2021
Annual report and accounts 2021
Trakm8 Holdings PLC
Company Number 05452547
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Trakm8 Holdings PLC
Through innovative products, Trakm8 collects billions of miles worth of data annually.
Trakm8 analyses data and provides actionable insights to customers so that they improve efficiency and
reduce risk.
STRATEGIC REPORT
Highlights
At a Glance
Executive Chairman’s Statement
Our Strategy
Finance Director’s Report
Key Performance Indicators
Risk Management Framework
Principle Risks and Uncertainties
GOVERNANCE REPORT
Board of Directors
DIRECTORS’ REPORT
Directors’ Report
FINANCIAL STATEMENTS
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 Statement of Cash-Flows
Notes to the Consolidated Financial Statements
Parent Company Statement of Financial Position
Parent Company Statement of Changes in Equity
Notes to the Parent Company Financial Statements
Officers and Advisors
Visit us online at trakm8.com
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Company Number 05452547
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Trakm8 Holdings PLC
Strategic Report
OVERVIEW
Financial
Revenue
£16.0m
FY-2020: £19.6m
Loss before tax
£1.9m
FY-2020: £1.7m
Adjusted loss before tax
£0.3m
FY-2020: £0.2m
Net cash generated from operations
£4.7m
FY-2020: £4.1m
Adjusted basic earnings per share
0.07p
FY-2020: 0.28p
Basic loss per share
2.47p
FY-2020: 2.19p
Operational
3 periods of lockdown impacted revenues significantly by an estimated £4m.
Strong continued reduction in direct and indirect costs.
4% increase to over 254,000 connected units in operation (FY-2020: 245,000).
New contract wins with four new Insurance companies.
A second significant European road side assistance company launched in volume during the year.
R&D spend down 28%, however still £2.9m invested.
Renewed Banking facilities for 2 years through to 31 October 2023, including delayed capital
Successfully navigated a large number of supply chain challenges.
Contract awards with the Parts Alliance and a major UK retailer.
repayments.
Recurring revenues continue to be significant although slightly down from £9.8m to £9.4m.
Outlook
Revenues in the current financial year from insurance clients increasing following the resumption of
driving tests with recent device shipments 16% ahead of last year resulting in revenues to end of May
being 28% ahead of last year. However the recovery from lockdown is slower than the corresponding
period last year.
Fleet sales showing good progress with revenues in the current financial year to end of May 24%
ahead of last year.
Group revenues in current financial year to end of May 26% ahead of last year.
Assuming no further lockdowns or unmanageable supply chain issues the Company expects to return
to pre Covid-19 revenues and deliver a profit.
Company Number 05452547
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Trakm8 Holdings PLC
Strategic Report (Continued)
AT A GLANCE
Connected Business
Trakm8 is a UK-based data analytics company that develops its own intellectual property to drive a greener,
safer, connected tomorrow. As leaders in the fleet management, insurance and automotive sectors, we enable
businesses to enhance their operations through a wide-range of telematics, camera and optimisation
solutions. Collecting data through intellectual property (‘IP’)-owned hardware, Trakm8 fine-tunes algorithms
and creates solutions that assist private drivers and commercial fleets with the reduction of risk, fuel
consumption and insurance premiums, while improving productivity, safety and compliance.
As a fully integrated business designing, manufacturing and supporting our own solutions we provide the best
customer service possible by not having to rely on third parties (apart from the cellular network).
Pioneering solutions
The Group’s product portfolio includes a range of telematics devices, from self-install dongles to 4G integrated
telematics cameras. We currently have a quarter of a million devices in operation.
Number of connected units
254,000 (FY-2020: 245,000)
Fleet Management & Optimisation
Fleet Management
Trakm8 has market leading software solutions for the entire fleet management activities built out in the
Insight platform. A combination of telematics, cameras, tachograph data retrieval, Electronic Proof of Delivery
(EPOD) and route optimisation and scheduling software empowers businesses to make informed decisions
about fleet operations - and to tackle a diverse range of obstacles. Benefits to fleets include the introduction of
safer driving practices, reductions in fuel, obtaining lower insurance premiums, having a smaller carbon
footprint and automating administrative tasks. Advanced algorithms are deployed to measure risk and
efficiency driving behaviours, feeding back to the driver on apps and in cab displays. Advanced Driver
Assistance Systems feature on the cameras to warn the driver, reducing the cost of accidents.
Optimisation
Through the development and application of pioneering algorithms, we are able to improve the operational
efficiency and productivity of our customers, and for our last mile delivery customers deliver a solution that
improves their customer experience by combining with our EPOD solution and customer communications
product. Our optimisation algorithms can be administered to a number of sectors including transport and
logistics, energy management, mobility and electric vehicles (EVs). Trakm8 has a fully integrated optimisation
solution built into the core Insight platform and provides customer specific bespoke solutions when this is
required.
Revenue
£9.5m (FY-2020: £12.0m) of which £6.5m is recurring revenue (FY-2020: £6.8m)
Number of connected units
70,000 (FY-2020: 77,000)
Company Number 05452547
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Trakm8 Holdings PLC
Strategic Report (Continued)
AT A GLANCE (CONTINUED)
Insurance & Automotive
Insurance
Insurers and brokers use our telematics hardware and data to better calculate risk among policyholders. Our
self-install and fitted to vehicle devices monitor high-risk driving styles and enable businesses to calculate
relative premiums based on real-world driving data. In addition, our leading algorithms allow insurance
companies to speed up and better control the First Notification of Loss (FNOL) claims process. Our end to end
Broker package allows Brokers to manage the full telematics policy journey.
Automotive
Our automotive team works with businesses to supply aftermarket connected vehicle technologies to its end
users to predict and report vehicles faults. Automotive solutions include the remote identification of vehicle
sensor and fault data, breakdown assistance apps, and reminders for MOT dates, servicing and tax renewals.
Specialist applications include electric vehicle system monitoring and tailored solutions to the vehicle leasing
companies to reduce costs in the management of service, repair and maintenance outcomes.
Revenue
£6.4m (FY-2020: £7.5m) of which £2.9m is recurring revenue (FY-2020: £2.9m)
Number of connected units
184,000 (FY-2020: 168,000)
Clients
The Group has built client relationships with large corporates, SMEs, down to sole traders either directly or via
partners who provide intermediary marketing support. These relationships often enable us to cross-sell
solutions and facilitate a high rate of contract renewals and extensions.
Company Number 05452547
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Trakm8 Holdings PLC
Strategic Report (Continued)
EXECUTIVE CHAIRMAN’S STATEMENT
FY 2021 was a year like no other in our memories. The impact of Covid-19 on our personal and business lives
has been huge. Trakm8 has been affected like so many others from its exposure to the motor insurance
industry; almost 6 months of no driving tests and higher levels of vehicles registered off the road (SORN)
resulted in a much reduced pool of drivers buying new policies. However the high level of recurring revenue
(over 50% in FY-2021) mitigated the impact of Covid-19 on the financial performance of the Group.
The first quarter of the year saw a significant reduction in Fleet connections with high levels of attrition from
small customers and reductions in fleet size from some larger customers. Thereafter, the level of Fleet
connections stabilised with new sales matching a return to a more normal level of losses from the existing
base.
The problems with the supply chain of electronic components have been widely reported. The major IT
suppliers had first grab of chip manufacturing capacity and the car companies have had a battle to get their
demand met. As a result we, too, have had to fight our corner. The benefit of a vertically integrated business
is that our engineers and purchasing teams can solve these challenges quickly. As a result, the year’s revenues
were not impacted by these issues.
The revenues of the business fell by 18% but the Group, with lower direct and indirect costs posted a broadly
similar adjusted loss before tax of £0.3m (FY-2020: £0.2m). Connections grew by 4% to 254,000. The total
number of fleet management connections decreased by 9% over the year to 70,000 (FY-2020: 77,000).
Telematics for insurance/automotive connections increased by 10%. At the year-end we had 184,000
insurance/automotive connections (FY-2020: 168,000). Recurring service revenues reduced by 3.8% to £9.4m
(FY-2020: £9.8m).
It was pleasing to maintain the strong cash generation of the business with a cash flow from operations of
£4.7m (FY-2020: £4.1m). This resulted in a free cash flow of £2.1m (FY-2020: £0.9m) and net debt reduced by
£0.7m at £4.9m (pre-IFRS 16). The Group had £2.4m cash on hand and an undrawn overdraft facility of £0.5m.
It was satisfying to see the vigorous actions taken reduced the inventory in the business by £0.6m. The
Company also benefitted from £1.8m of HMRC deferred payments on VAT/PAYE/NI, which is scheduled for
repayment over the next two financial years almost equally.
A broadly similar adjusted loss to the previous year on revenues 18% lower was achieved through the Group’s
continued focus on improving efficiency of our operations and engineering activities. Significant reductions in
direct and indirect costs were delivered during the year. The Company benefitted from the Job Retention
Support Scheme with £0.9m in cash received from the government. The investment in engineering resources,
whilst some £1.2m less (£0.8m less if the cost of engineering resources on furlough are included) than the
previous year, has continued to deliver market-leading software and hardware solutions. Trakm8’s Insight
platform provides superb customer experience and data, enabling vehicle operators to make significant
improvements to operational efficiencies and to reduce risk.
Renewed Banking facilities were agreed with HSBC for over two years. The new agreements comprise a Term
Loan of £5.3m and a £0.5m overdraft facility. Capital repayments commence in September 2021, with
appropriate ‘carve out’ in covenants to cover the Covid-19 impacted financial year. These facilities are in place
until October 2023. In addition, the capital repayment holiday of our loan with Maven (£1.4m outstanding)
has been extended, such that repayments will now re-commence in September 2021. Interest on the loans
continues to be paid monthly.
Company Number 05452547
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Trakm8 Holdings PLC
Strategic Report (Continued)
EXECUTIVE CHAIRMAN’S STATEMENT (CONTINUED)
Research and development (‘R&D’)
Trakm8 has maintained a significant level of investment in R&D for another year although below the level of
the previous year. The Board believes that this level of investment is necessary to retain a portfolio of market-
leading technology. Trakm8 continues to focus on owning the intellectual property (‘IP’) we use in our
solutions, and we see this as one of our key competitive advantages. Telematics systems are complex; but
because we own all the elements that encompass a solution (with the exception of the mobile networks) we
have the ability to understand and resolve problems more easily than our competitors.
The R&D investment has concentrated on the development of self-fit devices, additional improvements to
camera solutions, development of the feature set in Insight, and further development of our Insurance Broker
platform. As identified in previous years, the requirement to do more for less cost remains a key strategy as
this widens the opportunity to expand the rate of growth as the return on their investment for our customers
improves.
Trakm8 was pleased to be granted another patent in the year, bringing the total number of patents to four
that Trakm8 holds to protect its market leading IP in its software and hardware solutions.
Governance
The Group has adopted the Quoted Companies Alliance’s (QCA) Corporate Governance Code for small and
mid-size quoted companies, which the Board considers the most appropriate for the size and structure of the
Group. More information can be found in the Governance Report section of this report and our website.
Please see https://www.trakm8.com/investor-relations/corporate-governance
statement.
for our
full compliance
Dividend
The Group does not propose to recommend a dividend for the year at the forthcoming AGM. However, the
Board will continue to review its dividend policy in light of future results and investment requirements.
People
The number of people Trakm8 employs has reduced further during FY-2021 with reductions across the
business. In total our staff numbers have reduced by 10% over the year.
Working successfully in the Covid-19 remote working world has been a credit to our colleagues. We have an
exceptional team and I would like to thank everyone for their hard work, dedication and contribution to the
ongoing success of the business.
Company Number 05452547
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Trakm8 Holdings PLC
Strategic Report (Continued)
EXECUTIVE CHAIRMAN’S STATEMENT (CONTINUED)
Outlook
We start the new financial year assuming that the worst of the impact of Covid-19 is behind us.
With April still in lockdown our Insurance deliveries continued to be 55% lower than the peak of
September/October 2020, however May and June have started a growth phase, but at a slower rate than the
corresponding period last year. Currently Insurance devices supplied amount to 16% more than the
corresponding period last year.
Fleet deliveries have been reasonably good with new unit shipments 116% greater than the corresponding
period last year. More importantly the attrition during the period has been more normal.
April and May revenues were 26% higher than the corresponding period of the previous year.
We expect that this year will benefit from improved direct and indirect costs as a result of actions taken last
year. We do not envisage utilising the Job Retention Scheme as much this year.
Based on no more lockdowns or unsurmountable supply chains challenges we expect the revenues to return to
pre-Covid-19 levels and as a result return the group to profitability.
John Watkins
EXECUTIVE CHAIRMAN
28 June 2021
Company Number 05452547
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Trakm8 Holdings PLC
Strategic Report (Continued)
OUR STRATEGY
OUR VISION
Driving our greener, safer, connected tomorrow.
OUR MISSION
Trakm8 is an innovative and diverse UK-based technology company, focused on fleet management, insurance
and automotive telematics, and optimisation. Trakm8 strives to proactively provide actionable insights which
reduce risk and improve efficiency for its customers. From a firm foundation of integrity and family values,
Trakm8 encourages and develops its talented people to create world-leading solutions that are ethically
sourced, proudly manufactured, and professionally sold. By upholding these ideals, Trakm8 aims to deliver
growth in long-term value to shareholders.
OUR STRATEGY
1) Increasing our market share
The Group will continue to expand the number of connections in operation, with a particular focus on
expanding outside of the UK.
Progress in 2021
The total number of units in operation increased by 4% in FY-2021. Covid-19 in the first quarter of the year
impacted attrition significantly and reduced the Fleet installed base by 9%. Despite almost 6 months of
lockdown during the year the increased number of Insurance customers net increased our installed devices
and resulted in a 10% increase in connections.
The launch of the Automotive connected car solution into Holland has started successfully.
Trakm8 invested in the sales teams with the recently appointed Group Sales and Marketing Director.
Improved training and marketing has built a significantly improved sales engine.
Focus for 2022
We aim to grow the number of installed devices and connections with increased marketing spend, improved
lead generation engine and the improved functionality of our solutions. We will continue to seek international
distribution partners to expand our non-UK revenues.
We expect that our success in winning new insurance clients will lead to higher market share and higher levels
of installed devices. This should lead to more connections and higher levels of recurring revenues. We aim to
continue to widen the insurance telematics market with leading new commercial propositions.
Company Number 05452547
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Trakm8 Holdings PLC
Strategic Report (Continued)
OUR STRATEGY (CONTINUED)
2) Delivering a cutting-edge solutions portfolio
We plan to maintain the level of investment in research and development to maintain our market-leading
solution portfolio and to meet the demands of our customers.
Progress in 2021
The Group focused on expanding and improving the range of devices, including an improved camera and an
expanded line of self-fit devices. The Insight Optimisation solution has been expanded to meet the
requirements of food retailers and as a result for all our customers. Improved algorithms for crash detection,
driver scoring and ADAS continued to be developed.
Focus for 2022
We will maintain our expenditure in R&D this year by being more focused on our core areas of expertise. We
will continue developing products and solutions to meet the demands of our customers and market trends.
We expect during the year to improve our fleet solutions particularly in the HGV space, the integrated
optimisation package to include customer communications and ease of on-boarding, and an ongoing
development of our automotive capability particularly in EV.
3) Streamlining our internal operations
The Group will continue to focus on improving operational efficiencies and its cost as a percentage of
revenues.
Progress in 2021
The Group identified another £0.8m of annualised operational cost savings in both direct and indirect costs.
Focus in 2022
We will continue to drive out costs through better utilisation of hosting and technology, reduced device costs
and reduced communication/hosting costs. We will also invest in internal systems to improve the operational
efficiency of some of our internal support activities.
Company Number 05452547
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Trakm8 Holdings PLC
Strategic Report (Continued)
FINANCE DIRECTOR’S REPORT
Group Revenue (£’000)
of which, Recurring Revenue (£’000)
Loss before tax (£’000)
Adjusted Loss before tax1 (£’000)
Basic loss per share (p)
Adjusted basic earnings per share (p)
1
Before exceptional costs and share based payments
Revenue
2021
15,961
9,379
1,867
342
2.47
0.07
2020
19,550
9,753
1,705
224
2.19
0.28
Change
-18%
-4%
+10%
+53%
+13%
-75%
Group revenue decreased by 18% to £16.0m (FY-2020: £19.6m) due to the impact of Covid-19. Fleet revenues
decreased by 21% to £9.5m and Insurance and Automotive revenues decreased by 14% to £6.4m. Despite the
last lockdown, revenues in H2 were 18% higher than H1 due to recovery in trading after the first lock down.
The last lock down did impact trading, but not to the same extent as the first lock down. The growth in H2 was
driven by more normal level of new business sales in Fleet and Optimisation, and by the onboarding of new
insurance customers and launch of the Automotive connected car solution. Recurring revenue generated from
service and maintenance fees decreased by 4% to £9.4m (FY-2020: £9.8m) due to the reduction in Fleet
connections in H1 as a result of Covid-19. This resulted in higher than normal levels of attrition from small
customers and some reduction in fleets in larger customers.
Loss before tax
The Group reported a loss before tax of £1.9m (FY-2020: £1.7m). The loss remained broadly similar to the
prior year despite the reduction in revenue resulting in £2.2m less Gross Margin. This was achieved by a
£2.3m reduction in total administrative costs offset by £0.2m reduction in Grant Income. Total administrative
costs reduced by £2.3m of which £0.9m was due to income received under the Coronavirus Job Retention
Scheme, £0.9m reduction in one off exceptional integration and restructuring and new product component
refit costs, £0.3m due to lower headcount and £0.1m reduction in depreciation and amortisation.
