its global customer
base.
The success of this arrangement led in June 2020 to Transense granting a ten year worldwide exclusive
licence over current and future iTrack technology to ATMS, a subsidiary of Bridgestone, in exchange for
a royalty payment based on the number and classification of vehicles with iTrack fitted. At the end of the
ten year period, ATMS will have an option to purchase the iTrack technology for a nominal sum. The
operating business and net trading assets relating to iTrack were also transferred to ATMS for a gross
consideration of US$3.26m facilitating the repayment of all Bridgestone’s loans of $1.95m. At the year
end outstanding consideration of $1.62m was due and loans of $1.2m were still outstanding. Both of these
were settled in full by the end of September. The initial royalty receivable from ATMS in respect of vehicles
using the iTrack system at completion was at a run rate of approximately £0.60m per annum.
from
the vastly enhanced commercial opportunities and
Under these arrangements, the Company will continue to derive a significant and growing royalty income
resources contributed by
stream
Bridgestone/ATMS. Furthermore, our partnership eliminates the investment risk that would have been
associated with continuing to build the sales & marketing, customer service and product development
infrastructure that would have been required as an independent participant in large and geographically
diverse global market.
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Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Chairman’s statement (continued)
Consequently, we go forward with a significantly lower strategic risk profile from which to explore
opportunities for our continuing technology interests, both in SAW and in Translogik tyre monitoring
equipment.
SAW technology
Revenues from SAW technology (including grant income) were steady at £0.21m (2019: £0.21m), and
this segment generated a trading loss of £0.58m (2019: £0.28m), which included increased amortisation
and one-off impairment charges relating to intangible patent assets.
Transense aims to be the world’s first choice provider of SAW sensor solutions. We will achieve this by
continuing to identify innovative methods to apply our patented technology, and by the subsequent transfer
of know-how to major corporate partners in carefully selected target industry sectors. We seek to
strengthen the presence of our technology in a broader range of applications by actively marketing the
provision of technical, engineering consultancy and proto-typing services. Our goal is to commercialise at
scale by establishing licensees, joint ventures or other strategic alliances with the support of a secure
supply chain.
The credentials of our SAW technology have been validated by its selection after rigorous testing by GE
Aviation for use in the GE T901 Improved Turbine Engine Program (“ITEP”), under which the US Army
will re-engine its Boeing AH-64 Apaches and Sikorsky UH-60 Black Hawk helicopters. Over a period of
years, the US Army intends to replace more than 6,000 engines installed in their current fleet of these two
aircraft. The wider market for the T901 engine includes replacement engines for these aircraft in military
forces outside of the US, as well as other military and commercial medium sized vertical take-off aircraft
globally. During 2020, the ITEP successfully completed each of three Critical Design Review events and
is on schedule to execute the First Engine To Test assembly of all subcomponents in the second half of
calendar year 2021. We have continued to work in close co-operation with GE’s specified first tier system
supply partners to support these activities.
Our sensors are also installed on drive input shafts supplied to the NTT IndyCar series by McLaren, to
provide encrypted torque data used to regulate the power rating permitted to individual race teams. There
are further opportunities to expand the use of this technique into alternative race formats.
There is now a clear focus on the need to expand the commercial reach of this technology. Towards the
end of the financial year Nick Hopkins was appointed to lead our SAW team as Managing Director,
reporting to the Board. Nick has previously worked with Anthony and Bryan Lonsdale who were
instrumental in developing the SAW applications used by Transense and will be supported by Chief
Technology Officer, Victor Kalinin. Since his appointment, the Board has approved plans to further develop
the business. Our short term aim is to generate additional commercial and grant support income to ensure
that SAW makes a positive contribution to the Company’s financial results.
Beyond this relatively modest ambition, we have formulated plans to develop our network in carefully
selected market sectors in which we anticipate growth opportunities, including all forms of transport, both
on- and off-road, to include the leisure, commercial and domestic markets, avionics, industrial turbines
and green energy. We have made significant progress in forming a Commercial Advisory Panel (CAP); a
group of senior industrialists with knowledge, experience and insight into these key sectors. It is now our
intention to implement plans to increase our market engagement, including direct referrals, as well as
enhanced website(s), social media presence and participation in technical webinars and symposiums.
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Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Chairman’s statement (continued)
We believe that our technical leadership offers an exceptional approach to problem solving for customers
seeking improved performance, efficiency and safety. Our challenge now is to generate additional
commercial opportunities in order to derive the full benefit of these core strengths.
Translogik tyre inspection probes
Revenues from Translogik probes increased by 7.1% to £0.51m (2019: £0.48m), and this segment
generated a trading profit of £0.12m (2019: £0.19m), primarily as a consequence of increased marketing
and product development expenditure.
Our product range comprises accurate and reliable inspection gauges for car and commercial truck and
bus tyres, allowing effortless and rapid reading of tread depth, tyre pressure, radio frequency identification
(“RFID”) and tyre pressure monitoring system (“TPMS”) data. This data can be transferred via Bluetooth
to a smart device and stored and displayed on the customers’ tyre management software system.
Translogik probes are specified for use in the Goodyear Tire Optix system, the Bridgestone ‘Toolbox’ and
‘Total Tyre Care’ systems, and the Continental ‘Fleetfox’ system, underpinning our belief that they
represent an industry standard.
During the year, product development was underway to support the recent market launch of the new TLGX
Series, a modular range of four new gauges offering a broad variety of features at competitive prices.
These have been developed primarily for system integrators and fleet management software providers,
and early indications of interest are encouraging.
Capital Structure
The Board considers it important that the Company has the flexibility to pay dividends and make other
returns of capital to shareholders when appropriate and desirable to do so. This will, however, require
certain actions relating to the current capital structure of the Company. Accordingly, the Board will bring
forward proposals at the forthcoming Annual General Meeting to cancel all outstanding deferred shares,
and the amount standing to the credit of the share premium account.
Financial results and condition
Revenues for the year from continuing operations were steady at £0.60m (2019: £0.60m). Subscription
revenues generated from users of the iTrack system were accounted for as part of discontinued activities,
and increased by 50% to £1.47m (2019: £0.98m). In the current and subsequent financial years, royalty
income from iTrack will be accounted for as part of continuing operations and will commence at the rate
of £0.60m per annum, increasing in line with the growth in the installed base.
Gross margin was 55.1% of revenues from continuing operations (2019: 63.1%).
Administrative expenses were slightly increased at £1.70m (2019: £1.58m), mainly as a result of increased
amortisation and one-off impairment charges relating to intangible SAW patent assets. The net loss before
taxation from continuing operations was £1.27m (2019: £1.12m).
The total comprehensive loss for the year was £2.54m (2019: £1.47m), reflecting the loss on discontinued
activities of £1.45m (2019: £0.62m) and an R&D tax credit of £0.18m (2019: £0.28m).
Net cash used in operations increased to £1.86m (2019: £0.43m), which includes the cash resources
absorbed by iTrack operating activities of £1.33m during the year up to the date of the transfer of the
business to ATMS on 24 June 2020 (2019: £0.33m).
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Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Chairman’s statement (continued)
The Company closed the year with net cash and cash equivalents of £1.19m (2019: £2.65m). The
completion balance sheet relating to the iTrack business was agreed between the Company and ATMS
after the end of the financial year on 10 September 2020, at which time the balance of the consideration
monies was settled. Including the Bridgestone loan repayment and payment of related fees, there was
no significant net effect on post year end cash.
Board and advisor changes
It is clear that the business has changed over the course of the year under review, and particularly as a
consequence of the transactions with ATMS/Bridgestone. As a key part of these arrangements, David
Ford and Graham Storey-Macintosh (formerly Chairman and Chief Executive respectively) left the
Transense Board and transferred to lead ATMS as Chief Executive and Director of Global Sales
respectively. On behalf of the Board and shareholders, I would like to take this opportunity to express our
gratitude for their major contribution to the development of the Group’s businesses over several years. I
also wish them a bright future, not least because of our continuing financial interest in the success of their
new venture.
It has been a very enjoyable challenge to Chair the Board since February and lead the negotiations with
Bridgestone. On completion, I was also happy to commit additional time capacity to the Company by
accepting the role as Executive Chairman. I have been very ably supported throughout by Melvyn Segal
as Chief Financial Officer and Rodney Westhead, our Senior Independent Non-Executive Director. We
are mindful that it may be beneficial to add to the Board in due course, however we are currently satisfied
that we have the requisite knowledge and experience to fully discharge the responsibilities of the Board.
We have also taken the opportunity afforded by this major change in the structure of the Company’s
business to review our advisory and compliance support arrangements. Accordingly, we have appointed
Cooper Parry Group Limited as Auditors, and Allenby Capital Limited as Nominated Advisor and Broker.
We consider that these new arrangements provide the correct blend of scale and skills to meet the needs
of the Company and its shareholders at the current time, and for the foreseeable future.
Current trading and prospects
Trading in the first quarter of the current financial year is in line with expectations and reflects the
substantial reduction in overhead. Revenues from SAW and Probes have increased compared to the
same period last year and early indications are that royalty income on iTrack deployment during the year
has significant growth potential, although caution is clearly applicable in view of the global risks associated
with the broader economic and practical effects of the Covid-19 pandemic. The unaudited pre-tax result
in Q1 FY 21 shows the business trading around break-even level compared to the loss of £0.6m incurred
in Q1 FY 20.
The iTrack licence deal has both simplified and de-risked the business going forward, and moves
Transense closer to the original model of developing and licensing technology. We now have a reasonable
expectation that the Company will be financially self-sufficient for the foreseeable future.
Meanwhile, we have a fresh management grip on the commercial development of SAW, and a range of
new products for Translogik. Accordingly, we look forward with renewed confidence.
Nigel Rogers
Executive Chairman
19 October 2020
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Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Strategic Report
Financial Review
Results for the year
Revenues for the year from continuing operations were steady at £0.60m (2019: £0.60m). Subscription
revenues generated from users of the iTrack system were accounted for as part of discontinued activities
and increased by 50% to £1.47m (2019: £0.98m). In the current and subsequent financial years, royalty
income from iTrack will be accounted for as part of continuing operations and will commence at the rate
of £0.60m per annum, increasing in line with the growth in the installed base.
Gross margin was 55.1% of revenues from continuing operations (2019: 63.1%).
Administrative expenses were slightly increased at £1.70m (2019: £1.58m), mainly as a result of increased
amortisation and one-off impairment charges relating to intangible SAW patent assets. The net loss before
taxation from continuing operations was £1.27m (2019: £1.12m).
The total comprehensive loss for the year was £2.54m (2019: £1.47m), reflecting the loss on discontinued
activities of £1.45m (2019: £0.62m) and an R&D tax credit of £0.18m (2019: £0.28m).
The Earnings per share (EPS) are set out below (in Pence):
EPS (loss from continuing operations)
EPS (total loss)
Taxation
2020
2019
(6.7)
(15.6)
(6.4)
(11.1)
The Company has UK tax losses available to carry forward at 30 June 2020 of approximately £23m,
subject to HMRC agreement.
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. The
accounting treatment adopted is to recognise the R&D tax credits on a cash basis due to the uncertain
nature of the claim. Following the year end, the Company received R&D tax credits amounting to £0.18m
in respect of the year ended 30 June 2019.
Cash flow and financial position
Net cash used in operations increased to £1.86m (2019: £0.43m), which includes the cash resources
absorbed by iTrack operating activities during the year of £1.33m up to the date of the transfer of the
business to AMTS on 24 June 2020 (2019: £0.33m). During the year, the Company received the benefit
of interest-free working capital loans from Bridgestone of £1.59m, £0.61m of which was repaid in June on
completion of the transfer, and the remaining balance was settled after the year end out of the
consideration monies.
The Company closed the year with net cash and cash equivalents of £1.19m (2019: £2.65m). The
completion balance sheet relating to the iTrack business was agreed between the Company and ATMS
after the end of the financial year on 10 September 2020, at which time the balance of the consideration
monies was settled. Including the Bridgestone loan repayment and payment of related fees, there was
no significant net effect on post year end cash.
The forward looking cash flow forecasts based on the anticipated level of activity indicates that the Group
should have sufficient funds available for the foreseeable future.
