(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
2023
Annual report and accounts 2023
Trakm8 Holdings PLC
Company Number 05452547
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Trakm8 Holdings PLC
Driving a greener, safer, connected tomorrow by providing actionable insights to customers through
innovative products and solutions.
STRATEGIC REPORT
Overview
At a Glance
Cutting-Edge Innovation
Executive Chairman’s Statement
Our Strategy
Chief Financial Officer’s Report
Key Performance Indicators
Risk Management Framework
Principal Risks and Uncertainties
Driving our Greener Tomorrow
GOVERNANCE REPORT
Chairman’s Introduction
The 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
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Trakm8 Holdings PLC
Strategic Report
OVERVIEW
Financial
Group Revenue
Adjusted Profit before tax
(Loss) before tax
(Loss)/Profit after tax
Net cash generated from operations
Adjusted basic earnings per share
Basic (Loss)/earnings per share
Operational
FY-2023
£20.2m
£0.3m
(£1.2m)
(£0.8m)
£4.3m
0.95p
(1.57p)
FY-2022
£18.1m
£0.0m
(£0.1m)
£0.2m
£3.8m
0.41p
0.37p
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
12% increase in revenues
32% increase to over 348,000 connected devices in operation (FY-2022: 264,000)
7% increase in recurring revenues to £10.5m (FY-2022: £9.8m)
54% increase in software revenues to £2.1m (FY-2022: £1.4m)
Substantial contract extensions with Iceland Foods and Sainsburys
Significant reduction in indirect costs following strategic review
Successfully navigated a large number of supply chain challenges but at an increased cost
Continued inflationary costs pressures across all areas of operations
Outlook
(cid:120)
Insurance expected to be impacted by reinsurance cost and capacity issues in H1
(cid:120) H1 revenues expected to be in line with prior year but with lower operating costs
(cid:120)
The Board expects full year to continue trend of improved performance with strong second half
revenues, including from a significant software contract
Company Number 05452547
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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 uses AI based
algorithms and creates solutions that assist private drivers and commercial fleets with the reduction of risk,
fuel consumption and insurance premiums, while improving productivity, safety and compliance.
As a fully integrated business designing, manufacturing and supporting our own solutions, we provide the best
customer service possible by not having to rely on third parties (apart from the cellular network).
Pioneering solutions
The Group’s product portfolio includes a range of telematics devices, from self-install OBD devices to 4G
integrated telematics cameras. We currently have over a third of a million devices in operation.
Number of connected devices
348,000 (FY-2022: 264,000)
Fleet Management & Optimisation
Fleet Management
Trakm8 has market leading software solutions for the entire fleet management sector built out in our
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 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-2023 revenue of £11.4m (FY-2022: £11.3m) of which £7.0m is recurring revenue (FY-2022: £6.9m) and
£1.9m is software sales (FY-2022: £1.2m)
Number of connected devices
69,000 (FY-2022: 71,000)
Company Number 05452547
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Trakm8 Holdings PLC
Strategic Report (Continued)
AT A GLANCE (CONTINUED)
Insurance & Automotive
Insurance
Insurers and brokers use our telematics hardware and data to better calculate risk among policyholders. Our
self-install and fitted to vehicle devices monitor high-risk driving styles and enable businesses to calculate
relative premiums based on real-world driving data. In addition, our leading AI algorithms allow insurance
companies to speed up and better control the First Notification of Loss (FNOL) claims process, including crash
reconstruction. 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 vehicle 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-2023 revenue of £8.7m (FY-2022: £6.9m) of which £3.4m is recurring revenue (FY-2022: £2.9m) and £0.2m
is software sales (FY-2022: £0.2m)
Number of connected devices
279,000 (FY-2022: 193,000)
Clients
The Group is focusing on client relationships with large corporates. These relationships often enable us to
cross-sell solutions and facilitate a high rate of contract renewals and extensions.
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Trakm8 Holdings PLC
Strategic Report (Continued)
CUTTING-EDGE INNOVATION
During a year of supply chain challenges and a revised and refocussed strategy, our core line of products has
been refreshed and package protected for a number of years to come through the use of the latest generation
components with options for evergreen communication technologies.
Streamlined Product Offerings
Connect 200 - 12V Self Install Device
Compact and cost-effective self-fit device delivering driver location and
behaviour analysis, business-private recording and crash detection to both
our Fleet and Insurance customers helping manage risk and cost
Connect 330 - OBD Self-Install Device
Our market leading Connect 330 is one of the smallest self fit OBD devices
on the market delivering driver behaviour analysis, crash detection and
vehicle diagnostics including true odometer and vehicle fault codes. This
provides a data rich, lower overall cost solution to Fleet and Insurance
customers alike
Connect 430 - Wired Device
Providing the same data rich insights, the C430 provides insurers and fleets
an alternative wired solution ensuring complete vehicle park coverage.
Available as engineer fitted for covert applications as well as a lower cost
self-fit option. The C430 can be paired with in cab driver feedback to help
drive driver engagement to increase fleet efficiencies
Connect 500 - Ruggedised Wired Device
The rugged, waterproof, IP69K rated device has been designed to provide
detailed driver and vehicle information along with the option of
tachograph integration. Aimed at our Fleet customers this device can be
used across multiple platforms including HGV, trailers and non-road assets
driving efficiency savings through improved utilisation and behaviour
RH600 - Integrated Telematics 4G Camera
Our flagship connected 4G camera builds on our marketing leading
telematics adding event driven and on demand video and image capture
helping manage drivers and reduce insurance costs. The optional driver
facing or remote camera helps detect high risk behaviours and allow
delivery of valuable driver coaching.
Insight
Built on our evergreen microservice platform, Insight is our highly flexible
portal for delivering valuable actionable data from vehicles and devices.
Available in packages ranging from basic Fleet telematics to our fully
integrated telematics and Optimisation to our insurance risk management
solution, Insight uses our AI algorithms to increase productivity by up to
33% and cut fuel bills and accident rates by up to 20%.
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Trakm8 Holdings PLC
Strategic Report (Continued)
Future Product Development
RH800 –Integrated Telematics 4G Multi-cam Device
The RH800 will provide driving behaviour data via an
on-board accelerometer which allows for a camera
to be activated on parameters set by the customer
via our Insight platform inclusive of FNOL.
Integrating HD camera functionality with our market
leading telematics means that users can benefit
from a wealth of features, including driving
behaviour scoring, vehicle health alerts, driver ID
support, remote tachograph downloads,
livestreaming and in-cab driver feedback via our
accessory range.
Trakm8’s RH800 connected camera solution will
provide up to 4 channels of HD video and image
uploads. We also have an extensive range of camera
lenses and accessories that allows for bespoke
camera fitment requirements. This is the perfect
solution to help fleets become DVS compliant.
Insight Incident Workbench
Trakm8’s Incident Workbench tool helps customers
investigate incidents, including the context around
the event, the build-up to the incident and the
activity directly afterwards. This is so you can gain a
comprehensive understanding of an incident by
utilising telematics and optionally, camera data.
Main features:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
Incident investigation and reconstruction
workbench
Driving behaviour visibility
Connected camera integration
Driver incident report data
Area of impact visualiser
Vehicle health data
Local weather
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Trakm8 Holdings PLC
Strategic Report (Continued)
EXECUTIVE CHAIRMAN’S STATEMENT
The revenues of the business increased by 12% and posted an adjusted profit before tax of £0.3m (FY-2022:
£0.0m). Loss before tax was £1.2m (FY-2022: £0.1m) and Loss after Tax was £0.8m (FY-2022: profit £0.2m).
In September last year, the Company announced a restructuring to focus on those market and products where
we have been most successful. This was largely completed during the year and once complete will reduce our
annual cash outflow by over £2.5m, helping to mitigate the effect of inflationary pressures on remaining costs.
We reduced our headcount down to 121 which did not impact our rate of order entry overall and resulted in a
profitable second half to the year.
Connections grew by 32% to 348,000 (FY-2022: 264,000). Telematics for insurance/automotive connections
increased by 45%. At the year-end, we had 279,000 insurance/automotive connections (FY-2022: 193,000). The
total number of fleet management connections decreased by 3% over the year to 69,000 (FY-2022: 71,000).
Recurring service revenues increased by 7% to £10.5m (FY-2022: £9.8m).
The impact of the war in Ukraine on inflation and COVID induced component shortages have been widely
reported. Trakm8 navigated through these, avoiding any missed customer deliveries and managed to develop
revised devices to ensure continued supply where necessary. This did however negatively impact direct costs.
It was pleasing to maintain strong cash generation in the business with a cash flow from operations of £4.3m
(FY-2022: £3.8m). The Company paid down the final £0.9m of HMRC deferred payments on VAT/PAYE/NI. This
resulted in a free cash flow of £0.9m (FY-2022: £0.6m) and net debt, excluding IFRS16 lease liabilities, increased
by £0.3m to £5.6m. The Group had £1.1m cash on hand and an undrawn overdraft facility of £0.5m.
The Group issued unsecured convertible loan notes amounting to £1.58m with a repayment or conversion in
September 2025. The Group also extended its loan facilities with HSBC to 31 July 2024 maintaining existing
terms.
Overheads excluding exceptional costs increased by 16% to £11.9m with the restructuring and cost saving
completed mid way through the year. Headcount reduced by 24% during the year with underlying overall payroll
costs 16% lower than at the end of the previous year despite significant salary inflation.
Trakm8 has also made good progress with the process of Science Based Targets with the goal of achieving net
zero emissions by 2050.
A good number of contract wins and renewals were secured with both fleet and insurance clients showing our
commitment to long term customer relationships.
Research and development (‘R&D’)
Trakm8 has maintained a significant level of investment in R&D for another year but following a period of
significant investment has been able to reduce the amount invested going forward. The Board believes that this
new lower level of investment is necessary and sufficient to retain a portfolio of market-leading technology.
Over time as revenues grow, we expect that this investment as a proportion of revenues will further 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 update of all our devices to the most modern and most available
components, finalisation of a multi-camera solution, development of the feature set in Insight particularly for
our two major optimisation clients, and further development of our Insurance Broker platform. As identified in
previous years, the requirement to do more for less cost remains a key strategy as this widens the opportunity
to expand the rate of growth as the return on their investment for our customers improves.
