Registered number 01885075
Annual report and financial
statements
For the year ended 30 June 2021
1
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Contents
Directors and advisers
Financial Highlights
Chairman’s Statement for the year ended 30 June 2021
Strategic Report
Environmental, Social and Governance
Corporate Governance Statement
Remuneration report
Directors’ report
Statement of Directors’ responsibilities in respect of the Annual Report
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
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4
5
10
14
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18
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25
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34
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Directors and advisers
Directors
N F Rogers (Executive Chairman) (1)
M Segal (Chief Financial Officer)
R J Westhead (Non-Executive Director) (1, 2)
1 Member of the Audit and Risk Committee
2 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
Oxfordshire
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 2021
3
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Financial Highlights
• Revenues from continuing operations up threefold to £1.77m (2020: £0.60m)
•
iTrack Royalty Income annualised run rate up 97% in USD terms from initial annual rate
• Gross margin increased to 78.3% (2020: 55.1%)
• Loss before taxation from continuing operations of £0.16m (2020: £1.27m)
• Profit for the year of £0.16m (2020: loss of £2.54m)
• Earnings per share of 0.96 pence (2020: loss of 15.6 pence)
• Cash and cash equivalents at year end of £1.05m (2020: £1.19m)
• Distributable reserves at year end of £0.63m (2020: deficit of £5.90m)
• Corporation tax losses available for future offset of £23m (2020: £23m)
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Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Chairman’s statement for the year ended 30 June 2021
I am pleased to report on considerable progress made at Transense following the transformational
changes brought about by the licensing of our iTrack technology and the disposal of the iTrack operational
business to Bridgestone Corporation in June 2020. In many respects this represented a fresh start for the
Company, and has given us the opportunity to build firm foundations for future growth.
Financial overview
Revenue from continuing operations increased almost threefold over the prior year, which taken together
with a net performance just above breakeven resulted in Transense closing the year in line with the
upgraded expectations set at the time of our interim results release in February 2021. This favourable
outcome, coupled with improved prospects, has enabled the Company to begin to recognise deferred tax
assets in respect of prior years’ losses. In consequence, earnings per share and distributable reserves at
the end of the year each exceeded expectations.
Cash generation from operations was broadly in line with profits, and the closing net cash position provides
ample headroom to meet the future needs of the business.
Strategic overview
The overarching strategy of the Company is to develop innovative solutions for niche applications, using
our range of technologies. These are guided through early stage commercial startup, achieving realisation
by forging relationships with market leading partners as customers, licensees or acquirers.
This business model led to the successful exit from our iTrack business with an associated licence to
Bridgestone Corporation in June 2020. The growth in royalties achieved in the first year confirms our view
that this transaction structure optimises our return on the investment made in iTrack, whilst substantially
de-risking the continuing business model.
The commercialisation of our Translogik range of hand-held tyre measurement tools has been accelerated
by the launch of the modular TLGX range during the year, generating strong revenue growth and upgrades
in our expectations. This business segment delivers healthy gross margins and, with a lean overhead
structure, it is both profitable and cash generative. We are committed to continued development of this
business stream, working closely with a number of major customers to refine the product road map and
further increase market penetration through integration into their fleet tyre management systems.
Our patented Surface Acoustic Wave (SAW) technology is well proven in meeting the demanding
requirements of low volume high reliability applications. Renewed commercial focus has been aimed
towards new market sectors, where our technology satisfies unmet needs that provides customers with
technical superiority and in turn giving them a competitive advantage. In order to broaden our commercial
reach, the Company has sought input from a select group of experienced industrialists covering a broad
range of market sectors by forming a Commercial Advisory Panel (which we refer to as the “SAWCAP”).
This initiative has proved invaluable allowing us to gain insights into differentiation and the benefits of our
technology over alternative techniques, targeting our approach to sales and marketing, and enabling
access at a senior level to commercial networks through the SAWCAP’s relationships and knowledge.
The industrial landscape is entering a period of rapid technological change, driven by real-time
connectivity (Internet of things, 5G etc) and the recognition that climate change demands behavioural
changes now, rather than in future. Governments in developed economies are keen to invest in
infrastructure as they plan for the aftermath of the global pandemic and find sustainable solutions to the
challenges presented in energy, transport and food production. This opens up exciting opportunities for
companies with enabling technologies. The directors believe that our SAW technology can provide
meaningful data for enhanced control, efficiency, safety and maintenance routines which offer substantial
benefits to users in such fields.
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Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Chairman’s statement (continued)
Business Review
Royalty income from iTrack technology
This is the first full year of royalty income since the inception of the ten year licence of iTrack technology
to ATMS Limited, a subsidiary of Bridgestone Corporation (“Bridgestone”), on 24 June 2020. Royalty
income is generated by reference to the number and classification of vehicles upon which iTrack is
deployed. In the year ended 30 June 2021, this royalty income amounted to £0.83m, whilst the Sterling
equivalent of the annualised rate of royalty increased by 76% from £0.64m at inception to a year end rate
of £1.12m. Royalties are designated in US dollars, and the rate of growth is based on the volume increase,
which, excluding the effects of foreign exchange fluctuations was 97%.
iTrack system capabilities continue to be enhanced under Bridgestone ownership as it becomes further
embedded into their mining solutions business, and as referenced in their mid-term update in May 2021,
a number of global long term contracts have been committed and are in the roll out stage. This process is
expected to accelerate following completion of Bridgestone's proposed acquisition of Otraco International
PTY Limited, a leader in tyre management solutions with an extensive service network in key markets
such as Australia, Chile and South Africa and with many years experience of working with iTrack
technology in Latin America.
This business segment now bears no cash costs, with the only overhead being the amortisation of
intangible development costs relating to iTrack in prior years. Accordingly, the segmental operating result
was a profit of £0.79m compared with a loss from the discontinued operational business of £1.38m in the
prior year.
Translogik tyre inspection probes
Revenues from Translogik probes increased by 50% to £0.76m (2020: £0.51m), and this segment
generated a trading profit of £0.27m (2020: £0.12m), which was comfortably above the annual budget.
Last year we reported that our product range was expanded in May 2020 to include the TLGX Series,
being a modular range of four new probes offering a broad variety of features at competitive prices. These
have been developed primarily for system integrators and OEM fleet management systems, and offer
longer life using a lithium battery, a USB charging facility and a greater range of usage, including the
reading of RFID tags and tyre pressure sensors. These new products generated more than 27% of the
total sales value during the year.
In the second half of the financial year, a number of major tyre OEMs and fleet management software
providers undertook trials of the new range. This process temporarily diminished demand for the first
generation probe, as the customers evaluated the benefits of switching to the new TLGX range. By the
end of the year, and into the current trading year, it has become evident that these trials were successful
with the switch to the new range being well underway. This has also prompted commercial discussions to
secure mutual longer term commitment and the prospect of further customisation of our products to
customers’ fleet management solutions.
Surface Acoustic Wave technology (SAW)
Revenues generated by SAW almost doubled to £0.18m (2020: £0.09m) supplemented by grant income
of £0.05m (2020: £0.12m). The net loss attributable to this segment was virtually unchanged at £0.53m
(2020: £0.58m). As the only part of the business that requires some bespoke business premises, the
allocation of the cost of running these premises is allocated to the SAW segment along with other
associated costs. The R & D tax credit relating to FY20 is evenly split between work on SAW projects and
the development of iTrack prior to the licence being granted. The introduction of the R & D tax credit for
the current year is solely relating to SAW.
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Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Chairman’s statement (continued)
Although our technology is well advanced from an engineering standpoint, commercialisation for higher
volume applications remains at a relatively early stage. More than half of revenue was derived from
providing components and engineering support for projects expected to mature in future years, with the
remainder from ongoing activities, primarily motorsport. Revenue during the year also included
chargeable engineering support on behalf of first tier suppliers to GE’s Improved Turbine Engine Program
(“ITEP”), which is scheduled to execute the First Engine To Test (FETT) by the end of this calendar year.
FETT will be the next critical milestone for the programme which is planned to provide the next-generation
turbine engine power to the chosen Future Attack Reconnaissance Aircraft (FARA) aircraft and the
enduring Apache and Black Hawk fleets.
With new management in place in our SAW business, buttressed by the resources and expertise of
SAWCAP, the commercial activities and profile of the Company have been re-invigorated. There has been
meaningful engagement with multiple well known international companies across a broad range of target
sectors, providing opportunities to showcase our capabilities and gain valuable feedback on potential
applications. These have deepened our understanding, not only of the unique benefits of SAW technology,
but also of some technical and commercial barriers in certain markets, especially in relatively heavy
engineering such as wind turbines.
