Annual Report • Jun 8, 2009
Annual Report
Open in ViewerOpens in native device viewer
Annual report on fi scal year 2008/09.
As an international supplier of innovative road has subsidiaries and representative offi ces in 22 fi ve continents, we enjoy an excellent reputation interested in knowing what our solutions contri-That's the reason why we simply asked a few of
traffi c telematics solutions Kapsch Traffi cCom countries. With more than 220 references on all on the roads of this world. We are particularly bute to road users from their perspective. them all over the world for their experiences.
Project: Melbourne City Link
6 | |
Customer: Transurban Technology: Multi-lane free-fl ow ETC-System for all vehicles OBUs: 2,500,000 supplied Multi lanes: 17 MLFF segments, 48 Tolling lanes
| | 7
Thanks to the fully automated tolling system in Melbourne, Jonathon and his partner can go surfi ng more often. The only question is: How much longer will their Bully go with them?
Multi-lane free-fl ow ETC-systems as those used in Melbourne keep the traffi c fl owing, allowing people to arrive at their destination easily, quickly and stress free. Environmental burdens such as CO2 emissions are consistently reduced and traffi c safety increased. All good reasons for Jonathon to continue enjoying his leisure time unhindered.
| Vision/Mission | 9 |
|---|---|
| The Fiscal Year 2008/09 in Review | 10 |
| Highlights of Fiscal Year 2008/09 | 11 |
| Key Financial Data in Fiscal Year 2008/09 | 12 |
| Key Data in Fiscal Year 2008/09 | 13 |
Letter from the Chief Executive Offi cer 16
| Corporate History | 22 |
|---|---|
| Shareholders | 23 |
| Managing Board | 24 |
| Supervisory Board | 26 |
| Additional Information Relating to Board Members | 28 |
| Committees of the Supervisory Board | 29 |
| Report of the Supervisory Board | 30 |
| Corporate Governance Code | 32 |
| The Kapsch Traffi cCom Share | 33 |
| Market | 38 |
|---|---|
| Product and service portfolio | 40 |
| Business Segments | 42 |
| Projects and Customers | 44 |
| Research and Development | 46 |
| Innovation and Quality | 47 |
| Employees | 48 |
| Social and cultural commitment | 49 |
| Kapsch Traffi cCom AG and its subsidiaries | 52 |
| 4 Management Report Management Report 56 Statement of all Members of the Management Board Statement of all Members of the Management Board 69 Consolidated Financial Statements Consolidated Financial Statements as of 31 March 2009 70 Auditor's Report Auditor's Report 120 Services Addresses of Major Companies 124 Glossary 125 Financial Calendar 126 Five-Year Review 127 |
||
|---|---|---|
| 5 | ||
| 6 | ||
| 7 8 |
||
Imprint: Media proprietor and publisher: Kapsch Traffi cCom AG Design and production: Westend United Werbeagentur GmbH Photos: Peter Garmusch Picture editing: Vienna Paint Printing house: Stiepan Druck
The global exchange of information and goods has made our world faster, more transparent but also more challenging. Amplifi ed mobility and incremental networking increase productivity and fl exibility of our society but at the same time demand responsible management of sensitive matters such as the environment, individual freedom or security with a view to our future.
We believe in enriching our society and economy through information exchange, media convergence, real-time communication and mobility. We have therefore been dedicated for over 100 years to researching and applying new technologies. By embodying an entrepreneurial spirit and always striving to replace the good with what is better, we consistently follow the philosophy of our founder: "always one step ahead" and make our contribution to the sustainable design of the future and the development of a mobile and networked world.
As an international supplier we design, integrate, implement, maintain and operate innovative road traffi c telematics solutions over the long-term and in a sustainable manner.
It is part of our mission to consistently create competitive advantages and benefi ts for our customers and partners without losing sight of our responsibility towards the environment or the society. Our objective is global leadership in quality and innovation in the area of traffi c telematics solutions. In order to meet this goal we combine technological innovation and proximity to customers with the competence of our employees and we make our contribution in a way that road users all over the world reach their destination safely, fast and with a reasonable use of limited resources.
Mobile and productive, global and networked
Manage traffi c intelligently. Consistently add value. Kapsch Traffi cCom
In the fi scal year 2008/09 ending 31 March 2009, Kapsch Traffi cCom AG, listed on the Vienna Stock Exchange in the prime market segment since 26 June 2007, increased revenues by 8 % to EUR 200.3 million (2007/08: EUR 185.7 million). The increase in revenues in the past fi scal year 2008/09 was driven by both two large segments: Road Solution Projects (RSP) and Services, System Extensions, Components Sales (SEC).
