Annual / Quarterly Financial Statement • Jul 26, 2012
Annual / Quarterly Financial Statement
Open in ViewerOpens in native device viewer
Kapsch TrafficCom
always one step ahead
| Management Report 3 n |
|
|---|---|
| Statement of all Members of the Managing Board 22 n |
|
| Additional Information pursuant to Section 82 Para. 4 No. 3 BörseG 23 n |
|
| Consolidated Financial Statements as of 31 March 2012 24 n |
|
| Notes to the consolidated financial statements 28 n |
|
| Notes on individual items in the income statement and balance sheet 42 n |
|
| Auditor's Report 66 n |
| Management Report as of 31 March 2012 69 n |
|
|---|---|
| Statement of all Members of the Managing Board 92 n |
|
| Additional Information pursuant to Section 82 Para. 4 No. 3 BörseG 93 n |
|
| Balance Sheet as of 31 March 2012 94 n |
|
| Income Statement for the fiscal year 2011/12 95 n |
|
| Notes to the financial statements for the fiscal year 2011/12 96 n |
|
| Auditor's Report 108 n |
Kapsch TrafficCom AG on the Consolidated Financial Statements as of 31 March 2012.
The recovery from the global financial and economic crisis which started in 2009 gained pace during 2010 but turned out to be fragile in 2011. The global economic growth rate slowed to 3.9% from 5.3% in 2010, and world trade also lost dynamism and slumped to 5% in 2011 following a rebound to 13.8% the previous year. Although global economic activity began to stabilize towards the end of 2011 and remained stable in the first quarter of 2012, world economic growth for the whole of 2012 is expected to be slightly below that of 2011. The forecasted growth rate is 3.5%, although this might be seen as optimistic due to uncertainties affecting the forecast.
The greatest threat to the global economy is that soverei gn debt problems in the eurozone could re-trigger a substantial financial and economic crisis. However, there are also other developments curbing growth in world economic activity. First of all, oil price increases did not let up 2011. The average price for Brent climbed to USD 111.3 per barrel compared to USD 79.5 per barrel in 2010. As these oil price pressures reflect geopolitical tensions and the risk of supply disruption rather than a surge in global demand, they are expected to persist in 2012, thereby providing no relief for the economies of oil importing countries.
Furthermore, financial markets were highly vulnerable in 2011. Concerns about the contagion of the eurozone debt crisis have affected investor sentiment worldwide. This has contributed to significant volatility in a wide range of asset prices and, at times, has prompted noticeably more risk-averse behavior by investors. Although the situation on the global financial markets relaxed in late 2011 as well as in the first months of 2012, continued volatility is still expected.
Another reason for the weakness of the economic recovery has been the high debt burden of the household sector in many highly developed countries. The International Monetary Fund (IMF) recently established that recessions are more severe, lasting for at least five years, when they follow a big run-up in household debt, as was the case in the U.S., the U.K. and other European countries at the beginning of the financial crisis in 2007.
Economic developments in 2011 varied among the individual regions of the world. Governments of EU member states and of eurozone countries were faced with sovereign debt crises and the risk of their spreading to the global economy. An adequate and comprehensive set of policy measures, amongst others the enforcement of fiscal tightening, have proven successful in easing financial market pressure and in raising confidence, albeit at the cost of lower GDP growth. Real GDP increased by 1.5% in the EU in 2011 and will probably stagnate in 2012, while the eurozone saw economic growth of 1.4% in 2011 and is expected to go through a mild recession in 2012. The U.S. economy performed better than expected in 2011 with a GDP increase of 1.7% and gave strong signs at the end of the year that the recovery would accelerate in 2012. Japan struggled with the devastating effects of the earthquake in March and was additionally hit by the consequences of the floods in Thailand at the end of the year. As Thailand is an important production location for Japan, particularly for the electronic and automotive sectors, industrial activity in Japan suffered from severe disruptions in supply, which consequently had a negative impact on Japanese exports. Furthermore, the persistent strength of the yen has been a real burden for the export industry in Japan. Several exchange market interventions in 2011 aimed at tumbling the yen brought only temporary results. Japan's very expansive monetary policy (with key interest rates close to 0%) is currently being combined with a comprehensive asset purchase program which was enlarged by JPY 10 trillion in February 2012. In spite of these measures, real GDP contracted by 0.7% in 2011, but forecasts for 2012 predict a stronger Japanese economy. Emerging Markets were by far the biggest contributors to global growth once again in 2011, although they did
lose some momentum. Their performance is expected to slow further in 2012 because of a less favorable external environment and a weakening of internal demand. In the BRIC countries (Brazil, Russia, India and China), real GDP growth rates in 2011 ranged between 9.2% in China and 2.7% in Brazil.
Global inflation picked up in 2011 mainly because of a marked increase in energy prices. In 2012, global consumer price inflation is projected to ease as world demand drops further. In highly developed economies, inflation is expected to fall from 2.7% in 2011 to 1.9% in 2012. In emerging and developing economies, pressures are also expected to ease, with inflation around 6.2% in 2012 compared to 7.1% in 2011.
In light of the fragile world economy, economic policy continues to play a critical role. Monetary policy is expected to remain supportive, with key interest rates already at very low levels in many highly developed countries while further room for easing exists in emerging market economies. In contrast, as government debt levels have soared in a number of highly developed countries in recent years, fiscal consolidation is set to continue, with only limited scope for supporting growth through fiscal policy should the global economy weaken further.
The gross domestic product of the United States expanded moderately in the second half of 2011 following subdued gains in the first half of the year, resulting in a growth rate of 1.7% for the year as a whole. Economic data for the first quarter of 2012 indicates that economic developments have improved further. For instance, the IMF is currently forecasting a GDP growth rate of 2.1% for 2012. Private consumption, which is traditionally one of the main drivers of growth in the U.S.A., recovered at the end of 2011 and continued to rise in early 2012. Conditions in the labor market have improved with an increase in the pace of job creation and a reduction in the unemployment rate, which stood at 8.2% in March 2012 compared with 8.9% in March 2011. Nevertheless, the jobless rate remains quite high in the U.S.A.. Consumer price inflation fell to approximately 3.0% in December 2011 from a 3.9% peak in September. In order to support stronger economic recovery, the U.S. not only pursued an accommodative monetary policy but also employed a number of fiscal stimulus measures that subsequently led to a budget deficit of 8.5% of GDP in 2011. To avoid defaulting, the U.S. government raised the ceiling for public debt in August 2011, and a panel of Republicans and Democrats was set up to identify potential savings of at least USD 1.2 trillion by the end of November. As the panel failed to reach agreement, automatic spending cuts are due to enter into effect in 2013, after the presidential election in November 2012. Standard & Poor's (S&P) downgraded the long-term U.S. credit rating to AA+ in summer 2011, citing the risk of an ongoing rise in federal government debt ratios in the coming years. Other credit rating agencies subsequently added a negative outlook to their ratings for similar reasons.
2011 witnessed a slow-down in economic activity in a number of emerging market economies. Although growth is expected to weaken further in 2012, these economies remain by far the strongest stimulators of world economic growth. The Asian Development Bank predicts an aggregated GDP growth rate of 6.9% in 2012 for "Developing Asia" (a group of 44 Asian countries), down from 7.2% in 2011 and driven mainly by China and India. For Latin America and the Caribbean, the anticipated regional economic growth rate is 3.7% for 2012, compared with 4.5% in 2011. Only the Middle Eastern and North African region (MENA) is expected to have a stronger GDP growth in 2012 than in 2011. As MENA includes the most important oil exporting countries, it benefits from high oil prices and, as a result, seems to be less exposed to a fall-off in global economic activity.
The course of the European economy in 2011 was influenced primarily by the sovereign debt crisis. In light of persistent financial and structural problems in several member states, the economic growth rate of the EU-27 slowed down to 1.5% (2010: 2.0%). The second half-year, in particular, saw a significant loss of momentum, with some European countries even slipping into recession. Although both the investment climate and business sentiment started to pick up in early 2012, hard indicators such as order inflows and industrial production have remained weak. Consequently, economists predict that the aggregate GDP of the EU-27 will stagnate in 2012. Only in the following year is European business activity set to gain momentum again (+1.6%), driven in part by stronger economic growth outside of Europe.
One striking feature of the current situation in the European Union is the economic divide between its member states, which has widened significantly over the past few months. On the one hand, Germany experienced the second consecutive year of strong growth in 2011 (a GDP increase of 3%) and France, too, produced surprisingly good results (a slight GDP rise in the generally weak fourth quarter of 2011). On the other hand, economic growth in the United Kingdom has virtually come to a standstill. The divergences between the peripheral EU countries are even more obvious, however. While economic performance in Eastern European states like Poland (+4.3%) or Slovakia (+3.3%) improved markedly in 2011, the crisis-ridden countries of Southern Europe faced a recession. The situation in Greece remains particularly unstable, with GDP having fallen by as much as 15% since the start of the global financial crisis in 2008. Moreover, the economies in both Spain and Italy have yet to reach their pre-crisis levels, despite extensive reform and consolidation efforts. The current weakening of business activity in Southern Europe has also been felt on the labor market, with unemployment rates in Spain as well as in Greece passing the 20-percent mark (EU-27: 10.2% in February 2012).
The states of the eurozone were affected the most by the debt crisis in 2011, mainly because of the reactions of international financial markets to the uncertain future of the currency union. Economic growth decelerated significantly during the course of the year, eventually becoming negative the final quarter (-0.3% compared with the previous period). This slight downward trend is most likely to continue in 2012, although several signs have hinted at a stabilization of the economy in the eurozone. Interest rates for long-term government bonds, for instance, have started to come down in several countries, including Ireland and Italy. Furthermore, clear upward trends were also witnessed on the stock markets. Lastly, after months of negotiations, the Greek government reached an agreement with its creditors regarding debt relief in March 2012. This step was a prerequisite for the disbursement of additional EU funds aimed at getting the Greek economy back on its feet.
By pursuing an expansionary monetary policy, the European Central Bank played a vital role in containing the sovereign debt crisis. Over the last months, the ECB has repeatedly supported the financial sector in the eurozone with cheap money. In December 2011 and again in February 2012, European banks were provided with more than EUR 500 billion with a term of three years at a low interest rate. The aim of these initiatives was to prevent a credit crunch in the region as well as to stimulate demand for government bonds issued by eurozone members. In the short term, the ECB is most likely to continue with its expansionary monetary policy; the current level of the prime interest rate can be seen as an indication of this. Since the newly appointed president of the ECB, Mario Draghi, lowered the prime rate to a record low of 1% at the end of 2011, no change to this low-rate strategy has been seen.
The economic developments in the EU and the eurozone have also had repercussions for non-members in Eastern and South Eastern Europe. The structurally weak Balkan states, in particular, have been adversely affected by the sluggish demand from Europe and a more restrictive lending policy by international banks. While GDP growth amounted to about 2% in Bosnia-Herzegovina and Serbia in 2011, economic performance in these countries is expected to stagnate in 2012. In regard to the future EU member Croatia, experts even predict a GDP decline of -1.2% (2011: +0.3%). In contrast, the prospects for Russia and Ukraine are more optimistic. Both states are set to stay on their current growth path for the next few years (a GDP increase of 4% to 5% p.a.) according to analysts. In the case of Russia, positive effects are to be expected from its accession to the World Trade Organization, which was formally announced in December 2011.
In 2011, the Austrian economy expanded by 3.1%. A closer look at the data on a quarterly level shows, however, that economic growth slowed down noticeably over the course of the year. The fourth quarter even saw a moderate drop in GDP of 0.1 % compared with the previous period. This deceleration in economic performance is mainly attributable to weaker stimuli from other European states. As for 2012, first signs indicate a stabilization of business activity in the first half of the year, followed by a gradual expansion in the second half. Overall, Austrian GDP is forecast to rise by 0.4% in the year 2012, driven by increased confidence among both companies and private households.
Unlike the preceding year, foreign trade contributed only modestly to Austria's growth in 2011. The main reason for the loss of momentum in the export business lies in the poor economic performance of several European countries, including important trading partners like Italy and Hungary. Since there are no signs of a swift recovery in these countries yet, Austrian exporters are setting their hopes on an increase in demand from non-European markets, for instance the United States, whose economy is currently on the rebound. Nonetheless, export growth is set to decline to 3.3% (2011: +6.7%). Only in 2013 should Austrian companies once again start to benefit from a general and more sustained revival of global trade.
The strong inclination by Austrian companies to invest in expansion was a key driver of economic development in 2011. The amount of money spent on machinery and equipment soared by 11.3%, and investment in construction also rose by 2.6% after two consecutive years of declining expenditures. However, the general economic slow-down in late 2011 also affected the investment climate in Austria, lowering expectations for the coming months. According to the latest forecasts, investments in machinery and equipment as well as in construction are expected to increase only moderately in 2012.
Consumer prices in Austria experienced strong upward pressure in 2011, spurred by geopolitical tensions in the Middle East and their impact on the global oil market. The inflation rate exhibited an annual average of 3.3%. Only in the last quarter did the level of price increases start to recede, leading to an inflation rate of 2.4% in March 2012. On average, inflation is forecasted to amount to 2.4% in 2012. Private consumption should benefit from this gradual easing of price pressure and consequently expand slightly more in 2012 (+0.8%) than it did in the year before (+0.6%). In addition, an expected per-capita increase in salaries and wages of 0.8% is also set to stimulate private consumption, which should have a stabilizing effect on the whole economy.
As far as the latest developments on the job market are concerned, the Austrian unemployment rate of 4.2% was the lowest in the EU in 2011. More recently, though, the slow pace of GDP growth has triggered a steady rise in the number of jobless. For 2012, economists predict an unemployment rate of 4.6%. Contrary to popular belief, the 2011 opening of the Austrian labor market to certain EU member states in Eastern Europe is unlikely to aggravate the situation further.
The Austrian national finances showed a budget deficit of 3.3% and a slight increase in public debt in 2011. In order to prevent a further rise in debt levels, the national government adopted a comprehensive austerity package in March 2012. Provided that the measures stipulated therein are implemented accordingly, the budget deficit should gradually decrease to the Maastricht limit of 3% in 2012 and to 2.6% in the following year. Although these reforms may have a dampening effect on certain economic activities in the short run, experts believe that the positive effects will prevail in the long run. In light of the recent downgrading of the Austrian sovereign debt rating by Standard & Poor's (from triple-A to AA+), the austerity measures are intended to strengthen the confidence of international investors in Austria. This, in turn, should ensure the lowest possible costs for public debt financing.
To allow for easier comparisons, the Kapsch TrafficCom Group makes use of the internationally prevailing terms for the intelligent transportation systems (ITS) market. ITS are systems, in which information and communication technologies are employed to support and optimize road transportation, including infrastructure, vehicles and users.
The study "Intelligent Transportation Systems – A global strategic business report" from Global Industry Analysts, May 2008 and September 2010, describes the ITS as a diversifying market with widely differing application and product segments. The market comprises the following segments:
Market volume. According to Global Industry Analysts (May 2008 and September 2010), the volume of the ITS market amounted to USD 13.0 billion in 2011 and is expected to continue growing.
Market segmentation. The largest ITS market segment in 2011 was traffic management systems, accounting for almost 37% (USD 4.8 billion). Based on a worldwide volume of about USD 3.1 billion, electronic toll collection had an ITS market share of about 24% in 2011. The largest geographic region for ETC in 2011 was the U.S.A. with 38%, followed by Europe with 34%.
Market growth. The ITS market is expected to grow at an average annual rate of 10% between 2007 and 2015 to reach USD 18.6 billion in 2011, of which ETC will account for USD 5.2 billion in 2011, thereby exhibiting the fastest growth of all ITS segments at an average annual rate of 13%.
Funding for infrastructure projects. The growth in the number of vehicles worldwide requires additional financing to construct new and maintain existing roads. Toll collection offers a constant source of income and thus helps governments to provide the necessary funding for infrastructure projects. Efficient toll collection systems, especially electronic ones, offer a significant, constant and sustainable source of additional funds for governments, public authorities and concessionaires that can be used for the expansion and maintenance of road infrastructure.
The demand for the construction of new roads is largely generated by the worldwide increase in road traffic, which can be considered a global trend. Especially in Asia, an increased demand for electronic toll lanes is expected for the replacement and expansion of toll collection systems previously based on more traditional (manual) systems. Aside from general economic aspects, the worldwide increase in road traffic is probably the most important driver for the ITS market. According to analyses by the EU (European Union 2010, "Energy and Transport in Figures"), commercial traffic increased by 2.3% per year and by 33.7% in total between 1995 and 2008. Commercial road traffic increased by 2.9% per year and by 45.7% in total. While the recent economic crisis triggered a fall in the volume of goods transport, this has already been largely compensated for by the subsequent upswing. Despite political pressure, goods transports could not be shifted significantly from road to rail or ship. This growth increases the financing burden for road infrastructure enormously, which in turn fosters greater demand and a high growth potential for ITS applications and the market segment of electronic toll collection, in particular.
In 2005, the trans-European road network (TEN-V) had a total length of 84,700 km and comprised one-fourth of the primary street network but carried 40% of the total commercial traffic. It is predicted that TEN-V will be expanded by 4,800 km per year up to 2020, of which 3,500 km will consist of existing roads. Major investments will be required in the new EU member states and along the corridor routes to these countries. In the white paper "European transport policy for 2010", the European Union estimated that investments of EUR 600 billion will be required by 2020. The long-term forecasts for traffic growth remain high.
In addition to the construction of new roads, the high financing requirements for the preservation of the road infrastructure are another factor driving the ITS market. The high funding requirements in the U.S.A. (Standard & Poor's research estimates an annual demand of USD 92 billion for the preservation of highways and bridges and a further USD 125.6 billion for their improvement) are leading to new business models and private concessionaire models.
Depending on the requirements of the specific application, systems are introduced for the toll collection which make use of technology based on microwaves (dedicated short-range communication; DSRC), satellite navigation (global navigation satellite system; GNSS) or video, with the latter used in particular for automatic number plate recognition (ANPR) for the purpose of toll collection and enforcement in urban areas.
While in Europe the standardized technology is based on 5.8 GHz according to the Comité Européen de Normalisation (CEN) standard, toll collection systems in North America are based on proprietary protocols in the 915 MHz band. It is expected that a new communication protocol standard based on 5.9 GHz will gradually replace the existing technology in the U.S.A. over the coming years. In addition to the toll application, the communication standard 5.9 GHz WAVE (Wireless Access in the Vehicular Environment) is intended for real-time car-to-car and car-to-infrastructure communication, for applications that increase traffic safety as well as additional ITS solutions for traffic information, traffic management and entertainment.
Reducing congestion. Environmental pollution can be viewed as another key driver for the ITS market and for the market segment of electronic toll collection in particular. Toll collection is largely perceived as an effective solution for reducing high levels of congestion, particularly in metropolitan areas, as mandatory payments for road usage encourage carpooling or the use of public transportation. In large conurbations and capital cities, in particular, there is a growing need for electronic systems to control and reduce traffic. Systems for city charging and enforcing low-emission environmental zones are deployed by cities to reduce traffic congestion and environmental pollution. Due to the politically sensitive nature of this topic, this portion of the business has not developed as quickly as originally expected.
Traffic safety devices to monitor compliance with traffic regulations are another field of application in cities. Examples include systems to monitor traffic violations at junctions (e. g. running red lights) as well as systems to detect speeding. The market potential of these applications, which fall under the market segment of traffic management systems, is growing rapidly in cities as well as interurban areas. For municipal authorities, they often pave the way for larger and more extensive ITS solutions, such as city charging.
Reducing environmental pollution caused by road traffic. Efforts to reduce environmental pollution due to road traffic have become a market driver for the introduction of toll collection systems. Such systems encourage reduced or modified vehicle usage and decrease the need to further expand the road network, thereby lowering emissions and pollution levels. Electronic toll collection systems, in particular for multi-lane free-flow traffic, have proven their ability to decrease environmental pollution and carbon dioxide emissions by reducing congestion at toll stations without interfering with the traffic flow. The introduction of city charging schemes also helps to reduce congestion levels and environmental pollution.
Increasing traffic safety and security. Traffic management systems (market segment TMS) consistently lower accident rates while also helping increase the probability of surviving accidents. The addressees include governments and regional authorities as well as other organizations, such as concessionaires, that are engaged in developing transport policies utilizing ITS in order to ensure the availability and quality of traffic infrastructure in a way that improves safety, performance, security and environmental protection.
Enhancing vehicle and fleet productivity. Vehicle-oriented intelligent transportation systems are aimed at in-car telematics such as remote diagnostics or advanced driver assistance systems. Their purpose is mainly to enhance vehicle productivity, particularly that of commercial vehicles (market segment CVO), as well as traffic safety and security. Addressees are mainly car makers and their suppliers. This field includes systems for the real-time interaction between vehicles as well as between vehicles and infrastructure, which Kapsch TrafficCom believes will increasingly be based on 5.9 GHz technology. In the CVO segment, for example, data sent by the vehicle's on-board electronics via the 5.9 GHz band is analyzed to determine the condition of the vehicle.
Industry-oriented intelligent transportation systems are commercial applications designed to reduce the costs or maximize the revenue of vehicle fleet operators, including transportation companies (market segment PVTMS). Examples include systems for fleet management and for collecting information on the logistics of large-scale vehicle operators. Among the drivers are insurance companies, who see pay-as-you-drive car insurance as a promising way to attract new customers by offering fair insurance rates and ITS-based value-added mobility services.
Increased comfort expectations of travelers. User-oriented intelligent transportation systems are focused mainly on convenience and efficiency for travelers. The customer in the car receives information to aid in orientation, thereby increasing traffic safety. Example applications for vehicle information systems (market segment VIS) include transmitting traffic-related vehicle information to travelers before or during the trip as well as navigation. Addressees are information service providers such as wireless network operators, radio broadcasters and vendors of portable navigation devices. As a communication platform, the 5.9 GHz technology will enable a variety of future applications involving connected vehicles.
A common thread among all these forces driving the market is the convergence on the ITS market expected by Kapsch TrafficCom over the next 5 to 10 years. The company is convinced that applications, platforms and technologies will become increasingly interconnected and converge over time. In the view of Kapsch TrafficCom, the future lies in "connected vehicles in cooperative systems", which are systems for real-time interaction between vehicles (car-to-car communication) or between vehicles and infrastructure (car-to-infrastructure communication).
In fiscal year 2011/12, the Kapsch TrafficCom Group recorded the highest revenue since its foundation, continuing its growth from recent years. The North American subsidiaries acquired in the previous fiscal year contributed a full year's worth of revenue for the first time. The largest contribution from the project business originated from the implementation and the start of the operation of the nationwide electronic toll collection system viaTOLL for all vehicles above 3.5 tons on an existing road network in Poland of approximately 1,560 kilometers.
Major changes and events at a corporate level during fiscal year 2011/12 include the following:
n On 22 March 2012, Kapsch TrafficCom AG acquired the remaining minority stake in Kapsch-Busi S.p.A, Italy, and now holds 100% of the shares.
In fiscal year 2011/12, the Kapsch TrafficCom Group succeeded in renewing ongoing contracts in North America and Austria:
Expanding on the two large existing projects in South Africa and Poland, which significantly impacted the revenues and resources over the course of fiscal year 2011/12, the following additional projects were acquired:
Revenues of EUR 388.6 million in the previous fiscal year 2010/11 were improved by 161.3 million to reach EUR 549.9 million in fiscal year 2011/12, representing an increase of 41.5%. The two major segments of Road Solution Projects (RSP) and Services, System Extensions, Components Sales (SEC) both recorded significant revenue increases. The operating result (EBIT) declined by 13.6% to EUR 42.2 million in fiscal year 2011/12, compared to EUR 48.9 million in the previous year.
Revenues in the segment Road Solution Projects (RSP) reached EUR 229.9 million, up by 44.7% compared with the previous year (EUR 158.9 million) and corresponding to 41.8% of total revenues (2010/11: 40.9%). The most important factor here was the ongoing implementation of the nationwide electronic toll collection system in Poland, which was successfully completed at the end of fiscal year 2011/12. Increased revenues also resulted from the realization of the Australian Airport Link project, the project for the implementation of an electronic toll collection system in Portugal and the project in Belarus that was awarded shortly before the end of the fiscal year. The South African Gauteng project contributed less revenue than in the previous year, and no major extensions to the nationwide electronic truck toll collection system in the Czech Republic were contracted or realized.
The segment RSP recorded a positive operating result (EBIT) of EUR 4.1 million (2010/11: EUR 0.1 million). This can be primarily attributed to the project in Poland. Nevertheless, the operating results for this segment were weighed down by the regular costs associated with the segment, the continued expenditures for entry into new markets such as the U.S.A., Slovenia, Russia and Singapore as well as the upfront costs for ongoing and upcoming tenders.
In the segment Services, System Extensions, Components Sales (SEC), revenues increased by 38.0% (EUR 84.7 million), from EUR 223.3 million to EUR 308.1 million, corresponding to 56.0% of total revenues (2010/11: 57.5%). The most important factors for this development were the successful start of the nationwide toll collection system in Poland in July 2011, the mobilization phase for the electronic toll collection system in the South African Gauteng province and the associated deliveries of on-board units as well as the revenues of the Canadian and American IVHS subsidiaries acquired in November 2010. Both the ongoing technical and commercial operation of the nationwide truck toll collection system in the Czech Republic and the ongoing technical operation, including maintenance, of the nationwide truck toll collection system in Austria also recorded increased revenues. The volume of on-board units delivered reached an all-time high of 11.2 million units, more than double the volume of the previous year. Sales to the U.S.A., South Africa, France, Australia and Spain developed favorably.
The EBIT in the segment SEC reached EUR 37.3 million (2010/11: EUR 48.3 million), corresponding to an EBIT margin of 12.1% (2010/11: 21.6%). Due to an incomplete acceptance process of the system in Poland between July 2011 and February 2012, the respective revenues from the operation project were not received in their full amounts even though the full expenses were incurred. The EBIT in the segment was also burdened by the delay in connection with the start of the South African project as well as its lower profit margin compared with the previous year. Moreover, the order from the E-ZPass Group awarded in July 2011 was only obtained with a very price competitive offer.
In the segment Others (OTH), revenues increased from EUR 6.4 million in the previous year to EUR 12.0 million in fiscal year 2011/12. This increase can be attributed to the manufacturing and supply for the GSM-R project for Kapsch CarrierCom in France. The segment OTH contributed 2.2% to total revenues (2010/11: 1.6%). The operating result reached EUR 0.8 million (2010/11: EUR 0.4 million), corresponding to a slightly reduced EBIT margin of 6.5% in fiscal year 2011/12 (2010/11: 6.7%).
| Revenues by segment | 2011/12 | 2010/11 | +/-% | 2009/10 | ||||
|---|---|---|---|---|---|---|---|---|
| Road Solution Projects (RSP) | ||||||||
| Revenues (% of total revenues) | in million EUR | 229.9 | (42%) | 158.9 | (41%) | 45% | 45.8 | (21%) |
| EBIT | in million EUR | 4.1 | (2%) | 0.1 | (0%) | >300% | -20.9 (-46%) | |
| Services, System Extensions, Components Sales (SEC) | ||||||||
| Revenues (% of total revenues) | in million EUR | 308.1 | (56%) | 223.3 | (57%) | 38% | 161.9 | (75%) |
| EBIT | in million EUR | 37.3 | (12%) | 48.3 | (22%) | -23% | 45.3 | (28%) |
| Others (OTH) | ||||||||
| Revenues (% of total revenues) | in million EUR | 12.0 | (2%) | 6.4 | (2%) | 88% | 8.3 | (4%) |
| EBIT | in million EUR | 0.8 | (6.5%) | 0.4 | (6.7%) | 82% | 0.2 | (2%) |
Revenues by region. Europe accounted for the largest share of total revenues (62.1%) in fiscal year 2011/12. The revenue increase of EUR 159.4 million can be attributed largely to the projects in Poland and France. Revenues in the rest of the world decreased by EUR 29.4 million (-20.7%). Significantly lower revenues in South Africa compared to the previous year were responsible for this decline, whereas higher revenues were recorded in Australia and in Thailand. In the American region, revenues increased by EUR 36.0 million (130.4%), mainly due to the first full year of revenue contribution by the Kapsch TrafficCom IVHS subsidiaries in North America. Revenues in Austria fell by EUR 4.7 million (-12.6%) because no significant expansions of the nationwide truck toll collection system took place during the past fiscal year.
| Revenues by region | 2011/12 | 2010/11 | +/-% | 2009/10 | ||||
|---|---|---|---|---|---|---|---|---|
| Austria (% of total revenues) | in million EUR | 32.8 | (6%) | 37.5 | (10%) | -13% | 42.4 | (20%) |
| Europe (excl. Austria) (% of total revenues) | in million EUR | 341.4 | (62%) | 182.0 | (47%) | 88% | 117.1 | (54%) |
| Americas (% of total revenues) | in million EUR | 63.6 | (12%) | 27.6 | (7%) | 130% | 12.1 | (5%) |
| Rest of the World (% of total revenues) | in million EUR | 112.1 | (20%) | 141.5 | (36%) | -21% | 44.5 | (21%) |
The cost of materials and other production expenses rose from EUR 191.3 million to EUR 287.3 million in fiscal year 2011/12, which reflects an increase of EUR 96.0 million. Compared to the previous year, the share of costs for materials and other production expenses in relation to revenues changed from 49.2% to 52.2%. This can be attributed primarily to the higher proportion of outsourced deliveries for the implementation and operation project in Poland, which was necessary due to the unusually short implementation period.