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Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Strategic Report (continued)
Going Concern
The financial statements have been prepared on the going concern basis.
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 30 June 2023. These forecasts indicate that the Group should continue to be able to operate within
its current cash resources for this period.
Key Performance Indicators
The following KPI’s are some of the tools used by management to monitor the performance of the
operating business. In addition to the KPI’s, the statement of financial position and cash flow analysis are
reviewed at monthly Board meetings.
KPI's
FY 20
FY 19
Turnover – continuing operations (£m)
0.60
0.60
EBITDA – continuing operations (£m)
(0.68)
(0.70)
EBT – continuing operations (£m)
(1.27)
(1.12)
EPS - continuing operations (Pence)
EPS – attributable to shareholders (Pence)
(6.7)
(15.6)
(6.4)
(11.1)
Closing share price (Pence)
57.0
65.5
Net cash used in operations (£m)
(1.86)
(0.43)
Closing cash balance (£m)
Cash per Share (Pence)
1.19
2.65
7.3
16.2
Consolidated Net Assets (£m)
2.18
4.75
Net Assets/Share - Pence
13.4
29.12
Market Capitalisation at year end (£m)
9.30
10.68
Shares in issue (million)
16.3
16.3
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Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Strategic Report (continued)
Principal risks and uncertainties
Risk management is essential as part of the management process. Regular reviews are undertaken to
assess the nature and magnitude of risks faced and the manner in which they may be mitigated. Where
controls are in place, their adequacy is monitored.
Risk and Uncertainty
Details of Risk and Impact
Mitigation
Intellectual Property
Product Development
People
EU Membership
The SAW business is focused on the
design and manufacture of
technologically advanced products and
applications. Investment continues to be
made in development. Following a
detailed review of our patent portfolio
we now have 23 live granted patents
and continue to have significant in
house know how.
The IP element of the iTrack II product
is now licensed exclusively to ATMS
Technologies Limited (a Bridgestone
Corporation subsidiary).
The risk exists that our intellectual
property may be infringed by third
parties or that we may inadvertently
infringe third party rights with the impact
resulting in loss of profitability and cash
flow or loss of market share.
Procedures are in place to ensure we
monitor new third party patent
applications, in order to ensure
adequate protection for our key
intellectual property including
registration and avoid infringing third
party rights.
Although the functionality of iTrack II is
public knowledge, none of the elements
of know-how or copyright are published
thereby making copying the technology
far more difficult. The ongoing
development of the product will be
performed by ATMS and will further
strengthen our IP.
The decision making process for the
development of new and existing
products requires an assessment of the
potential return, which is generally
uncertain at the early stage of
development. A changing and evolving
market place and environment (see
below) will always present challenges to
produce marketable products.
Development spend is regularly planned
and reviewed. The Group’s
understanding of customer needs and
expectations is greatly enhanced by
working closely with customers on
extensive product trials. The introduction
of the new CAP will ensure that
development spend is directed solely
into commercial opportunities.
An experienced and knowledgeable
team is essential to continually develop
complex products for customers to be
used in demanding environments. The
market for skilled staff is extremely
competitive and a failure to recruit and
retain suitably qualified staff could
impact the Group’s ability to develop
and deliver services and product.
In June 2016 the UK electorate voted to
discontinue its membership of the EU.
In January 2020 the withdrawal
agreement was ratified by the UK
parliament and by the EU shortly
afterwards. Notwithstanding the
agreement between the UK and the EU
the Directors still await clarification of
the terms of the exit (referred to as
Brexit) to assess the impact, if any, on
the Group.
Providing the existing team with good
training and incentives is a key priority
for the business and has been
instrumental in retaining key staff. The
recruitment and development of new
employees, when required, is done so
by experienced staff to ensure the
correct calibre of individual is identified.
During the year we recruited a new MD
for SAW and following his appointment a
detailed strategic plan including
succession planning has been prepared.
The impact of Covid-19 will also
increase the availability of quality staff.
As is evident in the Segmental review on
page 39 only 25% of the group’s income
arises from UK and Europe and a far
lesser percentage of supplied goods and
services are from Europe. The Directors
will take any action necessary to
mitigate the effect of Brexit on the UK
element of manufacturing and assembly
of product and will consider whether
moving to an EU environment is
preferable.
11
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Strategic Report (continued)
Principal risks and uncertainties (continued)
Risk and Uncertainty
Details of Risk and Impact
Mitigation
Global Companies
Liquidity
Many of the customers and competitors
of Transense are major international
companies. The impact on Transense
dealing with customers of this size is
that invariably the time from initial
discussions to receiving a PO can be
far longer than the usual business
transaction cycle between SMEs. On
the competition side the Group can be
disadvantaged by not having substantial
cash and/or the human resources of far
larger entities.
Transense is continually striving to
achieve the point of consistent
profitability and cash generation.
However, until that point in time is
reached the Group will be exposed to
squeezes in liquidity. The failure to raise
additional funds for working capital, if
required, could threaten the going
concern status of Transense.
Foreign Currency
Fluctuation
Historically the Group has been
exposed to currency fluctuations in
AUD, CLP, Euro, USD and ZAR. Future
iTrack royalty income receivable will be
earned in USD.
Covid-19
The onset of Covid-19 and the impact
on businesses worldwide has been
considerable. Many businesses have
seen their income cease or significantly
reduce for a period in excess of 3
months with devastating effects.
The Group regularly monitors cash flow
to ensure that we are sufficiently funded
to endure the long lead times between
initial discussions and POs with global
businesses. The Group has also
substantially reduced its overhead
following the transfer of the iTrack
operational business to ATMS. With
regards the competition the far smaller
size of Transense ensures we are able
to move more swiftly to adapt
technology to customer requirements
and we have in place a very specialised
team of technicians to ensure our
products are best in class. There will
also be opportunities to partner global
companies to mitigate the cash flow
effects of long lead times and lack of
human resources.
Following the transaction with ATMS the
point of cash flow break even could be
reached in the financial year 2021 which
will have a significant impact on cash
resources and halt the historic
requirement to seek additional equity
funding. The Board also exert tight
controls on overheads and monitor cash
flow regularly and the short to medium
term cash flow projections do not
indicate the need for further funding.
Transense's biggest exposure has been
the volatility of the USD to GBP.
However as future royalty income from
the iTrack IP licence and the GE IP
Licence will be payable in USD, foreign
currency movements will be kept under
review and potential hedges evaluated
as the Royalty income grows.
Transense's exposure regarding Covid-
19 has been minimal. The Group moved
quickly to ensure the safety of its global
team and introduced working from home
where appropriate. So far as business
interruption is concerned the only
noticeable change to date is the length
of any decision making process in
uncertain times. There has been no
material change in business activity.
By order of the Board
Melvyn Segal
Chief Financial Officer
19 October 2020
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Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Corporate Governance Statement
In accordance with AIM rule 26 the Company has adopted the Quoted Companies Alliance’s (QCA)
Governance Code. The statement of compliance with the QCA’s Governance Code can be found on our
website. The Board is committed to high standards of corporate governance as appropriate to the
Company’s size and activities and set out below key areas of Corporate Governance.
Below is a brief description of the role of the Board and its committees, including a statement regarding
the Company’s system of internal financial control.
The Board of Directors
The following is a list of the full names, positions and ages of the current members of the Board: The
business address of each Director is 1 Landscape Close, Weston-on-the-Green, Bicester, Oxfordshire,
OX25 3SX.
Nigel Rogers (Executive Chairman *) Age 59
Nigel qualified as a Chartered Accountant in 1983, spending eight years with PwC before moving into
industry. He has over twenty years’ experience as a Director of listed businesses, including thirteen years
as Group CEO of both AIM listed Stadium Group Plc (2001-2011) and 600 Group Plc (2012-2015). Nigel
serves on both the Audit and Remuneration committees.
In addition to his responsibilities at Transense, he is also Chairman of AIM listed Surgical Innovations
Group Plc and a Non-Executive Director of AIM listed Solid State plc.
Melvyn Segal (Chief Financial Officer) Age 65
Melvyn is a chartered accountant and during his career of 22 years as a senior partner of mid-sized
accountancy firm Arram Berlyn Gardner he specialised in business advice, audit and taxation and was
involved in the successful sale of the firm’s financial services arm. On leaving the profession Melvyn has
been active as company finance Director and Non-Executive Director of successful SME’s.
Rodney Westhead (Non-Executive Director **) Age 76
Rodney qualified as a Chartered Accountant in 1967 spending time with PwC and Grant Thornton, the
latter including a term as managing partner of the London office. His experience in industry commenced
in 1992 at Ricardo Group plc, a major automotive consulting engineering group with annual sales
exceeding £200 million, where he was finance Director and subsequently CEO. After leaving Ricardo in
2005 he has had appointments as Chairman of Carter and Carter Group plc, Chairman of Clean Air Power
Limited and a Non-Executive Director of AEA Technology plc, Mouchel Plc and ACTA spa. Rodney was
a member of council at Brunel University.
*Member of Audit & Risk committee
** Chair of Audit & Risk and Remuneration committee
The Board has not adopted a formal process of evaluation, although the Chairman has actively
encouraged self-evaluation by all Board members, and sought individual feedback on the conduct and
content of Board meetings. The Board will consider whether a more structured approach is required in
future.
The Board is satisfied that the current composition provides the required degree of skill, experience and
capabilities appropriate to the current needs of the business, and that individual Directors have access to
adequate sources of information to update their knowledge as required.
The Board seeks appropriate expert advice where circumstances require such action to be necessary or
desirable, for example, by utilising legal advisors and regulatory compliance specialists in transaction
work. No Board committees or individual Board members have sought external advice in the current year,
but are free to do so at any time, and at the Company’s expense, should the need arise.
13
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Corporate Governance Statement (continued)
Throughout the financial year the Board schedule regular monthly formal Board meetings. It will approve
financial statements and significant changes in accounting practices and key commercial matters, such
as decisions to be taken on whether to take forward or to cancel a material collaboration project or
commercial agreement. There is a formal schedule of matters reserved for decision by the Board in place.
During the year, Board members attended meetings as follows:
Director
Maximum
number of
meetings
11
12
12
11
12
David Ford
Nigel Rogers
Melvyn Segal
Graham Storey
Rodney Westhead
*attended part of the meeting only as not a Committee member
** attended prior to appointment as Executive Chairman
Actual number
attended
Audit Committee
Remuneration
Committee
11
12
12
10
12
-
2
*2
-
2
-
**2
-
-
2
Currently, the Board includes one Non-Executive Director who is considered by the Directors to be
independent for the purposes of the QCA Code, Rodney Westhead. Rodney joined the Board in April
2007, and prior to this had no association with the Company.
The Board promotes high ethical and moral standards. The Board and all employees expect to be judged
by, and accountable for, their actions and compliance with the Company’s policies procedures.
Regular meetings with shareholders and other key representative groups provide specific opportunity for
raising any concerns relating to Company performance and/or corporate governance. Independent
feedback is sought following such meetings and provided to the Board, where appropriate on an
anonymised basis.
As noted in the Strategic and Business Review of Activities on pages 11-12, the Board has in place a risk
management policy and a risk management register for identifying, assessing and mitigating the
Company’s principal risks and uncertainties.
Internal Financial Control
The Board is responsible for establishing and maintaining the Company’s system of internal financial
controls. Internal financial control systems are designed to meet the particular needs of the Company and
the risk to which it is exposed, and by its very nature can provide reasonable, but not absolute, assurance
against material misstatement or loss. The Directors have reviewed the effectiveness of the procedures
presently in place and consider that they are appropriate to the nature and scale of the operations of the
Company. The Directors will continue to reassess internal financial controls as the Company expands
further.
14
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Corporate Governance Statement (continued)
Board Committees
Audit & Risk Committee
The Audit & Risk Committee’s principal functions include ensuring that the appropriate accounting
systems and financial controls are in place, monitoring the integrity of the financial statements of the
Company, reviewing the effectiveness of the Company’s accounting and internal control systems,
reviewing reports from the Group’s auditors relating to the Company’s accounting and internal controls,
and reviewing the interim and annual results and reports to Shareholders, in all cases having due regard
to the interests of Shareholders. The Audit & Risk Committee meets at least two times a year, with regard
to the reporting and audit cycle. Rodney Westhead has recent and relevant financial experience through
his role as senior partner in a large firm of Chartered Accountants and CEO of other UK listed companies
and acts as Chairman. Nigel Rogers the other member of the Audit & Risk Committee is a Fellow of the
ICAEW and has several years’ experience of listed company financial reporting.