Due to a large investment in the expansion into new markets, particularly the U.S.A., EBITDA declined by 10 % compared to the previous fi scal year (2007/08: EUR 39.0 million) to EUR 35.0 million. EBIT also declined by 17 % to EUR 29.0 million (2007/08: EUR 34.9 million). Due to a negative fi nancial result from currency losses and the impairment of certain short-term fi nancial assets (securities), profi t before tax decreased by 49 % to EUR 21.9 million (2007/08: EUR 42.8 million) and profi t after tax also decreased by 49 % to EUR 16.4 million (2007/08: EUR 32.1 million).
In accordance with the development of its profi tability, Kapsch Traffi cCom recorded a decline in its earnings per share to EUR 1.06 (2007/08: EUR 2.60 per share). Applying a consistent dividend policy, the managing board will propose that the shareholders' meeting to be held on 24 June 2009 resolve a dividend of EUR 0.50 per share (2007/08: EUR 0.90).
The Kapsch Traffi cCom Group clearly increased cash and cash equivalents in the past fi scal year: At EUR 60.2 million as of 31 March 2009 cash and cash equivalents were 27 % ahead of the the EUR 47.4 million as of 31 March 2008. The free cash fl ow was improved to EUR 19.9 million compared to EUR -14.8 million during the same period of the previous fi scal year.
Kapsch Traffi cCom continued its expansion strategy with fi rst-time orders in Thailand, France and through the newly established joint venture in Italy. The company was also successful in follow-up orders particularly in Austria and Australia. Further parts of the extension of the nationwide electronic truck tolling system (phase II) in the Czech Republic were realized.
In the U.S.A., Kapsch Traffi cCom made further progress: In July 2008, all of the assets of the "Mobility Solutions" business unit of TechnoCom Corporation in California were acquired. In November 2008, the new 5.9 GHz tolling technology was introduced to the public in New York. Kapsch Traffi cCom also successfully completed the performance evaluation of its tolling technology in Denver.
In January 2009, Kapsch Traffi cCom AG acquired shares representing 20.47 % of the outstanding shares in the Norwegian competitor Q-Free ASA.
| Revenues up by 8 % to EUR 200.3 million 1 | First orders in Thailand, France and Italy |
|---|---|
| Revenues in RSP segment up by 21 % 1 | Follow-up orders particularly in Australia and Austria |
| Revenues in SEC segment up by 5 % 1 | Parts of phase II in Czech Republic realized |
| Total volume of OBUs delivered up by 7 % to more than 2.7 million units 1 |
Further progress in the U.S.A. |
| Free cashfl ow up from EUR -14.8 to 19.9 million 1 |
Joint venture in Italy |
| Cash and cash equivalents up from EUR 47.4 to 60.2 million 2 |
Stake of 20.47 % in the Norwegian competitor Q-Free ASA acquired |
| Performance of securities 1 | 26 % of the shares of Brisa Group in Kapsch Telematic Services GmbH acquired 3 |
1 Fiscal year 2008/09 compared to fi scal year 2007/08
2 31 March 2009 compared to 31 March 2008 3 Event after the balance sheet date
Total Assets and Equity ratio 5
Earnings per share 2
Net Assets (+) /-Debt (-)
Revenues by Segment
Capital Expenditure 4
Revenues by Region 2008/09
EBIT by Segment
| Earnings Data 1 | 2008/09 | 2007/08 | +/- % | 2006/07 | ||||
|---|---|---|---|---|---|---|---|---|
| Revenues | in million EUR | 200.3 | 185.7 | 8 % | 198.6 | |||
| EBITDA | in million EUR | 35.0 | 39.0 | -10 % | 30.8 | |||
| EBITDA margin | in % | 17.5 | 21.0 | 15.5 | ||||
| EBIT | in million EUR | 29.0 | 34.9 | -17 % | 26.9 | |||
| EBIT margin | in % | 14.5 | 18.8 | 13.5 | ||||
| Profi t before tax | in million EUR | 21.9 | 42.8 | -49 % | 27.0 | |||
| Profi t after tax | in million EUR | 16.4 | 32.1 | -49 % | 20.3 | |||
| Earnings per share 2 | in EUR | 1.06 | 2.60 | -59 % | 2.04 | |||
| Free Cashfl ow 3 | in million EUR | 19.9 | -14.8 | <-100 % | -39.1 | |||
| Capital Expenditure 4 | in million EUR | 22.2 | 4.0 | >100 % | 2.3 | |||