The staff costs increased by EUR 35.3 million compared with the previous year, rising from EUR 86.5 million to EUR 121.7 million in fiscal year 2011/12. During the same time, the average number of employees grew by 964 persons from 1,621 to 2,585. The staff requirements connected with the technical and commercial operation projects in South Africa and Poland represented the most important factors here. The staff cost ratio (staff costs in relation to total revenues) remained nearly unchanged at 22.1% (2010/11: 22.3%).
Depreciation and amortization expenses increased by EUR 4.8 million compared with the previous year (2010/11: EUR 13.6 million; 2011/12: EUR 18.4 million), resulting primarily from the scheduled amortization of intangible assets from company acquisitions.
Other operating expenses increased from EUR 63.4 million to EUR 83.0 million in fiscal year 2011/12, representing an increase of EUR 19.6 million. This increase occurred primarily in the marketing and advertising expenses, travel expenses, communication and IT expenses as well as rental expenses. Additional project-related expenses as well as the establishment of the subsidiary in Poland were the main reasons for this development.
The Kapsch TrafficCom Group achieved a financial result of EUR -5.9 million (2010/11: EUR -7.6 million) in fiscal year 2011/12. Finance income increased due to not yet realized exchange rate gains in connection with intercompany financing, mainly for the Polish project and the subsidiaries in North America. Finance costs rose as a result of increased interest expenses for the corporate bond issued in the previous year and the financing of the project in Poland.
The profit before income taxes reached EUR 36.3 million, down by EUR 4.9 million compared with the previous year. Lower income taxes and higher finance income compensated for the lower operating result (EBIT) and led to an almost unchanged profit for the period of EUR 27.5 million (2010/11: EUR 28.4 million).
Total assets increased in large part as a consequence of the augmented project business to EUR 557.7 million as of 31 March 2012 (31 March 2011: EUR 450.1 million). Total equity reached EUR 256.2 million, up by EUR 64.7 million compared to the previous year (31 March 2011: EUR 191.5 million), mainly due to the capital increase at the end of July 2011 as well as the total comprehensive income for the period amounting to EUR 37.4 million. On this basis, the equity ratio of the Kapsch TrafficCom Group increased to 45.9% as of 31 March 2012 (31 March 2011: 42.5%) despite an increase in total assets and the high project-related net working capital.
The most significant changes in assets occurred within the current assets. In connection with the projects in Poland and South Africa, trade receivables and other current assets rose from EUR 190.9 million to EUR 287.6 million.
Non-current assets increased from EUR 159.7 million to EUR 168.1 million as of 31 March 2012. The largest change arose in other financial assets and investments solely due to the positive development of the shares in the Norwegian Q-Free ASA. The decline in intangible assets resulted from the scheduled amortization of assets from company acquisitions.
On the liabilities side, the current liabilities rose from EUR 141.2 million to EUR 187.6 million on 31 March 2012. This increase of EUR 46.4 million was mainly due to higher current financial liabilities, current provisions and other current liabilities and deferred income, all related to the project in Poland.
Non-current liabilities decreased to EUR 113.8 million (31 March 2011: EUR 117.4 million), mainly resulting from other non-current liabilities.
Net cash flow from operating activities declined to EUR -37.8 million in fiscal year 2011/12 compared to EUR -11.7 million in the previous year. This was mainly attributable to the increase in trade receivables and other current assets as well as in current provisions and to the decrease in trade payables and other current payables, which led to a further increase of the net working capital. The payment received from the project in Poland in April, however, significantly reduced trade receivables and other current assets after the end of the fiscal year on 31 March 2012. Moreover, the lower operating result (EBIT) weighed down the net cash flow from operating activities.
The net cash flow from investing activities in fiscal year 2011/12 was largely determined by the expansion of production facilities, modernization of office premises and the acquisition of securities. The free cash flow declined to EUR -50.9 million after EUR -19.9 million in the previous year.
The capital increase at the end of July 2011 in the gross amount of EUR 49.0 million and the drawdown of a short-term credit for the project in Poland positively affected the net cash flow from financing activities, while the payment of dividends totaling EUR 21.0 million lowered the result.
Cash and cash equivalents increased to EUR 44.9 million as of 31 March 2012, compared to EUR 42.0 million as of 31 March 2011. The increase in short-term financial liabilities did not result in a higher cash balance, leading to higher net debts of EUR 74.4 million as of 31 March 2012 compared to EUR 47.2 million as of 31 March 2011.
Reliability and accuracy of installed systems. The toll transaction rate is a figure for assessing the accuracy and reliability of a toll collection system. It indicates the number of successful transactions in relation to all potential toll transactions of vehicles equipped with a functioning on-board unit. A high toll transaction rate translates to high toll revenues.
In 2011, the average toll transaction rate of the existing truck toll collection system in Austria amounted to approximately 99.9%, again reaching the high level of 2010. During the same period, the average transaction rate of the nationwide electronic toll collection system in the Czech Republic was approximately 99.5%, up by 0.2% from 99.3% in the previous year. The calculation of the average transaction rate is based on methods agreed upon with the respective customer, meaning that comparisons between the average transaction rates achieved in different projects are only possible on a limited basis.
Staff. The average number of employees in the Kapsch TrafficCom Group in fiscal year 2011/12 was 2,585, which is 59.5 % higher than the average of 1,621 in fiscal year 2010/11. As of 31 March 2012, the group had a workforce of 2,705 (2,520 salaried and 185 non-salaried employees), of which more than half were located outside of Europe (roughly 1,100 employees in South Africa).
Kapsch TrafficCom places great importance on the continued training and education of its employees. This involves not only promoting professional education but also providing seminars and workshops for developing personal and teamwork skills. In addition, training sessions tailored to the particular needs of employees are offered within the framework of the Kapsch Academy. A job rotation program promotes the international exchange of staff between the various locations, and select employees are prepared for their future tasks in a management trainee program.
Kapsch TrafficCom makes contributions to an external pension fund for employees of group companies in Austria under a defined contribution scheme. The amounts of the payments are based on the individual employee's income and the operating profit margin of the company.
Kapsch TrafficCom is aware of the employees' contribution to its success and acknowledges this through a profit participation plan. The Kapsch TrafficCom Group rewards the commitment of its employees by distributing to them up to 5% of the group profit. Country-specific upper limits have been established to ensure that the distribution reflects local purchasing power. Every employee receives a share, which is independent of the person's salary or wage.
Moreover, Kapsch TrafficCom is committed to promoting the advancement of women in the workplace. Women are supported through a flexible working hours scheme that is designed to help combine professional and private life. In addition, Kapsch TrafficCom cooperates with schools, universities and colleges in order to increase the proportion of women employed, among other goals. The company also promotes women in the workforce through participation in specific programs such as "FIT Frauen in die Technik" or "FemTech". A specific trainee program "Women into sales" has been established within the Kapsch TrafficCom Group in addition to a committee for non-discrimination.
Quality. Kapsch TrafficCom AG defines its processes in an integrated management system for health and safety, security, environment and quality (HSSEQ). Valid certifications are held for quality management pursuant to ISO 9001 (since 2002), for occupational health and safety pursuant to OHSAS 18001 and for environmental management pursuant to ISO 14001 (since 2005). Kapsch TrafficCom has implemented the necessary measures in its internal processes and monitors them continuously. The certificate pursuant to ISO 27001 ensures the necessary information security management. The certificate pursuant to ISO 20000 for service management in connection with technical operations guarantees a high service quality in this area.
Environment. In the future, the group will strive to fulfill its responsibilities toward environmental protection even more extensively, particularly through the efficient and responsible use of natural resources.
Kapsch TrafficCom understands the challenge of long-term and responsible business activities and is dedicated to sustainability on an economic, environmental and social level. Regularly published sustainability reports will demonstrate the progress on a group level and the continuing establishment of predefined objectives.
Living up to its socio-political responsibility, the entire Kapsch Group – organized by Kapsch AG – further supports a number of contemporary art and cultural institutions and projects, and even initiates its own projects in this field. Select educational initiatives and extensive social measures complement this approach, which the company considers to be an obligation both inside and outside the group.
Music. A major component of this commitment consists of sponsoring activities related to the Vienna Concert Hall (Wiener Konzerthaus), a cultural institution with an excellent reputation even far beyond Austria's borders. The Kapsch Group has been the main sponsor of the Vienna Concert Hall since 1992. The "Wien Modern" festival – one of the world's best known festivals of contemporary music – has been supported by Kapsch since its launch in 1989.
Visual arts. Promoting lesser-known artists is of particular concern to the Kapsch Group. In particular, young Austrian and international artists are assisted by sponsorship campaigns. One example is the photo calendar that the Kapsch Group has supported since 1994. The calendar is presented annually in late autumn at a private exhibition.
Educational institutions. As a company that is driven by technology and innovation, Kapsch TrafficCom is constantly interested in establishing contacts as early as possible with the best engineering talents. Since 2005, the Kapsch Group has supported the work of Universitäre Gründerservice Wien GmbH, which aims to support and guide young entrepreneurs in the implementation of ideas relating to well defined business concepts.
Social activities. Kapsch TrafficCom takes pride in supporting select social projects at home and abroad. One example of the numerous projects is ICEP, the Institute for Cooperation in Development Projects, whose activities help improve the circumstances of people in developing countries. By directly promoting migration and integration, Kapsch TrafficCom contributes to social justice, the positive development of society as well as long-term safety and security.
As a technology company, Kapsch TrafficCom operates in an ever-changing environment. Risks are therefore part of its day-to-day business. For the company, risk means the possibility of deviating from company objectives, meaning that the definition of risk encompasses both positive (opportunities) as well as negative (risks) deviations from planned objectives.
Risk management has been positioned as a separate function within the finance department of Kapsch TrafficCom AG, focusing on project risk management and enterprise risk management (ERM).
Project risk management starts in the bid phase of customer projects. It comprises institutionalized processes aimed at identifying and analyzing all relevant opportunities and risks pertaining to the group's projects, thereby providing the basis for the timely planning and implementation of risk-mitigating activities.
The ERM focuses on risks of key customer projects as well as strategic, technological, organizational, financial, legal and IT risks, which are reported to the executive board on a semi annual basis. The goal of the ERM approach is early identification, analysis and control of all risks which might influence strategic and operational objectives of the company. The primary objective in this context is not to avoid risks but to deal with risks in a controlled and deliberate manner and to recognize and realize opportunities as they arise over time in order to make a valuable contribution to the management of the company.
The material risks faced by the Kapsch TrafficCom Group and the respective risk management measures are briefly explained below.
Volatility of new orders. A major portion of the revenues of the Kapsch TrafficCom Group is generated in the segment Road Solution Projects (RSP). In this segment, the group regularly participates in tenders for the implementation and operation of large electronic toll collection systems as well as for the collection of tolls on specific sections of road. On the one hand, there is a risk that tenders in which the group participates or plans to participate could be delayed or withdrawn, for instance as a result of political changes, appeals or legal actions by unsuccessful bidders. On the other hand, a risk exists that Kapsch TrafficCom may not win its bids for new projects due to technological, financial, formal or other reasons. Continuing revenues from the technical and commercial operation of systems also depend on the successful participation in tenders for systems.
In the past, the revenues of the Kapsch TrafficCom Group have been heavily influenced by the realization of implementation projects in the given fiscal year. In particular, significantly higher revenues were recorded in 2003 (implementation of a nationwide electronic truck toll collection system in Austria), 2006/07 (implementation of a nationwide electronic truck toll collection system in the Czech Republic) and 2010/11 (implementation of an electronic toll collection system in the South African province of Gauteng). In fiscal year 2011/12, sizeable revenues were generated from the implementation of a nationwide electronic truck toll collection system in Poland.
The strategy of the Kapsch TrafficCom Group is aimed, among other things, at reducing this volatility of revenues through increased geographic diversification and increased diversification of the customer base and product portfolio as well as sustained growth in the share of technical and commercial system operation in total revenues in the interest of strengthening the segment Services, System Extensions, Components Sales (SEC).
Risks of project execution. In connection with the installation of systems, Kapsch TrafficCom Group is usually contractually obligated to provide performance guarantees. Since electronic toll collection systems and other intelligent transportation systems are frequently sophisticated and technologically complex systems that must be implemented within a short timeframe, system and product defects or missed deadlines may occur due to the limited time available. Unexpected project modifications, lack of qualified personnel, quality defects, unexpected technical problems as well as performance problems of suppliers or consortium members may also have a negative impact on project schedules. The failure to meet guaranteed performance levels or deadlines usually results in penalties and/or compensation for damages, sometimes also compensation for lost toll revenues. Significant deadline overruns also frequently trigger contractual clauses that enable clients to terminate contracts prematurely. A significant delay in a project, failure to achieve guaranteed performance levels or failure to implement a project in time would also reduce the chances of success in future tenders for systems. There is also the risk that Kapsch TrafficCom Group cannot execute projects in line within the set cost budgets.
Kapsch TrafficCom Group employs risk management methods and project risk management procedures based on IPMA (International Project Management Association) standards in order to guard against risks associated with projects.
Long-term contracts with public authorities. In many cases, the system contracts are awarded by public agencies. Framework agreements and service contracts in connection with toll collection projects may include terms and conditions that are not negotiable in a tender process and that may be disadvantageous to the Kapsch TrafficCom Group. Some long-term contracts include challenging requirements with regard to the performance of the implemented systems, components and processes. These requirements can, if they are not achieved, result in significant penalties, damages or even contract termination. On the other hand, some contracts include substantial bonus payments for over-fulfillment of performance requirements. In the case of long-term contracts, the margins earned can also differ from the original estimates due to changes in costs.
Liabilities arising from contracts concluded by the Kapsch TrafficCom Group may include liabilities regarding customers' loss of profit, product liabilities and other liabilities. While the group aims to include appropriate limitations to its liability in contracts, it is still impossible to guarantee that all contracts contain sufficient limitations to the group's liability or that these limitations can be enforced under applicable law.
Capacity for innovation. The strong market position of the Kapsch TrafficCom Group is, to a large extent, based on its ability to develop state-of-the-art, efficient and reliable systems, components and products. Kapsch TrafficCom is committed to a permanent and integrated innovation process. In order to maintain its already strong position in technology, the Kapsch TrafficCom Group invests a considerable portion of its revenues in research and development activities. However, if the group does not succeed in developing new systems, components and products, this can be detrimental to its competitive position.
Since its capacity for innovation is based largely on technology, internal know-how and intellectual property, the global increase in product piracy and reverse engineering may have negative effects on the group. In addition, any failures in protecting these technologies may have a negative impact on the group's competitive position. Moreover, it is possible that systems, components, products or services could infringe on the intellectual property rights of third parties. The Kapsch TrafficCom Group places great importance on the protection of technologies and the company's internal know-how, e. g. through patents and non-disclosure agreements with other parties.
Acquisition and integration of companies as a part of the group's growth. One of the strategic objectives of the Kapsch TrafficCom Group is to grow internationally both by organic means and through select acquisitions and joint ventures. In the implementation of this strategy, the group has acquired and integrated companies around the world. However, a number of challenges remain in connection with this growth strategy in order to realize the desired synergies and objectives.
Country risk. The strong expansion of business activities in Eastern Europe and non-European countries has exposed the Kapsch TrafficCom Group to heightened political risks. Significant and unforeseeable political changes can exert a major influence on the ability to implement or operate ITS projects in these countries and can also affect the availability and accessibility of funds. There may also be interference with the property rights of the Kapsch TrafficCom Group or complications regarding business practices and activities.
Foreign exchange risk. The Kapsch TrafficCom Group maintains branches, offices and subsidiaries in a number of countries outside the eurozone. A considerable portion of revenues and costs are denominated in the currencies of the respective foreign companies rather than in euros. Although the group aims to hedge the net currency position of the individual contracts as necessary, currency fluctuations may result in exchange rate losses that may influence the consolidated financial statements (transaction risk). In addition, risks arise from the conversion of the separate financial statements of international companies into the group currency, the euro (translation risk). Fluctuations in exchange rates may also result in a change in the competitive position of the Kapsch TrafficCom Group.
Interest rate risk. Within the framework of project financing, the group regularly agrees to variable interest rates that are tied to market interest rates (Euribor, Pribor etc.). This exposes the Kapsch TrafficCom Group to interest rate risks. The group utilizes appropriate financial instruments to hedge against interest rate risks when these risks are significant.
Liquidity risk. Sufficient financial resources must be available to ensure that the Kapsch TrafficCom Group can meet its payment liabilities at any time. Medium and long-term financing must be available in order to carry out large-scale projects (such as implementing a nationwide toll collection system under delayed payment terms from the client) and for acquiring other companies. Additionally, implementing large-scale projects often requires the provision of significant bank guarantees to secure bid obligations (bid bonds) or to secure possible warranty claims (performance bonds).
In financing agreements, the Kapsch TrafficCom Group is subject to the customary restrictions in terms of its business policy, e. g. when drawing additional loans, using assets as collateral or providing guarantees for third parties. The availability of financing and bank guarantees depends on market conditions as well as the net assets and financial position of the Kapsch TrafficCom Group and the results of operations. A lack of liquid assets (even if the group is otherwise solvent), of financing or of bank guarantees can have an extremely adverse impact on the net assets and financial position of the Kapsch TrafficCom Group and the results of operations. The issuing of 800,000 new shares of authorized capital with gross proceeds of EUR 49 million in fiscal year 2011/12 helped the Kapsch TrafficCom Group to again improve its liquidity.
Liquidity risk is managed by ongoing, company-wide financial and cash planning. Potential liquidity shortages can thus be identified and mitigated.
Credit risk. The Kapsch TrafficCom Group is exposed to the risk of non-payment by customers. The credit ratings of new and existing customers are checked on a regular basis. Many of the key customers of the Kapsch TrafficCom Group are public authorities, especially in connection with implementing and/or operating nationwide or regional toll collection systems. There is also a risk that the counterparties (including financial institutions assumed to have good credit ratings) of both original and derivative financial instruments cannot meet their payment obligations when due. A payment default or the recognition of impairment charges to receivables can be extremely detrimental to the net assets and financial position of the Kapsch TrafficCom Group and the results of operations.
The success of the Kapsch TrafficCom Group depends heavily on key personnel with many years of experience in the industry. Moreover, the group's ability to recruit qualified staff, integrate them into the company and retain them over the long-term is crucial in its current growth phase. The loss of key personnel and difficulties in the recruitment of personnel may adversely affect the success of the group.
Kapsch TrafficCom Group has implemented a number of measures to counteract personnel risks, such as incentive schemes and employee development opportunities.
A variety of regulations and legal requirements must be observed in connection with participating in public tenders, erecting infrastructure for ITS solutions (such as toll stations) and the operation of toll collection systems. Identifying and adhering to applicable legal regulations and requirements can result in considerable administrative and technical expense. The failure to meet regulations or official requirements can lead to severe penalties and can also reduce the possibility of (successfully) taking part in tenders or continuing with the given business activity.
With the expansion into new regions and new ITS business areas, the risk of patent infringement or the violation of property rights increases. Kapsch TrafficCom has implemented active intellectual property (IP) management as a separate function. In order to avoid legal actions and court proceedings, the Kapsch TrafficCom Group monitors potential intellectual property rights infringements continuously as well as prior to entry into new markets or regions.
As a technology group, the Kapsch TrafficCom Group is exposed to typical IT risks relating to security, confidentiality and the availability of data. For this reason, Kapsch TrafficCom AG has implemented an IT risk management system designed according to the corporate risk and IT security application method (CRISAM) and has been certified pursuant to ISO 27001 (information security management). The Kapsch TrafficCom Group is also certified according to ISO 20000 "IT service management" (similar to ITIL) for the operation of toll collection systems.
The ERM approach of Kapsch TrafficCom is not only concerned with risks; it also includes the periodic identification, assessment and management of opportunities. Significant opportunities for Kapsch TrafficCom result from increased financing needs for infrastructure projects, global traffic growth, legislation to reduce the environmental impact of transportation, enhanced vehicle and fleet operations productivity and the increasing comfort and convenience expectations of travelers. In addition, many market opportunities arise from the geographic diversification as well as the increasing diversification of the customer base and product portfolio.
From the current perspective, no risks have been identified that could endanger the continued operations of the Kapsch TrafficCom Group. Increasing geographic expansion, the diversification of the product portfolio and an increased share of recurring revenues (further growth in the segment Services, System Extensions, Components Sales) are planned to further reduce the concentration of risks in the future.
The Corporate Law Amendment Act (URÄG 2008) adopted the 8th EU Directive into Austrian law. Under this legislation, companies with a capital market orientation are henceforth obliged to include in their group management reports not only an outline of their risk management systems but also of the main features of their ICS with regard to the financial reporting process.
Kapsch TrafficCom AG began analyzing and documenting its existing internal processes for financial reporting on an ongoing basis in fiscal year 2009/10. The results obtained so far have been presented at the quarterly meetings of the audit committee for assessment and discussion.
The Group Accounting Manual represents the cornerstone for financial accounting and reporting throughout the whole Kapsch Group. The manual is published and regularly updated by the Kapsch Group and contains the essential financial and reporting procedures based on the International Financial Reporting Standards (IFRS). Groupwide guidelines and work instructions represent another important pillar of the internal control system.
The central elements of the ICS process include regular verification of compliance with the principle of dual control and the segregation of duties as well as defined actions for monitoring the effectiveness and efficiency of operating activities, the reliability of financial reporting and the compliance with relevant legal regulations. The ICS guidelines of Kapsch TrafficCom AG follow the basic structure of the internationally recognized standards for internal control systems (COSO – Internal Control and Enterprise Risk Managing Frameworks of the Committee of Sponsoring Organizations of the Treadway Commission).
The accounting for all group transactions is handled by a variety of software solutions. In a number of countries, the accounting has been outsourced to locally-based tax accountants due to the size of the subsidiaries. Companies submit reporting packages to the head office on a quarterly basis which contain all accounting data pertaining to the statement of comprehensive income, balance sheet and cash flow statement. The data is then transferred into the central consolidation system (Hyperion Financial Management). This financial information is verified on a groupwide basis by the central Kapsch TrafficCom controlling department and subsequently forms the basis for the quarterly reports issued by the Kapsch TrafficCom Group in accordance with IFRS.
The supervisory board is kept informed of business developments by the executive board during regular meetings by way of consolidated presentations consisting of segment reporting, earnings development analyses with comparisons of current figures to figures from the budget and the previous period as well as select financial figures, forecasts, group financial statements and developments in the number of employees and order inflow.
In keeping with the decentralized structure of the Kapsch TrafficCom Group, local management is responsible for the implementation and monitoring of the internal control system. The managing directors of the individual subsidiaries are responsible for establishing and designing internal control and risk management processes that meet the needs of the given company in view of accounting procedures, as well as for ensuring compliance with the groupwide rules and guidelines in this respect. The head of finance of the Kapsch TrafficCom Group, the central controlling department and the internal audit department subsequently verify compliance with these audit procedures by local management, and the results are regularly reported to the audit committee.
The Kapsch TrafficCom Group has an international network of research and development centers in Vienna and Klagenfurt (Austria), Jönköping (Sweden), Bologna (Italy), Buenos Aires (Argentina), Toronto (Canada), Carlsbad (California, U.S.A.) and Cape Town (South Africa). As of 31 March 2012, the Kapsch TrafficCom Group employed more than 400 (2010/11: around 350) engineers in its R&D activities, which have high priority for the Kapsch TrafficCom Group in pursuing its strategic goal of staying always one step ahead. The knowledge of entirely new technologies based on national and international standards and the ability to implement these form the foundation for successful business developments and also enable the entry into new markets. The current focus lies on the regions of North and South America, Russia, Australia and South-East Asia.
In fiscal year 2011/12, the main focus of research and development activities was on a new high-performance roadside infrastructure platform that integrates all major sensor systems into a single, common software platform with improved re-use of core components, largely automated configuration and installation as well as simpler maintenance. This new sensor platform was succesfully put into operation in Portugal as well as deployed in South Africa and is now being extended for the U.S. market roll-out.
Major research activities included the prototyping of intelligent transportation systems (ITS) and participation in standardization for G5 (WAVE Europe) under the aspects of traffic management, control and reduction, as well as research and product development of combined solutions for road safety and electronic flow control (EFC) devices. The newly developed Kapsch ITS transponder platform enables vehicle-to-vehicle communication and the transmission of the vehicle status information. Research into vehicle detection and classification was undertaken to realize new video and sensor detection technologies with outstanding performance characteristics.
Important organizational initiatives during the last fiscal year included process and quality improvement initiatives in the central system and roadside areas to decrease expenses and delivery times as well as organizational changes and cost center splits to enable better product support.
The main initiatives in the component business involved developing new and less expensive generations of on-board units based on DSRC, GNSS or 5.9 GHz technology. The first new, lower-cost on-board units were approved for sale, and the first successful commercial vehicle 5.9 GHz transponder demonstration took place in the U.S. market.
Successful progressing R&D efforts are the foundation for sustained improvements in existing products and solutions as well as the continuous reduction of production, installation, operating and maintenance costs, all of which are essential for maintaining a technological and competitive advantage.
Research costs are recognized as expenses. The same applies to development costs, unless the IFRS criteria for classification as intangible assets are met. Since the statement of comprehensive income is structured by expense type, the research and development costs are reported under various statement of comprehensive income items, in particular under the cost of materials and other production services, staff costs and other operating expenses. In fiscal year 2011/12, the Kapsch TrafficCom Group invested approximately EUR 53.3 million (2010/11: EUR 37.3 million) in research and development, representing approximately 10% of total revenues.
Despite a macroeconomic environment that remains challenging, Kapsch TrafficCom takes an optimistic view of its markets for fiscal year 2012/13 and beyond. The company is convinced that many interesting opportunities exist worldwide for the delivery and operation of toll collection systems and that it is well prepared for the increasingly observable convergence of the ITS market. Fiscal year 2012/13 will be characterized in particular by the further developments associated with the date for the start of the electronic toll system for multi-lane free-flow traffic in the South African Gauteng province as well as the expected tenders for nationwide electronic toll collection systems in Hungary, Slovenia and Denmark. The company will also focus during fiscal year 2012/13 on implementation of the strategy up to the year 2016 as defined in fiscal year 2011/12 and on establishing the corresponding corporate structure.
