2022
Annual report and accounts 2022
Trakm8 Holdings PLC
Company Number 05452547
1
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
Overview
At a Glance
Executive Chairman’s Statement
Our Strategy
Chief Financial Officer’s Report
Key Performance Indicators
Risk Management Framework
Principle Risks and Uncertainties
Driving our Greener Tomorrow
GOVERNANCE REPORT
Chairman’s Introduction
Board of Directors
Governance Principles
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
3
4
6
8
10
13
15
17
20
21
21
23
29
35
42
43
44
45
46
82
83
84
91
Company Number 05452547
2
Trakm8 Holdings PLC
Strategic Report
OVERVIEW
Financial
Group Revenue
Adjusted Profit/(Loss) before tax
Loss before tax
Profit/(Loss) after tax
Net cash generated from operations
Adjusted basic earnings per share
Basic Profit/(Loss) per share
Operational
FY-2022
£18.1m
£0.0m
£0.1m
£0.2m
£3.8m
0.41p
0.37p
FY-2021
£16.0m
(£0.3m)
£1.9m
(£1.2m)
£4.7m
0.07p
(2.47p)
13% increase in revenues
4% increase to over 264,000 connected units in operation (FY-2021: 254,000)
5% increase in recurring revenues to £9.8m (FY-2021: £9.4m)
150% increase in software revenues to £1.4m (FY-2021: £0.5m)
•
•
•
•
• New contract wins with Ticker and Adiona
•
•
Strong continued reduction in direct and indirect costs
Successfully navigated a large number of supply chain challenges
Outlook
• Group revenues in current financial year to end of May 2022 were 11% ahead of last year
o Revenues from insurance clients increasing due to new contract wins and increased volumes
from existing clients - revenues to end of May 2022 were 33% ahead of the comparable 2021
period
Fleet sales showing good progress - revenues to end of May 2022 were 4% ahead of the
comparable 2021 period
o
•
•
•
Inflationary pressure on payroll and components is partially mitigated with lower headcount and
lower designed-in device costs
The Company continues to face component availability issues that could impact deliveries, but the
expectation is that we will continue to overcome these
The Board believes Trakm8 is building increasing momentum and is hopeful that this can be
transformed into improved financial returns as we move forward
Company Number 05452547
3
Trakm8 Holdings PLC
Strategic Report (Continued)
AT A GLANCE
Connected Business
Trakm8 is a UK-based AI 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 using AI based
algorithms 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 mobile 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 over a quarter of a million devices in operation.
Number of connected units
264,000 (FY-2021: 254,000)
Fleet Management & Optimisation
Fleet Management
Trakm8 has market leading software solutions for all fleet management activities built out in the evergreen
“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. AI 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 AI 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
FY-2022 revenue of £11.2m (FY-2021: £9.5m) of which £6.9m is recurring revenue (FY-2021: £6.5m) and £1.2m
is software sales (FY-2021: 0.5m)
Number of connected units
71,000 (FY-2021: 70,000)
Company Number 05452547
4
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 AI algorithms allow insurance
companies to speed up and better control the First Notification of Loss (FNOL) claims process, including crash
reconstruction. In addition, the change in mobility patterns following the pandemic means our solution is now
being utilised in usage-based insurance propositions as consumers seek personal cost savings. 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 tailored solutions to the vehicle leasing companies to reduce costs in the
management of service, repair and maintenance outcomes. Market leading EV applications have been created.
Revenue
FY 2022 revenue of £6.9m (FY-2021: £6.4m) of which £2.9m is recurring revenue (FY-2021: £2.9m) and £0.2m
is software sales (FY-2021: 0.0m)
Number of connected units
193,000 (FY-2021: 184,000)
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
5
Trakm8 Holdings PLC
Strategic Report (Continued)
EXECUTIVE CHAIRMAN’S STATEMENT
Covid-19 continued to impact the market for telematics, particularly in our Insurance business where young
drivers were unable to secure driving tests compounded by the scarcity and higher costs of secondhand cars. It
also led to significant challenges in the supply of electronic components for our devices. Trakm8 managed its
way through most of this and achieved a very significant improvement on the previous year delivering results in
line with market expectations, returning to a profit after tax for the first time in several years.
The revenues of the business increased by 13% and despite higher costs due to lower furlough support and
supply chain challenges posted an adjusted profit before tax of £0.0m (FY-2021: loss £0.3m). Loss before tax
improved to £0.1m (FY-2021: loss £1.9m) and Profit after Tax improved to £0.2m (FY-2021: loss £1.2m).
Connections grew by 4% to 264,000. The total number of fleet management connections increased by 1% over
the year to 71,000 (FY-2021: 70,000). Telematics for insurance/automotive connections increased by 5%. At
the year-end we had 193,000 insurance/automotive connections (FY-2021: 184,000). Recurring service
revenues increased by 5% to £9.8m (FY-2021: £9.4m). Software revenues increased by 150% to £1.4m (FY-2021:
£0.5m). A good number of contract wins and renewals were secured particularly with the insurance clients.
It was pleasing to have strong cash generation of the business with a cash flow from operations of £3.8m (FY-
2021: £4.7m). The Company paid down £0.9m of HMRC deferred payments on VAT/PAYE/NI, with the balance
of £0.9m to be paid during this financial year. This resulted in a free cash flow of £0.6m (FY-2021: £2.0m) and
net debt increased by £0.5m at £5.4m (pre-IFRS 16). The Group had £1.0m cash on hand and an undrawn
overdraft facility of £0.5m.
Overheads excluding exceptionals increased by 6% due to a reduction of furloughed staff along with an increased
marketing spend. Headcount reduced by 5% during the year with underlying salary costs 5% lower than at the
end of the previous year.
Trakm8 was awarded the London Stock Exchange Green Economy Mark during the year in recognition that what
the Company does plays a significant role in reducing the carbon footprint of our customers’ operations. Trakm8
has also started the process of joining the Science Based Targets initiative in the goal of achieving net zero
emissions by 2050.
Research and development (‘R&D’)
Trakm8 has maintained a significant level of investment in R&D for another year. The Board believes that this
level of investment is necessary to retain a portfolio of market-leading technology. Over time as revenues grow,
we expect that this investment as a proportion of revenues will decline. 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, a multi-camera solution,
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 our customers’ return on investment improves.
Company Number 05452547
6
Trakm8 Holdings PLC
Strategic Report (Continued)
EXECUTIVE CHAIRMAN’S STATEMENT (continued)
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
(https://www.trakm8.com/investor-relations/corporate-governance).
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-2022 with reductions across the business.
In total our staff numbers have reduced by 5% over the year.
Trakm8 has a great team and I would like to thank everyone for their hard work, dedication and contribution to
the ongoing success of the business.
Outlook
We start the new financial year with the ongoing supply chain challenges impacting our costs and our
development progress. A significant amount of our engineering resources are devoted to redesigning current
devices to meet component changes.
Currently Insurance & Automotive devices supplied to end of May 2022 amount to 60% more than the
corresponding period last year due to the increased number of new clients secured. Fleet deliveries have been
reasonably good with new unit shipments 38% greater than the corresponding period last year.
These shipments whilst increasing revenues for devices and where applicable installation in the short term, also
drive increased levels of service revenues and profit for future periods.
April and May revenues were 11% higher than the corresponding period in FY 2022.
Like many businesses, Trakm8 is having to continue to face challenges in a number of areas in particular,
component supply availability and logistics which have the potential to lead to shortages that could impact
customer product deliveries. In addition, salary and component inflationary pressures are prevalent.
However, the board is taking action to minimise the impact of these challenges on the Trakm8 business
through, for example, reduced headcount, higher selling prices and engineered cost reductions.
On a much more positive note, we are seeing strong growth in the Insurance business due, in particular, to
new customer wins. In addition, we are optimistic about securing a number of Fleet deployment contract
renewals during the remainder of this year.
It is against this business generation backdrop that the Board believes Trakm8 is building increasing
momentum and is hopeful that this can be transformed into improved financial returns as we move forward.
John Watkins
EXECUTIVE CHAIRMAN
28 June 2022
Company Number 05452547
7
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 uses AI based evergreen solutions 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 2022
The total number of units in operation increased by 4% in FY-2022. The fleet installed base increased by 1%.
Insurance customers increased our installed devices with stronger sales and resulted in a 5% increase in
connections.
Trakm8 invested 29% more in marketing costs resulting in a 23% increase in leads. This led to higher levels of
orders and an increase in the pipeline.
Focus for 2023
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.
We propose an increase in our marketing spend by a further 67% with a narrow focus on increasing lead
generation.
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 2022
The Group focused on expanding and improving the range of devices, including a multi-camera solution and an
expanded line of self-fit devices. The Insight Optimisation solution has been expanded to meet the
Company Number 05452547
8
Trakm8 Holdings PLC
Strategic Report (Continued)
OUR STRATEGY (continued)
requirements of a major mixed fleet client, significantly improving our HGV offering. Improved AI algorithms
for crash detection, crash reconstruction, driver scoring and ADAS continued to be developed.
Focus for 2023
We will maintain our expenditure in R&D this year focusing 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 with deeper integration into trailer and fuel systems, 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 2022
The Group identified another £0.4m of annualised operational cost savings in both direct and indirect costs,
despite revenues increasing.
Focus in 2023
We will continue to manage costs through better utilisation of hosting and technology, reduced device costs
and reduced communication/hosting costs. We will aim to mitigate salary and component inflation.