Remuneration Committee
The Remuneration Committee is responsible for determining and agreeing with the Board the framework
for the remuneration packages for Directors. The Remuneration Committee considers all aspects of the
Executive Directors’ remuneration, including pensions, bonus arrangements, benefits, incentive payments
and share option awards, and the policy for, and scope of any termination payments. The remuneration
of the Non-Executive Directors is a matter for the Board. The Remuneration Committee meets at least
twice a year and at such other times as may be deemed necessary. No Director may be involved in
discussions relating to their own remuneration. Rodney Westhead is the sole member of the
Remuneration Committee.
Nomination Committee
The Nomination Committee is responsible for reviewing the structure, size and composition of the Board
based upon the skills, knowledge and experience required to ensure the Board operates effectively. The
Nomination Committee is expected to meet when necessary to do so. The Nomination Committee also
identifies and nominates suitable candidates to join the Board when vacancies arise and makes
recommendations to the Board for the re-appointment of any Non-Executive Directors. The full Board
make up the Nomination Committee.
15
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
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 Remuneration Committee is responsible for determining the remuneration arrangements of the
Executive Directors and advising the Board on the remuneration policy for senior executives and
participation in the Company’s long term incentive share schemes.
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, Rodney Westhead, on any aspect of the
Company’s remuneration policy.
The Board as a whole, set 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, Bonuses and Benefits
The base salaries for the Executive Directors are reviewed annually, but not necessarily increased, by
the Remuneration Committee.
The Executive Directors are eligible to be considered for an annual bonus entitlement based on the overall
performance of the company and its financial position. Annual bonus entitlements may be based upon
the achievement of pre-agreed objectives or declared at the end of the year based solely on the discretion
of the Remuneration Committee.
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
Executive Directors are entitled to participate in the Company’s pension scheme on the same basis as other
full time employees, but during the year ended 30 June 2020 they did not choose to participate (2019:
£nil).
16
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Remuneration report (continued)
Service Contracts
The service contracts provide for the following notice periods:
12 months: Nigel Rogers and Melvyn Segal.
No notice period: Rodney Westhead
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 the next
page.
Information on Directors' emoluments is as follows:
Basic
Bonus
Benefits
Pension
Year ended
Year ended
Total emoluments
Executive Directors
N Rogers*
M Segal
D Ford**
G Storey-Macintosh**
Non-Executive
Directors
R Westhead
salary
£
£
37,383
114,083
163,746
171,971
13,483
50,000
40,000
-
-
-
£
-
6,164
6,253
8,439
-
30 June 2020
30 June 2019
£
£
87,383
160,247
169,999
180,410
30,800
121,948
150,069
200,643
13,483
12,900
£
-
-
-
-
-
Total 2020
500,666
90,000
20,856
-
611,522
516,360
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
Total 2019
394,400
105,000
16,960
-
516,360
==============================================
==============================================
==============================================
==============================================
==============================================
*Non-executive until appointed Executive Chairman on 24 June 2020. **Resigned on 24 June 2020
==============================================
==============================================
==============================================
==============================================
==============================================
These emoluments can be analysed as follows:
Continuing directors remuneration excluding bonus
Bonus related to the disposal of iTrack
Remuneration of directors leaving with ITrack
Total
2020
£
171,113
90,000
350,409
----------------------------------------------
611,522
2019
£
165,648
-
350,712
----------------------------------------------
516,360
==============================================
==============================================
17
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Remuneration report (continued)
Share based payment options have been granted under EMI and the discretionary scheme for Executive
Directors. 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 EMI were:
G Storey-Macintosh
G Storey-Macintosh
D Ford
D Ford
M Segal
M Segal
M Segal
M Segal
Directors' interests in the UDSOS were:
M Segal
N Rogers
At 1 July
2019
At 30 June
2020
Earliest
exercise
date
Exercise
price per
share
Hurdle
price per
share
120,000
cancelled
01/07/18
100,000
cancelled
30/06/20
70,000
cancelled
01/07/18
100,000
cancelled
30/06/20
30,000
50,000
-
-
30,000
01/07/18
50,000
30/06/20
170,000
12/08/21
126,000
24/06/23
£0.75
£1.00
£0.75
£1.00
£0.75
£1.00
£0.75
£0.62
£1.50
£2.00
£1.50
£2.00
£1.50
£2.00
£2.00
£1.50
==============================================
==============================================
==============================================
==============================================
==============================================
At 1 July
2019
At 30 June
2020
Earliest
exercise
date
Exercise
price per
share
Hurdle
price per
share
-
-
74,000
24/06/23
400,000
24/06/23
£0.62
£0.62
£1.50
£1.50
==============================================
==============================================
==============================================
==============================================
==============================================
Share price performance
The share price performance is disclosed in the Directors’ Report on page 20.
18
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Directors’ report
The Directors present their annual report and audited financial statements for the year ended 30 June
2020.
Business activities, review of the business and future developments
Transense is a provider of specialist sensor systems.
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 statement and Strategic
report on pages 5 to 12.
Results and Dividends
The results for the year ended 30 June 2020 show a loss after tax from continued operations of £1.09m
and a total loss of £2.54m (2019: £0.84m from continued operations and £1.47m in total). The Directors
do not recommend the payment of a dividend (2019: £nil).
Directors
The present Directors are listed on page 3. D M Ford and G Storey-Macintosh resigned on 24 June 2020.
There are no contracts of significance in which the Directors had a material interest during the year.
Substantial Shareholdings
At 30 June 2020, the following substantial shareholdings of 3% or more of the Company’s share capital
have been notified to the Company:
CriSeren*
Spreadex
Seneca
P Lobbenberg
WB Nominees
Legal & General
Harwood Capital LLP
Gerald Oury
Information correct at 20 October 2020.
Ordinary shares of
10p each
%
9.40%
7.97%
7.67%
5.94%
4.95%
3.31%
3.13%
3.03%
1,532,924
1,298,669
1,250,000
968,979
806,526
540,000
510,000
493,333
19
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
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-Macintosh
R J Westhead
D Ford
M Segal
N Rogers
Share price
Ordinary
shares of
50p each
30 June
2020
n/a
10,655
n/a
30,888
108,700
Ordinary
shares of
50p each
1 July
2019
78,687
5,655
5,555
22,888
80,000
==============================================
==============================================
The mid-price of the shares in the Company at 30 June 2020 was 57p (2019: 65.5p) and the range during
the period was 42.5p to 88.5p (2019: 29p to 73p).
Share based payment option schemes
The Remuneration Committee is responsible for the operation and administration of the Company’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 18.
Financial Instruments
The directors adopt a low risk financial objective. The financial instruments are denominated in sterling,
euros, Australian dollars and US dollars and the Group does not trade in derivative instruments (see note
27 to the financial statements).
Post balance sheet events
The completion accounts were agreed in September 2020 with the remaining consideration of $1.62m
received from Bridgestone and their remaining loan of $1.20m repaid.
Research and Development
In order to maintain and improve upon its market position, each of the Group’s trading divisions actively
engage in research and development activities. This ensures the Group continually improves its product
offerings and technical abilities. Research and development expenditure of £0.06m was expensed to the
Statement of Comprehensive Income in the year (2019: £0.05m).
Further development expenditure on the iTrack product of £0.38m was capitalised in the year (2019:
£0.25m).
20
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Directors’ report (continued)
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 2019/20.
Auditors
Grant Thornton LLP resigned as auditors and Cooper Parry Group Limited were appointed in their place.
In accordance with Section 489 of the Companies Act 2006, a resolution to appoint Cooper Parry Group
Limited as auditors of the Company is to be proposed at the forthcoming Annual General Meeting.
By order of the Board
N F Rogers M Segal
Chairman Chief Financial Officer
20 October 2020
1 Landscape Close
Weston-on-the-Green
Bicester
Oxfordshire
OX25 3SX
21
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Statement of Directors’ responsibilities in respect of the Strategic
Report, Directors’ Report, Remuneration Report and the Financial
Statements
The Directors are responsible for preparing the Strategic Report, the Remuneration 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. Under that law the Directors have to prepare the group financial statements in accordance
with International Financial Reporting Standards (IFRSs) as adopted by the European Union.
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 and profit or loss of the group and parent company
for that period. In preparing these 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 applicable IFRSs as adopted by the European Union have been followed, subject to
any material departures and explained in the Financial Statements;
• 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 the financial statements and
Remuneration Report comply with the Companies Act 2006. They have general responsibility for
safeguarding the assets of the group and parent company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors confirm that:
• So far as each director is aware, there is no relevant audit information of which the company’s
auditor is unaware; and
• The Directors have taken all the steps that they ought to have taken as Directors in order to make
themselves aware of any relevant audit information and to establish that the company’s auditor is
aware of that information.
The Directors are responsible for ensuring the Annual Report and the Financial Statements are made
available on a website. Financial statements are published on the Company’s website in accordance
with legislation in the United Kingdom governing the preparation and dissemination of financial
statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the
Company’s website is the responsibility of the Directors. The Directors’ responsibility also extends to
the ongoing integrity of the financial statements contained therein.
22
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Independent auditor’s report to the members of Transense
Technologies plc
Opinion
We have audited the financial statements of Transense Technologies plc (the ‘parent Company’) and its
subsidiaries (the ‘Group’) for the year ended 30 June 2020 which comprise the Consolidated Statement
of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Statement
of Changes in Equity, the Consolidated and Company Cash Flow Statement and the related notes to the
financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in the preparation of the group financial
statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the
European Union. The financial reporting framework that has been applied in the preparation of the parent
company financial statements is applicable law and United Kingdom Accounting Standards, including
Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted
Accounting Practice).
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 2020 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 European Union;
the parent Company financial statements have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent of the
Group and parent Company in accordance with the ethical requirements that are relevant to our audit of
the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and
we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us
to report to you where:
•
•
the directors’ use of the going concern basis of accounting in the preparation of the financial
statements is not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that
may cast significant doubt about the Group’s ability or the parent Company’s ability to continue to
adopt the going concern basis of accounting for a period of at least twelve months from the date when
the financial statements are authorised for issue.
23
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Independent auditor’s report to the members of Transense Technologies
plc (continued)
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial statements of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) we identified, including those which had the greatest
effect on the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the
engagement team. These matters were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Risk of error in revenue recognition
Matter
Under International Standard on Auditing (UK) 240 there is a presumed risk that revenue is misstated due
to fraud. The Group recognises revenue to the extent that economic benefits will flow to the Group and
the revenue can be reliably measured. Whilst there are a number of ways in which the Group generates
revenue, there is relatively little judgement involved in determining the timing and value of the amount to
be recognised. We therefore assess the significant risk to be specifically with respect to manual journals
posted to revenue.
Response
Our procedures in response to the risk included:
• Performing a walkthrough of the process as set out by management, to ensure controls
appropriate to the size and nature of operations are designed and implemented correctly
throughout the transaction cycle for each revenue stream;
• Obtaining a complete listing of journals posted to revenue nominal codes. From this listing we
selected a sample of manual adjustments which were vouched to evidence supporting the timing
and measurement of the revenue recognised;
• Performing enhanced cut-off testing to ensure sales are recognised in the correct accounting
period; and
• Performing transactional revenue testing to confirm the existence of revenue.
Our procedures did not identify any material misstatements in the revenue recognised during the year.
Disposal of iTrack
Matter
In June 2020 the Group disposed of the operating business and net trading assets of iTrack. This is a
significant transaction requiring appropriate disclosure with respect to discontinued operations and
disposal of trading assets.
Response
Our procedures in response to the risk included:
• Reviewing the sale and purchase agreements in connection with the transfer of the iTrack
operating business and assets to ATMS;
• Confirmed the accuracy of accounting for the business disposal and disclosures made in the
financial statements;
• Confirmed the disclosure of discontinued activities in the income and cash flow statements; and
• Considered the appropriateness of accounting for any other aspect of the transaction, including
loan relationships, related party transactions and associated costs.