This additional applications experience is now assisting greatly in better targeting our sales and marketing
efforts. On 14 September 2021 we announced that the Company has entered a Joint Collaboration
Agreement (“JCA”) with McLaren Applied Limited which builds on from the previous agreement that has
been in force since 2011. The JCA sets out a shared objective of developing non-contact torque products
for specific motorsport applications and target customers in other sectors using our SAW technology. The
new agreement is initially for five years and will continue development of the Transense Torque
Measurement System using SAW technology, extending McLaren Applied exclusivity in elite motorsport
drivetrain applications in exchange for minimum target revenues on an annual basis over a five year
period.
Although elite motorsport is a market with limited potential in absolute terms, McLaren anticipate
significant growth in the adoption of SAW technology for torque sensing. This will apply at the regulatory
body level as a control sensor both for rules compliance and for performance optimisation in accredited
race series, which is how it has been used for many years in a regulatory role for the IndyCar series. SAW
technology lends itself to motorsport applications in particular because of the low mass of the applications
components, coupled with the frequency, accuracy and reliability of measurement. This is a valuable
proving ground for our technology and showcases our capabilities in a premium and highly regulated
environment.
A significant target sector where SAW technology offers true competitive advantages is in the growing
aerospace sector. The fast responses, small size and mass of the SAW sensor together with digital
outputs from our electronics is aptly suited to build upon the rigorous testing and implementation from the
GE ITEP into other programmes and other types of power units. Such areas of growth in the aerospace
sector are with the revolutionary hybrid electrical engines for regional commercial aircraft. During the
year, we engaged on a confidential technology transfer program with a major participant in this field to
explore the use of SAW torque measurement technology. There is also initial interest in our capabilities
from companies in the fast-growing Advanced Air Mobility sector which uses multiple electric power units
for vertical lift rotors.
We have also gained interest from the agricultural sector where again the suitability of SAW technology
for medium volume, high value units has a value in improving agricultural machines with many rotating
parts to gain competitive advantages over rivals in providing easier to use plant that has greater up time
use.
In view of these opportunities, there is sufficient confidence in the outlook to justify further modest
investment in people and equipment to continuing building our engineering and operational capabilities.
In recent weeks we have expanded the engineering team with three key additional members. In addition,
evaluation of potential capital expenditure in the region of £0.15m is ongoing to facilitate increased test
and production volumes to meet potential demand.
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Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Chairman’s statement (continued)
Overall, we are satisfied both with progress during the year and the pipeline of potential opportunities. We
continue to pursue a short term objective of SAW being financially self-sufficient as a contributor to the
Company’s financial results, whilst seeking applications that can deliver further substantial streams of
licensing income over the long term.
Board, governance and investor relations
The directors are committed to the framework and principles of the QCA Corporate Governance Code
(“the Code”), and seek to apply these wherever this is practicable. Full application of the Code, with the
implications that this may have on board and compliance costs, is counterbalanced by scale of the
Company and the relatively low risk profile of its operations.
Accordingly, the Board is satisfied that the overall board structure and balance of independent input into
board decision making is appropriate to the circumstances. In particular, the directors are all shareholders
whose interests are well aligned with shareholders as a whole. Furthermore, the involvement of highly
qualified and experienced independent advisers via SAWCAP provides an additional layer of scrutiny and
oversight over the commercial activities of the Company.
There have also been significant efforts to improve our investor relations programme for private and retail
shareholders, including frequent engagement via online investor presentations. This has been
supplemented by a major redesign of the Company’s website (www.transense.com) and associated social
media platforms. The directors actively encourage regular engagement with all shareholders, and details
of how investors can engage are set out on the website.
The Board fully recognise the importance of Enviromental, Social & Governance (ESG) issues and have
introduced a new statement in this report to emphasise how our technology is supporting the environment,
and how we operate in a collaborative and ethical manner seeking to apply high moral standards in
accordance with the QCA code referred to above.
Distribution policy
In December 2020 the shareholders approved a resolution to reduce the capital of the Company, which
was subsequently approved by the Court resulting in the availability of distributable reserves. At 30 June
2021, the total reserves available for distribution amounted to £0.63m.
The directors are committed to delivering sustainable improvement in investment returns to shareholders
in the form of both income and capital growth. As the net income and prospects of the Company continue
to build momentum, the Board will maintain dialogue with shareholders, and seek to optimise the balance
between dividends, share buybacks and reinvestment in the business. As a component of overall policy,
it is anticipated that commencement of progressive dividend payments will be considered in respect of the
financial year ending 30 June 2023.
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Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Chairman’s statement (continued)
Current trading and prospects
There has been a further increase in royalty income in the period since the year end to 31 August 2021
such that the annualised rate at constant currency had increased by 8% to US$1.67m since inception,
with the Sterling equivalent up by 9% to £1.21m.
Revenues from Translogik tyre inspection probes and SAW were also substantially higher than the
corresponding period last year.
There is a groundswell of momentum behind the potential for growth in royalty income, and the positive
market response to new products for Translogik indicating the likelihood of further success.
The recent agreement relating to the use of our technology in motorsport applications underpins an
element of short term revenue for SAW, with further potential in off-road vehicles, agriculture and
aerospace in the development pipeline, and GE ITEP production on the horizon.
Accordingly, the directors continue to be optimistic about the outlook and future prospects for the
Company.
Nigel Rogers
Executive Chairman
27 September 2021
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Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Strategic Report
Financial Review
Results for the year
Revenues for the year from continuing operations increased nearly threefold to £1.77m (2020: £0.60m).
Royalty income from iTrack was £0.83m for the first year of the new licence agreement and will increase
in line with the growth in the installed base. In the previous year revenues of £1.71m were generated from
users of the iTrack system and accounted for as part of discontinued activities in 2020 following the sale
of the iTrack operating business in June 2020.
Gross margin was 78.3% of revenues from continuing operations (2020: 55.1%).
Administrative expenses were £1.58m (2020: £1.70m). In 2020 there were increased amortisation costs
and a one-off impairment charge relating to intangible SAW patent assets. The net loss before taxation
from continuing operations was £0.16m (2020: £1.27m).
The total comprehensive profit for the year was £0.16m (2020: loss of £2.54m), reflecting the restructured
business and licence income in FY21 (2020: loss on discontinued activities of £1.45m) and an R&D tax
credit of £0.27m for the first time including the current years credit £0.06m and a deferred tax credit of
£0.05m (2020: R & D Tax Credit £0.18m).
The Earnings per share (EPS) are set out below (in Pence):
EPS (profit/(loss) from continuing operations)
EPS (total profit/(loss))
Taxation
2021
2020
0.96
0.96
(6.7)
(15.6)
The Company has UK tax losses available to carry forward at 30 June 2021 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. In the year
R&D tax credits are recognised on an accruals basis and not as in previous years on a cash basis, as the
track record on claims has now removed some of the uncertainty.
Cash flow and financial position
Net cash used in operations decreased to £0.25m following the sale of the iTrack operational business
(2020: £1.86m, 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). During the prior 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
in September 2020 out of the consideration monies. Included in the opening creditors were £0.32m relating
to the discontinued operations that were settled by Transense in the year.
The Company closed the year with net cash and cash equivalents of £1.05m (2020: £1.19m). The
completion Balance Sheet relating to the iTrack business was agreed between the Company and ATMS
on 10 September 2020, at which time the balance of the consideration monies was settled, together with
the settlement of the Bridgestone loan and the payment of related fees.
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 2021
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 KPIs are some of the tools used by management to monitor the performance of the operating
business. In addition to the KPIs, the statement of financial position and cash flow analysis are reviewed
at monthly Board meetings.
KPIs
FY 21
FY 20
Turnover – continuing operations (£m)
1.77
0.60
EBITDA – continuing operations (£m)
0.06
(0.68)
EBT – continuing operations (£m)
(0.16)
(1.27)
EPS - continuing operations (Pence)
EPS – attributable to shareholders (Pence)
0.96
0.96
(6.7)
(15.6)
Closing share price (Pence)
90.5
57.0
Net cash used in operations (£m)
(0.25)
(1.86)
Closing cash balance (£m)
Cash per Share (Pence)
1.05
1.19
6.4
7.3
Consolidated Net Assets (£m)
2.34
2.18
Net Assets/Share (Pence)
14.4
13.4
Market Capitalisation at year end (£m)
14.76
9.30
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 2021
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 & Impact
Mitigation
Year on Year
change in risk
Covid - 19
Suppliers and Raw Materials
The Covid-19 pandemic continues to significantly
impact individuals, businesses, markets and
economies. The Government have introduced
during the period strict guidelines on office practice
and there have been several lockdown periods.