Adjusted Loss before tax
Despite the £3.6m reduction in revenue, the Group reported an adjusted loss of £0.3m, only £0.1m higher
than the prior year. The £2.2m of reduction in Gross margin that resulted from the revenue reduction was
offset by £1.3m lower headcount costs, of which £1.0m were reclassified to exceptional costs as they related
to the cost of employees whilst on furlough, and £0.3m due to lower headcount. In addition other overheads
(excluding exceptional items and depreciation and amortisation) reduced by £0.9m from lower marketing
spend and other costs due to Covid-19, grant income was £0.2m lower and depreciation and amortisation was
£0.1m lower.
Exceptional Costs
Exceptional costs total £1.3m (FY-2020: £1.3m) and primarily include £2.1m of one-off costs relating to Covid-
19. These include costs of employees whilst on furlough of £1.6m, costs relating to the cancellation of internal
and external projects totaling £0.5m and some costs relating to cancelled marketing events and bad debts.
These costs were offset by £0.9m received under the Coronavirus Job Retention Scheme. Additionally £0.2m
of restructuring costs relating to initiatives to streamline and rationalise the operations of the business were
incurred.
Company Number 05452547
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Trakm8 Holdings PLC
Strategic Report (Continued)
FINANCE DIRECTOR’S REPORT (CONTINUED)
Balance Sheet
Non-Current Assets
Net Current Assets
Non-Current Liabilities
Net Assets
2021
£’000
25,640
4,169
9,687
20,122
2020
£’000
25,759
4,437
9,017
21,179
Net Assets decreased by £1.1m to £20.1m (FY-2020: £21.2m) reflecting the loss for the year, after adding back
the IFRS2 Share based payments charge.
Non-current assets decreased by £0.2m to £25.6m (FY-2020: £25.8m). This is due to £0.5m reduction in right
of use assets due to depreciation offset by a £0.2m increase in Intangible assets and £0.2m increase in
Property, plant and equipment. Intangible assets increased due to the continued investment in development
in both software and hardware with capitalised development costs in the year totaling £2.3m (FY-2020:
£3.2m), offset by amortisation of £1.7m (FY-2020: £1.8m). Additionally £0.2m was written off to exceptional
costs relating to capitalised software costs, due to Covid-19 resulting in an internal software project being
cancelled.
Cash Flow
Net Cash generated from operations
Investing activities
Free Cash Flow1
Financing activities
Increase in Cash in Year
Net Debt2
1
Cash generated from operating activities less cash used in investing activities (excluding cash flows related to acquisitions)
2
Total borrowings less cash and cash equivalents. FY-2021 net debt excludes £1.9m IFRS 16 lease liability.
2021
£’000
4,737
(2,667)
2,070
(1,365)
705
4,887
2020
£’000
4,115
(3,199)
916
(456)
460
5,643
Cash from operating activities improved by £0.6m during this year to £4.7m (FY-2020: £4.1m), which included
R&D tax credit cash receipts of £0.9m (FY-2020: £1.0m). The R&D tax credit cash receipt reflects the Group’s
investment in development. The operational cash flow improvement is due to £0.6m improvement year on
year from improved working capital management. This improvement in working capital includes £1.8m of
HMRC deferred payments for VAT, PAYE & NI. The Group has a Time to Pay agreement with HMRC to repay
this almost equally over the next two financial years.
Free cash inflow of £2.1m (FY-2020: £0.9m) is due to the Net Cash generated from operating activities as
detailed above offset by cash outflows from investing activities which decreased by £0.5m to £2.7m (FY-2020:
£3.2m).
Financing activities was an outflow of £1.4m (FY-2020: £0.5m). The increased cash outflow is due to the
previous year including the receipt of the new £1.5m growth capital loan from MEIF WM Debt LP, and lower
loan capital repayments in the current year due to deferment of capital repayments from 30 June 2020. The
current year also includes the refinance of the HSBC facilities that resulted in a new £5.3m term loan repaying
£4.5m outstanding under the old HSBC credit facility and £0.7m under the old term loan.
Company Number 05452547
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Trakm8 Holdings PLC
Strategic Report (Continued)
Net Debt
Net debt excluding IFRS 16 lease liability of £1.9m (FY-2020 £2.3m) reduced by £0.7m to £4.9m (FY-2020:
£5.6m). Cash balances total £2.4m (FY-2020: £1.7m) and total borrowings including IFRS16 lease liability of
£1.9m totals £9.1m (FY-2020: £9.6m). Borrowing comprise £5.3m (FY-2020: £0.9m) term loan with HSBC,
£1.4m (FY-2020: £1.5m) term loan with MEIF WM Debt LP, nil (FY-2020: £4.5m) amounts drawn under the old
£5m revolving credit facility with HSBC and £2.4m (FY-2020: £2.8m) of obligations under Right-to-use lease
liabilities. In addition at the year end the Group has a £0.5m unused overdraft facility with HSBC.
Company Number 05452547
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Trakm8 Holdings PLC
Strategic Report (Continued)
KEY PERFORMANCE INDICATORS
Achieving our objectives
The Board monitors the following key performance indicators to ensure the objective of the Group are being
achieved.
Solutions Revenue
£16.0m: 2021
£19.6m: 2020
£19.1m: 2019
Recurring Service
Revenue
£9.4m: 2021
£9.8m: 2020
£10.1m: 2019
Connected units -
Insurance/Automotive
184,000: 2021
168,000: 2020
167,000: 2019
Connected units –
Fleet Management
70,000: 2021
77,000: 2020
76,000: 2019
Performance in 2021
This refers to the
amount of telematics
devices reporting in
operation from our
insurance & automotive
customers. Connected
Units in this market
increased by 10% due to
growth from newly
launched customers.
Focus for 2022
Continue to expand the
number of Insurance
clients with focus on the
Broker space and to
deliver growth on the
back of a return to
driving tests and
increased pay as you
drive insurance.
Benefit from the
expansion of the
connected car services.
Performance in 2021
This refers to the
amount of telematics
devices in operation
from our fleet
customers. The total
number of units from
our Fleet business
reduced by 9% due
to the high attrition
in quarter 1 due to
the first Covid-19
lockdown.
Focus for 2022
Maximise the
improved sales and
marketing engine to
grow fleet new
business sales. Use
the further
developed Insight
solution for fleet,
optimisation and
cameras to promote
greater efficiency
and reduced risk for
our clients.
Performance in 2021
If it were not for Covid-19
the Group would have
continued to grow as an
estimated £4m was lost in
revenues.
Good growth in Insurance
clients and the start of
Automotive connected car
sales in Holland were the
highlights.
Focus for 2022
Maximise the improved
sales and marketing
engine to grow fleet new
business sales. Use the
further developed Insight
solution for fleet,
optimisation and cameras
to promote greater
efficiency and reduced
risk for our clients.
Continue to expand the
number of Insurance
clients with focus on the
Broker space and to
deliver growth on the
back of a return to driving
tests and increased pay as
you drive insurance.
Benefit from the
expansion of the
connected car services.
Performance in 2021
Total recurring revenues
earned during the year
reduced by 4% to £9.4m
due to the reduction in
connections during the
year from our fleet
customers due to high
attrition in the 1st
quarter, which were not
offset by growth from
newly launched
Insurance customers.
Focus for 2022
The growth of insurance
connections with new
customers that will have
lower attrition in their
first year should
positively impact the
level of recurring
revenues. Despite the
market trend for richer
data for lower costs,
continued growth will be
achieved by increasing
the number of devices in
operation and driving
higher service fees either
from our integrated
cameras or by increasing
our data analytics
services.
Company Number 05452547
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Trakm8 Holdings PLC
Strategic Report (Continued)
KEY PERFORMANCE INDICATORS (CONTINUED)
Adjusted profit/ loss before tax
Gross Margin
£0.3m Loss: 2021
£0.2m Loss: 2020
£1.5m Loss: 2019
58.4%: 2021
59.1%: 2020
53.6%: 2019
Performance in 2021
Adjusted Loss before Tax (before
exceptional costs and share
based payments) was only £0.1m
higher than the prior year despite
the £3.6m reduction in revenue.
The £2.2m reduction in gross
margin resulting from the
revenue decline was offset by
£1.3m lower headcount costs
(£1.0m being reclassed to
exceptional costs as they related
to the costs of employees whilst
on furlough), £0.9m reduction in
other overheads (excluding
exceptional costs and
depreciation and amortisation),
£0.2m lower grant income and
£0.1m lower depreciation and
amortisation.
Focus for 2022
The Group plans to return to
profitability due to a return to
pre Covid-19 levels of revenue
combined with the lower cost
base as a result of the significant
cost savings realised over the last
few years.
Net cash generated from
Operating Activities
£4.7m: 2021
£4.1m:2020
(£1.8m): 2019
Performance in 2021
Cash generation from operating
activities improved on the prior
year due to improved working
capital management.
Performance in 2021
Gross margin percentage slightly
reduced to 58%. This small
reduction was due to the change
in revenue mix. However direct
costs significantly reduced from
lower hardware costs and
improved communication costs.
Focus for 2022
Strategy is to maintain our gross
margin percentage by continuing
to drive growth in our recurring
service revenues through
enhanced data analytic services
and optimisation benefits. We
expect to continue to deliver
ongoing direct cost reductions.
Focus for 2022
Maintain similar levels of cash
generation from Operating
Activities, having repaid HRMC in
line with the time to pay
agreement reached.
Company Number 05452547
15
Trakm8 Holdings PLC
Strategic Report (Continued)
RISK MANAGEMENT FRAMEWORK
Our risk management process is designed to improve the likelihood of delivering our business objectives, to
protect the interests of our key stakeholders, to enhance the quality of our decision making, and to assist in
the safeguarding of our assets. This includes people, finances, property and our reputation.
The Board takes overall responsibility for risk management, evaluating our exposure to individual strategic
risks, overseeing our risk governance structure and internal control framework. Strategic decisions are
evaluated against our tolerance levels to the risks identified and the Board continues to monitor these trends
in order to implement mitigation activities in line with our long-term strategy.
Approach to Risk Management
Each year the Board carries out a robust assessment of the principal risks facing the Group, including those
that would threaten our business model, future performance, solvency or liquidity. The report overleaf
summarises these possible risks and how they are being managed or mitigated.
The Executive Chairman and the senior management team take responsibility for reviewing the effectiveness
of the risk management process and the risk register is subjected to detailed review and discussion.
This group identifies all the key risks to the business and ensures our elimination and mitigation processes are
robust and up to date to minimise any possible impact. Risk identification is embedded in other processes,
including product development, contract approvals and other operational activities. Trakm8’s corporate
strategy is designed to optimise our business model and accept risk, with the required controls on an informed
basis.
To create value for our shareholders, we set varying risk tolerances and associated criteria. We continue to
accept risk and manage our risk environment on the following basis:
• Strategic – medium to low tolerance for risks arising from poor business decisions or substandard execution
of business objectives.
• Operational – low to near-zero tolerance for risks arising from business processes including the technical,
quality, and project management or organisational risk associated with programmes and products. During the
year we enhanced our testing procedures for new product launches following the issues experienced in the
previous financial year.
• Corporate –zero tolerance for compliance and reputational risks including those related to the law, health,
safety and the environment.
• Financial – zero tolerance for financial risks including failure to provide adequate liquidity to meet our
obligations and manage currency, interest rate and credit risks.
Company Number 05452547
16
Trakm8 Holdings PLC
Strategic Report (Continued)
RISK MANAGEMENT FRAMEWORK (CONTINUED)
RISK MANAGEMENT PROCESS
Risk management is a key element of the Group’s decision making process as there is a risk element in all areas
of its activities and these risks need to be managed appropriately. Alongside the strong governance structure
and effective internal controls, the risk management process gives the Board assurance that risks are being
appropriately identified and managed.
The Risk Management Process is set up in the following way:
• An annual business review to set strategies, objectives and agreed initiatives to achieve its goals, taking
account of the risk appetite set by the Board.
• Day-to-day operations are supported by a clear schedule of authority limits that define processes and
procedures for approving material decisions. This ensures that projects are approved at the appropriate level
of management, with the largest and most complex projects being approved by the Board.
• The Group’s Executive Directors also compile their own risk assessment, ensuring that a top-down approach
is undertaken when considering the Group-wide environment.
• The Group’s Audit and Risk Committee assists the Board in assessing and monitoring risk management across
the Group. The role of the Committee is to ensure the timely identification and robust management of
inherent and emerging risks. The Committee reviews the risk register as it develops, to ensure net risk and
proposed further actions are together consistent with the risk appetite set by the Board.
Company Number 05452547
17
Trakm8 Holdings PLC
Strategic Report (Continued)
PRINCIPAL RISKS AND UNCERTAINTIES
Link to strategic priorities
1
Increasing our
market share
2
Delivering cutting
edge solutions
3
Streamlining our
internal operations
Principal Risk
Potential Impact
Mitigation
Significant
operational system
failure
Reputational impact
Deterioration in
customer relations
Our systems are both within the Cloud and within a traditional
data centre environment. We provide no single point of
failure as there is diversity of datacentres from separate
suppliers and replication of data between data centres.
2
Reduction in revenues,
profitability and cash
generation
Daily point-in-time backups are also taken offsite.
Insurances are maintained to financially mitigate any risk
relating to an event that causes significant interruption at our
single site manufacturing facility.
Cyber-attack and
data security
2
Reputational Impact
We have maintained our ISO 27001 accreditation.
Deterioration in
customer relations
Liability claims
We continue to make considerable investments in security
and systems for both our internal and customer data,
including a review by an independent CISO.
We operate a secure development lifecycle and undertake
regular independent penetration testing of our devices and
hosting environments from CREST certified testers.
Operating in a fast
moving technology
industry where we
will always be at
risk from new
products being
launched
1, 2
Decelerating sales
growth affecting profit
We heavily invest in research and development to ensure we
are at the forefront of telematics technology.
Loss of significant
customer or market
We are device agnostic and will interface into OEMs and
autonomous vehicles as a central data hub.
Delay in achieving
projected revenues
Expansion of number of significant customers reduces the risk
of an individual customer loss.
OEM fit telematics to all
strategy
Autonomous cars
Product failure
We undertake rigorous testing using our in-house testing
team, synthetic testing has been enhanced by retrofitting
greatly enhanced automated test suites for unit and
integration testing, an additional set of test resource focussed
on trials of real world test cases, edge cases and specific
customer solutions to test the broadest possible functionality
has been introduced into the release process. Release
retrospectives complement this activity to drive kaizen
improvements into our software test & release process.
Company Number 05452547
18
Trakm8 Holdings PLC
Strategic Report (Continued)
PRINCIPAL RISKS AND UNCERTAINTIES (CONTINUED)
Principal Risk
Adverse mobile
network changes
2
Potential Impact
Reputational Impact
Deterioration in
customer relations
Attracting and
maintaining high
quality employees
1, 2, 3
Reduction in
revenues, profitability
and cash generation
Loss of key personnel
Potential business
disruption
Breakdown of
communication and
misalignment
Mitigation
We provide a configuration manager which allows remote
upgrade of the installed base and this can be used to address
system wide issues as long as basic GPRS communications exist.
We rely on mobile phone suppliers to provide a quality of service
and investment in suitable reliable infrastructure. The same is
true for the GPS network and the Internet.
In the process of implementing fully roaming SIM solutions.
We provide interesting work within a growing sector where we
have significant opportunity and maintaining this is key to
employee retention.
Companywide program of training and personal development
including promotion from within.
Knowledge of our bespoke systems is spread across a larger pool
of individuals to mitigate the risk of a key individual leaving the
business.
We are a sponsor on the government highly skilled migrant
program.
We have adopted more flexible working practices to widen the
talent pool.
Access to long
term and working
capital
1, 2
Electronics supply
chain materially
impacted by
Covid-19
1, 2, 3
Ability to deliver
business plans
We maintain regular discussions with banks and other financial
institutions.
We regularly review medium term capital requirements.
Long lead-times and
cost pressure
We have strong, long-term relationships with world class
distributors and manufacturers to mitigate the supply chain risk.
In addition we have relationships with alternative suppliers.
Single source
suppliers
Reduction in
revenues, profitability
and cash generation
As a fully vertically integrated business our design engineers
work alongside supply chain to mitigate changes in component
availability and lead time.
We have recently proved the success of these mitigating factors
as we have managed to secure appropriate supplies of
components for the foreseeable future and are in the process of
designing in alternative components into our core products to
reduce this risk.
Company Number 05452547
19
Trakm8 Holdings PLC
Strategic Report (Continued)
PRINCIPAL RISKS AND UNCERTAINTIES (CONTINUED)
Principal Risk
Rate of economic
recovery post
Covid-19
Potential Impact
Reduction in
revenues, profitability
and cash generation
1, 2, 3
Mitigation
As an agile business the Executive team is reviewing the situation
daily and making continuous adjustments to the operations of
the business.
We are utilising the various government support schemes to
protect the business, alongside a substantial recurring revenue
base Trakm8will manage the cash position carefully into the
medium term.
Established working practices that are flexible and agile can
quickly respond to any potential changes in Covid-19 infection
rates.
By order of the Board
Jon Furber
COMPANY SECRETARY
28 June 2021
Company Number 05452547
20
Trakm8 Holdings PLC
Governance Report
BOARD OF DIRECTORS
John Watkins
Executive Chairman
John Watkins has a Master’s Degree in Engineering Science from the University of Oxford. Through his
extensive career he has acquired considerable M&A and sales experience. He has been a Director of several
Public companies, Managing Director of a wide range of private and subsidiaries/divisions of public companies
and Chairman of two very successful private equity companies that exited with significantly better than
average IRRs.