Our procedures did not identify any material misstatements in the accounting for or the disclosure of the
disposal of the business.
24
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Independent auditor’s report to the members of Transense Technologies
plc (continued)
Going concern and impairment considerations relating to Covid-19
Matter
During March 2020, the potential impact of Covid-19 became significant. Management considered
implications for the Group’s going concern assessment, impairment of assets and appropriate disclosure
in the Annual Report.
Response
Our procedures in response to the risk included:
• Obtaining the assessment made by management and the Board regarding the Group’s ability to
continue as a going concern;
• Reviewing the Covid-19 impact factored into the forecasts used in terms of estimating likely length of
public restrictions and any forecast economic downturn following relaxation of those restrictions;
• Reviewing the latest cash position post iTrack sale and consideration of amounts due from ATMS and
the Bridgestone loan;
• Reviewing the other assumptions within those forecasts and performing sensitivity analysis over key
assumptions used; and
• Discussing with management and the Board any additional industry factors or other issues which
could impact the Group’s ability to continue as a going concern.
Based on the information available at the time of the directors’ approval of the financial statements and
our signing of our audit opinion, we consider the forecasts to be reasonable whilst noting that the impact
of Covid-19 on future sales and other inputs is currently difficult to quantify.
Our application of materiality
We apply the concept of materiality in planning and performing our audit, in determining the nature, timing
and extent of our procedures, in evaluating the effect of any identified misstatements, and in forming our
audit opinion.
The materiality for the Group financial statements as a whole was set at £23,000. This has been
determined with reference to the benchmark of the Group’s revenue which we consider to be an
appropriate measure for a group of companies such as these. Materiality represents 1% of Group revenue.
The materiality for the parent company financial statements as a whole was set at £17,500. This has been
determined with reference to the benchmark of the parent company’s revenue which we consider to be
an appropriate measure for a parent company such as this. Materiality represents 1.5% of the parent
company revenue.
An overview of the scope of our audit
We adopted a risk based audit approach. We gained a detailed understanding of the Group’s business,
the environment it operates in and the risks it faces.
The key elements of our audit approach were as follows:
Our Group audit scope focused on the Group’s principal trading entity, Transense Technologies plc which
was subject to a full scope audit, as was the Group consolidation. This represents 50% of revenue. In
addition, we performed specified audit procedures over the Group’s significant components Transense
Technologies Chile spa and Translogik South Africa Pty which collectively represent 41% of revenue.
25
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Independent auditor’s report to the members of Transense Technologies
plc (continued)
Other information
The directors are responsible for the other information. The other information comprises the information
included in the annual report, other than the financial statements and our auditor’s report thereon. Our
opinion on the financial statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material misstatements, we are required to determine
whether there is a material misstatement in the financial statements or a material misstatement of the
other information. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in
this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
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; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their
environment obtained in the course of the audit, we have not identified material misstatements in the
strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept, 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.
26
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Independent auditor’s report to the members of Transense Technologies
plc (continued)
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 22, the directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and
fair view, and for such internal control as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the
parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to liquidate the
group or the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor’s report.
Use of our report
This report is made solely to the parent 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
parent 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 parent company and the parent company’s members as a body, for our audit work,
for this report, or for the opinions we have formed.
Katharine Warrington (Senior Statutory Auditor)
For and on behalf of Cooper Parry Group Limited
Chartered Accountants and Statutory Auditor
Park View
One Central Boulevard
Blythe Valley Park
Solihull
B90 8BG
Date: 19 October 2020
27
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2020
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Year ended
30 June
2020
Note
£'000
Year ended
30 June
2019
restated
£'000
Continuing operations
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating loss
Financial income
Financial expense
Other income
Loss before taxation
Taxation
5
6
7
7
10
Loss for the year from continuing operations
Discontinued operations
Loss for the year from discontinued operations
Loss for the year
Basic and fully diluted loss per share (pence)
From continuing operations
26
From total loss for the year
Loss for the year
Other comprehensive income:
Exchange difference on translating foreign operations
Other comprehensive income for the year
Total comprehensive expense for the year attributable to the
equity holders of the parent
603
(271)
596
(220)
----------------------------------------------
----------------------------------------------
332
376
(1,703)
(1,581)
----------------------------------------------
----------------------------------------------
(1,371)
(1,205)
5
(17)
118
2
-
79
----------------------------------------------
----------------------------------------------
(1,265)
175
(1,124)
283
----------------------------------------------
----------------------------------------------
(1,090)
(841)
----------------------------------------------
----------------------------------------------
(1,452)
(624)
----------------------------------------------
----------------------------------------------
(2,542)
==============================================
(1,465)
==============================================
(6.68)
==============================================
(15.59)
==============================================
(6.38)
==============================================
(11.11)
==============================================
(2,542)
(1,465)
----------------------------------------------
----------------------------------------------
-
----------------------------------------------
-
2
----------------------------------------------
2
----------------------------------------------
----------------------------------------------
(2,542)
==============================================
(1,463)
==============================================
The comparative Statement of Comprehensive Income has been restated in order to present the results of
continuing operations and discontinued operations separately with no change in the overall loss for the
year.
Notes to the financial statements are from pages 33 to 57.
28
Consolidated Balance Sheet
at 30 June 2020
30 June
2020
£'000
2020
£'000
Note
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
2019
£'000
30 June
2019
£'000
529
946
290
844
----------------------------------------------
----------------------------------------------
1,134
1,475
63
175
1,677
1,193
566
-
789
2,647
----------------------------------------------
----------------------------------------------
3,108
----------------------------------------------
4,242
4,002
----------------------------------------------
5,477
(854)
(976)
(61)
-
-
(604)
-
-
(55)
(70)
----------------------------------------------
----------------------------------------------
(1,891)
(168)
----------------------------------------------
(2,059)
----------------------------------------------
2,183
==============================================
5,451
2,591
-
41
(5,900)
----------------------------------------------
2,183
==============================================
(729)
-
----------------------------------------------
(729)
----------------------------------------------
4,748
==============================================
5,451
2,591
23
41
(3,358)
----------------------------------------------
4,748
==============================================
Non current assets
Property, plant and equipment
Intangible assets
Current assets
Inventories
Corporation tax
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Current tax liabilities
Provisions
Non current liabilities
Lease liabilities
Total liabilities
Net assets
Equity
Issued share capital
Share premium
Translation reserve
Share based payments
Accumulated loss
Total equity
11
13
16
10
17
18
19
20
21
22
21
24
These financial statements were approved by the Board of Directors and authorised for issue on 19 October 2020 and
were signed on its behalf by:
N F Rogers
Chairman
M Segal
Chief Financial Officer
Notes to the financial statements are from pages 33 to 57.
29
Company Balance Sheet
at 30 June 2020
Non current assets
Property, plant and equipment
Intangible assets
Investments
Current assets
Inventories
Corporation tax
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Current tax liabilities
Provisions
Non current liabilities
Lease liabilities
Total liabilities
Net assets
Equity
Issued share capital
Share premium
Share based payments
Accumulated loss
Total equity
Note
12
13
14
16
17
18
19
20
21
22
21
24
30 June
2020
£'000
290
844
-
----------------------------------------------
63
175
1,677
1,193
----------------------------------------------
(854)
(976)
(61)
-
-
----------------------------------------------
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
2020
£'000
30 June
2019
£'000
2019
£'000
502
946
61
----------------------------------------------
1,134
1,509
562
-
938
2,585
----------------------------------------------
3,108
----------------------------------------------
4,242
4,085
----------------------------------------------
5,594
(551)
-
-
(41)
(70)
----------------------------------------------
(1,891)
(168)
----------------------------------------------
(2,059)
----------------------------------------------
2,183
==============================================
5,451
2,591
41
(5,900)
----------------------------------------------
2,183
==============================================
(662)
-
----------------------------------------------
(662)
----------------------------------------------
4,932
==============================================
5,451
2,591
41
(3,151)
----------------------------------------------
4,932
==============================================
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006. The loss
after tax for the year of the Parent Company was £2,749,000 (2019: £1,416,000).
These financial statements were approved by the Board of Directors and authorised for issue on 19 October 2020 and
were signed on its behalf by:
N F Rogers
Chairman
M Segal
Chief Financial Officer
Notes to the financial statements are from pages 33 to 57.
30
Statement of Changes in Equity
Group
Balance at 1 July 2018
Comprehensive income for the year:
Loss for the year
Other comprehensive income for the year:
Currency movement on subsidiary reserves
Total comprehensive income for the year
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Share
capital
£'000
5,025
Share
premium
£'000
Translation
reserve
£'000
Share based
payments
£'000
Cumulative
losses
£'000
682
21
41
(1,893)
Total
equity
£'000
3,876
-
-
-
-
-
-
-
2
2
-
-
-
-
-
(1,465)
(1,465)
-
(1,465)
-
2
(1,463)
2,335
Shares issued and share premium
426
1,909
Balance at 30 June 2019
5,451
2,591
23
41
(3,358)
4,748
------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
Comprehensive income for the year:
Loss for the year
Other comprehensive income for the year:
Currency movement on subsidiary reserves
Total comprehensive income for the year
Translation reserve recycled on disposal
-
-
-
-
-
-
-
-
-
-
-
(23)
-
-
-
-
(2,542)
(2,542)
-
-
(2,542)
(2,542)
-
(23)
Balance at 30 June 2020
5,451
2,591
-
41
(5,900)
2,183
------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
=========================================
==============================================
==============================================
==============================================
==============================================
==============================================
Company
Balance at 1 July 2018
Comprehensive income for the year:
Loss for the year
Total comprehensive income for the year
Share
capital
£'000
5,025
-
-
Share
premium
Share based
payments
Cumulative
losses
£'000
682
-
-
£'000
41
-
-
-
£'000
(1,735)
(1,416)
(1,416)
-
Total
equity
£'000
4,013
(1,416)
(1,416)
2,335
Shares issued and share premium
426
1,909
Balance at 30 June 2019
5,451
2,591
41
(3,151)
4,932
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
Comprehensive income for the year:
Loss for the year
Total comprehensive income for the year
-
-
-
-
-
-
(2,749)
(2,749)
(2,749)
(2,749)
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
Balance at 30 June 2020
5,451
2,591
41
(5,900)
2,183
==============================================
==============================================
==============================================
==============================================
==============================================
Notes to the financial statements are from pages 33 to 57.
31
Consolidated and Company Cash Flow Statement
For the year ended 30 June 2020
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Loss from operations
Adjustments for:
Taxation
Loss on disposal of trade and assets
Net financial expense/(income)
Depreciation
Loss on disposal of fixed assets
Impairment of investments
Amortisation and impairment of intangible assets
Operating cash flows before movements in
working capital
(Increase)/decrease in receivables
Increase in payables
(Increase)/decrease in inventories
Cash used in operations
Taxation (paid)/received
Net cash (used in)/generated from operations
Investing activities
Interest received
Acquisitions of property, plant and equipment
Acquisitions of intangible assets
Investment in subsidiary
Proceeds from disposal of trade and assets (net of
cash disposed of)
Net cash used in investing activities
Financing activities
Note
10
7
11,12
13
17
19
16
7
11,12
13
14
15
Group
Company
Year ended
30 June
2020
Year ended
30 June
2019
Year ended
30 June
2020
Year ended
30 June
2019
£'000
(2,542)
£'000
(1,465)
£'000
(2,749)
£'000
(1,416)
(171)
72
9
538
18
-
504
(266)
-
(2)
369
-
-
396
(175)
54
12
530
17
3
504
(283)
-
(2)
362
-
-
396
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
(1,572)
(968)
(1,804)
(943)
(177)
477
(582)
(91)
247
119
13
225
(586)
(114)
284
97
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
(1,854)
(4)
(693)
266
(2,152)
-
(676)
283
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
(1,858)
(427)
(2,152)
(393)
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
8
(764)
(513)
-
772
2
(424)
(433)
-
-
5
(760)
(513)
(5)
1,132
2
(420)
(433)
-
-
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
(497)
(855)
(141)
(851)
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
Proceeds from issue of equity share capital
24
-
2,335
-
2,335
Loans advanced
Loans repaid
Interest paid
Payment of lease liabilities
Net cash from financing activities
Net (decrease) / increase in cash and cash
equivalents
Unrealised currency translation gain
Cash and equivalents at the beginning of year
1,585
(609)
(17)
(58)
-
-
-
-
1,585
(609)
(17)
(58)
-
-
-
-
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
901
2,335
901
2,335
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
(1,454)
-
2,647
1,053
2
1,592
(1,392)
-
2,585
1,091
-
1,494
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
Cash and equivalents at the end of year
18
1,193
2,647
1,193
2,585
==============================================
==============================================
==============================================
==============================================
Notes to the financial statements are from pages 33 to 57.