Company Number 05452547
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Trakm8 Holdings PLC
Strategic Report (Continued)
EXECUTIVE CHAIRMAN’S STATEMENT (CONTINUED)
ESG
The Group provides solutions that significantly improve the carbon footprint of clients’ operations through
improved efficiencies and reduced risk costs. Trakm8 also provides device exchange programmes to recycle
hardware thereby reducing the need to make new ones and reducing the cost of telematics to our clients. We
also provide business optimisation consultancy for clients to assess opportunities for further reducing their
carbon footprint.
Trakm8 is also committed to Science Based Target initiative (SBTi) with the objective to reduce our Scope 1 and
Scope 2 emissions and reach Net Zero by 2025. All our company cars are now fully electric and we are analysing
all our uses of energy to minimise our impact on the environment through further internal projects. We will also
work with our supply chain to try to minimise our sourcing from suppliers not committed to reducing their
carbon impact.
Governance
The Group has adopted the Quoted Companies Alliance’s (QCA) Corporate Governance Code for small and mid-
size quoted companies, which the Board considers the most appropriate for the size and structure of the Group.
More information can be found in the Governance Report section of this report and our website.
Please see https://www.trakm8.com/investor-relations/corporate-governance
statement.
for our
full compliance
Dividend
The Group does not propose to recommend a dividend for the year at the forthcoming AGM. However, the
Board will continue to review its dividend policy in light of future results and investment requirements.
People
The number of people Trakm8 employs has reduced further during FY-2023 with reductions across the business.
In total, our staff numbers have reduced by 24% over the year.
Trakm8 has an exceptionally talented team and I would like to thank everyone for their hard work, dedication
and contribution to the ongoing success of the business.
Company Number 05452547
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Trakm8 Holdings PLC
Strategic Report (Continued)
EXECUTIVE CHAIRMAN’S STATEMENT (CONTINUED)
Outlook
In the trading update in April this year, we advised the market that there had been a significant impact on the
insurance market with increased re-insurance costs and some insurance capacity being removed from the
market. We expected that this would impact revenues for the first quarter. This has turned out to be correct
and we now expect that this will continue to significantly impact the second quarter of the financial year.
We expect that Group revenues in the first half of the year will be broadly in line with last year but with much
lower operating costs.
We secured several new Insurance contracts this year and last. The capacity constraints are expected to diminish
in the last calendar quarter of 2023 and therefore the Insurance activity is expected to be strong in the second
half of the year. As with last year, we expect that trading will be significantly loaded on the second half of the
financial year when we also expect to secure a significant software contract. The Board expects that FY2024 will
continue the trend of recent years with improving operational and financial results.
John Watkins
EXECUTIVE CHAIRMAN
3 July 2023
Company Number 05452547
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Trakm8 Holdings PLC
Strategic Report (Continued)
OUR STRATEGY
OUR VISION
Driving our greener, safer, connected tomorrow.
OUR MISSION
Trakm8 is an innovative and diverse UK-based technology company, focused on fleet management, insurance
and automotive telematics, and optimisation. Trakm8 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.
Progress in 2023
The total number of devices in operation increased by 32% in FY-2023. Strong device sales from our Insurance
customers resulted in a 45% increase in connections, net of cancellations. Fleet installed base decreased by
3%.
Focus for 2024
We aim to grow the number of installed devices and connections with more focused marketing spend and
concentrating on growing revenues with new and existing corporate clients rather than focusing on the SME
space.
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
provide wider and more analytics to increase the “share of wallet” in this space. We are increasing our sales
headcount in the insurance area.
2) Delivering a cutting-edge solutions portfolio
We plan to maintain the revised level of investment in research and development, following our change of
strategy during the year, to maintain our market-leading solution portfolio and to meet the demands of our
customers.
Progress in 2023
The Group focused on improving the entire range of devices to update to the most modern, available
components and finalised a multi-camera solution. The Insight Optimisation solution has been expanded to
meet the requirements of our key corporate clients. The insight platform has progressed so well that we deem
it is now in the maintenance phase of life having complete its core development. Improved AI algorithms for
crash detection, crash reconstruction, driver scoring and ADAS continued to be developed.
Company Number 05452547
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Trakm8 Holdings PLC
Strategic Report (Continued)
The Group reduced the annual expenditure on R&D now that the core products and solutions have generated
such good customer satisfaction.
Focus for 2024
We will operate with our reduced but still substantial 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 based on our existing platform.
3) Streamlining our internal operations
The Group will continue to focus on improving operational efficiencies and its costs as a percentage of
revenues.
Progress in 2023
The Group identified another £2.1m of annualised operational cost savings in both direct and indirect costs,
despite revenues increasing. The strategy announced last September to focus on the activities we have been
most successful at has shown good success with higher revenues since then and lower operational costs.
Focus in 2024
In the face of continued inflationary pressures, we will continue to seek cost reduction activities particularly in
respect of hosting, communications, rent, labour efficiency and energy. These are likely to involve some
capital expenditure but with rapid pay back.
Company Number 05452547
12
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Strategic Report (Continued)
CHIEF FINANCIAL OFFICER’S REPORT
Group Revenue (£’000)
of which, Recurring Revenue (£’000)
(Loss) before tax (£’000)
(Loss)/Profit after tax (£’000)
Adjusted Profit before tax1 (£’000)
Basic (Loss)/earnings per share (p)
Adjusted basic earnings per share (p)
1 Before exceptional costs and share based payments
Revenue
2023
20,197
10,466
(1,243)
(783)
306
(1.57)
0.95
2022
18,111
9,806
(122)
187
3
0.37
0.41
Change
+12%
+7%
-919%
-512%
+10,100%
-516%
+137%
Group revenue increased by 12% to £20.2m (FY-2022: £18.1m) with strong second half revenues of £11.2m
versus first half revenues of £9.0m.
Insurance and Automotive revenues grew by 26% to £8.7m (FY-2022: £6.9m) and benefitted from a full year of
shipments to new customers launched late last year, driving both increased device sales and associated service
and maintenance fees. The latter part of the period saw further contract wins and extensions adding additional
customers to increase the diversity and size of our Insurance client base.
Fleet and Optimisation revenues increased to £11.4m (FY-2022: £11.3m) inclusive of £1.9m of software sales
(FY-2022: £1.2m) following strong contract extensions in the second half of the period with both Iceland and
Sainsburys. This resulted in second half revenues increasing to £6.57m versus £4.83m for the first six months.
Recurring revenues remained strong at £7.0m (FY-2022: £6.9m) with slightly higher attrition in device
connections being offset by increased service fees per device as we continue to add features and benefits to
our solutions to both new and existing customers alike.
Loss before tax
The Group reported a loss before tax of £1.2m (FY2022: £0.1m). Gross margin value for the year, inclusive of
exceptional cost of sales, increased to £12.5m (FY-2022: £11.1m) and percentages were slightly increased to
61.8% (FY-2022: 61.3%). The ongoing impact of COVID continued to drive significant cost pressures in material
procurement during the first half of the year, including £0.2m of exceptional costs as we maintained continuity
of supply to our customers. This was offset in the second half with significant high margin software sales and
the supply of materials returning to a less distressed state and therefore lower exceptional costs of just
£0.05m.
Whilst total administration costs increased during the year, we did complete a change in strategy as
announced in September 2022 which significantly reduced operational costs ensuring a reduced cost base for
future periods. This coupled with improved, higher margin trading resulted in a profit before tax of £1.2m in
the second half of the year as expected, compared to a first half loss before tax of £2.4m. This was despite
inflationary pressures in our remaining costs.
Company Number 05452547
13
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Trakm8 Holdings PLC
Strategic Report (Continued)
Adjusted Profit before tax
The Group maintained the progress of the prior year with an adjusted profit of £0.3m (FY-2022: £0.0m).
Improved gross margins were offset by inflationary pressures and increased costs with the most significant
increases being Real Estate costs, Interest and Amortisation of £0.2m, £0.1m and £0.2m respectively.
The reduction in headcount did result in monthly payroll spend reducing by 28% helping reduce second half
expensed staff costs by £0.6m.
Exceptional Costs
Exceptional costs totalled £1.5m (FY-2022: £0.5m) and were dominated by the costs of our restructuring
efforts as previously discussed. These costs include staff costs as our head count reduced from the beginning
of the period by 24% to 121 along with associated professional fees incurred in executing our plan. £0.3m of
premium material costs were incurred to ensure delivery of products to our customers. Other COVID costs
include a contract write down as termination for a Fleet customer’s contracts was agreed due to their trading
performance during and since the pandemic.
Balance Sheet
Non-Current Assets
Net Current Assets
Non-Current Liabilities
Net Assets
2023
£’000
26,200
1,582
8,653
19,129
2022
£’000
25,874
1,704
7,702
19,876
Net Assets decreased by £0.7m to £19.1m (FY-2022: £19.9m) reflecting the loss for the year, after deducting
the IFRS2 Share based payments charges.
Non-current assets increased by £0.3m to £26.2m (FY-2022: £25.9m). This is due to a £0.3m reduction in right
of use assets due to depreciation offset by a £0.3m increase in Intangible assets and £0.3m increase in
Property, plant and equipment. Intangible assets increased due to the continued, albeit reduced, investment
in development in both software and hardware with capitalised development costs in the year totaling £2.7m
(FY-2022: £2.9m), offset by amortisation of £2.3m (FY-2022: £2.1m).
Non-Current Liabilities increased during the year with the issue of a new £1.58m convertible loan note which
helped finance our change of strategy and restructure. This was offset by a full year of capital repayments to
both HSBC and Maven following their recommencement in the second half of FY-2022.
Company Number 05452547
14
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Strategic Report (Continued)
Cash Flow
Net Cash generated from operations
Investing activities
Free Cash Flow1
Financing activities
Increase/(Decrease) in Cash in Year
Net Debt2
2023
£’000
4,314
(3,419)
895
(780)
115
5,618
2022
£’000
3,810
(3,254)
556
(1,992)
(1,366)
5,395
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-2023 net debt excludes £1.3m IFRS 16 lease liability.
Cash from operating activities increased by £0.5m to £4.3m (FY-2022: £3.8m) with improved working capital
management. This was despite the final repayment of £0.9m to HMRC under the time to pay agreement
negotiated at the end of FY-2021. Cash from operating activities also included R&D tax credit cash receipts of
£0.7m (FY-2022: £0.7m) which reflects the Group’s continued investment in cutting edge development.
Free cash inflow of £0.9m (FY-2022: £0.6m) is due to the Net Cash generated from operating activities as
detailed above, offset by cash outflows from investing activities which increased by £0.2m to £3.4m (FY-2022:
£3.2m).