Keith Evans
Senior Independent Non- Executive Deputy Chairman
Keith graduated from the University of Cambridge with a degree in Economics. Keith is a former partner for
over 25 years at PricewaterhouseCoopers LLP with very extensive experience of commercial and financial roles
having worked with companies operating in the financial services, automotive and information technology
sectors.
Nadeem Raza
Non-Executive Director
Nadeem Raza joined the Board in January 2019 following the strategic investment by Microlise Group Holdings
Limited. As CEO of Microlise, Nadeem has complete responsibility for the operational management and
control of all Microlise business activities. During his 20 year career with Microlise, Nadeem has fulfilled
various responsibilities and gained experience across all elements of the business, including sales, system
integration, marketing, operations and business computing.
Penny Searles
Non-Executive Director
Penny Searles joined as Non-Executive Director in June 2020 and has worked in Financial Services for over 25
years, latterly as a CEO and founder of two successful FinTech Companies: Wunelli Ltd which was purchased by
LexisNexis in 2014 and SmartDriverClub purchased by Calamp in 2020. Penny brings her impressive
operational experience in both Motor Insurance and Telematics to the Group.
Jon Furber
Group Finance Director
Jon joined Trakm8 as Finance Director to the Group in September 2017. Jon has previously held senior finance
roles at technology growth businesses; he was CFO at AppSense and at Vistorm/HP Information Security (UK),
and most recently interim CFO at Intrinsic Technology. Jon is a chartered accountant having trained and
qualified at KPMG.
Matt Cowley
Big Data Director
One of the founders of Trakm8 along with his brother Tim Cowley, Matt is a highly experienced software
Engineering Director with over 25 years’ experience within the Telematics and Telecommunications industry.
Awarded an MSc Software Engineering with distinction from University of Oxford in 1998, Matt now leads the
in-house Big Data team and is passionate about algorithms, machine learning, computer vision and data
science.
Company Number 05452547
21
Trakm8 Holdings PLC
Governance Report (Continued)
BOARD OF DIRECTORS (CONTINUED)
Tim Cowley
Group Strategy Director
Tim Cowley has 30 years’ experience in the Engineering & Technology sector. After graduating with a degree
in Electronics Engineering in 1988 from Brunel University, Tim was awarded a prestigious Michael Cobham
scholarship, and stayed with the Cobham Group for eleven years. Alongside his brother Matt, he founded
Trakm8 in 2002 and is now responsible for the Group Product Strategy and the Advanced Engineering function.
Peter Mansfield
Group Sales and Marketing Director
Peter joined the Board in March 2020 following his appointment as the Group Sales and Marketing Director.
Previously Peter has held senior roles in technology and data businesses including CEO of Deko, a fintech
business and as Managing Director of the Credit Solutions Division of Callcredit. Peter’s early career was as an
officer in the British Army and started his commercial career in financial services. He has a Master’s Degree
from Northumbria Business School.
Mark Watkins
Chief Operating Officer
Mark has a Master’s Engineering degree and worked for Ford Motor Co in the group IT team. He has
previously held positions in IT and Operations having been Head of Manufacturing Operations at Continental
UK for several years. In 2014 he joined Trakm8 Holdings as Managing Director of BOX Telematics following its
acquisition and is now responsible for all operational and engineering matters for the Group.
Company Number 05452547
22
Trakm8 Holdings PLC
Governance Report (Continued)
BOARD OF DIRECTORS AND COMMITTEES
The Board of Trakm8 Holdings PLC is responsible for the strategic direction of the Group’s businesses. The
Board’s specific roles include corporate governance policy and direction; as well as strategy formation and
monitoring the achievement of the Group against the business plan. The day-to-day management of the Group
is the responsibility of the team of executive Directors and the executive Chairman. The Board meetings of
Trakm8 Holdings PLC cover matters required to be covered by the Boards of the Group’s subsidiary entities.
The Board has operated Audit and Risk, Remuneration and Nomination Committees throughout the period.
These bodies operate under formally delegated duties and responsibilities and seek advice from independent
third parties as the need arises. The committees during the year have comprised of the three non-executive
Directors and the Executive Chairman.
For the financial year ended 31 March 2021 the Directors’ attendance at Board and Committee meetings has
been as follows:
Type
Total Held in period
Board Audit Nomination Remuneration
1
12
2
5
John Watkins
Keith Evans
Matt Cowley
Tim Cowley
Jon Furber
Mark Watkins
Nadeem Raza
Peter Mansfield
Penny Searles1
1
Attended 8 out of 9 Board meetings, 1 out of 1 Audit Committee meetings, 5 out of 5 Remuneration Committee meetings and 0 out of 0
Nomination Committee meetings whilst in office
12
12
12
11
12
11
11
12
8
1
1
-
-
-
-
1
-
-
5
5
-
-
-
-
5
-
5
2
2
-
-
-
-
1
-
1
Nominations committee
The committee met once during the year and appointed Penny Searles as Non-Executive Director.
Audit and Risk Committee
The Audit and Risk Committee is responsible for ensuring that the Group’s financial performance is properly
monitored, controlled and reported. The Finance Director and other Directors attend as required.
The committee and the external auditor have safeguards to avoid a potential compromise of auditor’s
objectivity and independence. These include the adoption of a policy that segregates the supply of audit and
non-audit services and requires committee approval for the supply of services such as tax services and
acquisition related due diligence.
The key issues considered by the Audit and Risk Committee included revenue recognition, capitalisation of
development costs, valuation of accrued income and impairment review of Goodwill. The Audit and Risk
Committee also reviewed in detail financial projections in concluding on its’ Going Concern assertion.
Company Number 05452547
23
Trakm8 Holdings PLC
Governance Report (Continued)
Remuneration committee
The Remuneration Committee’s terms of reference include making recommendations on Directors’
compensation packages to ensure that the Group enjoys and retains an appropriate level of motivated
resources. The Committee engages with external consultants as and where it is deemed beneficial.
The Group has adopted and operates a share dealing code for Directors and employees in accordance with the
requirements of the Combined Code.
Relations with shareholders
The Board values and attaches the utmost importance to the maintenance of good relationships with
shareholders. The Executive Chairman and the Finance Director meet investors immediately after publication
of the annual and interim results, at the Annual General Meeting and on an ongoing basis as required
throughout the year. In addition we provided a number of shareholders update presentations and the
intention is to continue this programme during the new financial year.
By order of the Board
Jon Furber
COMPANY SECRETARY
28 June 2021
Company Number 05452547
24
Trakm8 Holdings PLC
Directors’ Report
DIRECTORS’ REPORT
The Directors submit their Directors’ Report and the audited financial statements of the Group for the year
ended 31 March 2021.
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 development, manufacture, marketing and distribution of
telematics equipment and services and fleet optimisation solutions. Trakm8 Holdings PLC is the holding
company for the Trakm8 Group.
FINANCIAL RISK MANAGEMENT
The Group manages its key financial risks as follows. Further details can be found in note 28.
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. It is also the Group’s policy to mitigate the risk of
borrowings by maintaining cash reserves. The Group currently has an unused overdraft facility of £0.5m.
Currency risk
The Group endeavours to minimise its foreign currency exposure by trading in Sterling wherever possible. The
two principal foreign currencies used are the US Dollar and the Euro and where possible we endeavour to
match inflows and outflows.
Interest rate risk
The Group regularly monitors the risk of increasing interest rate and the effect this would have on our total
interest charges. Currently our bank borrowings are linked to variable interest rates and the Group would
move to fixed if it was deemed appropriate to minimise the effects of further interest rate rises.
Credit risk
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.
RESULTS AND DIVIDENDS
The Group results for the year ended 31 March 2021 are shown in the Consolidated Statement of
Comprehensive Income on page 38. The Directors do not recommend the payment of a dividend (2020: £nil).
Company Number 05452547
25
Trakm8 Holdings PLC
Directors’ Report (Continued)
RESEARCH AND DEVELOPMENT
The Group has continued to invest in research and development to ensure the future success of the business.
During the year the Group capitalised development costs of £2.3m, £0.6m was expensed and a further £0.4m
was categorised as exceptional costs relating to research and development employees furloughed during the
year. Further details about the Group’s approach to R&D can be found in the Strategic Report.
GOING CONCERN
These financial statements are presented on a going concern basis. The Groups projections for the next 12
months, and downside sensitivity analysis against its projections along with closing cash balances of
£2,370,000 and undrawn overdraft facility of £500,000 at 31 March 2021 provide the Directors a reasonable
expectation that the Group will have adequate financial resources to continue in operation for the
foreseeable future. Detailed considerations by the Directors are detailed in note 4 on page 55.
FUTURE DEVELOPMENTS
Consideration on the impact of the Covid-19 pandemic and supply chain challenges has been made in the
Executive Chairman’s Statement in the Strategic Report. Despite the impact of these issues the Group is still
confident of the growth potential in its chosen markets and that we have the solutions and sales teams to
deliver on this opportunity. The Group’s Fleet solutions significantly improve customer’s efficiencies so this
market driver is as relevant now as ever and therefore we expect this part of the business to return to growth
as the impact of the pandemic subsides. Revenues are also expected to increase during the financial year from
existing and recently launched insurance customers.
The Group will continue to invest in our software solutions, algorithms and devices to ensure that the Group
retains the market-leading solutions with the widest and deepest offer in the market today.
Further acquisitions will be assessed and only if our strict criteria are met will be progressed.
EMPLOYEES
The Group’s employment policies are designed to ensure that they meet the statutory, social and market
practices where the Group operates. The Group regularly provides employees with information about the
progress of the Group, wider economic factors and also matters likely to be of concern to them. The Group
recognises the importance of its employees and their training and conducts annual appraisals with each
member of staff.
The Group is committed to employment policies, which follow best practices and are based on equal
opportunities for all employees regardless of sex, race, colour, disability or marital status. The Group gives full
and fair consideration to applications for employment for disabled persons, having regard to their particular
aptitudes and abilities. If members of staff become disabled the Group will continue their employment either
in the same or an alternative position, with appropriate retraining being given if necessary.
Company Number 05452547
26
Trakm8 Holdings PLC
Directors’ Report (Continued)
DIRECTORS
The Directors of the company who were in office during the year and up to the date of signing the financial
statements were:
John Watkins
Keith Evans
Matt Cowley
Tim Cowley
Mark Watkins
Jon Furber
Nadeem Raza
Peter Mansfield
Penny Searles (appointed 18 June 2020)
DIRECTORS AND THEIR INTERESTS
At 31 March 2021 the Directors’ interests in the shares of the Company are detailed below:
1p Ordinary
shares at 31
March 2021
% of issued Ordinary
share capital
(50,004,002 Ordinary
shares)
1p Ordinary
shares at 31
March 2020
% of issued
Ordinary share
capital (50,004,002
Ordinary shares)
John Watkins
Keith Evans
Matt Cowley
Tim Cowley
Jon Furber
Mark Watkins
Nadeem Raza*
Peter Mansfield
Penny Searles
7,768,768
381,119
1,994,203
2,268,127
596,503
318,310
600,926
-
-
15.55%
0.76%
3.99%
4.54%
1.19%
0.64%
1.20%
-
-
7,768,768
381,119
1,994,203
2,268,127
596,503
318,310
278,622
-
-
15.55%
0.76%
3.99%
4.54%
1.19%
0.64%
0.56%
-
-
*Nadeem Raza is the CEO and principle shareholder in Microlise which holds 10,000,000 ordinary shares in the Company.
The Directors had no interest in the share capital of the Company’s subsidiary undertakings at 31 March 2021
or on the date on which these financial statements were approved.
Company Number 05452547
27
Trakm8 Holdings PLC
Directors’ Report (Continued)
DIRECTORS’ REMUNERATION
The Directors’ remuneration for the year ended 31 March 2021 was:
£’000
Salaries &
benefits
Fees
Total
remuneration
to year ended
31 March 2021
Pension
contribution
Total aggregate
emoluments to
year ended 31
March 2021
Total aggregate
emoluments to
year ended 31
March 2020
John Watkins
Keith Evans
Matt Cowley
Tim Cowley
Jon Furber
Mark Watkins
Nadeem Raza
Peter Mansfield
Penny Searles
Bill Duffy
Sean Morris
Total
289
36
100
113
145
145
36
160
36
-
-
1,060
-
-
-
-
-
-
-
-
-
-
-
-
289
36
100
113
145
145
36
160
36
-
-
1,060
-
1
3
3
14
14
1
4
1
-
-
41
289
37
103
116
159
159
37
164
37
-
-
1,101
289
37
107
123
179
173
46
9
-
27
183
1,173
Company Number 05452547
28
Trakm8 Holdings PLC
Directors’ Report (Continued)
DIRECTORS’ SHARE OPTIONS
At 31 March 2021 the following options had been granted to the Company's Directors and remain current and
unexercised:
Option
exercise
price
£0.45
£0.34
£0.34
£0.33
Balance as at
1 April 2020
250,000
125,000
300,000
-
Granted
during
year
-
-
-
100,000
Exercised
during
year
-
-
-
-
Expired/
forfeited
during year
-
-
-
-
Balance as at
31 March
2021
250,000
125,000
300,000
100,000
John Watkins
Keith Evans
Matt Cowley
Tim Cowley
Sean Morris
Mark Watkins
Jon Furber
Peter Mansfield
£0.33
Nadeem Raza
Penny Searles
£0.33
£0.33
£0.34
£0.34
£0.33
£0.45
£0.34
£0.33
£0.45
£0.34
£0.33
£0.34
£0.58
£0.34
£0.34
£0.33
£0.33
£0.34
£0.34
£0.33
75,000
50,000
-
-
-
25,000
125,000
25,000
-
-
-
100,000
125,000
50,000
-
-
-
100,000
350,000
-
200,000
125,000
250,000
-
-
-
-
-
100,000
25,000
125,000
475,000
-
-
-
100,000
-
-
-
400,000
25,000
25,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Expiry date
21/01/2024
04/03/2029
04/03/2029
23/07/2030
27/05/2029
27/05/2029
26/11/2030
21/01/2024
04/03/2029
26/11/2030
21/01/2024
04/03/2029
26/11/2030
-
-
-
-
-
-
-
-
-
75,000
50,000
25,000
125,000
25,000
100,000
125,000
50,000
100,000
350,000
-
04/03/2029
-
-
-
-
-
-
-
-
-
-
-
200,000
125,000
250,000
100,000
25,000
125,000
475,000
100,000
06/04/2024
04/03/2029
04/03/2029
23/07/2030
26/11/2030
04/03/2029
04/03/2029
23/07/2030
400,000
23/07/2030
25,000
23/07/2030
25,000
23/07/2030
All share options were issued at a premium to the mid-market closing share price on the day prior to the issue,
except for the options issued on the 22 January 2014 and 6 April 2014 which were issued at the open market
price on the day the options were granted.
The Group provides qualifying third party indemnity provisions for the Directors which was in place throughout
the year and has remained in place since the year end.
TREASURY SHARES
At 1 April 2020 and 31 March 2021 the Company held 29,000 of its own 1p Ordinary shares representing 0.06%
(2020: 0.06%) of the called up share capital. There were no purchases or sales by the Company during the
year.
Company Number 05452547
29
Trakm8 Holdings PLC
Directors’ Report (Continued)
STATEMENT AS TO DISCLOSURE OF INFORMATION TO THE AUDITORS
Each Director who was in office on the date of approval of these financial statements has confirmed, as far as
they are aware, that there is no relevant audit information of which the auditors are 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.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable law and regulation.
Company law requires the directors to prepare financial statements for each financial year. Under that law the
directors have prepared the group financial statements in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union and parent company financial statements in accordance
with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards,
comprising FRS 101 “Reduced Disclosure Framework”, and applicable law). Under company law the directors
must not approve the financial statements unless they are satisfied that they give a true and fair view of the
state of affairs of the group and parent company and of the profit or loss of the group and parent company for
that period. In preparing the financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
state whether applicable IFRSs as adopted by the European Union have been followed for the group
financial statements and United Kingdom Accounting Standards, comprising FRS 101, have been
followed for the company financial statements, subject to any material departures disclosed and
explained in the financial statements;
make judgements and accounting estimates that are reasonable and prudent; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the group and parent company will continue in business.
The directors are also responsible 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 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 comply
with the Companies Act 2006 and, as regards the group financial statements, Article 4 of the IAS Regulation.
The directors are responsible for the maintenance and integrity of the parent company’s website. Legislation
in the United Kingdom governing the preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
INDEPENDENT AUDITORS
A resolution to appoint Cooper Parry Group Limited, as auditors, will be put to the members at the Annual
General Meeting.
By approval of the Board on 28 June 2021
Jon Furber
Company Secretary
Company Number 05452547
30
Trakm8 Holdings PLC
Independent Auditors Report
Independent auditors’ report to the members of Trakm8 Holdings Plc
Opinion
We have audited the financial statements of Trakm8 Holdings plc (the ‘parent company’) and its subsidiaries
(the ‘group’) for the year ended 31 March 2021 which comprise the consolidated statement of comprehensive
income, the consolidated statement of changes in equity, the consolidated statement of financial position, the
consolidated statement of cash flows, the company statement of financial position, the company statement of
changes in equity and the related notes to the financial statements, including a summary of significant
accounting policies.