Company Number 05452547
9
Trakm8 Holdings PLC
Strategic Report (Continued)
CHIEF FINANCIAL OFFICER’S REPORT
Group Revenue (£’000)
of which, Recurring Revenue (£’000)
Loss before tax (£’000)
Profit/(Loss) after tax (£’000)
Adjusted Profit/(Loss) before tax1 (£’000)
Basic Profit/Loss per share (p)
Adjusted basic earnings per share (p)
1 Before exceptional costs and share based payments
Revenue
2022
18,111
9,806
122
187
3
0.37
0.41
2021
15,961
9,379
1,867
(1,237)
(342)
(2.47)
0.07
Change
+13%
+5%
+93%
+115%
+101%
+115%
+486%
Group revenue increased by 13% to £18.1m (FY-2021: £16.0m) as the impact of Covid-19 reduced. Fleet
revenues increased by 18% to £11.2m and Insurance and Automotive revenues increased by 7% to £6.9m.
Despite the majority of Covid-19 lockdown measures ending early in the financial year, Insurance revenues
recovered much slower than anticipated due to the well publicised driving test delays and secondhand car
price inflation and availability but offset by shipments to new customers in the final quarter. This was
complimented by increased levels of Fleet and Optimisation orders including strong software revenues in H1.
Recurring revenue generated from service and maintenance fees increased by 5% to £9.8m (FY-2021: £9.4m)
due to the higher levels of shipments of devices across both business units and implementation of
optimisation services.
Loss before tax
The Group reported a loss before tax of £0.1m (FY-2021: £1.9m). This marked significant progress as increased
revenues delivered gross margins of £11.1m (FY-2021: £9.3m). Total administrative costs remained broadly
similar at £10.8m despite the increased levels of revenue. This included an increase in marketing spend of £0.1m
to aid revenue growth, a reduction of Coronavirus Job Retention Scheme income to £0.19m (FY-2021: £0.94m)
and an increase in depreciation and amortisation of £0.2m. This was offset by overall reduction in employee
costs of £0.38m and a reduction in share-based payments of £0.6m compared to the prior year.
Adjusted Profit before tax
With the improved revenues and gross margins, the Group returned to profitability with an adjusted profit of
£0.0m (FY-2021: £0.3m loss). The improved revenue performance was offset by increased employee costs as
the furloughed staff costs decreased to £0.4m (FY-2021: £1.6m) along with increases in depreciation and
amortisation, marketing costs and a reduction in Other Income of £0.2m, £0.1m and £0.2m respectively. Our
continued efforts in efficiency savings improved underlying overheads including a reduction in employee costs
of £0.3m to offset the cost increases.
Exceptional Costs
Exceptional costs totalled £0.6m (FY-2021: £1.3m) and again primarily include one off costs relating to Covid-
19 albeit greatly reduced from the prior year. This included £0.4m of employee costs whilst on furlough in the
first half of the year and £0.2m of component costs due to the ongoing supply chain challenges instigated by
Covid-19 both here and abroad. This was offset by £0.2m received as part of the Coronavirus Job Retention
Scheme. In addition, £0.1m was incurred in our ongoing project to streamline our internal operations.
Company Number 05452547
10
Trakm8 Holdings PLC
Strategic Report (Continued)
CHIEF FINANCIAL OFFICER’S REPORT (continued)
Balance Sheet
Non-Current Assets
Net Current Assets
Non-Current Liabilities
Net Assets
2022
£’000
25,874
1,704
7,702
19,876
2021
£’000
25,640
4,169
9,687
20,122
Net Assets decreased by £0.2m to £19.9m (FY-2021: £20.1m) reflecting the profit for the year, after deducting
the IFRS2 Share based payments credits.
Non-current assets increased by £0.2m to £25.9m (FY-2021: £25.6m). This is due to a £0.5m reduction in right
of use assets due to depreciation offset by a £0.8m increase in Intangible assets and £0.1m decrease 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 £2.9m (FY-2021:
£2.3m), offset by amortisation of £1.9m (FY-2021: £1.7m).
Cash Flow
Net Cash generated from operations
Investing activities
Free Cash Flow1
Financing activities
(Decrease)/Increase in Cash in Year
Net Debt2
2022
£’000
3,810
(3,254)
556
(1,992)
(1,366)
5,395
2021
£’000
4,702
(2,667)
2,035
(1,330)
705
4,887
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-2022 net debt excludes £1.6m IFRS 16 lease liability.
Cash from operating activities reduced by £0.9m to £3.8m (FY-2021: £4.7m) which included the repayment of
£0.9m to HMRC under the time to pay agreement negotiated at the end of the last financial year. FY-2021
included the deferment of payments to HMRC which increased Cash from operating activities by £1.7m. Cash
from operating activities also included R&D tax credit cash receipts of £0.7m (FY-2021: £0.9m) which reflects
the Group’s continued investment in development.
Free cash inflow of £0.6m (FY-2021: £2.0m) is due to the Net Cash generated from operating activities as
detailed above, offset by cash outflows from investing activities which increased by £0.6m to £3.3m (FY-2021:
£2.7m).
Financing activities was an outflow of £1.9m (FY-2021: £1.3m). Following the negotiation of new and revised
terms for the Group’s borrowings in March 2021, capital repayments to both HSBC and the MEIF WM Debt LP
resumed in the second half of the year totalling £0.7m (FY2021: £0.1m).
Company Number 05452547
11
Trakm8 Holdings PLC
Strategic Report (Continued)
Net Debt
Net debt excluding IFRS 16 lease liability of £1.6m (FY-2021 £1.9m) increased by £0.5m to £5.4m (FY-2021:
£4.9m). Cash balances total £1.0m (FY-2021: £2.4m) and total borrowings including IFRS16 lease liability of
£1.6m totals £7.9m (FY-2021: £9.1m). Borrowing comprised £4.9m (FY-2021: £5.3m) term loan with HSBC, a
£1.2m (FY-2021: £1.5m) term loan with MEIF WM Debt LP and £2.0m (FY-2021: £2.4m) of obligations under
Right-to-use lease liabilities. In addition, at the year end the Group had a £0.5m unused overdraft facility with
HSBC.
Company Number 05452547
12
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
£18.1m: 2022
£16.0m: 2021
£19.6m: 2020
Recurring Service
Revenue
£9.8m: 2022
£9.4m: 2021
£9.8m: 2020
Connected units -
Insurance/Automotive
193,000: 2022
184,000: 2021
168,000: 2020
Connected units –
Fleet Management
71,000: 2022
70,000: 2021
77,000: 2020
Performance in 2022
This refers to the
amount of telematics
devices reporting in
operation from our
insurance & automotive
customers. Connected
Units in this market
increased by 5% due to
growth from newly
launched customers.
Focus for 2023
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 2022
This refers to the
amount of telematics
devices in operation
from our fleet
customers. The total
number of units from
our Fleet business
increased by 1% due
to the higher levels
of new sales and
lower attrition
Focus for 2023
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 2022
Improved Fleet orders
lead to growth of Fleet
revenues.
A slow start to the year
for insurance and ongoing
long wait times for driving
tests have slowed down
progress in insurance
revenues, despite several
client contract wins
Focus for 2023
Increase the sales and
marketing spend 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 2022
Total recurring revenues
earned during the year
increased by 5% to
£9.8m due to the
increased number of
connections and higher
per unit service fees on
Fleet.
Focus for 2023
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
13
Trakm8 Holdings PLC
Strategic Report (Continued)
KEY PERFORMANCE INDICATORS (continued)
Adjusted profit/ loss before tax
Gross Margin
£0.0m Profit : 2022
£0.3m Loss: 2021
£0.2m Loss: 2020
61.3%: 2022
58.4%: 2021
59.1%: 2020
Net cash generated from
Operating Activities
£3.8m: 2022
£4.7m: 2021
£4.1m: 2020
Performance in 2022
Adjusted profit before Tax
(before exceptional costs and
share based payments) was
£0.3m higher than the prior year
despite the increase in overheads
as a result of lower level of
furloughed team members and
higher marketing expenditure.
Focus for 2023
The Group plans to achieve
significant improvement of
revenue combined with the lower
cost base as a result of the
significant cost savings realised
over the last few years.
Performance in 2022
Gross margin percentage slightly
increased to 61.3%. This small
increase was due to higher levels
of software sales and despite a
poorer mix of higher hardware
sales.
Performance in 2022
Cash generation from operating
activities reduced on the prior
year due to HMRC debt
repayment of £0.9m with FY-
2021 benefitting from HMRC
payment deferrals of £1.7m.
Focus for 2023
Increase levels of cash generation
from Operating Activities through
higher profitability, having repaid
HMRC in line with the time to pay
agreement reached.
Focus for 2023
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 to
offset salary and component cost
inflation.
Company Number 05452547
14
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
15
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
16
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
Electronics supply
chain under
constraint
Long lead-times
Cost Pressure
Customer deliveries delayed
1,2
Attracting and
maintaining high
quality employees
1,2,3
Loss of key personnel
Potential business disruption
Breakdown of communication
and misalignment
The current market is challenging and throughout the
year we have faced using our resources to find
alternative components for items where orders from
suppliers have been delayed or become unavailable,
sometimes with associated additional costs.
As a fully vertically integrated business our design
engineers work alongside supply chain to mitigate these
issues which to date has meant we have had no
meaningful delay of goods to customers. We continue
to have the support of our valued world class
distributors and manufacturers in this activity.
