Trakm8 Holdings PLC
Annual Report 2012

Plain-text annual report

Trakm8 Holdings PLC REPORT AND FINANCIAL STATEMENTS for the year ended 31 March 2012 Trakm8 Holdings PLC Company Number 05452547  2 Company Number 05452547 Trakm8 Holdings PLC Contents 2 3 4 5 9 14 15 17 8 9 20 21 45 46 Officers and Advisers Highlights Chairman’s Statement CEO’s Statement Directors’ Report Statement of Directors’ Responsibilities Independent Auditors’ Report to the members of Trakm8 Holdings PLC Consolidated Statement of Comprehensive Income Consolidated Statement of Changes in Equity Consolidated Statement of Financial Position Consolidated Cash Flow Statement Notes to the Consolidated Financial Statements Parent Company Balance Sheet Notes to the Parent Company Financial Statements Trakm8 Holdings PLC Company Number 05452547  OFFICERS AND ADVISERS AUDITOR Milsted Langdon LLP Winchester House Deane Gate Avenue Taunton TA1 2UH NOMAD and BROKER finnCap Limited 60 New Broad Street London EC2M 1JJ FINANCIAL PUBLIC RELATIONS MHP Communications 60 Great Portland Street London W1W 7RT DIRECTORS C D Buck M Cowley T Cowley J Hedges J Watkins P Wilson SECRETARY J Hedges REGISTERED OFFICE Lydden House Wincombe Business Park Shaftesbury Dorset SP7 9QJ BANKERS HSBC Bank plc HSBC House Mitchell Way Southampton SO18 2XU 2 Company Number 05452547 Trakm8 Holdings PLC HIGHLIGHTS Revenue Gross profi t Gross profi t margin % Other income Operati ng profi t EBITDA (Earnings before interest, tax, depreciati on & amorti sati on) Adjusted EBITDA (excluding Government grants) Profi t before taxati on Cash and cash equivalents Net assets • • • • • • Revenues up 25% Adjusted EBITDA (excluding Government grants) up £120K Growth in annualised recurring revenues to £1,956K (2011: £1,500K) Robust fi nancial positi on with good cash balances T8 Mini and Driver feedback devices launched Contract win since year end with Motorola Soluti ons Year ended 31 March 2012 Year ended 31 March 2011 £000’s 5,215 3,326 63.7% 5 88 359 354 84 1,087 2,380 £000’s 4,186 2,787 66.6% 362 329 593 234 323 1,119 2,236 Trakm8 Holdings PLC Company Number 05452547 3 CHAIRMAN’S STATEMENT I am pleased to report that the results for the Group have continued to progress well and in line with market expectations. Revenues have increased by 25% to £5,215,565 (2011: £4,186,264) and we have realised a profit before tax of £83,884 (2011: £323,133). Excluding the Government funding of R&D our operating profits have improved by £114,355 over the previous year. Our adjusted EBITDA (excluding government grants) was £354,297 and this is a better guide to Trakm8’s underlying performance. Trakm8 has successfully introduced a number of new products and software solutions that have been well received by the market. Our recurring revenues continue to grow, which provides good visibility of our earnings. Despite the working capital requirement of the considerable growth and the pre-product launch build of inventory, the cash balances remain strong at £1,087,474. This robust financial position means that we can continue to invest to keep our products at the forefront of their markets and it gives our customers confidence that we are a well established business. The prospects for the Group continue to be positive. Trakm8 has achieved progressive gross profit expansion over the period, supported by the increased value-added nature of the Group’s activities. The Group has also seen a positive impact on revenue streams from the service offering, which now accounts for a significant proportion of Group revenues. The market is growing and the Trakm8 solutions are increasingly capable. The Board is therefore confident that the Group will continue to grow revenues and the Trakm8 Swift installed base. I am pleased to report that the new financial year has started ahead of the same period last year and we have a good pipeline of sales prospects. Dawson Buck Chairman 4 Company Number 05452547 Trakm8 Holdings PLC CEO’S STATEMENT I am pleased with the progress outlined in the Chairman’s statement. Trakm8 has enjoyed a significant improvement in sales of units and complete solutions, which has resulted in strong growth in revenues. Telematics revenues £2,226,230 (2011: £1,394,998) Trakm8 supplies other Telematics Service Providers with hardware solutions. In most cases this also includes our market leading configuration firmware for the hardware unit. These sales have been the core of Trakm8 revenue over the past 10 years and in excess of 150,000 have been supplied. During the year unit sales increased by 30% following contract wins in the UK and the Middle East. In the UK we have launched two in vehicle display devices that feed back to the driver vehicle performance and driver behaviour data. Over 6,000 of these devices were supplied during the year. Trakm8 has also launched a derivative of the A1091 telematics unit that was acquired from Vincotech in 2010. The new T8 Mini device combines a compact, waterproof design with exceptionally low power consumption. The T8, which is fitted onboard vehicles, can access a vast amount of data through the CANbus (Controller Area Network bus). This has recently been put into production and almost 2,000 units have already been supplied of the two variants. In addition, a range of tags for driver ID and temperature measurement have also been introduced. Since the year end we announced in June 2012 a major contract win with Motorola Solutions for 2,300 T8 telematics units to be used in South America. New firmware has been developed to allow data to be transmitted over private mobile radio networks providing a telematics solution in areas of poor or no GSM coverage. Trakm8 Holdings PLC Company Number 05452547 5 CEO’S STATEMENT (continued) Trakm8 swift revenues £2,776,872 (2011: £2,553,876) Trakm8 supplies customers with a fully integrated telematics service provision via Trakm8 Swift, an internet based service which is flexible, low cost and easy to use. Customers include the Automobile Association (“AA”), EO.N and Jewsons. This solution is also provided through a partner in South Africa. In total nearly 30,000 units are now using Swift, a net increase of 20% in the past twelve months. We now have five customers with over 1,000 vehicles operating Trakm8 Swift solutions. This has increased our base of recurring monthly revenues, which provides the improved security and predictability to future income. By the end of the financial year under review, the monthly recurring revenue had increased by 30% on the previous year. This also amounted to 70% of our operational costs up from 62% at the end of the previous year. During the past 12 months we have developed a number of variants of Swift. These include EcoN, which combines the Driver feedback device with server side analysis to improve the fuel economy of the vehicle. A security product, primarily for asset management, has also been launched with positive feedback. The server side solutions have had extensive development so that management reports are easier to use and can provide the higher levels of data now available from the driver feedback devices, the telematics unit and the CANbus connectivity. It is this provision and management use of the data available that enables vehicle operators to achieve significant reductions in fuel use. Trakm8’s knowledge of the vehicle electronic systems continues to be market leading following continuous development. Trakm8 has notified in previous statements that it is committed to owning the Intellectual Property throughout the value chain and the extensions of the server side applications continues this trend. The Trakm8 Swift product range is the core value enhancing segment of the Group. Hosting multiple applications on a single unit broadens its potential addressable markets including insurance, environmental services, Government and general consultancy. 6 Company Number 05452547 Trakm8 Holdings PLC CEO’S STATEMENT (continued) Professional services revenues £212,463 (2011: £237,390) Trakm8 undertakes bespoke software development for customers. The customer specific application engineering has been a major feature of the product development team as larger customers have demanded their particular requirements. This has also helped improve the core products. These engineering projects provide profitable consultancy activities in themselves, helping to integrate the customer with Trakm8 solutions, and provide on-going support and maintenance revenues. Whilst this activity remains a small percentage of the Group revenues it is considered a key skill and value added capability. We have recently renamed our subsidiary PJSoft to Trakm8 sro and this year they moved into new offices in Prague. This development team is an important element of the enhancement of our systems and the Professional Services revenues. Government grants £5,039 (2011: £361,542) The two Government funded projects, the Trusted Road Usage & Emissions Profiling Project and the Future Intelligent Transport Systems - Project Freeflow Initiative, were successfully completed early last year. We have been very pleased with the outcomes and much of the development work has been incorporated into our core products. Trakm8’s leading roles in government-sponsored projects ensures the Group is well positioned to capitalise on the regulatory and legislative drivers impacting the field of telematics. It is pleasing to see that we have realised a profit before tax excluding any Government Grant income and the table below demonstrates how important these projects have been to the continued development of our products. Trakm8 Holdings PLC Company Number 05452547 7 CEO’S STATEMENT (continued) Outlook The Group is confident that revenues will continue to improve over the next twelve months with results in line with market expectations. Trakm8 solutions are expected to increase market penetration both in the large fleet market and the SME space. The installed base for Trakm8 Swift and its’ consequent recurring revenues are expected to continue to increase. Hardware only solutions are expected to grow on the back of new customers and new products. To protect the technical superiority of the products and services and to ensure the lowest possible cost base, Trakm8 will continue to expand the engineering and professional services teams. The cost of fuel continues to rise and the capability of Trakm8 telematics based fleet management solutions to reduce fuel usage continues to become more sophisticated and beneficial to customers. We expect to benefit from these trends. Cost reduction initiatives and innovative product launches undertaken during the downturn, have left us well positioned for future growth. We have a strong balance sheet with substantial cash reserves and minimal debt. The market for vehicle telematics in the UK is still very fragmented and should opportunities emerge for us to grow by making acquisitions then we will seriously consider them. Finally, I would like to thank all the Trakm8 staff for their tremendous hard work over the past twelve months. John Watkins CEO 8 Company Number 05452547 Trakm8 Holdings PLC DIRECTORS’ REPORT The Directors submit their report and financial statements of Trakm8 Holdings PLC for the year ended 31 March 2012. Trakm8 Holdings PLC is a public listed company incorporated and domiciled in England (Company Number 05452547) whose shares are quoted on AIM, a market operated by the London Stock Exchange plc. PRINCIPAL ACTIVITIES The principal activities of the Trakm8 Group are the manufacture, marketing and distribution of vehicle telematics equipment and services. Trakm8 Holdings PLC is the holding company for the Trakm8 Group. REVIEW OF THE BUSINESS The review of the business is contained in the Chairman’s and CEO’s Statement on pages 4 to 8. RESULTS AND DIVIDENDS The Group results for the year ended 31 March 2012 are shown in the Consolidated Statement of Comprehensive Income on page 17. The Directors do not recommend the payment of a dividend. FUTURE DEVELOPMENTS Future developments of the business is contained in the Chairman’s and CEO’s Statement on pages 4 to 8. RESEARCH AND DEVELOPMENT The Board considers that the Group’s research and development activity plays an important role in the operational and financial success of the business. The Group continues to develop new products and during the year launched the T8 Mini and a T8 RFID solution. In addition further enhancements were rolled out for Trakm8 Swift. The Group believes this product strategy will enable the continued delivery of new and enhanced products and services during the coming year. Trakm8 Holdings PLC Company Number 05452547 9 DIRECTORS’ REPORT (conti nued) KEY PERFORMANCE INDICATORS The key performance indicators used to assess the performance and positi on of the Group are as follows:- 1. Operati ng profi t. The Group produced an operati ng profi t of £88,345 compared to last year’s operati ng profi t of £328,711. 2. Borrowings. The Group monitors its cash and borrowings positi on and updates cash fl ow forecasts for the following twelve months on a daily basis. During the year total borrowings increased from £186,491 to £219,191 at the year end. 3. Customer services. A weekly analysis is undertaken of outstanding customer service cases to ensure compliance with our service level agreements. 4. Credit control. All overdue accounts are reviewed and where necessary contacted on a weekly basis. GOING CONCERN The Directors confi rm that they are sati sfi ed that the Group has adequate resources and faciliti es to conti nue in business for the foreseeable future. For this reason they conti nue to adopt the going concern basis in preparing the fi nancial statements. DIRECTORS The following Directors have held offi ce during the year: C D Buck M Cowley T Cowley J Hedges J Watkins P Wilson DIRECTORS AND THEIR INTERESTS The present members of the Board are as listed on page 2. The Directors’ interests in the shares of the Company are detailed below:- 1p ordinary shares At 31 March 2012 % of issued ordinary share capital (18,864,731 ordinary shares) 1p ordinary shares At 1 Apr 2011 or on subsequent date of appointment % of issued ordinary share capital (18,764,731 ordinary shares) C D Buck M Cowley T Cowley J Hedges J Watkins P Wilson 541,994 1,194,203 1,459,002 1,171,025 3,852,738 420,512 2.87% 6.33% 7.73% 6.21% 20.42% 2.23% 511,994 1,164,203 1,429,002 891,025 3,822,738 320,512 2.73% 6.20% 7.62% 4.75% 20.37% 1.71% The Directors had no interest in the share capital of the Company’s subsidiary undertakings at 31 March 2012 or on the date on which these fi nancial statements were approved. 10 Company Number 05452547 Trakm8 Holdings PLC DIRECTORS’ REPORT (conti nued) DIRECTORS’ REMUNERATION The Directors’ remunerati on for the year ended 31 March 2012 was: AUDITED D Buck M Cowley T Cowley J Hedges J Watkins P Wilson Total Salaries & Fees Bonuses Benefi ts £ 35,000 77,000 80,104 80,104 75,000 73,500 420,708 £ - 957 995 995 9,769 93 13,629 £ - 3,755 3,699 3,624 - 8,681 19,759 Total 31 March 2012 £ Total 31 March 2011 £ 35,000 81,712 84,798 84,723 84,769 83,094 35,000 76,861 79,920 79,920 81,789 57,589 454,096 411,079 DIRECTORS’ SHARE OPTIONS At 31 March 2012 the following opti ons had been granted to the Company’s Directors and remain current and unexercised: Opti on exercise price Balance as at 31 March 2011 Granted during year Exercised during year Expired/ forfeited during year Balance as at 31 March 2012 Expiry date D Buck M Cowley T Cowley J Hedges J Watkins P Wilson £0.06 £0.06 £0.06 £0.05 £0.06 £0.06 100,000 75,000 75,000 100,000 200,000 100,000 - - - - - - - - - (100,000) - - - - - - - - 100,000 30/07/12 75,000 75,000 - 200,000 100,000 30/07/12 30/07/12 - 30/07/12 30/07/12 The Group provides indemnity cover for the Directors. Trakm8 Holdings PLC Company Number 05452547  DIRECTORS’ REPORT (continued) SUPPLIERS PAYMENT POLICY It is the Group’s policy to establish payment terms with suppliers and to adhere to those terms, provided that the goods and services are in accordance with the agreed terms and conditions. Trade payables for the parent company at the year end represented 45 days of purchases (2011: 49 days). EMPLOYMENT POLICY During the year, the Group has consulted with employees in matters likely to affect their interests and is committed to involving them in the performance and development of the Group. DISABLED EMPLOYEES The Group gives full consideration to applications for employment from disabled persons where the requirements of the job can be adequately fulfilled by a disabled person. Should existing employees become disabled, it is the Group’s policy wherever practicable to provide continuing employment under normal terms and conditions and to provide training, career development and promotion to such employees as appropriate. PRINCIPAL RISKS AND UNCERTAINTIES The following are identified as the principle risks and uncertainties facing the Group:- Technology risk - The Group invests in research and development to enable the delivery of new and enhanced products and services. Liquidity risk - The Group operates a long-term business, and its policy is to finance it primarily with equity and short to medium-term borrowings. Short-term flexibility is achieved by cash balances and overdraft facilities. Credit risk - The Group aims to minimise its exposure to credit risk through a mixture of credit insurance, credit limits and credit checks on new customers. Foreign currency risk - Historically the Group has not used hedging instruments to minimise currency risk as the exposure is limited. If foreign currency exposure increases, the use of foreign currency hedging instruments will be reviewed as necessary. EVENTS SINCE THE REPORTING DATE On 30 April 2012 five of the Directors exercised options totalling 550,000 ordinary shares of 1p each at a price of 6 pence per share under the Company’s Executive Management Incentive Scheme. The new shares were admitted to trading on AIM on 4 May 2012. 12 Company Number 05452547 Trakm8 Holdings PLC DIRECTORS’ REPORT (continued) STATEMENT AS TO DISCLOSURE OF INFORMATION TO THE AUDITOR The Directors who were in office on the date of approval of these financial statements have confirmed, as far as they are aware, that there is no relevant audit information of which the auditor is unaware. Each of the Directors has confirmed that they 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 it has been communicated to the auditor. AUDITOR A resolution to appoint Milsted Langdon LLP, Chartered Accountants, as auditor, will be put to the members at the annual general meeting. By approval of the Board on 27 June 2012. J Hedges Secretary Trakm8 Holdings PLC Company Number 05452547 3 STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN THE PREPARATION OF FINANCIAL STATEMENTS The Directors are responsible for preparing the Directors’ Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare Group and Company financial statements for each financial year. The Directors are required by the AIM Rules of the London Stock Exchange to prepare group financial statements in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union (“EU”) and have elected under company law to prepare the Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). The Group financial statements are required by law and IFRS adopted by the EU to present fairly the financial position and performance of the Group; the Companies Act 2006 provides in relation to such financial statements that references in the relevant part of that Act to financial statements giving a true and fair view are references to their achieving a fair presentation. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing each of the Group and Company financial statements, the Directors are required to: a. select suitable accounting policies and then apply them consistently; b. make judgements and accounting estimates that are reasonable and prudent; c. for the Group financial statements, state whether they have been prepared in accordance with IFRS adopted by the EU and for the Company financial statements state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the Group and Company financial statements; and d. prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the Company will continue in business. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s and the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Trakm8 Holdings PLC website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 14 Company Number 05452547 Trakm8 Holdings PLC INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TRAKM8 HOLDINGS PLC We have audited the financial statements of Trakm8 Holdings PLC which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in Equity, the Consolidated Statement of Financial Position, the Consolidated Cash Flow Statement, the Parent Company Balance Sheet and the related Notes. The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and International Financial Reporting Standards (IFRS) as adopted by the European Union. The financial reporting framework that has been applied in the preparation of the Parent Company financial statements is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed. RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS As more fully explained in the Directors’ Responsibilities Statement set out on page 14, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors. SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS A description of the scope of an audit of financial statements is provided on the APB’s website at www.frc.org.uk/apb/scope/private.cfm. OPINION ON THE FINANCIAL STATEMENTS In our opinion • the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 March 2012 and of the Group’s profit for the year then ended; • the Group financial statements have been properly prepared in accordance with IFRS as adopted by the European Union; • the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and • the financial statements have been prepared in accordance with the requirements of the Companies Act 2006. OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006 In our opinion the information given in the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements. Trakm8 Holdings PLC Company Number 05452547 15 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TRAKM8 HOLDINGS PLC (continued) MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: • adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or • the Parent Company financial statements are not in agreement with the accounting records and returns; or • certain disclosures of Directors’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit. Nigel Fry (Senior Statutory Auditor) For and behalf of Milsted Langdon LLP Chartered Accountants and Statutory Auditors Winchester House Deane Gate Avenue Taunton TA1 2UH 27 June 2012 16 Company Number 05452547 Trakm8 Holdings PLC CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 March 2012 REVENUE Cost of sales Gross profi t Other income Administrati ve expenses OPERATING PROFIT Finance income Finance costs PROFIT BEFORE TAXATION Income tax credit / (charge) Notes 2012 £ 2011 £ 6 5,215,565 4,186,264 (1,889,499) (1,399,046) 3,326,06 2,787,218 7 7 8 9 5,039 361,542 3,331,105 3,148,760 (3,242,760) (2,820,049) 88,345 328,711 788 979 89,133 329,690 (5,249) (6,557) 83,884 323,133 50,666 (117,094) PROFIT FOR THE YEAR ATTRIBUTABLE TO THE OWNERS OF THE PARENT 134,550 206,039 OTHER COMPREHENSIVE INCOME Currency translati on diff erences TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATTRIBUTABLE TO OWNERS OF THE PARENT EARNINGS PER ORDINARY SHARE (PENCE) ATTRIBUTABLE TO OWNERS OF THE PARENT Basic Diluted 1,493 1,008 136,043 207,047   0.71p 0.70p 1.10p 1.07p There were no disconti nued operati ons in 2012 or 2011. Accordingly the results relate to conti nuing operati ons. Trakm8 Holdings PLC Company Number 05452547 17 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 March 2012 Share Capital Share premium Merger Reserve Translati on reserve Retained Earnings Share based payment reserve Total equity att ributable to owners of the parent Balance as at 1 April 2010 187,647 1,719,402 509,837 63,152 205,313 (666,330) 2,019,021 £ £ £ £ £ £ £ Comprehensive income Profi t for the year Other comprehensive income Exchange diff erences on translati on of overseas operati ons Total comprehensive income Transacti ons with owners Transfer share based payment reserve to Retained earnings IFRS2 Share based payments Transacti ons with owners Balance as at 1 April 2011 Comprehensive income Profi t for the year Other comprehensive income Exchange diff erences on translati on of overseas operati ons Total comprehensive income Transacti ons with owners Shares issued IFRS2 Share based payments Transacti ons with owners - - - - - - - - - - - - - - - - - - 187,647 1,719,402 509,837 - - - - - - 1,000 4,250 - - 1,000 4,250 - - - - - - Balance as at 31 March 2012 188,647 1,723,652 509,837 - - - - 206,039 206,039 1,008 - 1,008 1,008 206,039 207,047 (63,152) - (63,152) - - - - - - - - - - - 63,152 - 9,921 9,921 73,073 9,921 206,321 (387,218) 2,235,989 - 134,550 134,550 (1,493) - (1,493) (1,493) 134,550 133,057 - - - - 5,537 5,537 5,250 5,537 10,787 204,828 (247,131) 2,379,833 8 Company Number 05452547 Trakm8 Holdings PLC CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31 March 2012 NON CURRENT ASSETS Intangible assets Property and equipment Deferred income tax asset CURRENT ASSETS Inventories Trade and other receivables Current tax assets Cash and cash equivalents CURRENT LIABILITIES Trade and other payables Borrowings CURRENT ASSETS LESS CURRENT LIABILITIES TOTAL ASSETS LESS CURRENT LIABILITIES NON CURRENT LIABILITIES Borrowings Provisions NET ASSETS EQUITY Share capital Share premium account Merger reserve account Translati on reserve Retained earnings TOTAL EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT Notes 2012 £ 2011 £ 12 3 16 14 15 9 17 8 1,005,107 1,150,235 517,118 98,421 463,007 63,243 1,620,646 1,676,485 410,016 782,375 15,488 1,087,474 2,295,353 259,042 893,172 17,828 1,119,027 2,289,069 (1,250,672) (1,473,074) (56,223) (27,305) (1,306,895) (1,500,379) 988,458 788,690 2,609,104 2,465,175 8 9 (163,093) (66,178) (159,186) (70,000) 2,379,833 2,235,989 21 188,647 187,647 1,723,652 1,719,402 509,837 204,828 509,837 206,321 (247,131) (387,218) 2,379,833 2,235,989 These fi nancial statements were approved by the Directors and authorised for issue on 27 June 2012 and are signed on their behalf by: D Buck Director J Hedges Director Trakm8 Holdings PLC Company Number 05452547 9 CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 March 2012 NET CASH INFLOW FROM OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property, plant and equipment Purchases of intangible assets NET CASH USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Issue of new shares New / (repayment of) obligati ons under hire purchase agreements Repayment of loans NET CASH (USED IN) /FROM FINANCING ACTIVITIES NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT END OF YEAR Notes 2012 £ 2011 £ 23 110,845 609,832 (91,232) (89,241) (49,758) (96,411) (180,473) (146,169) 5,250 53,296 (20,471) - (16,894) (19,880) 38,075 (36,774) (31,553) 426,889 1,119,027 692,138 1,087,474 1,119,027 20 Company Number 05452547 Trakm8 Holdings PLC NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March 2012 1. GENERAL INFORMATION Trakm8 Holdings PLC (“Company”) is a public limited company incorporated in the United Kingdom (registration number 05452547). The Company is domiciled in the United Kingdom and its registered address is Lydden House, Wincombe Business Park, Shaftesbury, Dorset, SP7 9QJ. The Company’s Ordinary Shares are traded on the AIM market of the London Stock Exchange. The Group’s principal activity is the manufacture, marketing and distribution of vehicle telematics equipment and services. The Company’s principal activity is to act as a holding company for its subsidiaries. 2. AUTHORISATION OF FINANCIAL STATEMENTS AND STATEMENT OF COMPLIANCE WITH IFRS The Group’s financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and International Financial Reporting Interpretations Committee (“IFRIC”) interpretations as endorsed by the European Union, and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. 3. BASIS OF PREPARATION The accounting policies set out in note 4 have been applied consistently to all periods presented in these consolidated financial statements. These financial statements are presented in sterling as that is considered to be the currency of the primary economic environment in which the Group operates. This decision was based on the Group’s workforce being based in the UK and that sterling is the currency in which management reporting and decision making is based. 