The financial reporting framework that has been applied in the preparation of the group financial statements is
applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. The
financial reporting framework that has been applied in the preparation of the parent company financial
statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting
Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
In our opinion:
the financial statements give a true and fair view of the state of the group’s and of the parent company’s
affairs as at 31 March 2021 and of the group’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
the parent company financial statements have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act
2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the financial statements section of our report. We are independent of the group and parent company
in accordance with the ethical requirements that are relevant to our audit of the financial statements in the
UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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 balance sheet, specifically around trade
and other receivables, inventory, intangible assets and right of use assets.
Reviewing management’s disclosures in relation to the potential impact of Coronavirus.
Company Number 05452547
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Trakm8 Holdings PLC
Independent Auditors Report
The key observations arising with respect to our evaluation included:
Management’s mitigating actions to minimise the impact of Coronavirus are within their control.
There do not appear to be any indicators of material impairment as at the balance sheet date.
Management’s disclosures in relation to the potential impact of Coronavirus are consistent with their
forecast scenarios.
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.
Risk of error in revenue recognition for multi-element arrangements
Matter
The Group enters into contracts where there are multiple deliverables to be provided to the customer. These
typically include the provision of hardware, software and services, or software and services. The accounting for
these contracts involves a higher degree of judgement, including:
Determining whether the contract contains performance obligations which should be separated for
revenue recognition purposes and whether each of those elements should be recognised at a point in time
or over time;
Determining the allocation of consideration on a fair value basis between components of multi-element
contracts; and
Determining the point at which it is appropriate to recognise revenues where revenues are recognised in
advance of billings.
Given the above, there is a risk that revenue is not accounted for appropriately.
Response
We have tested the accounting for multi-element contracts and the associated revenues recognised in the
year. Our procedures included:
Review of a sample of contracts with customers to ensure that separate deliverables within contracts have
been identified in line with contractual terms. Where separate deliverables have been identified we have
checked that the revenue recognition methodology applied appropriately separates out each deliverable;
Company Number 05452547
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Trakm8 Holdings PLC
Independent Auditors Report
Testing of the fair values of revenues attributed to different deliverables within the contract by reference
to appropriate supporting evidence, including standalone selling prices for different elements of revenue
or, where these do not exist, similar objective evidence derived from contract pricing over a number of
years; and
Review of contractual terms to check that where revenues are recognised in advance of billings, the Group
has an enforceable right to receive consideration in the future.
Based on the work performed we found that contracts containing more than one deliverable had been
appropriately identified, and revenues had been separately identified and allocated between different
deliverables on a reasonable basis. Where revenues had been recognised in advance of billings we found that
the Group had an enforceable right to receive consideration in the future.
Capitalisation of internally generated intangible assets
Matter
The Group continues to incur material expenditure on development activities (including software). This
expenditure is capitalised when the development project meets the criteria of International Accounting
Standard 38 'Intangible Assets' (IAS 38). During the year the Group capitalised £2.3m of development and
software expenditure on internally generated intangible assets. The capitalised costs consist of internal labour
and external bought in costs. IAS 38 sets out specific criteria that must be met for an asset to be capitalised.
These include:
whether it is probable that the expected future economic benefits attributable to the asset will flow to the
Group;
that the cost of the asset can be measured reliably;
that the technical feasibility of completing the asset can be demonstrated such that it will be available for
use or sale;
there is an intention to complete the asset and use or sell it;
the Group has the ability to use or sell the asset; and
the Group has adequate technical, financial and other resources to complete the development and to use
or sell the asset.
Management apply judgement in determining whether or not these criteria are met and there is therefore a
risk that expenditure may be incorrectly capitalised.
Response
We tested a sample of projects against which costs had been capitalised during the year to validate that the
projects met each of the relevant criteria within IAS 38 to support the capitalisation of costs. We also tested a
sample of costs capitalised during the year to confirm that the cost of the asset could be reliably measured and
had been accurately recorded by agreeing the capitalised costs back to appropriate audit evidence, for
example timesheet records, invoices or similar supporting documentation. Based on our work performed we
found that management’s assessment of projects against the capitalisation criteria within IAS 38 was
reasonable, and that costs capitalised within projects were recorded on an appropriate basis.
Goodwill impairment assessment
Matter
The Group has a material goodwill 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). Total goodwill at year
33
Company Number 05452547
Trakm8 Holdings PLC
Independent Auditors Report
end was £10.4m. Goodwill has been tested by reference to its value in use. Valuations of this nature are
inherently subjective and involve a high degree of estimation, for example over future cash flows of the group,
discount rates applied to those cash flows and terminal growth rates. This gives rise to an increased risk of
error in the calculation of value in use and therefore in the overall impairment assessment.
Response
We have performed audit procedures over management's impairment assessment, including the following
procedures:
Testing of the integrity of the cash flow model and the methodology applied;
Assessing key assumptions including future cash flows, discount rates and growth rates, including
sensitivity of these assumptions.
Agreeing future cash flows to Board approved budgets and considered the appropriateness of these
budgets by reference to historical performance of the Group, including understanding revenue split
between recurring and non-recurring, as well as sales orders and pipeline.
Considering 3 year extended forecasts approved by the board.
Assessing the terminal growth rate against long-term GDP growth in the UK and testing the calculation of
the discount rate.
Performing sensitivity analysis over key assumptions, in particular testing what level of sensitivity in the
assumptions would cause impairment.
Based on our audit procedures performed we found the model itself, the methodology, the forecasts and the
assumptions used in the calculation were appropriate and we concluded that there was no impairment of
goodwill. We also found that the related sensitivity disclosures in the financial statements were appropriate.
Going concern and impairment consideration relating to Coronavirus
Matter
During March 2020, the potential impact of Coronavirus became significant. As a result, management
(including the Board and Audit Committee) invested a significant amount of time to fully consider the
implications on the Group. Management considered implications for the Group’s going concern assessment,
impairment of certain assets and appropriate disclosure in the Annual Report and accounts, by developing
forecasts based on various scenarios to model potential impacts.
Response
We reviewed management’s forecast scenarios including levers available to management to mitigate the
impacts. 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 scenarios to be reasonable whilst noting that the impact
of Coronavirus on future sales and other inputs is currently difficult to quantify.
We challenged management on the key assumptions included in the scenarios and confirmed that
management’s mitigating actions are within their control. We considered the potential impact on the balance
sheet, specifically around trade and other receivables, inventory, intangible assets and right of use assets and
do not consider there to be any indicators of material impairment as at the balance sheet date or subsequently
(for disclosure only). We reviewed management’s disclosures in relation to the Coronavirus potential impact
and found them to be consistent with the forecast scenarios performed.
Company Number 05452547
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Trakm8 Holdings PLC
Independent Auditors Report
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 £160,000. This has been determined
with reference to the benchmark of the group’s revenue which we consider to be an appropriate measure for
a group of companies such as these. Materiality represents 1% of group revenue.
The materiality for the parent company financial statements as a whole was set at £128,000. This has been
determined with reference to the benchmark of the parent company’s net assets which we consider to be an
appropriate measure for a parent company such as this. Materiality represents 0.9% of the parent company
net assets, as a result of us restricting parent company materiality to 80% of the materiality used for the group
financial statements.
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 subsidiaries, Trakm8 Limited and Route
Monkey Limited which were subject to a full scope audit. Together with the parent company and its group
consolidation, which was also subject to a full scope audit, these entities represent the principal business units
of the Group and account for 99% of the Group’s revenue, 99% of the Group’s loss before tax and 100% of the
Group’s net assets. In performing our testing we utilised performance materiality of £136,000, equating to
85% of materiality.
In order to address the matters described in the Key audit matters section we performed focused audit
procedures over these areas, including reference to external market data and publicly available market
information in relation to assumptions used.
The accounting for all significant components in the group is located in the UK, with all audit work over these
components performed by the group audit team. Therefore, there is no requirement to utilise separate
component auditors.
Other information
The directors are responsible for the other information. The other information comprises the information
included in the annual report, other than the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material misstatements, we are required to determine
whether there is a material misstatement in the financial statements or a material misstatement of the other
Company Number 05452547
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Trakm8 Holdings PLC
Independent Auditors Report
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 30, the directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either intend to liquidate the group or the
parent company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Company Number 05452547
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Trakm8 Holdings PLC
Independent Auditors Report
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 European Union, 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 June 2021
Company Number 05452547
37
Trakm8 Holdings PLC
Consolidated Statement of Comprehensive Income For The Year Ended 31 March 2021
REVENUE
Cost of sales
Gross profit
Other income
Administrative expenses excluding exceptional costs
Exceptional administrative costs
Total administrative costs
OPERATING LOSS
Finance income
Finance costs
LOSS BEFORE TAXATION
Income tax
LOSS FOR THE YEAR
OTHER COMPREHENSIVE INCOME
Items that may be subsequently reclassified to profit or loss:
Exchange differences on translation of foreign operations
TOTAL OTHER COMPREHENSIVE INCOME
TOTAL COMPREHENSIVE LOSS FOR THE YEAR ATTRIBUTABLE TO
OWNERS OF THE PARENT
LOSS BEFORE TAXATION
Exceptional administrative costs
IFRS2 Share based payments charge
ADJUSTED LOSS BEFORE TAX
LOSS PER ORDINARY SHARE (PENCE) ATTRIBUTABLE TO OWNERS OF
THE PARENT
Basic
Diluted
The results relate to continuing operations.
Year ended
31 March
2021
£'000
15,961
(6,643)
Year ended 31
March 2020
£'000
19,550
(7,991)
9,318
11,559
194
364
(9,585)
(1,342)
(10,927)
(11,926)
(1,296)
(13,222)
(1,415)
(1,299)
78
(530)
12
(418)
(1,867)
630
(1,705)
612
(1,237)
(1,093)
(3)
(3)
(7)
(7)
(1,240)
(1,100)
(1,867)
1,342
183
(342)
(1,705)
1,296
185
(224)
(2.47p)
(2.19p)
(2.47p)
(2.19p)
Note
6
7
9
8
10
11
8
13
13
Company Number 05452547
38
Trakm8 Holdings PLC
Consolidated Statement of Changes in Equity For The Year Ended 31 March 2021
Note
Share
capital
Share
premium
Merger
reserve
Translation
reserve
Treasury
reserve
Retained
earnings
Total
equity
Balance as at 1 April 2019
500
14,691
1,138
203
(4)
5,566
22,094
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Comprehensive loss
Loss for the year
Other comprehensive loss
Exchange differences on translation
of overseas operations
-
-
-
-
-
(1,093)
(1,093)
-
-
-
(7)
-
-
(7)
Total comprehensive income
-
-
-
(7)
-
(1,093)
(1,100)
Transactions with owners
IFRS2 Share-based payments charge
-
-
-
-
-
185
185
Transactions with owners
-
-
-
-
-
185
185
Balance as at 1 April 2020
500
14,691
1,138
196
(4)
4,658
21,179
Comprehensive loss
Loss for the year
Other comprehensive loss
Exchange differences on translation
of overseas operations
-
-
-
-
-
-
-
-
(1,237)
(1,237)
(3)
-
-
(3)
Total comprehensive loss
-
-
-
(3)
-
(1,237)
(1,240)
Transactions with owners
IFRS2 Share based payments
charge
Transactions with owners
Balance as at 31 March 2021
-
-
-
-
-
183
183
-
500
-
14,691
-
1,138
-
193
-
(4)
183
3,604
183
20,122
Company Number 05452547
39
Trakm8 Holdings PLC
Consolidated Statement of Financial Position As At 31 March 2021 (Continued)
ASSETS
NON CURRENT ASSETS
Intangible assets
Property, plant and equipment
Right of use assets
Amounts receivable under finance leases
CURRENT ASSETS
Inventories
Trade and other receivables
Corporation tax receivable
Cash and cash equivalents
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Borrowings
Right of use liability
Provisions
CURRENT ASSETS LESS CURRENT LIABILITIES
TOTAL ASSETS LESS CURRENT LIABILITIES
NON CURRENT LIABILITIES
Trade and other payables
Borrowings
Right of use liability
Provisions
Deferred income tax liability
NET ASSETS
EQUITY
Share capital
Share premium
Merger reserve
Translation reserve
Treasury reserve
Retained earnings
Note
As at 31 March
2021
£'000
As at 31 March
2020
£'000
14
15
16
18
17
18
20
21
21
22
20
21
21
22
19
23
22,187
891
2,512
50
25,640
1,409
6,679
690
2,370
11,148
21,997
717
3,004
41
25,759
2,043
7,854
863
1,665
12,425
(5,417)
(855)
(680)
(27)
(6,979)
(6,180)
(1,125)
(656)
(27)
(7,988)
4,169
4,437
29,809
30,196
(1,546)
(5,815)
(1,767)
(190)
(369)
(9,687)
(713)
(5,675)
(2,162)
(157)
(310)
(9,017)
20,122
21,179
500
14,691
1,138
193
(4)
3,604
500
14,691
1,138
196
(4)
4,658
TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
20,122
21,179
The loss for the Company for the year determined in accordance with the Companies Act 2006 was £257,000
(2020: loss £236,000)
The notes on pages 42 to 79 are an integral part of these consolidated financial statements. These financial
statements on pages 38 to 79 were approved by the Board of directors and authorised for issue on 28 June 2021
and are signed on its behalf by:
John Watkins - Director
Jon Furber - Director
Company Number 05452547
40
Trakm8 Holdings PLC
Consolidated Statement of Cash Flows For The Year Ended 31 March 2021
Notes
Year ended 31
March 2021
Year ended 31
March 2020
NET CASH GENERATED FROM OPERATING ACTIVITIES
25
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment
Purchases of software
Capitalised development costs
£'000
4,737
£'000
4,115
(330)
(47)
(2,290)
(20)
(23)
(3,156)
NET CASH USED IN INVESTING ACTIVITIES
(2,667)
(3,199)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in loans
Loan arrangement fees
Repayment of loans
Repayment of obligations under lease agreements
Interest paid
5,300
(86)
(5,379)
(670)
(530)
2,000
-
(1,440)
(630)
(386)
NET CASH GENERATED FROM FINANCING ACTIVITIES
(1,365)
(456)
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
705
1,665
2,370
460
1,205
1,665
Company Number 05452547
41
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements
1
GENERAL INFORMATION
Trakm8 Holdings PLC (“Company”) and its subsidiaries (together the “Group”) develop, manufacture,
distribute and sell telematics devices and services and optimisation solutions.
Trakm8 Holdings PLC is a public limited company incorporated in the United Kingdom (registration number
05452547). The Company is domiciled in the United Kingdom and its registered office address is 4 Roman
Park, Roman Way, Coleshill, West Midlands, B46 1HG. The Company’s Ordinary shares are traded on the AIM
market of the London Stock Exchange. The Company is registered in England and is limited by shares.
The Group’s principal activity is the development, manufacture, marketing and distribution of vehicle
telematics equipment and services and optimisation solutions. The Company’s principal activity is to act as a
holding company for its subsidiaries.
The consolidated financial statements are presented in Sterling and all values are rounded to the nearest
thousand (£'000) except where otherwise indicated.
2 PREPARATION 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 IFRS Interpretations Committee (“IFRS IC”) 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 made up to 31 March 2021.
The preparation of the financial statements in conformity with IFRS requires the use of certain critical
accounting estimates and management to exercise its judgement in the process of applying the Group’s
accounting policies as disclosed within note 4 and 5.
Company Number 05452547
42
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
4 ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements have been prepared on the going concern basis under the historical cost convention
in accordance with the applicable accounting standards.
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.
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 when the
Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability
to affect those returns through its power over the investee.
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. All acquisition expenses have been reported within the
consolidated Statement of Comprehensive Income immediately.
Any contingent consideration to be transferred by the group is recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability
is recognised in accordance with IFRS 3 either in statement of comprehensive income or as a change to other
comprehensive income.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting
policies used in line with those used by other members of the Group.
The Company has taken advantage of the exemption provided under section 408 of the Companies Act 2006
not to publish its individual Statements of Comprehensive Income and related notes.
Company Number 05452547
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Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
4 ACCOUNTING POLICIES (Continued)
REVENUE RECOGNITION
Revenue represents the total of amounts receivable for goods and services provided excluding value added
tax.
The Group enters into sale of multi-element contracts, which contain a combination of separate performance
obligations which can include hardware, software and different services, including telematics services,
software maintenance, installation and configuration consulting contracts. Each performance obligation is
allocated a transaction price based on the stand-alone selling prices. Where stand-alone prices are not directly
observable, they are estimated based on expected cost plus margin.
Revenue on the sale of telematics devices and other hardware is recognised when control transfers to a
customer, or where bill and hold arrangements exist, when the products are identified separately as
belonging to the customer and currently ready for physical transfer to the customer. If the contracts include
the installation of hardware, revenue for the hardware is recognised at a point in time when the hardware is
delivered, the legal title passed and the customer has accepted the hardware.
Revenue for telematics services, being the provision of data and data analytics to customers, is recognised in
the accounting period in which the services are rendered. The appropriate portion of service revenue invoiced
in advance covering future periods is shown as deferred income within current and non-current liabilities.
Revenue for installation services is recognised when the performance obligation per the contract is complete.
Revenue from the sale of perpetual software license is recognised when the software is made available for
use by the customers. Revenue from the development of software and the integration of software with
customers’ existing systems is recognised over the life of the development project by reference to percentage
of completion. Revenue for engineering services is recognised as the services are provided.
Revenue from software maintenance contracts is based on the allocated transaction price based on the stand-
alone selling prices, recognised over the support term. Where the stand-alone price is not directly observable,
they are estimated based on expected cost plus margin.
Revenue from SaaS (software as a service) contracts is based on the allocated transaction price based on the
stand-alone selling prices, recognised over the contract term. Where the stand-alone price is not directly
observable, they are estimated based on expected cost plus margin.