These challenges are forecast to continue for a number
of months and we have open engineering projects to
substitute components within our products including a
number of key operational items which often also
results in increased product costs.
As an additional mitigation, commitments to supply
chain are being extended to try and ensure continuity
of supply for future months.
We provide interesting work within a growing sector
where we have significant opportunity and maintaining
this is key to employee retention. To compliment this
regular reviews of market rates ensure competitive
renumeration packages.
Increased remuneration costs
Company wide 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.
Company Number 05452547
17
Trakm8 Holdings PLC
Strategic Report (Continued)
PRINCIPAL RISKS AND UNCERTAINTIES (continued)
Principal Risk
Significant
operational failure
Potential Impact
Reputational impact
2
Deterioration in
customer relations
Reduction in
revenues, profitability
and cash generation
Contractual Penalties
and Litigation
Cyber-attack and
data security
Reputational impact
2
Deterioration in
customer relations
Liability Claims
Operating in a fast
moving
technology
industry where
we will always be
at risk from new
products being
launched
1,2
Decelerating sales
growth and affecting
profit
Loss of significant
customer
Delay in achieving
projected revenues
OEM fit telematics to
all strategy
Autonomous cars
Adverse mobile
network changes
2
Reputational Impact
Deterioration in
customer relations
Reduction in
revenues, profitability
and cash generation
Mitigation
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.
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.
As we continue to add large clients to our customer base, in
some instances the contractual arrangement includes SLA
penalties. We mitigate this issue through continual monitoring of
our platforms and ongoing investment in our evergreen platform
to ensure operational capacity at all times.
We have maintained our ISO 27001 accreditation.
We continue to make considerable investments in security and
systems for both our internal data 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.
We heavily invest in research and development to ensure we are
at the forefront of telematics technology.
We are device agnostic and will interface into OEMs and
autonomous vehicles as a central data hub.
Expansion of number of significant customers reduces the risk of
an individual loss.
We undertake rigorous testing using our in-house testing team,
synthetic testing has been augmented 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 continuous improvements into our software test &
release process.
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.
Company Number 05452547
18
Trakm8 Holdings PLC
Strategic Report (Continued)
PRINCIPAL RISKS AND UNCERTAINTIES (continued)
Principal Risk
Access to long
term and working
capital
1,2
Business
disruption from
COVID-19
1,2,3
Potential Impact
Ability to deliver
business plans
Mitigation
We maintain regular discussions with banks and other financial
institutions.
We regularly review medium term capital requirements.
We continue to monitor our supply chain closely and working
with our distributors and manufactures maintain order coverage
to ensure enough inventory to mitigate short term disruptions.
Supply chain
disruption due to
COVID-19 issues in
other geographies
Potential outbreak of
infection in members
of staff
Many of our teams continue to employ a hybrid approach to
office and home working. We have maintained many of our
COVID measures within the office and our ability for many teams
to work fully remotely remains should it be required.
Company Number 05452547
19
Trakm8 Holdings PLC
Strategic Report (Continued)
DRIVING OUR GREENER TOMORROW
For many years, Trakm8’s market leading solutions have helped customers reduce their impact on the
environment around them and we are passionate about continuing this with both new and existing customers.
Through reduced fuel consumption, reduction in mileage using optimisation and reduced accident incident
rates, we drive real change for our customers and partners. This is supported by our inclusion in the London
Stock Exchange Green Economy Mark which was granted during the year.
We take our own responsibilities towards sustainability seriously and have worked hard to minimise our
impact supported by our ISO 14001 certification which has been held for many years. Through this we have
already implemented a number of initiatives and continue to plan and execute further measures.
Initiatives Completed to Date:
- Migration of over 60% of company car fleet to full EV or hybrid vehicles
-
Reduced commuting emissions of employees through changed working arrangements post the
pandemic
- Use of LED lighting throughout our UK sites
-
Improved waste management including maximising general recycling and offering safe battery
disposal for all our colleagues
Initiatives Planned and Under Consideration:
- Migrate remainder of company car fleet to full EV or hybrid vehicles
-
-
-
Add services for customers to help improve the rate of return and re-use of our devices
Source Green supply of gas and electricity for all UK sites as soon as possible
Implement salary sacrifice scheme allowing our colleagues to transition to low emission vehicles
To show our continued support to a low-carbon future, we have recently committed to joining the Science
Based Targets Initiative (SBTi – www.sciencebasedtargets.org) part of which will allow us to report on an
annual basis our progress towards our targets and ensure our stakeholders are able to hold our actions to
account.
By order of the Board
Jon Edwards
COMPANY SECRETARY
28 June 2022
Company Number 05452547
20
Trakm8 Holdings PLC
Corporate Governance Report
CHAIRMAN’S INTRODUCTION
The Board and its Committees are responsible for corporate governance and determining, implementing and
reviewing the strategy, budgeting and corporate actions of the Group. The Board is always looking to deliver
high standards of Corporate Governance using its knowledge and the framework put in place to help achieve
this. This ensures that the duties to shareholders, employees and other stakeholders are understood and
delivered as expected. The Chairman has ultimate responsibility for corporate governance matters. No key
corporate governance matters have occurred during the year.
The remainder of this report outlines the members of the Board and the Group’s governance principles.
THE BOARD OF DIRECTORS
A summary of the career history of each of the Directors is given below providing an overview of their vast
knowledge and experience in senior roles across multiple positions and industries.
John Watkins
Executive Chairman
John Watkins has a Masters’ 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.
Company Number 05452547
21
Trakm8 Holdings PLC
Corporate Governance Report
BOARD OF DIRECTORS (continued)
Jon Edwards
Chief Financial Officer
Jon joined Trakm8 in 2007 as part of the Finance department. He held the position of Group Financial
Controller for six years and in that time was responsible for the integration of acquisitions into the Group’s
finance functions & also gained his Association of Accounting Technicians qualification. In 2016 Jon moved into
the Operations team where he held several positions, most recently Operations Director before being
appointed as CFO in October 2021.
Mark Watkins
Chief Operating Officer
Mark has a Masters’ 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.
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.
Matt Cowley
AI 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 AI team and is passionate about algorithms, machine learning, computer vision and data science.
Company Number 05452547
22
Trakm8 Holdings PLC
Corporate Governance Report
GOVERNANCE PRINCIPLES
The Directors recognise the importance of sound corporate governance and have therefore adopted the
Quoted Companies Alliance (QCA) code, which is reviewed annually. The Directors have developed procedures
to ensure that the Group complies with the QCA code, in line with its size and stage of corporate evolution.
These procedures are set out below. Where the Group does not fully comply, the reasons for the non-
compliance are explained and the alternative procedures put in place are also set out. The QCA is constructed
around ten broad principles and a set of related disclosures.
Principle 1. Establish a strategy and business model which promote long-term value for shareholders
Trakm8 Holdings PLC is a leading supplier of fleet, insurance and automotive solutions that helps drive the
reduction of risk, fuel consumption and insurance premiums, while improving productivity, safety and
compliance.
The principle aim of the Group is to increase use of its IP owned hardware and AI based algorithms driving
continual growth in its connections and therefore its SaaS recurring revenues.
Despite the short-term impact of Covid-19, in the long term our target is still to achieve 1 million connections
to our systems. We currently have over 264,000. This substantial increase will provide the level of profitable
growth and cash generation that should increase the Group’s share price substantially. The Group has specific
growth plans in place across its two business units: Insurance and Automotive and Fleet and Optimisation.
Progress against these plans is monitored by the Board.
Principle 2. Seek to understand and meet shareholder needs and expectations
John Watkins, as Executive Chairman, has long been the key link with shareholders. We believe this dual
Chairman/CEO role is acceptable for a company of our size. John has been CEO for thirteen years and
Executive Chairman for eight years. This extended timescale brings wide experience and is not unreasonable
for a company of our size.
However, we also recognised the need to supplement his position by appointing senior independent director
Keith Evans as Deputy Chairman in 2017 to provide an independent focal point for shareholders. We believe
this appointment goes some way to balancing John Watkins’ dual role of Chairman and CEO.
Both John and Keith, individually, hold meetings with major shareholders throughout the year, to understand
their views on, and expectations of, the Group’s performance.
John provides ad hoc updates to other shareholders as required.
Principle 3. Take into account wider stakeholder and social responsibilities and their implications for long-
term success
The Board has established a system to obtain regular feedback from both internal (our workforce) and external
(shareholders, customers, suppliers, regulators and others) stakeholders.
Internally
Regular meetings are held with the employees who are also kept up to date with the Group’s performance
through monthly bulletins and quarterly ‘town hall’ meetings. Individual feedback is also gathered by the
Group’s HR function, which reports directly to the monthly Management team and Board meetings.
Company Number 05452547
23
Trakm8 Holdings PLC
Corporate Governance Report
Externally
As noted above, regular feedback is obtained from shareholders.
There is in place a system of monitoring customer comments to assess our daily performance in satisfying their
requirements. A Net Promoter Score (NPS) system is in place to monitor and record customer feedback. This
information is considered by the Board at its monthly meetings. In addition, we regularly meet our key
customers to identify their future requirements and to put to them our ideas on future products that would
provide them with improved Returns on Investment (ROI). This has enabled us to develop the world-leading
engineering products we now have, and to put in place longer-term engineering plans.
Given the nature of our supply chain, we have to keep in regular contact with key suppliers to ensure
continued component delivery to our high standards of quality.