On 6 April 2012, the nationwide truck toll collection system in Poland was finally accepted by the customer. The last installment was paid in the net amount of EUR 103.3 million in April as well.
On 28 April 2012 – just two days before the final scheduled commissioning deadline – the start of the fully completed system in South Africa was suspended indefinitely by court order due to a lawsuit. On 23 May 2012, the government elected to appeal the court decision.
Vienna, 30 May 2012
Georg Kapsch Erwin Toplak André Laux
Chief Executive Officer Chief Operating Officer Executive Board member
We declare to the best of our knowledge that the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the group as required by the applicable accounting standards and that the group management report gives a true and fair view of the development and performance of the business and the position of the group, together with a description of the principal risks and uncertainties faced by the group.
Vienna, 30 May 2012
Georg Kapsch Erwin Toplak André Laux
Chief Executive Officer Chief Operating Officer Executive Board member
(Austrian Stock Exchange Act)
| Board Member | Area of responsibility |
|---|---|
| Georg Kapsch (CEO) | Finance and Administration, Mergers & Acquisitions, Investor Relations, Legal, International Subsidiaries, Human Resources, Marketing & Communications, International Relations & Affairs, Innovation Management, Production, Telematic Services and Region North American |
| Erwin Toplak (COO) | Sales region 1, Business Development, System Engineering, Research & Development and Technical Operations |
| André F. Laux (Executive Board Member) | Sales region 2, Business Development, Product and Project Management |
Consolidated statement of comprehensive income.
| All amounts in EUR | Note | 2011/12 | 2010/11 |
|---|---|---|---|
| Revenue | (1) | 549,921,391 | 388,577,354 |
| Other operating income | (2) | 10,250,121 | 7,564,449 |
| Changes in finished and unfinished goods and work in progress | (3) | -7,715,924 | 7,461,759 |
| Other own work capitalized | 196,825 | 0 | |
| Cost of materials and other production services | (4) | -287,288,207 | -191,255,566 |
| Staff costs | (5) | -121,725,367 | -86,462,023 |
| Amortization of intangible assets and depreciation of property, plant and equipment | (6) | -18,399,507 | -13,614,643 |
| Other operating expenses | (7) | -83,019,586 | -63,391,169 |
| Operating result | 42,219,746 | 48,880,161 | |
| Finance income | (8) | 7,209,800 | 4,497,773 |
| Finance costs | (8) | -13,083,030 | -12,117,209 |
| Financial result | (8) | -5,873,229 | -7,619,436 |
| Results from joint ventures and associates | (14) | -32,679 | 0 |
| Profit before income taxes | 36,313,838 | 41,260,725 | |
| Income taxes | (9) | -8,861,709 | -12,825,554 |
| Profit for the period | 27,452,129 | 28,435,171 | |
| Other comprehensive income for the period | |||
| Gains/losses recognized directly in equity: | |||
| Available-for-sale financial assets | 11,596,162 | -2,276,947 | |
| Currency translation differences | -1,541,864 | 4,294,277 | |
| Income tax relating to components of other comprehensive income | -78,020 | -258,963 | |
| Other comprehensive income for the period net of tax | (10) | 9,976,278 | 1,758,367 |
| Total comprehensive income for the period | 37,428,406 | 30,193,538 | |
| Profit attributable to: | |||
| Equity holders of the company | 20,599,568 | 22,062,116 | |
| Minority interests | 6,852,560 | 6,373,055 | |
| 27,452,129 | 28,435,171 | ||
| Total comprehensive income attributable to: | |||
| Equity holders of the company | 30,941,852 | 23,608,360 | |
| Minority interests | 6,486,554 | 6,585,178 | |
| 37,428,406 | 30,193,538 | ||
| Earnings per share from the profit for the period | |||
| attributable to the equity holders of the company (in EUR) | (29) | 1.62 | 1.81 |
| All amounts in EUR | Note | 31 March 2012 | 31 March 2011 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Property, plant and equipment | (12) | 21,847,139 | 19,404,442 |
| Intangible assets | (13) | 80,378,811 | 88,687,320 |
| Interests in joint ventures and investments in associates | (14) | 0 | 0 |
| Other non-current financial assets and investments | (15) | 51,229,052 | 34,489,914 |
| Other non-current assets | (16) | 3,420,384 | 9,017,638 |
| Deferred tax assets | (22) | 11,188,685 | 8,109,517 |
| 168,064,072 | 159,708,830 | ||
| Current assets | |||
| Inventories | (17) | 48,898,875 | 49,484,611 |
| Trade receivables and other current assets | (18) | 287,589,919 | 190,885,049 |
| Other current financial assets | (15) | 8,212,783 | 8,036,841 |
| Cash and cash equivalents | (19) | 44,929,361 | 42,000,584 |
| 389,630,938 | 290,407,085 | ||
| Total assets | 557,695,010 | 450,115,915 | |
| EQUITY | |||
| Capital and reserves attributable to equity holders of the company | |||
| Share capital | (20) | 13,000,000 | 12,200,000 |
| Capital reserve | 117,508,771 | 70,077,111 | |
| Retained earnings and other reserves | 112,098,233 | 94,065,714 | |
| 242,607,004 | 176,342,825 | ||
| Minority interests | 13,639,537 | 15,170,566 | |
| Total equity | 256,246,542 | 191,513,391 | |
| LIABILITIES | |||
| Non-current liabilities | |||
| Non-current financial liabilities | (21) | 74,255,766 | 74,112,367 |
| Liabilities from post-employment benefits to employees | (23) | 16,703,633 | 16,314,606 |
| Non-current provisions | (26) | 1,097,655 | 686,388 |
| Other non-current liabilities | (24) | 3,439,531 | 10,422,739 |
| Deferred income tax liabilities | (22) | 18,315,570 | 15,875,749 |
| 113,812,155 | 117,411,848 | ||
| Current liabilities | |||
| Trade payables | 59,013,463 | 72,531,371 | |
| Other liabilities and deferred income | (25) | 53,047,511 | 36,881,453 |
| Current tax payables | 3,795,130 | 3,973,331 | |
| Current financial liabilities | (21) | 53,249,432 | 23,082,571 |
| Current provisions | (26) | 18,530,776 | 4,721,950 |
| 187,636,313 | 141,190,676 | ||
| Total liabilities | 301,448,468 | 258,602,524 | |
| Total equity and liabilities | 557,695,010 | 450,115,915 |
| All amounts in EUR | ||||||
|---|---|---|---|---|---|---|
| Attributable to equity holders of the Company | Minority interests | Total equity | ||||
| Share capital | Capital reserve | Other reserves | Consolidated retained earnings |
|||
| Carrying amount as of 31 March 2010 | 12,200,000 | 70,077,111 | 2,702,758 | 78,233,966 | 5,034,869 | 168,248,704 |
| Dividend for 2009/10 | -9,150,000 | -3,245,699 | -12,395,699 | |||
| Effects from business combinations and the acquisition of minority interests |
-1,329,370 | 6,796,218 | 5,466,848 | |||
| Result for the period | 22,062,116 | 6,373,055 | 28,435,171 | |||
| Other comprehensive income for the period: |
||||||
| Currency translation differences | 4,082,155 | 212,122 | 4,294,277 | |||
| Fair value gains/losses on available-for-sale financial assets |
-2,535,909 | 0 | -2,535,909 | |||
| Carrying amount as of 31 March 2011 | 12,200,000 | 70,077,111 | 4,249,003 | 89,816,711 | 15,170,566 | 191,513,391 |
| Proceeds from shares issued | 800,000 | 47,431,660 | 48,231,660 | |||
| Dividend for 2010/11 | -13,000,000 | -8,017,583 | -21,017,583 | |||
| Contributions from shareholders | 90,667 | 90,667 | ||||
| Result for the period | 20,599,568 | 6,852,560 | 27,452,129 | |||
| Other comprehensive income for the period: |
||||||
| Currency translation differences | -1,175,858 | -366,006 | -1,541,864 | |||
| Fair value gains/losses on available-for-sale financial assets |
11,518,142 | 0 | 1,518,142 | |||
| Carrying amount as of 31 March 2012 | 13,000,000 | 117,508,771 | 14,681,954 | 97,416,280 | 13,639,537 | 256,246,542 |
| All amounts in EUR | Note | 2011/12 | 2010/11 |
|---|---|---|---|
| Cash flow from operating activities | |||
| Operating result | 42,219,746 | 48,880,161 | |
| Adjustments for non-cash items and other reconciliations: | |||
| Depreciation and amortization | (6) | 18,399,507 | 13,614,643 |
| Impairment charge | 50,242 | 0 | |
| Increase/decrease in obligations for post-employment benefits | (23) | 389,028 | 114,354 |
| Increase/decrease in other non-current liabilities and provisions | (24, 26) | -2,973,804 | 103,655 |
| Increase/decrease in other non-current receivables and assets | -537,793 | 757,768 | |
| Increase/decrease in trade receivables (non-current) | (16) | 5,977,137 | -537,067 |
| Increase/decrease in trade payables (non-current) | (24) | -3,834,549 | 971,092 |
| Other (net) | -2,264,443 | -1,825,561 | |
| 57,425,071 | 62,079,045 | ||
| All amounts in EUR | Note | 2011/12 | 2010/11 |
|---|---|---|---|
| Changes in net current assets: | |||
| Increase/decrease in trade receivables and other assets | (18) | -92,190,370 | -72,588,781 |
| Increase/decrease in inventories | (17) | 585,736 | -8,098,837 |
| Increase/decrease in trade payables and other current payables | 1,944,819 | 28,696,976 | |
| Increase/decrease in current provisions | (26) | 13,808,826 | -2,218,992 |
| -75,850,989 | -54,209,634 | ||
| Cash flow from operations | -18,425,918 | 7,869,411 | |
| Interest received | (8) | 1,032,668 | 1,173,389 |
| Interest payments | (8) | -6,987,381 | -3,476,705 |
| Net payments of income taxes | -13,463,043 | -17,229,370 | |
| Net cash flow from operating activities | -37,843,673 | -11,663,275 | |
| Cash flow from investing activities | |||
| Purchase of property, plant and equipment | (12) | -10,648,960 | -6,362,478 |
| Purchase of non-current intangible assets | (13) | -2,412,085 | -1,888,740 |
| Purchase of securities and investments | (15) | -4,781,127 | -69,125 |
| Payments for acquisition of companies (net of cash acquired) | 0 | -52,180,953 | |
| Payments for acquisition of minority interests | 0 | -1,000,000 | |
| Payments for the acquisition of shares in companies consolidated at equity | (14) | -32,679 | 0 |
| Proceeds from the disposal of shares in subsidiaries | 0 | 35,999 | |
| Proceeds from the disposal of property, plant and equipment and intangible assets | 1,181,546 | 553,619 | |
| Net cash flow from investing activities | -16,693,304 | -60,911,678 | |
| Cash flow from financing activities | |||
| Proceeds from shares issued and contributions from shareholders | 48,322,327 | 0 | |
| Dividends paid to company shareholders | -13,000,000 | -9,150,000 | |
| Dividends paid to minority shareholders of group companies | -8,017,583 | -3,245,699 | |
| Increase in other non-current financial liabilities | (21) | 203,061 | 64,052,117 |
| Increase in current financial liabilities | (21) | 42,794,567 | 13,938,131 |
| Decrease in current financial liabilities | (21) | -12,684,280 | -92,126 |
| Net cash flow from financing activities | 57,618,092 | 65,502,423 | |
| Net decrease/increase in cash and cash equivalents | 3,081,114 | -7,072,530 | |
| Change in cash and cash equivalents | |||
| Cash and cash equivalents at beginning of year | (19) | 42,000,584 | 47,743,108 |
| Net decrease/increase in cash and cash equivalents | 3,081,114 | -7,072,530 | |
| Exchange gains/losses on cash and cash equivalents | -152,338 | 1,330,006 | |
| Cash and cash equivalents at end of year | (19) | 44,929,361 | 42,000,584 |
Kapsch TrafficCom Group is an international supplier of superior intelligent transportation systems (ITS).
The business activities of the Kapsch TrafficCom Group are subdivided into the following three segments:
The segment Road Solution Projects relates to the installation of ITS solutions.
The segment Services, System Extensions, Components Sales relates to the sale of services (maintenance and operation) and components in the area of ITS solutions.
The segment Others relates to non-core business activities conducted by Kapsch Components GmbH & CoKG. In this segment, Kapsch TrafficCom Group offers engineering solutions, electronic manufacturing and logistics services to affiliated entities and third parties.
DATAX HandelsgmbH, Vienna, is the ultimate parent of Kapsch Group. Until June 2007, KAPSCH-Group Beteiligungs GmbH, Vienna, a wholly-owned subsidiary of DATAX HandelsgmbH, had been the sole shareholder of the parent company, Kapsch TrafficCom AG.
Under an initial public offering in June 2007 and as a result of further changes in share ownership in the fiscal year ending 31 March 2009 and in the fiscal year ending 31 March 2012, KAPSCH-Group Beteiligungs GmbH reduced its share to 61.90%. The shares of Kapsch TrafficCom AG in free float have been listed in the Prime Market segment of the Vienna Stock Exchange since 26 June 2007.
The parent company, Kapsch TrafficCom AG, is a joint stock corporation incorporated and domiciled in Vienna, Austria. The address of its registered office is 1120 Vienna, Am Europlatz 2.
The following subsidiaries are part of the consolidated group:
n Kapsch Telematic Services IOOO, Minsk, Republic of Belarus *)
n PREMID a.s. v likidácii, Bratislava, Slovakia **)
*) Companies newly established in the fiscal year 2011/12 **) in liquidation
In the fiscal year 2011/12, Kapsch TrafficCom Cooperatief U.A., Amsterdam, Netherlands, and Mark IV Holdings B.V., Amsterdam, Netherlands, were liquidated and Kapsch Traffic Com HoldCo Inc., Halifax, Canada, and Kapsch TrafficCom IVHS Corp., Mississauga, Canada, were amalgamated into Kapsch TrafficCom Canada Inc., Halifax, Canada, as receiving company.
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below:
Pursuant to § 245a UGB, the consolidated financial statements as of 31 March 2012 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU). The presentation currency is the euro (EUR). The consolidated financial statements as of 31 March 2012 have been prepared under the historical cost convention, with the exception of available-for-sale securities and derivative financial instruments, which are measured at fair value at the balance sheet date.
The preparation of the consolidated financial statements in conformity with IFRS requires the use of estimates and assumptions which influence the amount and presentation of assets and liabilities reported at the balance sheet date and income and expenses recorded during the reporting period. Although these estimates are made by the executive board to the best of their knowledge and are based on current transactions, actual figures may differ from these estimates. The areas involving a higher degree of judgment or complexity as well as areas where assumptions and estimates are material to the consolidated financial statements are disclosed in Note 21.
There are no IFRSs or IFRIC interpretations that are effective for the first time for the fiscal year 2011/12 that would be expected to have a material impact on the group.
IAS 19, 'Employee benefits', was amended in June 2011. The impact on the group will be as follows: to eliminate the corridor approach and recognize all actuarial gains and losses in OCI as they occur; to immediately recognize all past service costs; and to replace interest cost and expected return on plan assets with a net interest amount that is calculated by applying the discount rate to the net defined benefit liability (asset). The group is yet to assess the full impact of the amendments. The group will apply IAS 19 (revised 2011) in the fiscal year starting 1 April 2013 at the latest.
IFRS 9, 'Financial instruments', addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was issued in November 2009, October 2010 and December 2011. It replaces the parts of IAS 39, 'Financial instruments: recognition and measurement' that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories: those measured at fair value and those measured at amortized cost. The determination is made at initial recognition. The classification depends on the entity's business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity's own credit risk is recorded in other comprehensive income rather than the statement of comprehensive income, unless this creates an accounting mismatch. The group will adopt IFRS 9 no later than the accounting period starting on 1 April 2015.
IFRS 10, 'Consolidated financial statements', builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where this is difficult to assess. The group has yet to assess IFRS 10's full impact and intends to adopt IFRS 10 no later than the accounting period beginning on 1 April 2013.
IFRS 11, 'Joint arrangements', changes the definition of joint ventures. A joint arrangement is hereby defined as contractual agreement that gives two or more parties joint control of the arrangement. Joint control exists only when decisions about the relevant activities that significantly affect the returns of the arrangement require the unanimous consent of the parties sharing control. Each party to the joint arrangement has to account for its rights and obligations from the arrangement. The standard focuses on the rights and obligations of the agreement rather than on its legal form. According to IFRS 11, there are now only two types of joint arrangements: (i) joint operations and (ii) joint ventures. The proportionate consolidation method will no longer be permitted for joint ventures. The parties to a joint venture have to account for the joint venture by using the equity method. After endorsement by the EU, IFRS 11 has to be applied retrospectively for periods beginning on or after 1 January 2013. The group does not expect any major impact on its net assets, financial position or results of operations.
IFRS 12, 'Disclosure of interests in other entities' includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. The group is yet to assess IFRS 12's full impact and intends to adopt IFRS 12 no later than the accounting period beginning on 1 April 2013.
IFRS 13, 'Fair value measurement', aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements, which are largely aligned between IFRS and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs or US GAAP. The group intends to adopt IFRS 13 no later than the accounting period beginning 1 April 2013.
There are no other IFRSs or IFRIC interpretations not yet in effect that would be expected to have a material impact on the group.
The consolidated financial statements were prepared by the executive board on the undersigned date and released for publication. The annual financial statements of the parent company, which have been included in the consolidated financial statements after transition to the applicable accounting standards, have not yet been approved by the supervisory board on the undersigned date.
Subsidiaries are all entities (including special purpose entities) over which the group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases.
The group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.
On an acquisition-by-acquisition basis, the group recognizes any non-controlling interest in the acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree's net assets.
Any contingent consideration to be transferred by the group is recognized at fair value at the acquisition date. Subsequent changes to the fair value of a contingent consideration that is deemed to be an asset or liability are recognized in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income. A contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity. Any contingent considerations included in the financial statements resulting from business combinations before adoption of IFRS 3 (2008) are accounted for in accordance with IFRS 3 (2004). The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the group's share of the identifiable net assets acquired is recorded as goodwill. If the acquisition costs are less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the profit for the period.
Goodwill is tested annually for impairment as well as when there are indications of impairment. If an impairment requirement is identified, goodwill is reduced immediately by the amount of the impairment. Impairment losses on goodwill are not reversed. Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose.
Inter-company transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.
The group treats transactions with non-controlling interests as transactions with equity owners of the group. For purchases of non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals of non-controlling interests are also recorded in equity.
When the group ceases to have control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognized in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss.
Joint Ventures are entities where two or more venturers are bound by a contractual arrangement that establishes joint control. The group applies the equity method for joint ventures.
Associates are companies in which the group has significant influence but no control, generally accompanied by a shareholding of between 20 % and 50 % of the voting rights. Associates are accounted for by the equity method. The group's share of its associates' post-acquisition profits or losses is recognized in the statement of comprehensive income, and its share of post-reserve movements is recognized in reserves. Goodwill on acquisition of associates is included in the investment in associates, net of any impairment losses.
The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the group does not recognize further losses unless it has incurred obligations or made payments on behalf of the associate.
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognized in other comprehensive income are reclassified to profit or loss where appropriate.
Significant unrealized gains from transactions between the group and associates are eliminated to the extent of the group's interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
In accordance with IAS 21, financial statements of foreign subsidiaries which are included in the consolidated financial statements are translated as follows:
The statements of comprehensive income of foreign subsidiaries (except those denominated in the currency of a hyperinflationary economy) that have a functional currency different from the euro are translated into the group's functional currency at average exchange rates of the reporting periods, balance sheets at the prevailing mean exchange rate at the balance sheet date. Exchange differences arising from the translation of the net investment in foreign entities are recognized in shareholders' equity under "Currency translation differences". When a foreign operation is sold, such exchange differences are recognized in the statement of comprehensive income as part of the gain or loss on disposal of shares in foreign entities.
Goodwill and fair value write-ups arising upon the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.
In the fiscal year 2011/12, the subsidiary Kapsch Telematic Services IOOO, Minsk, Belarus, was founded. For the fiscal year ending 31 March 2012, Belarus is classified as a hyperinflationary economy. The group is currently assessing whether IAS 29, Financial reporting in hyperinflationary economies, has to be applied to the subsidiary. There is no impact on the result of the fiscal year ending 31 March 2012.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing on the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of comprehensive income. Non-cash items in the balance sheet are translated at historical exchange rates and non-cash items that were recognized at their lower net realizable value are translated at the exchange rate prevailing at the time of measurement.
Foreign exchange gains and losses that relate to cash and cash equivalents and borrowings are presented in the statement of comprehensive income under financial result. All other foreign exchange gains and losses are presented in the statement of comprehensive income in other operating income or other operating expenses.
Material financial instruments presented in the balance sheet include "cash and cash equivalents", "securities", "financial assets and investments", "receivables and payables" and "loans". For the accounting and measurement policies applicable for these items, refer to the explanation of the respective balance sheet item.
The group's activities expose it to a variety of financial risks, particularly foreign exchange risk, interest rate risk and credit risk. The group's risk management focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the group's financial performance. The group does not employ hedge accounting as envisaged by IAS 39.
Foreign exchange risk is the risk arising from fluctuations in the value of financial instruments, other balance sheet items (e. g. receivables and payables) and/or cash flows due to exchange rate fluctuations. In particular, foreign exchange risk exists where business transactions are made or could arise in the normal course of business in a currency other than the company's functional currency (referred to as foreign currency below).
The group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Czech crown, Polish zloty, South African rand and the US dollar. Customer orders are invoiced mainly in the respective local currencies of the group companies. Only in cases when the group expects to be exposed to significant foreign exchange risk, major orders denominated in foreign currencies are hedged by forward foreign exchange contracts.
If the exchange rate of the stated currencies (with respect to current and non-current receivables and payables) as at 31 March 2012 (31 March 2011) had differed by the percentage rate ("volatility") stated below and provided all other variables remained unchanged, the profits before tax would have been higher or lower by the following amounts.
| Currency | Volatility | Hypothetical impact on result in TEUR | |||
|---|---|---|---|---|---|
| 2011/12 | 2010/11 (adjusted) | ||||
| AUD | 10% | 496 | 190 | ||
| CAD | 10% | 2,054 | 1,797 | ||
| CZK | 10% | 3,332 | 3,582 | ||
| PLN | 10% | 10,043 | 1,692 | ||
| SEK | 10% | 794 | 838 | ||
| USD | 10% | 3,491 | 3,639 | ||
| ZAR | 10% | 3,133 | 907 |
The effects for the Polish zloty result from the implementation project of the tolling system in Poland.
Interest rate risk is the risk arising from fluctuations in the value of financial instruments, other balance sheet items (e. g. receivables and payables) and/or cash flows due to fluctuations in the market interest rates. For fixed-interest balance sheet items, the risk comprises the present value risk. In case the market rate for the financial instrument fluctuates, either a profit or a loss may result if the financial instrument is sold prior to maturity.
For variable-interest balance sheet items, the risk relates to the cash flow. With variable-interest financial instruments, adjustments in the interest rates may result from changes in the market rates. Such changes would entail changes in interest payments. Variableinterest (both short-term and long-term) financial liabilities account for approximately one-third of financial interest balance sheet items. If the market interest rate had been 100 basis points higher (lower) on 31 March 2012, this, as in the prior year, would not have had a material impact on the result of the group. At the balance sheet date, no financial derivatives were used to hedge the interest rate risk.
As part of the group's risk management policy, the group only deals with third parties recognized as creditworthy and implements policies to ensure that the group sells to customers with appropriate credit histories. In addition, the group monitors its receivables balances on an ongoing basis in order to limit its exposure to bad debts. Certain of the group's policies limit the amount of its credit exposure to any financial institution, depending on the rating of the institution. There is usually a credit risk in the implementation phase of large tolling projects. With the exception of the tolling projects in Czech Republic, South Africa and Poland (see Note 18), there is no concentration of credit risk relating to trade receivables since the group generally has a large number of customers worldwide. Based on the group's experiences, the default risk for trade receivables can be considered low.
The maximum credit risk is similar to the book values:
| All amounts in TEUR | 2011/12 | 2010/11 |
|---|---|---|
| Other non-current financial assets and investments | 51,229 | 34,490 |
| Other non-current assets | 3,420 | 9,018 |
| Trade receivables and other current assets | 287,590 | 190,885 |
| Cash and cash equivalents | 44,929 | 42,001 |
| 387,168 | 276,394 |
Prudent liquidity risk management involves securing the availability of sufficient cash and cash equivalents as well as the possibility of funding through the availability of adequate credit lines. Providing for adequate liquidity is mandatory for every company under Austrian commercial law. The group provides for its liquidity through available credit lines.
The objectives of the group with respect to capital management, include on the one hand, securing its going concern in order to be able to provide the equity holders with dividends and the other stakeholders with appropriate services and, on the other hand, maintaining an optimal capital structure.
The group monitors its capital based on net gearing, calculated from the ratio of net debt (net assets) to equity. Net debt (net assets) include(s) non-current and current financial liabilities less cash and cash equivalents, bank balances and current securities.
| All amounts in TEUR | 2011/12 | 2010/11 |
|---|---|---|
| Non-current financial liabilities | 74,256 | 74,112 |
| Current financial liabilities | 53,249 | 23,083 |
| Total financial liabilities | 127,505 | 97,195 |
| Cash on hand and at banks | 44,929 | 42,001 |
| Current securities | 8,213 | 8,037 |
| Net assets (+)/debt (-) | -74,363 | -47,157 |
| Equity | 256,247 | 191,513 |
| Net gearing | 29% | 25% |
Research expenditures are recognized as an expense as they are incurred. Costs incurred on development projects (relating to the design and testing of new or improved products) are recognized as intangible assets when the following criteria are fulfilled:
Other development expenditures that do not meet these criteria are recognized as an expense. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period. Capitalized development costs are recorded as intangible assets and amortized from the point at which the asset is ready for use on a straight-line basis over its useful life, not exceeding three years. Capitalized development costs are tested for impairment annually in accordance with IAS 36.
Acquisition costs of computer software, industrial property and similar rights are capitalized and amortized systematically over their useful lives ranging from 4 to 30 years. Acquired customer contracts (tolling contracts, maintenance contracts) are amortized over 2 to 10 years. The carrying amount of each intangible asset is tested for impairment when a triggering event occurs.
Financial assets recognized under non-current assets and under other short-term financial assets include available-for-sale securities and financial assets at fair value through profit and loss. Available-for-sale securities and financial assets at fair value through profit and loss are carried at fair value. Unrealized gains and losses arising from the changes in fair value of availablefor-sale securities are recognized in equity under a separate item; unrealized gains and losses arising from the changes in fair value of financial assets at fair value through profit and loss are recognized in the statement of comprehensive income.
The difference arising on the sale of financial assets between the proceeds and the carrying amounts is taken through profit or loss. Additionally, the amount recognized in equity is taken through profit or loss. All acquisitions and sales are recognized at the respective date of the transaction; transaction costs are included in acquisition costs (except for financial assets at fair value taken through profit and loss).
At each balance sheet date, the group assesses whether there is objective evidence of impairment of each significant individual financial asset or group of financial assets. If such evidence exists, the group accounts for that impairment and the amounts previously recognized in equity are removed from equity and recognized in profit or loss. The amount of the impairment is measured as the difference between the carrying amount and the present value of the estimated future cash flows.
If in subsequent periods the fair value of the impaired financial instruments increases and that increase can be directly related to an event occurring after the impairment was recognized in profit or loss, the group reverses the impairment loss. In the case of debt instruments, the reversal is recognized in profit or loss; in the case of equity instruments, it is recognized directly in equity.
Other available-for-sale investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are carried at cost less impairment.
At each balance sheet date, the group assesses whether there is objective evidence that a financial asset or a group of financial assets is impaired. If in a subsequent period the reason for the impairment is no longer valid, no reversal of the impairment is recognized.