| Employees as of 31 March of each year | 946 | 824 | 15 % | 774 | ||||
| Revenues by Segment (percentage of Revenues) | 2008/09 | 2007/08 | +/- % | 2006/07 | ||||
| Road Solution Projects (RSP) | in million EUR | 56.8 | (28 %) | 47.0 | (25 %) | 21% | 105.0 | (53 %) |
| Services, System Extensions, Components Sales (SEC) | in million EUR | 135.6 | (68 %) | 128.8 | (69 %) | 5% | 80.6 | (41 %) |
| Others (OTH) | in million EUR | 8.0 | (4 %) | 10.0 | (5 %) | -20% | 13.0 | (7 %) |
| Revenues by Region (percentage of Revenues) | 2008/09 | 2007/08 | +/- % | 2006/07 | ||||
| Central & Eastern Europe (incl. Austria) | in million EUR | 139.3 | (70 %) | 124.2 | (67 %) | 12% | 157.3 | (79 %) |
| Western Europe | in million EUR | 21.3 | (11 %) | 17.6 | (9 %) | 21% | 12.9 | (6 %) |
| Americas | in million EUR | 14.0 | (7 %) | 18.8 | (10 %) | -25% | 15.4 | (8 %) |
| Rest of World | in million EUR | 25.6 | (12 %) | 25.2 | (14 %) | 2% | 13.0 | (7 %) |
| Balance Sheet Data | 31 March 2009 | 31 March 2008 | +/- % | 31 March 2007 | ||||
| Total Assets | in million EUR | 324.5 | 298.4 | 9 % | 227.2 | |||
| Total Equity 5 | in million EUR | 134.2 | 133.4 | 1 % | 45.6 | |||
| Equity ratio 5 | in % | 41.4 | 44.7 | 20.1 | ||||
| Net Assets (+) /-Debt (-) | in million EUR | 5.0 | 28.4 | -82 % | -12.5 | |||
| Capital Employed | in million EUR | 193.4 | 161.3 | 20 % | 78.2 | |||
| Net Working Capital | in million EUR | 122.3 | 131.4 | -7 % | 56.8 | |||
| Stock Exchange Data 6 | 2008/09 | 2007/08 | ||||||
| Offer price per share on 26 June 2007 | in EUR | 32.0 | 32.0 | |||||
| Number of shares as of 31 March of each year | in million | 12.2 | 12.2 | |||||
| Free fl oat as of 31 March of each year | in % | 31.6 | 30.3 | |||||
| Closing price as of 31 March of each year | in EUR | 14.8 | 31.8 | |||||
| Market capitalization as of 31 March of each year | in million EUR | 180.6 | 388.2 | |||||
| Share performance | in % | -53.8 | -0.6 | |||||
| Dividend per share | in EUR | 0.50 | 0.90 |
1 only continuing operations
2 earnings per share in fi scal year 2008/09 relate to 12.2 million shares, in fi scal year 2007/08 relate to a weighted average number of 11.7 million outstanding shares and in fi scal year 2006/07 relate to 10.0 million shares
3 operating cashfl ow minus capital expenditure from operations (excl. acquisitions and securities)
4 capital expenditure from operations (excl. acquisitions and securities)
5 incl. minority interests
6 for additional capital market data see page 34
system in the Czech Republic? The fact that he
Multi-lane free-fl ow ETC-systems such as the one that Kapsch Traffi cCom operates for nationwide truck tolling in the Czech Republic enable charges and tolls to be levied, without affecting the fl ow of traffi c. The vehicle data is recorded and processed fully automatically. Stefan can therefore concentrate on what he should pay the most attention to: The traffi c and the road.
14 | |
| | 15
Project: National Truck e-Toll System
Customer: Czech Republic Start of operation: January 2007 Technology: Nationwide Multi-lane free-fl ow ETC-System and stationary tolling test of "Kapsch Area" – a hybrid pilot system which combines DSRC and GNSS technologies. OBUs: 700,000 supplied Multi lanes: 1,230
Georg Kapsch, Chief Executive Offi cer
even against the background of the currently diffi cult situation on the international fi nancial markets, I am delighted to report about a fi scal year 2008/09, in which we continued the controlled growth of the business and the extension of our strong position in the various markets. As can be seen from this annual report, the Kapsch Traffi cCom Group recorded growth rates in revenues despite the tense situation on the fi nancial markets. We also succeeded to generate a clearly positive free cashfl ow and to advance our cash position. With this strengthening of the fi nancial power we regard ourselves as well prepared for future growth and even in a probably more challenging economic environment.