On the regulatory side we ensure that we meet all relevant regulatory requirements. The Board receives
monthly updates on our compliance against a range of measures, including relevant ISO standards, Health and
Safety standards, carbon dioxide and other emission standards.
Principle 4. Embed effective risk management, considering both opportunities and threats, throughout the
organisation
The Board has ensured effective risk management is fully embedded throughout the organisation, as detailed
in the risk management framework section of our annual report.
The Board receives a monthly assessment of performance against selected risks. This assessment is regularly
discussed at Board meetings and improvements are monitored.
In addition, the audit committee also considers the quality and effectiveness of the Group’s risk management
procedures.
Principle 5. Maintain the Board as a well-functioning, balanced team led by the Chair
John Watkins is Chairman and CEO. We believe this is not inappropriate for a Group of our size. However, to
balance this, Keith Evans has been appointed Deputy Chairman. As required by the QCA code, the Board has
independent non-executives, Keith Evans and Penny Searles. This is complemented with the non-executive
directorship of Nadeem Raza, who cannot be considered to be independent due to him being the CEO and
principle shareholder in Microlise which is a substantial shareholder in the Company.
However, the Board still does not currently meet the requirements for a balance between executive and non-
executive Board members. On the Board are the two founding directors, who still are key members of the
Management Team. We believe they contribute substantially, given their long association with the Company
and, with over 8% of the shares in issue combined, they represent significant shareholders. Jon Edwards, CFO
and Mark Watkins as COO are key directors of the Group and so are rightly on the Board.
Details of attendance at the Board and the various committees by directors can be found later in this report.
In addition, the independent directors also attend the monthly detailed management team meetings. This
provides them with a greater understanding of the issues the Group faces, so they are in a better position to
provide advice and challenge.
Company Number 05452547
24
Trakm8 Holdings PLC
Corporate Governance Report
Principle 6. Ensure that between them the Directors have the necessary up-to-date experience, skills and
capabilities
The Board contains an appropriate mix of engineering, operational, selling and financial expertise. Part of the
process of assessing performance is to ensure time is available for each board member to keep up to date in
their specialisms.
Part of the assessment of the performance of each director is a review of the training they undertake.
Principle 7. Evaluate board performance based on clear and relevant objectives, seeking continuous
improvement
There is a continuous formal process of individual director objective setting and regular assessment of
progress against those objectives for each member of both the Group Board and the Senior Management
Team. The process is overseen by John Watkins.
In addition, the financial remuneration and bonuses of the Board and Management Team are directly linked to
achieving pre-set objectives. Keith Evans has the responsibility to evaluate John Watkins’s performance. To do
this he takes soundings, particularly from fellow directors, senior management and major shareholders.
In evaluating the general performance of the Board, a number of factors are reviewed including the
attendance, involvement and challenge raised at meetings as well as attendance at Board and Committee
meetings where applicable. In addition, where matters arise from each meeting these actions are followed up
effectively with updates reported back to the relevant forum.
In considering succession planning for the Board, the Company nurture the best talent through coaching and
training ensuring that where available internal promotion is encouraged across the Group. This includes
appointment to the Board should the opportunity arise and should they be required the Group’s recruitment
and appointment processes are used.
Principle 8. Promote a corporate culture that is based on ethical values and behaviours
Our corporate culture is driven and underpinned by our company values:
•
•
•
•
•
Integrity, Quality and Pride in our thoughts and our actions
Innovation in our design, manufacture and delivery of remarkable solutions
Commitment in our support of customers, partners, colleagues and shareholders
Teamwork in our mentoring, ownership and passion to win
Fun and celebration in our work and in our success
All employees have these values explained to them when joining and continually reinforced by their
colleagues, mentors and management whenever possible. All members of the Group are encouraged to raise
and suggest new ideas that help deliver these values either through their line management or via our regular
management meetings.
The Group’s mission continues to benefit the environment and our commitment to this is also shown through
our continued efforts in maintaining our ISO14001 certification.
Company Number 05452547
25
Trakm8 Holdings PLC
Corporate Governance Report
Principle 9. Maintain governance structures and processes that are fit for purpose and support good
decision-making by the Board
We have a governance structure that is appropriate for a company of our size and corporate evolution. Our
governance structures are explained below. As we grow, we recognise that the structure will need to evolve.
John Watkins, as Chairman and CEO, supported by Jon Edwards CFO, is responsible for relations with
shareholders and the City, and takes overall responsibility for the Group’s strategy and operations. In
summary, the other directors are:
Keith Evans is the senior independent non-executive director and Deputy Chairman.
•
• Nadeem Raza is a non-executive director.
•
Penny Searles is an independent non-executive director.
•
Jon Edwards, as CFO, is responsible for all the financial aspects of the company.
• Mark Watkins is COO and responsible for all aspects of Operations and Engineering.
•
• Matt Cowley is responsible for AI
Tim Cowley is responsible for Product strategy and development.
Our processes are continually being improved. For example, our investment in new plant and equipment for
our factory has enhanced our product testing, so providing better quality and lower costs.
Principle 10. Communicate how the Company is governed and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
The list of directors and their expertise and responsibilities are included in this Governance report, and on our
website (www.trakm8.com). The Board of Directors meets monthly. For this meeting reports are produced on
Risks, Finance, Sales and Marketing, Engineering and Operations. The Legal Counsel also attends, and full
minutes are taken.
The Board maintains dialogue with its shareholders through the annual report and accounts, interim report,
other regulatory announcements, the AGM and one-to-one meetings with both existing and potential
shareholders. Interaction, views and feedback is also sought through discussions at the end of the AGM
directly from shareholders and also from our corporate brokers.
Company Number 05452547
26
Trakm8 Holdings PLC
Corporate Governance Report
BOARD OF DIRECTORS AND COMMITTEES
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 2022 the Directors’ attendance at Board and Committee meetings has
been as follows:
Type
Board
Audit
Nomination Remuneration
Total Held in period
John Watkins
Keith Evans
Matt Cowley
Tim Cowley
Jon Furber1
Mark Watkins
Nadeem Raza
Peter Mansfield2
Penny Searles
Jon Edwards3
13
13
12
13
13
6
12
13
6
13
6
2
2
2
-
-
-
-
2
-
2
-
1
1
1
-
-
-
-
1
-
1
-
3
3
3
-
-
-
-
3
-
3
-
1 Attended 6 out of 6 Board meetings whilst in office
2 Attended 6 out of 7 Board meetings whilst in office
3 Attended 6 out of 7 Board meetings whilst in office
Nominations committee
The committee met once during the year and appointed Jon Edwards as CFO. John Watkins chairs the
committee with Keith Evans, Nadeem Raza and Penny Searles as members.
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. Keith Evans chairs the committee with John Watkins, Nadeem Raza and
Penny Searles as members. The CFO 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
27
Trakm8 Holdings PLC
Corporate Governance Report
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 market abuse regulation. John Watkins chairs the committee with Keith Evans, Nadeem
Raza and Penny Searles as members.
By order of the Board
Jon Edwards
COMPANY SECRETARY
28 June 2022
Company Number 05452547
28
Trakm8 Holdings PLC
Corporate Governance Report
DIRECTORS’ REPORT
The Directors submit their Directors’ Report and the audited financial statements of the Group for the year
ended 31 March 2022.
Trakm8 Holdings PLC is a public limited 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 2022 are shown in the Consolidated Statement of
Comprehensive Income on page 42. The Directors do not recommend the payment of a dividend (2021: £nil).
Company Number 05452547
29
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 £2.9m and a further £0.6m was expensed. 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 Group’s projections for the next 12
months, and downside sensitivity analysis against its projections along with closing cash balances of £1,004k
and undrawn overdraft facility of £500k at 31 March 2022 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 59.
FUTURE DEVELOPMENTS
Consideration on the impact of the 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 continue to grow 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
30
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 resigned 30 September 2021
Nadeem Raza
Peter Mansfield resigned 16 November 2021
Penny Searles
Jon Edwards appointed 1 October 2021
DIRECTORS AND THEIR INTERESTS
At 31 March 2022 the Directors’ interests in the shares of the Company are detailed below:
1p Ordinary
shares at 31
March 2022
% of issued Ordinary
share capital (50,004,002
Ordinary shares)
1p Ordinary
shares at 31
March 2021
% of issued Ordinary
share capital (50,004,002
Ordinary shares)
John Watkins
Keith Evans
Matt Cowley
Tim Cowley
Jon Edwards
Mark Watkins
Nadeem Raza*
Penny Searles
7,768,768
381,119
1,994,203
2,268,127
4,418
318,310
600,926
-
15.55%
0.76%
3.99%
4.54%
0.01%
0.64%
1.20%
-
7,768,768
381,119
1,994,203
2,268,127
4,418
318,310
600,926
-
15.55%
0.76%
3.99%
4.54%
0.01%
0.64%
1.20%
-
*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 2022
or on the date on which these financial statements were approved.