4. ACCOUNTING POLICIES BASIS OF ACCOUNTING The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the date of the financial statements. If in the future such estimates and assumptions which are based on management’s best judgement at the date of the financial statements, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the year in which the circumstances change. Where necessary, the comparatives have been reclassified or extended from the previously reported results to take into account presentational changes. Trakm8 Holdings PLC Company Number 05452547 21 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2012 4. ACCOUNTING POLICIES (continued) BASIS OF CONSOLIDATION The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 March each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. The trading results of subsidiaries acquired or disposed of during the year are included in the consolidated Statement of Comprehensive Income from the effective date of acquisition or up to the effective date of disposal, as appropriate. All intra-group transactions, balances, income and expenditure are eliminated on consolidation. The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are initially measured at fair value at the acquisition date irrespective of the extent of any minority interest. The excess of cost of acquisition over the fair values of the Group’s share of identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition below the fair value of identifiable net assets acquired (i.e. discount on acquisition) is recognised directly in the Statement of Comprehensive Income. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group. SHARE-BASED PAYMENTS The Group has applied the requirements of IFRS 2 Share-based Payment. In accordance with the transitional provisions, IFRS 2 has been applied to all grants of equity instruments after 7 November 2002 that were unvested as of 1 April 2006. The Group 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 determined at the grant date of equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest. The fair value is measured by use of the Black-Scholes option pricing model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effect of non-transferability, exercise restrictions, and behavioural considerations. No expense is recognised for awards that do not ultimately vest. 22 Company Number 05452547 Trakm8 Holdings PLC NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2012 4. ACCOUNTING POLICIES (continued) FINANCIAL INSTRUMENTS Financial assets and financial liabilities are recognised in the Group’s balance sheet when the Group becomes a party to the contractual provisions of the instrument. Trade receivables Trade receivables are initially recognised at fair value and subsequently measured at their amortised cost using the effective interest method less any provision for impairment. A provision for impairment is made where there is objective evidence, (including customers with financial difficulties or in default on payments), that amounts will not be recovered in accordance with original terms of the agreement. A provision for impairment is established when the carrying value of the receivable exceeds the present value of the future cash flow discounted using the original effective interest rate. The carrying value of the receivable is reduced through the use of an allowance account and any impairment loss is recognised in the Statement of Comprehensive Income. Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value. For the purposes of the Cash Flow Statement, cash and cash equivalents includes bank overdrafts. Financial liabilities and equity Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Bank borrowings Interest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs. Finance charges, including premiums payable on settlement or redemption, are accounted for on an accruals basis and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. Trade payables Trade payables are initially recognised at fair value and subsequently at amortised cost using the effective interest method. GOODWILL Goodwill arising on consolidation is recorded as an intangible asset and is the surplus of the cost of acquisition over the Group’s interest in the fair value of identifiable net assets acquired. Goodwill is reviewed annually for impairment. Any impairment identified as a result of the review is charged in the Statement of Comprehensive Income. Negative goodwill is written off in the year in which it arises. On disposal of a subsidiary, associate or jointly controlled entity, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. Trakm8 Holdings PLC Company Number 05452547 23 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2012 4. ACCOUNTING POLICIES (continued) INTANGIBLE ASSETS OTHER THAN GOODWILL An intangible asset, which is an identifiable non-monetary asset without physical substance, is recognised to the extent that it is probable that the expected future economic benefits attributable to the asset will flow to the Group and that its cost can be measured reliably. Such intangible assets are carried at cost less amortisation. Amortisation is charged to ‘Administrative expenses’ in the Statement of Comprehensive Income on a straight line basis over the intangible assets’ useful economic life (1-10 years). Expenditure on research activities is recognised as an expense in the period in which it is incurred. Development expenditure is capitalised as an intangible asset only if the following conditions are met: • • • • • an asset is created that can be identified; it is probable that the asset created will generate future economic benefit; the development cost of the asset can be measured reliably; it meets the Group’s criteria for technical and commercial feasibility; and sufficient resources are available to meet the development to either sell or use as an asset. Development expenditure thus capitalised is amortised on a straight-line basis over its useful life. Where the criteria are not met, development expenditure is recognised as an expense in the ‘Administrative expenses’ line of the Statement of Comprehensive Income. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost less any subsequent accumulated depreciation or impairment losses. With the exception of freehold buildings held at 31 March 2006 (the date of transition to IFRS), cost represents purchase price together with any incidental costs to acquisition. As permitted by IFRS 1, the cost of freehold buildings at 31 March 2006 represents deemed cost, being the market value of the property for existing use at that date. Depreciation is provided on all property, plant and equipment, other than freehold land, at rates calculated to write each asset down to its estimated residual value over its expected useful life, as follows: Buildings 2% Furniture, fixtures and equipment 25% 33% Computer equipment straight line reducing balance straight line Assets held under finance leases or hire purchase arrangements are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, over the term of the relevant agreement. The assets’ residual values and useful lives are reviewed at each balance sheet date and adjusted if appropriate. The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. 24 Company Number 05452547 Trakm8 Holdings PLC NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2012 4. ACCOUNTING POLICIES (continued) INVENTORIES Inventories are valued at the lower of cost and net realisable value. In general cost is determined on a first in first out basis and includes all direct expenditure and production overheads based on a normal level of activity. Net realisable value is the price at which the stocks can be sold in the normal course of business after allowing for the costs of realisation and where appropriate for the costs of conversion from its existing state to a finished condition. Provision is made for obsolete, slow moving and defective stocks. LEASES Assets held under finance leases, which are leases where substantially all the risks and rewards of ownership of the asset have been transferred to the Group, are capitalised in the balance sheet and depreciated over the shorter of the lease term or their useful lives. The asset is recorded at the lower of its fair value and the present value of the minimum lease payments at the inception of the lease. The capital elements of future obligations under finance leases are included in liabilities in the balance sheet and analysed between current and non-current amounts. The interest elements of future obligations under finance leases are charged to the Statement of Comprehensive Income over the periods of the leases and represent a constant proportion of the balance of capital repayments outstanding in accordance with the effective interest rate method. Leases where the lessor retains substantially all the risks and rewards of ownership are classified as operating leases. The cost of operating leases (net of any incentives received from the lessor) is charged to the Statement of Comprehensive Income on a straight line basis over the periods of the leases. FOREIGN CURRENCIES Foreign currency assets and liabilities are converted to sterling at the rates of exchange ruling at the end of the financial year. Transactions in foreign currencies are converted to sterling at the rates of exchange ruling at the transaction date. All of the resulting exchange differences are recognised in the Statement of Comprehensive Income as they arise. For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are classified as equity and transferred to the Group’s reserves. Such translation differences are recognised as income or expense in the period in which the operation is disposed of. Trakm8 Holdings PLC Company Number 05452547 25 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2012 4. ACCOUNTING POLICIES (continued) TAXATION The tax expense represents the sum of the current tax expense and deferred tax expense. The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated by using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based upon tax rates that have been enacted or substantively enacted. REVENUE RECOGNITION Revenue represents the total of amounts receivable for goods and services provided excluding value added tax. Revenue is recognised on the delivery of the goods to the customer. Where a service is provided covering a future period the applicable revenue is shown as Deferred Income under Current Liabilities. WARRANTY CLAIMS Provision is made for liabilities arising in respect of expected warranty claims. GOVERNMENT GRANTS Government grants towards research and development projects are recognised as income over the periods necessary to match them with the related costs and are included within Other Income. 