Financing activities was an outflow of £0.8m (FY-2022: £2.0m). A full year of repayments in relation to our
agreements with HSBC and Maven drove outflows of £1.1m (FY2022: £0.7m) but new unsecured convertible
loan notes were issued totaling £1.58m which assisted the financing of our restructuring activities.
Net Debt
Net debt excluding IFRS 16 lease liability of £1.3m (FY-2022 £1.6m) increased by £0.3m to £5.6m (FY-2022:
£5.4m). Cash balances total £1.1m (FY-2022: £1.0m) and total borrowings including IFRS16 lease liability of
£1.3m totals £6.9m (FY-2022: £6.9m). Borrowing comprised £4.1m (FY-2022: £4.9m) term loan with HSBC, a
£0.8m (FY-2022: £1.2m) term loan with MEIF WM Debt LP, Unsecured Convertible Loan Notes of £1.6m (FY-
2022: £nil) and £1.6m (FY-2022: £2.0m) 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
15
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Trakm8 Holdings PLC
Strategic Report (Continued)
KEY PERFORMANCE INDICATORS
Achieving our objectives
The Board monitors the following key performance indicators to ensure the objectives of the Group are being
achieved.
Solutions Revenue
£20.2m: 2023
£18.2m: 2022
£16.0m: 2021
Recurring Service
Revenue
£10.5m 2023
£9.8m: 2022
£9.4m: 2021
Connected devices -
Insurance/Automotive
279,000: 2023
193,000: 2022
184,000: 2021
Connected devices –
Fleet Management
69,000: 2023
71,000:2022
70,000: 2021
Performance in 2023
New contract wins in
Insurance drove strong
growth in Insurance
revenues.
Contract extensions and
upgrades in Fleet
increased software
revenues. Higher fees per
device also increased
Fleet revenues.
Focus for 2024
Sales and marketing
spend will focus on core
corporate opportunities
both with existing and
new clients.
Additional sales resource
will be added to focus on
broadening our Insurance
customer base.
Performance in 2023
Total recurring revenues
earned during the year
increased by 7% to
£10.5m due to the
increased number of
connections and higher
per device service fees
on Fleet.
Focus for 2024
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 by
increasing our data
analytics services.
Performance in 2023
This refers to the
amount of telematics
devices reporting in
operation from our
insurance & automotive
customers. Connected
devices in this market
increased by 45% due to
growth from newly
launched customers.
Focus for 2024
Continue to expand the
number of Insurance
clients and benefit from
growth at existing
customers.
Benefit from the
expansion of the
connected car services.
Performance in 2023
This refers to the
amount of telematics
devices in operation
from our fleet
customers. The total
number of devices
from our Fleet
business decreased
by 3% due to slightly
increased levels of
attrition.
Focus for 2024
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.
Company Number 05452547
16
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Strategic Report (Continued)
KEY PERFORMANCE INDICATORS (CONTINUED)
Adjusted profit/ loss before tax
Gross Margin
£0.3m Profit: 2023
£0.0m Profit: 2022
£0.3m Loss: 2021
61.8%: 2023
61.3%: 2022
58.4%: 2021
Net cash generated from
Operating Activities
£4.3m: 2023
£3.8m: 2022
£4.7m: 2021
Performance in 2023
Adjusted profit before Tax
(before exceptional costs and
share based payments) was
£0.3m higher than the prior year
as a result of higher revenues.
Performance in 2023
Gross margin percentage slightly
increased to 61.8%. This small
increase was due to higher levels
of software sales offset by
increased direct material costs.
Performance in 2023
Cash generation from operating
activities improved on the prior
year despite a HMRC debt
repayment of £0.9m through
improved working capital
management.
Focus for 2024
The Group aims to achieve
improvement of revenues
combined with a lower cost base
as a result of the significant cost
savings realised over the last few
years.
Focus for 2024
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.
Focus for 2024
Increase levels of cash generation
from Operating Activities through
higher profitability. Further focus
on working capital improvements
having fully repaid HMRC in 2023.
Company Number 05452547
17
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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
18
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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 in conjunction with the Board, 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
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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
Deteriorating
economic
climate
1, 2
Increase in
operational costs
Reduction in
revenues
Adverse working
capital
movements
Cyber-attack
and data
security
2
Reputational
impact
Deterioration in
customer
relations
Liability claims
The Group like many other businesses and individuals across the UK
and Europe has experienced increases in costs through the last 12
months. We continue to strive for reductions in these through regular
review and projects to gain efficiency savings wherever possible.
Our Insurance revenues are linked to the sale and renewal of Insurance
policies which can be affected by Insurance Premium capacity and cost
along with the availability of practical driving tests. In recent years, we
have increased the diversity and quantity of Insurance customers
making the business more resilient to any deteriorating economic
conditions or temporary market changes.
In challenging times, Fleet customers can reduce or delay investment
decisions but our products and services are well placed to help
customers achieve efficiency improvements and cost reductions which
continues to make it a compelling solution even in challenging market
conditions.
Our recurring service revenue model also ensures revenues from the
existing customer base. We regularly monitor our sales order book and
pipeline to review our performance, make decisions on discretionary
costs including sales and marketing investments and review our
commitments with supply chain to mitigate challenges wherever
possible.
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 review next generation hardware and software
solutions coming to market to ensure we make use of these and reduce
the risk of a cyber event.
We operate a secure development lifecycle and undertake regular
independent penetration testing of our devices and hosting
environments from CREST certified testers.
The Group also ensures adequate insurance is in place in the event of a
Cyber event.
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Trakm8 Holdings PLC
Strategic Report (Continued)
PRINCIPAL RISKS AND UNCERTAINTIES (continued)
Principal Risk
Attracting and
maintaining
high quality
employees
1,2,3
Operating in a
fast moving
technology
industry where
we will always
be at risk from
new products
being launched
1,2
Significant
operational
failure
2
Potential Impact Mitigation
Loss of key
personnel
We provide interesting work within a growing sector where we have
significant opportunity and maintaining this is key to employee
retention. To complement this, regular reviews of market rates ensure
competitive renumeration packages.
Potential business
disruption
Breakdown of
communication
and misalignment
Decelerating sales
growth and
affecting profit
Loss of significant
customer
Delay in achieving
projected
revenues
OEM fit
telematics to all
strategy
Autonomous cars
Reputational
impact
Deterioration in
customer
relations
Reduction in
revenues,
profitability and
cash generation
Contractual
penalties and
litigation
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 and provide flexibility to the team wherever possible.
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.
Our recent refresh of all our products means customers are able to
select 4G enabled devices across our product range meaning a future
proof field population for their assets.
We undertake rigorous testing using our in-house testing team,
synthetic testing has been enhanced by retrofitting automated test
suites for unit and integration testing, an additional set of test resource
focussed on trials of real world test cases, edge cases and specific
customer solutions to test the broadest possible functionality has been
introduced into the release process. Release retrospectives
complement this activity to drive kaizen improvements into our
software test & release process.
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.
21
Company Number 05452547
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Trakm8 Holdings PLC
Strategic Report (Continued)
PRINCIPAL RISKS AND UNCERTAINTIES (continued)
Potential Impact Mitigation
Reputational
Impact
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.
Principal Risk
Adverse mobile
network
changes
2
Access to long
term and
working capital
1,2
Electronics
supply chain
under
constraint
1,2
Deterioration in
customer
relations
Reduction in
revenues,
profitability and
cash generation
Ability to deliver
business plans
Long lead-times
Cost Pressure
Customer
deliveries delayed
Business
disruption from
Communicable
Diseases
1,2,3
Supply chain
disruption due to
Communicable
diseases such as
COVID-19
Potential
outbreak of
infection in
members of staff
Reduced trading
We rely on mobile network suppliers to provide a quality of service and
investment in suitable reliable infrastructure. The same is true for the
GPS network and the Internet.
We maintain relationships for the supply of mobile network services to
provide mitigation for any supply or service-related issues.
We maintain regular discussions with banks and other financial
institutions.
We regularly review medium term capital requirements.
The past 18 months have been challenging and significant costs and
delays were encountered - there are now signs that this constraint has
significantly reduced. Whilst the ongoing war in Ukraine has yet to
effect our supply chain, it remains a risk should this escalate or widen in
scale.
As a fully vertically integrated business our design engineers work
alongside supply chain to mitigate these issues with huge success to
date and the ability to respond to future challenges should they arise.
We continue to have the support of our valued world class distributors
and manufacturers in this activity.
As an additional mitigation, commitments to supply chain have been
extended to try and ensure continuity of supply for future months.
We monitor our supply chain closely and working with our distributors
and manufacturers maintain order coverage to ensure enough
inventory to mitigate short term disruptions.
Many of our teams continue to employ a hybrid approach to office and
home working with the ability to switch to fully remote should it be
required.
Our recurring revenue model ensures revenues and cash are generated
from the existing customer base mitigating any short term reductions in
trading.
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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.
We estimate that our current Fleet business alone saves in excess of 50,000 tonnes of CO2 per year through
improved behaviours and optimised use of assets, far outweighing our own emissions through trading.
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 recognises organisations contributing to wider environmental
objectivew.
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. In addition, we have now
applied to join the Science Based Targets Initiative (SBTi – www.sciencebasedtargets.org).
Our Greenhouse gas (GHG) emissions are as follows:
Emissions from combustion of fuel in tCO2e (Scope 1)
Emissions from purchased electricity in tCO2e (Scope
2)
Emissions from other purchasing activities in tCO2e
(Scope 3)
Total Emissions tCO2e
Grams of CO2e per £ revenue
FY-2023
FY-2022
35.70
166.24
73.83
144.29
FY-2018
(Comparison
Year)
112.71
160.28
3,688.01
3,294.84
3,854.12
3,889.95
192.60
3,512.96
193.97
4,127.11
215.57
We continue to strive for improvements and initiatives planned for the coming period are as follows:
-
-
-
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 and
reduce impact of commuting
Continue to support customers in increasing their rate of device recycling
By order of the Board
Jon Edwards
COMPANY SECRETARY
3 July 2023
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Trakm8 Holdings PLC
Corporate Governance Report (Continued)
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 three 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.
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Trakm8 Holdings PLC
Corporate Governance Report (Continued)
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 Madeline Cowley, he founded
Trakm8 in 2002 and is now responsible for the Group Product Strategy and the Advanced Engineering function.