Derivative financial instruments are accounted for as stand-alone derivatives and are measured at fair value through profit or loss.
Changes in the fair value of these derivative financial instruments are recognized immediately in the statement of comprehensive income either in other operating income and expenses or in the financial result, depending on the purpose of the derivative.
Property, plant and equipment are carried at cost less accumulated depreciation. Depreciation is charged on a straight-line basis over the expected useful lives of the assets.
The useful lives range between 3 to 26 years for plants and buildings on leasehold land, 4 to 20 years for technical equipment and machinery and 3 to 10 years for other equipment, factory and office equipment.
Impairment is charged for the difference between the recoverable amount and the carrying amount of an asset. The recoverable amount represents the higher of fair value less cost to sell or value in use of an asset. For purposes of impairment testing, the assets are grouped down to the lowest level at which separate cash flows are identifiable.
The difference between the proceeds from the sale of property, plant and equipment and their carrying amount is taken through profit or loss and recognized in the operating result.
Leasing agreements by which the group as lessee assumes substantially all risks and rewards associated with the use of an asset are accounted for as finance leases.
The respective assets are capitalized under non-current assets at the lower of the net present value of minimum lease payments or the fair value of the leased asset and are depreciated over their expected useful lives. The difference between the minimum lease payments and the accrued net present value is recognized as deferred interest expense. The interest component is spread over the term of the lease using the effective interest rate method.
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the statement of comprehensive income on a straight-line basis over the period of the lease.
Government grants with regard to assets relate to purchased non-current assets (technical equipment) and are deferred and taken through profit or loss over the estimated useful life of the respective asset.
Other government grants received as compensation for expenses or losses already incurred are immediately taken through profit or loss.
Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted average cost method. The cost of finished goods and work in progress comprises design costs, raw materials, direct labor, other direct costs and related production overheads (based on normal operating capacity) but excludes borrowing costs. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.
The group accounts for construction contracts in accordance with IAS 11. When the outcome of a construction contract can be estimated reliably and it is probable that the contract will be profitable, contract revenue is recognized over the period of the contract. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognized as an expense immediately. The construction progress is represented by the ratio of costs incurred by the balance sheet date and the estimated total costs for the respective project.
The carrying amount results from comparing the total of accumulated costs incurred by the balance sheet date plus the profit calculated according to the percentage of completion method (prorated) or loss (in full) on the respective construction contract to the invoiced amounts. The balance is recognized either under current assets (amounts due from customers for contract work) or under current liabilities (amounts due to customers for contract work).
Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less allowance for bad debts. An allowance for bad debts is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of receivables. The amount of the allowance is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the allowance is recognized in the statement of comprehensive income.
For the presentation of the cash flow statement, cash and cash equivalents include cash in hand, deposits held at call and other cash at banks. Overdrafts are recognized in the balance sheet under current financial liabilities.
Provisions are set up when the group has a present legal or constructive obligation to third parties as a result of past events if it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made.
Provisions for warranties, liabilities for construction flaws and serial and system problems mainly serve as coverage for obligations for free repairs and replacement deliveries, in accordance with the general sales and delivery conditions or due to individual agreements, and are measured using rates based on past experience regarding direct labor and material costs incurred, overheads and replacement deliveries or rebates. A provision is recognized for the best estimate of the costs of defects to be rectified under warranty for products sold before the balance sheet date.
The group provides various post-employment benefits to employees and other long-term benefits either based on individual agreements or in accordance with local labor law provisions.
For the calculation of liabilities arising from pension obligations and termination benefits in accordance with IAS 19, the projected unit credit method is used. According to this method, post-employment costs for employee benefits are recognized in the statement of comprehensive income in such a way that scheduled costs are spread over the employees' years of service on the basis of an expert opinion by a qualified actuary, who completely remeasures the schemes annually. The obligation for pension payments and termination benefits is calculated as the present value of future benefits using an interest rate based on the average yield on industrial bonds of the same maturity. Actuarial gains and losses outside the corridor (= up to 10% of benefit obligation or 10% of plan assets, if any, at beginning of period) are charged to the statement of comprehensive income over the average remaining term of service of the active staff.
Contributions paid by the group under a defined contribution pension scheme are charged to the statement of comprehensive income under staff costs in the period in which they occur.
For the calculation of liabilities arising from obligations for anniversary bonuses in accordance with IAS 19, the projected unit credit method is used. Anniversary bonuses are special lump-sum payments stipulated in the Collective Agreement and dependent on compensation and years of service. Eligibility is determined by a certain number of service years. The calculation of liabilities arising from obligations for anniversary bonuses is performed in the same way as the calculation for liabilities arising from termination benefits, however without taking the corridor method into consideration.
Deferred income tax assets or liabilities are recorded in full, using the liability method, for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, if the deferred income tax asset or liability arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss, it is not accounted for. Deferred income tax assets or liabilities are determined using tax rates (and laws) that have been enacted or essentially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred income tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.
Temporary differences mainly arise in connection with depreciation (amortization) periods of non-current assets, provisions for pension benefits, other post-employment benefits, differences regarding the measurement of receivables and payables and tax loss carry-forwards.
Deferred income tax assets or liabilities are recognized for temporary differences arising with investments in subsidiaries and associates and except where the timing of the reversal of the temporary difference is controlled by the group and it is probable that the temporary difference will not be reversed in the foreseeable future.
Deferred income tax assets or liabilities are offset, taking maturities into account, when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets or liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.
Liabilities are recognized at amortized cost using the effective interest rate method. Liabilities denominated in foreign currencies are measured at the current rate at the balance sheet date. Borrowings are recognized initially at fair value, net of transaction costs incurred and subsequently stated at amortized cost using the effective interest rate method. Borrowing costs are charged to the statement of comprehensive income in the period in which they are incurred.
Contingent liabilities occur for two reasons. For one, they comprise possible obligations that arise from past events and whose existence will be confirmed by uncertain future events that are at least partly beyond an entity's control. For another, they comprise present obligations that fail to meet general or special recognition standards (i.e. the amount of settlement of an obligation cannot be measured with sufficient reliability or an outflow of resources to settle the obligations is not deemed probable).
The group discloses contingent liabilities unless the possibility of an outflow of resources embodying economic benefits is remote and a liability does not have to be recognized pursuant to IFRS.
In accordance with IAS 18, revenue is recognized in the statement of comprehensive income upon delivery when the significant risks and rewards of ownership of the goods are transferred to the customer, net of discounts and eliminated sales within the group. Sales of services are recognized in the accounting period in which the services are rendered, with reference to the degree of completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided.
Revenue for construction contracts (mainly tolling projects) is recognized in accordance with the "percentage-of-completion method", provided the conditions under IAS 11 are met.
Other revenue is recognized by the group as follows:
The group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely be identical to the corresponding actual results.
In particular, estimates and assumptions regarding revenue recognition have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fiscal year.
The group uses the percentage-of-completion method in accounting for its construction contracts. Use of the percentage-ofcompletion method requires the group to estimate the expected profit mark-up for the construction contract. Sensitivity analyses on assumptions made by management indicate that no material effect is to be expected if the actual final results should deviate by 10% from estimates. The analysis of assumptions made in the past as well as of actual profit mark-ups has shown that the estimates have been reliable up to now.
Further areas where assumptions and estimates are significant to the consolidated financial statements include capitalized goodwill, inventories, deferred taxes, liabilities from post-employment benefits to employees and provisions for warranties. Sensitivity analyses of the assumptions made by management in connection with capitalized goodwill, inventories, deferred taxes and provisions for warranties indicate that no material effect will arise if the actual final outcomes were to differ by 10% from the estimates made.
Sensitivities for the acquired goodwill (break-even interest rate) are detailed in Note 13.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decisionmaker. The chief operating decision-maker is responsible for allocating resources to the operating segments and assessing their performance. The executive board has been identified as the chief operating decision-maker.
Figures in the notes are presented in euro thousands (TEUR) unless otherwise stated.
The group reports three main operating segments (see section "General information"):
The segment information follows the same principles and same accounting and measurement policies as applied in these consolidated financial statements.
The segment results for the fiscal year ended 31 March 2012 are as follows (in EUR million):
| Road Solution Projects |
Services, System Extensions, Components Sales |
Others | Consolidated group |
|
|---|---|---|---|---|
| Revenue | 229.9 | 308.1 | 12.0 | 549.9 |
| Operating result | 4.1 | 37.3 | 0.8 | 42.2 |
The segment results for the fiscal year ended 31 March 2011 are as follows (in EUR million):
| Road Solution Projects |
Services, System Extensions, Components Sales |
Others | Consolidated group |
|
|---|---|---|---|---|
| Revenue | 158.9 | 223.3 | 6.4 | 388.6 |
| Operating result | 0.1 | 48.3 | 0.4 | 48.9 |
The segment assets and liabilities as of 31 March 2012 as well as capital expenditure, depreciation and amortization and other non-cash-effective expenses for the period then ended are as follows (in EUR million):
| Road Solution Projects |
Services, System Extensions, Components Sales |
Others | Consolidated group |
|
|---|---|---|---|---|
| Assets | 131.8 | 301.5 | 8.8 | 442.1 |
| Investments in joint ventures and associates | 0.0 | 0.0 | 0.0 | 0.0 |
| Unallocated assets | 115.6 | |||
| Total assets | 131.8 | 301.5 | 8.8 | 557.7 |
| Liabilities | 60.4 | 87.5 | 7.8 | 155.6 |
| Unallocated liabilities | 145.8 | |||
| Total liabilities | 60.4 | 87.5 | 7.8 | 301.4 |
| Capital expenditure | 0.0 | 13.1 | 0.0 | 13.1 |
| Depreciation and amortization | 2.7 | 15.6 | 0.2 | 18.4 |
| Other non-cash-effective expenses | 0.0 | 0.3 | 0.0 | 0.3 |
The segment assets and liabilities as of 31 March 2011 as well as capital expenditure, depreciation and amortization and other non-cash-effective expenses for the period then ended are as follows (in EUR million):
| Road Solution Projects |
Services, System Extensions, Components Sales |
Others | Consolidated group |
|
|---|---|---|---|---|
| Assets | 138.6 | 215.4 | 3.4 | 357.5 |
| Investments in joint ventures and associates | 0.0 | 0.0 | 0.0 | 0.0 |
| Unallocated assets | 92.6 | |||
| Total assets | 138.6 | 215.4 | 3.4 | 450.1 |
| Liabilities | 56.2 | 87.9 | 1.5 | 145.5 |
| Unallocated liabilities | 113.1 | |||
| Total liabilities | 56.2 | 87.9 | 1.5 | 258.6 |
| Capital expenditure | 0.0 | 7.0 | 0.0 | 7.0 |
| Depreciation and amortization | 1.6 | 11.8 | 0.2 | 13.6 |
| Other non-cash-effective expenses | 0.0 | 0.9 | 0.0 | 0.9 |
The breakdown of revenue by customer who contributed more than 10% to the result for the year is as follows. In addition, the respective segments are shown (in EUR million):
| 2011/12 | 2010/11 | |||||
|---|---|---|---|---|---|---|
| Revenue | Road Solution Projects |
Services, System Extensions, Components Sales |
Revenue | Road Solution Projects |
Services, System Extensions, Components Sales |
|
| Customer 1 | 205.1 | X | X | 39.7 | X | |
| Customer 2 | 84.6 | X | X | 99.7 | X | X |
| Customer 3 | 72.4 | X | X | 98.7 | X | X |
Revenue is segmented by the location of the customers and balance sheet figures by the location of the company.
The figures for the fiscal year ended 31 March 2012 are as follows (in EUR million):
| Austria | Europe (excl. Austria) |
Americas | Rest of World | Consolidated group |
|
|---|---|---|---|---|---|
| Revenue | 32.8 | 341.4 | 63.6 | 112.1 | 549.9 |
| Non-current non-financial assets | 12.6 | 42.0 | 43.8 | 3.7 | 102.2 |
The figures for the fiscal year ended 31 March 2011 are as follows (in EUR million):
| Austria | Europe (excl. Austria) |
Americas | Rest of World | Consolidated group |
|
|---|---|---|---|---|---|
| Revenue | 37.5 | 182.0 | 27.6 | 141.5 | 388.6 |
| Non-current non-financial assets | 13.2 | 46.9 | 41.4 | 6.6 | 108.1 |
| 2011/12 | 2010/11 | |
|---|---|---|
| Income from the sale of non-current assets | 44 | 72 |
| Income from costs recharged | 75 | 62 |
| Sundry operating income | 10,131 | 7,431 |
| 10,250 | 7,564 |
Sundry operating income mainly relates to research funding awards received and to the assumption of costs of transactions billed for the nationwide electronic truck toll collection system in the Czech Republic.
| 2011/12 | 2010/11 | |
|---|---|---|
| Change in unfinished goods and work in progress | 922 | -235 |
| Change in finished goods | -8,638 | 7,697 |
| -7,716 | 7,462 |
| 2011/12 | 2010/11 | |
|---|---|---|
| Cost of materials | 100,562 | 82,315 |
| Cost of purchased services | 186,726 | 108,940 |
| 287,288 | 191,256 |
| 2011/12 | 2010/11 | |
|---|---|---|
| Wages | 4,009 | 2,345 |
| Salaries and other remunerations | 95,303 | 67,026 |
| Expenses for social security and payroll-related taxes and contributions | 19,837 | 15,181 |
| Expenses for termination benefits (see Note 23) | 895 | 573 |
| Expenses for pensions (see Note 23) | 640 | 556 |
| Contributions to pension funds and other external funds (see Note 23) | 326 | 264 |
| Fringe benefits | 714 | 517 |
| 121,725 | 86,462 |
As of 31 March 2012, the number of staff amounted to 2,705 persons (31 March 2011: 2,167 persons) and averaged 2,585 persons in the fiscal year 2011/12 (2010/11: 1,621).
| 2011/12 | 2010/11 | |
|---|---|---|
| Depreciation of property, plant and equipment | 7,065 | 6,595 |
| Amortization of intangible assets | 11,335 | 7,020 |
| 18,400 | 13,615 |
Low-value assets are capitalized as property, plant and equipment or intangible assets and written off fully in the year of acquisition.
| 2011/12 | 2010/11 | |
|---|---|---|
| Legal and consulting fees | 13,799 | 13,096 |
| Marketing and advertising expenses | 10,467 | 6,086 |
| Travel expenses | 9,801 | 7,243 |
| Rental expenses | 9,798 | 8,470 |
| Communication and IT expenses | 7,767 | 5,641 |
| License and patent expenses | 4,168 | 3,155 |
| Automobile expenses | 3,970 | 2,586 |
| Office expenses | 3,680 | 3,563 |
| Insurance costs | 3,056 | 2,181 |
| Maintenance | 2,982 | 3,752 |
| Training costs | 2,005 | 1,652 |
| Transport costs | 1,746 | 954 |
| Commissions and other fees | 1,121 | 2,488 |
| Taxes and charges | 603 | 280 |
| Adjustment of provision for warranties | 266 | -489 |
| Allowance and write-off of receivables | 135 | 584 |
| Losses on disposal of non-current assets | 99 | 282 |
| Impairment charge | 50 | 0 |
| Other | 7,506 | 1,869 |
| 83,020 | 63,391 |
The item "Other" includes membership dues and bank charges, other administrative and selling expenses as well as exchange rate losses on operating activities. The increase in the fiscal year 2011/12 mainly results from the exchange rate losses on operating activities (TEUR 4,690).
| 2011/12 | 2010/11 | |
|---|---|---|
| Interest and similar income: | ||
| Interest income | 893 | 1,034 |
| Income from securities | 139 | 139 |
| Income from interest accretion of long-term receivables | 380 | 437 |
| Gains from the disposal of financial assets | 0 | 18 |
| Income from other investments | 1 | 0 |
| Gains from changes of the fair value of derivative financial instruments | 27 | 0 |
| Currency translation differences | 5,769 | 2,869 |
| 7,210 | 4,498 | |
| Interest and similar expenses: | ||
| Interest expense | -6,987 | -3,417 |
| Expense from interest accretion of long-term payables | -236 | -362 |
| Expenses from other investments | 0 | -469 |
| Losses from changes of the fair value of derivative financial instruments | 0 | -1,340 |
| Currency translation differences | -5,859 | -6,530 |
| -13,083 | -12,117 | |
| -5,873 | -7,619 |
| 2011/12 | 2010/11 | |
|---|---|---|
| Current taxes | -9,647 | -10,329 |
| Deferred taxes (see Note 22) | 785 | -2,496 |
| Total | -8,862 | -12,826 |
| Thereof income/expense from group taxation | -1,905 | -102 |
The reasons for the difference between the arithmetic tax expense/(income) based on the Austrian corporate income tax rate of 25% and the recognized tax expense/(income) are as follows:
| 2011/12 | 2010/11 | |
|---|---|---|
| Profit before income taxes | 36,314 | 41,261 |
| Arithmetic tax expense based on a tax rate of 25% (2010/11: 25%) | -9,078 | -10,315 |
| Unrecognized deferred tax assets on current losses | -2,518 | -1,421 |
| De-recognition of deferred tax assets recognized on prior year losses | -130 | -1,179 |
| De-recognition of deferred tax assets for unrecognized prior-year losses | 40 | 0 |
| Different foreign tax rates | 1,385 | 383 |
| Tax allowances claimed and other permanent tax differences | 1,019 | -929 |
| Income and expenses not subject to tax and other differences | 420 | 636 |
| Recognized tax expense | -8,862 | -12,826 |
For further information on deferred tax assets and liabilities, see Note 22.
| 2011/12 | Before taxes | Tax expense/income | After taxes |
|---|---|---|---|
| Fair value gains/losses on available-for-sale financial assets: | |||
| Unrealized gains/losses in the current period | 11,596 | -78 | 11,518 |
| Currency translation differences | -1,542 | -1,542 | |
| Fair value changes recognized in equity | 10,054 | -78 | 9,976 |
| 2010/11 | Before taxes | Tax expense/income | After taxes |
| Fair value gains/losses on available-for-sale financial assets: | |||
| Unrealized gains/losses in the current period | -2,277 | -259 | -2,536 |
| Currency translation differences | 4,294 | 4,294 | |
| Fair value changes recognized in equity | 2,017 | -259 | 1,758 |
| 2011/12 | 2010/11 | |
|---|---|---|
| Available-for-sale financial assets: | ||
| Other non-current financial assets and investments | 51,229 | 34,490 |
| Other current financial assets | 8,213 | 8,037 |
| 59,442 | 42,527 | |
| Loans and receivables: | ||
| Other non-current assets | 3,420 | 9,018 |
| Trade receivables | 80,495 | 79,329 |
| Cash and cash equivalents | 44,929 | 42,001 |
| 128,844 | 130,348 | |
| Financial liabilities at (amortized) cost: | ||
| Non-current financial liabilities | 74,256 | 74,112 |
| Other non-current liabilities | 3,440 | 10,423 |
| Trade payables | 59,013 | 72,531 |
| Current financial liabilities | 53,249 | 23,083 |
| 189,958 | 180,149 | |
Financial instruments are recognized in the statement of comprehensive income with the following net results:
| 2011/12 | 2010/11 | |
|---|---|---|
| Available-for-sale financial assets | 167 | -312 |
| Loans and receivables | 1,183 | -2,189 |
| Financial liabilities at (amortized) cost | -7,224 | -5,118 |
| -5,873 | -7,619 |
| Land and buildings |
Technical equipment and machinery |
Construction in progress |
Other equipment, factory and office equipment |
Total | |
|---|---|---|---|---|---|
| Carrying amount as of 31 March 2010 | 3,930 | 5,751 | 194 | 5,948 | 15,824 |
| Currency translation differences | -5 | 39 | -19 | 98 | 112 |
| Reclassification | 3 | 0 | -3 | 0 | 0 |
| Addition resulting from company acquisition | 425 | 2,137 | 516 | 2,207 | 5,284 |
| Additions | 716 | 2,866 | 463 | 1,434 | 5,477 |
| Disposals | -93 | -37 | -355 | -213 | -698 |
| Scheduled depreciation | -720 | -3,417 | 0 | -2,458 | -6,595 |
| Carrying amount as of 31 March 2011 | 4,256 | 7,337 | 796 | 7,015 | 19,404 |
| Acquisition/production cost | 6,767 | 38,337 | 796 | 18,095 | 63,995 |
| Accumulated depreciation | -2,511 | -31,000 | 0 | -11,081 | -44,591 |
| Carrying amount as of 31 March 2011 | 4,256 | 7,337 | 796 | 7,015 | 19,404 |
| Currency translation differences | 0 | 56 | 36 | -29 | 63 |
| Reclassification | 0 | 0 | 0 | 1 | 1 |
| Additions | 943 | 3,602 | 1,301 | 4,803 | 10,649 |
| Disposals | -31 | -38 | -872 | -265 | -1,205 |
| Scheduled depreciation | -867 | -3,547 | 0 | -2,650 | -7,065 |
| Carrying amount as of 31 March 2012 | 4,301 | 7,410 | 1,261 | 8,875 | 21,847 |
| Acquisition/production cost | 7,690 | 41,412 | 1,261 | 20,539 | 70,902 |
| Accumulated depreciation | -3,389 | -34,002 | 0 | -11,664 | -49,055 |
| Carrying amount as of 31 March 2012 | 4,301 | 7,410 | 1,261 | 8,875 | 21,847 |
| Capitalized development costs |
Concessions and rights |
Goodwill | Total | |
|---|---|---|---|---|
| Carrying amount as of 31 March 2010 | 181 | 7,761 | 20,586 | 28,529 |
| Currency translation differences | 1 | 7 | -589 | -581 |
| Reclassification | 0 | -2,168 | 2,168 | 0 |
| Addition resulting from company acquisition | 0 | 40,995 | 24,942 | 65,937 |
| Additions | 0 | 655 | 1,233 | 1,888 |
| Disposals | 0 | -65 | 0 | -65 |
| Scheduled amortization | -60 | -6,960 | 0 | -7,020 |
| Carrying amount as of 31 March 2011 | 122 | 40,224 | 48,341 | 88,687 |
| Acquisition/production cost | 8,675 | 55,157 | 48,341 | 112,173 |
| Accumulated amortization | -8,553 | -14,933 | 0 | -23,485 |
| Carrying amount as of 31 March 2011 | 122 | 40,224 | 48,341 | 88,687 |
| Currency translation differences | 0 | 2 | 695 | 696 |
| Reclassification | 0 | -1 | 0 | -1 |
| Additions | 0 | 1,469 | 943 | 2,412 |
| Disposals | 0 | -31 | 0 | -31 |
| Impairment charge | 0 | -50 | 0 | -50 |
| Scheduled amortization | -60 | -11,275 | 0 | -11,335 |
| Carrying amount as of 31 March 2012 | 63 | 30,338 | 49,979 | 80,379 |
| Acquisition/production cost | 8,743 | 55,952 | 49,979 | 114,674 |
| Accumulated amortization | -8,681 | -25,614 | 0 | -34,295 |
| Carrying amount as of 31 March 2012 | 63 | 30,338 | 49,979 | 80,379 |
The additions to the goodwill result from the acquisition of the remaining shares of Kapsch-Busi, S.p.A., Bologna, Italy, as well as subsequent earn-out payments for the acquisition of Kapsch TrafficCom Argentina S.A., Buenos Aires, Argentina, which are accounted for under the rules of IFRS 3 (2004).
For the purpose of impairment testing, goodwill was allocated to two cash-generating units (CGU) ("Road Solution Projects" and "Services, System Extensions, Components Sales"). The following assumptions were made:
| Road Solution Projects | Services, System Extensions, Components Sales |
|
|---|---|---|
| The carrying amount of goodwill allocated to the CGU | TEUR 38,779 | TEUR 11,199 |
| The carrying amount of intangible assets with indefinite useful lives allocated to the CGU |
TEUR 0 | TEUR 0 |
| Determination of recoverable amount of CGU | Value in use | Value in use |
Key assumptions for determining expected cash flows of the CGU:
Effects of changes in key assumptions on the recoverable amount:
n Management has based its determination on the assumption that realistically possible changes in key assumptions on which the recoverable amount is based will not result in the carrying amount of goodwill of the CGU exceeding the recoverable amount of the CGU. The interest rate at which the value in use corresponds to the carrying amount is 56.2% (2010/11: 20.1%).
Key assumptions for determining expected cash flows of the CGU:
Effects of changes in key assumptions on the recoverable amount:
n Management has based its determination on the assumption that realistically possible changes in key assumptions on which the recoverable amount is based will not result in the carrying amount of goodwill of the CGU exceeding the recoverable amount of the CGU. The interest rate at which the value in use corresponds to the carrying amount is 34.4% (2010/11: 45.6%).
Development costs relate to expenses which in accordance with IAS 38 are capitalized and amortized over 3 years once the assets are available for commercial use. Additional research and development costs of the group in the fiscal year 2011/12 amounted to EUR 53.3 million (2010/11: EUR 37.3 million). In the fiscal year 2011/12, EUR 23.1 million of this amount (2010/11: EUR 14.9 million) related to project-specific development costs were charged to the customer. The remaining amount of EUR 30.2 million (2010/11: EUR 22.4 million) was recognized as an expense.
Interests in joint ventures developed as follows:
| 2011/12 | 2010/11 | |
|---|---|---|
| Carrying amount as of 31 March of the prior year | 0 | 0 |
| Addition from foundation of a joint venture | 33 | 0 |
| Share in result | -33 | 0 |
| Currency translation differences | 0 | 0 |
| Carrying amount as of 31 March of the fiscal year | 0 | 0 |
Together with two partners, the group founded the joint venture LLC "United Toll Systems", Moscow, Russia, on 17 May 2011. The group holds a 33.3% interest in this company. As of 31 March 2012, total assets amounted to TEUR 1,225, liabilities amounted to TEUR 2,065, revenue amounted to TEUR 28 and the loss for the year amounted to TEUR -908. The unrecognized share of losses amounts to TEUR 269.
In relation to the 20.27% shares in Q-Free ASA, Trondheim, Norway, no significant influence can be presumed according to IAS 28 as no representation on the management and supervisory boards is foreseeable at this time.
| 2011/12 | 2010/11 | |
|---|---|---|
| Other non-current financial assets and investments | 51,229 | 34,490 |
| Other current financial assets | 8,213 | 8,037 |
| 59,442 | 42,527 |
| Other non-current financial assets and investments | Available-for-sale securities |
Available-for-sale investments |
Other | Total |
|---|---|---|---|---|
| Carrying amount as of 31 March 2010 | 3,517 | 28,571 | 6,849 | 38,937 |
| Currency translation differences | 0 | 0 | 520 | 520 |
| Additions | 69 | 0 | 505 | 574 |
| Change in fair value | -103 | -3,313 | 0 | -3,416 |
| Write-down | 0 | -343 | -157 | -500 |
| Disposals | 0 | 0 | -1,625 | -1,625 |
| Carrying amount as of 31 March 2011 | 3,483 | 24,916 | 6,092 | 34,490 |
| Currency translation differences | 0 | 0 | 63 | 63 |
| Additions | 0 | 4,781 | 942 | 5,723 |
| Change in fair value | 136 | 11,284 | 0 | 11,420 |
| Write-down | 0 | 0 | 0 | 0 |
| Disposals | 0 | 0 | -467 | -467 |
| Carrying amount as of 31 March 2012 | 3,619 | 40,981 | 6,629 | 51,229 |
| Other current financial assets | Available-for-sale securities |
Other | Total |
|---|---|---|---|
| Carrying amount as of 31 March 2010 | 6,898 | 0 | 6,898 |
| Additions | 0 | 0 | 0 |
| Disposals | 0 | 0 | 0 |
| Change in fair value | 1,139 | 0 | 1,139 |
| Carrying amount as of 31 March 2011 | 8,037 | 0 | 8,037 |
| Additions | 0 | 0 | 0 |
| Disposals | 0 | 0 | 0 |
| Change in fair value | 176 | 0 | 176 |
| Carrying amount as of 31 March 2012 | 8,213 | 0 | 8,213 |
As of 31 March 2012, available-for-sale securities relate to government and bank bonds as well as shares in investment funds. As of 31 March 2012, the other investments classified as available-for-sale mainly relate to a 20.27% investment in the listed company Q-Free ASA, Trondheim, Norway.