Revenues were at EUR 200.3 million in fi scal year 2008/09, up by 8 % compared to the same period of the previous fi scal year (EUR 185.7 million). Due to large investments in the expansion into new markets, particularly the U.S.A., EBITDA declined by 10 % compared to the previous fi scal year (EUR 39.0 million) to EUR 35.0 million and EBIT also declined by 17 % to EUR 29.0 million (2007/08: EUR 34.9 million). Due to a negative fi nancial result resulting from currency losses and the impairment of certain short-term fi nancial assets (securities), profi t before tax decreased by 49 % to EUR 21.9 million (2007/08: EUR 42.8 million) and profi t after tax also decreased by 49 % to EUR 16.4 million (2007/08: EUR 32.1 million).
In line with our strategic objectives, the performance of the SEC (Services, System Extensions, Components Sales) segment was particularly strong. We increased revenues by 5 % from EUR 128.8 million to EUR 135.6 million.
1 Fiscal year 2008/09 compared to fi scal year 2007/08 2 31 March 2009 compared to 31 March 2008
Challenging economic environment
Revenue up by 8 % to EUR 200.3 million 1
EBITDA down by 10 % to EUR 35.0 million and EBIT down by 17 % to EUR 29.0 million 1
Revenues in SEC segment up by 5 % to EUR 135.6 million 1
This positive development was primarily attributable to recurring revenues from services in connection with the technical and commercial operation of the nationwide electronic truck tolling system in the Czech Republic and an increase in the volume of components sales, particularly on-board units (OBUs). At more than 2.7 million, total volume of OBUs delivered in the fi scal year 2008/09 increased by 7 % compared with nearly 2.5 million units in the previous fi scal year. Moreover, bonus payments from the nationwide electronic truck tolling systems in the Czech Republic, where the average toll transaction rate further increased from 97.5 % in the calendar year 2007 to 98.2 % in the calendar year 2008, and in Austria contributed to this positive development of the segment.
We clearly improved the free cashfl ow to EUR 19.9 million compared to EUR -14.8 million during the same period of the previous fi scal year. In fi scal year 2008/09, cash and cash equivalents increased to EUR 60.2 million, as of 31 March 2009 (31 March 2008: EUR 47.4 million), even though we distributed dividends of approximately EUR 12.0 million and invested approximately EUR 24.2 million in acquisitions as well as increased capital expenditures to EUR 22.2 million (2007/08: EUR 4.0 million). This improves our position in the current situation on the international fi nancial markets.
In line with the development of our profi tability, earnings per share decreased by 59 % to EUR 1.06 in fi scal year 2008/09. The managing board will propose that the shareholders' meeting to be held on 24 June 2009 resolve a dividend of EUR 0.50 per share for fi scal year 2008/09 (2007/08: EUR 0.90 per share), representing a payout ratio of approximately 47 % (2007/08: approximately 35 %).
We scored with several new international orders in the past fi scal year. We are particularly proud of the expansion into three new markets: Thailand, France and Italy. Thailand decided for a fi rst electronic tolling system from Kapsch Traffi cCom with a contract volume of approximately EUR 8.5 million. Our French subsidiary already succeeded – just over a year after its establishment – in securing signifi cant orders. Over the course of the next three years, Kapsch Traffi cCom France will implement four orders for the large French road operators (Vinci, APRR and Sanef Groups) and their joint venture company Axxès. In total, Kapsch Traffi cCom will supply over half a million OBUs and related equipment to France for a total order value of approximately EUR 10 million. In Italy, Kapsch-Busi S.p.A. achieved a fi rst-time success only a few months after the establishment of the joint venture with Busi Impianti S.p.A., and received an order for a city access control project at a contract volume of EUR 0.8 million in Bergamo in October 2008. In December 2008, we also received orders from Torino and from Cremona.