Company Number 05452547
31
Trakm8 Holdings PLC
Directors’ Report (Continued)
DIRECTORS’ REMUNERATION
The Directors’ remuneration for the year ended 31 March 2022 was:
£’000
Salaries &
benefits
Fees
Total
remuneration
to year ended
31 March 2022
Pension
contribution
Total aggregate
emoluments to
year ended 31
March 2022
Total aggregate
emoluments to
year ended 31
March 2021
John Watkins
Keith Evans
Matt Cowley
Tim Cowley
Jon Furber1
Mark Watkins
Nadeem Raza
Peter Mansfield2
Penny Searles
Jon Edwards
289
36
118
109
80
153
36
101
36
55
Total
1,013
1 Jon Furber resigned 30.09.2021
2 Peter Mansfield resigned 16.11.2021
-
-
-
-
-
-
-
-
-
-
-
289
36
118
109
80
153
36
101
36
55
-
-
3
3
7
7
1
3
1
1
289
36
121
112
87
160
37
104
37
56
289
37
103
116
159
159
37
164
37
-
1,013
26
1,039
1,101
Company Number 05452547
32
Trakm8 Holdings PLC
Directors’ Report (Continued)
DIRECTORS’ SHARE OPTIONS
At 31 March 2022 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
£0.34
£0.34
£0.33
£0.45
£0.34
£0.33
£0.27
£0.45
£0.34
£0.33
£0.27
£0.58
£0.34
£0.34
£0.33
£0.33
£0.16
£0.82
£0.34
£0.20
£0.27
£0.33
£0.33
John Watkins
Keith Evans
Matt Cowley
Tim Cowley
Mark Watkins
Jon Edwards
Nadeem Raza
Penny Searles
Balance as at
1 April 2021
Granted
during
year
Exercised
during
year
Expired/
forfeited
during year
250,000
125,000
300,000
100,000
75,000
50,000
25,000
125,000
25,000
100,000
-
125,000
50,000
100,000
-
200,000
125,000
250,000
100,000
25,000
-
25,000
50,000
25,000
-
25,000
25,000
-
-
-
-
-
-
-
-
-
-
75,000
-
-
-
50,000
-
-
-
-
-
300,000
-
-
-
300,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance as at
31 March
2022
250,000
125,000
300,000
100,000
75,000
50,000
25,000
125,000
25,000
100,000
75,000
125,000
50,000
100,000
50,000
200,000
125,000
250,000
100,000
25,000
300,000
25,000
50,000
25,000
300,000
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
16/11/2031
21/01/2024
04/03/2029
26/11/2030
16/11/2031
06/04/2024
04/03/2029
04/03/2029
23/07/2030
26/11/2030
11/07/2031
30/07/2024
04/03/2029
23/07/2030
16/11/2031
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 2021 and 31 March 2022 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
33
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 UK-adopted international
accounting standards 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 United Kingdom 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 reappoint 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 2022.
Jon Edwards
Company Secretary
Company Number 05452547
34
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 2022 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 UK-adopted international accounting standards. 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 2022 and of the group’s profit for the year then ended;
the group financial statements have been properly prepared in accordance with UK-adopted international
accounting standards;
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 and banking covenants,
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
35
Trakm8 Holdings PLC
Independent Auditors’ Report
The key observations arising with respect to our evaluation included:
• Management’s mitigating actions to minimise the ongoing 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;
• 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,
Company Number 05452547
36
Trakm8 Holdings PLC
Independent Auditors’ Report
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 £2.9m 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
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,
37
Company Number 05452547
Trakm8 Holdings PLC
Independent Auditors’ Report
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 2 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
Matter
Management (including the Board and Audit Committee) invested a significant amount of time to fully consider
the implications of general economic conditions on the going concern position of 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 the impact of
general economic conditions on future sales and other inputs.
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 going concern and found them to be
consistent with the forecast scenarios performed.
Company Number 05452547
38
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 £199,000. 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 approximately 1% of group revenue.
The materiality for the parent company financial statements as a whole was set at £159,000. 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 £179,000, equating to approximately
90% 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 information. If, based on the
Company Number 05452547
39
Trakm8 Holdings PLC
Independent Auditors’ Report
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 34, 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
40
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, UK-adopted international accounting
standards 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
Sky View, Argosy Road
East Midlands Airport
Derby
DE74 2SA
Date: 28 June 2022
Company Number 05452547
41
Trakm8 Holdings PLC
Consolidated Statement of Comprehensive Income For The Year Ended 31 March 2022
REVENUE
Cost of sales
Gross profit
Other income
Administrative expenses excluding exceptional costs
Exceptional administrative costs
Total administrative costs
OPERATING PROFIT/(LOSS)
Finance income
Finance costs
LOSS BEFORE TAXATION
Income tax
Note
6
7
9
8
10
11
Year ended 31
March 2022
£'000
18,111
(7,004)
Year ended 31
March 2021
£'000
15,961
(6,643)
11,107
9,318
13
194
(10,193)
(568)
(10,761)
(9,585)
(1,342)
(10,927)
359
(1,415)
67
(548)
78
(530)
(122)
309
(1,867)
630
PROFIT/(LOSS) FOR THE YEAR
187
(1,237)
OTHER COMPREHENSIVE INCOME
Items that may be subsequently reclassified to profit or loss:
Exchange differences on translation of foreign operations
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS)
TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR
ATTRIBUTABLE TO OWNERS OF THE PARENT
LOSS BEFORE TAXATION
Exceptional administrative costs
IFRS2 Share based payments (release)/charge
ADJUSTED PROFIT/(LOSS) BEFORE TAX
PROFIT/(LOSS) PER ORDINARY SHARE (PENCE) ATTRIBUTABLE TO
OWNERS OF THE PARENT
Basic
Diluted
The results all relate to continuing operations.
10
10
(3)
(3)
197
(1,240)
(122)
568
(443)
3
(1,867)
1,342
183
(342)
0.37p
(2.47p)
0.37p
(2.47p)
8
13
13
Company Number 05452547
42
Trakm8 Holdings PLC
Consolidated Statement of Changes in Equity For The Year Ended 31 March 2022
Note
Share
capital
Share
premium
Merger
reserve
Translation
reserve
Treasury
reserve
Retained
earnings
Total
equity
£'000
500
£'000
14,691
£'000
1,138
£'000
196
£'000
(4)
£'000
4,658
£'000
21,179
-
-
-
-
-
-
-
-
(1,237)
(1,237)
(3)
-
-
(3)
-
-
-
(3)
-
(1,237)
(1,240)
-
-
-
-
-
183
183
-
-
-
-
-
183
183
Balance as at 1 April 2020
Comprehensive loss
Loss for the year
Other comprehensive loss
Exchange differences on
translation of overseas
operations
Total comprehensive loss
Transactions with owners
IFRS2 Share-based payments
charge
Transactions with owners
Balance as at 1 April 2021
500
14,691
1,138
193
(4)
3,604
20,122
Comprehensive income
Income for the year
Other comprehensive income
Exchange differences on
translation of overseas
operations
Total comprehensive income
Transactions with owners
IFRS2 Share based payments
credit
Transactions with owners
Balance as at 31 March 2022
-
-
-
-
-
-
-
187
187
-
10
-
- 10
-
-
-
10
-
187
197
-
-
-
-
-
(443)
(443)
-
500
-
14,691
-
1,138
-
203
-
(4)
(443)
(443)
3,348 19,876
Company Number 05452547
43
Trakm8 Holdings PLC
Consolidated Statement of Financial Position As At 31 March 2022
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
2022
£'000
As at 31 March
2021
£'000
14
15
16
18
17
18
20
21
21
22
20
21
21
22
19
23
23,012
803
2,032
27
25,874
22,187
891
2,512
50
25,640
1,322
7,944
709
1,004
10,979
1,409
6,679
690
2,370
11,148
(7,521)
(1,115)
(612)
(27)
(9,275)
(5,417)
(855)
(680)
(27)
(6,979)
1,704
4,169
27,578
29,809
(626)
(4,855)
(1,367)
(112)
(742)
(7,702)
(1,546)
(5,815)
(1,767)
(190)
(369)
(9,687)
19,876
20,122
500
14,691
1,138
203
(4)
3,348
500
14,691
1,138
193
(4)
3,604
TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
19,876
20,122
The notes on pages 46 to 81 of the annual report and accounts are an integral part of these consolidated financial
statements. These financial statements were approved by the Board of directors and authorised for issue on 28
June 2022 and are signed on its behalf by:
John Watkins - Director
Jon Edwards - Director
Company Number 05452547
44
Trakm8 Holdings PLC
Consolidated Statement of Cash Flows For The Year Ended 31 March 2022
Notes
NET CASH GENERATED FROM OPERATING ACTIVITIES
25
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchases of software
Capitalised development costs
Year ended
31 March
2022
£'000
3,810
Year ended
31 March
2021
£'000
4,702
(420)
125
(48)
(2,911)
(330)
-
(47)
(2,290)
NET CASH USED IN INVESTING ACTIVITIES
(3,254)
(2,667)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in loans
Loan arrangement fees
Repayment of loans
Repayment of obligations under lease agreements
Interest paid
-
(5)
(743)
(674)
(500)
5,300
(88)
(5,379)
(670)
(493)
NET CASH USED IN FINANCING ACTIVITIES
(1,922)
(1,330)
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
(1,366)
705
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
2,370
1,665
CASH AND CASH EQUIVALENTS AT END OF YEAR
1,004
2,370
Company Number 05452547
45
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 UK-adopted 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 2022.
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
46
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
4 ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements have been prepared under the historical cost convention as modified by the
revaluation of certain property, plant and equipment and financial instruments, as described in the accounting
policies set out below.