32
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
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 3. The consolidated financial
statements of the Company as at and for the year ended 30 June 2020 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 20.
These financial statements are presented in pounds sterling, in round thousands, 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”) and those parts of the Companies Act 2006 that are relevant to companies preparing accounts
under IFRS. 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.
3
Going Concern
At 30 June 2020 the Group had net cash balances of £1.19m (2019: £2.65m). Whilst it is anticipated that the
Company will continue to consume cash to finance on-going activities in the short term, the Directors have
prepared cash flow forecasts to June 2023, including plausible downside sensitivities that might arise in respect of
the impact of Covid-19 and the current economic conditions, and consider that there are sufficient cash resources
available in this period in which reaching a break-even level of revenues is expected to occur, and accordingly are
satisfied that the Group can continue trading as a going concern for the foreseeable future.
4
Accounting policies
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods
presented in these consolidated financial statements.
International Financial Reporting Standards (IFRS) adopted for the first time in 2019
IFRS 16 was adopted for the first time this year and the impact is set out in note 25. The prior year comparatives
have not been restated for any changes in accounting policies that were required due to the adoption of new
standards this year.
There are no new standards, interpretations and amendments that are in issue but not yet effective which are
expected to have a material effect on the Company’s or Group’s future Financial Statements.
33
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Notes to the financial statements (continued)
4
Accounting policies (continued)
Significant accounting judgements and sources of estimation uncertainty
Certain estimates and judgements need to be made by the Directors which affect the results and position of the
Group as reported in the financial statements. Estimates and judgements are required if, for example, there are
intangible assets which are required to be amortised over their useful lives. The following judgements and
estimates have been identified by the Group:
• 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 also requires significant judgement as there are limited historical cash flows on which to base
the future cash flows. Discussions are held within the Group between the relevant technical, commercial and
finance employees on the expected future cash flows of patents in individual territories.
• Judgement is also applied when patent costs are reviewed in particular when considering patents in products
and territories that are not integral to the future business plans.
• Distinguishing the research and development phases of new products and determining whether the recognition
requirements for the capitalisation of development costs are met and their subsequent amortisation period
requires judgement. After capitalisation management monitors whether the recognition requirements continue
to be met and whether there are any indicators that capitalised costs may be impaired. iTrack II has required a
substantial amount of developments costs as the new iTrack is a significant improvement on the original iTrack
model. Following the licence granted to ATMS Technologies Limited in June 2020 it is unlikely that there will
be any further development costs incurred by Transense as the iTrack product has reached a level of maturity.
It was concluded last year that the ongoing development cost of the iTrack II system will remain focused on the
current version and not the next iteration and that iTrack II continues to have a useful life. Management
therefore concluded that the cost should be amortised over 3 years, from the date the cost has been incurred.
This policy will be amended in the next set of accounts following the 10 year licence granted to ATMS in June
2020.
•
• As the deferred shares have limited distribution and capital rights, it is management’s judgement that they are
to be considered equity rather than debt.
Measurement convention
The financial statements are prepared on the historical cost basis.
Basis of consolidation
Subsidiaries
The Group financial statements consolidate those of the Parent Company and all of its subsidiaries as of 30 June
2020. Following the disposal of the trading subsidiaries in June 2020, there is no difference between the
Company’s and Group balance sheets.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised
gains and losses on transactions between Group companies. Amounts reported in the financial statements of
subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by
the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are
recognised from the effective date of acquisition, or up to the effective date of disposal.
Discontinued operations
In the event of a sale of a material element of the Group’s operations in the year or where it is held for sale with a
committed disposal plan at the year end, in the Statement of Comprehensive Income revenue, costs of sales,
expenses and tax represent only continued operations and discloses the net trading result from discontinued
operations and the gain or loss on disposal in one line of the statement. The comparative results for the prior period
are also restated on this basis with the summarised revenue statement and gain or loss on disposal disclosed in
the notes together with an analysis of the disposal assets and liabilities and consideration received.
34
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Notes to the financial statements (continued)
4
Accounting policies (continued)
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, based on usage;
• 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 as work is completed;
• Product sales to customers are recognised on customer acceptance of the goods;
• Subscription contracts revenue is recognised on a monthly basis when the service is provided to the customer
in accordance with IFRS 15;
• License revenue is recognised in accordance with the contractual agreement for each deal; and
• The Bridgestone support fee income Is recognised at the point the cash is received as at that point it is deemed
there are no future obligations to be settled.
Contracts are entered into with customers to provide one of the above goods or services on a standalone basis.
The standalone selling price of the related performance obligation is therefore clearly determined from the contract.
The total transaction price is estimated as the amount of consideration to which the Group expects to be entitled
in exchange for the transferring the promised goods or services. Payment terms are generally between 30 and 90
days for all types of sale and therefore the impact of the time value of money is minimal.
Revenue represents sales to external customers at invoiced amounts net of VAT and other sales related taxes.
Grant income
Grant monies received, classified as other income in the Statement of Comprehensive Income, has been
recognised as an appropriate percentage of the deliverables that have been carried out as per the terms of the
Grant.
Segment reporting
The Group had two reportable segments being the unique trading divisions, SAW and Translogik, which make use
of technology developed by the Group to measure and record temperature, pressure and torque. In prior year
financial statement disclosures, the Translogik segment included the material iTrack results. A decision was made
to sell the iTrack trade to Bridgestone and enter into a licence agreement to receive future royalties. As a
consequence of the focus on the impact of this, Translogik now includes only continuing activity and the
discontinued iTrack activity has been shown as a separate segment.
The revenues include royalties, engineering support and sale of product in relation to this technology.
Information regarding the Group’s segments is included in the 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 is stated at cost less accumulated depreciation and any provision for impairment.
Until the end of the June 2019 financial year, leases of property, plant and equipment were classified as either
finance leases or operating leases. From 1 July 2019, under IFRS 16, leases are recognised as right-of-use assets,
presented as a separate category within tangible fixed assets, and a corresponding lease liability from the date at
which the leased asset is available for use by the company.
35
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Notes to the financial statements (continued)
4
Accounting policies (continued)
Assets and liabilities arising from a lease are initially measured at the present value of the lease payments and
payments to be made under reasonably certain extension options are also included in the measurement of the
liability. The lease payments are discounted using the interest rate implicit in the lease or the incremental borrowing
rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value
to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
Lease payments are allocated between principal, presented as a separate category within liabilities, and finance
cost. The finance cost is charged to the statement of comprehensive income over the lease period so as to produce
a constant periodic rate of interest on the remaining balance of the liability for each period. Right-of-use assets are
measured at cost comprising the amount of the initial measurement of lease liability, any lease payments made at
or before the commencement date less any lease incentives received and any initial direct costs.
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
Fixtures and Fitting 3 – 10 years; and
Motor Vehicles 4 years; and
iTrack Equipment 1 – 3 years
The assets’ estimated residual values and useful lives are reviewed, and adjusted if appropriate, at each balance
sheet date.
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a
straight-line basis.
Research and development
Expenditure on research (or the research phase of an internal project) is recognised as an expense in the period
in which it is incurred. Development costs incurred on specific projects are capitalised when all the following
conditions are satisfied:
• Completion of the intangible asset is technically feasible so that it will be available for use or sale;
• The Group intends to complete the intangible asset and use or sell it;
• The Group has the ability to use or sell the intangible asset;
• The intangible asset will generate probable future economic benefits. Among other things, this requires that
there is a market for the output form the intangible asset or for the intangible asset itself, or, if it is to be used
internally, the asset will be used in generating such benefits;
• There are adequate technical, financial and other resources to complete the development and to use or sell
the intangible asset, and
• The expenditure attributable to the intangible asset during its development can be measure reliably.
All new expenditure on research and development activities in relation to iTrack in the year has been capitalised.
The amortisation of this expenditure was previously amortised over a fixed 3 year period to August 2019 however
as the development of iTrack II is ongoing the policy was changed to write off all expenditure over 3 years from
the date of the expenditure. Following the 10 year IP licence granted to the Bridgestone Corporation subsidiary
ATMS Limited in June 2020, the amortisation policy with effect from 1 July 2020 will be to amortise the remaining
net book value over the life of the licence.
Historical expenditure on development activities has been capitalised and is being amortised over 10 years on a
straight line basis.
36
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Notes to the financial statements (continued)
4
Accounting policies (continued)
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.
Where patents have been enhanced, and this improvement results in an increase in the life of the patent, the
amortisation period for that patent is updated accordingly to reflect the increased lifespan of the patent. 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.
Patents are reviewed annually, reviewing their strategic and commercial value on a territory by territory basis.
Any impairment that is identified is recognised immediately in the statement of comprehensive income.
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.
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
From 1 July 2019 IFRS 16 was applied with additional right-of-use-assets and related liabilities recognised as set
out in the property, plant and equipment policy note for the property lease. Payments associated with short-term
leases of equipment and vehicles and all leases of low-value assets continue to be recognised on a straight-line
basis as an expense in the statement of comprehensive income. Short-term leases are leases with a lease term
of 12 months or less. Until 30 June 2019 all operating lease payments were subject to this policy, subject to
spreading the benefit of lease incentives straight line over the life 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.
37
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Notes to the financial statements (continued)
4
Accounting policies (continued)
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 and laws 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 of Sterling at foreign exchange rates ruling at
the balance sheet date.
The revenues and expenses of foreign operations are translated into Sterling upon consolidation. Where significant
exchange differences arise from this translation of foreign operations these are reported as an item of other
comprehensive income and accumulated in the translation reserve.
Foreign currency transactions are translated into the functional currency of the respective group entity, using the
exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and
losses resulting from the settlement of such transactions and from the remeasurement of monetary items
denominated in foreign currency at year-end exchange rates are recognised in the Statement of Comprehensive
Income.
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
recognised 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 considers 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.
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.
Warranty provisions are made for specific product issues based on an estimate of the likely cost arising. It has
been deemed prudent to provide for an amount based on historical information.
38
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Notes to the financial statements (continued)
4
Accounting policies (continued)
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.
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.
Finance leases
IAS17 was applied until 1 July 2019 when IFRS 16 was adopted. Leases were classified as finance leases
whenever the terms of the contract transferred substantially all the risk and rewards of ownership to the lessee. All
other contracts were classified as operating leases.
Equity and reserves
Share capital represents the nominal value of shares that have been issued. Share premium represents the excess
consideration received over the nominal value of share capital upon the issue of shares, less any costs of issue.
The accumulated loss includes all current and prior period retained net losses.
The share based payment reserve represents the accumulated amount arising from crediting equity share based
payment charges included in the statement of comprehensive income.
5
Revenue and segmental reporting
The tables below set out the Group’s revenue split and operating segments. These disclose information for
continuing operations and in view of their relative size, information for discontinued operations. The disposal of
iTrack operations will result in future royalty income replacing direct sales income and costs.