Revenue from configuration consulting contracts is based on the allocated transaction price based on the
stand-alone selling prices, recognised as related services are performed. Where the stand-alone price is not
directly observable, they are estimated based on expected cost plus margin.
Rental income from operating leases and rental of equipment is recognised on a straight-line basis over the
term of the lease or rental period.
Company Number 05452547
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Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
4 ACCOUNTING POLICIES (Continued)
REVENUE RECOGNITION (continued)
Assets sold by the Group where substantially all the risk and rewards of ownership of the assets have been
transferred to the customer, of which the customer is paying over a number of future periods are classified as
finance leases. Revenue is recognised at the present value of the minimum lease payments at the inception of
the lease. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of
return on the Group's net investment outstanding in respect of the leases.
Invoicing for all revenue streams is undertaken in accordance with the terms of the agreement with the
customer. Where this is different to revenue recognition either accrued or deferred income is recognised on
the statement of financial position as appropriate.
In cases where customers pay for the goods and services over an agreed period, the fair value of the
consideration is determined by discounting all future receipts using an imputed rate of interest. The
difference between the fair value and the nominal amount of the consideration is recognised as investment
income over the payment period.
GRANT INCOME
Government grants for revenue expenditure are recognised in the Statement of Comprehensive Income on a
systematic basis over the periods in which the entity recognises expenses for the related costs for which the
grants are intended to compensate. For grants relating to assets the grant is deducted from the carrying
amount of the asset.
Company Number 05452547
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Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
4 ACCOUNTING POLICIES (Continued)
LEASES
The Group has adopted IFRS 16 Leases with effect from 1 April 2019 using the modified retrospective
approach.
At inception of a contract, the Group assesses whether a contract is, or contains a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time
in exchange for consideration. To assess whether a contract conveys the right to control the use of an
identified asset, the Group assesses whether:
- The contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should
be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier
has a substantive substitution right, then the asset is not identified.
- The Group has the right to obtain substantially all of the economic benefits from use of the asset through
the period of use; and
- The Group has the right to direct the use of the asset. The Group has this right when it has the decision-
making rights that are most relevant to changing how and for what purpose the asset is used. In rare cases
where the decision about how and for what purpose the asset is used is predetermined, the Group has the
right to direct the use of the asset if either:
o The Group has the right to operate the asset; or
o The Group designed the asset in a way that predetermines how and for what purpose it will be used.
At inception or on reassessment of a contract that contains a lease component, the Group allocates the
consideration in the contract to each lease component on the basis of their relative stand-alone prices.
However, for the leases of land and buildings in which it is a lessee, the Group has elected to separate non-
lease components and therefore accounts for the lease and non-lease components as separate lease
components.
Group as lessee
At inception of a contract the Group assesses whether the contract is or contains a lease as detailed above.
Where a lease is identified the Group recognises a right of use asset and a corresponding lease liability, except
for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets.
Company Number 05452547
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Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
4 ACCOUNTING POLICIES (Continued)
LEASES (Continued)
Lease liability – initial recognition
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date. The lease payments are discounted at the Group’s incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
• fixed lease payments (including in-substance fixed payments), less any lease incentives;
• variable lease payments such as those that depend on an index or rate (such as RPI), initially measured
using the index or rate at the commencement date;
• the amount expected to be payable by the lessee under residual value guarantees;
• the exercise price of purchase options where the Group is reasonably certain to exercise the options; and
• payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to
terminate the lease.
The lease liability is presented as a separate line in the Consolidated Statement of Financial Position, split
between current and non-current liabilities.
Lease liability – subsequent measurement
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease
liability (using the effective interest method) and by reducing the carrying amount to reflect the lease
payments made.
Lease liability – re-measurement
The lease liability is re-measured where:
• there is a change in the assessment of exercise of a purchase option, in which case the lease liability is re-
measured by discounting the revised lease payments using a revised discount rate or;
• the lease payments change due to changes in an index or rate or a change in expected payment under a
guaranteed residual value, in which cases the lease liability is re-measured by discounting the revised lease
payments using the initial discount rate (unless the lease payments change is due to a change in a floating
interest rate, in which case a revised discount rate is used) or;
• the lease contract is modified and the lease modification is not accounted for as a separate lease, in which
case the lease liability is re-measured by discounting the revised lease payments using a revised discount rate.
When the lease liability is re-measured, an equivalent adjustment is made to the right of use asset unless its
carrying amount is reduced to zero, in which case any remaining amount is recognised in the Statement of
Comprehensive Income.
Where the lease liability is denominated in a foreign currency it is retranslated at the Statement of Financial
Position date with foreign exchange gains and losses recognised in the Statements of Comprehensive Income.
Company Number 05452547
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Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
4 ACCOUNTING POLICIES (Continued)
LEASES (Continued)
Right of use asset – initial recognition
The right of use asset comprises the initial measurement of the corresponding lease liability, lease payments
made at or before the commencement date and any initial direct costs. They are subsequently measured at
cost less accumulated depreciation and impairment losses.
Where the Group has an obligation for costs to dismantle and remove a leased asset, restore the site on
which it is located or restore the underlying asset to the condition required by the terms and conditions of the
lease, a provision is recognised and measured under IAS 37. The costs are included in the related right of use
asset, unless those costs are incurred to produce inventories.
The right of use asset is presented as a separate line in the Statement of Financial Position.
Right of use asset – subsequent measurement
Right of use assets are depreciated over the shorter of the lease term and useful life of the underlying asset.
Impairment
The Group applies IAS 36 to determine whether a right of use asset is impaired and accounts for any identified
impairment loss as described in the ‘Impairment – non-financial assets’ policy.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease
liability and the right of use asset. The related payments are recognised as an expense in the period in which
the event or condition that triggers those payments occurs.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account
for any lease and associated non-lease components as a single arrangement. The Group has not used this
practical expedient.
Short term leases and low value assets
For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis
over the term of the lease unless another systematic basis is more representative of the time pattern in which
economic benefits from the leased assets are consumed.
EXCEPTIONAL ITEMS
Exceptional items are those items that, in the Directors’ view, are required to be separately disclosed by virtue
of their size or incidence to enable a full understanding of the Group’s financial performance. See note 9 for
further details.
Company Number 05452547
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Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
4 ACCOUNTING POLICIES (Continued)
TAXATION
The tax expense represents the sum of the current tax expense and deferred tax expense.
Current tax is based on taxable profits 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
Statement of Financial Position date.
Research and Development tax credits (SME R&D tax relief) are shown as part of the current tax charge for
the year in the Statement of Comprehensive Income.
Research and Development Expenditure Credit ('RDEC') in relation to research and development costs not
claimed under SME R&D tax relief are shown as part of other income in the Statement of Comprehensive
Income.
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 Statement of Financial Position 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 in the foreseeable future.
Deferred tax on share based payments is recognised in the Statement of Comprehensive Income to the extent
that the future tax deduction does not exceed the charge in the Statement of Comprehensive Income.
Deferred tax for the excess is recognised directly in Statement of Changes in Equity.
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 at the year
end.
SHARE-BASED PAYMENTS
The Group issues equity-settled share-based payments to certain employees. The Group has applied the
requirements of IFRS 2 Share-based payment, the corresponding entry to the expense in the Statement of
Comprehensive Income is recognised in equity within the Statement of Changes in Equity. 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.
Company Number 05452547
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Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
4 ACCOUNTING POLICIES (Continued)
GOODWILL
Goodwill arising on consolidation is recorded as an intangible asset and is the surplus of the fair value of the
consideration over the Group’s interest in the fair value of identifiable net assets (including intangible assets)
acquired. Goodwill is tested for impairment annually as at 31 March and when circumstances indicate that
the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable
amount of each CGU (or group of CGUs) to which the goodwill relates. When the recoverable amount of the
CGU is less than its carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill
cannot be reversed in future periods. Any impairment identified as a result of the review is charged in the
Statement of Comprehensive Income.
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.
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. The nature of intangible assets
recognised and their amortisation rates for each category are:
Software
Development cost
20 - 100% Straight line
10 - 40% Straight line
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 costs to either sell or use as an asset.
INTANGIBLE ASSETS ACQUIRED AS PART OF A BUSINESS COMBINATION
For acquisitions, the Group recognises intangible assets separately from goodwill provided they are separable
or arise from contractual or other legal rights and their fair value can be measured reliably. Intangible assets
are initially recognised at fair value, which is regarded as their cost. Intangible assets are subsequently held at
cost less accumulated amortisation and impairment losses. Where intangible assets have finite lives, their cost
is amortised on a straight-line basis over those lives. The nature of intangible assets recognised and their
amortisation rates for each category are:
Software
Websites
Intellectual property
Customer relationships
10 - 20% Straight line
33 - 50% Straight line
20% Straight line
33% Straight line
The assets’ residual values and useful lives are reviewed at each Statement of Financial Position date and
adjusted if appropriate. The carrying values of intangible assets are reviewed for impairment when events or
changes in circumstances indicate that the carrying value may not be recoverable.
Company Number 05452547
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Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
4 ACCOUNTING POLICIES (Continued)
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. In summary the
depreciation rates used for each category is as follows:
Freehold property
Furniture, fixtures and equipment
Computer equipment
Motor vehicles
2% Straight line
5% - 10% Straight line
20% Straight line
25% Straight line
PROPERTY, PLANT AND EQUIPMENT IMPAIRMENT
The assets’ residual values and useful lives are reviewed at each Statement of Financial Position 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.
INVENTORIES
Inventories are valued at the lower of cost and net realisable value. In general cost is determined on weighted
average cost 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.
FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are recognised in the Group’s Statement of Financial Position when the
Group becomes a party to the contractual provisions of the instrument.
Company Number 05452547
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Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
4 ACCOUNTING POLICIES (Continued)
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. The IAS 39 category, Loans and
Receivables, required assets to be measured at amortised cost and therefore the change in category in the
adoption of IFRS 9 does not in fact result in a change in measurement of trade receivables.
The Group recognises an allowance for Expected Credit Losses (ECLs) for trade receivables. IFRS 9 requires
an impairment provision to be recognised on origination of a trade receivable, based on its ECL.
The directors have taken the simplification available under IFRS 9.5.5.15 which allows the loss amount in
relation to a trade receivable to be measured at initial recognition and throughout its life at an amount
equal to lifetime ECL. This simplification is permitted where there is either no significant financial
component (such as customer receivables where the customer is expected to repay the balance in full prior
to interest accruing) or where there is a significant financial component (such as where the customer
expects to repay only the minimum amount each month), but the directors make an accounting policy
choice to adopt the simplification.
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 Statement of Cash Flows, cash and cash equivalents includes bank
overdrafts where applicable.
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. Financial liabilities and equity instruments are initially
recognised at fair value and subsequently at amortised cost using the effective interest method.
BANK BORROWINGS
Borrowings are initially recognised at fair value, being proceeds received less directly attributable
transaction costs incurred. Borrowings are subsequently measured at amortised cost with any transaction
costs amortised to the Statement of Comprehensive Income over the period of the borrowings using the
effective interest method.
TRADE PAYABLES
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of
business from suppliers. Trade payables are initially recognised at fair value and subsequently at amortised
cost using the effective interest method.
Company Number 05452547
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Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
4 ACCOUNTING POLICIES (Continued)
PROVISIONS
Provisions are recognised when the Group has a present obligation as a result of 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 net expenditure required to settle the obligation at the year-end date and are
discounted to present value where the effect is material.
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.
Treasury reserve represents the cost of shares held in Treasury. Where any group company purchases the
company’s equity share capital (treasury shares), the consideration paid, including any directly attributable
incremental costs (net of income taxes) is deducted from equity attributable to the company’s equity
holders until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued,
any consideration received, net of any directly attributable incremental transaction costs and the related
income tax effects, is included in equity attributable to the company’s equity holders.
Retained earnings represents retained profits and the share based payment reserve.
Company Number 05452547
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Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
4 ACCOUNTING POLICIES (Continued)
FOREIGN CURRENCIES
Sterling is the presentational currency of the Group. The functional currency of the companies within the
Group is sterling. This is 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.
Foreign currency monetary 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 Statement of Financial Position 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.
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.
The Board have assessed that there continues to be just one segment following the integration of the
Trakm8 and Route Monkey businesses. This segment has one separate revenue stream of Integrated
Telematics Technology.
Company Number 05452547
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Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
4 ACCOUNTING POLICIES (Continued)
GOING CONCERN
These financial statements are prepared on a going concern basis after assessing the principal risks. To
monitor the future cash position the Group produces projections of its working capital and long term
funding requirements covering 3 months in detail and 1 and 2 year projections. These projections are
updated on a regular basis to reflect current trading and latest information on future trading. The Group
does have a substantial recurring revenue base that accounts for 50% of revenues that provide a strong
underlying base, and the Group is still taking advantage of the Job Retention scheme as trading recovers
following relaxation of lock down rules. Further consideration of other significant risks and the mitigations
the Group has developed are detailed in page 18.
The Group renewed its debt facilities with HSBC in March 2021. The new agreement comprises a Term Loan
of £5,300,000 and a £500,000 overdraft facility. Capital repayments commence in September 2021 at
£86,000 per month with a final payment of the outstanding balance on 31 October 2023, which is when
these facilities are in place until. In addition, the capital repayment holiday of our loan with Maven
(£1,400,000 outstanding) has been extended, such that repayments will now recommence in September
2021. In addition the company has reached an agreement with HMRC on a time to pay agreement to spread
£1,759,000 of VAT, PAYE & NI payment deferments that resulted from the Covid-19 lockdowns almost
equally over the next two financial years. Covenants agreed with both HSBC and Maven reflect the impact
of trading due to Covid-19 over the preceding twelve months, as such the main covenant test over the next
financial year relates to an absolute EBITDA tested quarterly through to end of the financial year, with a cash
flow cover and leverage covenant only started to be tested in June 2022.
At the year end the Group has cash balances of £2,370,000 and an unused overdraft facility of £500,000.
The Groups latest projections for twelve months from the date of signing the financial statements show that
the Group has sufficient cash resources and will meet its covenants with ample headroom for the
foreseeable future. The Group has undertaken a number of adverse sensitivities against its projections to
reflect much slower recovery post the lock down at the end of the last financial year. The Groups base line
projection has a 10% headroom against its EBITDA covenant, its downside sensitivity analysis shows that a
£2.4m reduction in revenue only reduces EBITDA by 3%, with minimal impact on cash. This downside
scenario still passes all covenants with the Group having additional mitigating actions not included in the
projections. One of the current risks is cost pressure and long lead times due to the electronics supply chain
being materially impacted by Covid-19. The Group is in a strong position to mitigate that risk due to the
strong long-term relationships with its suppliers, and due to it being a fully vertically integrated business
which means the design engineers working closed with supply chain. However, the Group’s sensitivity
analysis demonstrated headroom in its latest projection of a 15% increase in component prices. On this
basis the Directors have a reasonable expectation that the Group will have adequate financial resources to
continue in operation for the foreseeable future and therefore it is appropriate to adopt the going concern
basis of accounting in preparing the financial statements.
Company Number 05452547
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Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
4 ACCOUNTING POLICIES (Continued)
CHANGES IN ACCOUNTING STANDARDS AND DISCLOSURES
The Group did not adopt any new standards, or new provisions of amended standards during the current
financial year.
OUTLOOK FOR ADOPTIONS OF FUTURE STANDARDS (new and amended)
At the date of authorisation of these Consolidated Financial Statements, there were no new or revised IFRSs,
amendments or interpretations in issue but not yet effective that are potentially relevant for the Group and
which have not yet been applied.
5 CRITICAL JUDGEMENTS AND ESTIMATES 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 a significant effect on the amounts recognised in the financial
statements (apart from those involving estimations, which are dealt with below).
REVENUE RECOGNITION
Revenue is recognised with reference to the fair value of contracts.
Based on revenue recognition criteria in note 4 above, the allocation of transaction price to different
performance obligations was identified as the only part of the criteria that is a significant judgement.
Management applies judgement on contracts which involve more than one deliverable. Each deliverable is
assigned to one or more separate element of revenue and the contract consideration is allocated to each
element based on its relative fair value. Determining the fair value of each element can require complex
estimates due to the nature of goods and services provided. A fair value is estimated for each element
based on equivalent sales prices where it is sold on a standalone basis after considering volume discounts
when applicable.
The split between initial recognition for products supplied and subsequent recognition for service revenue
over the contract period and allocating the fair value between these elements is another key judgement
made by management in ensuring appropriate revenue recognition.
Management also assesses the state of completion of engineering services, software development and
integration projects by reference to work done, elements delivered and services provided to the customer.
CAPITALISED DEVELOPMENT COSTS
At the start of a project, management assesses whether or not the project meets the criteria for
capitalisation under the requirements of IAS 38. Subsequently, the recoverability of capitalised development
costs is dependent on assessments of the future commercial viability of the relevant products and
processes. Management assess this viability based on market knowledge and demand from customers for
improvements to existing product, service and software capabilities.
Company Number 05452547
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Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
5 CRITICAL JUDGEMENTS AND ESTIMATES IN APPLYING THE GROUP’S ACCOUNTING POLICIES (continued)
KEY SOURCES OF ESTIMATION UNCERTAINTY
The key assumptions concerning the future and other key estimations at the Statement of Financial Position
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 TRADE RECEIVABLES AND ACCRUED INCOME
Management are particularly conscious of the financial weakness of some companies and closely monitors
its outstanding debtor book in order to minimise the risk associated with future bad debts. Active credit
control management is undertaken with a credit approval process in place and active monitoring of accounts
resulting in future supplies being stopped if debts 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 receivables in the future.