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
47
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
48
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
4 ACCOUNTING POLICIES (continued)
REVENUE RECOGNITION (continued)
Certain 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
49
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
50
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
51
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
52
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 and Monte Carlo 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
53
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 - 100% 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
54
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
55
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
56
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 a past event and it is
probable that the Group will be required to settle that obligation. Provisions are measured at the
Directors' best estimate of the 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
57
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
58
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 54% of revenues that provide a strong
underlying base. Further consideration of other significant risks and the mitigations the Group has
developed are detailed in page 17.
The Group renewed its debt facilities with HSBC in March 2021 and benefitted from deferral of capital
repayments which recommenced in September 2021. This was in addition to reaching an agreement with
HMRC to repay £1.8m VAT, PAYE & NI equally between this financial year and next. Covenant tests to the
end of March 2022 were an absolute EBITDA tested quarterly, moving to quarterly cash flow cover and
leverage covenants from June 2022.
At the year end the Group has cash balances of £1,004,000 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 headroom for the
foreseeable future. The Group has completed adverse sensitivities against its current projections to
reflect potential external risks where material shortages constrain its ability to fulfil orders or demand of
its products and services reduce and material costs increase.
To assess the potential impact of these, a 10% reduction in Fleet new business contract value and
Insurance shipments and a 10% increase in material costs were modelled against the Groups current
forecast. Despite the cumulative impact of these changes the Group still maintains compliance with the
covenants for the coming twelve months without the inclusion of any mitigations that could and would be
implemented such as price increases and savings in both direct and indirect costs.
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
59
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
60
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
61
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
Year ended 31
March 2022
Year ended 31
March 2021
£'000
18,111
11,217
6,894
£'000
15,961
9,520
6,441
Year ended 31
March 2022
Year ended 31
March 2021
£'000
17,784
-
-
272
55
18,111
£'000
15,647
4
2
293
15
15,961
Year ended 31
March 2022
£'000
Year ended 31
March 2021
£'000
13
13
194
194
Company Number 05452547
62
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
8 OPERATING PROFIT/(LOSS)
The following items have been included in arriving at operating profit/(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 (see note 9)
Auditors’ remuneration
Year ended
31 March
2022
Year ended
31 March
2021
£'000
£'000
176
630
156
625
2,134
34
669
263
22
5,187
568
1,992
13
637
318
1
6,465
1,342
- Fees payable to the Company’s auditors for the audit of the parent
company and consolidated financial statements
77
73
Adjusted profit/(loss) before tax is monitored by the Board and measured as follows:
Loss before tax
Exceptional administrative costs (note 9)
Share based payments
Adjusted profit/(loss) before tax
9 EXCEPTIONAL ADMINISTRATIVE COSTS
Integration and restructuring costs
Covid-19 costs
Furlough grant income
Year ended
31 March
2022
£'000
(122)
568
(443)
3
Year ended
31 March
2021
£'000
(1,867)
1,342
183
(342)
Year ended
31 March
2022
£'000
107
646
(185)
568
Year ended
31 March
2021
£'000
168
2,109
(935)
1,342
Company Number 05452547
63
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
9 EXCEPTIONAL ADMINISTRATIVE COSTS (continued)
The Group incurred exceptional costs in the current and prior financial year relating to the Covid-19 pandemic.
These costs include the increased cost of temporarily buying raw materials from auxiliary markets to ensure
continuity of supply of key components which were in constraint due to supply chain issues caused by the
pandemic. In addition this includes the costs of employees during periods of furlough.
The Group has also 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:
- Restructuring costs incurred as a result of a headcount reduction activity undertaken during the current
financial year.
- In the 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.
In the current and prior year, the Group received furlough grant income that relates to 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
11
INCOME TAX
Tax credit for the year
Year ended 31
March 2022
£'000
388
48
112
548
Year ended 31
March 2021
£'000
373
37
120
530
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
tax rate change
prior year adjustment
sub total
Year ended 31
March 2022
£'000
(708)
26
(682)
Year ended 31
March 2021
£'000
(687)
(2)
(689)
257
117
(1)
373
89
-
(30)
59
Income tax credit
Total
(309)
(630)
Company Number 05452547
64
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 (2021: lower) than the applicable rate of corporation tax in the UK. The
difference is explained below:
Loss before tax
Loss on ordinary activities multiplied by the standard rate of
corporation tax in the UK of 19% (2021: 19%)
Effects of:
Expenses not deductible/income not taxable
R&D relief enhanced deduction
Adjustments in respect of
prior periods:
Deferred tax
Current tax
Opening and closing deferred tax rate adjustment
Other movements
Total tax credit
Tax on exceptional items
Year ended 31
March 2022
£'000
(122)
Year ended 31
March 2021
£'000
(1,867)
(23)
(355)
(94)
(432)
39
(338)
37
26
174
3
(309)
8
(2)
31
(13)
(630)
The tax effect of exceptional items is to increase the tax credit by £108,000 (2021: £255,000).
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% (2021: 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 25%.
Company Number 05452547
65
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
12
EMPLOYEES
Year ended
31 March
2022
Year ended
31 March
2021
No.
No.
The average monthly number of persons (including Directors) employed by the Group was:
Engineering
Sales & marketing
Production
Administration
56
58
29
22
165
63
65
34
21
183
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
2022
Year ended
31 March
2021
£'000
4,937
584
(443)
109
5,187
£'000
5,532
629
183
121
6,465
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
2022
Year ended
31 March
2021
£'000
£'000
1,099
35
(471)
663
1,131
41
171
1,343
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 (2021: £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 32.
Company Number 05452547
66
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 profit/(loss) for the
year and the weighted average number of Ordinary shares in issue during the year as follows:
Profit/(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 profit/(loss) per share
Diluted profit/(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 2022
£'000
187
568
(443)
(108)
204
Year ended 31
March 2021
£'000
(1,237)
1,342
183
(255)
33
No.
50,004,002
50,004,002
50,056,538
No.
50,004,002
50,004,002
50,004,002
0.37p
0.37p
0.92p
(0.89p)
0.41p
0.41p
(2.47p)
(2.47p)
2.17p
0.37p
0.07p
0.07p
*In the current year, the Group awarded Tranch AI with an exercise price of 16p. This grant is dilutive as the
exercise price is less than the average share price as at year end.
Company Number 05452547
67
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
COST
As at 1 April 2020
Additions - Internal developments
Additions - External purchases
Impairments
Disposals
As at 31 March 2021
Additions - Internal developments
Additions - External purchases
As at 31 March 2022
AMORTISATION
As at 1 April 2020
Charge for year
Disposals
As at 31 March 2021
Charge for year
As at 31 March 2022
NET BOOK AMOUNT
As at 31 March 2022
As at 31 March 2021
As at 1 April 2020
10,417
-
-
-
-
10,417
-
-
10,417
1,920
-
-
-
-
1,920
-
-
1,920
100
-
-
-
-
100
-
-
100
- 1,910
- 10
-
-
- 1,920
-
-
- 1,920
100
-
-
100
-
100
2,119
171
-
17,190 1,903 31,530
- 2,119
47 218
(155)
(274)
19,242 1,759 33,438
2,567
2,521 46
392
390 2
22,153 1,807 36,397
(155)
(36)
(238)
(238)
6,479 1,044 9,533
1,733 249 1,992
(274)
7,974 1,257 11,251
1,943 191 2,134
9,917 1,448 13,385
(36)
10,417
-
- 12,236 359 23,012
10,417
-
- 11,268 502 22,187
10,417
10
- 10,711 859 21,997
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.
The impairment review has been based on the Group’s budgets for FY-2023 which have been reviewed and
approved by the Board and projections for FY-2024. 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 9% (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.
Company Number 05452547
68
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
14
INTANGIBLE ASSETS (continued)
The forecast shows sufficient headroom of cash flow above the net assets value when we have performed
sensitivity analysis.
1. An increase in the discount rate to 12% shows headroom of £3m.
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 £11m.
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 4% 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-2023 and FY-2024 of 14%.
Amortisation expenses of £2,134,000 (2021: £1,992,000) have been charged to Administrative expenses in the
Consolidated Statement of Comprehensive Income.
Company Number 05452547
69
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
-
7
-
154
-
-
(86)
68
1,065
76
303
(3)
1,441
-
461
(351)
1,551
543
(76)
20
(131)
356
-
15
-
371
7
-
-
-
7
-
-
-
7
1,762
-
330
(134)
1,958
-
476
(437)
1,997
11
-
7
-
18
-
7
-
25
568
(2)
138
(3)
701
-
155
(49)
807
459
2
11
(131)
341
-
14
-
355
7
-
-
-
7
-
-
-
7
1,045
-
156
(134)
1,067
-
176
(49)
1,194
43
744
16
-
803
136
740
15
-
891
136
497
84
-
717
COST
As at 1 April 2020
Reclassification
Additions
Disposals
As at 31 March 2021
Reclassification
Additions
Disposals
As at 31 March 2022
DEPRECIATION
As at 1 April 2020
Reclassification
Charge for year
Disposals
As at 31 March 2021
Reclassification
Charge for year
Disposals
As at 31 March 2022
NET BOOK AMOUNT
As at 31 March 2022
As at 31 March 2021
As at 1 April 2020
Included within freehold property is £nil (2021: £86,000) relating to land which is not depreciated.
Total depreciation expenses of £176,000 (2021: £156,000) have been charged to administrative expenses in
the Consolidated Statement of Comprehensive Income.