Revenue
North America
South America
Australia
UK and Europe
Rest of the World
Year ended
30 June 2020
Year ended
30 June 2020
Continuing Discontinued
£'000
235
793
479
-
201
----------------------------------------------
1,708
=============================================
£'000
282
83
5
148
85
----------------------------------------------
603
=============================================
Year ended
30 June 2019
Year ended
30 June 2019
Continuing Discontinued
£'000
469
616
397
-
148
----------------------------------------------
1,630
=============================================
£'000
274
54
1
192
75
----------------------------------------------
596
=============================================
39
Notes to the financial statements (continued)
5
Revenue and segmental reporting (continued)
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Segments
Year ended 30 June 2020
Sales
Gross profit
Other income
Overheads
Operating profit/(loss)
Net financial expense
Loss on disposal
Taxation
Profit/(loss) for the year
EBITDA reconciliation
Operating loss
Depreciation, amortisation and
impairment
EBITDA
Year ended 30 June 2019
Sales
Gross profit
Other income
Overheads
Operating profit/(loss)
Net financial income
Taxation
Profit/(loss) for the year
EBITDA reconciliation
Operating loss
Depreciation, amortisation and
impairment
EBITDA
Translogik
£'000
SAW
£'000
Discontinued
£'000
Unallocated
£'000
Total
£'000
93
510
1,708
2,311
===================== ===================== ===================== ===================== ====================
1,712
118
(4,462)
-----------------------------
83
118
(783)
------------------------------
1,380
-
(2,759)
------------------------------
-
-
(799)
------------------------------
249
-
(121)
-----------------------------
-
128
-
-
-
(582)
-
-
-
(1,379)
3
(72)
(4)
(799)
(12)
-
175
(2,632)
(9)
(72)
171
------------------------------- ------------------------------- ------------------------------- ------------------------------- -------------------------------
128
(2,542)
====================== ====================== ====================== ====================== ======================
Discontinued
(1,452)
(636)
(582)
£'000
(1,379)
470
Continuing
£'000
(1,253)
Total
£'000
(2,632)
572
1,042
------------------------------- ------------------------------- -------------------------------
(909)
(1,590)
====================== ====================== ======================
(681)
Translogik
£'000
SAW
£'000
Discontinued
£'000
Unallocated
£'000
Total
£'000
476
=====================
263
-
(72)
-----------------------------
-
120
1,630
2,226
===================== ===================== ===================== ====================
1,791
79
(3,603)
-----------------------------
113
79
(472)
------------------------------
1,415
-
(2,022)
------------------------------
-
-
(1,037)
------------------------------
191
-
-
(280)
-
-
(607)
-
(17)
(1,037)
2
283
(1,733)
2
266
------------------------------- ------------------------------- ------------------------------- ------------------------------- -------------------------------
191
(280)
(1,465)
====================== ====================== ====================== ====================== ======================
Discontinued
£'000
(607)
Continuing
£'000
(1,126)
Total
£'000
(1,733)
(752)
(624)
339
426
765
------------------------------- ------------------------------- -------------------------------
(268)
(968)
====================== ====================== ======================
(700)
40
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Notes to the financial statements (continued)
5
Revenue and segmental reporting (continued)
During the year ended 30 June 2020 there were 2 (2019: 1) customers whose turnover accounted for more than
10% of the Group’s total continuing revenue as follows:
Year ended 30 June 2020
Customer A
Customer B
Year ended 30 June 2019
Customer A
Customer B
Revenue
£'000
Percentage
of total
93
66
15
11
Revenue
£000
Percentage
of total
169
35
28%
6%
Discontinued revenue includes Bridgestone as a customer, who have now acquired the iTrack business and which
is expected through royalties to contribute in excess of 10% of future revenues.
All non-current assets are held in the UK (2019: all UK with the exception of some property, plant and equipment
of £0.04m which was held in China and Chile).
6
Expenses and auditor’s remuneration
Included in the loss are the following:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Impairment of intangible assets
Loss on disposal of tangible fixed assets
Operating lease rentals payable – land and buildings
Loss/(gain) on foreign exchange transactions
Auditors’ remuneration for the Group and Company:
Audit of these financial statements
Fees payable for tax compliance services
Fees for payable for tax advisory services
Fees payable for tax research and development services
7
Finance income and expense
Recognised in statement of comprehensive income
Finance income
Finance expense
Year ended
30 June 2020
£'000
Year ended
30 June 2019
£'000
538
366
138
18
-
30
=============================================
369
396
-
-
66
(12)
=============================================
Year ended
30 June 2020
£'000
Year ended
30 June 2019
£'000
39
4
-
5
=============================================
36
4
8
4
=============================================
Year ended
30 June 2020
Year ended
30 June 2019
£'000
£'000
5
=============================================
(17)
=============================================
2
=============================================
-
=============================================
41
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Notes to the financial statements (continued)
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:
Number of employees
Management and technical
Administration
Non-Executive Directors
Group
Company
Year ended
30 June 2020
Year ended
30 June 2019
Year ended
30 June 2020
Year ended
30 June 2019
24
9
2
----------------------------------------------
35
=============================================
17
9
2
----------------------------------------------
28
=============================================
21
2
2
----------------------------------------------
25
=============================================
14
2
2
----------------------------------------------
18
=============================================
The aggregate payroll costs including Directors of these persons were as follows:
Wages and salaries
Share based payments (note 23)
Social security costs
Contributions to defined contribution pension
plan
Group
Company
Year ended
30 June 2020
£'000
Year ended
30 June 2019
£'000
Year ended
30 June 2020
£'000
Year ended
30 June 2019
£'000
1,532
-
199
41
1,599
-
174
31
1,453
-
182
41
1,290
-
156
31
----------------------------------------------
1,772
=============================================
----------------------------------------------
1,804
=============================================
----------------------------------------------
1,676
=============================================
----------------------------------------------
1,477
=============================================
The potential share based payment charge in respect of share options in the year was £2,000 (2019: £4,000)
however due to the small size of the charge no expense was included in these accounts.
9
Directors’ remuneration
Directors’ emoluments
Directors’ bonuses
Directors’ benefits
Employers national insurance
Share based payments (note 23)
Year ended
30 June 2020
£'000
Year ended
30 June 2019
£'000
501
90
21
----------------------------------------------
612
394
105
17
----------------------------------------------
516
73
-
=============================================
64
-
=============================================
The aggregate of emoluments and amounts receivable under long term incentive schemes of the highest paid
director was £180,410 (2019: £200,643). No company pension contributions were made to a money purchase
scheme on his behalf (2019: 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 (2019: nil).
The number of Directors accruing retirement benefits under money purchase schemes in the year was nil (2019:
nil).
The number of Directors who exercised share options in the year was nil (2019: nil).
42
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Notes to the financial statements (continued)
9
Directors’ remuneration (continued)
The number of Directors in respect of whose services were received or receivable under long term incentive
schemes was nil (2019: nil).
The potential share based payment charge in respect of Directors share options in the year was £nil (2019:
£3,000) however due to the small size of the charge no expense was included in these accounts.
10
Taxation
Recognised in the statement of comprehensive income in respect of continuing operations
Current tax expense
Current year
Adjustment for previous year
Tax credit in statement of comprehensive income
Reconciliation of effective tax rate
Loss before tax from continuing operations
Tax calculated at the average standard UK corporation tax rate of 19.00% (2019:
19:00%)
Expenses not deductible for tax purposes
Additional deduction for R&D expenditure
Current year losses for which no deferred tax asset was recognised
Adjustment to deferred tax average rate of 19%
Prior year adjustment
Total tax credit
A deferred tax asset has not been recognised in respect of the following item:
Tax losses and other timing differences
Year ended
30 June 2020
£'000
Year ended
30 June 2019
restated
£'000
-
(175)
----------------------------------------------
(175)
=============================================
-
(283)
----------------------------------------------
(283)
=============================================
Year ended
30 June 2020
Year ended
30 June 2019
restated
£'000
(1,265)
=============================================
£'000
(1,124)
=============================================
(240)
2
(145)
383
-
(214)
12
(120)
288
34
(175)
----------------------------------------------
(175)
=============================================
(283)
----------------------------------------------
(283)
=============================================
4,416
3,760
=============================================
=============================================
The applicable UK corporation tax rate is 19% throughout the reporting period.
The Group has tax losses, subject to agreement by HM Revenue and Customs, in the sum of £23.2m (2019:
£20.7m), 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 Finance Act 2020 maintained the rate of UK Corporation Tax at 19%.
The effective tax rate used to calculate the current tax for the year ended 30 June 2020 was 19.00% (2019:
19.00%). Unrecognised deferred tax balances at 30 June 2020 have been calculated using a rate of 19% (2019:
17%) as this is now the enacted rate for future periods.
43
Notes to the financial statements (continued)
11
Property, plant and equipment – Group
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Cost
Balance at 1 July 2018
Additions
Balance at 30 June 2019
Balance at 1 July 2019
On transition to IFRS 16 (note 25)
Reclassification
Additions
Disposals
Balance at 30 June 2020
Depreciation and impairment
Balance at 1 July 2018
Depreciation charge for the year
Balance at 30 June 2019
Balance at 1 July 2019
Reclassification
Depreciation charge for the year
Disposals
Balance at 30 June 2020
Net book value
At 1 July 2018
At 1 July 2019
At 30 June 2020
Right-of-
use-
property
assets
£’000
iTrack
Equipment
£’000
Plant and
Equipment
£'000
Fixtures
and
Fittings
£'000
Motor
Vehicles
£'000
-
-
492
376
510
44
107
4
26
-
Total
£'000
1,135
424
----------------------------------------------
-
----------------------------------------------
868
=============================================
-
272
-
-
-
=============================================
868
-
-
641
(1,509)
----------------------------------------------
272
----------------------------------------------
-
=============================================
=============================================
-
-
183
307
----------------------------------------------
-
----------------------------------------------
490
=============================================
-
-
57
-
=============================================
490
-
411
(901)
----------------------------------------------
57
----------------------------------------------
-
=============================================
=============================================
----------------------------------------------
554
----------------------------------------------
111
============================================= =============================================
111
-
72
68
(77)
----------------------------------------------
174
============================================= =============================================
554
-
(72)
50
(128)
----------------------------------------------
404
----------------------------------------------
26
----------------------------------------------
1,559
============================================= =============================================
1,559
272
-
764
(1,735)
----------------------------------------------
860
============================================= =============================================
26
-
-
5
(21)
----------------------------------------------
10
444
41
----------------------------------------------
485
20
18
----------------------------------------------
38
============================================= =============================================
38
71
26
(17)
----------------------------------------------
118
============================================= =============================================
485
(71)
40
(69)
----------------------------------------------
385
14
3
----------------------------------------------
17
661
369
----------------------------------------------
1,030
============================================= =============================================
1,030
-
538
(998)
----------------------------------------------
570
============================================= =============================================
17
-
4
(11)
----------------------------------------------
10
-
309
66
87
12
474
=============================================
-
=============================================
378
=============================================
215
=============================================
-
69
============================================= =============================================
73
============================================= =============================================
56
19
9
============================================= =============================================
529
============================================= =============================================
290
-
=============================================
=============================================
============================================= =============================================
============================================= =============================================
The depreciation charge is recognised in the following line items in the Statement of Comprehensive Income:
Administrative expenses – continuing operations
Loss on discontinued operations
2020
£'000
90
448
----------------------------------------------
538
=============================================
2019
£'000
41
328
----------------------------------------------
369
=============================================
44
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Notes to the financial statements (continued)
12
Property, plant and equipment – Company
Right-of-
use-
property
assets
£’000
iTrack
Equipment
£’000
Plant and
equipment
£'000
Fixtures
and
fittings
£'000
Motor
vehicles
£'000
Total
£'000
Cost
Balance at 1 July 2018
Additions
Balance at 30 June 2019
Balance at 1 July 2019
On transition to IFRS 16 (note 25)
Reclassification
Additions
Disposals
Balance at 30 June 2020
Depreciation and impairment
Balance at 1 July 2018
Depreciation charge for the year
Balance at 30 June 2019
Balance at 1 July 2019
Reclassification
Depreciation charge for the year
Disposals
Balance at 30 June 2020
Net book value
At 1 July 2018
At 1 July 2019
At 30 June 2020
-
-
----------------------------------------------
-
=============================================
492
376
----------------------------------------------
868
=============================================
-
272
-
-
-
----------------------------------------------
272
868
-
-
641
(1,509)
----------------------------------------------
-
=============================================
=============================================
-
-
----------------------------------------------
-
=============================================
-
-
57
-
----------------------------------------------
57
=============================================
183
307
----------------------------------------------
490
=============================================
490
-
411
(901)
----------------------------------------------
-
=============================================
-
309
=============================================
-
=============================================
215
=============================================
=============================================
378
=============================================
-
=============================================
493
41
102
3
---------------------------------------------- ----------------------------------------
105
1,097
420
----------------------------------------------
1,517