Besides the expansion into new markets, we also continued extending our presence in existing markets. Beside a follow-up order in Austria at a total volume of approximately EUR 14.4 million, Kapsch Traffi cCom won, among other orders, an order of 500,000 OBUs in Australia. Total volume of OBUs delivered up by 7 % to more than 2.7 million units 1
Average toll transaction rate in the Czech Republic increased
Free cashfl ow up from EUR -14.8 to 19.9 million 1
Cash and cash equivalents up from EUR 47.4 to 60.2 million 2
Earnings per Share down by 59 % to EUR 1.06 1
Managing Board will propose a dividend of EUR 0.50 per share
First-time orders in Thailand, France and Italy
Follow-up orders particularly in Australia and Austria
Parts of phase II in the Czech Republic realized In the fi scal year 2008/09, we have made substantial progress with regard to the extension of the nationwide electronic truck tolling system (phase II) in the Czech Republic. For the extended use of the tolling system, a pilot installation of a satellite-based tolling system started operation in June 2008 and a telematics platform was implemented. In October 2008, the implementation of a traffi c management system was completed.
In the fi rst quarter of 2008/09, we took a further important step in Italy and strengthened our presence through the partnership with Busi Impianti S.p.A. and the establishment of the Kapsch-Busi joint venture. This long-term partnership represents an ideal addition to our activities in Italy and to our portfolio of solutions. Both companies can point to many years of experience in their respective fi elds: Busi as a renown company in system construction with numerous installations in the "city access" fi eld, and Kapsch Traffi cCom in the fi eld of traffi c telematics and tolling systems for motorways and urban areas. The joint venture company will combine these core competences for activities in the Italian market. We see great potential in the area of traffi c telematics solutions in the coming years. Joint Venture in Italy established
In the U.S.A., we made further progress: In July 2008, we acquired all of the assets of the "Mobility Solutions" business unit of TechnoCom Corporation in California that conducts a business which, among other things, develops vehicle infrastructure integration technologies, including but not limited to multiband confi gurable networking units (MCNU), and related technology for the transportation and automotive industries, systems integrators and federal, state, and local government agencies. The total purchase price amounted to approximately EUR 13.9 million. In October 2008, we completed the performance evaluation with a collection rate of 100 percent on more than 10,500 samples at the trial facility in Denver. In November 2008, we introduced the new 5.9 GHz tolling technology to the public in New York. Further progress in the U.S.A.
On 16 January 2009, Kapsch Traffi cCom AG acquired 11,047,017 shares in the Norwegian competitor Q-Free ASA at a price of NOK 10.00 per share, representing 20.47 % of the outstanding shares in Q-Free ASA. The total purchase price amounted to approximately EUR 12.3 million. As of 31 March 2009, the share traded at a price of NOK 12.90. Stake of 20.47 % in the Norwegian competitor Q-Free ASA acquired
26% of the shares of Brisa Group in Kapsch Telematic Services GmbH acquired
On 9 April, 2009 (after the end of the fi scal year), Kapsch Traffi cCom AG acquired 26 % of the shares of Brisa Group in Kapsch Telematic Services GmbH. The total purchase price amounted to approximately EUR 4.2 million. It is intended to continue the collaboration in a cooperation.
With the fi scal year 2009/10 in mind, we take an optimistic view on our markets in the long term even in a changed economic environment. The fi scal year 2009/10 will be shaped by participation in tenders and by project awards in Hungary, Slovenia, France, Portugal, South Africa, and in the U.S.A.
The success of our company is based on a strong corporate culture and goal-oriented teamwork by all parties. My special thanks go out to our employees all over the world, whose commitment again allowed us to record excellent results despite the large investments into new markets and products. I would like to extend my thanks to my colleague on the managing board, Erwin Toplak, for our most intense and constructive cooperation, and to the supervisory board for our productive discussions and their effi cient handling of all issues. In concluding, I would like to express my thanks to you, our shareholders, for the trust you have placed in us. Please continue to accompany us on our growth course into a successful future.
Looking forward with optimism
Thanks to employees and management, Supervisory Board and shareholders
With all best wishes
Georg Kapsch
Chief Executive Offi cer
Certain statements contained in this report constitute "forward-looking statements." These statements, which contain the words "believe", "intend", "expect" and words of similar meaning, refl ect management's beliefs and expectations and are subject to risks and uncertainties that may cause actual results to differ materially. As a result, readers are cautioned not to place undue reliance on such forward-looking statements. The company disclaims any obligation to publicly announce the result of any revisions to the forward-looking statements made herein, except where it would be required to do so under applicable law.