Company Number 05452547
70
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
16 RIGHT OF USE ASSETS
Freehold
property
Furniture,
fixtures and
equipment
Computer
equipment
Motor
vehicles
Software
Total
£'000
£'000
£'000
£'000
£'000
£'000
COST
As at 1 April 2020
Additions
Impairments
Disposals
As at 31 March 2021
Additions
Disposals
As at 31 March 2022
AMORTISATION
As at 1 April 2020
Charge for year
Disposals
As at 31 March 2021
Charge for year
Disposals
As at 31 March 2022
NET BOOK AMOUNT
As at 31 March 2022
As at 31 March 2021
As at 1 April 2020
2,098
-
-
-
2,098
-
-
2,098
509
42
-
-
551
-
-
551
175
175
619
79
- -
-
350
56
-
406
(83)
615
94
(97)
612
153
-
(153)
3,554
296
(153)
(83)
- 3,614
- 150
-
(97)
- 3,667
264
265
-
529
265
-
794
49
75
-
124
70
-
194
62
58
-
120
114
-
234
175
227
(73)
329
181
(97)
413
-
550
- 625
(73)
-
- 1,102
- 630
(97)
-
- 1,635
1,304
357
172
199
- 2,032
1,569
427
230
286
- 2,512
-
-
-
-
-
-
Total depreciation expenses of £630,000 (2021: £625,000) have been charged to administrative expenses in
the Consolidated Statement of Comprehensive Income.
17
INVENTORIES
Raw materials
Work in progress
Finished goods and goods for resale
As at 31
March 2022
£'000
370
502
450
1,322
As at 31
March 2021
£'000
174
584
651
1,409
The cost of inventories recognised as an expense and included in cost of sales amounted to £3,509,000 (2021:
£3,308,000). During the year, inventories of £171,000 (2021: £270,000) were written down including
manufacturing attrition and repair costs. These were charged to cost of sales in the Consolidated Statement of
Comprehensive Income.
Company Number 05452547
71
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 2022
£'000
-
-
27
-
As at 31
March 2021
£'000
-
-
50
-
As at 31
March 2022
£'000
3,831
110
23
351
As at 31
March 2021
£'000
2,555
166
63
371
-
-
3,629
3,524
27
50
7,944
6,679
The analysis of trade receivables by currency is as follows:
Pound Sterling
Euro
As at 31
March 2022
£'000
3,827
4
3,831
As at 31
March 2021
£'000
2,554
1
2,555
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 £130,000 (2021: £197,000 ).
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 2022
£'000
197
As at 31
March 2021
£'000
415
72
(139)
-
(67)
38
(177)
(79)
(218)
Closing provision for impairment of trade receivables
130
197
As at 31 March 2022 trade receivables of £819,000 (2021: £868,000) 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 2022
£'000
532
287
819
As at 31
March 2021
£'000
626
242
868
72
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
2021
£'000
65
52
-
117
2022
£'000
24
28
-
52
Present value of minimum
lease payments
2021
2022
£'000
£'000
63
23
27
50
- -
50
113
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% (2021: 2.45%) per annum.
19 DEFERRED TAX
The analysis of deferred tax liability calculated using a tax rate of 25% 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
2022
£'000
As at 31
March
2021
£'000
- -
(742)
(742)
(369)
(369)
As at 31
March
2022
£'000
2,266
-
(3,008)
(742)
As at 31
March
2021
£'000
1,673
(9)
(2,033)
(369)
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 asset during the year is as follows:
At 31 March 2021
Credited / (debited) to the Statement of
Comprehensive Income
Credited / (debited) to the Statement of
Changes in Equity
Trading
losses
Accelerated
tax
depreciation
£'000
1,673
£'000
(2,033)
Short term
timing
differences
£'000
(9)
593
(975)
9
TOTAL
£'000
(369)
(373)
-
-
-
-
At 31 March 2022
2,266
(3,008)
-
(742)
Company Number 05452547
73
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
2021
As at 31
March
2022
£'000
£'000
- -
799
-
- -
-
-
Current liabilities
As at 31
March
2022
£'000
2,956
1,747
56
897
As at 31
March
2021
£'000
1,996
1,744
-
773
626
747
1,865
904
7,521
The Directors consider that the carrying amount of trade payables approximates to their fair value.
1,546
626
5,417
Revenue recognised in the current reporting period relating to carried-forward contract liabilities was £1.9m
(2021: £1.4m).
21 BORROWINGS
As at 31 March 2022
As at 31 March 2021
Loans
Obligations
under right
of use
assets
Total
Loans
Obligations
under right
of use
assets
Total
Gross
£'000
Arrangement
fee
Net
Gross
£'000 £'000
£'000
£'000
£'000
Arrangement
fee
£'000
Net
£'000
£'000
£'000
Current
Non
Current
1,165
(50)
1,115
612 1,727
902
(47)
855
680
1,535
4,892
6,057
(37)
4,855
(87) 5,970
1,367
6,222
1,979 7,949
5,898
6,800
(83)
(130)
5,815
6,670
1,767
2,447
7,582
9,117
All borrowings are held in sterling and the Directors consider their carrying amount approximates to their
fair values.
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 2022 the Group owed £4.9m (2021: £5.3m).
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 2022 (2021: £nil) 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. As at 31 March 2022 the
Group owed £1.2m (2021: £1.5m)
The Group’s obligations under right of use assets are secured by the lessors’ title to the leased assets (see
below).
Company Number 05452547
74
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
21 BORROWINGS (continued)
Obligations under right of use assets by category at 31 March 2022 were as follows:
Furniture,
fixtures and
equipment
Computer
equipment
Freehold
property
Motor
vehicles
Software
Current
Non-current
Total
£'000
259
1,145
1,404
£'000
77
46
123
£'000
98
87
185
£'000
126
76
202
£'000
52
13
65
The maturity of obligations under right of use assets at 31 March 2022 were as follows:
Furniture,
fixtures and
equipment
Freehold
property
Computer
equipment
Motor
vehicles
Software
£'000
259
1,145
(1)
1,403
£'000
78
38
7
123
£'000
98
56
31
185
£'000
126
66
9
201
£'000
52
11
2
65
Total
£'000
612
1,367
1,979
Total
£'000
613
1,316
48
1,977
Within 1 year
1 to 2 years
2 to 5 years
Total
22 PROVISIONS
As at 1 April 2020
Arising during the year
Released during the year
As at 1 April 2021
Arising during the year
Released during the year
At 31 March 2022
Dilapidations
£'000
119
42
-
161
Warranty
£'000
65
-
(9)
56
Total
£'000
184
42
(9)
217
-
-
-
(61)
100
(17)
39
(78)
139
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
2022
£'000
27
112
139
As at 31
March
2021
£'000
27
190
217
Company Number 05452547
75
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 2022
As at 31 March 2021
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% (2021: 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.
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 12 July 2021 which were issued at the closing market
price on the 11 July 2021. 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 Monte
Carlo (2021: 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
2 tranches of options were awarded, tranche AH and AI. The inputs to our Black Scholes pricing model were:
Grant date
Weighted average FV (pence)
Weighted average exercise price (pence)
Expected volatility (%)
Expected life of option
Dividend yield (%)
Risk free (%)
Tranch AH
12-Jul-21
2.82
16.00
96.4%
5.0
0.0%
0.5%
Tranch AI
18-Nov-21
5.89
27.00
96.1%
5.0
0.0%
0.5%
The risk-free rate of return is the yield on government gilt market price and the volatility has been based on
historic share prices.
Options granted during the year were:
Grant date
12-Jul-21
18-Nov-21
No of shares
875,000
450,000
Option
Exercise Price
16p
27p
Date of
expiry
12/07/2031
18/11/2031
Company Number 05452547
76
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
24 SHARE-BASED PAYMENTS (continued)
A reconciliation of option movements over the year to 31 March 2022 is shown below;
As at 31 March 2022
As at 31 March 2021
Share
options
Weighted
average
Exercise
Share
options
Weighted
average
Exercise
No
4,350,000
1,325,000
(1,275,000)
4,400,000
Price (p)
33
20
31
30
No
3,425,000
1,475,000
(550,000)
4,350,000
Price (p)
35
28
31
33
Outstanding at beginning of the year
Granted during the period
Forfeited during the period
Outstanding at the end of the year
The range of exercise prices of the outstanding options is 16.0 pence to 192.5 pence (2021: 18.5 pence to
192.5pence) and the weighted average remaining contractual life is 6.9 years (2021: 7.7 years).
The Group released £443,000 to the Statement of Comprehensive Income in respect of Share-Based Payments
for the financial year ended 31 March 2022 (2021: £183,000 charge).
Share options exercisable at 31 March 2022 were 1,650,000 (2021: 900,000).
25 CASH GENERATED FROM OPERATIONS
As at 31 March
2022
£'000
As at 31 March
2021
£'000
Loss before tax
Depreciation
(Profit)/Loss on disposal of fixed assets
Net bank and other interest
Exceptional costs
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 before exceptional costs
Cash outflow from exceptional costs
Cash generated from operations
Interest received
Income taxes received
Net cash inflow from operating activities
Company Number 05452547
(122)
806
263
481
568
2,134
10
(443)
3,697
87
(1,242)
1,184
(78)
3,648
(568)
3,080
67
663
3,810
(1,867)
781
318
452
1,342
1,992
(3)
183
3,198
634
1,166
70
33
5,101
(1,342)
3,759
78
865
4,702
77
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
26 FINANCIAL COMMITMENTS
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
2022
As at 31 March
2021
£'000
£'000
1
-
1
11
1
12
A total of 875,000 (2021: 1,000,000) share options were granted during the year to five key management
personnel (2021: nine).