Due to a combination of Covid-19, Brexit, the Suez
blockage and the fire at a key Taiwan computer
chip manufacturer the availability and therefore
lead times for acquiring stock for our products and
services has become challenging and has put the
Company in a position where the demand could
outstrip the supply. Additionally because of the size
of our business the ability to use multiple suppliers
for key products is limited.
Foreign currency fluctuation
The Royalty income from Bridgestone is payable in
USD and over 90% of Probes sales are made
outside the UK. The major currency exposure is to
USD.
People
An experienced and knowledgeable team is
essential to continually develop complex products
for customers to be used in demanding markets.
The market for skilled staff is extremely competitive
and a failure to recruit and retain suitably qualified
staff could impact the Company's ability to develop
and deliver services and product.
Global Companies and
Competition
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
SME's. Additionally there is a risk that global
organisations have the budgets to enable them to
develop products and services that are more
attractive to customers either by way of price or
technical performance.
Transense's exposure regarding Covid - 19
has been minimal. The Company has
adopted Government guidelines with regards
to working in the office and video
conferencing has substantially mitigated the
failure to be able to travel to visit non UK
customers.
The Company has following the year end
increased the ordering of stock to meet the
anticipated demand and started sourcing
new suppliers.
The Board regularly review the key foreign
exchange rates (USD & Euro) and will hedge
against the movements if they move outside
of a set range. Additionally in certain
instances the Company has a natural hedge
where monies are both due in and payable in
the same foreign currencies.
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 of new employees, when
required, is done so by experienced staff to
ensure the correct calibre of individual is
identified. The active support of SAWCAP has
significantly enhanced the ability of our in
house team. During the year we recruited a
new Mechanical Engineer, further recruitment
to our in house team is planned, this will
improve the depth and breadth of the team.
Whilst in the past the delay in PO's could
have been critical to the Company's cash
flow the Board consider we are sufficiently
funded to endure the long lead times
between initial discussions and PO's with
Global businesses. With regards the
competition the far smaller size of Transense
ensures we are able to move far 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
effects of competition.
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Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Strategic Report (continued)
Principal risks and uncertainties (continued)
Risk and Uncertainty
Details of Risk & Impact
Mitigation
Year on Year
change in risk
Commercialisation and
Development of New
Products
Following the disposal of the iTrack operating
business the focus on new products is primarily on
SAW. The decision making process for the
development of new and existing products needs a
broad understanding of future industrial needs and
then an assessment of the potential return which
can be uncertain in the early stages of
development. A changing and evolving market
place and environment (see below) will always
present challenges to produce profitable products.
Development spend is regularly planned and
reviewed. The Company's understanding of
customer needs and expectations is greatly
enhanced by working closely with customers
on extensive product trials. SAWCAP enables
us best understand where our opportunities
lie and also to best understand the problems
of particular markets and technical products.
This also assists in subsequently eliminating
those opportunities deemed least likely to
provide a good return.
Intellectual Property
The SAW business is centred on the exploitation of
the SAW patents with a clear focus on the design
and development of technologically advanced
products and applications. Investment continues to
be made in Development. Following the latest
review of our patent portfolio we currently have 22
live granted patents and continue to have
significant in house know how. The development of
know how is equally applicable to the iTrack
system and the Probe.
The risk exists that we fail to improve and generate
new know how and where possible extend the
scope and life of our patents.
Liquidity
Transense has in the past found it necessary to
raise funds to support losses and working captal
requirements.
We are strengthening our inhouse
development team, receiving excellent ideas
from our SAWCAP team of engineering
industry experts and thereby widening our
scope of technical and industrial need and
opportunities. With the assistance of our
Patent agents 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.
The IP relating to iTrack has now been
licensed to ATMS Technologies Limited (a
Bridgestone Corporation subsidiary) and no
further development is carried out by
Transense. Development in the form of know
how is applied to the Probe adapting it to the
needs of OEM and fleet management
software systems.
Following the completion of the Bridgestone
deal the Company's finances have become
substantially stronger and the operating cash
flow (before working capital movements) has
become positive. Notwithstanding the
stronger financial position the Board review
monthly forecast cash flows which look
forward between 12 and 24 months to ensure
the Company remains liquid throughout that
period.
Brexit
The UK left the European Union during the year
under review and the transition arrangements
ended on 31 December 2020. The new trade deal
entered into between the UK and the European
Union was in negotiation until the end of the
transition period and therefore the implementation
of new processes has been done with little forward
notice of the details of trading arrangements. This
has, to date, caused some relatively minor short-
term disruption.
The Company works closely with import and
export agents as well astaking professional
advice to ensure that we are compliant with
the various new regulations now in force.
The Company will continue to monitor local
regulations as the new requirements settle
down and will introduce new trading practises
as are necessary.
By order of the board
Melvyn Segal
Chief Financial Officer
27 September 2021
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Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Environmental, Social and Governance
Transense’s commitment to promoting a greener environment is integral to our mission. Our technologies
can improve sustainability across the wide variety of markets in which we are present. Transense operates
in line with the United Nations 17 Sustainable Development Goals (SDGs); the UN guidelines for member
states to ensure they operate in line with its 2030 Agenda for Sustainable Development. As a leading
developer of technology, Transense aims to “ensure sustainable consumption and production patterns”
aligned with Goal 12 of the SDGs.
Reducing our impact on the environment
Transense has adopted a policy to safeguard the environment and minimize the generation of harmful
substances as much as possible. We enable customers to do the same, through the supply of our value
added technologies that improve efficiency, optimize performance and reduce emissions.
We operate in line with all relevant environmental legislation and regulatory requirements and train our
employees to carry out their duties whilst being mindful of the environment and the Company’s concern
for it. Transense only uses approved waste disposal contractors to dispose of waste in an environmentally
friendly manner, whilst promoting responsible energy use and recycling on site. We encourage and
support our suppliers to have sound environmental policies in place.
Our technology is an enabling technology and aims to achieve a positive environmental impact for larger
manufacturing companies who wish to use it to improve their products in areas of performance, fuel
consumption, predictive maintenance, and unit up time as they work towards net zero emissions.
Social responsibility
The Board of Transense continually aim to manage their business in a socially responsible and ethical
manner and act with integrity and behave responsibly as we execute our strategy.
Health and safety
We are committed to operating an environment that promotes Health and Safety (H&S). During the Covid-
19 pandemic we regularly reviewed H & S procedures and considered risk assessments whilst also
supporting homeworking during the height of the pandemic.
Employees
People are central to what we do. Transense strives to provide its team with good training and incentives
which have been instrumental in retaining key employees. Our Health and Safety Policy enables
employees to perform their work safely and efficiently in line with health and safety law and is reviewed
annually with employees consulted before the integration of any new practices.
We are continually looking to develop a high performance culture through our recruitment, employee
engagement, people development and resource management strategies.
Equal opportunities
The Group is committed to a policy of equal opportunity by which it ensures that all activities are based
on merit.
14
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Corporate Governance Statement
The Board is committed to high standards of corporate governance as appropriate to the Company’s size
and activities and sets out below key areas of Corporate Governance. The Board considers it appropriate
to adopt the principles of the QCA Code published in April 2018. The extent of compliance with the ten
principles that comprise the QCA Code, together with an explanation of any areas of non-compliance, and
any steps taken or intended to move towards full compliance, are set out on the company
website https://www.transense.com.
The group aims to operate to high standards of moral and ethical behaviour. All members of the Board
fully support the value and importance of good corporate governance and in our accountability to all of the
Company’s stakeholders, including shareholders, employees, customers, distributors, suppliers,
regulators and the wider community.
The corporate governance framework which the Company has set out, including Board leadership and
effectiveness, remuneration and internal control, is based upon practices which the Board believes are
proportionate to the risks inherent to the size and complexity of group operations.
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 60
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 both AIM listed Surgical Innovations
Group Plc and Solid State plc.
Melvyn Segal (Chief Financial Officer) Age 66
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 77
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.
15
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Corporate Governance Statement (continued)
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.
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
Actual number
attended
Audit and Risk
Committee
Remuneration
Committee
Nigel Rogers
Melvyn Segal
Rodney Westhead
*attended part of the meeting only as not a Committee member
11
11
11
1
*1
1
-
-
2
Maximum
number of
meetings
11
11
11
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 Report on pages 10-13, 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.
16
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
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.
17
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
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 2021 they did not choose to participate (2020:
£nil).