Madeline Cowley
AI Director
One of the founders of Trakm8 along with Tim Cowley, Maddie 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, Maddie now leads the in-house
AI team and is passionate about algorithms, machine learning, computer vision and data science.
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Trakm8 Holdings PLC
Corporate Governance Report (Continued)
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 principal 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 recent 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 348,000. 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. We also
have a Works Council which the senior executive team meet with periodically to gain additional feedback.
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Trakm8 Holdings PLC
Corporate Governance Report (Continued)
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
principal 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.
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Trakm8 Holdings PLC
Corporate Governance Report (Continued)
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:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
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.
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Trakm8 Holdings PLC
Corporate Governance Report (Continued)
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.
(cid:120)
(cid:120) Nadeem Raza is a non-executive director.
(cid:120)
Penny Searles is an independent non-executive director.
(cid:120)
Jon Edwards, as CFO, is responsible for all the financial aspects of the company.
(cid:120) Mark Watkins is COO and responsible for all aspects of Operations and Engineering.
(cid:120)
(cid:120) Madeline 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
29
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Trakm8 Holdings PLC
Corporate Governance Report (Continued)
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 2023 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
Nadeem Raza
Penny Searles
Jon Edwards
Mark Watkins
Madeline Cowley
Tim Cowley
Nominations committee
12
12
11
10
11
12
12
12
10
2
2
2
2
-
-
-
-
-
1
1
1
1
1
-
-
-
-
1
1
1
1
1
-
-
-
-
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
30
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Trakm8 Holdings PLC
Corporate Governance Report (Continued)
Remuneration committee
The Remuneration Committee’s terms of reference include making recommendations on Directors’
compensation packages to ensure that the Group enjoys and retains an appropriate level of motivated
resources. The Committee engages with external consultants as and where it is deemed beneficial.
The Group has adopted and operates a share dealing code for Directors and employees in accordance with the
requirements of the 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
3 July 2023
Company Number 05452547
31
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Trakm8 Holdings PLC
Directors’ Report
DIRECTORS’ REPORT
The Directors submit their Directors’ Report and the audited financial statements of the Group for the year
ended 31 March 2023.
Trakm8 Holdings PLC is a public listed company incorporated and domiciled in England (Company Number
05452547) whose shares are quoted on AIM, a market operated by the London Stock Exchange plc.
PRINCIPAL ACTIVITIES
The principal activities of the Trakm8 Group are the development, manufacture, marketing and distribution of
telematics equipment and services and fleet optimisation solutions. Trakm8 Holdings PLC is the holding
company for the Trakm8 Group.
FINANCIAL RISK MANAGEMENT
The Group manages its key financial risks as follows. Further details can be found in note 28.
Liquidity risk
The Group’s objective is to maintain a balance between continuity and flexibility of funding through the use of
borrowings and financial assets with a range of maturities. It is also the Group’s policy to mitigate the risk of
borrowings by maintaining cash reserves. The Group currently has an unused overdraft facility of £0.5m.
Currency risk
The Group endeavours to minimise its foreign currency exposure by trading in Sterling wherever possible. The
two principal foreign currencies used are the US Dollar and the Euro and where possible we endeavour to
match inflows and outflows.
Interest rate risk
The Group regularly monitors the risk of increasing interest rate and the effect this would have on our total
interest charges. Currently, some of 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 2023 are shown in the Consolidated Statement of
Comprehensive Income on page 45. The Directors do not recommend the payment of a dividend (2022: £nil).
Company Number 05452547
32
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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 £2.7m and £0.4m 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
£1,119,000 and undrawn overdraft facility of £500,000 at 31 March 2023 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 62.
FUTURE DEVELOPMENTS
Consideration of the impact of the supply chain challenges and the condition of wider economy, particularly
the Insurance market, 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 customers’ 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 acquired insurance customers.
The Group will continue to invest in its 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
33
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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
Nadeem Raza
Penny Searles
Jon Edwards
Mark Watkins
Madeline Cowley
Tim Cowley
DIRECTORS AND THEIR INTERESTS
At 31 March 2023, the Directors’ interests in the shares of the Company are detailed below:
1p
Ordinary
shares at
31 March
2023
7,768,768
381,119
600,926
-
4,418
318,310
1,994,203
2,268,127
% of issued
Ordinary
share capital
(50,004,002
Ordinary
shares)
15.55%
0.76%
1.20%
-
0.01%
0.64%
3.99%
4.54%
1p
Ordinary
shares at
31 March
2022
7,768,768
381,119
600,926
-
4,418
318,310
1,994,203
2,268,127
% of issued
Ordinary
share capital
(50,004,002
Ordinary
shares)
15.55%
0.76%
1.20%
-
0.01%
0.64%
3.99%
4.54%
John Watkins
Keith Evans
Nadeem Raza*
Penny Searles
Jon Edwards
Mark Watkins
Madeline Cowley
Tim Cowley
*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 2023
or on the date on which these financial statements were approved.
Company Number 05452547
34
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Directors’ Report (Continued)
DIRECTORS’ REMUNERATION
The Directors’ remuneration for the year ended 31 March 2023 was:
£’000
Salaries &
benefits
Fees
Total
remuneration
to year ended
31 March 2023
Pension
contribution
Total aggregate
emoluments to
year ended 31
March 2023
Total aggregate
emoluments to
year ended 31
March 2022
John Watkins
Keith Evans
Nadeem Raza
Penny Searles
Jon Edwards
Mark Watkins
Madeline Cowley
Tim Cowley
Total
339
38
38
38
122
177
112
116
980
-
9
-
-
-
-
-
-
9
339
47
38
38
122
177
112
116
989
-
-
1
1
4
16
3
3
28
339
47
39
39
126
193
115
119
1,017
289
36
37
37
56
160
121
112
848
Company Number 05452547
35
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Directors’ Report (Continued)
DIRECTORS’ SHARE OPTIONS
At 31 March 2023 the following options had been granted to the Company's Directors and remain current and
unexercised:
Option
exercise
price
£0.45
£0.34
£0.34
£0.33
Balance as
at 1 April
2022
250,000
125,000
300,000
100,000
Granted
during
year
-
-
-
-
Exercised
during
year
-
-
-
-
Expired/
forfeited
during year
-
-
-
-
Balance as at
31 March
2023
250,000
125,000
300,000
100,000
John Watkins
Keith Evans
Madeline Cowley
Tim Cowley
Mark Watkins
Jon Edwards
Nadeem Raza
Penny Searles
£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
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
25,000
25,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Expiry date
21/01/2024
04/03/2029
04/03/2029
23/07/2030
27/05/2029
27/05/2029
26/11/2030
21/01/2024
04/03/2029
26/11/2030
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
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
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 2022 and 31 March 2023 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
36
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Trakm8 Holdings PLC
Directors’ Report (Continued)
STATEMENT AS TO DISCLOSURE OF INFORMATION TO THE AUDITORS
Each Director who was in office on the date of approval of these financial statements has confirmed, as far as
they are aware, that there is no relevant audit information of which the auditors are unaware. Each of the
Directors has confirmed that they have taken all the steps that they ought to have taken as Directors in order
to make themselves aware of any relevant audit information and to establish that it has been communicated
to the auditor.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable law and regulation.
Company law requires the directors to prepare financial statements for each financial year. Under that law the
directors have prepared the group financial statements in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the United Kingdom 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:
(cid:120)
(cid:120)
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;
(cid:120) make judgements and accounting estimates that are reasonable and prudent; and
(cid:120) 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 3 July 2023.
Jon Edwards
Company Secretary
Company Number 05452547
37
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Trakm8 Holdings PLC
Officers and Advisors for Trakm8 Holdings PLC
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 2023 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:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
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 2023 and of the group’s loss 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:
(cid:120)
(cid:120)
(cid:120)
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;
and
evaluating disclosures in the financial statements.
Company Number 05452547
38
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Officers and Advisors for Trakm8 Holdings PLC
The key observations arising with respect to our evaluation included:
(cid:120) Disclosures made in the notes to the financial statements appear appropriate
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:
(cid:120) 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;
(cid:120) Determining the allocation of consideration on a fair value basis between components of multi-element
contracts; and
(cid:120) 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:
(cid:120) 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;
(cid:120) Testing of the fair values of revenues attributed to different deliverables within the contract by reference to
appropriate supporting evidence, including standalone selling prices for different elements of revenue or,
where these do not exist, similar objective evidence derived from contract pricing over a number of years;
and
(cid:120) 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.
Company Number 05452547
39
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Officers and Advisors for Trakm8 Holdings PLC
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 £2.7m 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:
(cid:120) whether it is probable that the expected future economic benefits attributable to the asset will flow to the
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
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,
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.
Company Number 05452547
40
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Officers and Advisors for Trakm8 Holdings PLC
Response
We have performed audit procedures over management's impairment assessment, including the following
procedures:
(cid:120) Testing of the integrity of the cash flow model and the methodology applied;
(cid:120) Assessing key assumptions including future cash flows, discount rates and growth rates, including sensitivity
of these assumptions.
(cid:120) 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.
(cid:120) Considering 2 year extended forecasts approved by the board.
(cid:120) Assessing the terminal growth rate against long-term GDP growth in the UK and testing the calculation of
the discount rate.
(cid:120) 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.
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 £192,000. 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.
Company Number 05452547
41
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Officers and Advisors for Trakm8 Holdings PLC
The materiality for the parent company financial statements as a whole was set at £153,000. 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 1% 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 £172,000, 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 principal trading subsidiaries 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
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:
(cid:120)
(cid:120)
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.
Company Number 05452547
42
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Officers and Advisors for Trakm8 Holdings PLC
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:
(cid:120)
(cid:120)
(cid:120)
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
(cid:120) 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.
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:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
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
Company Number 05452547
43
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Officers and Advisors for Trakm8 Holdings PLC
(cid:120)
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.