Unrealized gains and losses are recognized in other comprehensive income of the period (see Note 10).
Other non-current financial assets mainly relate to a fixed-term investment amounting to TEUR 5,653 (2010/11: TEUR 5,597). This fixed-term investment is pledged as collateral for guarantees issued by the group.
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from a stock market, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm's length basis. These instruments are included in level 1 in accordance with IFRS 7 and relate to the investment in Q-Free ASA Trondheim, Norway.
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques based on observable market data. The available-for-sale securities fall into this category (level 2).
Financial instruments are included in level 3 if the inputs for the asset or liability are not based on observable market data. If one or more of the significant inputs is not based on observable market data the instrument is classified as level 3.
| 2011/12 | 2010/11 | |
|---|---|---|
| Truck toll collection system Czech Republic | 3,420 | 9,017 |
| Other | 0 | 1 |
| 3,420 | 9,018 |
Other non-current assets relate to trade receivables (long-term) that are due from the Czech Ministry of Transport for the installation of the Czech truck toll collection system. As in the prior year, they fall due between 1 and 5 years from the balance sheet date.
Long-term receivables were discounted on the basis of cash flows using an interest rate of 4.00 – 5.00% (for that part which was funded by external loans) and an interest rate for alternative investments of 2.89% (for that part which was funded by internal cash flows of the group). Thus, the fair values approximate the carrying amounts.
Gross cash flows of other non-current assets are as follows:
| 2011/12 | 2010/11 | |
|---|---|---|
| Up to 2 years | 2,964 | 7,705 |
| Between 2 and 3 years | 623 | 1,753 |
| More than 3 years | 0 | 1 |
| 3,586 | 9,459 |
| 2011/12 | 2010/11 | |
|---|---|---|
| Purchased parts and merchandise, at acquisition cost | 20,637 | 13,520 |
| Unfinished goods and work in progress, at production cost | 9,984 | 9,062 |
| Finished goods, at production cost | 18,265 | 26,903 |
| Prepayments on inventories | 13 | 0 |
| 48,899 | 49,485 |
Individual inventory items were written down, where necessary, to their net realizable values. The write-downs of inventories amount to TEUR 12,136 (2010/11: TEUR 9,793).
| 2011/12 | 2010/11 | |
|---|---|---|
| Trade receivables | 80,905 | 80,408 |
| Allowances for bad debt | -410 | -1,079 |
| Trade receivables – net | 80,495 | 79,329 |
| Gross amount due from customers for contract work | 141,592 | 84,225 |
| Receivables from tax authorities (other than income tax) | 13,593 | 10,030 |
| Other receivables and prepaid expenses | 51,910 | 17,301 |
| 287,590 | 190,885 |
Allowances for bad debt developed as follows:
| 2011/12 | 2010/11 | |
|---|---|---|
| Balance as of 31 March of the prior year | -1,079 | -587 |
| Addition resulting from company acquisition | 0 | -207 |
| Addition | -135 | -421 |
| Utilization | 223 | 27 |
| Disposal | 581 | 108 |
| Balance as of 31 March of the fiscal year | -410 | -1,079 |
Maturity structure of trade receivables and other current assets:
| 2011/12 | 2010/11 | |
|---|---|---|
| Not yet due | 271,768 | 176,618 |
| Overdue, but not impaired: | ||
| Less than 60 days | 12,434 | 12,059 |
| More than 60 days | 3,798 | 3,288 |
| 288,000 | 191,965 |
The fair values approximate the carrying amounts. There is no concentration of credit risk with respect to trade receivables (except for the toll collection projects in the Czech Republic, South Africa and Poland) as the group generally has a large number of customers worldwide. Trade receivables (current) relating to the installation of the Czech truck toll collection system amounting to TEUR 3,010 (2010/11: TEUR 4,361) and to the operation and maintenance of the system amounting to TEUR 30,009 (2010/11: TEUR 27,907) are due from Ředitelstvím silnic a dálnic ČR (RSD), a company of the Czech Republic. Trade receivables from the toll collection project in South Africa (Gauteng) amounting to TEUR 11,435 (2010/11: TEUR 0) are due from South African National Road Agency Limited (SANRAL). Trade receivables from the toll collection project in Poland due from GDDKiA (Generalna Dyrekcja Dróg Krajowych i Autostrad) amount to TEUR 2,944 (2010/11: TEUR 0).
Trade receivables amounting to TEUR 6,840 (2010/11: TEUR 7,353) were pledged as collateral to banks (see Note 21).
Amounts due from customers for contract work are as follows:
| 2011/12 | 2010/11 | |
|---|---|---|
| Construction costs incurred plus recognized gains | 347,600 | 136,707 |
| Less amounts billed and prepayments received | -206,008 | -52,481 |
| 141,592 | 84,225 |
As of 31 March 2012, amounts due from customers for contract work relate to the toll collection project in South Africa amounting to TEUR 23,818 (2010/11: TEUR 43,273) and to the toll collection project in Poland amounting to TEUR 107,253 (2010/11: TEUR 39,692).
Revenues from construction contracts amount to TEUR 199,273 in 2011/12 (2010/11: TEUR 123,915).
| 2011/12 | 2010/11 | |
|---|---|---|
| Cash on hand | 60 | 65 |
| Deposits held with banks | 44,870 | 41,935 |
| 44,929 | 42,001 |
The carrying amounts of this item also represent cash and cash equivalents at the end of the reporting period as presented in the cash flow statement.
| 2011/12 | 2010/11 | |
|---|---|---|
| Carrying amount as of 31 March of the fiscal year | 13,000 | 12,200 |
Following the capital increase on 27 July 2011 – 800,000 shares were issued – the registered share capital of the parent company amounts to EUR 13,000,000. The placement price was fixed at EUR 61.25 per share, resulting in gross proceeds of EUR 49 million for the group. The total number of shares issued is 13,000,000. The shares are ordinary bearer shares and have no par value.
| 2011/12 | 2010/11 | |
|---|---|---|
| Current | ||
| Loans for acquisitions | 0 | 10,000 |
| Loans for project financing | 34,000 | 0 |
| Other current loans | 19,249 | 13,083 |
| 53,249 | 23,083 | |
| Non-current | ||
| Corporate bond | 73,957 | 73,796 |
| Other | 299 | 316 |
| 74,256 | 74,112 | |
| Total | 127,505 | 97,195 |
The corporate bond of Kapsch TrafficCom AG was successfully placed in November 2010 with a volume of EUR 75 million, a maturity of 7 years and an interest rate of 4.25%. The effective interest rate amounts to 4.54%.
All other non-current liabilities mature in 1 to 5 years.
The fair values and the gross cash flows of current and non-current financial liabilities are as follows:
| 2011/12 | 2010/11 | |
|---|---|---|
| Carrying amount | 127,505 | 97,195 |
| Fair value | 124,192 | 92,227 |
| Gross cash flows: | ||
| Up to 1 year | 53,249 | 23,083 |
| Between 1 and 3 years | 9,732 | 9,754 |
| Between 3 and 5 years | 6,286 | 6,273 |
| More than 5 years | 75,529 | 78,442 |
| 144,796 | 117,551 |
Interest rates on current and non-current financial liabilities are as follows:
| 2011/12 | 2010/11 | |
|---|---|---|
| Total financial liabilities: | ||
| Carrying fixed interest rates | 119,957 | 79,579 |
| Carrying variable interest rates | 7,548 | 17,616 |
| 127,505 | 97,195 | |
| Average interest rates: | ||
| Short-term loans | 1.56 – 2.70% | 1.65 – 2.25% |
| Loans for project financing | 1.37 – 1.95% | – |
| Loans for acquisitions | – | 3.53% |
| Corporate bond | 4.54% | 4.54% |
| Other | 2.50 – 3.86% | 2.50% |
Trade receivables (current) amounting to TEUR 6,840 (2010/11: TEUR 7,353) were pledged as collateral for guarantees issued by banks and for loans granted. A bill of exchange amounting to TEUR 1,425 (2010/11: TEUR 1,425) was issued for an export promotion credit.
| 2011/12 | 2010/11 | |
|---|---|---|
| Deferred tax assets | ||
| Deferred tax assets to be recovered after more than 12 months | 9,457 | 3,985 |
| Deferred tax assets to be recovered within 12 months | 1,732 | 4,125 |
| 11,189 | 8,110 | |
| Deferred tax liabilities | ||
| Deferred tax liabilities to be recovered after more than 12 months | 6,887 | 12,150 |
| Deferred tax liabilities to be recovered within 12 months | 11,429 | 3,725 |
| 18,316 | 15,876 | |
| Deferred tax assets net (+)/deferred tax liabilities net (-) | -7,127 | -7,766 |
Deferred taxes due to tax loss carry-forwards and other temporary differences deductible in the future are recognized only to the extent of their potential realization. In these consolidated financial statements, tax loss carry-forwards amounting to TEUR 15,154 (2010/11: TEUR 14,087) have not been recognized because it was uncertain whether there would be sufficient taxable profits available against which to offset them. All other deferred tax assets have been recognized in the respective group companies as future deductible items.
Deferred income tax assets and liabilities are offset, taking maturities into account, when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.
Deferred tax assets/liabilities are attributable to the following positions:
| 31 March 2010 | Addition resulting from company acquisition |
Taken through profit or loss |
Taken through equity |
Currency translation differences |
31 March 2011 | |
|---|---|---|---|---|---|---|
| Deferred tax assets | ||||||
| Tax loss carry-forwards | 3,413 | 0 | -195 | 0 | 1 | 3,219 |
| Provisions disallowed for tax purposes | 1,868 | 0 | -817 | 0 | 26 | 1,077 |
| Depreciation disallowed for tax purposes | 0 | 0 | 894 | 0 | 0 | 894 |
| Other | 4,369 | 1,391 | -2,871 | 26 | 6 | 2,921 |
| 9,650 | 1,391 | -2,990 | 26 | 33 | 8,110 | |
| Deferred tax liabilities | ||||||
| Special depreciation/amortization of non-current assets |
0 | 0 | 2 | 0 | 0 | 2 |
| Gains from recognition at fair value | 1,661 | 12,798 | -3,005 | 0 | 0 | 11,454 |
| Other | 1,622 | 0 | 2,509 | 285 | 3 | 4,420 |
| 3,283 | 12,798 | -494 | 285 | 3 | 15,876 | |
| Total change | 6,366 | -11,407 | -2,496 | -259 | 30 | -7,766 |
| 31 March 2011 | Addition resulting from company acquisition |
Taken through profit or loss |
Taken through equity |
Currency translation differences |
31 March 2012 | |
|---|---|---|---|---|---|---|
| Deferred tax assets | ||||||
| Tax loss carry-forwards | 3,219 | 0 | 10,274 | 0 | 31 | 13,524 |
| Provisions disallowed for tax purposes | 1,077 | 0 | 7,094 | 0 | 35 | 8,206 |
| Depreciation disallowed for tax purposes | 894 | 0 | 214 | 0 | 4 | 1,112 |
| Other | 2,921 | 0 | 1,671 | -78 | -11 | 4,503 |
| 8,110 | 0 | 19,253 | -78 | 59 | 27,343 | |
| Deferred tax liabilities | ||||||
| Special depreciation/amortization of non-current assets |
2 | 0 | 339 | 0 | 10 | 351 |
| Construction contracts | 0 | 0 | 23,465 | 0 | 118 | 23,583 |
| Gains from recognition at fair value | 11,454 | 0 | -2,931 | 0 | 0 | 8,523 |
| Other | 4,420 | 0 | -2,406 | 0 | -2 | 2,012 |
| 15,876 | 0 | 18,468 | 0 | 126 | 34,470 | |
| Total change | -7,766 | 0 | 785 | -78 | -68 | -7,127 |
Amounts recognized in the balance sheet:
| 2011/12 | 2010/11 | |
|---|---|---|
| Termination benefits | 6,452 | 5,912 |
| Pension benefits | 10,251 | 10,403 |
| 16,704 | 16,315 |
The obligation to set up a provision for termination benefits is based on the respective labor law.
Liabilities for retirement benefits recognized at the balance sheet date relate to retirees only. All pension agreements are based on past service cost and are, except for the pension plans acquired in the course of the business combination of Mark IV IVHS, not covered by external plan assets (funds). In addition, contributions are paid to an external pension fund for employees of the group (see Note 5).
Termination benefits and pension benefit obligations were valued based on an interest rate of 5% (2010/11: 5%) and compensation increases based on a rate of 3% (2010/11: 3%). In addition, the calculation was based on the earliest possible statutory retirement age including transition provisions and using the mortality tables AVÖ 2008-P (2010/11: AVÖ 2008-P) by Pagler & Pagler. Pension increases were estimated at 2-3% (2010/11: 2-3%).
The following amounts are recognized in the statement of comprehensive income as expenses for termination benefits:
| 2011/12 | 2010/11 | |
|---|---|---|
| Current service cost | 459 | 182 |
| Interest expense | 358 | 322 |
| Actuarial losses | 79 | 70 |
| Total, included in staff costs (Note 5) | 895 | 573 |
| Change in liabilities recognized in the balance sheet: | ||
| Carrying amount as of 31 March of the prior year | 5,912 | 5,561 |
| Total expense according to the table above | 895 | 573 |
| Payments | -355 | -223 |
| Carrying amount as of 31 March of the fiscal year | 6,452 | 5,912 |
| Actuarial present value of obligations (defined benefit obligation) | 8,220 | 7,094 |
| Unrecognized actuarial gains/losses | -1,768 | -1,183 |
| Amount recognized in the balance sheet | 6,452 | 5,912 |
The following amounts are recognized in the statement of comprehensive income as expenses for retirement benefits:
| 2011/12 | 2010/11 | ||
|---|---|---|---|
| Current service cost | 44 | 4 | |
| Interest expense | 581 | 533 | |
| Actuarial adjustment | 15 | 17 | |
| Gains from external plan assets | 0 | 1 | |
| Total, included in staff costs (Note 5) | 640 | 556 | |
| Change in liabilities recognized in the balance sheet: | |||
| Carrying amount as of 31 March of the prior year | 10,616 | 8,755 | |
| Addition from acquisitions (Change in consolidated entities) | 0 | 2,024 | |
| Total expense according to the table above | 640 | 556 | |
| Payments | -1,064 | -720 | |
| Currency translation differences | 59 | 0 | |
| Total | 10,251 | 10,616 | |
| Fair value of plan assets | 0 | -213 | |
| Carrying amount as of 31 March of the fiscal year | 10,251 | 10,403 | |
| Actuarial present value of obligations (defined benefit obligation) | 11,902 | 11,877 | |
| Unrecognized actuarial gains/losses | -1,650 | -1,261 | |
| Fair value of plan assets | 0 | -213 | |
| Amount recognized in the balance sheet | 10,251 | 10,403 | |
The plan assets from the previous year relate to Kapsch TrafficCom Canada Inc. and were released in the current fiscal year 2011/12.
| 2011/12 | 2010/11 | |
|---|---|---|
| Truck toll collection system Czech Republic | 2,587 | 6,185 |
| Other | 853 | 4,238 |
| 3,440 | 10,423 |
Other non-current liabilities relate to trade payables (non-current) amounting to TEUR 2,587 (2010/11: TEUR 6,185) due to subcontractors for the installation of the Czech truck toll collection system. As in the prior year, these liabilities are due in more than 1 year and less than 5 years from the balance sheet date. These non-current liabilities were discounted on the basis of cash flows using discount rates that correspond to those rates applied in discounting non-current receivables from the Czech truck toll collection system (see Note 16). Thus, the fair values approximate the carrying amounts.
Other non-current liabilities mainly relate to the non-current portion of a contingent payment obligation amounting to TEUR 610 (2010/11: TEUR 574) from the acquisition of the "Mobility Solutions" business of TechnoCom Corporation, Encino, U.S.A., in the fiscal year ending 31 March 2009.
The gross cash flows of other non-current liabilities are as follows:
| 2011/12 | 2010/11 | |
|---|---|---|
| Less than 2 years | 1,870 | 9,151 |
| Between 2 and 3 years | 944 | 1,450 |
| More than 3 years | 851 | 405 |
| 3,665 | 11,006 |
| 2011/12 | 2010/11 | |
|---|---|---|
| Amounts due to customers for contract work | 0 | 300 |
| Prepayments received | 1,056 | 205 |
| Non-current employee liabilities | 16,821 | 13,381 |
| Liabilities to tax authorities (other than income tax) | 3,406 | 1,556 |
| Other liabilities and deferred income | 31,765 | 21,439 |
| 53,048 | 36,881 |
Amounts due to customers for contract work are as follows:
| 2011/12 | 2010/11 | |
|---|---|---|
| Construction costs incurred plus recognized gains | 0 | -202 |
| Less amounts billed and prepayments received | 0 | 503 |
| 0 | 300 |
| 2011/12 | 2010/11 | |
|---|---|---|
| Non-current | 1,098 | 686 |
| Current | 18,531 | 4,722 |
| 19,628 | 5,408 |
The provisions changed as follows:
| 31 March 2010 |
Addition resulting from company acquisition |
Addition | Utilization | Disposal | Currency translation differences |
31 March 2011 |
|
|---|---|---|---|---|---|---|---|
| Obligations from anniversary bonuses | 583 | 0 | 52 | 0 | -30 | 0 | 605 |
| Other | 0 | 98 | 0 | -14 | 0 | -3 | 81 |
| Non-current provisions, total | 583 | 98 | 52 | -14 | -30 | -3 | 686 |
| Warranties | 2,361 | 45 | 100 | -860 | -303 | 136 | 1,480 |
| Losses from pending transactions and rework |
710 | 0 | 0 | -710 | 0 | 0 | 0 |
| Legal fees, costs of litigation and contract risks |
891 | 0 | 55 | -36 | 497 | 35 | 1,442 |
| Other | 2,883 | 51 | 1,761 | -2,340 | -570 | 15 | 1,800 |
| Current provisions, total | 6,845 | 96 | 1,916 | -3,946 | -376 | 186 | 4,722 |
| Total | 7,428 | 194 | 1,969 | -3,960 | -405 | 183 | 5,408 |
| 31 March 2011 |
Addition resulting from company acquisition |
Addition | Utilization | Disposal | Currency translation differences |
31 March 2012 |
|
|---|---|---|---|---|---|---|---|
| Obligations from anniversary bonuses | 605 | 0 | 290 | 0 | -27 | 0 | 868 |
| Other | 81 | 0 | 223 | -81 | 0 | 7 | 230 |
| Non-current provisions, total | 686 | 0 | 513 | -81 | -27 | 7 | 1,098 |
| Warranties | 1,480 | 0 | 249 | -426 | -83 | 8 | 1,229 |
| Losses from pending transactions and rework |
0 | 0 | 12,320 | 0 | 0 | 63 | 12,382 |
| Legal fees, costs of litigation and contract risks |
1,442 | 0 | 697 | -35 | -1,085 | 3 | 1,022 |
| Other | 1,800 | 0 | 3,412 | -1,220 | -71 | -23 | 3,897 |
| Current provisions, total | 4,722 | 0 | 16,678 | -1,681 | -1,239 | 51 | 18,531 |
| Total | 5,408 | 0 | 17,190 | -1,763 | -1,266 | 58 | 19,628 |
The provision for anniversary bonuses relates to non-current entitlements by employees based on collective labor agreement provisions. The valuation was based on an interest rate of 5% (2010/11: 5%), the earliest possible statutory retirement age including transition provisions and using the mortality tables AVÖ 2008-P (2010/11: AVÖ 2008-P) by Pagler & Pagler. Increases in salary were considered at 3% (2010/11: 3%).
As manufacturer, dealer and service provider, the group issues product warranties at the time of sale to its customers. Usually, under the terms of the warranty contract, the group has the obligation to repair or replace manufacturing or software defects that become apparent within the period under guarantee.
When the group expects warranty claims on products sold or services rendered during the period under guarantee, a corresponding
provision is set up in the financial statements. Based on the expectation that the majority of the expenditure will be incurred in the short or medium term, the best estimate for the cost of warranty is used for the recognition of the provision. Likewise, historical data is taken into account in the calculation of the provision amount. According to past experience, it is probable that there will be claims under the warranties.
The provision for losses from pending transactions and rework was set up for expected losses from not yet completed construction contracts at the balance sheet date.
Other provisions mainly include provisions for commissions and bonuses, credits receivable, discounts granted to customers and legal and consulting fees.
The group's contingent liabilities primarily result from large-scale projects. Other commitments mainly relate to contract and warranty bonds, bank guarantees, performance and bid bonds as well as sureties.
Details of contingent liabilities and other commitments are as follows:
| 2011/12 | 2010/11 | |
|---|---|---|
| Contract, warranty, performance and bid bonds | ||
| City Highway Sydney and Melbourne | 1,811 | 2,306 |
| Truck toll collection system Austria | 8,500 | 12,500 |
| Truck toll collection system Czech Republic | 4,471 | 9,414 |
| Toll collection system Poland | 43,501 | 24,656 |
| Toll collection systems South Africa: Gauteng, Marian Hill, Huguenot | 114,113 | 120,208 |
| Toll collection system Portugal | 1,820 | 0 |
| Other | 906 | 967 |
| 175,121 | 170,051 | |
| Bank guarantees | 1,722 | 1,975 |
| Sureties | 524 | 544 |
| 177,366 | 172,570 |
For details of securities for above-mentioned contingent liabilities and other commitments, see Note 15 and Note 21. In addition, various assets of Kapsch TrafficCom AB, Jönköping, Sweden, amounting to TEUR 8,796 (2010/11: TEUR 10,075) are pledged in favour of a Swedish bank in order to secure contingent liabilities.
The future payments from non-cancelable obligations from rental and operating lease contracts are presented below:
| 2011/12 | 2010/11 | |
|---|---|---|
| Up to 1 year | 10,279 | 8,969 |
| Between 1 and 5 years | 26,521 | 25,198 |
| Over 5 years | 5,113 | 12,860 |
| 41,914 | 47,027 |
The following transactions were performed with related parties:
Since January 2005, the company has provided services to the group in the area of group consolidation and legal advice. Expenses incurred by the group in the fiscal year 2011/12 amounted to TEUR 484 (2010/11: TEUR 490). Furthermore, the company invoices insurance costs (directors & officers liability insurance) to the group amounting to TEUR 22 (2010/11: TEUR 22).
In December 2005, the company issued a parental guarantee to FöreningsSparbanken AB, Stockholm, Sweden, in favor of the group company Kapsch TrafficCom AB, Jönköping, Sweden, amounting to EUR 20.2 million. For the project in South Africa (Gauteng), the company also issued parental guarantees in favor of Kapsch TrafficCom AG to Unicredit Bank Austria AG, Vienna, and to Raiffeisen Bank International AG, Vienna, in September 2009. As of the balance sheet date of 31 March 2012, the assumed guarantees amount to EUR 28.9 million. The annual fee for the assumption of the liabilities is 0.5% of the guaranteed amounts. Expenses incurred by the group in the fiscal year 2011/12 amounted to TEUR 242 (2010/11: TEUR 241).
KAPSCH-Group Beteiligungs GmbH acts as the tax group leader in a tax group formed in March 2005, of that Austrian subsidiaries of this group are also members. Accordingly, all post-formation tax effects of the group companies that are tax group members are considered to be related party transactions.
In connection with the use of the KAPSCH trademark and logo, the company invoices license fees to the group. The license fee amounts to 0.5% of all third-party sales of the group. Expenses incurred by the group in the fiscal year 2011/12 amounted to TEUR 2,812 (2010/11: TEUR 1,924).
Activities in the area of corporate development, public relations, sponsoring and other marketing activities are carried out centrally by Kapsch Aktiengesellschaft for all group companies. Costs allocated to the group in the fiscal year 2011/12 amounted to TEUR 1,919 (2010/11: TEUR 1,591).
Furthermore, the company invoices management and consulting services (including costs for the chairman of the board of the company, Georg Kapsch, and costs for consulting services of certain supervisory board members of the company) to the group. Expenses incurred by the group in the fiscal year 2011/12 amounted to TEUR 1,582 (2010/11: TEUR 1,400).
Kapsch Aktiengesellschaft has entered into various insurance contracts covering all group companies. The costs allocated to the group in the fiscal year 2011/12 amounted to TEUR 361 (2010/11: TEUR 355). In addition Kapsch Aktiengesellschaft maintains a software tool and invoiced TEUR 70 (2010/11: 55) to the group for this service. In fiscal year 2011/12, proportionate cost for the participation of managers in the management convention in Istanbul amounting to TEUR 322 were invoiced to the group (2010/11: TEUR 0).
The company provides human resources services (payroll services, administration, recruiting, advice on labor law and human resources development) to the group and provides apprentices and trainees. Expenses incurred by the group in the fiscal year 2011/12 amounted to TEUR 1,510 (2010/11: TEUR 1,092).
The company leases telephone and IT equipment (hardware and software) to the group and provides call center services and IT support. Expenses incurred by the group in the fiscal year 2011/12 amounted to TEUR 1,043 (2010/11: TEUR 869).
The company delivers hardware (IT equipment) on behalf of Kapsch TrafficCom AG, Vienna, and provides maintenance and other services for various customer projects, the three largest of which by far are the "Truck toll collection system Austria", the "Truck toll collection system Czech Republic" and the "Truck toll collection system Poland". The deliveries and services performed amounted to TEUR 3,044 in the fiscal year 2011/12 (2010/11: TEUR 6,141).
The company provides IT, data processing and telephone services to the group amounting to TEUR 3,838 (2010/11: TEUR 2,725) as well as other services amounting to TEUR 456 (2010/11: TEUR 456).
The group invoices consulting services in the area of public relations to the company. Income of the group resulting from these services in the fiscal year 2011/12 totaled TEUR 44 (2010/11: TEUR 44).
Kapsch Components GmbH & CoKG provides logistic services to the company amounting to TEUR 76 (2010/11: TEUR 71) and other services amounting to TEUR 162 (2010/11: TEUR 100).
Kapsch TrafficCom AG provides services in the area of public relations to the company. Income of the group resulting from this service in the fiscal year 2011/12 amounted to TEUR 44 (2010/11: TEUR 44).
Kapsch Components GmbH & CoKG provides logistic services to the company amounting to TEUR 766 (2010/11: TEUR 663), manufacturing services for GSM-R amounting to TEUR 1,869 (2010/11: TEUR 0) and provides the company with other deliverables and performances amounting to TEUR 33 (2010/11: TEUR 45).
Kapsch Components GmbH & CoKG provides logistical and manufacturing services to the company for GSM-R projects amounting to TEUR 5,879 (2010/11: TEUR 0)
The company provides technical maintenance services for the Czech truck toll collection system and is responsible for the current IT support for the Czech subsidiaries. Expenses incurred for this in the fiscal year 2011/12 totaled TEUR 2,114 (2010/11: TEUR 2,736). Furthermore, the company provided public relations services amounting to TEUR 100 in the fiscal year 2011/12 (2010/11: TEUR 91) and other services amounting to TEUR 146 (2010/11: TEUR 133).
The company provides hardware (IT equipment) to the group and renders maintenance and other services for the customer project in Poland. These services amounted to TEUR 4,678 in the fiscal year 2011/12 (2010/11: TEUR 2,857).
On 15 July 2008, a new lease agreement was concluded for the location Am Europlatz 2 and a cancelation waiver for 10 years was agreed to. It is possible to partly terminate the agreement after 5 or 7 years. Lease expenses incurred by the group amounted to TEUR 3,266 in the fiscal year 2011/12 (2010/11: TEUR 3,193).
Lease income of the group resulting from the sub-lease to related parties in the fiscal year 2011/12 totaled TEUR 362 (2010/11: TEUR 386).