The Group recognises an allowance for Expected Credit Losses (ECLs) for trade receivables. IFRS 9 requires
an impairment provision to be recognised on origination of a trade receivable, based on its ECL.
The directors have taken the simplification available under IFRS 9.5.5.15 which allows the loss amount in
relation to a trade receivable to be measured at initial recognition and throughout its life at an amount
equal to lifetime ECL. This simplification is permitted where there is either no significant financial
component (such as customer receivables where the customer is expected to repay the balance in full prior
to interest accruing) or where there is a significant financial component (such as where the customer
expects to repay only the minimum amount each month), but the directors make an accounting policy
choice to adopt the simplification.
IMPAIRMENT OF GOODWILL
The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation
of the value in use of the cash-generating units to which the goodwill is allocated. Estimating the value in use
requires the Group to make an estimate of the expected future cash flows from the cash generating unit and
also to choose a suitable discount rate in order to calculate the present value of those cash flows. Further
details are given in note 14.
Company Number 05452547
57
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
6 SEGMENTAL ANALYSIS
The chief operating decision maker (“CODM”) is identified as the Board. It continues to define all the Group's
trading under the single Integrated Telematics Technology segment and therefore review the results of the
group as a whole. Consequently all of the Group’s revenue, expenses, assets and liabilities are in respect of
one Integrated Telematics Technology segment.
The Board as the CODM review the revenue streams of Integrated Fleet, Optimisation, Insurance and
Automotive Solutions (“Solutions”) as part of their internal reporting. Solutions represents the sale of the
Group’s full vehicle telematics and optimisation services, engineering services, professional services and
mapping solutions to customers.
A breakdown of revenues within these streams are as follows:
Solutions:
Fleet and optimisation
Insurance and automotive
A geographical analysis of revenue by destination is as follows:
United Kingdom
North America
Norway
Rest of Europe
Rest of World
7 OTHER INCOME
Grant income
R&D tax credit
R&D tax credit adjustment in respect of prior periods
Year ended
31 March
2021
£'000
15,961
9,520
6,441
Year ended
31 March
2020
£'000
19,550
12,034
7,516
Year ended
31 March
2021
£'000
15,647
4
2
293
15
15,961
Year ended
31 March
2020
£'000
19,181
7
-
67
295
19,550
Year ended
31 March
2021
£'000
194
-
-
194
Year ended
31 March
2020
£'000
361
4
(1)
364
Company Number 05452547
58
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
8 OPERATING LOSS
The following items have been included in arriving at operating loss:
Depreciation
- owned assets (see note 15)
- right of use assets (see note 16)
Amortisation of intangible assets
- owned assets (see note 14)
Other operating lease rentals
Research and development expenditure
Loss on disposal of property plant and equipment
Loss on foreign exchange transactions
Staff costs (note 12)
Exceptional administrative costs (note 9)
Auditors’ remuneration
- Fees payable to the Company’s auditors for the audit of the parent
company and consolidated financial statements
Adjusted loss before tax is monitored by the Board and measured as follows:
Loss before tax
Exceptional administrative costs (note 9)
Share based payments
Adjusted loss before tax
9 EXCEPTIONAL ADMINISTRATIVE COSTS
Acquisition costs
Integration & restructuring costs
New product component refit costs
Covid-19 costs
Furlough grant income
Year ended
31 March
2021
Year ended
31 March
2020
£'000
£'000
156
625
149
550
1,992
13
637
318
1
6,465
1,342
2,194
80
896
-
2
6,730
1,296
73
73
Year ended
31 March
2021
£'000
(1,867)
1,342
183
(342)
Year ended
31 March
2020
£'000
(1,705)
1,296
185
(224)
Year ended
31 March
2021
£'000
-
168
-
2,109
(935)
1,342
Year ended
31 March
2020
£'000
52
602
442
200
-
1,296
Company Number 05452547
59
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
9 EXCEPTIONAL ADMINISTRATIVE COSTS (continued)
The acquisition costs incurred in 2020 relate to non-underlying charges under a separate agreement linked
to the acquisition in 2017. The costs incurred are directly linked to the acquisition and not as part of the
underlying business. This agreement terminated on 31 July 2019.
The Group has incurred significant costs relating to its ongoing project to streamline and rationalise the
operations of the business. This has resulted in the following non-underlying, one-off costs:
- In the current and prior year, integration and restructuring costs incurred relate to integrating the
activities of Route Monkey Limited and Roadsense Limited that were acquired in previous financial years and
include costs associated with office closures and costs and profits incurred as part of its long-term real estate
plan.
- Restructuring costs incurred as a result of a headcount reduction activity undertaken during the current
financial year
The Product component refit costs incurred in the prior year relate to significant component and software
issues that arose in 2019 on a new product. These issues were fixed by the end of 2019. However significant
re-visit and material costs were incurred in previous financial year as a result of the project to remedy these
issues. No customers have been lost as a result of these issues.
The Group also incurred exceptional costs in the current financial year relating to the Covid-19 pandemic.
These costs mainly relate to the cost of employees whilst on furlough (£1,607,000) and the cancellation of
internal and external projects (£476,000), and some costs relating to cancelled marketing events and bad
debts (£26,000).
Furlough grant income relates to other income received from the Coronavirus Job Retention Scheme for
employees furloughed as a result of Covid-19.
10 FINANCE COSTS
Interest on bank loans
Amortisation of debt issue costs
Interest on right of use assets
Year ended 31
March 2021
£'000
373
37
120
530
Year ended 31
March 2020
£'000
284
32
102
418
Company Number 05452547
60
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
11
INCOME TAX
Tax credit for the year
The tax credit for the year is shown below. Tax is made up of current and deferred tax. Current tax is the
amount payable/(receivable) on the taxable income in the year and any adjustments to the tax
payable/(receivable) in the previous years. Deferred tax is explained in note 19.
Current tax
Deferred tax
current year credit
prior year adjustment
sub total
current year charge
prior year adjustment
sub total
Year ended 31
March 2021
£'000
(687)
(2)
(689)
Year ended 31
March 2020
£'000
(855)
21
(834)
89
(30)
59
169
53
222
Income tax credit
Total
(630)
(612)
Company Number 05452547
61
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
11
INCOME TAX (continued)
Factors affecting the tax charge
The tax assessed for the year is lower (2020: lower) than the applicable rate of corporation tax in the UK. The
difference is explained below:
Loss before tax
Year ended 31
March 2021
£'000
(1,867)
Year ended 31
March 2020
£'000
(1,705)
Loss on ordinary activities multiplied by the standard rate of
corporation tax in the UK of 19% (2020: 19%)
(355)
(324)
Effects of:
Expenses not deductible/income not taxable
R&D relief enhanced deduction
Adjustments in respect of prior periods:
Opening and closing deferred tax rate adjustment
Other movements
Total tax credit
Tax on exceptional items
Deferred tax
Current tax
39
(338)
8
(2)
31
(13)
(630)
41
(376)
53
21
-
(27)
(612)
The tax effect of exceptional items is to increase the tax credit by £255,000 (2020: £246,000).
R&D relief enhanced deduction
This deduction is available on research and development work done by the Group to develop and enhance
its data analytics functionality and telematics hardware.
Prior year adjustment
The prior year adjustment mainly relates to the R&D tax credits and capital allowances claim that were
finalised during the year.
Factors affecting future tax changes
The standard rate of corporation tax in the UK for the year was 19% (2020: 19%). On the 3 March 2021 it
was announced that the corporation tax rate would increase to 25% from 1 April 2023. This was
substantively enacted on 24 May 2021. As a result current year deferred tax is calculated at 19%, however
the new rate of 25% that was enacted post year end would have resulted in a £108,000 increase in the
deferred tax liability if this had applied at the year end.
Company Number 05452547
62
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
12
EMPLOYEES
Year ended
31 March
2021
Year ended
31 March
2020
No.
No.
The average monthly number of persons (including Directors) employed by the Group was:
Engineering
Sales & marketing
Production
Administration
63
65
34
21
183
66
82
39
21
208
Staff costs for the employees and Directors (included under Administrative expenses and Cost of sales):
Wages and Salaries
Social security costs
Share based payments
Other pension costs
Year ended
31 March
2021
Year ended
31 March
2020
£'000
5,532
629
183
121
6,465
£'000
5,740
675
185
130
6,730
The compensation for key management personnel was as follows (included under Administrative
expenses and Cost of sales):
Salaries and other short-term employee benefits
Post-employment benefits
Share based payments
Year ended
31 March
2021
Year ended
31 March
2020
£'000
1,131
41
171
1,343
£'000
1,295
58
148
1,501
The key management personnel are the Directors and one senior manager who have previously been
identified as key management personnel.
The key management personnel made gains of £nil (2020: £nil) on the exercise of share options during the
year.
Details of Directors’ fees and salaries, bonuses and pensions (including that of the highest paid Director)
and are given in the Directors’ Report on page 28.
Company Number 05452547
63
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
13 EARNINGS PER ORDINARY SHARE
The earnings per Ordinary share have been calculated in accordance with IAS 33 using the loss for the year
and the weighted average number of Ordinary shares in issue during the year as follows:
Loss for the year after taxation
Exceptional administrative costs
Share based payments
Tax effect of adjustments
Adjusted profit for the year after taxation
Number of Ordinary shares of 1p each at 31 March
Basic weighted average number of Ordinary shares of 1p each
Diluted weighted average number of Ordinary shares of 1p each
Basic loss per share
Diluted loss per share
Adjust for effects of:
Exceptional costs
Share based payments
Adjusted basic earnings per share
Adjusted diluted earnings per share
Year ended 31
March 2021
£'000
(1,237)
1,342
183
(255)
33
Year ended 31
March 2020
£'000
(1,093)
1,296
185
(246)
142
No.
50,004,002
50,004,002
50,004,002
(2.47p)
(2.47p)
2.17p
0.37p
0.07p
0.07p
No.
50,004,002
50,004,002
50,004,002
(2.19p)
(2.19p)
2.10p
0.37p
0.28p
0.28p
Company Number 05452547
64
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
14
INTANGIBLE ASSETS
Goodwill
Intellectual
property
Customer
relationships
Development
costs
Software
Total
£'000
£'000
£'000
£'000
£'000
£'000
10,417
1,920
100
14,034
2,033
28,504
-
-
-
-
(153)
(153)
-
-
- 2,763
-
2,763
-
-
-
393
23
416
10,417
1,920
100
17,190
1,903
31,530
-
-
- 2,119
-
2,119
-
-
-
171
47
218
-
-
10,417
-
-
1,920
-
-
100
-
(238)
19,242
(155)
(36)
1,759
(155)
(274)
33,438
-
-
-
-
-
-
1,849
61
1,910
10
-
1,920
89
11
100
4,632
1,847
6,479
- 1,733
(238)
-
7,974
100
769
275
1,044
249
(36)
1,257
7,339
2,194
9,533
1,992
(274)
11,251
10,417
-
-
11,268
502
22,187
COST
As at 1 April 2019
Reclassification of right of
use assets(a)
Additions - Internal
developments
Additions - External
purchases
As at 31 March 2020
Additions - Internal
developments
Additions – External
purchases
Impairments
Disposals
As at 31 March 2021
AMORTISATION
As at 1 April 2019
Charge for year
As at 31 March 2020
Charge for year
Disposals
As at 31 March 2021
NET BOOK AMOUNT
As at 31 March 2021
As at 31 March 2020
10,417
10
-
10,711
859
21,997
As at 1 April 2019
10,417
71
11
9,402
1,264
21,165
Goodwill arose in relation to the Group’s acquisition of 100% of the share capital of Roadsense Technology
Limited (Roadsense), Route Monkey Limited (Route Monkey), Box Telematics Limited (Box) and DCS Systems
Limited (DCS).
Since the acquisition Roadsense, Box, Route Monkey and DCS have been incorporated into the Trakm8 business.
These businesses have therefore been assessed as one cash generating unit for an impairment test on Goodwill.
The impairment review has been performed using a value in use calculation.
Company Number 05452547
65
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
14
INTANGIBLE ASSETS (continued)
The impairment review has been based on the Group’s budgets for FY-2022 which have been reviewed and approved
by the Board and projections for FY-2023. Forecasts for the subsequent 3 years have been produced based on 7% (a
prudent growth rate for telematics market) growth rates in revenue and EBITDA in each year. A net present value has
been calculated using a pre-tax discount rate of 10% (Group's weighted average cost of capital) which is deemed to be
a reasonable rate taking account of the Group’s cost of funds and an extra element for risk. A terminal value has been
calculated and included in the discounted cash flow forecasts used within the model to fully support the goodwill
value. A growth rate of 2% was used to determine the terminal value.
The forecasts show sufficient headroom of cash flow above the net assets value when we performed sensitivity
analysis:
1. An increase in the discount rate to 12% shows headroom of £4m.
2. A decrease in the growth rate to 5% shows headroom of £10m.
3. A decrease in the terminal growth rate to 1% shows headroom of £10m.
In addition, sensitivity analysis has been undertaken and indicates that an impairment will be triggered by:
1. Decrease in annual growth rates from 7% to 2% and decrease in terminal growth rate from 2% to 1% and increase
the discount rate from 10% to 11%.
Or triggered by:
1. Decrease in net cash generated from operating activities for FY-2022 and FY-2023 of 22%.
Amortisation expenses of £1,992,000 (2020: £2,194,000) have been charged to Administrative expenses in the
Consolidated Statement of Comprehensive Income.
(a) Amounts previously recognised as finance lease assets have been reclassified to right of use assets upon transition
to IFRS 16 on 1 April 2019. Refer to Note 16 – Right of Use Assets for further details.
Company Number 05452547
66
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
15 PROPERTY, PLANT AND EQUIPMENT
Freehold
property
£'000
Furniture,
fixtures and
equipment
£'000
Computer
equipment
£'000
Motor
vehicles
£'000
Total
£'000
147
1,573
771
7
2,498
-
(526)
(230)
-
(756)
-
147
-
7
-
154
18
1,065
76
303
(3)
1,441
2
543
(76)
20
(131)
356
-
7
-
-
-
7
20
1,762
-
330
(134)
1,958
5
541
513
7
1,066
-
(80)
(90)
-
(170)
6
11
-
7
-
18
107
568
(2)
138
(3)
701
36
459
2
11
(131)
341
-
7
-
-
-
7
149
1,045
-
156
(134)
1,067
136
740
15
-
891
COST
As at 1 April 2019
Reclassification of right
of use assets(a)
Additions
As at 31 March 2020
Reclassification
Additions
Disposals
As at 31 March 2021
DEPRECIATION
As at 1 April 2019
Reclassification of right of
use assets(a)
Charge for year
As at 31 March 2020
Reclassification
Charge for year
Disposals
As at 31 March 2021
NET BOOK AMOUNT
As at 31 March 2021
As at 31 March 2020
136
497
84
-
717
As at 1 April 2019
142
1,032
258
-
1,432
Included within freehold property is £85,000 (2020: £85,000) relating to land which is not depreciated.
Total depreciation expenses of £156,000 (2020: £149,000) have been charged to administrative expenses
in the Consolidated Statement of Comprehensive Income.
(a) Amounts previously recognised as finance lease assets have been reclassified to right of use assets
upon transition to IFRS 16 on 1 April 2019. Refer to Note 16 – Right of Use Assets for further details.
Company Number 05452547
67
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
16 RIGHT OF USE ASSETS
Leased
property
£'000
Furniture,
fixtures
and
equipment
£'000
Computer
equipment
Motor
vehicles
Software
Total
£'000
£'000
£'000
£'000
2,098
-
-
412
-
2,510
-
446
140
-
153
739
-
-
2,098
-
-
-
2,098
63
-
509
42
-
-
551
35
-
175
175
-
-
350
244
(37)
619
79
-
(83)
615
-
-
153
-
(153)
-
-
342
(37)
3,554
296
(153)
(83)
3,614
-
264
264
265
-
529
-
49
49
75
-
124
-
62
62
58
-
120
-
175
175
227
(73)
329
-
-
-
-
-
-
-
550
550
625
(73)
1,102
1,569
427
230
286
-
2,512
COST
As at 1 April 2019
Reclassification of right
of use assets(a)
Additions
Disposals
As at 31 March 2020
Additions
Impairments
Disposals
As at 31 March 2021
AMORTISATION
As at 1 April 2019
Charge for year
As at 31 March 2020
Charge for year
Disposals
As at 31 March 2021
NET BOOK AMOUNT
As at 31 March 2021
As at 31 March 2020
1,834
460
113
444
153
3,004
As at 1 April 2019
2,098
-
-
412
-
2,510
Total depreciation expenses of £625,000 (2020: £550,000) have been charged to administrative expenses in
the Consolidated Statement of Comprehensive Income.
(a) Amounts previously recognised as finance lease assets have been reclassified to right of use assets upon
transition to IFRS 16 on 1 April 2019. Refer to Note 14 - Intangible assets and Note 15 – Property, plant and
equipment for further details.
17
INVENTORIES
Raw materials
Work in progress
Finished goods and goods for resale
As at 31
March 2021
174
584
651
1,409
As at 31
March 2020
£'000
621
715
707
2,043
The cost of inventories recognised as an expense and included in cost of sales amounted to £3,308,000 (2020:
£3,746,000). During the year old inventory lines totalling £270,000 (2020: £111,000) were written down and
charged to cost of sales in the Consolidated Statement of Comprehensive Income.