18
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
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
£
45,000
120,250
-
-
24,000
£
-
-
-
-
-
£
-
7,488
-
-
-
30 June 2021
30 June 2020
£
£
45,000
127,738
-
-
87,383
160,247
169,999
180,410
24,000
13,483
£
-
-
-
-
-
Total 2021
189,250
-
7,488
-
196,738
611,522
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
Total 2020
500,666
90,000
20,856
-
611,522
==============================================
==============================================
==============================================
==============================================
==============================================
*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
2021
£
196,738
-
-
2020
£
171,113
90,000
350,409
----------------------------------------------
196,738
----------------------------------------------
611,522
==============================================
==============================================
19
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
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:
M Segal
M Segal
M Segal
M Segal
Directors' interests in the UDSOS were:
M Segal
N Rogers
At 1 July
2020
At 30 June
2021
Earliest
exercise
date
Exercise
price per
share
Hurdle
price per
share
30,000
50,000
170,000
126,000
-
01/07/18
50,000
30/06/20
170,000
12/08/21
126,000
24/06/23
£0.75
£1.00
£0.75
£0.62
£1.50
£2.00
£2.00
£1.50
==============================================
==============================================
==============================================
==============================================
==============================================
At 1 July
2020
At 30 June
2021
Earliest
exercise
date
Exercise
price per
share
Hurdle
price per
share
74,000
74,000
24/06/23
400,000
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 22.
20
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Directors’ report
The Directors present their annual report and audited financial statements for the year ended 30 June
2021.
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 13.
Results and Dividends
The results for the year ended 30 June 2021 show a profit after tax of £0.16m (2020: loss of £1.09m from
continued operations and a total loss of £2.54m). The Directors do not recommend the payment of a
dividend (2020: £nil).
Directors
The present Directors are listed on page 3.
There are no contracts of significance in which the Directors had a material interest during the year.
Substantial Shareholdings
The following substantial shareholdings of 3% or more of the Company’s share capital have been notified
to the Company:
CriSeren
Seneca
P Lobbenberg
WB Nominees
Harwood Capital LLP
Legal & General
Javed Abrahams
Gerald Oury
Information correct as at 24 September 2021.
Ordinary shares of
10p each
%
9.40%
7.67%
5.94%
4.95%
4.91%
3.31%
3.23%
3.03%
1,532,924
1,250,000
968,979
806,526
800,000
540,000
525,474
493,333
21
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
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:
R J Westhead
M Segal
N Rogers
Share price
Ordinary
shares of
50p each
30 June
2021
30,655
44,888
200,000
Ordinary
shares of
50p each
1 July
2020
10,655
30,888
108,700
==============================================
==============================================
The mid-price of the shares in the Company at 30 June 2021 was 90.5p (2020: 57p) and the range during
the period was 47.5p to 96.5p (2020: 42.5p to 88.5p).
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 20.
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
25 to the financial statements).
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.
Following the grant of an exclusive licence to ATMS in June 2020 in respect of the iTrack Intellectual
Property no further development expenditure on the iTrack product was capitalised in the year (2020:
£0.38m).
22
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
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 2020/21.
Disclosure of information to Auditors
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.
Auditors
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
27 September 2021
1 Landscape Close
Weston-on-the-Green
Bicester
Oxfordshire
OX25 3SX
23
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Statement of Directors’ responsibilities in respect of the Annual Report
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 United Kingdom.
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 United Kingdom have been followed, subject to
any material departures and explained in the Financial Statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the group and the parent company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the group and parent company’s transactions and disclose with reasonable accuracy at any time
the financial position of the group and 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 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.
24
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
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 2021 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 UK adopted International Financial Reporting Standards (IFRSs). 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 2021 and of the group’s profit for the year then ended;
the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the
United Kingdom;
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
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the entity’s ability to continue to adopt the going concern basis of
accounting included:
• Challenging management on key assumptions included in their forecast scenarios.
• Considering the potential impact of forecast scenarios on the forecast cash position, specifically around trade
and other receivables and inventory.
• Reviewing management’s disclosures in the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the group's ability to continue as a going
concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
Key audit matters
Key audit matters are those matters that, in our professional judgment, 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.
25
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Independent auditor’s report to the members of Transense Technologies
plc (continued)
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 walk through 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.
Impairment of intangible assets
Matter
The Group has a material intangible asset balance which is required to be tested for impairment on an annual basis
in accordance with International Accounting Standard 36 ‘Impairment of Assets’ (IAS 36). The total net book value
of intangible assets at 30 June 2021 was £0.7m. Management assess intangible assets for potential impairment by
reference to future cash flow forecasts.
Response
We reviewed management’s forecasts prepared. 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.
We challenged management on the key assumptions included within the forecasts and performed sensitivity analysis
to understand the headroom available within those forecasts. Based on our review of the forecasts we do not consider
there to be any indicators of material impairment.
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 audit 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 £26,500. 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 £23,850. 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 has been capped to 90% of group revenue.
26
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Independent auditor’s report to the members of Transense Technologies
plc (continued)
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 and represents all of the revenue generated in the year.
Other information
The other information comprises the information included in the annual report, other than the financial statements
and our auditor’s report thereon. The directors are responsible for the other information included in the annual report.
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. 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.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 24, 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.
27
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Independent auditor’s report to the members of Transense Technologies
plc (continued)
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in
line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Our assessment focused on key laws and regulations the company has to comply with and areas of the financial
statements we assessed as being more susceptible to misstatement. These key laws and regulations included but
were not limited to compliance with the Companies Act 2006, International Financial Reporting Standards (IFRSs)
as adopted by the United Kingdom, and relevant tax legislation.
We are not responsible for preventing irregularities. Our approach to detecting irregularities included, but was not
limited to, the following:
•
•
•
•
•
obtaining an understanding of the legal and regulatory framework applicable to the entity and how the entity is
complying with that framework;
obtaining an understanding of the entity’s policies and procedures and how the entity has complied with these,
through discussions and sample testing;
obtaining an understanding of the entity’s risk assessment process, including the risk of fraud;
designing our audit procedures to respond to our risk assessment; and
performing audit testing over the risk of management override of controls, including testing of journal entries and
other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the
normal course of business and reviewing accounting estimates for bias.
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
One Central Boulevard
Blythe Valley Business Park
Solihull
West Midlands
B90 8BG
Date:
28
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2021
Year ended
30 June
2021
Year ended
30 June
2020
Note
£'000
£'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
Profit/(loss) for the year from continuing operations
Discontinued operations
Loss for the year from discontinued operations
Profit/(loss) and total comprehensive income/(loss) for the
year attributable to the equity holders of the parent
Basic and fully diluted profit/(loss) per share (pence)
From continuing operations
24
From total profit/(loss) for the year
Notes to the financial statements are from pages 34 to 56.
1,773
(385)
603
(271)
----------------------------------------------
----------------------------------------------
1,388
332
(1,581)
(1,703)
----------------------------------------------
----------------------------------------------
(193)
-
(12)
48
(1,371)
5
(17)
118
----------------------------------------------
----------------------------------------------
(157)
313
(1,265)
175
----------------------------------------------
----------------------------------------------
156
(1,090)
----------------------------------------------
----------------------------------------------
-
(1,452)
----------------------------------------------
----------------------------------------------
156
(2,542)
==============================================
==============================================
0.96
==============================================
0.96
==============================================
(6.68)
==============================================
(15.59)
==============================================
29
Consolidated Balance Sheet
at 30 June 2021
Non current assets
Property, plant and equipment
Intangible assets
Deferred tax
Current assets
Inventories
Corporation tax
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Non current liabilities
Lease liabilities
Total liabilities
Net assets
Equity
Issued share capital
Share premium
Share based payments
Retained earnings/(accumulated loss)
Total equity
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Note
11
13
10
16
10
17
18
19
20
21
21
23
30 June
2021
£'000
211
770
47
2021
£'000
30 June
2020
£'000
2020
£'000
290
844
-
----------------------------------------------
----------------------------------------------
1,028
1,134
73
60
564
1,046
63
175
1,677
1,193
----------------------------------------------
----------------------------------------------
1,743
----------------------------------------------
2,771
3,108
----------------------------------------------
4,242
(260)
-
(65)
(854)
(976)
(61)
----------------------------------------------
----------------------------------------------
(325)
(104)
----------------------------------------------
(429)
----------------------------------------------
2,342
==============================================
1,631
-
82
629
----------------------------------------------
2,342
==============================================
(1,891)
(168)
----------------------------------------------
(2,059)
----------------------------------------------
2,183
==============================================
5,451
2,591
41
(5,900)
----------------------------------------------
2,183
==============================================
These financial statements were approved by the board of Directors and authorised for issue on 27 September 2021
and were signed on its behalf by:
N F Rogers
Chairman
M Segal
Chief Financial Officer
Notes to the financial statements are from pages 34 to 56.