Services are usually negotiated with related parties on a cost-plus basis. Goods are bought and sold at arm's length.
Liabilities for pension benefits include pension obligations (pensions in payment) to the widow of Dr. Karl Kapsch, a former board member of Kapsch Aktiengesellschaft.
The following tables provide an overview of revenues and expenses in the respective fiscal years as well as receivables from and payables due to related parties at the respective balance sheet dates:
| 2011/12 | 2010/11 | |
|---|---|---|
| Parent company | ||
| Revenue | 0 | 0 |
| Expenses | 758 | 884 |
| Affiliated companies | ||
| Revenue | 9,350 | 1,583 |
| Expenses | 23,122 | 21,667 |
| Other related parties | ||
| Revenue | 0 | 0 |
| Expenses | 4,511 | 4,193 |
| 31 March 2012 | 31 March 2011 | |
|---|---|---|
| Parent company | ||
| Trade receivables and other assets | 494 | 1,696 |
| Trade payables and other payables | 998 | 96 |
| Affiliated companies | ||
| Trade receivables and other assets | 2,707 | 262 |
| Trade payables and other payables | 9,486 | 4,405 |
| Other related parties | ||
| Trade receivables and other assets | 0 | 0 |
| Trade payables and other payables | 290 | 412 |
Earnings per share (basic earnings) are calculated by dividing the profit for the period attributable to equity holders of the company by the weighted average number of ordinary shares in issue during the year, excluding, if any, ordinary shares purchased by the company and held as treasury shares. As of 31 March 2012, as in the prior year, no treasury shares were held by the company. There were no dilutive effects.
| 2011/12 | 2010/11 | |
|---|---|---|
| Profit for the period attributable to equity holders of the company (in EUR) | 20,599,568 | 22,062,116 |
| Weighted average number of ordinary shares | 12,744,262 | 12,200,000 |
| Earnings per share (in EUR) | 1.62 | 1.81 |
On 6 April 2012, the nationwide truck toll collection system in Poland was finally accepted by the customer. The last installment was paid in the net amount of EUR 103.3 million in April as well.
On 28 April 2012 – just two days before the final scheduled commissioning deadline – the start of the fully completed system was suspended indefinitely by court order due to a lawsuit. On 23 May 2012, the government elected to appeal the court decision.
The consolidated group companies are listed in the notes to the consolidated financial statements under the item "consolidated group". The parent company Kapsch TrafficCom AG, Vienna, directly or indirectly holds 100% of the shares in the fully consolidated subsidiaries, with the exception of Kapsch Telematic Services sp. z o.o., Poland, Electronic Toll Collection (PTY) Ltd., South Africa, Kapsch Telematic Services Danmark ApS, Denmark, Kapsch Telematic Services Solutions A/S, Denmark, Kapsch Telematic Services GmbH, Vienna, Kapsch Telematic Services GmbH Deutschland, Germany, Kapsch Telematic Services Kft., Hungary, Kapsch Telematic Services spol. s r.o., Czech Republic, Kapsch TrafficCom Construction & Realization spol. s r.o., Czech Republic, TMT Services and Supplies (Pty) Ltd., South Africa, SafeTCam (Pty) Ltd., South Africa, Traffic Software Solutions (Pty) Ltd., South Africa, TMT Services and Supplies (Gauteng) (Pty) Ltd., South Africa, Electronic Tolling Operations (Pty) Ltd., South Africa, Crestwave 63 (Pty) Ltd., South Africa, Crestwave 61 (Pty) Ltd., South Africa, TMT Services and Supplies (North) (Pty) Ltd., South Africa, Berrydust 51 (Pty) Ltd., South Africa and Kapsch Telematic Services IOOO, Minsk, Republic of Belarus. With regard to additional disclosures in accordance with § 265 (2) 1 UGB for the companies mentioned above, the protection-of-interest clause pursuant to § 265 (3) UGB was applied.
The average number of staff in the fiscal year 2011/12 was 2,404 salaried employees and 181 wage earners (2010/11: 1,551 salaried employees and 70 wage earners).
The expenses for the auditor amount to TEUR 128 (2010/11: TEUR 184) and are broken down as follows:
| 2011/12 | 2010/11 | |
|---|---|---|
| Audit of the consolidated financial statements | 58 | 61 |
| Other assurance services | 53 | 111 |
| Tax consulting services | 0 | 0 |
| Other services | 17 | 12 |
| 128 | 184 |
The compensation paid to members of the executive board is shown below:
| Executive board remuneration in TEUR | Fixed | Variable | Total 2011/12 |
Total 2010/11 |
|---|---|---|---|---|
| Georg Kapsch | 444 | 578 | 1,022 | 821 |
| Erwin Toplak | 378 | 64 | 442 | 417 |
| André Laux | 285 | 74 | 359 | 334 |
| Total | 1,107 | 716 | 1,823 | 1,573 |
Expenses for termination benefits for members of the executive board amount to TEUR 59 (2010/11: TEUR 43).
Individual pension agreements are granted to Erwin Toplak and André Laux. Annually, approximately TEUR 19 (2010/11: TEUR 19) is paid by Kapsch TrafficCom AG to an external pension fund.
Remunerations paid to supervisory board members amount to TEUR 8 (2010/11: TEUR 21).
As in the previous years, no advances or loans were granted to members of the executive and supervisory boards, nor any guarantees issued in their favor.
In the fiscal year 2011/12, the following persons served on the executive board: Georg Kapsch (Chief Executive Officer) Erwin Toplak André Laux
In the fiscal year 2011/12, the following persons served on the supervisory board: Franz Semmernegg (Chairman) Kari Kapsch (Deputy-Chairman) William Morton Llewellyn (until 22 August 2011) Sabine Kauper (from 22 August 2011)
Delegated by the works council: Christian Windisch Claudia Rudolf-Misch
Authorized for issue:
Vienna, 30 May 2012
Georg Kapsch Erwin Toplak André Laux
Chief Executive Officer Chief Operating Officer Executive Board member
We have audited the accompanying consolidated financial statements of Kapsch TrafficCom AG, Vienna, for the fiscal year from 1 April 2011 to 31 March 2012. These consolidated financial statements comprise the consolidated balance sheet as of 31 March 2012, the consolidated statement of comprehensive income, the consolidated cash flow statement and the consolidated statement of changes in equity for the fiscal year ended 31 March 2012 as well as the notes to the consolidated financial statements.
The company's management is responsible for the group accounting system and for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and with the legal provisions as applicable in Austria. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; making accounting estimates that are reasonable in the circumstances.
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with laws and regulations applicable in Austria and Austrian Standards on Auditing as well as in accordance with International Standards on Auditing (ISA) issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC). Those standards require that we comply with professional guidelines and that we plan and perform the audit to obtain reasonable assurance of whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the group's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the group's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a reasonable basis for our audit opinion.
Our audit did not give rise to any objections. In our opinion, which is based on the results of our audit, the consolidated financial statements comply with legal requirements and give a true and fair view of the financial position of the group as of 31 March 2012 and of its financial performance and its cash flows for the fiscal year from 1 April 2011 to 31 March 2012 in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
Pursuant to statutory provisions, the management report for the group is to be audited as to whether it is consistent with the consolidated financial statements and as to whether the other disclosures are not misleading with respect to the company's position. The auditor's report also has to contain a statement as to whether the management report for the group is consistent with the consolidated financial statements.
In our opinion, the management report for the group is consistent with the consolidated financial statements.
Vienna, 30 May 2012
PwC Wirtschaftsprüfung GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft
signed: Felix Wirth Austrian Certified Public Accountant
| Management Report as of 31 March 2012 69 | |
|---|---|
| Statement of all Members of the Managing Board 92 | |
| Additional Information pursuant to Section 82 Para. 4 No. 3 BörseG 93 | |
| Balance Sheet as of 31 March 2012 94 | |
| Income Statement for the fiscal year 2011/12 95 | |
| Notes to the financial statements for the fiscal year 2011/12 96 | |
| Auditor's Report 108 |
on the financial statements as of 31 March 2012
The recovery from the global financial and economic crisis, which started in 2009, gained pace during 2010, but turned out to be fragile in 2011. The global economic growth rate slowed to 3.9 % from 5.3 % in 2010, and world trade also slumped to 5 % in 2011 following a rebound to 13.8 % in the previous year. Although global economic activity began to stabilize towards the end of 2011 and remained stable in the first quarter of 2012, world economic growth for the whole of 2012 is expected to be slightly below that of 2011. The forecasted growth rate is 3.5 %, although this might be seen as optimistic due to uncertainties affecting the forecast.
The greatest threat to the global economy is that sovereign debt problems in the eurozone could re-trigger a substantial financial and economic crisis. However, there are also other developments curbing growth in world economic activity. First of all, oil price increases did not let up in 2011. The average price for Brent climbed to USD 111.3 per barrel compared to USD 79.5 per barrel in 2010. As these oil price pressures reflect geopolitical tensions and the risk of supply disruption rather than a surge in global demand, they are expected to persist in 2012, thereby providing no relief for the economies of oil importing countries.
Furthermore, financial markets were highly vulnerable in 2011. Concerns about the contagion of the eurozone debt crisis have affected investor sentiment worldwide. This has contributed to significant volatility in a wide range of asset prices and, at times, has prompted noticeably more risk-averse behavior by investors. Although the situation on the global financial markets relaxed in late 2011 as well as in the first months of 2012, continued volatility is still expected.
Another reason for the weakness of the economic recovery has been the high debt burden of the household sector in many highly developed countries. The International Monetary Fund (IMF) recently established that recessions are more severe, lasting for at least five years, when they follow a big run-up in household debt, as was the case in the U.S., the U.K. and other European countries at the beginning of the financial crisis in 2007.
Economic developments in 2011 varied among the individual regions of the world. Governments of EU member states and of eurozone countries were faced with sovereign debt crises and the risk of their spreading to the global economy. An adequate and comprehensive set of policy measures, amongst others the enforcement of fiscal tightening, have proven successful in easing financial market pressure and in raising confidence, albeit at the cost of lower GDP growth. Real GDP increased by 1.5 % in the EU in 2011 and will probably stagnate in 2012, while the eurozone saw economic growth of 1.4 % in 2011 and is expected to go through a mild recession in 2012. The U.S. economy performed better than expected in 2011 with a GDP increase of 1.7 % and gave strong signs at the end of the year that the recovery would accelerate in 2012. Japan struggled with the devastating effects of the earthquake in March and was also hit by the consequences of the floods in Thailand at the end of the vear. As Thailand is an important production location for Japan, particularly for the electronic and automotive sectors, industrial activity in Japan suffered from severe disruptions in supply, which consequently had a negative impact on Japanese exports. Furthermore, the persistent strength of the yen has been a real burden for the export industry in Japan. Several exchange market interventions in 2011 aimed at weakening the yen brought only temporary results. Japan's very expansive monetary policy (with key interest rates close to 0 %) is currently being combined with a comprehensive asset purchase program, which was enlarged by JPY 10 trillion in February 2012. In spite of these measures, real GDP contracted by 0.7 % in 2011, but forecasts for 2012 predict a stronger Japanese economy. Emerging markets were by far the biggest contributors to global growth once again in 2011. although they did lose some momentum.
Their performance is expected to slow further in 2012 because of a less favorable external environment and a weakening of internal demand. In the BRIC countries (Brazil, Russia, India and China), real GDP growth rates in 2011 ranged between 9.2 % in China and 2.7 % in Brazil.
Global inflation picked up in 2011 mainly because of a marked increase in energy prices. In 2012, global consumer price inflation is projected to ease as world demand drops further. In highly developed economies, inflation is expected to fall from 2.7 % in 2011 to 1.9 % in 2012. In emerging and developing economies, pressures are also expected to ease, with inflation around 6.2 % in 2012 compared to 7.1 % in 2011.
In light of the fragile world economy, economic policy continues to play a critical role. Monetary policy is expected to remain supportive, with key interest rates already at very low levels in many highly developed countries, while further room for easing exists in emerging market economies. In contrast, as government debt levels have soared in a number of highly developed countries in recent years, fiscal consolidation is set to continue, with only limited scope for supporting growth through fiscal policy should the global economy weaken further.
The gross domestic product of the United States expanded moderately in the second half of 2011 following subdued gains in the first half of the year, resulting in a growth rate of 1.7 % for the year as a whole. Economic data for the first quarter of 2012 indicates that economic developments have improved further. For instance, the IMF is currently forecasting a GDP growth rate of 2.1 % for 2012. Private consumption, which is traditionally one of the main drivers of growth in the U.S.A., recovered at the end of 2011 and continued to rise in early 2012. Conditions in the labor market have improved with an increase in the pace of job creation and a reduction in the unemployment rate, which stood at 8.2 % in March 2012 compared with 8.9 % in March 2011. Nevertheless, the jobless rate remains quite high in the U.S.A. Consumer price inflation fell to approximately 3.0 % in December 2011 from a 3.9 % peak in September. In order to support stronger economic recovery, the U.S. not only pursued an accommodative monetary policy but also employed a number of fiscal stimulus measures that subsequently led to a budget deficit of 8.5 % of GDP in 2011. To avoid defaulting, the U.S. government raised the ceiling for public debt in August 2011, and a panel of Republicans and Democrats was set up to identify potential savings of at least USD 1.2 trillion by the end of November. As the panel failed to reach agreement, automatic spending cuts are due to enter into effect in 2013, after the presidential election in November 2012. Standard & Poor's (S&P) downgraded the long-term U.S. credit rating to AA+ in summer 2011, citing the risk of an ongoing rise in federal government debt ratios in the coming years. Other credit rating agencies subsequently added a negative outlook to their ratings for similar reasons.
2011 witnessed a slow-down in economic activity in a number of emerging market economies. Although growth is expected to weaken further in 2012, these economies remain by far the strongest stimulators of world economic growth. The Asian Development Bank predicts an aggregated GDP growth rate of 6.9 % in 2012 for "Developing Asia" (a group of 44 Asian countries), down from 7.2 % in 2011 and driven mainly by China and India. For Latin America and the Caribbean, the anticipated regional economic growth rate is 3.7 % for 2012, compared with 4.5 % in 2011. Only the Middle Eastern and North African region (MENA) is expected to have a stronger GDP growth in 2012 than in 2011. As MENA includes the most important oil exporting countries, it benefits from high oil prices and, as a result, seems to be less exposed to a fall-off in global economic activity.
The course of the European economy in 2011 was influenced primarily by the sovereign debt crisis. In light of persistent financial and structural problems in several member states, the economic growth rate of the EU-27 slowed down to 1.5 % (2010: 2.0 %). The second halfyear, in particular, saw a significant loss of momentum, with some European countries even slipping into recession. Although both the investment climate and business sentiment started to pick up in early 2012, hard indicators such as order inflows and industrial production have remained weak. Consequently, economists predict that the aggregate GDP of the EU-27 will stagnate in 2012. Only in the following year is European business activity set to gain momentum again (+1.6 %), driven in part by stronger economic growth outside of Europe.
One striking feature of the current situation in the European Union is the economic divide between its member states, which has widened significantly over the past few months. On the one hand, Germany experienced the second consecutive year of strong growth in 2011 (a GDP increase of 3 %) and France, too, produced surprisingly good results (a slight GDP rise in the generally weak fourth quarter of 2011). On the other hand, economic growth in the United Kingdom has virtually come to a standstill. The divergences between the peripheral EU countries are even more obvious, however. While economic performance in Eastern European states like Poland (+4.3 %) or Slovakia (+3.3 %) improved markedly in 2011, the crisis-ridden countries of Southern Europe faced a recession. The situation in Greece remains particularly unstable, with GDP having fallen by as much as 15 % since the start of the global financial crisis in 2008. Moreover, the economies in both Spain and Italy have yet to reach their pre-crisis levels despite extensive reform and consolidation efforts. The current weakening of business activity in Southern Europe has also been felt on the labor market. with unemployment rates in Spain as well as in Greece passing the 20-percent mark (EU-27: 10.2 % in February 2012).
The states of the eurozone were affected the most by the debt crisis in 2011, mainly because of the reactions of international financial markets to the uncertain future of the currency union. Economic growth decelerated significantly during the course of the year, eventually becoming negative in the final quarter (-0.3 % compared with the previous period). This slight downward trend is most likely to continue in 2012, although several signs have indicated a stabilization of the economy in the eurozone. Interest rates for long-term government bonds, for instance, have started to come down in several countries, including Ireland and Italy. Furthermore, clear upward trends were also witnessed on the stock markets. Lastly, after months of negotiations, the Greek government reached an agreement with its creditors regarding debt relief in March 2012. This step was a prerequisite for the disbursement of additional EU funds aimed at getting the Greek economy back on its feet.
By pursuing an expansionary monetary policy, the European Central Bank played a vital role in containing the sovereign debt crisis. Over the last months, the ECB has repeatedly supported the financial sector in the eurozone with cheap money. In December 2011 and again in February 2012, European banks were provided with more than EUR 500 billion with a term of three years at a low interest rate. The aim of these initiatives was to prevent a credit crunch in the region as well as to stimulate demand for government bonds issued by eurozone members. In the short term, the ECB is most likely to continue with its expansionary monetary policy; the current level of the prime interest rate can be seen as an indication of this. Since the newly appointed president of the ECB, Mario Draghi, lowered the prime rate to a record low of 1 % at the end of 2011, no change to this low-rate strategy has been seen.
The economic developments in the EU and the eurozone have also had repercussions for non-members in Eastern and South Eastern Europe. The structurally weak Balkan states, in particular, have been adversely affected by the sluggish demand from Europe and a more restrictive lending policy by international banks. While GDP growth amounted to about 2 % in Bosnia-Herzegovina and Serbia in 2011, economic performance in these countries is expected to stagnate in 2012. In regard to the future EU member Croatia, experts even predict a GDP decline of -1.2 % (2011: +0.3 %). In contrast, the prospects for Russia and Ukraine are more optimistic. Both states are set to stay on their current growth path for the next few years (a GDP increase of 4 % to 5 % p.a.) according to analysts. In the case of Russia, positive effects are to be expected from its accession to the World Trade Organization, which was formally announced in December 2011.
In 2011, the Austrian economy expanded by 3.1 %. A closer look at the data on a quarterly level shows, however, that economic growth slowed down noticeably over the course of the year. The fourth quarter even saw a moderate drop in GDP of 0.1 % compared with the previous period. This deceleration in economic performance is mainly attributable to weaker stimuli from other European states. As for 2012, first signs indicate a stabilization of business activity in the first half of the year, followed by a gradual expansion in the second half. Overall, Austrian GDP is forecast to rise by 0.4 % in the year 2012, driven by increased confidence among both companies and private households.
Unlike the preceding year, foreign trade contributed only modestly to Austria's growth in 2011. The main reason for the loss of momentum in the export business lies in the poor economic performance of several European countries, including important trading partners like Italy and Hungary. Since there are no signs of a swift recovery in these countries yet, Austrian exporters are setting their hopes on an increase in demand from non-European markets, for instance the United States, whose economy is currently on the rebound. Nonetheless, export growth is set to decline to 3.3 % (2011: +6.7 %). Only in 2013 should Austrian companies once again start to benefit from a general and more sustained revival of global trade.
The strong inclination by Austrian companies to invest in expansion was a key driver of economic development in 2011. The amount of money spent on machinery and equipment soared by 11.3 %, and investment in construction also rose by 2.6 % after two consecutive years of declining expenditures. However, the general economic slow-down in late 2011 also affected the investment climate in Austria, lowering expectations for the coming months. According to the latest forecasts, investments in machinery and equipment as well as in construction are expected to increase only moderately in 2012.
Consumer prices in Austria experienced strong upward pressure in 2011, spurred by geopolitical tensions in the Middle East and their impact on the global oil market. The inflation rate exhibited an annual average of 3.3 %. Only in the last quarter did the level of price increases start to recede, leading to an inflation rate of 2.4 % in March 2012. On average, inflation is forecasted to amount to 2.4 % in 2012. Private consumption should benefit from this gradual easing of price pressure and consequently expand slightly more in 2012 (+0.8 %) than it did in the year before (+0.6 %). In addition, an expected per-capita increase in salaries and wages of 0.8 % is also set to stimulate private consumption, which should have a stabilizing effect on the whole economy.
As far as the latest developments on the job market are concerned, the Austrian unemployment rate of 4.2 % was the lowest in the EU in 2011. More recently, though, the slow pace of GDP growth has triggered a steady rise in the number of jobless. For 2012, economists predict an unemployment rate of 4.6 %. Contrary to popular belief, the 2011 opening of the Austrian labor market to certain EU member states in Eastern Europe is unlikely to aggravate the situation further.
The Austrian national finances showed a budget deficit of 3.3 % and a slight increase in public debt in 2011. In order to prevent a further rise in debt levels, the national government adopted a comprehensive austerity package in March 2012. Provided that the measures stipulated therein are implemented accordingly, the budget deficit should gradually decrease to the Maastricht limit of 3 % in 2012 and to 2.6 % in the following year. Although these reforms may have a dampening effect on certain economic activities in the short run, experts believe that the positive effects will prevail in the long run. In light of the recent downgrading of the Austrian sovereign debt rating by Standard & Poor's (from triple-A to AA+), the austerity measures are intended to strengthen the confidence of international investors in Austria. This, in turn, should ensure the lowest possible costs for public debt financing.
To allow for easier comparisons, Kapsch TrafficCom Group makes use of the internationally prevailing terms for the intelligent transportation systems (ITS) market. ITS are systems in which information and communication technologies are employed to support and optimize road transportation, including infrastructure, vehicles and users.
The study "Intelligent Transportation Systems - A global strategic business report" from Global Industry Analysts, May 2008 and September 2010, describes the ITS market as a diversifying market with widely differing application and product segments. The market comprises the following market segments:
Market volume. According to Global Industry Analysts (May 2008 and September 2010), the volume of the ITS market amounted to USD 13.0 billion in 2011 and is expected to continue arowina.
Market segmentation. The largest market segment in 2011 was traffic management systems, accounting for almost 37 % (USD 4.8 billion). Based on a worldwide volume of about USD 3.1 billion, electronic toll collection had an ITS market share of about 24 % in 2011. The largest geographic region in 2011 was the U.S.A. with 38 %, followed by Europe with 34 %.
Market growth. The ITS market is expected to grow at an average annual rate of 10 % between 2007 and 2015 to reach USD 18.6 billion in 2011, of which ETC will account for USD 5.2 billion in 2011, thereby exhibiting the fastest growth of all ITS segments at an average annual rate of 13 %.
Funding for infrastructure projects. The growth in the number of vehicles worldwide requires additional financing to construct new and maintain existing roads. Toll collection offers a constant source of income and thus helps governments to provide the necessary funding for infrastructure projects. Efficient toll collection systems, especially electronic ones, offer a significant, constant and sustainable source of additional funds for governments, public authorities and concessionaires that can be used for the expansion and maintenance of road infrastructure.
The demand for the construction of new roads is largely generated by the worldwide increase in road traffic, which can be considered a global trend. Especially in Asia, an increased demand for electronic toll lanes is expected for the replacement and expansion of toll collection systems previously based on more traditional (manual) systems. Aside from general economic aspects, the worldwide increase in road traffic is probably the most important driver for the ITS market. According to analyses by the EU (European Union 2010, "Energy and Transport in Figures"), commercial traffic increased by 2.3 % per year and by 33.7 % in total between 1995 and 2008. Commercial road traffic increased by 2.9 % per year and by 45.7 % in total. While the recent economic crisis triggered a fall in the volume of goods transport, this has already been largely compensated for by the subsequent upswing. Despite political pressure, goods transports could not be shifted significantly from road to rail or ship. This growth increases the financing burden for road infrastructure enormously, which in turn fosters greater demand and a high growth potential for ITS applications and the market segment of electronic toll collection systems, in particular.
In 2005, the trans-European road network (TEN-V) had a total length of 84,700 km and comprised one-fourth of the primary street network but carried 40 % of the total commercial traffic. It is predicted that TEN-V will be expanded by 4,800 km per year up to 2020, of which 3.500 km will consist of existing roads. Major investments will be required in the new EU member states and along the corridor routes to these countries. In the white paper "European transport policy for 2010", the European Union estimated that investments of EUR 600 billion will be required by 2020. The long-term forecasts for traffic growth remain high.
In addition to the construction of new roads, the high financing requirements for the preservation of the road infrastructure are another factor driving the ITS market. The high funding requirements in the U.S.A. (Standard & Poor's research estimates an annual demand of USD 92 billion for the preservation of highways and bridges and a further USD 125.6 billion for their improvement) are leading to new business models and private concessionaire models.
Depending on the requirements of the specific application, systems are introduced for the toll collection which make use of technology based on microwaves (dedicated short-range communication; DSRC), satellite navigation (global navigation satellite system; GNSS) or video cameras, with the latter used in particular for automatic number plate recognition (ANPR) for the purpose of toll collection and enforcement in urban areas. While in Europe the standardized technology is based on 5.8 GHz according to the Comité Européen de Normalisation (CEN) standard, toll systems in North America are based on proprietary protocols in the 915 MHz band. It is expected that a new communication protocol standard based on 5.9 GHz will gradually replace the existing technology in the U.S.A. over the coming years. In addition to the toll application, the communication standard 5.9 GHz WAVE (Wireless Access in the Vehicular Environment) is intended for real-time car-to-car and car-toinfrastructure communication, for applications that increase traffic safety as well as additional ITS solutions for traffic information, traffic management and entertainment.
Reducing congestion. Environmental pollution can be viewed as another key driver for the ITS market and for the market segment of electronic toll collection in particular. Toll collection is largely perceived as an effective solution for reducing high levels of congestion, particularly in metropolitan areas, as mandatory payments for road usage encourage carpooling or the use of public transportation. In large conurbations and capital cities, in particular, there is a growing need for electronic systems to control and reduce traffic. Systems for city charging and enforcing low-emission environmental zones are deployed by cities to reduce traffic congestion and environmental pollution. Due to the politically sensitive nature of this topic, this portion of the electronic toll collection market segment has not developed as quickly as originally expected.
Traffic safety devices to monitor compliance with traffic regulations are another field of application in cities. Examples include systems to monitor traffic violations at junctions (e.g. running red lights) as well as systems to detect speeding. The market potential of these applications, which fall under the market segment of traffic management systems, is growing rapidly in cities as well as interurban areas. For municipal authorities, they often pave the way for larger and more extensive ITS solutions, such as city charging.
Reducing environmental pollution caused by road traffic. Efforts to reduce environmental pollution due to road traffic have become a market driver for the introduction of toll collection systems. Such systems encourage reduced or modified vehicle usage and decrease the need to further expand the road network, thereby lowering emissions and pollution levels. Electronic toll collection systems, in particular for multi-lane free-flow traffic, have proven their ability to decrease environmental pollution and carbon dioxide emissions by reducing congestion at toll plazas without interfering with the traffic flow. The introduction of city charging schemes also helps to reduce congestion levels and environmental pollution.
Increasing safety on the road. Traffic management systems (market segment TMS) consistently lower accident rates while also helping increase the probability of surviving accidents. Customers include governments and regional authorities as well as other organizations, such as concessionaires, that are engaged in developing transport policies utilizing ITS in order to ensure the availability and quality of traffic infrastructure in a way that improves safety, performance, security and environmental protection.
Enhancing vehicle and fleet productivity. Vehicle-oriented intelligent transportation systems are aimed at in-car telematics such as remote diagnostics or advanced driver assistance systems. Their purpose is mainly to enhance vehicle productivity, particularly that of commercial vehicles (market segment CVO), as well as traffic safety and security. Customers are mainly car makers and their suppliers. This field includes systems for the real-time interaction between vehicles as well as between vehicles and infrastructure, which Kapsch TrafficCom believes will increasingly be based on 5.9 GHz technology. In the CVO segment, for example, data sent by the vehicle's on-board electronics via the 5.9 GHz band is analyzed to determine the condition of the vehicle.