Non-Executive Director Nadeem Raza is a Director of Microlise Limited, a customer of the Group. Sales to
Microlise Limited in the current year were £5,000 (2021: £nil). All sales were based on prices and terms that
would be available to third parties. At 31 March 2022 Microlise Limited owed Trakm8 £nil (2021: £nil).
The Non-Executive Director Penny Searles is a Director of A Plan Holdings (appointed during the current
financial year), a customer of the Group. Sales to A Plan Holdings in the current year were £606,000. All sales
were based on prices and terms that would be available to third parties. At 31 March 2022 A Plan Holdings
owed Trakm8 £162,000.
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 base rate, the following table details the Group's sensitivity to an
increase of 2% and 5% in this rate.
Base rate
Base rate
Company Number 05452547
2%
As at 31
March 2022
As at 31
March 2021
Profit
£'000
(121)
5%
Profit
£'000
(303)
Profit
£'000
(136)
Profit
£'000
(340)
78
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
28 FINANCIAL INSTRUMENTS (continued)
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.
10% decrease
10 % increase
Year ended 31
March 2022
Profit & equity
£'000
(125)
(16)
Year ended 31
March 2021
Profit & equity
£'000
(127)
(96)
Year ended 31
March 2022
Profit & equity
£'000
102
13
Year ended 31
March 2021
Profit & equity
£'000
104
78
20% decrease
20 % increase
Profit & equity
£'000
(282)
(36)
Profit & equity
£'000
(286)
(215)
Profit & equity
£'000
188
24
Profit & equity
£'000
191
144
US Dollar
Euro
US Dollar
Euro
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
2022
Year ended
31 March
2022
Year ended
31 March
2021
Year ended
31 March
2021
Monetary
Assets
£'000
Monetary
Liabilities
£'000
- 80
43
4
123
4
15,910
8,593
16,033
8,597
Monetary
Assets
£'000
3
1
4
8,674
8,678
Monetary
Liabilities
£'000
57
199
256
15,825
16,081
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.
Company Number 05452547
79
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
28 FINANCIAL INSTRUMENTS (continued)
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 2022
£'000
1,004
1,004
As at 31
March 2021
£'000
2,370
2,370
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.
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 trading and 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 2022
As at 31
March 2021
£'000
7,949
6,345
19,876
£'000
9,117
7,172
20,122
27,825
26,221
29,239
27,294
29%
24%
31%
26%
At the year end the Group had total net borrowings of £6,945,000 (2021: £6,747,000). This includes IFRS16
impact of £1,606,000 (2021: £1,945,000).
Company Number 05452547
80
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
28 FINANCIAL INSTRUMENTS (continued)
Assets as per Statement of Financial Position
Trade and other receivables excluding prepayments
Cash and cash equivalents
Borrowings
Trade and other payables excluding statutory liabilities and deferred revenue
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
Receivables and Cash
As at 31
March 2022
£'000
7,593
1,004
8,597
As at 31
March 2021
£'000
6,308
2,370
8,678
Financial liabilities at
amortised cost
As at 31
March 2022
As at 31
March 2021
£'000
7,949
8,084
16,033
£'000
9,117
6,964
16,081
As at 31
March 2022
£'000
9,121
5,525
1,387
-
16,033
As at 31
March 2021
£'000
7,137
3,296
5,228
420
16,081
Cash and cash equivalents comprise solely of cash in hand held by the Group.
29 DIVIDENDS
The Company is not proposing a final dividend for the year (2021: £nil).
No Dividend was paid during the year (2021: £nil).
30 OPERATING LEASES AS LESSOR
The Group rents out equipment under operating leases. Equipment rental income earned during the year
was £nil (2021: £43,000). 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
Company Number 05452547
As at 31
March 2022
£'000
-
-
As at 31
March 2021
£'000
-
-
81
Trakm8 Holdings PLC
Parent Company Statement of Financial Position As At 31 March 2022
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
2022
£'000
As at 31 March
2021
£'000
4
5
6
7
7
8
10,986
306
11,292
11,429
218
11,647
10,579
19
10,598
11,342
403
11,745
(437)
(1,115)
(1,552)
(621)
(855)
(1,476)
9,046
10,269
20,338
21,916
(4,855)
(5,815)
15,483
16,101
500
14,691
627
(4)
(331)
500
14,691
627
(4)
287
TOTAL SHAREHOLDERS’ FUNDS
15,483
16,101
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 £176,000 (2021: loss £257,000).
These financial statements on pages 82 to 91 were approved by the Board of Directors and authorised for issue
on 28 June 2022 and are signed on their behalf by:
John Watkins - Director
Jon Edwards - Director
Company Number 05452547
82
Trakm8 Holdings PLC
Parent Company Statement of Changes in Equity For The Year Ended 31 March 2022
Called up
share
capital
£'000
500
-
-
500
Share
premium
account
£'000
14,691
-
-
14,691
Merger
reserve
Treasury
reserve
Retained
earnings
TOTAL
SHAREHOLDERS
' FUNDS
£'000
627
-
-
627
£'000
(4)
-
-
(4)
£'000
361
183
(257)
287
£'000
16,175
183
(257)
16,101
Balance as at 1 April 2020
IFRS2 Share-Based payment charge
Loss for the year
Balance as at 31 March 2021
IFRS2 Share based payments credit
Loss for the year
Balance as at 31 March 2022
-
-
500
-
-
14,691
-
-
627
-
-
(4)
(443)
(175)
(331)
(443)
(175)
15,483
Company Number 05452547
83
Trakm8 Holdings PLC
Notes To The Parent Company Financial Statements (Continued)
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 2022.
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 information)
− 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
84
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.
Company Number 05452547
85
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 and Monte Carlo 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
86
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 £176,000 (2021: loss £257,000). Audit fees for the Company for
the year were £3,000 (2021: £3,000).
4
INVESTMENTS
Cost
At 31 March 2021
Capital contribution in respect of share based payments
At 31 March 2022
Subsidiaries
£'000
11,429
(443)
10,986
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
BOX Telematics Limited England and
Wales
Route Monkey Limited
Scotland
services and
distribution of
vehicle
telematics
Non-trading
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
Proportion
held and
voting rights
Ordinary
100%
Ordinary
100%
Ordinary
100%
Ordinary
100%
Company Number 05452547
87
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
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
Class of
holding
Ordinary
Proportion
held and
voting
rights
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 2022 (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 2022. 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
88
Trakm8 Holdings PLC
Notes To The Parent Company Financial Statements (Continued)
5
TRADE AND OTHER RECEIVABLES
Amounts due from subsidiary undertakings
Social security and other taxes
Prepayments and other receivables
As at 31 March
2022
£'000
10,552
8
19
10,579
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.
6
TRADE AND OTHER PAYABLES
As at 31 March
2022
£'000
49
311
77
437
Amounts due to subsidiary undertakings is unsecured, interest free and repayable on demand.
Trade creditors
Amounts due to subsidiary undertakings
Accruals and other creditors
As at 31 March
2021
£'000
-
456
165
621
7
BORROWINGS
Current
Non current
As at 31 March 2022
Loans
As at 31 March 2021
Loans
Gross
£'000
1,165
4,892
6,057
Arrangement
fee
£'000
(50)
(37)
(87)
Net
£'000
1,115
4,855
5,970
Gross
£'000
902
5,898
6,800
Arrangement
fee
£'000
(47)
(83)
(130)
Bank loan
The Bank loan is repayable as follows:
Within one year
After one and within two years
After two and within five years
5,970
£'000
1,115
4,458
397
5,970
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 2022 the Group owed £4.9m (2021: £5.3m).
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 2022 (2021: £nil) 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. As at 31 March 2022 the Group
owed £1.2m (2021: £1.5m).
Company Number 05452547
89
Net
£'000
855
5,815
6,670
6,670
£'000
855
1,385
4,430
6,670
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 875,000 (2021: 1,000,000) share options were granted during the year to five key management
personnel (2021: nine).
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 (2021: £nil) during the year (other than the Directors). See remuneration report on page 32 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 29.
12 DIVIDENDS
The Company is not proposing a final dividend for the year (2021: £nil).
No Dividend was paid during the year (2021: £nil).
Company Number 05452547
90
Trakm8 Holdings PLC
Officers and Advisors for Trakm8 Holdings PLC
Directors
Matthew Cowley
Tim Cowley
Keith Evans
John Watkins
Mark Watkins
Peter Mansfield
Nadeem Raza
Penny Searles
Jon Edwards (appointed 1 October 2021)
Jon Furber (resigned 30 September 2021)
Company Secretary
Jon Edwards (appointed 2 January 2022)
Lucie Green (1 October 2021 - 1 January 2022)
Jon Furber (resigned 30 September 2021)
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, Sky View, Argosy Road, East Midlands Airport,
Castle Donington, Derby, DE74 2SA
Nominated Adviser and Broker
Allenby Capital Limited
Address: 5th Floor, 5 St Helen’s Place, London, EC3A 6AB
Significant Shareholders
Significant Shareholder
Number of shares
Percentage Holding
Microlise Group Holdings Limited
John Watkins
Edric Property & Investment Company
James Hedges
Tim Cowley
Matt Cowley
10,000,000
7,768,768
3,836,000
2,313,712
2,268,127
1,994,203
Company Number 05452547
20.0%
15.6%
7.7%
4.6%
4.5%
4.0%
91