30
Company Balance Sheet
at 30 June 2021
Non current assets
Property, plant and equipment
Intangible assets
Investments
Deferred tax
Current assets
Inventories
Corporation tax
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Non current liabilities
Lease liabilities
Total liabilities
Net assets
Equity
Issued share capital
Share premium
Share based payments
Retained earnings/(accumulated loss)
Total equity
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
30 June
2021
£'000
2021
£'000
30 June
2020
£'000
2020
£'000
Note
1
0
12
13
14
16
10
17
18
19
20
21
21
23
211
770
-
47
290
844
-
-
----------------------------------------------
----------------------------------------------
1,028
1,134
73
60
564
1,046
----------------------------------------------
(260)
-
(65)
----------------------------------------------
63
175
1,677
1,193
----------------------------------------------
1,743
----------------------------------------------
2,771
3,108
----------------------------------------------
4,242
(854)
(976)
(61)
----------------------------------------------
(325)
(104)
----------------------------------------------
(429)
----------------------------------------------
2,342
==============================================
1,631
-
82
629
----------------------------------------------
2,342
==============================================
(1,891)
(168)
----------------------------------------------
(2,059)
----------------------------------------------
2,183
==============================================
5,451
2,591
41
(5,900)
----------------------------------------------
2,183
==============================================
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006. The profit
after tax for the year of the Parent Company was £156,000 (2020: loss of £2,749,000).
These financial statements were approved by the board of Directors and authorised for issue on 27 September 2021
and were signed on its behalf by:
N F Rogers
Chairman
M Segal
Chief Financial Officer
Notes to the financial statements are from pages 34 to 56.
31
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Statement of Changes in Equity
Group
Balance at 1 July 2019
Comprehensive income for the year:
Loss for the year
Translation reserve recycled on disposal
Share
capital
£'000
5,451
Share
premium
£'000
Translation
reserve
£'000
Share based
payments
£'000
Retained
earnings
£'000
2,591
23
41
(3,358)
Total
equity
£'000
4,748
-
-
-
-
-
-
-
-
(23)
-
-
-
(2,542)
(2,542)
-
(23)
------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
Balance at 30 June 2020
5,451
2,591
-
41
(5,900)
2,183
------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
Comprehensive income for the year:
Profit for the year
Share based payment
Share capital reduction
Expenses of capital reduction
-
-
-
-
(3,820)
(2,591)
-
-
-
-
-
-
-
41
-
-
156
156
-
6,411
(38)
41
-
(38)
------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
Balance at 30 June 2021
1,631
-
-
82
629
2,342
=========================================
==============================================
==============================================
==============================================
==============================================
==============================================
Company
Balance at 1 July 2019
Comprehensive income for the year:
Loss for the year
Share
capital
£'000
5,451
Share
premium
Share based
payments
£'000
2,591
£'000
41
Retained
earnings
£'000
(3,151)
Total
equity
£'000
4,932
-
-
-
(2,749)
(2,749)
Balance at 30 June 2020
5,451
2,591
41
(5,900)
2,183
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
Comprehensive income for the year:
Profit for the year
Share based payment
Share capital reduction
Expenses of capital reduction
-
-
-
-
(3,820)
(2,591)
-
-
-
41
-
-
156
156
-
6,411
(38)
41
-
(38)
Balance at 30 June 2021
1,631
-
82
629
2,342
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
==============================================
==============================================
==============================================
==============================================
==============================================
Notes to the financial statements are from pages 34 to 56.
32
Consolidated and Company Cash Flow Statement
For the year ended 30 June 2021
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Profit/(loss) from operations
Adjustments for:
Taxation
Loss on disposal of trade and assets
Net financial expense
Share based payment
Depreciation
Loss on disposal of fixed assets
Impairment of investments
Note
10
7
11,12
Group
Company
Year ended
30 June
2021
Year ended
30 June
2020
Year ended
30 June
2021
Year ended
30 June
2020
£'000
156
£'000
(2,542)
£'000
156
£'000
(2,749)
(313)
(171)
(313)
(175)
-
12
41
85
-
-
72
9
-
538
18
-
504
-
12
41
85
-
-
121
54
12
-
530
17
3
504
Amortisation and impairment of intangible assets
13
121
Operating cash flows before movements in
working capital
(Increase)/decrease in receivables
(Decrease)/increase in payables
(Increase) in inventories
Cash used in operations
Taxation received/(paid)
Net cash used in 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 generated from/(used in) investing
activities
Financing activities
Capital reduction expenses
Loans advanced
Loans repaid
Interest paid
Payment of lease liabilities
Net cash (used in)/from financing activities
Net (decrease) in cash and cash equivalents
Cash and equivalents at the beginning of year
Cash and equivalents at the end of year
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
102
(1,572)
102
(1,804)
17
19
16
(124)
(594)
(10)
(177)
477
(582)
(124)
(594)
(10)
13
225
(586)
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
(626)
381
(1,854)
(4)
(626)
381
(2,152)
-
----------------------------------------------
(245)
----------------------------------------------
----------------------------------------------
(1,858)
----------------------------------------------
----------------------------------------------
(245)
----------------------------------------------
----------------------------------------------
(2,152)
----------------------------------------------
7
11,12
13
14
15
23
-
(6)
(47)
-
1,237
8
(764)
(513)
-
772
-
(6)
(47)
-
5
(760)
(513)
(5)
1,237
1,132
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
1,184
(497)
1,184
(141)
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
(38)
-
(976)
(12)
(60)
-
1,585
(609)
(17)
(58)
(38)
-
(976)
(12)
(60)
-
1,585
(609)
(17)
(58)
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
(1,086)
901
(1,086)
901
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
(147)
1,193
(1,454)
2,647
(147)
1,193
(1,392)
2,585
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
18
1,046
==============================================
1,193
==============================================
1,046
==============================================
1,193
==============================================
Notes to the financial statements are from pages 34 to 56.
33
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
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 2021 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 21.
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 United
Kingdom (“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 2021 the Group had net cash balances of £1.05m (2020: £1.19m). Whilst the business may require short
term working capital it is now considered that trading has reached cash neutral level and starting to generate cash.
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 exceeding 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.
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.
34
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
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.
• The balance of iTrack II development costs are, with effect from July 2021 amortised over the period of the 10
year period of the licence agreement with Bridgestone reflecting the longer useful life. In 2020 the period of
amortisation term was 3 years.
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
2021. 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, 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.
35
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
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;
• Revenue from subscription contracts, which ceased in the current year following the sale of the iTrack business,
was 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
•
In the previous year the Bridgestone support fee income was 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 three 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 and the iTrack
royalty activity in respect of income from licensed technology. 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 continuing royalty income and discontinued iTrack activity
have been shown as separate segments.
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 property, plant and equipment, and a corresponding lease liability from the
date at which the leased asset is available for use by the company.
36
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
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;
Fixtures and Fitting 3 – 10 years;
Motor Vehicles 4 years; and
iTrack Equipment 1 – 3 years
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.
The assets’ estimated residual values and useful lives are reviewed, and adjusted if appropriate, at each Balance
Sheet date.
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 was capitalised up to 30 June 2020.
The amortisation of this expenditure was previously amortised over a fixed 3 year period to August 2019 however
as the development of iTrack II was 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 is 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.
37
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
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.
38
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
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, where applicable, for specific product issues based on an estimate of the likely cost
arising, utilising data from historical information.
39
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
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.