Company Number 05452547
68
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
18 TRADE AND OTHER RECEIVABLES
Trade receivables
Other receivables
Amounts receivable under finance leases
Prepayments
Assets recognised for goods and services
delivered but not billed (contract asset)
Non-current assets
Current assets
As at 31
March 2021
£'000
-
-
50
-
As at 31
March 2020
£'000
-
-
41
-
As at 31
March 2021
£'000
2,555
166
63
371
As at 31
March 2020
£'000
3,294
73
98
344
-
-
3,524
4,045
50
41
6,679
7,854
The analysis of trade receivables by currency is as follows:
Pound Sterling
Euro
As at 31
March 2021
£'000
2,554
1
2,555
As at 31
March 2020
£'000
3,271
23
3,294
An allowance is made for Expected Credit Losses (ECLs) for trade receivables. IFRS 9 requires an impairment
provision to be recognised on origination of a trade receivable, based on its ECL. The allowance that has been
made for ECL for trade receivables is £197,000 (2020: £415,000 ).
Movement in provision for impairment of trade receivables:
Opening provision for impairment of trade receivables
Arising during the year
Utilised during the year
Released during the year
Impairment loss during the year
As at 31
March 2021
£'000
415
As at 31
March 2020
£'000
720
38
(177)
(79)
(218)
208
(409)
(104)
(305)
Closing provision for impairment of trade receivables
197
415
As at 31 March 2021 trade receivables of £868,000 (2020: £1,675,000) were past due but not impaired. The
ageing analysis of these trade receivables is as follows:
Up to 3 months past due
3 to 6 months past due
Company Number 05452547
As at 31
March 2021
£'000
626
242
868
As at 31
March 2020
£'000
1,438
237
1,675
69
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
18 TRADE AND OTHER RECEIVABLES (continued)
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 reporting date is the carrying value of each class of
receivable mentioned above.
The analysis of amounts receivable under finance leases is as follows:
Within one year
After one and within two years
After two and within five years
Minimum lease
payments
Present value of
minimum lease
payments
As at 31
March 2021
£'000
65
52
-
As at 31
March 2020
£'000
100
41
-
As at 31
March 2021
£'000
63
50
-
As at 31
March 2020
£'000
98
41
-
117
141
113
139
The interest rate inherent in the leases is fixed at the contract date for the entire lease term. The average
effective interest contract is approximately 2.45% (2020: 2.45%) per annum.
19 DEFERRED TAX
The analysis of deferred tax liability calculated using a tax rate of 19% is as follows:
Deferred tax liability
Deferred tax liability to be released within 12 months
Deferred tax liability to be released after more than 12 months
The deferred tax liability consists of the following:
Trading losses
Short term timing differences
Accelerated tax depreciation
As at 31
March 2021
As at 31
March 2020
£'000
-
(369)
(369)
£'000
(165)
(145)
(310)
As at 31
March 2021
As at 31
March 2020
£'000
1,673
(9)
(2,033)
(369)
£'000
1,525
(29)
(1,806)
(310)
Deferred income tax assets are recognised for tax losses carried forward to the extent that the realisation of
the related tax benefit through future taxable profits is probable.
The movement in the deferred income tax liability during the year is as follows:
At 31 March 2020
Credited / (debited) to the Statement of
Comprehensive Income
Credited / (debited) to the Statement of
Changes in Equity
Trading losses
£'000
1,525
Accelerated tax
depreciation
£'000
(1,806)
148
(227)
Short term
timing
differences
£'000
(29)
20
TOTAL
£'000
(310)
(59)
-
-
-
-
At 31 March 2021
1,673
(2,033)
(9)
(369)
Company Number 05452547
70
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
20 TRADE AND OTHER PAYABLES
Trade payables
Social security and other taxes
Other payables
Accruals and deferred income
Payments received in advance of service delivery (contract liability)
Non-current liabilities
As at 31
March
2020
£'000
As at 31
March
2021
£'000
-
799
-
-
747
1,546
Current liabilities
As at 31
March
2021
£'000
- 1,996
1,744
-
-
-
773
-
904
713
5,417
713
As at 31
March
2020
£'000
2,950
1,257
-
859
1,114
6,180
The Directors consider that the carrying amount of trade payables approximates to their fair value.
Revenue recognised in the current reporting period relating to carried-forward contract liabilities was £1.4m (2020:
£1.0m).
21 BORROWINGS
As at 31 March 2021
As at 31 March 2020
Loans
Obligations
under right
of use assets
Total
Loans
Obligations
under right
of use assets
Total
Gross
£'000
Arrangement
fee
Net
Gross
Arrangement
fee
Net
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Current
902
(47)
855
680 1,535
Non-Current
5,898
(83)
5,815
1,767 7,582
1,160
5,719
(35)
1,125
656 1,781
(44) 5,675
2,162
7,837
6,800
(130)
6,670
2,447
9,117
6,879
(79) 6,800
2,818 9,618
All borrowings are held in sterling and the Directors consider their carrying amount approximates to their fair values.
Loans comprise the following:
A £5.3m term loan with HSBC. The loan is secured by a fixed and floating charge on all the assets of the Group. It is
repayable by 22 monthly instalments from 30 September 2021 of £86,000 and a final repayment of the outstanding
balance on 31 October 2023 and bears interest at a floating rate of 5.1% over base rate. As at 31 March 2021 the Group
owed £5.3m (2020: £0.9m).
On 31 March 2021, the Group used this term loan to pay off £4.5m (2020:£4.5m) that was due on a credit facility and
£0.7m (2020: £0.9m) that was due on a term loan, both from HSBC.
A £0.5m overdraft facility with HSBC. The overdraft facility bears an interest rate of 5.3% over LIBOR on the drawn
amount. As at 31 March 2021 the Group had not used this overdraft facility.
A £1.5m growth capital loan with MEIF WM Debt LP. The loan bears a fixed interest rate of 8% per annum and is
repayable in 15 quarterly instalments commencing on 30 September 2021. The loan is secured by a secondary fixed and
floating charge on all the assets of the Group.
During the current year, it was agreed with both HSBC and MEIF WM Debt LP to defer the capital repayment instalments
from 30 June 2020 to 30 September 2021.
The Group’s obligations under right of use assets are secured by the lessors’ title to the leased assets.
Company Number 05452547
71
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
21
BORROWINGS (continued)
Obligations under right of use assets by category at 31 March 2021 were as follows:
Leased
property
Furniture,
fixtures and
equipment
Computer
equipment
Motor
vehicles
Software
Total
£'000
251
1,404
1,655
£'000
106
108
214
£'000
74
121
195
£'000
178
112
290
£'000
71
22
93
£'000
680
1,767
2,447
Current
Non-current
Total
The maturity of obligations under right of use assets at 31 March 2021 were as follows:
Leased
property
Furniture,
fixtures and
equipment
Computer
equipment
Motor
vehicles
Software
Total
£'000
£'000
£'000
£'000
£'000
£'000
251
259
726
419
1,655
106
87
21
-
214
74
84
37
-
195
178
101
71
19
11
3
-
290
-
93
680
550
798
419
2,447
Dilapidations Warranty
£'000
65
-
-
65
£'000
77
42
-
119
Total
£'000
142
42
-
184
42
-
161
-
(9)
56
42
(9)
217
Within 1 year
1 to 2 years
2 to 5 years
More than 5 years
Total
22
PROVISIONS
As at 1 April 2019
Arising during the year
Released during the year
As at 1 April 2020
Arising during the year
Utilised during the year
At 31 March 2021
The warranty provision relates to the potential warranty claims that may come to fruition in the near future.
The dilapidation provision relates to the cost for restoring leased buildings to the original state at inception
of the lease agreement.
These provisions are expected to be utilised as follows:
Current
Non-Current
As at 31
March 2021
£'000
27
190
217
As at 31
March 2020
£'000
27
157
184
Company Number 05452547
72
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
23 SHARE CAPITAL
Authorised:
Ordinary shares of 1p each
Allotted, issued and fully paid:
Ordinary shares of 1p each
As at 31 March 2021
As at 31 March 2020
No’s
‘000’s
200,000
£'000
2,000
No’s
‘000’s
200,000
£'000
2,000
50,004
500
50,004
500
The Company currently holds 29,000 Ordinary shares in treasury representing 0.06% (2020: 0.06%) of the
Company’s issued share capital. The number of 1 pence Ordinary shares that the Company has in issue less
the total number of Treasury shares is 49,975,002.
Company Number 05452547
73
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
24 SHARE-BASED PAYMENTS
Trakm8 Holdings PLC has issued options (under the Trakm8 2017 Unapproved Share Option Plan) to
subscribe for Ordinary shares of 1p in the Company. The purpose of the Option Scheme is to retain and
motivate eligible employees.
The exercise price of all share options are at a premium to the mid-market closing share price for the day
before the grant date except for options issued on the 25 November 2020 which were issued at the closing
market price on the 24 November 2020. A vesting period of 3 years is applicable according to the terms of
each scheme which specify the options will vest providing employees remain in service for 3 years from the
date of grant. The maximum term of options granted is 10 years from grant date. All share options are equity
settled.
The fair value of the equity settled share options granted is estimated as at the date of grant using the Black
Scholes option pricing model taking into account the terms and conditions upon which the options were
granted. No performance conditions were included in the fair value calculations. During the year one
tranche of options was awarded, tranche AC. The inputs to our Black Scholes pricing model were:
24-Jul-20
Grant date
13.06
Weighted average FV (pence)
32.50
Weighted average exercise price (pence)
99.3%
Expected volatility (%)
5.0
Expected life of option
0.0%
Dividend yield (%)
Risk free (%)
0.8%
The risk free rate of return is the yield on government gilt market price and the volatility has been based on
historic share prices.
Tranche AD Tranche ADE Tranche AE Tranche AF Tranche AG
24-Jul-20
27-Nov-20
12.13
14.38
20.00 20.00 18.50 32.50
99.4%
5.0 5.0 5.0 5.0
0.0%
0.1%
05-Aug-20
13.72
25-Nov-20
13.61
0.0%
0.8%
0.0%
0.8%
0.0%
0.1%
99.5%
99.2%
99.3%
Options granted during the year were:
Grant date
24-Jul-20
24-Jul-20
05-Aug-20
25-Nov-20
27-Nov-20
No of shares Option Exercise Price
Date of expiry
750,000
350,000
25,000
100,000
250,000
33p
20p
20p
19p
33p
24/07/2030
24/07/2030
05/08/2030
25/11/2030
27/11/2030
A reconciliation of option movements over the year to 31 March 2021 is shown below;
As at 31 March 2021
As at 31 March 2020
Share options
Weighted
average
Exercise
Share options
Weighted
average
Exercise
No
3,425,000
1,475,000
(550,000)
4,350,000
Price (p)
35
28
31
33
No
3,950,000
125,000
(650,000)
3,425,000
Price (p)
38
34
53
35
Outstanding at beginning of the year
Granted during the period
Forfeited during the period
Outstanding at the end of the year
Company Number 05452547
74
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
24 SHARE-BASED PAYMENTS (continued)
The range of exercise prices of the outstanding options is 18.5 pence to 192.5 pence (2020: 19.5 pence to
192.5pence) and the weighted average remaining contractual life is 7.7 years (2020: 6.4 years).
The Group charged £183,000 to the Statement of Comprehensive Income in respect of Share-Based
Payments for the financial year ended 31 March 2021 (2020: £185,000).
Share options exercisable at 31 March 2021 were 900,000 (2020: 675,000).
25 CASH GENERATED FROM OPERATIONS
Loss before tax
Depreciation
(Profit)/Loss on disposal of fixed assets
Net bank and other interest
Amortisation of intangible assets
Exchange movement
Share based payments
Operating cash flows before movement in working capital
Movement in inventories
Movement in trade and other receivables
Movement in trade and other payables
Movement in provisions
Cash generated from operations
Interest received
Income taxes received
Net cash inflow from operating activities
26 FINANCIAL COMMITMENTS
As at 31 March
2021
As at 31 March
2020
£'000
£'000
(1,867)
781
318
487
1,992
(3)
183
1,891
634
1,166
70
33
3,794
78
865
4,737
(1,705)
699
-
406
2,194
(7)
185
1,772
693
589
(21)
42
3,075
12
1,028
4,115
At the Statement of Financial Position date, the Group had outstanding commitments for future minimum
operating lease payments under non-cancellable operating leases, which fall due as follows:
Operating Leases
Other:
Within one year
In the second to fifth years inclusive
27 RELATED PARTY TRANSACTIONS
As at 31 March
2021
As at 31 March
2020
£'000
£'000
11
1
12
15
27
42
A total of 1,000,000 (2020: 125,000) share options were granted during the year to nine key management
personnel (2020: one).
Company Number 05452547
75
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
28 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 cash reserves.
Interest rate risk
The Group's borrowings are linked to the Bank of England base rate (2020: LIBOR and base rate), the
following table details the Group's sensitivity to an increase of 2% and 5% in these two rates.
LIBOR
Base rate
LIBOR
Base rate
2%
As at 31 March 2021
Profit
£'000
-
(136)
As at 31 March 2020
Profit
£'000
(90)
(48)
5%
Profit
£'000
-
(340)
Profit
£'000
(225)
(119)
Currency risk
The Group operates internationally although the majority of its sales are in sterling. Purchases of
components are also made in US Dollars and Euros. The Group endeavours to minimise its foreign currency
exposure by trading in Sterling wherever possible, or otherwise match inflows and outflows in its principal
trading currencies.
The following table details the Group’s sensitivity to a 10% and a 20% decrease and increase in the value of
Sterling against the US Dollar and the Euro and the resulting effect on profit. The sensitivity analysis of the
Group’s exposure to foreign currency risk at the year-end has been determined based upon the assumption
that the increase in US Dollar and Euro exchange rates is effective throughout the financial year and all other
variables remain constant.
US Dollar
Euro
US Dollar
Euro
10% decrease
10 % increase
Year ended 31
March 2021
Profit & equity
£'000
(127)
(96)
Year ended 31
March 2020
Profit & equity
£'000
(97)
(107)
Year ended 31
March 2021
Profit & equity
£'000
104
78
Year ended 31
March 2020
Profit & equity
£'000
79
88
20% decrease
20 % increase
Profit & equity
£'000
(286)
(215)
Profit & equity
£'000
(219)
(241)
Profit & equity
£'000
191
144
Profit & equity
£'000
146
161
76
Company Number 05452547
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
28 FINANCIAL INSTRUMENTS (continued)
The Group has the following exposure to foreign currency denominated monetary assets and monetary
liabilities in the Balance Sheet, translated into the sterling at the relevant year-end exchange rates:
Financial assets / liabilities
US Dollar
Euro
Sterling
Total
Credit risk
Year ended
31 March
2021
Year ended
31 March
2021
Year ended
31 March
2020
Year ended
31 March
2020
Monetary
Assets
£'000
3
1
4
8,674
8,678
Monetary
Liabilities
£'000
57
199
256
15,825
16,081
Monetary
Assets
£'000
3
22
25
9,150
9,175
Monetary
Liabilities
£'000
69
240
309
13,166
13,475
The Group’s principal financial assets are bank balances, 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 the date of invoice. Overdue trade receivables are
managed through a phased escalation culminating in legal action.
The credit quality of cash balances that are neither past due nor impaired can be ascertained with reference
to the banks external credit ratings. All remaining financial assets are unrated.
Credit rating (Fitch)
AA-
As at 31
March 2021
£'000
2,370
2,370
As at 31
March 2020
£'000
1,665
1,665
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. The
directors do not consider that any of the cash balances are impaired.
Company Number 05452547
77
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
28 FINANCIAL INSTRUMENTS (continued)
Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an
optimal 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.
The group's external borrowings are subject to covenants which are assessed periodically throughout the
year. The covenants for the next financial year relate to an absolute EBITDA target and cash availability. In
future years the covenants relate to cash flow and leverage requirements. The covenants were reset during
the current year and the company complied with all covenant requirements during the period. The Group
expects to meet the covenant requirements in the future periods.
Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. This
ratio is calculated as total borrowings divided by total capital. Total borrowings include “current and non-
current borrowings” as shown in the Consolidated Statement of Financial Position. Total capital is calculated
as “capital and reserves” as shown in the Consolidated Statement of Financial Position plus total borrowings.
The Group’s strategy has been to maintain gearing. This was achieved (removing IFRS 16 impact) through
improved working capital management.
Total borrowings (note 21)
Total borrowings (excluding IFRS 16 impact)
Total capital and reserves
Total capital
Total capital (excluding IFRS 16 impact)
Gearing ratio
Gearing ratio (excluding IFRS 16 impact)
As at 31
March 2021
As at 31
March 2020
£'000
9,117
7,172
20,122
£'000
9,618
7,308
21,179
29,239
27,294
30,797
28,487
31%
26%
31%
26%
At the year end the Group had total net borrowings of £6,747,000 (2020 : £7,953,000). This includes IFRS16
impact of £1,945,000.
Assets as per Statement of Financial Position
Receivables and Cash
Trade and other receivables excluding prepayments
Cash and cash equivalents
Borrowings
Trade and other payables excluding statutory liabilities and deferred revenue
Company Number 05452547
As at 31
March 2021
£'000
6,308
2,370
8,678
As at 31
March 2020
£'000
7,510
1,665
9,175
Financial liabilities at
amortised cost
As at 31
March 2021
As at 31
March 2020
£'000
9,117
6,964
16,081
£'000
9,618
3,857
13,475
78
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
28 FINANCIAL INSTRUMENTS (continued)
Payable as follows
On demand or within one year
After one and within two years
After two and within five years
After five years
Cash and cash equivalents
As at 31
March 2021
£'000
7,137
3,296
5,228
420
16,081
As at 31
March 2020
£'000
4,462
5,699
2,655
659
13,475
Cash and cash equivalents comprise solely of cash in hand held by the Group.