26 Company Number 05452547 Trakm8 Holdings PLC NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2012 4. ACCOUNTING POLICIES (continued) SEGMENTAL REPORTING Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors. EQUITY Equity comprises the following: Share capital represents the nominal value of equity shares. Share premium represents the excess over nominal value of the fair value of consideration received - - for equity shares, net of expenses of the share issue. - Merger reserve represents the excess over nominal value of the fair value of consideration received for equity shares issued on reverse acquisition of subsidiaries, net of expenses of the share issue prior to the date of transition to IFRS. - Translation reserve represents cumulative foreign exchange gains and losses on retranslation of overseas operations. - Retained earnings represents retained losses. CHANGES IN ACCOUNTING STANDARDS AND DISCLOSURES a) The Group has adopted the following new interpretations and amendments to existing standards in the year ended 31 March 2012:- - IAS 24 (Amendment) ‘Related Party Disclosures’ effective 1 January 2011 The adoption of this amendment to the existing standard has not led to any changes in the Group’s accounting policies. b) The following standards and interpretations have been issued by the IASB. They become effective after the current year and have not been early adopted by the Group: - - IFRS 9 IFRS 13 ‘Financial Instruments’ effective 1 January 2013 ‘Fair value measurement’ effective 1 January 2013 The impact on the Group’s financial statements is not expected to be material. Trakm8 Holdings PLC Company Number 05452547 27 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2012 5. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY CRITICAL JUDGEMENTS IN APPLYING THE GROUP’S ACCOUNTING POLICIES In the process of applying the Group’s accounting policies, which are described in note 4, management has made the following judgements that have the most significant effect on the amounts recognised in the financial statements (apart from those involving estimations, which are dealt with below). Valuation of intellectual property In assessing the fair value of the intellectual property, management have considered the underlying value of the income streams. Attention has been paid to the potential introduction of new products and services and the return anticipated from these and existing product sales. The Directors believe that the fair value of the intellectual property is both appropriate and a realistic assessment of its long term value to the Group. KEY SOURCES OF ESTIMATION UNCERTAINTY The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Recoverability of internally-generated intangible asset During the year, management reconsidered the recoverability of its internally generated intangible asset which is included in the balance sheet at £177,885. The costs relate to the development of the Group’s portfolio of hardware and software products and management continue to believe that the anticipated revenues will enable the carrying amount to be recovered in full. Assumptions have been made on the number of years over which the costs will be recovered based on management’s best expectations and these could turn out to be longer or shorter although any subsequent adjustment is not expected to be material. Recoverability of trade debtors The withdrawal or reduction of credit facilities from Banks and leasing companies is affecting a wide range of businesses. Management are particularly conscious of the financial weakness of some companies and is closely monitoring its outstanding debtor book in order to minimise the risk associated with future bad debts. Weekly cash receipts are analysed and future supplies are stopped if accounts remain overdue. An increasing number of customers taking the Group’s services pay by direct debit and this is reducing the Group’s exposure to the non-recoverability of trade debtors in the future. 28 Company Number 05452547 Trakm8 Holdings PLC NOTES TO THE FINANCIAL STATEMENTS (conti nued) for the year ended 31 March 2012 6. SEGMENTAL ANALYSIS The format of segmental reporti ng is based on the Group’s management and internal reporti ng of the segments below which carry diff erent risks and rewards and are used to make strategic decisions. Telemati cs is the sale of hardware through the Group’s distributors. Trakm8 SWIFT represents the sale of the Group’s full vehicle telemati cs service direct to customers. Development and other services comprises bespoke professional services and mapping soluti ons. The Board review the revenue results by segment and the gross margin. Cost of sales comprise hardware costs and have been allocated to the segments based on the number of units sold. Administrati on costs and assets and liabiliti es are not separated out by segment. Year ended 31 March 2012 Telemati cs Trakm8 SWIFT Development & other services Unallocated Total £ £ Segment revenue 2,226,230 2,776,872 Gross profi t Other income 789,858 2,323,746 - - £ 212,463 212,462 5,039 Depreciati on & amorti sati on (124,058) (53,703) (93,230) £ - - - - Finance income Finance costs Income tax - - - - - - - - - 788 (5,249) 50,666 £ 5,215,565 3,326,066 5,039 (270,991) 788 (5,249) 50,666 Trakm8 Holdings PLC Company Number 05452547 29 NOTES TO THE FINANCIAL STATEMENTS (conti nued) for the year ended 31 March 2012 6. SEGMENTAL ANALYSIS (conti nued) Year ended 31 March 2011 Telemati cs Trakm8 SWIFT Development & other services Unallocated Total £ £ Segment revenue 1,394,998 2,553,876 Gross profi t Other income 489,081 2,060,747 - - £ 237,390 237,390 361,542 Depreciati on & amorti sati on (127,182) (41,668) (95,714) £ - - - - £ 4,186,264 2,787,218 361,542 (264,564) Finance income Finance costs Income tax - - - - - - - - - 979 979 (6,557) (6,557) (117,094) (117,094) The Group’s operati ons are located in the UK and the Czech Republic. The following table provides an analysis of the Group’s revenue by geography based upon locati on of the Group’s customers. Year ended 31 March 2012 United Kingdom Europe Africa Rest of the World Telemati cs Trakm8 SWIFT Development & other services £ £ 1,291,621 2,767,583 171,772 214,928 547,909 9,289 - - £ 98,205 24,258 90,000 - Total £ 4,157,409 205,319 304,928 547,909 2,226,230 2,866,872 122,463 5,215,565 The Group had one customer who accounted for more than 10% of the Group revenue (2011: two). Year ended 31 March 2011 Telemati cs Trakm8 SWIFT Development & other services United Kingdom Europe Africa Rest of the World £ 502,235 193,874 278,361 420,528 £ 2,543,862 10,014 - - Total £ £ 114,983 3,161,080 58,450 47,000 16,957 262,338 325,361 437,485 1,394,998 2,553,876 237,390 4,186,264 30 Company Number 05452547 Trakm8 Holdings PLC NOTES TO THE FINANCIAL STATEMENTS (conti nued) for the year ended 31 March 2012 7. PROFIT FROM OPERATIONS Profi t from operati ons is stated aft er (crediti ng)/charging: Other income - Government grant Depreciati on - owned fi xed assets - assets on hire purchase Amorti sati on of intangible assets Operati ng lease rentals Land and buildings Other Loss/(profi t) on foreign exchange transacti ons Staff costs (note 10) Auditor’s remunerati on - audit services Parent Company and consolidati on Subsidiary audits - tax advisory services 8. FINANCE COSTS Bank interest payable Interest on fi nance leases Interest on other loans 2012 £ 2011 £ (5,039) (359,760) 30,205 6,417 18,955 11,684 234,369 233,925 14,251 31,123 11,180 14,222 11,587 (3,987) 1,714,323 1,517,374 2012 £ 2011 £ 4,680 10,920 2,285 4,500 10,500 2,200 2012 £ - 54 5,195 5,249 2011 £ 62 790 5,705 6,557 Trakm8 Holdings PLC Company Number 05452547 3 NOTES TO THE FINANCIAL STATEMENTS (conti nued) for the year ended 31 March 2012 9. INCOME TAX R&D tax credit Recogniti on of deferred tax Current year movement Income tax (credit) / charge Factors aff ecti ng the tax charge 2012 £ (15,488) (112,689) 2011 £ (17,828) - 77,511 134,922 (50,666) 117,094 The tax assessed for the year is lower (2011: higher) than the applicable rate of corporati on tax in the UK. The diff erence is explained below: Profi t before tax Profi t on ordinary acti viti es multi plied by the standard rate of corporati on tax in the UK of 26% (2011: 28%) Eff ects of: Expenses not deducti ble/income not taxable Share opti on adjustment Temporary diff erences Change in deferred tax rates Deferred tax brought forward recognised R&D tax credit Total tax 10. EMPLOYEES The average monthly number of persons (including Directors) employed by the Group was: Research and development Selling and distributi on Producti on Administrati on 2012 £ 2011 £ 83,884 323,133 21,810 90,477 23,167 (706) 16,979 16,261 (112,689) (15,488) (50,666) 61,593 2,778 (2,988) 3,015 (19,953) (17,828) 117,094 2012 No. 2011 No. 15 9  10 45 3 14 3  41 32 Company Number 05452547 Trakm8 Holdings PLC NOTES TO THE FINANCIAL STATEMENTS (conti nued) for the year ended 31 March 2012 10. EMPLOYEES (conti nued) Staff costs for the employees and Directors (included under Administrati ve expenses): Wages and salaries Social Security costs Share Based Payments Costs relati ng to the Directors who are the key management of the Group: Wages and salaries Benefi ts Social Security costs Share Based Payments 2012 £ 2011 £ 1,509,854 1,336,898 198,931 5,537 170,555 9,921 1,714,322 1,517,374 2012 £ 2011 £ 434,337 404,594 19,759 49,659 1,103 6,485 41,840 3,236 504,858 456,155 Further details of Directors’ fees and salaries, bonuses and pensions are given in the Directors’ Report on page 11. 