Industry-oriented intelligent transportation systems are commercial applications designed to reduce the costs or maximize the revenue of vehicle fleet operators, including transportation companies (market segment PVTMS). Examples include systems for fleet management and for collecting information on the logistics of large-scale vehicle operators. Other customers include insurance companies who see pay-as-you-drive car insurance as a promising way to attract new customers by offering fair insurance rates and ITS-based value-added mobility services.
Increased comfort expectations of travelers. User-oriented intelligent transportation systems are focused mainly on convenience and efficiency for travelers. The customer in the car receives information to aid in orientation, thereby increasing traffic safety. Example applications for vehicle information systems (market segment VIS) include transmitting trafficrelated vehicle information to travelers before or during the trip as well as navigation. Customers are information service providers such as wireless network operators, radio broadcasters and vendors of portable navigation devices. As a communication platform, the 5.9 GHz technology will enable a variety of future applications involving connected vehicles.
A common thread among all these forces driving the market is the convergence on the ITS market expected by Kapsch TrafficCom over the next 5 to 10 years. The company is convinced that applications, platforms and technologies will become increasingly interconnected and converge over time. In the view of Kapsch TrafficCom, the future lies in "connected vehicles in cooperative systems", which are systems for real-time interaction between vehicles (car-to-car communication) or between vehicles and infrastructure (car-to-infrastructure communication).
In the past fiscal year, Kapsch TrafficCom AG managed to further consolidate its position as internationally leading provider of innovative traffic systems, products and services. The company supplies products and systems for toll collection and traffic management and, in addition, offers the technical and also commercial operation, as is the case e.g. in the nationwide electronic truck toll collection system in the Czech Republic and in Poland.
Fiscal year 2011/12 was marked by the implementation and the start of the operation of the nationwide electronic toll collection system viaTOLL for all vehicles above 3.5 tons on an existing road network in Poland of approximately 1,560 kilometers, the project for the multi-lane free-flow in the province Gauteng in South Africa and the start of operations of the first toll stations of an electronic toll collection system in Portugal in November 2011.
In Austria, roughly 2,200 km of highways and expressways are tolled with fully electronic multi-lane free-flow systems for trucks heavier than 3.5 tons permissible total weight. Since 2004. Kapsch TrafficCom AG has delivered the entire central and roadside infrastructure for 490 toll stations as well as approximately 1 million on-board units (GO Boxes). The average toll transaction rate in Austria remained at the previous year's high level of 99.9 %. At the beginning of the third quarter, a basic agreement with Asfinag Mautservice GmbH regarding the extension of the operation and maintenance contract for the nationwide electronic truck toll collection system for the period up to the end of calendar year 2018 was reached.
On 29 February 2012, Kapsch TrafficCom signed an agreement with the Ministry for Transportation and Communication of the Republic of Belarus for the implementation of a nationwide electronic truck toll collection system. The agreement includes the implementation of a system based on dedicated short-range communication (DSRC) for a road network that will total 2,743 km upon completion of the final project stage as well as the technical and commercial operation for 20 years. The total contract value for the implementation of the system (excluding operation) is approximately EUR 267 million, of which EUR 158 million will go toward the first two phases over the next two years. The first phase of the system will start operation on 1 July 2013.
On 27 July 2011, Kapsch TrafficCom AG successfully issued 800,000 new shares of authorized capital at a price of EUR 61.25 per share, resulting in gross proceeds of EUR 49 million for the company.
Between September and November 2011, Kapsch TrafficCom AG acquired additional shares in Q-Free ASA, Norway, and now holds a stake slightly greater than 20 %.
On 1 April 2011, Kapsch Telematic Services IOOO, Minsk, Belarus, was founded and on 22 March 2012 Kapsch TrafficCom AG took over the remaining shares in Kapsch-Busi S.p.A., Bologna, Italy, and is now the sole shareholder.
Compared to the prior year, net sales in the amount of EUR 179.9 million were up 126 %. and the operating performance was EUR 172.2 million. This means an increase in the operating performance of 96 % over the prior year (EUR 71.5 million). Sales in the segment Road Solution Projects (RSP) increased from EUR 24.9 million in prior year to EUR 102.7 million in the fiscal year. Sales in the segment Services, System Extensions, Components Sales (SEC) went up from EUR 54.7 million in the prior year to EUR 77.3 million.
In connection with the increase in sales primarily from the tolling project in Poland, cost of materials and other purchased services also increased from EUR 45.1 million to EUR 89.2 million, and other operating expenses from EUR 31.2 million to EUR 38.4 million.
Personnel expenses rose from EUR 29.9 million to EUR 38.9 million. At the same time the average number of staff increased by 93 employees, from 395 to 488 in fiscal year 2011/12.
EBIT improved from EUR -1.5 million to EUR 13.7 million year-on-year.
In contrast, the financial result developed negatively and decreased from EUR 19.8 million in prior year to EUR 3.5 million in fiscal year 2011/12 due to lower dividends from subsidiaries.
The balance sheet total of Kapsch TrafficCom AG increased by 35.0 % from EUR 261.0 million to EUR 352.8 million.
On the one hand, with regard to financial assets, shares in affiliated companies rose by EUR 4.8 million, on the other hand, receivables from affiliated companies increased by EUR 91.3 million.
On the liabilities side, the increase of the balance sheet total is mainly reflected in capital reserves due to the proceeds from the capital increase at the end of July 2011 and in payables.
Equity could be increased by 37.1 % to EUR 189.5 million, which resulted in a rise of the equity ratio from 53.0 % to 53.7 %.
Due to the increase in trade receivables and other current assets, the net cash flow from operating activities amounted to EUR -49.1 million.
The net cash flow from investing activities in the amount of EUR -13.2 million resulted from investments made in financial assets and financing of subsidiaries.
The net cash flow from investing activities was EUR 67.3 million and resulted from the capital increase in the gross amount of EUR 49.0 million as well as the payment of the dividend for fiscal year 2010/11 in the amount of EUR 13.0 million.
Overall, cash and bank balances increased from EUR 6.3 million to EUR 11.3 million over the prior year.
The toll transaction rate is a figure for assessing the accuracy and reliability of a toll collection system. It indicates the number of successful transactions in relation to all potential toll transactions of vehicles equipped with a functioning on-board unit. A high toll transaction rate translates to high toll revenues.
In 2011, the average toll transaction rate of the existing truck toll collection system in Austria amounted to approximately 99.9 %, again reaching the high level of 2010. During the same period, the average transaction rate of the nationwide electronic toll collection system in the Czech Republic was approximately 99.5 %, up by 0.2 % from 99.3 % in the previous year. The calculation of the average transaction rate is based on methods agreed upon with the respective customer, meaning that comparisons between the average transaction rates achieved in different projects are only possible on a limited basis.
The average number of employees in Kapsch TrafficCom AG in fiscal year 2011/12 was 488 (prior year: 395). As of 31 March 2012, the company had a workforce of 519 (prior year: 433).
Kapsch TrafficCom places great importance on the continued training and education of its employees. This involves not only promoting professional education but also providing seminars and workshops for developing personal and teamwork skills. In addition, training sessions tailored to the particular needs of employees are offered within the framework of the Kapsch Academy. A job rotation program promotes the international exchange of staff between the various locations, and select employees are prepared for their future tasks in a management trainee program.
Kapsch TrafficCom makes contributions to an external pension fund for employees of group companies in Austria under a defined contribution scheme. The amounts of the payments are based on the individual employee's income and the operating profit margin of the company.
Kapsch TrafficCom is aware of the employees' contribution to its success and acknowledges this through a profit participation plan. The Kapsch TrafficCom Group rewards the commitment of its employees by distributing to them up to 5 % of the group profit. Country-specific upper limits have been established to ensure that the distribution reflects local purchasing power. Every employee receives a share, which is independent of the person's salary or wage.
Moreover, Kapsch TrafficCom is committed to promoting the advancement of women in the workplace. Women are supported through a flexible working hours scheme that is designed to help combine professional and private life. In addition, Kapsch TrafficCom cooperates with schools, universities and colleges in order to increase the proportion of women employed, among other goals. The company also promotes women in the workforce through participation in specific programs such as "FIT Frauen in die Technik" or "FemTech". A specific trainee program "Women into sales" has been established within the Kapsch TrafficCom Group in addition to a committee for non-discrimination.
Kapsch TrafficCom AG defines its processes in an integrated management system for health and safety, security, environment and quality (HSSEQ). Valid certifications are held for quality management pursuant to ISO 9001 (since 2002), for occupational health and safety pursuant to OHSAS 18001 and for environmental management pursuant to ISO 14001 (since 2005). Kapsch TrafficCom has implemented the necessary measures in its internal processes and monitors them continuously. The certificate pursuant to ISO 27001 ensures the necessary information security management. The certificate pursuant to ISO 20000 for service management in connection with technical operations quarantees a high service quality in this area.
In the future, the group will strive to fulfill its responsibilities toward environmental protection even more extensively, particularly through the efficient and responsible use of natural resources.
Kapsch TrafficCom understands the challenge of long-term and responsible business activities and is dedicated to sustainability on an economic, environmental and social level. Regularly published sustainability reports will demonstrate the progress on a group level and the continuing establishment of predefined objectives.
Living up to its socio-political responsibility, the entire Kapsch Group - organized by Kapsch AG - further supports a number of contemporary art and cultural institutions and projects, and even initiates its own projects in this field. Select educational initiatives and extensive social measures complement this approach, which the company considers to be an obligation both inside and outside the group.
Music. A major component of this commitment consists of sponsoring activities related to the Vienna Concert Hall (Wiener Konzerthaus), a cultural institution with an excellent reputation even far beyond Austria's borders. The Kapsch Group has been the main sponsor of the Vienna Concert Hall since 1992. The "Wien Modern" festival - one of the world's best known festivals of contemporary music – has been supported by Kapsch since its launch in 1989.
Visual arts. Promoting lesser-known artists is of particular concern to the Kapsch Group, in particular, young Austrian and international artists are assisted by sponsorship campaigns. One example is the photo calendar that the Kapsch Group has supported since 1994. The calendar is presented annually in late autumn at a private exhibition.
Social activities. Kapsch TrafficCom takes pride in supporting select social projects at home and abroad. One example of the numerous projects is ICEP, the Institute for Cooperation in Development Projects, whose activities help improve the circumstances of people in developing countries. By directly promoting migration and integration, Kapsch TrafficCom contributes to social justice, the positive development of society as well as long-term safety and security.
As a technology company, Kapsch TrafficCom operates in an ever-changing environment. Risks are therefore part of its day-to-day business. For the company, risk means the possibility of deviating from company objectives, meaning that the definition of risk encompasses both positive (opportunities) as well as negative (risks) deviations from planned objectives.
Risk management has been positioned as a separate function within the finance department of Kapsch TrafficCom AG, focusing on project risk management and enterprise risk management (ERM).
Project risk management starts in the bid phase of customer projects. It comprises institutionalized processes aimed at identifying and analyzing all relevant opportunities and risks pertaining to the group's projects, thereby providing the basis for the timely planning and implementation of risk-mitigating activities.
The ERM system focuses on risks of key customer projects as well as strategic, technological, organizational, financial, legal and IT risks, which are reported to the executive board on a semi annual basis. The goal of the ERM approach is early identification, analysis and control of all risks which might influence strategic and operational objectives of the company. The primary objective in this context is not to avoid risks, but to deal with risks in a controlled and deliberate manner and to recognize and realize opportunities as they arise over time in order to make a valuable contribution to the management of the company.
The material risks faced by Kapsch TrafficCom AG and the respective risk management measures are briefly explained below.
Volatility of new orders. A major portion of the revenues of Kapsch TrafficCom AG is generated in the segment Road Solution Projects (RSP). In this segment, the group regularly participates in tenders for the implementation and operation of large electronic toll collection systems as well as for the collection of tolls on specific sections of road. On the one hand, there is a risk that tenders in which the group participates or plans to participate could be delayed or withdrawn, for instance as a result of political changes, appeals or legal actions by unsuccessful bidders. On the other hand, a risk exists that Kapsch TrafficCom may not win its bids for new projects due to technological, financial, formal or other reasons. Continuing revenues from the technical and commercial operation of systems also depend on the successful participation in tenders for systems.
In the past, the revenues of Kapsch TrafficCom AG have been heavily influenced by the realization of implementation projects in the given fiscal year. In particular, significantly higher revenues were recorded in 2003 (implementation of a nationwide electronic truck toll collection system in Austria), 2006/07 (implementation of a nationwide electronic truck toll collection system in the Czech Republic) and 2010/11 (implementation of an electronic toll collection system in the South African province of Gauteng). In fiscal year 2011/12, sizeable revenues were generated from the implementation of a nationwide electronic truck toll collection system in Poland.
The strategy of Kapsch TrafficCom AG is aimed, among other things, at reducing this volatility of revenues through increased geographic diversification and increased diversification of the customer base and product portfolio as well as sustained growth in the share of technical and commercial system operation in total revenues in the interest of strengthening the segment Services, System Extensions, Components Sales (SEC).
Risks of project execution. In connection with the installation of systems, Kapsch Traffic-Com AG is usually contractually obligated to provide performance guarantees. Since electronic toll collection systems and other intelligent transportation systems are frequently sophisticated and technologically complex systems that must be implemented within a short timeframe, system and product defects or missed deadlines may occur due to the limited time available. Unexpected project modifications, lack of qualified personnel, quality defects, unexpected technical problems as well as performance problems of suppliers or consortium members may also have a negative impact on project schedules. The failure to meet quaranteed performance levels or deadlines usually results in penalties and/or compensation for damages, sometimes also compensation for lost toll revenues. Significant deadline overruns also frequently trigger contractual clauses that enable clients to terminate contracts prematurely. A significant delay in a project, failure to achieve guaranteed performance levels or failure to implement a project in time would also reduce the chances of success in future tenders for systems. There is also the risk that Kapsch TrafficCom AG cannot execute projects in line within the set cost budgets.
Kapsch TrafficCom AG employs risk management methods and project risk management procedures based on IPMA (International Project Management Association) standards in order to quard against risks associated with projects.
Long-term contracts with public authorities. In many cases, the system contracts are awarded by public agencies. Framework agreements and service contracts in connection with toll collection projects may include terms and conditions that are not negotiable in a tender process and that may be disadvantageous to Kapsch TrafficCom AG. Some long-term contracts include challenging requirements with regard to the performance of the implemented systems, components and processes. These requirements can. if they are not achieved, result in significant penalties, damages or even contract termination. On the other hand. some contracts include substantial bonus payments for over-fulfillment of performance requirements. In the case of long-term contracts, the margins earned can also differ from the original estimates due to changes in costs.
Liabilities arising from contracts concluded by Kapsch TrafficCom AG may include liabilities regarding customers' loss of profit, product liabilities and other liabilities. While the group aims to include appropriate limitations to its liability in contracts, it is still impossible to guarantee that all contracts contain sufficient limitations to the group's liability or that these limitations can be enforced under applicable law.
Capacity for innovation. The strong market position of Kapsch TrafficCom AG is, to a large extent, based on its ability to develop state-of-the-art, efficient and reliable systems, components and products. Kapsch TrafficCom is committed to a permanent and integrated innovation process. In order to maintain its already strong position in technology, Kapsch Traffic-Com AG invests a considerable portion of its revenues in research and development activities. However, if the group does not succeed in developing new systems, components and products, this can be detrimental to its competitive position.
Since its capacity for innovation is based largely on technology, internal know-how and intellectual property, the global increase in product piracy and reverse engineering may have negative effects on the group. In addition, any failures in protecting these technologies may have a negative impact on the group's competitive position. Moreover, it is possible that systems, components, products or services could infringe on the intellectual property rights of third parties. Kapsch TrafficCom AG places great importance on the protection of technologies and the company's internal know-how, e.g. through patents and non-disclosure agreements with other parties.
Acquisition and integration of companies as a part of growth. One of the strategic objectives of Kapsch TrafficCom AG is to grow internationally both by organic means and through select acquisitions and joint ventures. In the implementation of this strategy, the group has acquired and integrated companies around the world. However, a number of challenges remain in connection with this growth strategy in order to realize the desired synergies and objectives.
Country risk. The strong expansion of business activities in Eastern Europe and non-European countries has exposed Kapsch TrafficCom AG to heightened political risks. Significant and unforeseeable political changes can exert a major influence on the ability to implement or operate ITS projects in these countries and can also affect the availability and accessibility of funds. There may also be interference with the property rights of Kapsch TrafficCom AG or complications regarding business practices and activities.
Foreign exchange risk. Kapsch TrafficCom AG maintains branches, offices and subsidiaries in a number of countries outside the eurozone. A considerable portion of revenues and costs are denominated in the currencies of the respective foreign companies rather than in euros. Although the group aims to hedge the net currency position of the individual contracts, as necessary, currency fluctuations may result in exchange rate losses that may influence the consolidated financial statements (transaction risk). In addition, risks arise from the conversion of the separate financial statements of international companies into the group currency, the euro (translation risk). Fluctuations in exchange rates may also result in a change in the competitive position of Kapsch TrafficCom AG.
Interest rate risk. Within the framework of project financing, the group regularly agrees to variable interest rates that are tied to market interest rates (Euribor, Pribor etc.). This exposes Kapsch TrafficCom AG to interest rate risks. The group utilizes appropriate financial instruments to hedge against interest rate risks when these risks are significant.
Liquidity risk. Sufficient financial resources must be available to ensure that Kapsch TrafficCom AG can meet its payment liabilities at any time. Medium and long-term financing must be available in order to carry out large-scale projects (such as implementing a nationwide toll collection system under delayed payment terms from the client) and for acquiring other companies. Additionally, implementing large-scale projects often requires the provision of significant bank guarantees to secure bid obligations (bid bonds) or to secure possible warranty claims (performance bonds).
In financing agreements, Kapsch TrafficCom AG is subject to the customary restrictions in terms of its business policy, e.g. when drawing additional loans, using assets as collateral or providing quarantees for third parties. The availability of financing and bank guarantees depends on market conditions as well as the net assets and financial position of Kapsch TrafficCom AG and the results of operations. A lack of liquid assets (even if the group is otherwise solvent), of financing or of bank guarantees can have an extremely adverse impact on the net assets and financial position of Kapsch TrafficCom AG and the results of operations. The issuing of 800,000 new shares of authorized capital with gross proceeds of EUR 49 million in fiscal year 2011/12 helped Kapsch TrafficCom AG to again improve its liquidity.
Liquidity risk is managed by ongoing, company-wide financial and cash planning. Potential liquidity shortages can thus be identified and mitigated.
Credit risk. Kapsch TrafficCom AG is exposed to the risk of non-payment by customers. The credit ratings of new and existing customers are checked on a regular basis. Many of the key customers of Kapsch TrafficCom AG are public authorities, especially in connection with implementing and/or operating nationwide or regional toll collection systems. There is also a risk that the counterparties (including financial institutions assumed to have good credit ratings) of both original and derivative financial instruments cannot meet their payment obligations when due. A payment default or the recognition of impairment charges to receivables can be extremely detrimental to the net assets and financial position of Kapsch TrafficCom AG and the results of operations.
$\lambda$
The success of Kapsch TrafficCom AG depends heavily on key personnel with many years of experience in the industry. Moreover, the group's ability to recruit qualified staff, integrate them into the company and retain them over the long term is crucial in its current growth phase. The loss of key personnel and difficulties in the recruitment of personnel may adversely affect the success of the group.
Kapsch TrafficCom AG has implemented a number of measures to counteract personnel risks, such as incentive schemes and employee development opportunities.
A variety of regulations and legal requirements must be observed in connection with participating in public tenders, erecting infrastructure for ITS solutions (such as toll stations) and the operation of toll collection systems. Identifying and adhering to applicable legal regulations and requirements can result in considerable administrative and technical expense. The failure to meet regulations or official requirements can lead to severe penalties and can also reduce the possibility of (successfully) taking part in tenders or continuing with the given business activity.
With the expansion into new regions and new ITS business areas, the risk of patent infringement or the violation of property rights increases. Kapsch TrafficCom has implemented active intellectual property (IP) management as a separate function. In order to avoid legal actions and court proceedings, Kapsch TrafficCom AG monitors potential intellectual property rights infringements continuously as well as prior to entry into new markets or regions.
As a technology group, Kapsch TrafficCom AG is exposed to typical IT risks relating to security, confidentiality and the availability of data. For this reason, Kapsch TrafficCom AG has implemented an IT risk management system designed according to the corporate risk and IT security application method (CRISAM) and has been certified pursuant to ISO 27001 (information security management). Kapsch TrafficCom AG is also certified according to ISO 20000 "IT service management" (similar to ITIL) for the operation of toll collection systems.
The ERM approach of Kapsch TrafficCom is not only concerned with risks; it also includes the periodic identification, assessment and management of opportunities. Significant opportunities for Kapsch TrafficCom result from increased financing needs for infrastructure projects, global traffic growth, legislation to reduce the environmental impact of transportation, enhanced vehicle and fleet operations productivity and the increasing comfort and convenience expectations of travelers. In addition, many market opportunities arise from the geographic diversification as well as the increasing diversification of the customer base and product portfolio.
From the current perspective, no risks have been identified that could endanger the continued operations of the Kapsch TrafficCom AG. Increasing geographic expansion, the diversification of the product portfolio and an increased share of recurring revenues (further growth in the segment Services, System Extensions, Components Sales) are planned to further reduce the concentration of risks in the future.
The Corporate Law Amendment Act (URAG 2008) adopted the 8th EU Directive into Austrian law. Under this legislation, companies with a capital market orientation are henceforth obliged to include in their group management reports not only an outline of their risk management systems but also of the main features of their ICS with regard to the financial reporting process.
Kapsch TrafficCom AG began analyzing and documenting its existing internal processes for financial reporting on an ongoing basis in fiscal year 2009/10. The results obtained so far have been presented at the quarterly meetings of the audit committee for assessment and discussion.
The group accounting manual represents the cornerstone for financial accounting and reporting throughout the whole Kapsch Group. The manual is published and regularly updated by the Kapsch Group and contains the essential financial and reporting procedures based on the International Financial Reporting Standards (IFRS). Groupwide guidelines and work instructions represent another important pillar of the internal control system.
The central elements of the ICS process include regular verification of compliance with the principle of dual control and the segregation of duties as well as defined actions for monitoring the effectiveness and efficiency of operating activities, the reliability of financial reporting and the compliance with relevant legal regulations. The ICS quidelines of Kapsch TrafficCom AG follow the basic structure of the internationally recognized standards for internal control systems (COSO - Internal Control and Enterprise Risk Managing Frameworks of the Committee of Sponsoring Organizations of the Treadway Commission).
The supervisory board is kept informed of business developments by the executive board during regular meetings by way of consolidated presentations consisting of segment reporting, earnings development analyses with comparisons of current figures to figures from the budget and the previous period as well as select financial figures, forecasts, group financial statements and developments in the number of employees and order inflow.
The head of finance of Kapsch TrafficCom AG, the central controlling department and the internal audit department subsequently verify compliance with these audit procedures by local management, and the results are regularly reported to the audit committee.
Kapsch TrafficCom AG has an international network of research and development centers in Vienna and Klagenfurt (Austria), Jönköping (Sweden), Bologna (Italy), Buenos Aires (Argentina), Toronto (Canada), Carlsbad (California, U.S.A.) and Cape Town (South Africa). Research and development activities are being coordinated from the headquarters in Vienna.
R&D activities have high priority for Kapsch TrafficCom AG in pursuing its strategic goal of staying always one step ahead. The knowledge of entirely new technologies based on national and international standards and the ability to implement these form the foundation for successful business developments and also enable the entry into new markets. The current focus lies on the regions of North and South America, Russia, Australia and South-East Asia.
In the past fiscal year, the main focus of research and development activities was on a new high-performance roadside infrastructure platform that integrates all major sensor systems into a single, common software platform with improved re-use of core components, largely automated configuration and installation as well as simpler maintenance. This new sensor platform was succesfully put into operation in Portugal as well as deployed in South Africa and is now being extended for the U.S. market roll-out.
Major research activities included the prototyping of intelligent transportation systems (ITS) and participation in standardization for G5 (WAVE Europe) under the aspects of traffic management, control and reduction, as well as research and product development of combined solutions for road safety and electronic flow control (EFC) devices. The newly developed Kapsch ITS transponder platform enables vehicle-to-vehicle communication and the transmission of the vehicle status information. Research into vehicle detection and classification was undertaken to realize new video and sensor detection technologies with outstanding performance characteristics.
Important organizational initiatives during the last fiscal year included process and quality improvement initiatives in the central system and roadside areas to decrease expenses and delivery times as well as organizational changes and cost center splits to enable better product support.
The main initiatives in the component business involved developing new and less expensive generations of on-board units based on DSRC, GNSS or 5.9 GHz technology. The first new, lower-cost on-board units were approved for sale, and the first successful commercial vehicle 5.9 GHz transponder demonstration took place in the U.S. market.
Successful progressing R&D efforts are the foundation for sustained improvements in existing products and solutions as well as the continuous reduction of production, installation, operating and maintenance costs, all of which are essential for maintaining a technological and competitive advantage.
Research costs are recognized as expenses. Since the total-cost method is used, the research and development costs are reported within various items of the income statement, in particular under cost of materials and other production services, staff costs and other operating expenses.
In fiscal year 2011/12, expenses for research and development amounted to EUR 30.8 million (prior year: EUR 23.4 million).
Despite a macroeconomic environment that remains challenging, Kapsch TrafficCom takes an optimistic view of its markets for fiscal year 2012/13 and beyond. The company is convinced that many interesting opportunities exist worldwide for the delivery and operation of toll collection systems and that it is well prepared for the increasingly observable convergence of the ITS market. Fiscal year 2012/13 will be characterized in particular by the further developments associated with the date for the start of the electronic toll system for multi-lane free-flow traffic in the South African Gauteng province as well as the expected tenders for nationwide electronic toll collection systems in Hungary, Slovenia and Denmark. The company will also focus during fiscal year 2012/13 on implementation of the strategy up to the year 2016 as defined in fiscal year 2011/12 and on establishing the corresponding corporate structure.
On 6 April 2012, the nationwide truck toll collection system in Poland was finally accepted by the customer. The last installment was paid in the net amount of EUR 103.3 million in April as well.
On 28 April 2012 - just two days before the final scheduled commissioning deadline - the start of the fully completed system in South Africa was suspended indefinitely by court order due to a lawsuit. On 23 May 2012, the government elected to appeal the court decision.
Vienna, 30 May 2012
The executive board:
signed:
signed:
Mag. Georg Kapsch (Chief Executive Officer)
Ing. Erwin Toplak (Chief Operating Officer)
signed:
André Laux (Executive board member)
We declare to the best of our knowledge that the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the parent company as required by the applicable accounting standards and that the management report gives a true and fair view of the development and performance of the business and the position of the company, together with a description of the principal risks and uncertainties the company faces.
Vienna, 30 May 2012
Mag.
Georg
Kapsch
Ing.