============================================= ======================================= ============================================= =============================================
10
-
----------------------------------------------
10
534
534
-
(72)
46
(104)
105
-
72
68
(71)
---------------------------------------------- ---------------------------------------
174
1,517
272
-
760
(1,689)
----------------------------------------------
860
============================================= ======================================= ============================================= =============================================
10
-
-
5
(5)
----------------------------------------------
10
404
480
441
39
10
-
----------------------------------------------
10
19
16
---------------------------------------------- ---------------------------------------
35
653
362
----------------------------------------------
1,015
============================================= ======================================= ============================================= =============================================
1,015
-
530
(975)
----------------------------------------------
570
============================================= ====================================== ============================================= =============================================
35
71
25
(13)
---------------------------------------------- ----------------------------------------
118
10
-
1
(1)
----------------------------------------------
10
480
(71)
36
(60)
385
-
52
83
444
============================================= ====================================== ============================================= =============================================
502
============================================= ====================================== ============================================= =============================================
290
============================================= ======================================= ============================================= =============================================
56
70
54
19
-
-
45
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Notes to the financial statements (continued)
13
Intangible assets
Group and Company intangible assets
Cost
Balance at 1 July 2018
Additions
Balance at 30 June 2019
Balance at 1 July 2019
Additions
Disposals
Balance at 30 June 2020
Amortisation and impairment
Balance at 1 July 2018
Amortisation for the year
Balance at 30 June 2019
Balance at 1 July 2019
Reclassification
Amortisation for the year
Impairment in the year
Disposals
Balance at 30 June 2020
Net book value
At 1 July 2018
At 1 July 2019
At 30 June 2020
Goodwill
£'000
50
-
----------------------------------------------
50
=============================================
50
-
-
----------------------------------------------
50
=============================================
-
-
----------------------------------------------
-
=============================================
-
-
-
-
----------------------------------------------
-
=============================================
50
=============================================
50
=============================================
50
=============================================
Patents
rights and
trademarks
£'000
Development
costs
£'000
1,755
92
----------------------------------------------
1,847
=============================================
1,847
79
(957)
----------------------------------------------
969
=============================================
1,205
100
----------------------------------------------
1,305
=============================================
1,305
-
154
120
(957)
----------------------------------------------
622
=============================================
550
=============================================
542
=============================================
347
=============================================
1,662
254
----------------------------------------------
1,916
=============================================
1,916
381
-
----------------------------------------------
2,297
=============================================
1,353
284
----------------------------------------------
1,637
=============================================
1,637
4
209
-
-
----------------------------------------------
1,850
=============================================
309
=============================================
279
=============================================
447
=============================================
Licences
-
87
----------------------------------------------
87
=============================================
87
53
(140)
----------------------------------------------
-
=============================================
-
12
----------------------------------------------
12
=============================================
12
(4)
3
18
(29)
----------------------------------------------
-
=============================================
-
=============================================
75
=============================================
-
=============================================
Total
£'000
3,467
433
----------------------------------------------
3,900
=============================================
3,900
513
(1,097)
----------------------------------------------
3,316
=============================================
2,558
396
----------------------------------------------
2,954
=============================================
2,954
-
366
138
(986)
----------------------------------------------
2,472
=============================================
909
=============================================
946
=============================================
844
=============================================
Amortisation and impairment charge
The amortisation and impairment is recognised in the following line items in the statement of comprehensive
income:
Administrative expenses – continuing operations
Loss on discontinued operations
2020
£'000
482
22
----------------------------------------------
504
=============================================
2019
£'000
384
12
----------------------------------------------
396
=============================================
All new expenditure on research and development activities in relation to iTrack is capitalised. The amortisation of
this expenditure has previously been amortised over a fixed 3 year period to August 2019, however, as the
development of iTrack is ongoing the policy was changed to write off all expenditure over 3 years from the date of
that expenditure.
46
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Notes to the financial statements (continued)
13
Intangible assets (continued)
Development Costs
Development expenditure of the new iTrack II was capitalised in the year amounting to £0.38m (2019: £0.25m).
These development costs have been deemed to have a useful economic life of 3 years. There were Research and
Development costs expensed to the Statement of Comprehensive Income in the year of £0.06m (2019: £0.05m).
Impairment testing
Impairment testing has been performed in accordance with the provisions of IAS 36, and in such circumstances
the aggregate carrying value of the intangible asset is compared against the expected recoverable amount. The
recoverable amount of goodwill is determined from operating cashflow projections for the period to June 2023
based on currently contracted income levels and which support the carrying value of goodwill.
14
Investments in subsidiaries
The Group and Company have the following investments in subsidiaries:
Country of
Incorporation
Class of
shares held
Status
Ownership
2019
2018
Translogik RFID Limited
Dormant
Lanesra Inc (Formerly IntelliSAW Inc.)
Dormant
Translogik Ltd (Formerly Cranwick Ltd)
Dormant
UK
USA
UK
Transense K.K.
Dormant
Japan
Ordinary
Shares
Ordinary
Shares
Ordinary
Shares
Ordinary
Shares
100%
100%
100%
100%
100%
100%
100%
100%
Company
Cost
At 1 July 2018 and 2019
Additions
Disposals in year ended 30 June 2020
Impairment
Impairment in the year and at 30 June 2020
Net book value
At 30 June 2018 and 2019
At 30 June 2020
£'000
61
5
(63)
----------------------------------------
3
----------------------------------------
3
----------------------------------------
61
=============================================
-
=============================================
The following investments were included in the Company balance sheet at 30 June 2019. They were disposed
of during 2020 and the net asset value was realised from the disposals on 24 June 2020.
Transense K.K.
Transense Technologies Chile SPA
Translogik South Africa Pty Ltd
Company
Year ended
30 June 2020
£'000
-
-
-
----------------------------------------------
-
=============================================
Year ended
30 June 2019
£'000
3
53
5
----------------------------------------------
61
=============================================
47
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Notes to the financial statements (continued)
15
Disposal of subsidiaries, trade and assets of iTrack business
On 24 June 2020, the Company granted an exclusive worldwide licence (the "Licence") to ATMS Technology
Limited ("ATMS"), a newly-formed wholly owned subsidiary of Bridgestone, covering all current and future iTrack
technology for a period of ten years. In order to capitalise fully on the market potential of the use of the
technology, the operational business and trading assets relating to the iTrack system, including the shareholdings
in the Company’s subsidiaries in Chile and South Africa, have been transferred to ATMS at a fair value which
largely equated to the net asset value. Approximately 50 % of the consideration was received at completion by
the Company with the remaining £1.24m included in other receivables and all received in August and September
2020. The Company also repaid $0.75m of the loan previously advanced by Bridgestone in June 2020 with the
remaining $1.2m repaid post year end in August 2020.
The assets and liabilities disposed of were as follows:
Property plant and equipment
Intangible assets
Inventories
Trade and other receivables
Cash (held by subsidiaries)
Trade and other payables
Net assets
Consideration in cash at completion
Consideration on agreement of completion accounts
Foreign exchange reserve recycled through the Statement of Comprehensive
Income
Net assets disposed of
Legal and professional fees in respect of the sale
Loss on disposal of trade and assets
The cash flows from the discontinued operations were:
£'000
720
111
1,085
508
361
(320)
----------------------------------------------
2,465
=============================================
1,313
1,237
23
----------------------------------------------
2,573
(2,465)
(180)
----------------------------------------------
(72)
=============================================
Operating cash flows
Investing cash flows
Financing cash flows
Total net cash outflows
Group
Company
Year ended
30 June
2020
Year ended
30 June
2019
Year ended
30 June
2020
Year ended
30 June
2019
£’000
£’000
£’000
£’000
(1,333)
(560)
976
----------------------------------------------
(917)
=============================================
(332)
(401)
-
----------------------------------------------
(733)
=============================================
(1,672)
(560)
976
----------------------------------------------
(1,256)
=============================================
(152)
(401)
-
----------------------------------------------
(553)
=============================================
48
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Notes to the financial statements (continued)
16
Inventories
Raw materials
Finished goods
30 June 2020
£'000
Group
30 June 2019
£'000
30 June 2020
£'000
Company
30 June 2019
£'000
33
30
----------------------------------------------
63
=============================================
176
390
----------------------------------------------
566
=============================================
33
30
----------------------------------------------
63
=============================================
176
386
----------------------------------------------
562
=============================================
Raw materials, consumables and changes in finished goods and work in progress recognised as cost of sales in
the year ended 30 June 2020 amounted to £0.32m (2019: £0.43m). Inventories are stated net of impairment
provisions of £0.008m (2019: £0.058m).
17
Trade and other receivables
Amounts falling due within one year
Trade receivables
Expected credit losses
Other receivables
Amounts due from group undertakings
Accrued income
Prepayments
30 June 2020
£'000
Group
30 June 2019
£'000
30 June 2020
£'000
Company
30 June 2019
£'000
142
(1)
----------------------------------------------
141
1,437
-
-
99
----------------------------------------------
1,677
=============================================
511
(30)
----------------------------------------------
481
99
-
64
145
----------------------------------------------
789
=============================================
142
(1)
----------------------------------------------
141
1,437
-
-
99
----------------------------------------------
1,677
=============================================
397
(30)
----------------------------------------------
367
95
308
23
145
----------------------------------------------
938
=============================================
As at 30 June 2020 there were no past due but not impaired trade receivables (2019: no past due but not
impaired).
18
Cash and cash equivalents
30 June 2020
£'000
Group
30 June 2019
£'000
30 June 2020
£'000
Company
30 June 2019
£'000
Cash and cash equivalents per balance sheet
1,193
----------------------------------------------
2,647
----------------------------------------------
1,193
---------------------------------------------
2,585
----------------------------------------------
Cash and cash equivalents per cash flow
statements
1,193
=============================================
2,647
=============================================
1,193
=============================================
2,585
=============================================
49
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Notes to the financial statements (continued)
19
Trade and other payables
Current
Trade payables
Non-trade payables and accrued expenses
Deferred grant income
20 Borrowings
Current
Loans (see note 15)
21
Lease liabilities
Current
Amounts due in less than one year
Non-current
Amounts due in one to five years
22
Provisions
30 June 2020
£'000
Group
30 June 2019
£'000
30 June 2020
£'000
Company
30 June 2019
£'000
488
366
-
----------------------------------------------
854
=============================================
205
379
20
----------------------------------------------
604
=============================================
488
366
-
----------------------------------------------
854
=============================================
201
330
20
----------------------------------------------
551
=============================================
30 June 2020
£'000
Group
30 June 2019
£'000
30 June 2020
£'000
Company
30 June 2019
£'000
976
=============================================
-
=============================================
976
=============================================
-
=============================================
30 June 2020
£'000
Group
30 June 2019
£'000
30 June 2020
£'000
Company
30 June 2019
£'000
61
----------------------------------------------
-
----------------------------------------------
61
----------------------------------------------
-
----------------------------------------------
168
----------------------------------------------
229
=============================================
-
----------------------------------------------
-
=============================================
168
----------------------------------------------
229
=============================================
----------------------------------------------
=============================================
At 1 July 2019
Credited to statement of comprehensive income
At 30 June 2020
Group and Company
Provisions
Warranty
£'000
70
(70)
Total
£'000
70
(70)
----------------------------------------------
----------------------------------------------
-
-
=============================================
=============================================
The warranty provision represented management’s best estimate of the Group’s liabilities under warranties
granted on its iTrack products. This has been released following disposal of the trade and related obligations.
At 30 June 2019
At 30 June 2020
Group and Company
Provisions
Warranty
£'000
70
Total
£'000
70
----------------------------------------------
----------------------------------------------
-
-
=============================================
=============================================
50
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Notes to the financial statements (continued)
23
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 2020 was £0.04m (2019: £0.03m).
Share-based payments – Group and Company
The Group and Company has two share option plans, the Unapproved Discretionary Share Option Scheme and
Enterprise Management Incentives (EMI) 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
and with regards Executive Directors the remuneration committee) 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 considers the exercise price,
share price at grant date, expected term and expected share price volatility. The volatility level and risk-free
interest rate depends on the date of grant as shown in the tables below. There is an expected dividend yield of
nil pence. The key variable is share price volatility.