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 retained earning reserve (accumulated loss at 30 June 2020) includes all current and prior period net retained
profits and 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 2021
Year ended
30 June 2021
Continuing Discontinued
£'000
-
-
-
-
-
----------------------------------------------
-
=============================================
£'000
1,150
244
28
83
268
----------------------------------------------
1,773
=============================================
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
=============================================
40
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 2021
Segments
Year ended 30 June 2021
Sales
Gross profit
Overheads
Operating profit/(loss)
Other income
Net financial expense
Taxation
Deferred Tax
Translogik
£'000
SAW
£'000
iTrack royalties
£'000
Unallocated
£'000
Total
£'000
177
764
1,773
===================== ===================== ===================== ===================== ====================
1,388
(1,581)
-----------------------------
171
(917)
------------------------------
385
(114)
------------------------------
-
(503)
------------------------------
832
(47)
-----------------------------
832
-
271
-
-
-
-
(746)
48
-
164
-
785
-
-
102
-
(503)
-
(12)
-
47
(193)
48
(12)
266
47
------------------------------- ------------------------------- ------------------------------- ------------------------------- -------------------------------
Profit/(loss) for the year
271
(534)
887
(468)
156
====================== ====================== ====================== ====================== ======================
EBITDA reconciliation
Operating loss
Other Income
Depreciation and amortisation
EBITDA
Year ended 30 June 2020
Sales
Gross profit
Overheads
Operating profit/(loss)
Other income
Net financial expense
Loss on disposal
Taxation
Profit/(loss) for the year
EBITDA reconciliation
Operating loss
Other Income
Depreciation, amortisation and
impairment
EBITDA
£'000
(193)
48
206
-------------------------------
61
======================
Translogik
£'000
SAW
£'000
Discontinued
£'000
Unallocated
£'000
Total
£'000
510
=====================
249
(121)
-----------------------------
128
-
-
-
-
-
93
1,708
83
(783)
------------------------------
2,311
===================== ===================== ===================== ====================
1,712
(4,462)
-----------------------------
(2,750)
118
-
(799)
------------------------------
(799)
1,380
(2,759)
------------------------------
(1,379)
-
(700)
118
-
-
-
3
(72)
(4)
-
(12)
-
175
(9)
(72)
171
128
(582)
------------------------------- ------------------------------- ------------------------------- ------------------------------- -------------------------------
(2,542)
====================== ====================== ====================== ====================== ======================
Discontinued
£'000
(1,379)
-
Continuing
£'000
(1,371)
118
Total
£'000
(2,750)
118
(1,452)
(636)
470
572
1,042
------------------------------- ------------------------------- -------------------------------
(909)
(1,590)
====================== ====================== ======================
(681)
The directors have not disclosed Balance Sheet segmental information as no analysis is prepared at this level.
41
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Notes to the financial statements (continued)
5
Revenue and segmental reporting (continued)
During the year ended 30 June 2021 there was 1 customer (2020: 2) whose turnover accounted for more than
10% of the Group’s total continuing revenue as follows:
Year ended 30 June 2021
Customer A
Customer B
Year ended 30 June 2020
Customer B
Customer C
Revenue
£'000
Percentage
of total
915
200
52
11
Revenue
£000
Percentage
of total
93
66
15
11
Discontinued revenue in FY20 included Bridgestone as a customer, who have now acquired the iTrack business
and from which all the royalty income now arises within continuing revenue.
All non-current assets are held in the UK.
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
(Gain)/loss on foreign exchange transactions
Year ended
30 June 2021
£'000
Year ended
30 June 2020
£'000
85
121
-
-
(19)
=============================================
538
366
138
18
30
=============================================
During the period £nil was recognised as an expense in the Statement of Comprehensive Income in respect of
operating leases (2020: £0.07m in respect of discontinued operations).
Auditors’ remuneration for the Group and Company:
Audit of these financial statements
Fees payable for tax compliance 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 2021
£'000
Year ended
30 June 2020
£'000
31
4
3
=============================================
39
4
5
=============================================
Year ended
30 June 2021
Year ended
30 June 2020
£'000
£'000
-
=============================================
(12)
=============================================
5
=============================================
(17)
=============================================
42
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
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 2021
Year ended
30 June 2020
Year ended
30 June 2021
Year ended
30 June 2020
11
2
1
----------------------------------------------
14
=============================================
24
9
2
----------------------------------------------
35
=============================================
11
2
1
----------------------------------------------
14
=============================================
21
2
2
----------------------------------------------
25
=============================================
The aggregate payroll costs including Directors of these persons were as follows:
Wages and salaries
Share based payments (note 22)
Social security costs
Contributions to defined contribution pension
plan
Group
Company
Year ended
30 June 2021
£'000
Year ended
30 June 2020
£'000
Year ended
30 June 2021
£'000
Year ended
30 June 2020
£'000
771
41
93
30
1,532
-
199
41
771
41
93
30
1,453
-
182
41
----------------------------------------------
935
=============================================
----------------------------------------------
1,772
=============================================
----------------------------------------------
935
=============================================
----------------------------------------------
1,676
=============================================
The share based payment charge included in the accounts in respect of share options in the year was £41,000
(2020: potential charge of £2,000 not included in the accounts due to the small size of the charge).
9
Directors’ remuneration
Directors’ emoluments
Directors’ bonuses
Directors’ benefits
Employers national insurance
Share based payments (note 22)
Year ended
30 June 2021
£'000
Year ended
30 June 2020
£'000
189
-
7
501
90
21
----------------------------------------------
196
----------------------------------------------
612
22
28
=============================================
73
-
=============================================
The aggregate of emoluments and amounts receivable under long term incentive schemes of the highest paid
director was £127,738 (2020: £180,410). No company pension contributions were made to a money purchase
scheme on his behalf (2020: 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 (2020: Nil).
The number of Directors accruing retirement benefits under money purchase schemes in the year was nil (2020:
Nil).
The number of Directors who exercised share options in the year was Nil (2020: Nil).
43
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
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 (2020: Nil).
The share based payment charge in respect of Directors share options in the year was £28,000 (2020: Nil).
10
Taxation
Recognised in the statement of comprehensive income in respect of continuing operations
Current tax credit
Current year
Adjustment for previous year
Deferred tax credit
Current 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% (2020:
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
Recognition of deferred tax in respect of prior year losses
Prior year adjustment
Total tax credit
Corporation tax receivable
Deferred tax assets are:
Recognised – in respect of tax losses
Unrecognised – in respect of tax losses and other timing differences
Year ended
30 June 2021
£'000
Year ended
30 June 2020
£'000
(60)
(206)
-
(175)
(47)
-
----------------------------------------------
(313)
=============================================
----------------------------------------------
(175)
=============================================
Year ended
30 June 2021
Year ended
30 June 2020
£'000
(157)
=============================================
£'000
(1,265)
=============================================
(30)
8
(38)
-
(47)
(240)
2
(145)
383
-
(206)
----------------------------------------------
(313)
=============================================
60
(175)
----------------------------------------------
(175)
=============================================
175
-
4,416
47
5,670
=============================================
=============================================
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 £23.1m (2020:
£23.2m), 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% and in May 2021 the Finance Act 2021
was substantively enacted with a rate of 25% to apply from April 2023. The effective tax rate used to calculate
the current tax for the year ended 30 June 2021 was 19.00% (2020: 19.00%). Unrecognised deferred tax
balances at 30 June 2021 have been calculated using a rate of 25% (2020: 19%) as this was the substantively
enacted rate at the year end dates.