11. EARNINGS PER ORDINARY SHARE Staff costs for the employees and Directors (included under Administrati ve expenses): The earnings per ordinary share has been calculated using the profi t for the year and the weighted average number of ordinary shares in issue during the year as follows: Earnings for the year aft er taxati on Number of ordinary shares of 1p each Basic weighted average number of ordinary shares of 1p each Basic weighted average number of ordinary shares of 1p each (diluted) Basic profi t pence per share Diluted profi t pence per share 2012 £ 2011 £ 134,550 206,039 18,864,731 18,764,731 18,820,621 18,764,731 19,159,446 19,180,873 0.71p 1.10p 0.70p 1.07p Trakm8 Holdings PLC Company Number 05452547 33 NOTES TO THE FINANCIAL STATEMENTS (conti nued) for the year ended 31 March 2012 12. INTANGIBLE ASSETS COST As at 1 April 2010 Additi ons As at 31 March 2011 Additi ons As at 31 March 2012 AMORTISATION As at 1 April 2010 Charge for year As at 31 March 2011 Charge for year As at 31 March 2012 NET BOOK VALUE As at 31 March 2012 As at 31 March 2011 As at 1 April 2010 Intellectual property Development costs £ £ Total £ 1,546,007 127,856 1,673,863 344,514 141,996 1,890,521 269,852 486,510 2,160,373 - 89,241 89,241 1,673,863 575,751 2,249,614 Intellectual property Development costs £ £ Total £ 501,594 165,787 667,381 179,260 274,619 68,138 342,757 55,109 776,213 233,925 1,010,138 234,369 846,641 397,866 1,244,507 827,222 177,885 1,005,107 1,006,482 143,753 1,150,235 1,044,413 69,895 1,114,308 The intellectual property has been purchased from third parti es. Development costs have been internally generated. Amorti sati on expenses of £234,369 (2011: £233,925) have been charged to Administrati ve expenses in the Consolidated Statement of Comprehensive Income. Development costs will be fully amorti sed within the next three years and Intellectual Property will be fully amorti sed within the next fi ve years. 34 Company Number 05452547 Trakm8 Holdings PLC NOTES TO THE FINANCIAL STATEMENTS (conti nued) for the year ended 31 March 2012 13. PROPERTY & EQUIPMENT COST As at 1 April 2010 Additi ons Exchange diff erences Disposals As at 31 March 2011 Additi ons Exchange diff erences Disposals As at 31 March 2012 DEPRECIATION As at 1 April 2010 Charge for year Exchange diff erences Disposals As at 31 March 2011 Charge for year Exchange diff erences Disposals As at 31 March 2012 NET BOOK VALUE As at 31 March 2012 As at 31 March 2011 As at 1 April 2010 Freehold property Furniture, fi xtures and equipment Computer equipment Total £ £ £ £ 420,000 - - - 420,000 - - - 62,097 37,469 - (15,297) 84,269 10,498 (504) - 202,603 12,289 215 (33,942) 181,165 80,734 - - 684,700 49,758 215 (49,239) 685,434 91,232 (504) - 420,000 94,263 261,899 776,162 17,632 4,408 - - 22,040 4,408 - - 51,338 5,150 - (15,297) 41,191 11,332 (5) - 171,852 21,081 205 (33,942) 159,196 20,882 - - 240,822 30,639 205 (49,239) 222,427 36,622 (5) - 26,448 52,518 180,078 259,044 393,552 41,745 81,821 517,118 397,960 402,368 43,078 10,759 21,969 30,751 463,007 443,878 Included within freehold property is £199,585 (2011: £199,585) relati ng to land which is not depreciated. The net book value of plant and computer equipment includes £51,750 (2011: £8,167) in respect of assets held under fi nance leases and hire purchase contracts. The depreciati on charge in respect of these assets was £6,417 (2011: £11,684). Total depreciati on expenses of £36,622 (2011: £30,639) have been charged to administrati ve expenses in the Consolidated Statement of Comprehensive Income. Trakm8 Holdings PLC Company Number 05452547 35 NOTES TO THE FINANCIAL STATEMENTS (conti nued) for the year ended 31 March 2012 14. INVENTORIES Finished goods and goods for resale 2012 £ 2011 £ 410,016 259,042 The cost of inventories recognised as an expense and included in cost of sales amounted to £1,889,499 (2011: £1,399,046). During the year old inventory lines totalling £40,947 (2011: nil) were writt en down and charged to cost of sales in the Consolidated Statement of Comprehensive income. 15. TRADE AND OTHER RECEIVABLES Trade receivables Other receivables Prepayments The analysis of trade receivables by currency is as follows: Pound sterling Euro Other 2012 £ 2011 £ 690,354 757,160 - 92,021 782,375 63,237 72,775 893,172 2012 £ 570,532 54,147 65,675 690,354 2011 £ 638,604 111,188 7,368 757,160 An allowance for impairment is made where there is an identi fi ed event which, based on previous experience, is evidence of a reducti on in the recoverability of the outstanding amount. An allowance has been made for esti mated irrecoverable trade receivables of £20,500 (2011: £6,000). As at 31 March 2012 trade receivables of £374,132 were past due but not impaired. The ageing analysis of these trade receivables is as follows:- Up to 3 months 3 to 6 months 2012 £ 359,411 14,721 374,132 2011 £ 295,477 59,047 354,524 The Directors consider that the carrying amount of trade and other receivables approximates to their fair values. The maximum exposure to credit risk at the reporti ng date is the carrying value of each class of receivable menti oned above. 36 Company Number 05452547 Trakm8 Holdings PLC NOTES TO THE FINANCIAL STATEMENTS (conti nued) for the year ended 31 March 2012 16. DEFERRED TAX The analysis of deferred tax assets and deferred tax liabiliti es is as follows: 2012 £ 2011 £ Deferred tax asset Deferred tax asset to be recovered aft er more than 12 months 116,443 81,428 Deferred tax liability £ £ Deferred tax liability to be recovered aft er more than 12 months (18,022) (18,185) Deferred tax asset net 98,421 63,243 The movement in the deferred income tax assets and liabiliti es during the year is as follows:- Deferred tax assets As at 1 April 2011 Charged to the income statement At 31 March 2012 Deferred tax liabiliti es As at 1 April 2010 Credited to the income statement At 31 March 2011 Credited to the income statement At 31 March 2012 Accelerated tax depreciati on Uti lisati on of unrecognised losses £ (1,689) (15,050) (16,739) £ 83,117 50,065 Total £ 81,428 35,015 133,182 116,443 Building revaluati on £ (18,348) 163 (18,185) 163 (18,022) Trakm8 Holdings PLC Company Number 05452547 37 NOTES TO THE FINANCIAL STATEMENTS (conti nued) for the year ended 31 March 2012 17. TRADE AND OTHER PAYABLES Trade payables Taxati on and social security Other payables Accruals and deferred income 2012 £ 429,574 136,333 14,801 669,964 2011 £ 481,688 224,093 43,588 723,705 1,250,672 1,473,074 The Directors consider that the carrying amount of trade payables approximates to their fair value. 18. BORROWINGS Bank loan Obligati ons under fi nance leases and hire purchase arrangements (see note 20) On demand or within one year Aft er one and within two years Aft er two and within fi ve years Aft er fi ve years Less: Amount due for sett lement within one year (shown as current liabiliti es) Amount due for sett lement aft er more than one year 2012 £ 159,191 60,125 219,316 56,223 46,740 69,269 47,084 219,316 (56,223) 163,093 2011 £ 179,661 6,830 186,491 27,305 21,099 67,225 70,862 186,491 (27,305) 159,186 The bank loan is secured by a fi xed and fl oati ng charge on all the assets of the Group. It is repayable by monthly instalments unti l 2019 and bears interest at a fl oati ng rate of 2.50% over base rate. 19. PROVISIONS As at 1 April (Decrease) / increase during the year At 31 March 2012 £ 70,000 (3,822) 66,178 2011 £ - 70,000 70,000 The provision relates to the esti mated additi onal costs payable under the terms of the contract for the acquisiti on of the telemati cs assets from Vincotech Gmbh. The costs relate to commission payable and have been esti mated based on the anti cipated numbers of units that will be sold. 38 Company Number 05452547 Trakm8 Holdings PLC NOTES TO THE FINANCIAL STATEMENTS (conti nued) for the year ended 31 March 2012 NOTES TO THE FINANCIAL STATEMENTS (conti nued) for the year ended 31 March 2012 17. TRADE AND OTHER PAYABLES 20. OBLIGATIONS UNDER HIRE PURCHASE CONTRACTS The Directors consider that the carrying amount of trade payables approximates to their fair value. 18. BORROWINGS The present value of minimum hire purchase payments is analysed as follows: Bank loan Obligati ons under fi nance leases and hire purchase arrangements (see note 20) No later than 1 year Later than 1 year and no later than 5 years Gross hire purchase liabiliti es – minimum payments: No later than 1 year Later than 1 year and no later than 5 years Less future fi nance charges Present value 2012 £ 35,125 25,000 60,125 - 60,125 2012 £ 35,125 25,000 60,125 2011 £ 6,884 - 6,884 (54) 6,830 2011 £ 6,830 - 6,830 All contracts are denominated in sterling and are secured on the assets. The fair value of the hire purchase obligati ons approximates to their carrying amount. 