29 BUSINESS COMBINATIONS
Roadsense Technology Limited
In 2017 financial year, the Group purchased 100% of the share capital of Roadsense Technology Limited. No
acquisition costs were incurred in 2021 (2020: £52,000) relating to non-underlying charges under two
separate agreements linked to the acquisition in the prior year. The costs incurred are directly linked to the
acquisition and not as part of the ongoing underlying business. One agreement terminated on 31 July 2019,
and the second agreement terminated on 31 March 2019.
These costs has been recognised as an exceptional administrative expense in the consolidated statement of
comprehensive income. Exceptional administrative expenses have been analysed in Note 9.
30 DIVIDENDS
The Company is not proposing a final dividend for the year (2020: £nil).
No Dividend was paid during the year (2020: £nil).
31 OPERATING LEASES AS LESSOR
The Group rents out equipment under operating leases. Equipment rental income earned during the year
was £43,000 (2020: £104,000). At the year end the Group had contracted with lessees of the Group for the
following future minimum lease payments under non-cancellable operating leases.
Within 1 year
As at 31
March 2021
£'000
-
As at 31
March 2020
£'000
43
-
43
Company Number 05452547
79
Trakm8 Holdings PLC
Parent Company Statement of Financial Position As At 31 March 2021
ASSETS
NON CURRENT ASSETS
Investments
Deferred tax asset
CURRENT ASSETS
Trade and other receivables
Cash and cash equivalents
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Borrowings
CURRENT ASSETS LESS CURRENT LIABILITIES
TOTAL ASSETS LESS CURRENT LIABILITIES
NON CURRENT LIABILITIES
Borrowings
NET ASSETS
CAPITAL AND RESERVES
Called up share capital
Share premium account
Merger reserve
Treasury reserve
Retained earnings
Note
As at 31 March
2021
£'000
As at 31 March
2020
£'000
4
5
6
7
7
8
11,429
218
11,647
11,246
127
11,373
11,342
403
11,745
11,197
1,009
12,206
(621)
(855)
(1,476)
(604)
(1,125)
(1,729)
10,269
10,477
21,916
21,850
(5,815)
(5,675)
16,101
16,175
500
14,691
627
(4)
287
500
14,691
627
(4)
361
TOTAL SHAREHOLDERS’ FUNDS
16,101
16,175
The parent company has taken the exemption conferred by s.408 Companies Act 2006 not to publish the
statement of Comprehensive Income of the parent company with these accounts. The loss dealt with for the year
in the parent company's financial statements was £257,000 (2020: loss £236,000).
These financial statements on pages 80 to 88 were approved by the Board of Directors and authorised for issue
on 28 June 2021 and are signed on their behalf by:
John Watkins - Director
Jon Furber - Director
Company Number 05452547
80
Trakm8 Holdings PLC
Parent Company Statement of Changes in Equity For The Year Ended 31 March 2021
Called up
share
capital
£'000
500
-
Share
premium
account
£'000
14,691
-
Merger
reserve
Treasury
reserve
Retained
earnings
£'000
627
-
£'000
(4)
-
£'000
412
-
TOTAL
SHAREHOLDERS'
FUNDS
£'000
16,226
-
-
-
-
-
-
-
-
185
185
-
(236)
(236)
500
14,691
627
(4)
361
16,175
-
-
-
-
-
-
-
183
183
-
(257)
(257)
500
14,691
627
(4)
287
16,101
Balance as at 1 April 2019
Shares issued
IFRS2 Share-Based payment
charge
Loss for the year
Balance as at 31 March
2020
IFRS2 Share-Based payment
charge
Loss for the year
Balance as at 31 March
2021
Company Number 05452547
81
Trakm8 Holdings PLC
Notes To The Parent Company Financial Statements
1 ACCOUNTING POLICIES
BASIS OF PREPARATION
The accounting policies set out below have been applied consistently to all periods presented in these
consolidated financial statements made up to 31 March 2021.
The financial statements of the parent company have been prepared in accordance with United Kingdom
Accounting Standards - Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (“FRS 101”). The
financial statements have been prepared on the going concern basis, under the historical cost convention and
in accordance with the Companies Act 2006 as applicable to companies using FRS 101.
The Company has taken advantage of the legal dispensation contained in Section 408 of the Companies Act
2006 allowing it not to publish a separate income statement and related notes. The Company has also taken
advantage of the legal dispensation contained in Section 408 of the Companies Act 2006 allowing it not to
publish a separate statement of other comprehensive income.
The following exemptions from the requirements of IFRS have been applied in the preparation of these
financial statements, in accordance with FRS 101:
• Paragraphs 45(b) and 46 to 52 of IFRS 2, ‘Share—based payment’ (details of the number and weighted—
average exercise prices of share options, and how the fair value of goods or services received was determined)
• IFRS 7, ‘Financial Instruments: Disclosures’
• Paragraphs 91 to 99 of IFRS 13, ‘Fair value measurement’ (disclosure of valuation techniques and inputs
used for fair value measurement of assets and liabilities)
• Paragraph 38 of ‘International Accounting Standard 1, Presentation of financial statements’ (IAS1)
comparative information requirements in respect of paragraph 79(a)(iv) of IAS1
• The following paragraphs of IAS1, ‘Presentation of financial statements’:
− 10(d) (statement of cash flows)
− 16 (statement of compliance with all IFRS)
− 38A (requirement for minimum of two primary statements, including cash flow statements)
− 38B-D (additional comparative information)
− 111 (cash flow statement informa(cid:415)on)
− 134-136 (capital management disclosures)
• IAS 7, ‘Statement of cash flows’
• Paragraphs 30 and 31 of IAS 8, ‘Accounting policies, changes in accounting estimates and errors’
(requirement for the disclosure of information when an entity has not applied a new IFRS that has been issued
but is not yet effective)
• Paragraph 17 and 18A of IAS 24, ‘Related party disclosures (key management compensation)
• The requirements of IAS 24, ‘Related party disclosures’ to disclose related party transactions entered into
between two or more members of a group
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. Cost includes directly attributable acquisition expenses.
Company Number 05452547
82
Trakm8 Holdings PLC
Notes To The Parent Company Financial Statements (Continued)
1 ACCOUNTING POLICIES (continued)
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 Statement of Cash Flows, cash and cash equivalents includes bank
overdrafts where applicable.
TRADE PAYABLES
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of
business from suppliers. Trade payables are initially recognised at fair value and subsequently at amortised
cost using the effective interest method.
BANK BORROWINGS
Borrowings are initially recognised at fair value, being proceeds received less directly attributable transaction
costs incurred. Borrowings are subsequently measured at amortised cost with any transaction costs
amortised to the statement of comprehensive income over the period of the borrowings using the effective
interest method.
TAXATION
The tax expense represents the sum of the current tax expense and deferred tax expense.
Current tax is based on taxable profits 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 Company’s
liability for current tax is calculated by using tax rates that have been enacted or substantively enacted by the
Statement of Financial Position 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 Statement of Financial Position 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 in the foreseeable future.
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 at the year
end.
Company Number 05452547
83
Trakm8 Holdings PLC
Notes To The Parent Company Financial Statements (Continued)
1 ACCOUNTING POLICIES (continued)
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.
Treasury reserve represents the cost of shares held in Treasury. Where any Group company purchases the
company’s equity share capital (treasury shares), the consideration paid, including any directly attributable
incremental costs (net of income taxes) is deducted from equity attributable to the company’s equity holders
until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any
consideration received, net of any directly attributable incremental transaction costs and the related income
tax effects, is included in equity attributable to the company’s equity holders.
Retained earnings represents retained profits and the share based payment reserve.
SHARE-BASED PAYMENTS
The Company has applied the requirements of IFRS 2 Share-based payments.
The grant by the Company of options over its equity instruments to the employees of a subsidiary undertaking
in the Group is treated as a capital contribution. The fair value of employee services received, measured by
reference to the grant date fair value of the equity instrument, is recognised over the vesting period as an
increase to investment in subsidiary undertakings, with a corresponding credit to equity. At each balance
sheet date, the Company revises its estimates of the number of options or shares that are expected to vest.
The impact of any revision, if any, is recognised as a capital contribution with a corresponding adjustment to
reserves.
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.
2 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 1, management has
made the following judgements that have a significant effect on the amounts recognised in the financial
statements (apart from those involving estimations, which are dealt with below).
Company Number 05452547
84
Trakm8 Holdings PLC
Notes To The Parent Company Financial Statements (Continued)
2 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (continued)
CRITICAL JUDGEMENTS IN APPLYING THE GROUP’S ACCOUNTING POLICIES
(continued)
INVESTMENTS CARRYING VALUE
A full impairment review has been performed on a “value in use” basis, which requires estimation of future
net operating cash flows, the time period over which they will occur, an appropriate discount rate and an
appropriate growth rate.
3 PROFIT AND LOSS ACCOUNT
As permitted by Section 408 of the Companies Act 2006, the Statement of Comprehensive Income of the
Company is not presented as part of these financial statements.
The loss after tax for the year in the Company is £257,000 (2020: loss £236,000). Audit fees for the Company
for the year were £3,000 (2020: £3,000).
4
INVESTMENTS
Cost
At 31 March 2020
Capital contribution in respect of share based payments
At 31 March 2021
Subsidiaries
£'000
11,246
183
11,429
The Directors believe that the carrying value of the investments is supported by their underlying net assets.
Name of subsidiary
Country of
incorporation
Nature of
business
Registered Office
Trakm8 Limited
England and
Wales
Development,
manufacture,
marketing and
distribution of
vehicle
telematics
Trakm8 s.r.o.
Czech Republic Mapping services
and distribution
of vehicle
telematics
BOX Telematics Limited
England and
Wales
Non-trading
Route Monkey Limited
Scotland
Route
optimisation
4 Roman Park,
Roman Way,
Coleshill, West
Midlands, B46
1HG
A7 Office Centre
Praha 7 U
Pruhonu
1588/11a 170 00
Czech Republic
4 Roman Park,
Roman Way,
Coleshill, West
Midlands, B46
1HG
4 Roman Park,
Roman Way,
Coleshill, West
Midlands, B46
1HG
Class of
holding
Ordinary
Proportion
held and
voting
rights
100%
Ordinary
100%
Ordinary
100%
Ordinary
100%
85
Company Number 05452547
Trakm8 Holdings PLC
Notes To The Parent Company Financial Statements (Continued)
4
INVESTMENTS (continued)
Name of subsidiary
Country of
incorporation
Nature of
business
Registered Office
Class of
holding
Proportion
held and
voting
rights
Interactive Projects
Limited
England and
Wales
Dormant
Data Driven Telematics
Limited
England and
Wales
Dormant
DCS Systems Limited
England and
Wales
Dormant
Roadsense Technology
Limited
England and
Wales
Dormant
Trakm8 HK Limited
Hong Kong
Dormant
4 Roman Park, Roman
Way, Coleshill, West
Midlands, B46 1HG
4 Roman Park, Roman
Way, Coleshill, West
Midlands, B46 1HG
4 Roman Park, Roman
Way, Coleshill, West
Midlands, B46 1HG
4 Roman Park, Roman
Way, Coleshill, West
Midlands, B46 1HG
Prosperity Centre, 25
Chong Yip Street, Kwun
Tong, Hong Kong
Ordinary
100%
Ordinary
100%
Ordinary
100%
Ordinary
100%
Ordinary
100%
The following dormant companies within the Group will take the exemption from preparing and filing
financial statements for the year ended 31 March 2021 (by virtue of s394A and 448A of Companies Act 2006
respectively). As the ultimate parent company, Trakm8 Holdings PLC has guaranteed the debts and liabilities
held within these companies as required under section 394C of the Companies Act 2006.
Company
Interactive Projects Limited
Data Driven Telematics Limited
DCS Systems Limited
BOX Telematics Limited
Roadsense Technology Limited
Company
registration
number
4327499
5785552
9641691
3947199
8300339
The following companies within the Group will adopt the Department for Business, Innovation and skills audit
exemption for the year ended 31 March 2020. As the ultimate parent company, Trakm8 Holdings PLC has
guaranteed the debts and liabilities held within these companies as required under section 479A of the
Companies Act 2006.
Company
Trakm8 Limited
Route Monkey Limited
Company Number 05452547
Company
registration
number
4415597
SC353016
86
Trakm8 Holdings PLC
Notes To The Parent Company Financial Statements (Continued)
5 TRADE AND OTHER RECEIVABLES
As at 31
March 2021
£'000
11,318
6
18
11,342
Amounts due from subsidiary undertakings is unsecured, interest free and repayable on demand.
Amounts due from subsidiary undertakings
Social security and other taxes
Prepayments and other receivables
As at 31
March 2020
£'000
11,175
6
16
11,197
6 TRADE AND OTHER PAYABLES
Trade creditors
Amounts due to subsidiary undertakings
Accruals and other creditors
As at 31
March 2021
£'000
-
456
165
621
As at 31
March 2020
£'000
24
471
109
604
Amounts due to subsidiary undertakings is unsecured, interest free and repayable on demand.
7 BORROWINGS
As at 31 March 2021
Loans
As at 31 March 2020
Loans
Current
Non-current
Gross
£'000
902
5,898
6,800
Arrangement
fee
£'000
(47)
(83)
(130)
Net
£'000
855
5,815
6,670
Gross
£'000
1,160
5,719
6,879
Arrangement
fee
£'000
(35)
(44)
(79)
The loans are repayable as follows:
Within one year
After one and within two years
After two and within five years
£'000
855
1,385
4,430
6,670
Net
£'000
1,125
5,675
6,800
£'000
1,125
4,862
813
6,800
Bank loans comprise the following:
A £5.3m term loan with HSBC. The loan is secured by a fixed and floating charge on all the assets of the Group.
It is repayable by 22 monthly instalments from 30 September 2021 of £86,000 and a final repayment of the
outstanding balance on 31 October 2023 and bears interest at a floating rate of 5.1% over base rate. As at 31
March 2021 the Group owed £5.3m (2020: £0.9m).
On 31 March 2021, the Group used this term loan to pay off £4.5m (2020:£4.5m) that was due on a credit
facility and £0.7m (2020: £0.9m) that was due on a term loan, both from HSBC.
A £0.5m overdraft facility with HSBC. The overdraft facility bears an interest rate of 5.3% over LIBOR on the
drawn amount. As at 31 March 2021 the Group had not used this overdraft facility.
A £1.5m growth capital loan with MEIF WM Debt LP. The loan bears a fixed interest rate of 8% per annum and
is repayable in 15 quarterly instalments commencing on 30 September 2021. The loan is secured by a
secondary fixed and floating charge on all the assets of the Group.
During the current year, it was agreed with both HSBC and MEIF WM Debt LP to defer the capital repayment
instalments from 30 June 2020 to 30 September 2021.
Company Number 05452547
87
Trakm8 Holdings PLC
Notes To The Parent Company Financial Statements (Continued)
8
CALLED UP SHARE CAPITAL AND RESERVES
Details of share capital and share options are shown in notes 23 and 24 to the consolidated financial
statements above.
Details of the Company's other reserves are shown in note 4 to the consolidated financial statements.
9
GUARANTEE
The borrowings of the company is guaranteed by the assets of subsidiary company, Trakm8 Limited and Route
Monkey Limited.
10 RELATED PARTIES
The company has taken advantage of the exemptions conferred by IAS 24 from the requirement to disclose
transactions between wholly owned subsidiary undertakings.
A total of 1,000,000 (2020: 125,000) share options were granted during the year to nine key management
personnel (2020: one).
11 EMPLOYEES AND DIRECTORS
The Directors of the Company were paid by Trakm8 Ltd for their services to the Group. The Company had no
employees (2020: £nil) during the year (other than the Directors). See remuneration report on page 28 for
further details.
Details of Group Directors’ fees and salaries, bonuses and pensions (including that of the highest paid Director)
have been audited and are given in the Directors’ Report on page 28.
12 DIVIDENDS
The Company is not proposing a final dividend for the year (2020: £nil).
No Dividend was paid during the year (2020: £nil).
Company Number 05452547
88
Trakm8 Holdings PLC
Officers and Advisors for Trakm8 Holdings PLC Statements
Officers and Advisors for Trakm8 Holdings PLC
Directors
Matthew Cowley
Tim Cowley
Keith Evans
Jon Furber
John Watkins
Mark Watkins
Peter Mansfield
Nadeem Raza
Penny Searles (appointed 18 June 2020)
Company Secretary
Jon Furber
Registered Office
4 Roman Park, Roman Way, Coleshill, Birmingham,
West Midlands, United Kingdom, B46 1HG
Principal Bankers
HSBC Bank plc, 6 Broad Street, Worcester, WR1 2EJ
Independent Auditors
Cooper Parry Group Limited, Park View, One Central
Boulevard, Blythe Valley Park, Solihull, B90 8BG
Nominated Adviser and Broker
Arden Partners
Address: 125 Old Broad Street, London, EC2N 1AR
Significant Shareholders
Significant Shareholder
Number of shares
Percentage Holding
Microlise Group Holdings Limited
John Watkins
Edric Property & Investment Company
Hargreaves Lansdown
James Hedges
Tim Cowley
HSDL Nominees
Matt Cowley
10,000,000
7,768,768
3,815,000
3,457,406
2,438,766
2,268,127
2,341,367
1,994,203
Company Number 05452547
20.0%
15.6%
7.6%
6.9%
4.9%
4.5%
4.7%
4.0%
89