44
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 2021
Cost
Balance at 1 July 2019
On transition to IFRS 16
Reclassification
Additions
Disposals
Balance at 30 June 2020
Balance at 1 July 2020
Additions
Balance at 30 June 2021
Depreciation and impairment
Balance at 1 July 2019
Reclassification
Depreciation charge for the year
Disposals
Balance at 30 June 2020
Balance at 1 July 2020
Depreciation charge for the year
Balance at 30 June 2021
Net book value
At 1 July 2019
At 1 July 2020
At 30 June 2021
Right-of-
use-
property
assets
£’000
iTrack
Equipment
£’000
Plant and
Equipment
£'000
Fixtures
and
Fittings
£'000
Motor
Vehicles
£'000
-
272
-
-
-
868
-
-
641
(1,509)
554
-
(72)
50
(128)
111
-
72
68
(77)
26
-
-
5
(21)
Total
£'000
1,559
272
-
764
(1,735)
----------------------------------------------
272
----------------------------------------------
-
----------------------------------------------
404
----------------------------------------------
174
----------------------------------------------
10
----------------------------------------------
860
=============================================
272
-
=============================================
-
-
----------------------------------------------
272
----------------------------------------------
-
=============================================
=============================================
404
6
----------------------------------------------
410
============================================= =============================================
174
-
----------------------------------------------
174
============================================= =============================================
10
-
----------------------------------------------
10
============================================= =============================================
860
6
----------------------------------------------
866
============================================= =============================================
-
-
57
-
490
-
411
(901)
485
(71)
40
(69)
38
71
26
(17)
17
-
4
(11)
1,030
-
538
(998)
----------------------------------------------
57
----------------------------------------------
-
=============================================
57
57
=============================================
-
-
----------------------------------------------
114
----------------------------------------------
-
----------------------------------------------
385
----------------------------------------------
118
============================================= =============================================
118
15
----------------------------------------------
133
385
13
----------------------------------------------
398
----------------------------------------------
10
----------------------------------------------
570
============================================= =============================================
570
85
----------------------------------------------
655
10
-
----------------------------------------------
10
=============================================
=============================================
============================================= =============================================
============================================= =============================================
-
378
=============================================
215
=============================================
-
=============================================
158
=============================================
-
=============================================
=============================================
19
69
73
============================================= =============================================
56
============================================= =============================================
41
============================================= =============================================
12
9
529
============================================= =============================================
290
============================================= =============================================
211
============================================= =============================================
-
-
The depreciation charge is recognised in the following line items in the Statement of Comprehensive Income:
Administrative expenses – continuing operations
Loss on discontinued operations
2021
£'000
85
-
----------------------------------------------
85
=============================================
2020
£'000
90
448
----------------------------------------------
538
=============================================
45
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
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 2019
On transition to IFRS 16
Reclassification
Additions
Disposals
Balance at 30 June 2020
Balance at 1 July 2020
Additions
Balance at 30 June 2021
Depreciation and impairment
Balance at 1 July 2019
Reclassification
Depreciation charge for the year
Disposals
Balance at 30 June 2020
Balance at 1 July 2020
Depreciation charge for the year
Balance at 30 June 2021
Net book value
At 1 July 2019
At 1 July 2020
At 30 June 2021
-
272
-
-
-
868
-
-
641
(1,509)
----------------------------------------------
272
=============================================
----------------------------------------------
-
=============================================
272
-
----------------------------------------------
272
-
-
----------------------------------------------
-
=============================================
=============================================
-
-
57
-
----------------------------------------------
57
=============================================
57
57
----------------------------------------------
114
=============================================
490
-
411
(901)
----------------------------------------------
-
=============================================
-
-
----------------------------------------------
-
=============================================
-
378
=============================================
215
=============================================
158
=============================================
=============================================
-
=============================================
-
=============================================
534
-
(72)
46
(104)
105
-
72
68
(71)
---------------------------------------------- ----------------------------------------
174
1,517
272
-
760
(1,689)
----------------------------------------------
860
============================================= ======================================= ============================================= =============================================
10
-
-
5
(5)
----------------------------------------------
10
404
174
404
-
6
---------------------------------------------- ---------------------------------------
174
860
6
----------------------------------------------
866
============================================= ======================================= ============================================= =============================================
10
-
----------------------------------------------
10
410
385
480
(71)
36
(60)
10
-
1
(1)
----------------------------------------------
10
35
71
25
(13)
---------------------------------------------- ---------------------------------------
118
1,015
-
530
(975)
----------------------------------------------
570
============================================= ======================================= ============================================= =============================================
570
85
----------------------------------------------
655
============================================= ====================================== ============================================= =============================================
118
15
---------------------------------------------- ----------------------------------------
133
10
-
----------------------------------------------
10
385
13
398
-
54
70
502
============================================= ====================================== ============================================= =============================================
290
============================================= ====================================== ============================================= =============================================
211
============================================= ======================================= ============================================= =============================================
41
56
19
12
-
-
The right of use asset relates to the main property held under a 5 year lease. IFRS16 interest charges of £12,000
(2020: £16,000) are included in note 7 and lease liabilities are shown in note 21. The total cash outflow was
£72,000 (2020: £72,000).
46
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Notes to the financial statements (continued)
13
Intangible assets
Group and Company intangible assets
Cost
Balance at 1 July 2019
Additions
Disposals
Balance at 30 June 2020
Balance at 1 July 2020
Additions
Disposals
Balance at 30 June 2021
Amortisation and impairment
Balance at 1 July 2019
Reclassification
Amortisation for the year
Impairment in the year
Disposals
Balance at 30 June 2020
Balance at 1 July 2020
Amortisation for the year
Disposals
Balance at 30 June 2021
Net book value
At 1 July 2019
At 1 July 2020
At 30 June 2021
Goodwill
£'000
50
-
-
----------------------------------------------
50
=============================================
50
-
-
----------------------------------------------
50
=============================================
-
-
-
-
-
----------------------------------------------
-
=============================================
-
-
-
----------------------------------------------
-
=============================================
50
=============================================
50
=============================================
50
=============================================
Patents
rights and
trademarks
£'000
Development
costs
£'000
1,847
79
(957)
----------------------------------------------
969
=============================================
969
47
(111)
----------------------------------------------
905
=============================================
1,305
-
154
120
(957)
----------------------------------------------
622
=============================================
622
74
(111)
----------------------------------------------
585
=============================================
542
=============================================
347
=============================================
320
=============================================
1,916
381
-
----------------------------------------------
2,297
=============================================
2,297
-
-
----------------------------------------------
2,297
=============================================
1,637
4
209
-
-
----------------------------------------------
1,850
=============================================
1,850
47
-
----------------------------------------------
1,897
=============================================
279
=============================================
447
=============================================
400
=============================================
Licences
87
53
(140)
----------------------------------------------
-
=============================================
-
-
-
----------------------------------------------
-
=============================================
12
(4)
3
18
(29)
----------------------------------------------
-
=============================================
-
-
-
----------------------------------------------
-
=============================================
75
=============================================
-
=============================================
-
=============================================
Total
£'000
3,900
513
(1,097)
----------------------------------------------
3,316
=============================================
3,316
47
(111)
----------------------------------------------
3,252
=============================================
2,954
-
366
138
(986)
----------------------------------------------
2,472
=============================================
2,472
121
(111)
----------------------------------------------
2,482
=============================================
946
=============================================
844
=============================================
770
=============================================
Goodwill represents the excess of consideration paid for a business over the value of the net assets acquired and is
not amortised.
Amortisation and impairment charge
The amortisation and impairment charge is recognised in the following line items in the Statement of Comprehensive
Income:
Administrative expenses – continuing operations
Loss on discontinued operations
2021
£'000
121
-
----------------------------------------------
121
=============================================
2020
£'000
482
22
----------------------------------------------
504
=============================================
47
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Notes to the financial statements (continued)
13
Intangible assets (continued)
Development Costs
Development expenditure on the new iTrack II was capitalised in the year amounting to £Nil (2020: £0.38m). These
development costs have been deemed to have a useful economic life of 3 years.
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 cash flow 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
2021
2020
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 2019
Additions
Disposals
At 30 June 2020 and 2021
Impairment
Impairment in the year ended 30 June 2020
At 30 June 2020 and 30 June 2021
Net book value
At 30 June 2020
At 30 June 2021
£'000
61
5
(63)
----------------------------------------
3
----------------------------------------
3
----------------------------------------
3
----------------------------------------
-
=============================================
-
=============================================
48
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
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 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 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
2021
Year ended
30 June
2020
Year ended
30 June
2021
Year ended
30 June
2020
£’000
£’000
£’000
£’000
-
1,237
(976)
----------------------------------------------
261
=============================================
(1,333)
(560)
976
----------------------------------------------
(917)
=============================================
-
1,237
(976)
----------------------------------------------
261
=============================================
(1,672)
(560)
976
----------------------------------------------
(1,256)
=============================================
49
Notes to the financial statements (continued)
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
16
Inventories
Raw materials
Finished goods
30 June 2021
£'000
Group
30 June 2020
£'000
30 June 2021
£'000
Company
30 June 2020
£'000
38
35
----------------------------------------------
73
=============================================
33
30
----------------------------------------------
63
=============================================
38
35
----------------------------------------------
73
=============================================
33
30
----------------------------------------------
63
=============================================
Raw materials, consumables and changes in finished goods and work in progress recognised as cost of sales in
the year ended 30 June 2021 amounted to £0.36m (2020: £0.32m). Inventories are stated net of impairment
provisions of £0.016m (2020: £0.008m).
17
Trade and other receivables
Amounts falling due within one year
Trade receivables
Expected credit losses
Other receivables
Accrued income
Prepayments
30 June 2021
£'000
Group
30 June 2020
£'000
30 June 2021
£'000
Company
30 June 2020
£'000
139
(4)
----------------------------------------------
135
39
276
114
----------------------------------------------
564
=============================================
142
(1)
----------------------------------------------
141
1,437
-
99
----------------------------------------------
1,677
=============================================
139
(4)
----------------------------------------------
135
39
276
114
----------------------------------------------
564
=============================================
142
(1)
----------------------------------------------
141
1,437
-
99
----------------------------------------------
1,677
=============================================
As at 30 June 2021 there were no past due but not impaired trade receivables (2020: no past due but not
impaired). Included within receivables is a rent deposit of £28,000 repayable after more than one year.