Whilst considering how our audit work addressed the detection of irregularities, we also consider the likelihood
of detection based on our approach. Irregularities from fraud are inherently more difficult to detect than those
arising from error.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including
those leading to a material misstatement in the financial statements or non-compliance with regulation. This
risk increases the more that compliance with a law or regulation is removed from the events and transactions
reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves
intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for
preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
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
Statutory Auditor
Sky View, Argosy Road
East Midlands Airport
Derby
DE74 2SA
3 July 2023
Company Number 05452547
44
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Consolidated Statement of Comprehensive Income For The Year Ended 31 March 2023
REVENUE
Cost of sales
Exceptional cost of sales
Total cost of sales
Gross profit
Other income
Administrative expenses excluding exceptional costs
Exceptional administrative costs
Total administrative costs
OPERATING (LOSS)/PROFIT
Finance income
Finance costs
LOSS BEFORE TAXATION
Corporation tax
Note
6
9
7
9
8
10
11
Year ended 31
March 2023
£'000
20,197
Year ended 31
March 2022
£'000
18,111
(7,445)
(261)
(7,706)
(7,004)
-
(7,004)
12,491
11,107
16
13
(11,860)
(1,272)
(13,132)
(10,193)
(568)
(10,761)
(625)
359
50
(668)
67
(548)
(1,243)
460
(122)
309
(LOSS)/PROFIT FOR THE YEAR
(783)
187
OTHER COMPREHENSIVE INCOME
Items that may be subsequently reclassified to profit or loss:
Exchange differences on translation of foreign operations
TOTAL OTHER COMPREHENSIVE INCOME
TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR
ATTRIBUTABLE TO OWNERS OF THE PARENT
9
9
10
10
(774)
197
LOSS BEFORE TAXATION
Exceptional Cost of Sales
Exceptional administrative costs
IFRS2 Share based payments charge/(release)
ADJUSTED PROFIT BEFORE TAX
(1,243)
261
1,272
16
306
(122)
-
568
(443)
3
8
(LOSS)/PROFIT PER ORDINARY SHARE (PENCE) ATTRIBUTABLE TO OWNERS OF THE PARENT
Basic
Diluted
The results relate to continuing operations.
13
13
(1.57p)
(1.57p)
0.37p
0.37p
Company Number 05452547
45
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Consolidated Statement of Changes in Equity For The Year Ended 31 March 2023
Balance as at 1 April
2021
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 release
Transactions with
owners
Balance as at 1 April
2022
Comprehensive income
Loss for the year
Other comprehensive
income
Exchange differences on
translation of overseas
operations
Total comprehensive
loss
Transactions with
owners
IFRS2 Share based
payments charge
Convertible Loan
Transactions with
owners
Balance as at 31 March
2023
Share
capital
Share
premium
Merger
reserve
Translation
reserve
Treasury
reserve
£'000
£'000
£'000
£'000
£'000
Convertible
loan
reserve
£'000
Retained
earnings
Total
equity
£'000
£'000
500
14,691
1,138
193
(4)
-
3,604
20,122
-
-
-
-
-
-
-
-
187
187
-
10
-
-
-
10
-
-
-
10
-
-
-
-
-
-
-
-
-
-
-
-
-
-
187
197
(443)
(443)
(443)
(443)
500
14,691
1,138
203
(4)
-
3,348
19,876
-
-
-
-
(783)
(783)
-
-
-
-
-
-
-
9
-
-
9
-
-
-
-
9
(783)
(774)
-
-
-
-
-
-
16
16
-
-
-
-
-
11
-
11
-
-
-
-
-
11
16
27
500
14,691
1,138
212
(4)
11
2,581
19,129
Company Number 05452547
46
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Consolidated Statement of Financial Position As At 31 March 2023
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
Convertible loan reserve
Retained earnings
Note
As at 31 March
2023
£'000
As at 31 March
2022
£'000
14
15
16
18
17
18
20
21
21
22
20
21
21
22
19
23
23,382
1,103
1,711
4
26,200
23,012
803
2,032
27
25,874
2,426
7,948
856
1,119
12,349
1,322
7,944
709
1,004
10,979
(9,196)
(1,031)
(466)
(74)
(10,767)
(7,521)
(1,115)
(612)
(27)
(9,275)
1,582
1,704
27,782
27,578
(828)
(5,435)
(1,113)
(166)
(1,111)
(8,653)
(626)
(4,855)
(1,367)
(112)
(742)
(7,702)
19,129
19,876
500
14,691
1,138
212
(4)
11
2,581
500
14,691
1,138
203
(4)
-
3,348
TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
19,129
19,876
The notes on pages 49 to 87 are an integral part of these consolidated financial statements. These financial
statements were approved by the Board of directors and authorised for issue on 3 July 2023 and are signed on its
behalf by:
John Watkins - Director
Jon Edwards - Director
47
Company Number 05452547
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Consolidated Statement of Cash Flows For The Year Ended 31 March 2023
Notes
Year ended 31
March 2023
Year ended 31
March 2022
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
£'000
4,314
£'000
3,810
(749)
-
(12)
(2,658)
(420)
125
(48)
(2,911)
NET CASH USED IN INVESTING ACTIVITIES
(3,419)
(3,254)
CASH FLOWS FROM FINANCING ACTIVITIES
New convertible loan note
Loan arrangement fees
Repayment of loans
Repayment of obligations under lease agreements
Interest paid
1,580
(36)
(1,095)
(619)
(610)
-
(5)
(743)
(674)
(500)
NET CASH USED IN FINANCING ACTIVITIES
(780)
(1,922)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
115
(1,366)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
1,004
2,370
CASH AND CASH EQUIVALENTS AT END OF YEAR
1,119
1,004
Company Number 05452547
48
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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 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 2023.
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
49
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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 profit or loss 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
50
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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
51
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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
52
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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
53
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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
54
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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
55
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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 model, whilst schemes which include an exercise
restriction are measured using the Monte Carlo option pricing model. The expected life used in the models has
been adjusted, based on management’s best estimate, for the effect of non-transferability, exercise
restrictions, and behavioural considerations.
Company Number 05452547
56
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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
57
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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
58
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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
59
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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.
Convertible loan reserve represents the value which gives the holder the right to convert into shares.
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
60
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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 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
61
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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 52% 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 20.
The Group extended its debt facilities with HSBC in March 2023 in line with the existing arrangement inclusive
of quarterly covenant tests of both Leverage and Debt Service. In addition the HMRC arrangement to repay
£1.7m of VAT and PAYE accrued during the COVID-19 pandemic was settled during the year. During the year a
new Convertible Loan note with existing shareholders was secured totalling £1.58m, helping to finance a
significant restructure following a review of the company strategy.
At the year end the Group has cash balances of £1,119,000 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 the wider economic climate reduces demand, across both Insurance and Automotive device sales and
Fleet new business contracts, as well as potential increases in material costs incurred.
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
62
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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
63
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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
64
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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 2023
Year ended 31
March 2022
£'000
20,197
11,475
8,722
£'000
18,111
11,217
6,894
Year ended 31
March 2023
Year ended 31
March 2022
£'000
19,769
-
-
397
31
20,197
£'000
17,784
-
-
272
55
18,111
Year ended 31
March 2023
£'000
16
16
Year ended 31
March 2022
£'000
13
13
Company Number 05452547
65
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
8 OPERATING (LOSS)/PROFIT
The following items have been included in arriving at operating (loss)/profit:
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 cost of sales (see note 9)
Exceptional administrative costs (see note 9)
Auditors’ remuneration
Year ended
31 March
2023
Year ended
31 March
2022
£'000
£'000
227
540
176
630
2,300
96
395
222
32
5,693
261
1,272
2,134
34
669
263
22
5,187
-
568
- Fees payable to the Company’s auditors for the audit of the parent
company and consolidated financial statements
100
77
Adjusted profit before tax is monitored by the Board and measured as follows:
Loss before tax
Exceptional costs (note 9)
Share based payments
Adjusted profit before tax
9 EXCEPTIONAL COSTS
Exceptional costs of sales
Covid-19 - component acquisition
Exceptional administrative costs
Covid-19 - other costs
Integration & restructuring costs
Furlough grant income
Total exceptional administrative costs
Total exceptional costs
Company Number 05452547
Year ended
31 March
2023
£'000
(1,243)
1,533
16
306
Year ended
31 March
2022
£'000
(122)
568
(443)
3
Year ended
31 March
2023
£'000
Year ended
31 March
2022
£'000
261
-
261
-
234
1,038
-
646
107
(185)
1,272
568
1,533
568
66
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
9 EXCEPTIONAL COSTS (continued)
During the year the Group completed a review of its strategy and significantly reduced its sales and marketing
resources, engineering investment and associated support functions. In addition, the Group completed a
refresh of it’s hardware platforms and narrowed its product range accordingly. Costs were incurred during the
period through a reduction in headcount, inventory write down, non-refundable marketing event deposits and
associated professional service costs.
In the prior year, restructuring costs were also incurred as a result of headcount reduction.
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 inventory 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, the group terminated a contract with a customer affected by ongoing issues
following the pandemic.
In the 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 loans
Amortisation of debt issue costs
Interest on lease liabilities
11
INCOME TAX
Tax credit for the year
Year ended 31
March 2023
£'000
510
58
100
668
Year ended 31
March 2022
£'000
388
48
112
548
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 2023
£'000
(856)
27
(829)
Year ended 31
March 2022
£'000
(708)
26
(682)
369
-
-
369
257
117
(1)
373
Income tax credit
Total
(460)
(309)
Company Number 05452547
67
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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 (2022: 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% (2022: 19%)
Effects of:
Expenses not deductible/income not taxable
R&D relief enhanced deduction
Adjustments in respect of prior periods:
Opening and closing deferred tax rate adjustment
Other movements
Total tax credit
Tax on exceptional items
Deferred tax
Current tax
Year ended 31
March 2023
£'000
(1,243)
Year ended 31
March 2022
£'000
(122)
(236)
(21)
(368)
28
27
91
19
(460)
(23)
(94)
(432)
37
26
174
3
(309)
The tax effect of exceptional items is to increase the tax credit by £291,000 (2022: £108,000).
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% (2022: 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
68
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
12
EMPLOYEES
Year ended
31 March
2023
Year ended
31 March
2022
No.
No.
The average monthly number of persons (including Directors) employed by the Group was:
Engineering
Sales, Marketing & Customer Services
Manufacturing and Logistics
Administration
57
51
25
18
151
56
58
29
22
165
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
2023
Year ended
31 March
2022
£'000
4,935
637
16
105
5,693
£'000
4,937
584
(443)
109
5,187
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
2023
Year ended
31 March
2022
£'000
£'000
1,279
38
10
1,327
1,099
35
(471)
663
The key management personnel are the Directors and three (2022:1) senior managers who have been
identified as key management personnel.