The potential share based payment charge in respect of share options in the year was £2,000 (2019: £4,000)
however due to the small size of the charge no expense was included in these accounts (2019: £nil included).
Unapproved Discretionary Share Option Scheme
At 30 June 2020 the following share options remained outstanding under the Company’s Unapproved Discretionary
Share Option Scheme.
.
Number of Options
Option
Price
Date of
Grant
Date of Exercise
Cancelled/
30 June
First
Last
Granted
Expired
Exercised
2020
1 July 2019
127,285
1,800
5,000
5,000
-
-
-
-
-
-
50,000
474,000
-
-
-
-
-
-
-
-
-
-
-
-
127,285
£3.75 15.08.13 15.08.13
1,800
£3.75 31.01.14 31.01.17
5,000
£3.75 27.10.14 31.01.17
5,000
£3.75 09.10.15 31.01.18
50,000
£0.75 13.08.19 12.08.21
474,000
£0.62 25.06.20 24.06.23
06.03.22
31.01.24
27.10.24
09.10.25
12.08.29
24.06.30
51
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Notes to the financial statements(continued)
23
Employee benefits (continued)
Unapproved Discretionary Share Option Scheme (continued)
The assumptions used in the valuation of the old 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
15.08.13
31.01.14
27.10.14
09.10.15
13.08.19
25.06.20
£0.5725
£0.5725
£0.5725
£0.5725
£0.1093
£0.1568
£3.75
£1.5850
£3.1250
£0.6125
£0.61
£0.62
£3.75
£3.75
£3.75
£3.75
£0.75
£0.62
Enterprise Management Incentive Option Scheme
%
72.26%
72.26%
72.26%
72.26%
52.40%
52.40%
1.50
1.50
1.50
1.50
3.00
3.00
%
0.65%
0.65%
0.65%
0.65%
1.50%
1.50%
%
Nil
Nil
Nil
Nil
Nil
Nil
At 30 June 2020, the following shares remained outstanding under an Enterprise Management Incentive Option
Scheme.
Number of Options
Option
Price
Date of
Grant
Date of Exercise
First
Last
30 June
Granted
Cancelled
Exercised
2020
1 July
2019
375,000
270,000
20,000
-
-
-
(266,000)
(220,000)
(15,000)
-
-
910,000
(732,000)
539,000
-
-
-
-
-
-
109,000
£0.75
26.06.17
30.06.18
30.06.21
50,000
5,000
178,000
539,000
£1.00
£0.75
26.06.17
30.06.20
30.06.27
26.06.17
30.06.20
30.06.27
£0.75
13.08.19
12.08.21
12.08.29
£0.62
25.06.20
24.06.23
24.06.30
The assumptions used in the valuation of the current 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
26.06.17
26.06.17
26.06.17
13.08.19
25.06.20
£0.0834
£0.0388
£0.0834
£0.1093
£0.1107
£0.715
£0.715
£0.715
£0.61
£0.62
£0.75
£1.00
£0.75
£0.75
£0.62
%
28.08%
28.08%
28.08%
52.40%
52.40%
%
1.00%
1.00%
1.00%
1.50%
1.50%
3
3
3
3
3
%
Nil
Nil
Nil
Nil
Nil
52
Notes to the financial statements (continued)
24
Share capital
Issued share capital
In issue at 1 July 2019
Issued for cash Ordinary Shares at £0.10 on 19 March 2019
Issued for cash Ordinary Shares at £0.10 on 2 April 2019
Issued for cash Ordinary Shares at £0.10 on 10 April 2019
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Ordinary shares of 10 pence
Deferred shares of 40 pence
each
each
30 June 2020
30 June 2019
30 June 2020
30 June 2019
16,307,282
12,048,948
9,548,948
9,548,948
-
-
-
2,384,953
1,606,715
266,666
-
-
-
-
-
-
-----------------------------
-----------------------------
-----------------------------
-----------------------------
In issue at 30 June 2020 – fully paid
16,307,282
16,307,282
9,548,948
9,548,948
=====================
=====================
=====================
=====================
Allotted, called up and fully paid
Ordinary shares of £0.10 each
Deferred shares of £0.40 each
Shares classified as equity
30 June
2020
£'000
1,631
3,820
30 June
2019
£'000
1,631
3,820
----------------------------------------------
5,451
----------------------------------------------
5,451
=============================================
=============================================
The deferred shares are non-voting, have no dividend rights and a right to capital only after each ordinary share
has received a return of £10m.
There are also 96,392 warrants in place exercisable at £0.50 per share expiring 22 December 2020 and 130,458
warrants exercisable at £0.60 per share expiring 13 September 2021.
25
Operating leases and transition to IFRS 16
Non-cancellable operating lease rentals are payable as follows:
Within less than one year
Group and Company
Land &
Buildings
30 June 2020
Other Lease
30 June 2020
Land &
Buildings
30 June 2019
Other Lease
30 June 2019
£'000
-
========================
£'000
-
========================
£'000
73
========================
£'000
-
========================
The operating lease relates to the lease of premises which is used by the Group and Company. Following the
adoption of IFRS 16 these commitments are now included in lease liabilities at 30 June 2020. During the period
£0.07m was recognised as an expense in the statement of comprehensive income in respect of operating leases
related to discontinued operations (2019: £0.07m for all operations).
On transition to IFRS 16 at 1 July 2019, the group has adopted the modified approach whereby the net present
value of the remaining property lease payments at this date of £287,000 are recognised as the opening liability
with an equal right-of-use asset of £272,000 as adjusted for prepaid rent and unamortised lease incentives
depreciated over the remaining lease period. This represents the remaining 54 months of the lease amounting to
£329,000 discounted by £42,000 at the assessed incremental borrowing rate of 6% (compared to the minimum
contractual commitment at 30 June 2019 of £73,000 with the benefit of a potential break option which was not
exercised). Depreciation of £57,000 has been charged in respect of the asset for the year and finance charges of
£16,000 compared with £67,000 of rent that would have been charged under the previous basis, an increase of
£6,000 in the total charges included in the Statement of Comprehensive Income. The comparatives for the year
ended 30 June 2019 have not been adjusted and are prepared in accordance with IAS17.
53
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Notes to the financial statements (continued)
26
Basic and fully diluted loss per share
Basic loss per share is calculated by dividing the loss by the weighted average number of ordinary shares in issue
during the year of 16,307,282 (2019: 13,184,581). Unexercised options over the ordinary shares are not included
in the calculation of diluted loss per share as they are anti-dilutive.
Weighted average number of shares – basic
Share option adjustment
Weighted average number of shares – diluted
Loss from continuing operations
Loss from discontinued operations
Basic loss per share from continuing operations
Basic loss per share from discontinued operations
Basic loss per share
Year ended
30 June 2020
Year ended
30 June 2019
Number
Number
16,307,282
13,184,581
-
------------------------------
-
------------------------------
16,307,282
======================
13,184,581
======================
Year ended
30 June 2020
Year ended
30 June 2019
£'000
£'000
(1,090)
(841)
(1,452)
------------------------------
(624)
------------------------------
(2,542)
------------------------------
(1,465)
------------------------------
(6.68)
(8.91)
------------------------------
(6.38)
(4.73)
------------------------------
(15.59)
(11.11)
====================== ======================
There are 1,544,085 share options and 226,850 warrants in place at 30 June 2020 (2019: 804,085 and 226,850
respectively) that are not included within diluted earnings per share because they are anti-dilutive.
27
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 credit. liquidity and market risks, the companies’
objectives, policies and processes for measuring and managing risk, and the companies’ management of capital.
54
Notes to the financial statements (continued)
27
Financial instruments (continued)
Liquidity risk
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
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 £1.19m
(2019: £2.65m). Note 3 states that the Directors consider there to be sufficient cash resources for the period to
June 2023 in which reaching a break even level is expected to occur and that the Group remains a going concern.
The Group has no external borrowing other than property lease liabilities arising under IFRS 16 and finances
investment in its operations by raising equity finance on the Alternative Investment Market (AIM).
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
A change of 100 basis points in interest rates at the reporting date would not have created any material change in
the Statement of Comprehensive Income for 2020 or 2019. Interest rates are currently low and markets are not
predicting any significant increases in the medium term.
The Directors consider that the Group’s exposure to interest rates is low (2019: 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.
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.
The table below shows the net un-hedged monetary assets/(liabilities) of the Group that are not denominated in
the functional currency of the operating unit and which therefore give rise to exchange gains and losses in the
Statement of Comprehensive Income.
Functional currency of Group operation
Sterling
Chilean Peso
South African Rand
At 30 June 2019
Sterling
At 30 June 2020
Euro
£'000
115
-
-
115
9
9
US Dollar
£'000
643
Australian
Dollar
£'000
(39)
49
-
692
87
87
-
-
(39)
-
-
British Pound
£’000
-
-
5
5
-
-
The Group has analysed the effects of both a 10% increase and decrease in each of the currencies the Group
uses in its operations and has determined there would be no material impact on the consolidated operating profit.
55
Notes to the financial statements (continued)
27
Financial instruments (continued)
At the reporting date the profile of the Group’s financial instruments was:
Financial assets held at amortised cost
Trade receivables
Other receivables
Accrued income
Cash and cash equivalents
Financial liabilities held at amortised cost
Trade payables
Borrowings
Lease liabilities
Accruals
Financial liabilities at amortised cost
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
30 June
2020
£000
141
1,273
-
1,193
30 June
2019
£000
481
-
64
2,647
----------------------------------------------
2,607
=============================================
----------------------------------------------
3,192
=============================================
488
976
229
315
205
-
-
319
----------------------------------------------
2,008
----------------------------------------------
524
=============================================
=============================================
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 Board
considers it important that the Company has the flexibility to pay dividends and make other returns of capital to
shareholders when appropriate and desirable to do so. This will, however, require certain actions relating to the
current capital structure of the Company. Accordingly, the Board will bring forward proposals at the forthcoming
Annual General Meeting to cancel all outstanding deferred shares, and the amount standing to the credit of the
share premium account. The Group is not subject to externally imposed capital requirements.
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, and trade and
other receivables. The maximum receivable credit exposure was £0.58m (2019: £0.48m) 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 2020 the Group’s cash was divided between current accounts £0.13m (2019: £0.47m) and £1.06m in
fixed rate monthly deposits (2019: £2.18m) with a weighted average interest rate for the year of 0.1% (2019:
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.
56
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2020
Notes to the financial statements (continued)
27
Financial Instruments (continued)
Maturity Analysis
The maturity of the lease liabilities including financing charges is as follows
In less than one year
In one to two years
In two to five years
30 June 2020
£'000
73
73
109
----------------------------------------------
255
=============================================
Group
30 June 2019
£'000
-
-
-
----------------------------------------------
-
=============================================
30 June 2020
£'000
73
73
109
----------------------------------------------
255
=============================================
Company
30 June 2019
£'000
-
-
-
----------------------------------------------
-
=============================================
Reconciliation of movements in total financing liabilities
At 1 July 2018 and 30 June 2019
Lease liabilities on transition to IFRS16
Interest accrued
Payments of lease liabilities in the year
Loans advanced
Loan repaid
Interest paid in the year
Total financing liabilities at 30 June 2020
Group
£’000
-
287
16
(58)
1,585
(609)
(16)
----------------------------------------------
1,205
=============================================
Company
£’000
-
287
16
(58)
1,585
(609)
(16)
----------------------------------------------
1,205
=============================================
28
Contingencies and commitments
Group
The Group had no capital commitments or contingent liabilities as at 30 June 2020 (2019: £nil).
Company
The Company has no capital commitments or contingent liabilities as at 30 June 2020 (2019: £nil).
29
Related parties
Group
The compensation of key management personnel (considered to be the Directors) is shown in note 9.
The Company leased a property owned by D Ford and G Storey-Macintosh's pension fund at a cost of £33,331
for the period from 1 September 2019 to 24 June 2020 (when they were Directors of the Company) and the lease
was then assigned to ATMS Limited.
In the opinion of the Directors, there is no one individual controlling party of the Company.
57