21. SHARE CAPITAL Authorised Ordinary shares of 1p each Allott ed, issued and fully paid Ordinary shares of 1p each Movement in share capital: As at 1 April New shares issued As at 31 March 2012 No’s ‘000’s 2011 No’s ‘000’s £ £ 200,000 2,000,000 200,000 2,000,000 18,864 188,647 18,764 187,647 2012 £ 2011 £ 187,647 187,647 1,000 - 188,647 187,647 Trakm8 Holdings PLC Company Number 05452547 39 Trade payables Taxati on and social security Other payables Accruals and deferred income On demand or within one year Aft er one and within two years Aft er two and within fi ve years Aft er fi ve years 19. PROVISIONS As at 1 April At 31 March (Decrease) / increase during the year Less: Amount due for sett lement within one year (shown as current liabiliti es) Amount due for sett lement aft er more than one year The bank loan is secured by a fi xed and fl oati ng charge on all the assets of the Group. It is repayable by monthly instalments unti l 2019 and bears interest at a fl oati ng rate of 2.50% over base rate. The provision relates to the esti mated additi onal costs payable under the terms of the contract for the acquisiti on of the telemati cs assets from Vincotech Gmbh. The costs relate to commission payable and have been esti mated based on the anti cipated numbers of units that will be sold. 2012 £ 429,574 136,333 14,801 669,964 2011 £ 481,688 224,093 43,588 723,705 1,250,672 1,473,074 2012 £ 159,191 60,125 219,316 56,223 46,740 69,269 47,084 219,316 (56,223) 163,093 2011 £ 179,661 6,830 186,491 27,305 21,099 67,225 70,862 186,491 (27,305) 159,186 2012 £ 70,000 (3,822) 66,178 2011 £ - 70,000 70,000 NOTES TO THE FINANCIAL STATEMENTS (conti nued) for the year ended 31 March 2012 22. SHARE-BASED PAYMENTS Trakm8 Holdings PLC has issued opti ons (under the Trakm8 Approved Opti on Scheme) to subscribe for ordinary shares of 1p in the Company. The purpose of the Opti on Scheme is to retain and moti vate eligible employees. The exercise price and number of shares to which the opti ons relate are as follows: Opti on Exercise Price 5.25p 6.0p 15.5p 12.5p Total Balance as at 31 March 2011 100,000 550,000 300,000 Granted during year Exercised during year Expired/ forfeited during the year Balance as at 31 March 2012 Grant date Opti on & expected Life (years) Risk free rate of return Volati lity - - (100,000) - - - - - - 30/11/08 550,000 30/07/09 300,000 30/04/10 (100,000) 100,000 31/07/11 3.0 3.0 3.0 3.0 3.02% 3.02% 3.02% 3.02% 54% 54% 60% 54% - 200,000 950,000 200,000 (100,000) (100,000) 950,000 The share price was 13.5 pence on 9 September 2011 being the date of exercise of the above 100,000 opti ons. The weighted average exercise price of share opti ons outstanding as at 31 March 2012 was 9.5 pence. The exercise price of all share opti ons is the closing market price on the day of grant. A vesti ng period of 1 or 2 years is applicable according to the terms of each scheme. The fair value of the equity sett led share opti ons granted is esti mated as at the date of grant using the Black Scholes opti on pricing model taking into account the terms and conditi ons upon which the opti ons were granted. The volati lity has been based on historic share prices and the dividend yield has been assumed to be 0% for all schemes. The Group charged £5,537 to the Statement of Comprehensive Income in respect of Share-Based Payments for the fi nancial year ended 31 March 2012 (2011: £9,921). 40 Company Number 05452547 Trakm8 Holdings PLC NOTES TO THE FINANCIAL STATEMENTS (conti nued) for the year ended 31 March 2012 NOTES TO THE FINANCIAL STATEMENTS (conti nued) for the year ended 31 March 2012 22. SHARE-BASED PAYMENTS 23. CASH FLOWS Trakm8 Holdings PLC has issued opti ons (under the Trakm8 Approved Opti on Scheme) to subscribe for ordinary shares of 1p in the Company. The purpose of the Opti on Scheme is to retain and moti vate eligible employees. The exercise price and number of shares to which the opti ons relate are as follows: Opti on Exercise Price Balance as Granted Exercised during year during Expired/ forfeited year during the Balance as at 31 March 2012 Grant date Opti on & expected Life (years) Risk free Volati lity at 31 March 2011 100,000 550,000 300,000 (100,000) - 30/11/08 year - - 550,000 30/07/09 300,000 30/04/10 - - - - - - 200,000 (100,000) 100,000 31/07/11 950,000 200,000 (100,000) (100,000) 950,000 rate of return 3.02% 3.02% 3.02% 3.02% 3.0 3.0 3.0 3.0 54% 54% 60% 54% The share price was 13.5 pence on 9 September 2011 being the date of exercise of the above 100,000 opti ons. The weighted average exercise price of share opti ons outstanding as at 31 March 2012 was 5.25p 6.0p 15.5p 12.5p Total 9.5 pence. The exercise price of all share opti ons is the closing market price on the day of grant. A vesti ng period of 1 or 2 years is applicable according to the terms of each scheme. The fair value of the equity sett led share opti ons granted is esti mated as at the date of grant using the Black Scholes opti on pricing model taking into account the terms and conditi ons upon which the opti ons were granted. The volati lity has been based on historic share prices and the dividend yield has been assumed to be 0% for all schemes. The Group charged £5,537 to the Statement of Comprehensive Income in respect of Share-Based Payments for the fi nancial year ended 31 March 2012 (2011: £9,921). Reconciliati on of profi t before tax to net cash fl ow from operati ng acti viti es: Profi t before tax Depreciati on Bank and other interest charges Amorti sati on of intangible assets Capitalised development costs Share based payments Operati ng cash fl ows before movement in working capital Movement on retranslati on of overseas operati ons Movement in inventories Movement in trade and other receivables Movement in trade and other payables Cash generated from operati ons Interest paid Interest received Income taxes received 2012 £ 83,884 36,622 4,461 2011 £ 323,133 30,639 5,578 234,369 233,925 - (103,441) 5,537 9,922 364,873 499,756 (994) (150,974) 110,797 (226,224) 998 (152,406) (191,843) 375,401 97,478 531,906 (5,249) 788 17,828 (6,557) 979 83,504 Net cash infl ow from operati ng acti viti es 110,845 609,832 Cash and cash equivalents comprise cash at bank, other short-term highly liquid investments with a maturity of three months or less (together presented as ‘Cash and cash equivalents’ on the face of the balance sheet). Trakm8 Holdings PLC Company Number 05452547 41 NOTES TO THE FINANCIAL STATEMENTS (conti nued) for the year ended 31 March 2012 24. FINANCIAL COMMITMENTS At the balance sheet date, the Group had outstanding commitments for future minimum operati ng lease payments under non-cancellable operati ng leases, which fall due as follows: Operati ng Leases Land and buildings Within one year In the second to fi ft h years inclusive Other Within one year In the second to fi ft h years inclusive 2012 £ 2011 £ 17,522 70,086 34,112 36,646 14,222 - 12,078 19,131 Land and buildings under operati ng leases represents one lease payable by the Group which has an expiry date in March 2017. 25. RELATED PARTY TRANSACTIONS Details of the remunerati on of the Directors, who are the key management personnel of the Group, are disclosed in the Directors’ report. J Watkins is a Director and shareholder of Omitec Group Limited. Omitec Limited is a wholly owned subsidiary of Omitec Group Limited. During the year ended 31 March 2012 a total of £1,678,110 was invoiced to Trakm8 Limited by Omitec Limited (2011: £579,339) and Trakm8 Limited invoiced Omitec Limited £20,056 (2011: £10,668). The net balance due on 31 March 2012 from Trakm8 Limited to Omitec Limited was £129,717 (2011: £68,817). The value of outstanding commitments with Omitec as at 31 March 2012 was £1,563,346 (2011: £939,381) 42 Company Number 05452547 Trakm8 Holdings PLC NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2012 26. FINANCIAL INSTRUMENTS Financial risk factors The Group’s activities expose it to a variety of financial risks: market risk (including currency risk and interest rate risk), credit risk and liquidity risk. Where appropriate, the Group seeks to mitigate potential adverse effects on its financial performance. Liquidity risk The Group’s objective is to maintain a balance between continuity and flexibility of funding through the use of borrowings and financial assets with a range of maturities. Borrowing facilities are monitored against the Group’s forecast requirements and it is the Group’s policy to mitigate the risk by maintaining undrawn overdraft facilities and cash reserves. The bank overdraft facility is £250,000 and as at 31 March 2012 this facility was not being utilised. Credit risk The Group’s principal financial assets are bank balances, cash and trade and other receivables. The Group’s credit risk is primarily attributable to its trade receivables and the Group attaches considerable importance to the collection and management of trade receivables. The Group minimises its credit risk through the application of appropriate credit limits to customers based on an assessment of net worth and trading history with the Group. Standard credit terms are net 30 days from date of invoice. Overdue trade receivables are managed through a phased escalation culminating in legal action. The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies. Significant accounting policies Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expense are recognised, in respect of each class of financial asset, liability and equity instrument are disclosed in note 4 to the financial statements. Trakm8 Holdings PLC Company Number 05452547 43 NOTES TO THE FINANCIAL STATEMENTS (conti nued) for the year ended 31 March 2012 26. FINANCIAL INSTRUMENTS (conti nued) Capital risk management The Group’s objecti ves when