The key management personnel made gains of £nil (2022: £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
69
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
13 EARNINGS PER ORDINARY SHARE
The earnings per Ordinary share have been calculated in accordance with IAS 33 using the (loss)/profit for the
year and the weighted average number of Ordinary shares in issue during the year as follows:
(Loss)/Profit for the year after taxation
Exceptional administrative costs
Share based payments
Tax effect of adjustments
Adjusted profit for the year after taxation
Number of Ordinary shares of 1p each at 31 March
Basic weighted average number of Ordinary shares of 1p each
Diluted weighted average number of Ordinary shares of 1p each
Basic (loss)/profit per share
Diluted (loss)/profit 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 2023
£'000
(783)
1,533
16
(291)
475
Year ended 31
March 2022
£'000
187
568
(443)
(108)
204
No.
50,004,002
50,004,002
50,004,002
(1.57p)
(1.57p)
2.48p
0.03p
0.95p
0.95p
No.
50,004,002
50,004,002
50,056,538
0.37p
0.37p
0.92p
(0.89p)
0.41p
0.41p
Company Number 05452547
70
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
14
INTANGIBLE ASSETS
Goodwill
Intellectual
property
Customer
relationships
Development
costs
Software
Total
£'000
£'000
£'000
£'000
£'000
£'000
10,417
1,920
100
19,242
1,759
33,438
-
-
-
2,521
46
2,567
-
-
-
390
2
392
10,417
1,920
100
22,153
1,807
36,397
-
-
-
2,320
-
2,320
-
-
-
338
12
350
10,417
1,920
100
24,811
1,819
39,067
-
-
-
-
-
1,920
-
1,920
-
1,920
100
-
100
-
100
7,974
1,943
9,917
2,125
12,042
1,257
191
1,448
175
1,623
11,251
2,134
13,385
2,300
15,685
10,417
-
-
12,769
196
23,382
10,417
-
-
12,236
359
23,012
10,417
-
-
11,268
502
22,187
COST
As at 1 April 2021
Additions - Internal
developments
Additions - External
purchases
As at 31 March 2022
Additions - Internal
developments
Additions - External
purchases
As at 31 March 2023
AMORTISATION
As at 1 April 2021
Charge for year
As at 31 March 2022
Charge for year
As at 31 March 2023
NET BOOK AMOUNT
As at 31 March 2023
As at 31 March 2022
As at 1 April 2021
Company Number 05452547
71
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
14
INTANGIBLE ASSETS (continued)
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-2024 which have been reviewed and
approved by the Board and projections for FY-2025. Forecasts for the subsequent 3 years have been produced
based on 7% (a prudent growth rate for the 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.
The forecast show sufficient headroom of cash flow above the net assets value when we have performed
sensitivity analysis.
1. An increase in the discount rate to 13% shows headroom of
£8m.
2. A decrease in the growth rate to 3% shows headroom of £15m.
3. A decrease in the terminal growth rate to 1% shows headroom of £20m.
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 3% and decrease in terminal growth rate from 2% to 1% and
increase the discount rate from 10% to 14%.
Or triggered by:
1. Decrease in net cash generated from operating activities for FY-2024 and FY-2025 of 14%.
Amortisation expenses of £2,300,000 (2022: £2,134,000) have been charged to Administrative expenses in the
Consolidated Statement of Comprehensive Income.
Company Number 05452547
72
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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
154
-
(86)
68
-
-
-
68
1,441
461
(351)
1,551
-
732
(254)
2,029
356
15
-
371
-
17
(7)
381
7
-
-
7
-
-
-
7
1,958
476
(437)
1,997
-
749
(261)
2,485
18
7
-
25
-
7
-
32
701
155
(49)
807
-
207
(32)
982
341
14
-
355
-
13
(7)
361
7
-
-
7
-
-
-
7
1,067
176
(49)
1,194
-
227
(39)
1,382
36
1,047
20
-
1,103
43
744
16
-
803
136
740
15
-
891
COST
As at 1 April 2021
Additions
Disposals
As at 31 March 2022
Reclassification
Additions
Disposals
As at 31 March 2023
DEPRECIATION
As at 1 April 2021
Charge for year
Disposals
As at 31 March 2022
Reclassification
Charge for year
Disposals
As at 31 March 2023
NET BOOK AMOUNT
As at 31 March 2023
As at 31 March 2022
As at 1 April 2021
Total depreciation expenses of £227,000 (2022: £176,000) have been charged to administrative expenses in
the Consolidated Statement of Comprehensive Income.
Company Number 05452547
73
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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
2,098
-
-
-
2,098
-
-
2,098
551
-
-
-
551
32
-
583
350
56
-
-
406
96
-
502
615
94
(97)
-
612
91
(96)
607
-
-
-
-
-
-
-
3,614
150
(97)
-
3,667
219
(96)
3,790
529
265
-
794
265
-
1,059
124
70
-
194
70
-
264
120
114
-
234
73
-
307
329
181
(97)
413
132
(96)
449
-
-
-
-
-
-
-
1,102
630
(97)
1,635
540
(96)
2,079
1,039
319
195
158
-
1,711
COST
As at 1 April 2021
Additions
Impairments
Disposals
As at 31 March 2022
Additions
Disposals
As at 31 March 2023
AMORTISATION
As at 1 April 2021
Charge for year
Disposals
As at 31 March 2022
Charge for year
Disposals
As at 31 March 2023
NET BOOK AMOUNT
As at 31 March 2023
As at 31 March 2022
1,304
357
172
199
-
2,032
As at 31 March 2021
1,569
427
230
286
-
2,512
Total depreciation expenses of £540,000 (2022: £630,000) 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
2023
£'000
1,010
373
1,043
2,426
As at 31
March 2022
£'000
370
502
450
1,322
The cost of inventories recognised as an expense and included in cost of sales amounted to £3,869,000 (2022:
£3,509,000). During the year, inventories of £543,000 (2022: £171,000) 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
74
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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 2023
£'000
-
-
4
-
As at 31
March 2022
£'000
-
-
27
-
As at 31
March 2023
£'000
3,916
233
23
364
As at 31
March 2022
£'000
3,831
110
23
351
-
4
-
27
3,412
7,948
3,629
7,944
The analysis of trade receivables by currency is as follows:
Pound Sterling
Euro
As at 31
March 2023
£'000
3,915
1
3,916
As at 31
March 2022
£'000
3,827
4
3,831
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 £405,000 (2022: £130,000 ).
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 2023
£'000
130
As at 31
March 2022
£'000
197
351
(76)
-
275
72
(139)
-
(67)
Closing provision for impairment of trade receivables
405
130
As at 31 March 2023 trade receivables of £1,168,000 (2023: £819,000) 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 2023
£'000
945
223
1,168
As at 31
March 2022
£'000
532
287
819
75
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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
2023
£'000
23
4
-
27
2022
£'000
24
28
-
52
Present value of
minimum lease
payments
2022
£'000
23
27
-
50
2023
£'000
23
4
-
27
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% (2022: 2.45%) per annum.
Company Number 05452547
76
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
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
2023
£'000
As at 31
March
2022
£'000
- -
(742)
(742)
(1,111)
(1,111)
As at 31
March
2023
£'000
2,134
(9)
(3,236)
(1,111)
As at 31
March
2022
£'000
2,266
-
(3,008)
(742)
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 2022
Credited / (debited) to the Statement of
Comprehensive Income
Credited / (debited) to the Statement of
Changes in Equity
Trading losses
Accelerated tax
depreciation
£'000
2,266
(132)
£'000
(3,008)
(228)
Short term
timing
differences
£'000
-
(9)
TOTAL
£'000
(742)
(369)
-
-
-
-
At 31 March 2023
2,134
(3,236)
(9)
(1,111)
Company Number 05452547
77
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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
Current liabilities
As at 31
March 2023
As at 31
March 2022
As at 31
March 2023
As at 31
March 2022
£'000
-
-
-
-
£'000
-
-
-
-
£'000
5,183
739
103
959
£'000
2,956
1,747
56
897
828
626
2,212
1,865
828
626
9,196
7,521
The Directors consider that the carrying amount of trade payables approximates to their fair value.
Revenue recognised in the current reporting period relating to carried-forward contract liabilities was £3.0m
(2022: £1.9m).
21 BORROWINGS
As at 31 March 2023
As at 31 March 2022
Loans
Obligations
under lease
liabilities
Total
Loans
Obligations
under lease
liabilities
Total
Arrangement
fee
Net
Gross
£'000 £'000
£'000
£'000
£'000
Arrangement
fee
£'000
Net
£'000
£'000
£'000
(48) 1,031
466 1,497
1,165
(50)
1,115
612
1,727
(3) 5,435
1,113 6,548
4,892
(37)
4,855
1,367
6,222
(51) 6,466
1,579 8,045
6,057
(87)
5,970
1,979
7,949
Gross
£'000
1,079
5,438
6,517
Current
Non
Current
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 17 monthly instalments from 30 March 2023 of £86,000 and a final repayment of the outstanding
balance on 31 July 2024 and bears interest at a floating rate of 5.1% over base rate. As at 31 March 2023 the
Group owed £4.1m (2022: £4.9m).
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 2023 the Group was not using the facility.
A £1.6m convertible unsecured loan note. The loan note bears a fixed interest rate of 12% per annum, with a
two-year term from its issue on 14 September 2022. The interest is payable quarterly from issue date until
repayment on 13 September 2024. The Loan Note is convertible at a conversion price of 17.10p, a ten percent
discount on the closing mid-market price of a Trakm8 ordinary share on 13 September 2022, the last practicable
date prior to its completion.
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 2023 the Group owed
£0.8m (2022: £1.2m).
The Group’s obligations under lease liabilities are secured by the lessors’ title to the leased assets (see note 21).