Erwin
Toplak André
Laux
Chief
Executive
Officer Chief Operating Officer Board member
(Austrian Stock Exchange Act)
| Board Member | Area of responsibility |
|---|---|
| Georg Kapsch (CEO) | Finance and Administration, Mergers & Acquisitions, Investor Relations, Legal, International Subsidiaries, Human Resources, Marketing & Communications, International Relations & Affairs, Innovation Management, Production, Telematic Services and Region North American |
| Erwin Toplak (COO) | Sales region 1, Business Development, System Engineering, Research & Development and Technical Operations |
| André F. Laux (Executive Board Member) | Sales region 2, Business Development, Product and Project Management |
Kapsch TrafficCom AG, Vienna
Shareholders' Equity and Liabilities
| 113,439 | 104,973,217.67 | Contingent liabilities | |||
|---|---|---|---|---|---|
| 261,024 | 352,769,444.75 | 261,024 | 69,444.75 352.7 |
||
| 1,875 | 1,649,983.29 | C. Prepaid expenses and deferred charges | |||
| 173,666 | 23,126.32 256,7 |
||||
| 112.844 | 141,355,222.27 | 6,274 | 220, 765, 421.10 | III. Cash, bank balances | |
| (prior year: EUR 599k) | 131,930 | ||||
| of which social security payables EUR 726,531.62 | 4,266 | 4,904,063.66 | Other assets $\ddot{\circ}$ |
||
| of which taxes EUR 65,405.20 (prior year: EUR 52k), | 119,666 | 210,918,497.36 | 2. Receivables from affiliated companies | ||
| 3,254 | 6,034,533.15 | Other liabilities, | 7,998 | 4,942,860.08 | I. Trade receivables |
| 11,238 | 13,441,526.79 | Payables to affiliated companies ဟဲ တ |
Receivables and other assets | ||
| 8,896 | 4,403,828.87 | Trade payables 4 |
35,462 | 24,657,248.46 | |
| 531 | 299,870.90 | Customer advances $\sim$ |
4,929 | 6,860,114.32 | Prepayments က် |
| 13,925 | 42,175,462.56 | Bank loans and overdrafts | 13,351 | 5,626,877.70 | 2. Services not yet invoiced |
| 75,000 | 75,000,000.00 | Bonds | 17,182 | 12, 170, 256.44 | 1. Merchandise |
| Accounts payable $\overline{a}$ |
Inventories | ||||
| 9,316 | 21,393,339.67 | Current asets ø |
|||
| 6,598 | 18,392,689.67 | Other accruals $\overline{\mathbf{N}}$ |
78,146 85.483 |
87,903,037.26 94,396,335.14 |
|
| 2,718 | 3,000,650.00 | Accruals for severance payments $\overline{a}$ |
8,041 | 8,217,157.69 | Securities ത് |
| C. Accruals | 12,407 | 17,187,516.64 | 2. Participating interests | ||
| 57,698 | 62,498,362.93 | 1. Shares in affiliated companies III. Financial assets |
|||
| 595 | 518,067.23 | B. Investment grants | 5,502 | 2,302,866.20 5,348,119.06 |
|
| 2,301 | Other equipment, factory and office equipment $\vec{c}$ |
||||
| 138,269 | 189,502,815.58 | 508 | 519,134.59 | Technical equipment and machinery | |
| unappropriated retained earnings brought forward EUR 43,868,992.26 (prior year: EUR 38,634k) |
2,693 | 2,526,118.27 | I. Investments in leasehold buildings Tangible assets $\equiv$ |
||
| 56,869 | 59,102,815.58 | Unappropriated retained earnings, thereof prior period | |||
| 69,200 | 117,400,000.00 | Appropriated | 1,835 | 45,178.82 | licenses in such rights and assets |
| Capital reserves | Industrial property and similar rights and assets, and | ||||
| 12,200 | 13,000,000.00 | Share capital | Intangible assets | ||
| Shareholders' equity ∢ |
A. Fixed assets | ||||
| EUR '000 | EUR | EUR '000 | EUR | ||
| 31/3/2011 | 31/3/2012 | 31/3/2011 | 31/3/2012 |
113,439
104,973,217.67
Ť
$\mathcal{A}^{\mathcal{A}}$
| 2011/12 | 2010/11 | |
|---|---|---|
| EUR | EUR '000 | |
| 1. Net sales | 179,944,409.64 | 79,539 |
| 2. Change in services not yet invoiced | -7,723,742.47 | 8,393 |
| 3. Other operating income | ||
| a) Income from the retirement of fixed assets excluding financial | ||
| assets | 500.00 | |
| b) Income from the reversal of accruals | 160,690.41 | 2,437 |
| c) Other | 10,030,799.87 | |
| 10,191,990.28 | 16,507 | |
| 4. Cost of materials and purchased services | 18,944 | |
| a) Cost of materials | ||
| $-37,078,204.98$ | $-6,166$ | |
| b) Cost of purchased services | $-52, 130, 718.30$ | $-38,889$ |
| -89,208,923.28 | $-45,055$ | |
| 5. Personnel expenses | ||
| a) Wages | $-147,775.91$ | $-125$ |
| b) Salaries | $-30,455,694.52$ | $-23,291$ |
| c) Expenses for severance payments and contributions to severance | ||
| provision funds | $-656,256.31$ | $-503$ |
| d) Expenses for pensions | $-69,238.00$ | $-19$ |
| e) Expenses for statutory social security, payroll-relates taxes and | ||
| mandatory contributions | $-7,399,786.69$ | $-5,801$ |
| f) Other social benefits | $-212,443.27$ | $-155$ |
| $-38,941,194.70$ | $-29,894$ | |
| 6. Depreciation and amortization of fixed intangible and tangible assets | $-2,169,394.68$ | $-2,161$ |
| 7. Other operating income | ||
| a) Taxes not included in line 17 | $-756,920.68$ | $-101$ |
| b) Other | $-37,598,919.27$ | $-31,133$ |
| $-38,355,839.95$ | ||
| 8. Subtotal of lines 1 to 7 (Operating result) | $-31,234$ | |
| 9. Income from participating interests, of which from affiliated | 13,737,304.84 | $-1,468$ |
| companies EUR 4,460,851.17 (prior year: EUR 20,478k) | 4,460,851.17 | 20,478 |
| 10. Income from long-term securities | 25,928.28 | 20 |
| 11. Other interest and similar income, of which from affiliated | ||
| companies EUR 3,842,003.91 (prior yerar: EUR 1,820k) | 3,952,858.50 | 1,925 |
| 12. Income from the retirement and write-up of fixed financial assets | 176,740.90 | 1,139 |
| 13. Expenses on fixed financial assets, of which | -750,768.84 | $-2,019$ |
| a) Amounts written off EUR 750,768.84 (prior year: EUR 2,019k) | ||
| b) Relating to affiliated companies EUR 750,768.84 | ||
| (prior year: EUR 1,677k) | ||
| 14. Interest and similar expenses, of which relating to affiliated | ||
| companies EUR 128,751.49 (prior year: EUR 76k) | $-4,389,030.22$ | $-1,743$ |
| 15. Subtotal of lines 9 to 14 (Financial result) | 3,476,579.79 | 19,800 |
| 16. Net operating income | 17,213,884.63 | 18,332 |
| 17. Taxes on income, thereof recharged from group parent | ||
| EUR 1,980,061.31 (prior year: EUR 97k) | $-1,980,061.31$ | $-97$ |
| 18. Net income for the year | 15,233,823.32 | 18,235 |
| 19. Prior period unappropriated retained earnings brought forward | 43,868,992.26 | 38,634 |
| 20. Unappropriated retained earnings | 59,102,815.58 | 56,869 |
The financial statements as of 31 March 2012 have been prepared in accordance with the financial reporting requirements of the Austrian Commercial Code (UGB) as amended.
The financial statements, prepared under Austrian generally accepted accounting principles, present a true and fair view of the assets and liabilities, the financial situation of the Company, as well as its results of operations.
Accounting and valuation methods are based on generally accepted accounting principles. Section 201 (2) UGB was adhered to, as were the provisions on classification and valuation of balance sheet and income statement items under Sections 195 to 211 and 222 to 235 UGB. The income statement was prepared in accordance with the total expenditure format.
Purchased intangible assets and tangible assets are valued at acquisition or production cost less scheduled straight-line amortization/depreciation charged according to the estimated useful life of the assets
Low-value assets with acquisition costs of less than EUR 400 were written off in the year of acquisition or production in an insignificant amount.
Acquired IT software is amortized based on a useful life of between four to eight years.
Tangible assets were depreciated on a straight-line basis over the following useful lives:
| Years | |
|---|---|
| Investments in leasehold buildings | $2 - 10$ |
| Technical equipment and machinery | $2 - 12$ |
| Factory and office equipment | $2 - 20$ |
No unscheduled depreciation was charged in the fiscal year.
Additions to fixed assets are depreciated according to the date of their initial use.
Financial assets are stated at acquisition costs or the lower market values at the balance sheet date. Write-downs are made only in case a diminution in value is expected to be permanent.
Foreign currency receivables are stated using the exchange rate at the date of the transaction or the lower bank buying rate at the balance sheet date.
Foreign currency payables are stated using the exchange rate at the date of the transaction or the higher bank selling rate at the balance sheet date.
Inventories and receivables were stated in accordance with the strict lower of cost or market principle.
The stocks of purchased goods, recorded by means of electronic data processing, were stated using the moving average price method. Inventories denominated in foreign currencies were stated using the exchange rate at the date of acquisition. Where required, writedowns were made to the lower replacement costs.
A proportional deduction from acquisition or production cost was made for goods with diminished usability or marketability, which was derived from the respective inventory turnover ratio. In case of long-term contracts, no administrative and selling overheads were capitalized (option provided by Section 206 (3) UGB).
Receivables were stated at nominal values. Identifiable risks were considered in the valuation of the individual receivables by write-offs. No-interest or low-interest receivables were discounted
The accruals were set up in accordance with the principle of prudence at the estimated amounts.
The accruals for severance payments and anniversary bonuses were calculated in accordance with IAS 19 using the projected unit credit method (for severance payments the corridor method of IAS 19 is applied). A discount rate of 5.0 % (prior year: 5.0 %) was used for the calculation of entitlements and a percentage of 3.0 % (prior year: 3.0 %) was assumed for salary increases. Furthermore, the calculation was based on the earliest possible retirement age in accordance with the transitional statutory provisions and the mortality tables Pagler & Pagler AVÖ 2008-P (prior year: AVÖ 2008-P).
In accordance with the principle of prudence, accounts payable were valued at the amount repayable.
Assets
Movements in fixed assets:
| Acquisition/Production cost | Accumulated | Net book value | Amortization | Write-ups | |||||
|---|---|---|---|---|---|---|---|---|---|
| Balance | Additions | Disposals | Balance | amortization/ | Balance | Balance | depreciation | of current | |
| 1/4/2011 | 31/3/2012 | depreciation | 31/3/2012 | 31/3/2011 | current vear | fiscal vear | |||
| EUR | EUR | EUR | EUR | EUR | 出口 | EUR El |
EUR | ΞR | |
| ndustrial property and similar rights and assets, and licenses in such rights and assets Intangible assets |
7.354.827.08 | 221.536.76 | 15.942.31 | 7,560,421.53 | 6.415.242.71 | 1.145.178.82 | 1.835.094.41 | 911,428.91 | 8 8 |
| Tangible assets | |||||||||
| . Investments in leasehold buildings | 3,752,706.84 | 307,022.62 | 49,461.59 | 4.010.267.87 | 484,149.60 | 2,526,118.27 | 2,692,925.66 | 442,685.13 | 0.00 |
| 2. Technical equipment and machinery | 1,380,363.56 | 261,620.97 | 1.015.69 | 1.640.968.84 | 1,121,834.25 | 519.134.59 | 507.722.05 | 250,208.43 | 89 |
| 3. Other equipment, factory and office | |||||||||
| equipment | 4,849,040.25 | 569.321.31 | 129, 148.26 | 5.289.213.30 | 2.986.347.10 | 2.302.866.20 | 2.301.403.89 | 565.072.21 | $\frac{8}{3}$ |
| 9,982,110.65 | 1.137.964.90 | 179.625.54 | 10.940.450.01 | 5.592.330.95 | 5.348.119.06 | 5.502.051.60 | 1.257.965.77 | 0.00 | |
| II. Financial assets | |||||||||
| Shares in affiliated companies | 62,003,687.91 | 5,550,761.54 | $\overline{5}$ | 67.554.449.45 | 5.056.086.52 | 62,498,362.93 | 57.698.370.23 | 750.768.84 | 0.00 |
| 2. Participating interests | 12,748,970.30 | 4.781,126.79 | 342.580.45 | 7,187,516.64 | 7,187,516.64 | 12,406,390.85 | 8 0.0 |
0.00 | |
| Securities | 10,004,356.99 | ິຣິ | $\frac{8}{3}$ | 0.004.356.99 | 1.787.199.30 | 8.217.157.69 | 8.041.215.79 | $\frac{80}{20}$ | 175.941.90 |
| 84.757.015.20 | 10.331.888.33 | 342.580.45 | 94.746.323.08 | 6.843.285.82 | 87.903.037.26 | 78.145.976.87 | 750.768.84 | 175.941.90 | |
| 102.093,952.93 | 11.691.389.99 | 538, 148.30 113, 247, 194.62 | 18.850.859.48 | 94.396.335.14 | 85.483.122.88 | 2.920.163.52 | 175,941.90 |
3/4
| In the following fiscal year |
In the next 5 fiscal years |
|||
|---|---|---|---|---|
| EUR | Prior year EUR '000 |
Prior year EUR '000 |
||
| Obligations from rental and leasing agreements |
5,911,912.00 | 5,144 16,642,136.00 | 15,906 |
Financial obligations of the Company from the use of tangible assets not recognized in the balance sheet amount to:
| Share | Sharehold- ers' equity |
Result of fiscal year |
FN | |
|---|---|---|---|---|
| % | EUR '000 | EUR '000 | ||
| a) Shares in affiliated companies | ||||
| Kapsch TrafficCom AB, Jönköping, Sweden | 100 | 20,795 | 1,867 | 1) |
| Kapsch TrafficCom Argentina S.A., Buenos Aires, Argentina | 95 | 2,072 | 381 | $\overline{1}$ |
| Kapsch Components GmbH & Co KG, Vienna | 100 | 4,078 | 4,758 | $\overline{1}$ |
| Kapsch Components GmbH, Vienna | 100 | 83 | 7 | 1) |
| Kapsch TrafficCom B.V., Amsterdam, Netherlands | 100 | 47,080 | $-62$ | 1) |
| Kapsch Telematic Services GmbH, Vienna | 2) | |||
| Kapsch TrafficCom Construction & Realization spol. s r.o., | ||||
| Prague, Czech Republic | 99 | 624 | 447 | 1) |
| Kapsch TrafficCom S.r.l., Milan, Italy | 100 | $-30$ | 1) | |
| Kapsch-Busi S.p.A., Bologna, Italy | 100 | 207 | 87 | $\overline{1}$ |
| Kapsch Telematic Technologies Bulgaria EAD, Sofia, | ||||
| Bulgaria | 100 | 59 | 26 | 3) |
| Kapsch TrafficCom Ltd., Manchester, England | 100 | 409 | 59 | 1) |
| ArtiBrain Software Entwicklungsgesellschaft mbH, Vienna | 100 | 54 | $-2$ | 1) |
| Kapsch TrafficCom Russia OOO, Moscow, Russia | 100 | 315 | $-377$ | 3) |
| Kapsch TrafficCom d.o.o., Ljubljana, Slovenia | 100 | 29 | 6 | $\overline{1}$ |
| Kapsch TrafficCom France SAS, Paris, France | 30.19 | 281 | 51 | 1) |
| Electronic Toll Collection (PTY) Ltd., Centurion, South Africa | 25 | 6,115 | 3,181 | 1) |
| Kapsch TrafficCom South Africa Holding (Pty) Ltd., Cape | ||||
| Town, South Africa | 100 | 9,589 | 1,388 | 1) |
| Kapsch TrafficCom Kazakhstan LLC, Astana, Kazakhstan | 100 | 23 | 6 | 3) |
| Jibeseov GmbH, Vienna | 100 | 269 | 208 | 3) |
| PREMID a.s., Bratislava, Slovak Republic | 100 | 15 | $-17$ | 1) |
| Transport Telematic Systems LLC, Abu Dhabi, United Arab | ||||
| Emirates | 2) | |||
| Kapsch Telematic Services IOO, Minsk, Belarus | 99 | 15 | $\overline{2}$ | 3) |
| b) Shares in associates | ||||
| Q-Free ASA, Trondheim, Norway | 20,27 | 74,178 | 3,191 | 3) |
1) Figures as of 31 March 2012
2) The protection-of-interest clause pursuant to Section 241 (2) UGB is used.
3) Figures as of 31 December 2011
Prepayments in the amount of EUR 6,850,000.00 (prior year: EUR 4,325k) relate to prepayments made to affiliated companies.
| 31/3/2012 | 31/3/2011 | |||
|---|---|---|---|---|
| Total | of which with a remaining maturity > 1 year |
Total | of which with a remaining maturity > 1 year |
|
| EUR | EUR. | EUR | EUR | |
| 1. Trade receivables | 4,942,860.08 | 8,429.23 | 7.998.447.38 | 8,429.23 |
| 2. Receivables from affiliated companies | 210,918,497.36 | 52,529,677.73 | 119,665,713.81 | 48,847,153.27 |
| 3. Other assets | 4,904,063.66 | 0.00 1 | 4,266,154.92 | 0.00 |
| 220.765.421.10 | 52,538,106.96 | 131.930.316.11 | 48.855.582.50 |
Receivables from affiliated companies include trade receivables in the amount of EUR 128,806,385.79 (prior year: EUR 31,018k), loan receivables in the amount of EUR 70,997,873.65 (prior year: EUR 69,512k), dividend receivables in the amount of EUR 11,114,237.92 (prior year: EUR 17,860k) and intra-group recharges in the amount of EUR 0.00 (prior year: EUR 1,276k).
Other assets mainly include research bonuses, receivables from fiscal authorities, accrued receivables and other receivables.
Other receivables include income in the amount of EUR 4,127,843.96 (prior year: EUR 2,694k) that will affect cash flow only after the balance sheet date.
Kapsch TrafficCom AG, Vienna, received an investment grant amounting to EUR 750,000.00 from the lessor for the adaptation of the new location at Euro Plaza. The grant is related to the following items of fixed assets:
| Balance 1/4/2011 |
Usage | Balance 31/3/2012 |
|
|---|---|---|---|
| EUR | EUR | EUR | |
| Leasehold improvements | 594,957.99 | -76,890.76 518,067.23 |
The amount recognized in the balance sheet does not include actuarial losses amounting to EUR 1,019,596.00 (prior year: EUR 476k).
| Other accruals include the following items: | 31/3/2012 EUR |
31/3/2011 EUR '000 |
|---|---|---|
| Invoices not yet received and outstanding project costs Personnel accruals (including vacation accruals of |
12,268,268.69 | 2.196 |
| EUR 2,695,297.99, prior year: EUR 2,342k) | 4,719,276.68 | 3,705 |
| Losses from pending transactions | 428,841.00 | 0 |
| Warranties and liabilities for construction flaws, | ||
| as well as production and system defects | 290,148.99 | 184 |
| Sundry accruals | 686,154.31 | 513 |
| 18,392,689.67 | 6,598 |
| 31/3/2012 | 31/3/2011 | ||||||
|---|---|---|---|---|---|---|---|
| total | remaining maturity > 1 year |
remaining maturity > 5 years |
total | remaining maturity > 1 year |
remaining maturity > 5 years |
||
| EUR | EUR | EUR | EUR | EUR | EUR | ||
| 1. Bonds | 75,000,000.00 75,000,000.00 75,000,000,00 | 75,000,000.00 75,000,000.00 75.000.000.00 | |||||
| 12. Bank loans and overdrafts | 42.175.462.56 | 0.001 | 0.00 | 13,925,462.56 | 0.001 | 0.00 | |
| 13. Customer advances | 299,870.90 | 0.00 | 0.001 | 530.748.62 | 0.001 | 0.00 | |
| 14. Trade payables | 4,403,828.87 | 646,526.73 | 0.001 | 8,895,826.49 | 0.00l | 0.001 | |
| 5. Payables to affiliated companies | 13,441,526.79 | 0.001 | 0.001 | 11,238,295.36 | 0.00l | 0.001 | |
| 6. Other payables | 6,034,533.15 | 0.00 | 0.001 | 3,254,008.83 | 60,250,00 | 0.001 | |
| 141,355,222.27 75,646,526.73 75,000,000.00 112,844,341.86 75,060,250.00 75,000,000.00 |
In November 2010, Kapsch TrafficCom AG issued a bond with a volume of EUR 75 million, a maturity of 7 years and a fixed interest rate of 4.25 %.
All other long-term liabilities have a maturity below five years.
Payables to affiliated companies include only trade payables with the exception of a loan in the amount of EUR 3,042,246.83 (prior year: EUR 0k).
Other liabilities include expenses in the amount of EUR 3,305,903.70 (prior year: EUR 2,947k) that will affect cash flow only after the balance sheet date.
The export promotion credit recognized in the amount of EUR 1,425,462.56 is secured by bill of exchange.
In connection with the financing of the "Truck Tolling Czech Republic" project, current as well as future receivables, rights or other claims from the subcontractor agreement for the "Truck Tolling Czech Republic" project against Kapsch Components GmbH & Co KG, Vienna, and Kapsch TrafficCom Argentinia S.A., Buenos Aires, Argentina, as well as from a receivable subordinated in relation to Kapsch TrafficCom Construction & Realization spol. s r.o., Prague, Czech Republic, were pledged as collateral to Ceskoslovenska Obchodni Banka A.S., Prague, Czech Republic, in accordance with the collateral agreement and collateral assignment agreement dated 23 January 2007.
| 31/3/2012 EUR |
31/3/2011 EUR |
|
|---|---|---|
| Assumption of a liability on behalf of subsidiaries | 10,478,318.75 | 10,624,565.09 |
| Bank guarantees for the performance of contracts | ||
| relating to major projects | 63,401,956.47 | 68,380,768.34 |
| Payment guarantees | 18,784,723.36 | 17,670,205.44 |
| Guarantees for project financings | 11,825,413.89 | 16,286,437.40 |
| Other guarantees (security deposits, bid bonds | ||
| and sureties | 482,805.20 | 476,879.13 |
| 104,973,217.67 | 113,438,855.40 |
In addition, Kapsch TrafficCom AG, Vienna, issued performance bonds for export transactions or projects of Kapsch TrafficCom AB, Jönköping, Sweden, in a contract value of EUR 45.3 million (prior year: EUR 44.8 million).
At the balance sheet date, the Company had a forward exchange contract for cash at bank in the amount of PLN 25 million with a positive fair value of EUR 55,643.00. Accounting for the underlying transaction is based on a measurement unit with an agreed forward rate.
| By activity: | 2011/12 EUR |
2010/11 EUR '000 |
|---|---|---|
| Road Solution Projects Services, System Extensions, Components Sales |
102,650,740.31 77,293,669.33 179,944,409.64 |
24,880 54,659 79,539 |
| By region: | 2011/12 EUR |
2010/11 EUR '000 |
| Domestic European Union Foreign |
29,805,170.24 140,930,534.45 9,208,704.95 179,944,409.64 |
17,669 48,323 13,547 79,539 |
| EUR '000 |
|---|
| 326,584.67 262 |
| 329,671.64 241 |
| 656,256.31 503 |
Expenses for the auditor amount to EUR 128,130.00 (prior year: kEUR 185) and are broken down as follows:
| 2011/12 EUR |
2010/11 EUR '000 |
|
|---|---|---|
| Audit of the financial statements | 53,160.00 | 50 |
| Other assurance services | 57,540.00 | 122 |
| Other services | 17,430.00 | 13 |
| 128,130.00 | 185 |
The registered share capital of the Company amounts to EUR 13,000,000. The share capital is fully paid in. The total number of shares issued is 13,000,000. The shares are no-par value bearer shares
Under the initial public offering in July 2011, the Company issued 800,000 new shares from the authorized capital at an issue price of EUR 61.25 per share.
Authorized capital amounts to EUR 0.00 as of 31 March 2012 (prior year: EUR 800k).
The Company is a 61.90% subsidiary of KAPSCH-Group Beteiligungs GmbH, Vienna, and thus is related to its shareholder and its affiliated companies as a group company.
DATAX HandelsgmbH, Vienna, prepares the consolidated financial statements for the largest group of companies. These consolidated financial statements are deposited at the Commercial Court Vienna.
The Company prepares the consolidated financial statements for the smallest group of companies.
Regarding the disclosure on the legal and economic relations with affiliated companies, the protection clause pursuant to Section 241 (3) UGB was used.
The average number of staff during the fiscal year 2011/12 was 488, including 469 salaried employees and 19 waged workers (prior year: 395, including 375 salaried employees. 20 waged workers).
In the fiscal year, total remunerations of the management board amounted to EUR 1,820,541.00 (prior year: EUR 1,573k), expenses for severance payments and pensions for managing directors amounted to EUR 78,037.39 (prior year: EUR 62k).
Remunerations paid to the supervisory board amounted to EUR 7,952.42 (prior year: EUR 21k).
The following persons served on the management and supervisory board:
Mag. Georg Kapsch (Chief Executive Officer) Ing. Erwin Toplak André Laux
Dr. Franz Semmernegg (Chairman) Dr. Kari Kapsch (Deputy Chairman) William Morton Llewellyn (until 22 August 2011) Sabine Kauper (since 22 August 2011)
delegated by the Works Council:
Ing. Christian Windisch Claudia Rudolf-Misch
Vienna, 30 May 2012
signed:
signed:
Mag. Georg Kapsch
Ing. Erwin Toplak
signed:
André Laux
We draw attention to the fact that the English translation of this auditor's report according to Section 274 of the Austrian Commercial Code (UGB) is presented for the convenience of the reader only and that the German wording is the only legally binding version.
We have audited the accompanying financial statements, including the accounting system of Kapsch TrafficCom AG, Vienna, for the fiscal year from 1 April 2011 to 31 March 2012. These financial statements comprise the balance sheet as of 31 March 2012, the income statement for the fiscal year ended 31 March 2012, and the notes.
The Company's management is responsible for the accounting system and for the preparation and fair presentation of these financial statements in accordance with Austrian Generally Accepted Accounting Principles. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with laws and regulations applicable in Austria and Austrian Standards on Auditing. Those standards require that we comply with professional guidelines and that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a reasonable basis for our audit opinion.
Our audit did not give rise to any objections. In our opinion, which is based on the results of our audit, the financial statements comply with legal requirements and give a true and fair view of the financial position of the Company as of 31 March 2012 and of its financial performance for the fiscal vear from 1 April 2011 to 31 March 2012 in accordance with Austrian Generally Accepted Accounting Principles.
Pursuant to statutory provisions, the management report is to be audited as to whether it is consistent with the financial statements and as to whether the other disclosures are not misleading with respect to the Company's position. The auditor's report also has to contain a statement as to whether the management report is consistent with the financial statements and whether the disclosures pursuant to Section 243a UGB are appropriate.
In our opinion, the management report is consistent with the financial statements. The disclosures pursuant to Section 243a UGB are appropriate.
Vienna, 30 May 2012
PwC Wirtschaftsprüfung GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft
signed:
Felix Wirth Austrian Certified Public Accountant
Disclosure, publication and duplication of the financial statements together with the auditor's report according to Section 281 (2) UGB in a form not in accordance with statutory requirements and differing from the version audited by us is not permitted. Reference to our audit may not be made without prior
Kapsch TrafficCom is a provider of high-performance intelligent transportation systems (ITS) in the application fields of toll collection, urban access management and traffic safety and security. Kapsch TrafficCom covers the entire value creation chain of its customers as a one-stop shop by providing products and components as well as subsystems as open market products, by integrating them into turnkey systems or by developing end-to-end solutions, including services for the technical and commercial operations of systems. Within its current core business of electronic toll collection (ETC), Kapsch TrafficCom designs, builds and operates primarily electronic toll collection systems, in particular for multi-lane free-flow traffic. With 280 references in 41 countries on all 5 continents and with almost 70 million on-board units delivered and about 18,000 lanes equipped, Kapsch TrafficCom has positioned itself among the internationally recognized suppliers of electronic toll collection worldwide. Kapsch TrafficCom is headquartered in Vienna, Austria, and has subsidiaries and representative offices in 30 countries.
Kapsch TrafficCom AG | Am Europlatz 2 | 1120 Vienna | Austria | www.kapschtraffic.com Investor Relations | Marcus Handl | Phone +43 50 811 1120 | Fax +43 50 811 99 1120 | Email [email protected] Corporate Marketing | Alf Netek | Phone +43 50 811 1700 | Fax +43 50 811 99 1700 | Email [email protected]
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.