managing capital are to safeguard the Group’s ability to conti nue as a going concern in order to provide returns for shareholders and benefi ts for other stakeholders and to maintain an opti mal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. Consistent with others in the industry, the Group monitors capital on the basis of the gearing rati o. This rati o is calculated as debt divided by total capital. Debt is calculated as total borrowings including “current and non-current borrowings” as shown in the consolidated balance sheet. Total capital is calculated as “equity” as shown in the consolidated balance sheet plus debt. The Group’s strategy has been to reduce gearing and to increase cash and cash equivalents. This has been successfully achieved through the profi ts generated during the year. Total borrowings (note 18) Total equity Total capital Gearing rati o 2012 £ 2011 £ 219,316 186,491 2,379,833 2,235,989 2,599,149 2,422,480 8% 7% Financial instruments by category Assets as per balance sheet Loans and receivables Trade and other receivables excluding prepayments Cash and cash equivalents 2012 £ 2011 £ 705,842 820,397 1,087,474 1,119,207 1,793,316 1,939,604 Liabiliti es as per balance sheet Financial liabiliti es at amorti sed cost Borrowings (excluding fi nance lease liabiliti es) Hire purchase Trade and other payables excluding statutory liabiliti es 2012 £ 159,191 60,125 2011 £ 179,661 6,830 1,114,339 1,248,981 1,333,655 1,435,472 44 Company Number 05452547 Trakm8 Holdings PLC 26. FINANCIAL INSTRUMENTS (conti nued) Capital risk management The Group’s objecti ves when managing capital are to safeguard the Group’s ability to conti nue as a going concern in order to provide returns for shareholders and benefi ts for other stakeholders and to maintain an opti mal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. Consistent with others in the industry, the Group monitors capital on the basis of the gearing rati o. This rati o is calculated as debt divided by total capital. Debt is calculated as total borrowings including “current and non-current borrowings” as shown in the consolidated balance sheet. Total capital is calculated as “equity” as shown in the consolidated balance sheet plus debt. The Group’s strategy has been to reduce gearing and to increase cash and cash equivalents. This has been successfully achieved through the profi ts generated during the year. Total borrowings (note 18) Total equity Total capital Gearing rati o Financial instruments by category Trade and other receivables excluding prepayments Cash and cash equivalents Borrowings (excluding fi nance lease liabiliti es) Hire purchase Trade and other payables excluding statutory liabiliti es Assets as per balance sheet Loans and receivables Liabiliti es as per balance sheet Financial liabiliti es at amorti sed cost 2012 £ 2011 £ 219,316 186,491 2,379,833 2,235,989 2,599,149 2,422,480 8% 7% 2012 £ 2011 £ 705,842 820,397 1,087,474 1,119,207 1,793,316 1,939,604 2012 £ 159,191 60,125 2011 £ 179,661 6,830 1,114,339 1,248,981 1,333,655 1,435,472 PARENT COMPANY BALANCE SHEET as at 31 March 2012 FIXED ASSETS Investments CURRENT ASSETS Debtors Cash at bank CREDITORS: Amounts falling due within one year NET CURRENT ASSETS NET ASSETS CAPITAL AND RESERVES Called up share capital Share premium Profi t and loss account SHAREHOLDERS’ FUNDS Notes 2012 £ 2011 £ 3 4 5 6 7 7 801,782 801,782 894,364 312,375 564,804 626,229 1,206,739 1,191,033 (34,134) (32,168) 1,172,605 1,158,865 1,974,387 1,960,647 188,647 187,647 1,723,652 62,088 1,719,402 53,598 1,974,387 1,960,647 These fi nancial statements were approved by the Directors and authorised for issue on 27 June 2012 and are signed on their behalf by: D Buck J Hedges Director Director Trakm8 Holdings PLC Company Number 05452547 45 NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS for the year ended 31 March 2012 1. ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements have been prepared under the historical cost convention in accordance with the applicable accounting standards. SHARE-BASED PAYMENTS The company has applied the requirements of FRS 20 Share-based Payments. In accordance with the transitional provisions, FRS 20 has been applied to all grants of equity instruments after 7 November 2002 that were unvested as of 1 April 2006. 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 determined at the grant date of equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company’s estimate of shares that will eventually vest. The fair value is measured by use of the Black-Scholes option pricing model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effect of non-transferability, exercise restrictions, and behavioural considerations. No expense is recognised for awards that do not ultimately vest. FINANCIAL INSTRUMENTS Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. Instruments issued by the Company are recorded at the proceeds received, net of direct issue costs. INVESTMENTS Fixed asset investments are stated at cost less impairment against the cost of investments. The carrying values of investments in subsidiaries are reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable. FOREIGN CURRENCIES Foreign currency assets and liabilities are converted to sterling at the rates of exchange ruling at the end of the financial year. Transactions in foreign currencies are converted to sterling at the rates of exchange ruling at the transaction date. All of the resulting exchange differences are recognised in the profit and loss account as they arise. DEFERRED TAXATION Provision is made for deferred taxation in respect of all material timing differences that have originated but not reversed by the balance sheet date. Timing differences represent differences between gains and losses recognised for tax purposes in periods different from those in which they are recognised in the financial statements. No deferred tax is recognised on permanent differences between the Company’s taxable gains and losses and its results as stated in the financial statements. Deferred tax assets and liabilities are included without discounting. 46 Company Number 05452547 Trakm8 Holdings PLC NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS (conti nued) for the year ended 31 March 2012 2. PROFIT AND LOSS ACCOUNT As permitt ed by Secti on 408 of the Companies Act 2006, the profi t and loss account of the Company is not presented as part of these fi nancial statements. The profi t aft er tax for the year in the Company is £2,953 (2011: loss £10,528). 3. INVESTMENTS Cost At 1 April 2011 and 31 March 2012 Name of subsidiary Country of incorporati on Class of holding Proporti on held and voti ng rights Trakm8 Limited England and Wales Ordinary 100% PJSoft s.r.o. Czech Republic Interacti ve Projects Limited England and Wales Purple Reality Limited England and Wales Ordinary Ordinary Ordinary 100% 100% 100% 4. DEBTORS Amounts due from subsidiary undertakings Prepayments 5. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Trade creditors Accruals and other creditors Trakm8 Holdings PLC Company Number 05452547 Subsidiaries £ 801,782 Nature of business Marketi ng and distributi on of vehicle telemati cs Mapping services Dormant Dormant 2012 £ 2011 £ 887,619 558,971 6,745 5,833 894,364 564,804 2012 £ 14,649 19,485 34,134 2011 £ 14,627 17,541 32,168 47 NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS (conti nued) for the year ended 31 March 2012 6. SHARE CAPITAL Details of share capital and share opti ons are shown in notes 21 and 22 to the consolidated accounts above. 7. RESERVES At 1 April 2010 Prior year adjustment Transfer share based payment reserve to profi t and loss reserve FRS20 Share based payments Loss for the year At 1 April 2011 Shares issued FRS20 Share based payments Profi t for the year As at 31 March 2012 8. RELATED PARTIES Share Capital Share premium Share based payment reserve Profi t and loss reserve Total £ £ £ £ £ 187,647 1,719,402 63,152 (69,146) 1,901,055 - - - - - - - - 187,647 1,719,402 1,000 4,250 - - - - 188,647 1,723,652 - (63,152) 60,199 63,152 60,199 - - - - - - - - 9,921 9,921 (10,528) (10,528) 53,598 1,960,647 - 5,537 2,953 5,250 5,537 2,953 62,088 1,974,387 The Company has taken advantage of the exempti ons conferred by FRS 8 from the requirement to disclose transacti ons between wholly owned subsidiary undertakings. 48 Company Number 05452547 Trakm8 Holdings PLC NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS (continued) for the year ended 31 March 2012 Details of share capital and share options are shown in notes 21 and 22 to the consolidated accounts above. 6. SHARE CAPITAL 7. RESERVES At 1 April 2010 Prior year adjustment Transfer share based payment reserve to profit and loss reserve FRS20 Share based payments Loss for the year At 1 April 2011 Shares issued FRS20 Share based payments Profit for the year As at 31 March 2012 8. RELATED PARTIES Share Capital Share Share based Profit and Total premium payment loss reserve 187,647 1,719,402 63,152 (69,146) 1,901,055 £ - - - - - - reserve £ (63,152) - - - - - - - - £ 60,199 63,152 £ - 60,199 9,921 9,921 (10,528) (10,528) - 5,537 2,953 5,250 5,537 2,953 187,647 1,719,402 53,598 1,960,647 1,000 4,250 188,647 1,723,652 62,088 1,974,387 £ - - - - - - The Company has taken advantage of the exemptions conferred by FRS 8 from the requirement to disclose transactions between wholly owned subsidiary undertakings. Trakm8 Holdings PLC Company Number 05452547 49 Lydden House, Wincombe Business Park, Shaftesbury, Dorset, SP7 9QJ Tel: 01747 858444 www.trakm8.com 50 Company Number 05452547 Trakm8 Holdings PLC 

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