Company Number 05452547
78
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
21 BORROWINGS (continued)
Obligations under lease liabilities by category at 31 March 2023 were as follows:
Furniture,
fixtures and
equipment
Computer
equipment
Freehold
property
Motor
vehicles
Software
Current
Non-current
Total
£'000
234
912
1,146
£'000
38
7
45
£'000
117
95
212
£'000
66
97
163
£'000
11
2
13
The maturity of obligations under lease liabilities at 31 March 2023 were as follows:
Furniture,
fixtures and
equipment
Freehold
property
Computer
equipment
Motor
vehicles
Software
Total
£'000
466
1,113
1,579
Total
£'000
£'000
£'000
£'000
£'000
£'000
Within 1 year
1 to 2 years
2 to 5 years
More than 5 years
Total
234
242
670
-
1,146
38
7
0
-
45
117
72
23
-
212
66
56
41
-
163
11
2
0
-
13
466
379
734
-
1,579
22 PROVISIONS
As at 1 April 2021
Arising during the year
Released during the year
As at 1 April 2022
Arising during the year
Released during the year
At 31 March 2023
Dilapidations
£'000
161
-
(61)
100
Warranty
£'000
56
-
(17)
39
Total
£'000
217
-
(78)
139
92
-
192
9
-
48
101
-
240
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 2023
£'000
74
166
240
As at 31
March 2022
£'000
27
112
139
Company Number 05452547
79
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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 2023
As at 31 March 2022
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% (2022: 0.06%) of the
Company’s issued share capital. The number of 1 pence Ordinary shares that the Company has in issue less
the total number of Treasury shares is 49,975,002.
Company Number 05452547
80
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
24 SHARE-BASED PAYMENTS
Trakm8 Holdings PLC has issued options (under the Trakm8 2017 Unapproved Share Option Plan) to subscribe
for Ordinary shares of 1p in the Company. The purpose of the Option Scheme is to retain and motivate eligible
employees.
The exercise price of all share options are at a premium to the mid-market closing share price for the day
before the grant date except for options issued on the 12 December 2022 which were issued at the closing
market price on the 9 December 2022. A vesting period of 3 years is applicable according to the terms of each
scheme which specify the options will vest providing employees remain in service for 3 years from the date of
grant. The maximum term of options granted is 10 years from grant date. All share options are equity settled.
The fair value of the equity settled share options granted is estimated as at the date of grant using the Black
Scholes option pricing model taking into account the terms and conditions upon which the options were
granted. No performance conditions were included in the fair value calculations. In the prior year Monte Carlo
option pricing was used to value grants which contained exercise restrictions.
During the year 1 tranche of options were awarded, tranche AJ. 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 (%)
Tranche AJ
12-Dec-22
5.50
13.50
56.8%
3.0
0.0%
3.3%
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-Dec-22
No of
shares
Option
Exercise
Price
Date of
expiry
775,000 13.5p
12/12/2032
A reconciliation of option movements over the year to 31 March 2023 is shown below;
Outstanding at beginning of the year
Granted during the period
Forfeited during the period
Outstanding at the end of the year
As at 31 March 2023
As at 31 March 2022
Share
options
No
4,400,000
775,000
(425,000)
4,750,000
Weighted
average
Exercise
Price (p)
30
14
19
28
Share
options
No
4,350,000
1,325,000
(1,275,000)
4,400,000
Weighted
average
Exercise
Price (p)
33
20
31
30
The range of exercise prices of the outstanding options is 13.5 pence to 192.5 pence (2022: 16.0 pence to
192.5pence) and the weighted average remaining contractual life is 6.4 years (2022: 6.9 years).
The Group charged £16,000 to the Statement of Comprehensive Income in respect of Share-Based Payments
for the financial year ended 31 March 2023 (2022: £443,000 release).
Share options exercisable at 31 March 2023 were 1,175,000 (2022: 1,650,000).
Company Number 05452547
81
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
25 CASH GENERATED FROM OPERATIONS
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
26 FINANCIAL COMMITMENTS
As at 31 March
2023
£'000
As at 31 March
2022
£'000
(1,243)
767
222
618
1,533
2,300
9
16
4,222
(1,104)
19
1,877
101
5,115
(1,533)
3,582
50
682
4,314
(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
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
As at 31 March
2023
As at 31 March
2022
£'000
£'000
-
-
-
1
-
1
Company Number 05452547
82
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
27 RELATED PARTY TRANSACTIONS
A total of 200,000 (2022: 875,000) share options were granted during the year to one member of key
management personnel (2022: five).
The 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 £1,000 (2022: £5,000). All sales were based on prices and terms that
would be available to third parties. At 31 March 2023 Microlise Limited owed the Group £171 (2022: £nil).
The Non-Executive Director Penny Searles is a Director of Howden Driving Data Limited, a customer of the Group.
Sales to Howden Driving Data Limited in the current year were £193,000. All sales were based on prices and terms
that would be available to third parties. At 31 March 2023 Howden Driving Data Limited owed the Group £6,000
(2022: £162,000).
During the year new Convertible Unsecured Loan Notes were raised totalling £1.58m. These were issued to
existing shareholders including £1,000,000 with Microlise Group plc where Non-Executive Director Nadeem Raza
is a Director, along with Directors of the Company John Watkins (£400,000), Tim Cowley (£60,000) and Madeline
Cowley (£60,000).
Company Number 05452547
83
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
28 FINANCIAL INSTRUMENTS
Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk and interest
rate risk), credit risk and liquidity risk. Where appropriate, the Group seeks to mitigate potential adverse effects
on its financial performance.
Liquidity risk
The Group’s objective is to maintain a balance between continuity and flexibility of funding through the use of
borrowings and financial assets with a range of maturities. Borrowing facilities are monitored against the
Group’s forecast requirements and it is the Group’s policy to mitigate the risk by maintaining cash reserves.
Interest rate risk
The Group's borrowings are linked to the base rate, the following table details the Group's sensitivity to an
increase of 2% and 5% in this rate.
Base rate
Base rate
2%
As at 31
March 2023
As at 31
March 2022
Profit
£'000
(83)
5%
Profit
£'000
(207)
Profit
£'000
(121)
Profit
£'000
(303)
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 it's 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
US Dollar
Euro
US Dollar
Euro
Year ended 31
March 2023
Year ended 31
March 2022
Profit & equity
Profit & equity
£'000
(189)
(16)
£'000
(125)
(16)
Year ended
31 March
2023
Profit &
equity
£'000
155
13
Year ended
31 March
2022
Profit &
equity
£'000
102
13
20% decrease
20 % increase
Profit & equity
Profit & equity
£'000
(425)
(36)
£'000
(282)
(36)
Profit &
equity
£'000
283
24
Profit &
equity
£'000
188
24
84
Company Number 05452547
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
28 FINANCIAL INSTRUMENTS (continued)
The Group has the following exposure to foreign currency denominated monetary assets and monetary
liabilities in the Balance Sheet, translated into the sterling at the relevant year-end exchange rates:
Financial assets / liabilities
US Dollar
Euro
Sterling
Total
Credit risk
Year ended
31 March
2023
Year ended
31 March
2023
Year ended
31 March
2022
Year ended
31 March
2022
Monetary
Assets
£'000
-
1
1
8,702
8,703
Monetary
Liabilities
£'000
216
46
262
17,449
17,711
Monetary
Assets
£'000
Monetary
Liabilities
£'000
- 80
43
4
123
4
15,910
8,593
16,033
8,597
The Group’s principal financial assets are bank balances, trade and other receivables. The Group’s credit risk
is primarily attributable to its trade receivables and the Group attaches considerable importance to the
collection and management of trade receivables. The Group minimises its credit risk through the application
of appropriate credit limits to customers based on an assessment of net worth and trading history with the
Group. Standard credit terms are net 30 days from the date of invoice. Overdue trade receivables are
managed through a phased escalation culminating in legal action.
The credit quality of cash balances that are neither past due nor impaired can be ascertained with reference
to the banks external credit ratings. All remaining financial assets are unrated.
Credit rating (Fitch)
AA-
As at 31
March 2023
£'000
1,119
1,119
As at 31
March 2022
£'000
1,004
1,004
Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the
basis of measurement and the basis on which income and expense are recognised, in respect of each class of
financial asset, liability and equity instrument are disclosed in note 4 to the financial statements. The
directors do not consider that any of the cash balances are impaired.
Company Number 05452547
85
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
28 FINANCIAL INSTRUMENTS (continued)
Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an
optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the
Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new
shares or sell assets to reduce debt.
The group's external borrowings are subject to covenants which are assessed periodically throughout the year.
The covenants for the next financial year relate to an absolute EBITDA target and cash availability. In future
years the covenants relate to cash flow and leverage requirements. The covenants were reset during the current
year and the company complied with all covenant requirements during the period. The Group expects to meet
the covenant requirements in the future periods.
Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio is
calculated as total borrowings divided by total capital. Total borrowings include “current and non-current
borrowings” as shown in the Consolidated Statement of Financial Position. Total capital is calculated as “capital
and reserves” as shown in the Consolidated Statement of Financial Position plus total borrowings.
The Group’s strategy has been to broadly 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 2023
As at 31
March 2022
£'000
8,045
6,736
19,129
£'000
7,949
6,345
19,630
27,174
25,865
27,579
25,975
30%
26%
29%
24%
At the year end the Group had total net borrowings of £6,926,000 (2022: £6,945,000). This includes IFRS16
impact of £1,306,000 (2022: £1,606,000).
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
Company Number 05452547
Receivables and Cash
As at 31
March 2023
£'000
7,584
1,119
8,703
As at 31
March 2022
£'000
7,593
1,004
8,597
Financial liabilities at
amortised cost
As at 31
March 2023
As at 31
March 2022
£'000
8,045
9,666
17,711
£'000
7,949
8,084
16,033
86
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Notes To The Consolidated Financial Statements (Continued)
28 FINANCIAL INSTRUMENTS (continued)
Payable as follows
On demand or within one year
After one and within two years
After two and within five years
After five years
Cash and cash equivalents
As at 31
March
2023
£'000
10,334
6,643
734
-
17,711
As at 31
March
2022
£'000
9,121
5,525
1,387
-
16,033
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 (2022: £nil).
No Dividend was paid during the year (2022: £nil).
30 OPERATING LEASES AS LESSOR
The Group rents out equipment under operating leases. Equipment rental income earned during the year was
£nil (2022 £nil). At the year end the Group had contracted with lessees of the Group for the following future
minimum lease payments under non-cancellable operating leases.
Within 1 year
As at 31
March
2023
£'000
-
-
As at 31
March
2022
£'000
-
-
Company Number 05452547
87
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Parent Company Statement of Financial Position As At 31 March 2023
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
Convertible loan reserve
Retained earnings
Note
As at 31 March
2023
£'000
As at 31 March
2022
£'000
4
5
6
7
7
8
11,002
54
11,056
10,986
306
11,292
10,840
7
10,847
10,579
19
10,598
(456)
(1,031)
(1,487)
(437)
(1,115)
(1,552)
9,360
9,046
20,416
20,338
(5,435)
(4,855)
14,981
15,483
500
14,691
627
(4)
11
(844)
500
14,691
627
(4)
-
(331)
TOTAL SHAREHOLDERS’ FUNDS
14,981
15,483
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 £258,000 (2022: loss £176,000).