18
Cash and cash equivalents
Cash and cash equivalents per Balance
Sheet
Cash and cash equivalents per cash flow
statements
30 June 2021
£'000
Group
30 June 2020
£'000
30 June 2021
£'000
Company
30 June 2020
£'000
1,046
1,193
1,046
1,193
----------------------------------------------
----------------------------------------------
---------------------------------------------
----------------------------------------------
1,046
=============================================
1,193
=============================================
1,046
=============================================
1,193
=============================================
50
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Notes to the financial statements (continued)
19
Trade and other payables
30 June 2021
£'000
Group
30 June 2020
£'000
30 June 2021
£'000
Company
30 June 2020
£'000
103
157
----------------------------------------------
260
=============================================
488
366
----------------------------------------------
854
=============================================
103
157
----------------------------------------------
260
=============================================
488
366
----------------------------------------------
854
=============================================
30 June 2021
£'000
Group
30 June 2020
£'000
30 June 2021
£'000
Company
30 June 2020
£'000
-
=============================================
976
=============================================
-
=============================================
976
=============================================
30 June 2021
£'000
Group
30 June 2020
£'000
30 June 2021
£'000
Company
30 June 2020
£'000
65
----------------------------------------------
61
----------------------------------------------
65
----------------------------------------------
61
----------------------------------------------
104
----------------------------------------------
169
=============================================
168
----------------------------------------------
229
=============================================
104
----------------------------------------------
169
=============================================
168
----------------------------------------------
229
=============================================
Current
Trade payables
Non-trade payables and accrued expenses
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
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 2021 was £0.03m (2020: £0.04m).
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 share based payment charge in respect of share options in the year was £41,000 (2020: £2,000 potential
charge not included in the accounts due to the small size of the charge).
51
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Notes to the financial statements(continued)
22
Employee benefits (continued)
Unapproved Discretionary Share Option Scheme
At 30 June 2021 the following share options remained outstanding under the Company’s Unapproved Discretionary
Share Option Scheme. .
Number of Options
Cancelled/
30 June
Option
Price
Date of
Grant
Date of Exercise
First
Last
1 July 2020
Granted
Expired
Exercised
2021
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
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:
Share price
Estimated fair
value
Expected
Life – Years
Date of
grant
Option
price
Expected
volatility
%
Risk free
rate
%
Expected
dividends
%
13.08.19
25.06.20
£0.1093
£0.1568
£0.61
£0.62
£0.75
£0.62
52.40%
52.40%
3.00
3.00
1.50%
1.50%
Nil
Nil
Enterprise Management Incentive Option Scheme
At 30 June 2021, the following shares remained outstanding under an Enterprise Management Incentive Option
Scheme.
1 July
2020
109,000
50,000
5,000
178,000
539,000
Number of Options
Option
Price
Date of
Grant
Date of Exercise
First
Last
30 June
Granted
Cancelled
Exercised
2021
-
-
-
-
-
(109,000)
-
-
(178,000)
-
-
-
-
-
-
-
-
-
-
-
50,000
5,000
£0.75
£1.00
26.06.17
30.06.18
30.06.21
26.06.17
30.06.20
30.06.27
£0.75
26.06.17
30.06.20
30.06.27
-
£0.75
13.08.19
12.08.21
12.08.29
539,000
£0.62
25.06.20
24.06.23
24.06.30
8,000
170,000
£0.62
£0.75
08.12.20
08.12.20
12.08.29
08.12.20
08.12.20
12.08.29
-
-
8,000
170,000
The assumptions used in the valuation of the current share options are as follows:
Share price
Option
price
Expected
Life – Years
Date of
grant
Estimated fair
value
26.06.17
26.06.17
26.06.17
13.08.19
25.06.20
8.12.20
8.12.20
£0.0834
£0.0388
£0.0834
£0.1093
£0.1102
£0.1013
£0.0823
£0.715
£0.715
£0.715
£0.61
£0.62
£0.54
£0.54
£0.75
£1.00
£0.75
£0.75
£0.62
£0.62
£0.75
Expected
volatility
%
28.08%
28.08%
28.08%
52.40%
52.40%
52.40%
52.40%
Risk free
rate
%
1.00%
1.00%
1.00%
1.50%
1.50%
1.00%
1.00%
Expected
dividends
%
Nil
Nil
Nil
Nil
Nil
Nil
Nil
52
3
3
3
3
3
3
3
Notes to the financial statements (continued)
23
Share capital
Issued share capital
In issue at 1 July
Share capital reduction
In issue at 30 June – fully paid
Allotted, called up and fully paid
Ordinary shares of £0.10 each
Deferred shares of £0.40 each
Shares classified as equity
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Ordinary shares of 10 pence
Deferred shares of 40 pence
each
each
30 June 2021
30 June 2020
30 June 201
30 June 2020
16,307,282
16,307,282
9,548,948
9,548,948
-
-
(9,548,948)
-
-----------------------------
-----------------------------
-----------------------------
-----------------------------
16,307,282
16,307,282
-
9,548,948
=====================
=====================
=====================
=====================
30 June
2021
£'000
1,631
-
30 June
2020
£'000
1,631
3,820
----------------------------------------------
1,631
----------------------------------------------
5,451
=============================================
=============================================
Resolutions were passed in the year and approved by court order on 26 January 2021 to cancel all the deferred
shares and the share premium account. The respective amounts of £3,820,000 and £2,591,000 were transferred
to the retained earnings reserve together with directly related expenses of £38,000.
There are also 130,458 warrants exercisable at £0.60 per share expiring 9 October 2021 which were exercised in
August 2021.
24
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 (2020: 16,307,282). Unexercised options and warrants over the ordinary shares
results in a highly immaterial number of dilutive shares included in the calculation of diluted loss per share as the
exercise price of most options exceeds the average share price during the year.
Weighted average number of shares – basic
Share option adjustment
Weighted average number of shares – diluted
Profit/(loss) from continuing operations
Loss from discontinued operations
Basic profit/(loss) per share from continuing operations
Basic loss per share from discontinued operations
Year ended
30 June 2021
Number
Year ended
30 June 2020
Number
16,307,282
16,307,282
30,206
------------------------------
16,337,488
======================
-
------------------------------
16,307,282
======================
Year ended
30 June 2021
£'000
Year ended
30 June 2020
£'000
156
(1,090)
-
------------------------------
(1,452)
------------------------------
156
------------------------------
(2,542)
------------------------------
0.96
-
------------------------------
(6.68)
(8.91)
------------------------------
Basic profit/(loss) per share
(15.59)
====================== ======================
There are 1,435,085 share options and 130,458 warrants in place at 30 June 2021 (1,544,085 share options and
226,850 warrants at 30 June 2020).
0.96
53
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Notes to the financial statements (continued)
25
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.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to the Group’s reputation. The Group has a cash balance at year end totalling £1.05m
(2020: £1.19m). 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 2021 or 2020. 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 (2020: 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 Group had no significant assets or liabilities denominated in foreign currencies at either 30 June 2021 or 30
June 2020 and which therefore could give rise to exchange gains and losses in the Statement of Comprehensive
Income.
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.
54
Notes to the financial statements (continued)
25
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 2021
30 June
2021
£000
135
39
276
1,046
30 June
2020
£000
141
1,273
-
1,193
----------------------------------------------
1,496
=============================================
----------------------------------------------
2,607
=============================================
103
-
169
121
488
976
229
315
----------------------------------------------
393
----------------------------------------------
2,008
=============================================
=============================================
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 £0.41m (2020: £0.58m) 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 2021 the Group’s cash was divided between current accounts £0.15m (2020: £0.13m) and £0.9m in
fixed rate monthly deposits (2020: £1.06m) with a weighted average interest rate for the year of 0.1% (2020: 0.1%).
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.
55
Registered number 01885075
Annual report and financial statements
For the year ended 30 June 2021
Notes to the financial statements (continued)
25
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 2021
£'000
73
73
36
----------------------------------------------
182
=============================================
Group
30 June 2020
£'000
73
73
109
----------------------------------------------
255
=============================================
30 June 2021
£'000
73
73
36
----------------------------------------------
182
=============================================
Company
30 June 2020
£'000
73
73
109
----------------------------------------------
255
=============================================
Reconciliation of movements in total financing liabilities
At start of the year
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 end of the year
Year ended 30 June 2021
Company
£’000
1,205
-
12
(60)
-
(976)
(12)
Group
£’000
1,205
-
12
(60)
-
(976)
(12)
----------------------------------------------
169
----------------------------------------------
169
=============================================
=============================================
Year ended 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
=============================================
26
Contingencies and commitments
The Company and Group had no capital commitments or contingent liabilities as at 30 June 2021 (2020: £nil).
27
Related parties and controlling party
Group
The compensation of key management personnel (considered to be the Directors) is shown in note 9.
In the opinion of the Directors, there is no one individual controlling party of the Company.
56