These financial statements on pages 88 to 96 were approved by the Board of Directors and authorised for issue
on 3 July 2023 and are signed on their behalf by:
John Watkins - Director
Jon Edwards - Director
Company Number 05452547
88
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Parent Company Statement of Changes in Equity For The Year Ended 31 March 2023
Called up
share
capital
Share
premium
account
Merger
reserve
Treasury
reserve
Convertible
Loan
reserve
Retained
earnings
TOTAL
SHAREHOLDERS'
FUNDS
£'000
500
£'000
14,691
£'000
627
£'000
(4)
£’000
-
£'000
287
£'000
16,101
-
-
-
-
-
-
500
14,691
627
-
-
(4)
-
-
-
(443)
(175)
(443)
(175)
(331)
15,483
-
-
-
-
-
16
16
-
-
-
-
-
-
-
-
500
14,691
627
(4)
11
-
11
-
(529)
11
(529)
(844)
14,981
Balance as at 1 April 2021
IFRS2 Share-Based payment
charge
Loss for the year
Balance as at 31 March
2022
IFRS2 Share based payments
credit
Convertible Loan Note
Loss for the year
Balance as at 31 March
2023
Company Number 05452547
89
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Notes To The Parent Company Financial Statements
1 ACCOUNTING POLICIES
BASIS OF PREPARATION
The accounting policies set out below have been applied consistently to all periods presented in these
consolidated financial statements made up to 31 March 2023.
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’:
(cid:1086)(cid:3)(cid:1005)(cid:1004)(cid:894)(cid:282)(cid:895)(cid:3)(cid:894)(cid:400)(cid:410)(cid:258)(cid:410)(cid:286)(cid:373)(cid:286)(cid:374)(cid:410)(cid:3)(cid:381)(cid:296)(cid:3)(cid:272)(cid:258)(cid:400)(cid:346)(cid:3)(cid:296)(cid:367)(cid:381)(cid:449)(cid:400)(cid:895)
(cid:1086)(cid:3)(cid:1005)(cid:1010)(cid:3)(cid:894)(cid:400)(cid:410)(cid:258)(cid:410)(cid:286)(cid:373)(cid:286)(cid:374)(cid:410)(cid:3)(cid:381)(cid:296)(cid:3)(cid:272)(cid:381)(cid:373)(cid:393)(cid:367)(cid:349)(cid:258)(cid:374)(cid:272)(cid:286)(cid:3)(cid:449)(cid:349)(cid:410)(cid:346)(cid:3)(cid:258)(cid:367)(cid:367)(cid:3)(cid:47)(cid:38)(cid:90)(cid:94)(cid:895)
(cid:1086)(cid:3)(cid:1007)(cid:1012)(cid:4)(cid:3)(cid:894)(cid:396)(cid:286)(cid:395)(cid:437)(cid:349)(cid:396)(cid:286)(cid:373)(cid:286)(cid:374)(cid:410)(cid:3)(cid:296)(cid:381)(cid:396)(cid:3)(cid:373)(cid:349)(cid:374)(cid:349)(cid:373)(cid:437)(cid:373)(cid:3)(cid:381)(cid:296)(cid:3)(cid:410)(cid:449)(cid:381)(cid:3)(cid:393)(cid:396)(cid:349)(cid:373)(cid:258)(cid:396)(cid:455)(cid:3)(cid:400)(cid:410)(cid:258)(cid:410)(cid:286)(cid:373)(cid:286)(cid:374)(cid:410)(cid:400)(cid:853)(cid:3)(cid:349)(cid:374)(cid:272)(cid:367)(cid:437)(cid:282)(cid:349)(cid:374)(cid:336)(cid:3)(cid:272)(cid:258)(cid:400)(cid:346)(cid:3)(cid:296)(cid:367)(cid:381)(cid:449)(cid:3)(cid:400)(cid:410)(cid:258)(cid:410)(cid:286)(cid:373)(cid:286)(cid:374)(cid:410)(cid:400)(cid:895)
(cid:1086)(cid:3)38B-D (additional comparative information)
(cid:1086)(cid:3)(cid:1005)(cid:1005)(cid:1005)(cid:3)(cid:894)(cid:272)(cid:258)(cid:400)(cid:346)(cid:3)(cid:296)(cid:367)(cid:381)(cid:449)(cid:3)(cid:400)(cid:410)(cid:258)(cid:410)(cid:286)(cid:373)(cid:286)(cid:374)(cid:410)(cid:3)(cid:349)(cid:374)(cid:296)(cid:381)(cid:396)(cid:373)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:895)
(cid:1086)(cid:3)(cid:1005)(cid:1007)(cid:1008)-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
90
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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
91
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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 model, whilst schemes which include an exercise
restriction are measured using the Monte Carlo option pricing model. The expected life used in the models has
been adjusted, based on management’s best estimate, for the effect of non-transferability, exercise
restrictions, and behavioural considerations.
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
92
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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 £258,000 (2022: loss £176,000). Audit fees for the Company for
the year were £3,300 (2022: £3,000).
4
INVESTMENTS
Cost
At 31 March 2022
Capital contribution in respect of share based payments
At 31 March 2023
Subsidiaries
£'000
10,986
16
11,002
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
Class of holding
Proportion held
and voting
rights
100%
Ordinary
Trakm8 Limited
England and
Wales
Development,
manufacture,
marketing and
distribution of
vehicle
telematics
Trakm8 s.r.o.
Czech Republic Mapping
services and
distribution of
vehicle
telematics
Non-trading
BOX Telematics
Limited
England and
Wales
Route Monkey
Limited
Scotland
Route
optimisation
4 Roman Park,
Roman Way,
Coleshill, West
Midlands, B46
1HG
A7 Office Centre
Praha 7 U
Pruhonu
1588/11a 170
00 Czech
Republic
4 Roman Park,
Roman Way,
Coleshill, West
Midlands, B46
1HG
4 Roman Park,
Roman Way,
Coleshill, West
Midlands, B46
1HG
Ordinary
100%
Ordinary
100%
Ordinary
100%
Company Number 05452547
93
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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
Proportion
held and
voting
rights
Ordinary
100%
Ordinary
100%
Ordinary
100%
Ordinary
100%
Ordinary
100%
The following dormant companies within the Group will take the exemption from preparing and filing financial
statements for the year ended 31 March 2023 (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
94
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
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 2023
£'000
10,813
12
15
As at 31
March
2022
£'000
10,552
8
19
10,840
10,579
Amounts due from subsidiary undertakings is unsecured, interest free and repayable on demand.
6 TRADE AND OTHER PAYABLES
Trade creditors
Amounts due to subsidiary undertakings
Accruals and other creditors
Amounts due to subsidiary undertakings is unsecured, interest free and repayable
on demand.
As at 31
March 2023
£'000
68
311
77
456
As at 31
March
2022
£'000
49
311
77
437
7 BORROWINGS
Current
Non current
As at 31 March 2023
Loans
Arrangement
fee
£'000
(48)
(3)
(51)
Gross
£'000
1,079
5,438
6,517
Bank loan
The Bank loan is repayable as follows:
Within one year
After one and within two years
After two and within five years
As at 31 March 2022
Loans
Arrangement
fee
£'000
(50)
(37)
(87)
Gross
£'000
1,165
4,892
6,057
Net
£'000
1,115
4,855
5,970
5,970
£'000
1,115
4,458
397
5,970
Net
£'000
1,031
5,435
6,466
6,466
£'000
1,031
5,435
-
6,466
Company Number 05452547
95
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Notes To The Parent Company Financial Statements (Continued)
7
BORROWINGS (continued)
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 17 monthly instalments from 30 March 2023 of £86,000 and a final repayment of the
outstanding balance on 31 July 2024 and bears interest at a floating rate of 5.1% over base rate. As at 31 March
2023 the Group owed £4.1m (2022: £4.9m).
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 2023 the Group was not using the facility.
A £1.6m convertible unsecured loan note. The loan note bears a fixed interest rate of 12% per annum, with a
two-year term from its issue on 14 September 2022. The interest is payable quarterly from issue date until
repayment on 13 September 2024. The Loan Note is convertible at a conversion price of 17.10p, a ten percent
discount on the closing mid-market price of a Trakm8 ordinary share on 13 September 2022, the last practicable
date prior to its completion.
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 2023 the Group
owed £0.8m (2022: £1.2m).
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.
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 200,000 (2022: 875,000) share options were granted during the year to one member of key
management personnel (2022: five).
During the year new Convertible Unsecured Loan Notes were raised totalling £1.58m. These were issued to
existing shareholders including £1,000,000 with Microlise Group plc where Non-Executive Director Nadeem
Raza is a Director, along with Directors of the Company John Watkins (£400,000), Tim Cowley (£60,000) and
Madeline Cowley (£60,000).
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 (2022: £nil) during the year (other than the Directors). See remuneration report on page 36
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 35.
12 DIVIDENDS
The Company is not proposing a final dividend for the year (2022: £nil).
No Dividend was paid during the year (2022: £nil).
Company Number 05452547
96
(cid:17)(cid:28)(cid:22)(cid:30)(cid:21)(cid:25)(cid:24)(cid:27)(cid:1)(cid:18)(cid:27)(cid:31)(cid:23)(cid:26)(cid:28)(cid:29)(cid:23)(cid:1)(cid:20)(cid:17)(cid:13)(cid:1)(cid:3)(cid:5)(cid:8)(cid:5)(cid:17)(cid:17)(cid:4)(cid:18)(cid:2)(cid:14)(cid:9)(cid:5)(cid:3)(cid:2)(cid:7)(cid:14)(cid:16)(cid:19)(cid:2)(cid:15)(cid:8)(cid:18)(cid:7)(cid:2)(cid:12)(cid:7)(cid:17)(cid:6)(cid:18)(cid:10)(cid:11)(cid:5)(cid:11)(cid:14)(cid:19)(cid:17)
Trakm8 Holdings PLC
Officers and Advisors for Trakm8 Holdings PLC
Directors
Madeline Cowley
Tim Cowley
Keith Evans
John Watkins
Mark Watkins
Nadeem Raza
Penny Searles
Jon Edwards
Company Secretary
Jon Edwards
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
Madeline 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%
97