Project: NH-8-Delhi Gurgaon Expressway, India
Customer: DS Constructions Ltd. Start of operation: January 2008 Length: 27 km Technology: Mixed manual/ microwave based ETC-System Payment: Cash, OBUs, SmartCards OBUs: 82,000 supplied Toll lanes: 56
The best thing about our tolling system on National Highway No. 8 is that Kulwant from New Delhi will no longer have to miss a single one of his grandson's cricket games.
Modern tolling systems such as the one on India's Highway No. 8 in New Delhi considerably reduce traffi c delays and jams. The constant fl ow of traffi c reduces environmentally harmful emissions and makes roads safer. And we are at least as proud of that as Kulwant is of his grandson.
Kapsch Group, founded in 1892, entered the road traffi c telematics business in the early 1990s
Entering the commercial operation of tolling systems business in 2005
Accelerated internationalization since 2006
Further strengthening of the global expansion in fi scal year 2008/09
The Kapsch Group was founded in 1892 by Johann Kapsch in Vienna, Austria. In the early 1990s, the Kapsch Group entered the road traffi c telematics business supported by selected acquisitions, including the acquisitions of the electronic toll collection division of Bosch Telecom, Germany (1999), and Combitech Traffi c Systems AB, Sweden (2000). Following a reorganization of the Kapsch Group in 2002, Kapsch Traffi cCom AG was formed by means of a demerger from former Kapsch AG.
With the foundation of Kapsch Telematic Services GmbH in 2005, the company entered the commercial operation of tolling systems business.
Since 2006, the Kapsch Traffi cCom Group has accelerated the internationalization by establishing subsidiaries and representative offi ces in various countries across the world, making selected acquisitions, including the acquisitions of DPS Automation S.A., Argentina in 2006 and VTI Industrials Pty, South Africa in 2007.
The global expansion was further strengthened in the fi scal year 2008/09. With the acquisition of assets of TechnoCom Corp., U.S.A., the company entered the North-American, with a joint venture company with Busi Impianti S.p.A. the Italian market. In January 2009, Kapsch Traffi cCom purchased a stake of 20.47 % in the Norwegian competitor Q-Free ASA.
As of 31 March 2009, approximately 31.6 % of the shares were in free fl oat, whereas the remaining approximately 68.4 % were held by KAPSCH-Group Beteiligungs GmbH. 1 As of 31 March 2009, no other shareholder held shares of Kapsch Traffi cCom conferring voting rights in excess of 5 %.
KAPSCH-Group Beteiligungs GmbH is a wholly-owned subsidiary of DATAX HandelsgmbH. In turn, the shares in DATAX HandelsgmbH are held in equal proportions by Traditio-Privatstiftung, ALUK-Privatstiftung and Children of Elisabeth-Privatstiftung, each a private trust under the Austrian Law for Private Trusts (Privatstiftungsgesetz).
Each of these private trusts is managed by a separate executive board (Stiftungsvorstand) and no person serves on the executive board of more than one of the three private trusts. The benefi ciaries of these private trusts are Georg Kapsch and members of his family (Traditio-Privatstiftung), Kari Kapsch and members of his family (ALUK-Privatstiftung) and Elisabeth Kapsch and members of her family (Children of Elisabeth-Privatstiftung).
Kapsch Traffi cCom AG, together with its subsidiaries, currently forms the road traffi c telematics division of the Kapsch Group. The following chart shows in simplifi ed form the corporate structure of the Kapsch Group:
1 for additional data on the shareholder structure see page 35
31.6 % of the shares in free fl oat
68.4 % of the shares held by KAPSCH-Group Beteiligungs GmbH
Erwin Toplak, Chief Operating Offi cer Georg Kapsch, Chief Executive Offi cer
Kapsch Traffi cCom AG has a two-tier management and oversight structure in accordance with the Austrian Stock Corporation Act (Aktiengesetz), consisting of the managing board (Vorstand) and the supervisory board (Aufsichtsrat). The managing board is responsible for managing the business and represents the company in dealings with third parties. The supervisory board is responsible for appointing and removing the members of the managing board and supervising the business conducted by the managing board.
Although the supervisory board does not actively manage the company, both the Austrian Stock Corporation Act (Aktiengesetz) and the company's articles of association, together with the managing board's internal rules of procedure (Geschäftsordnung), require that the consent of the supervisory board be given before the managing board takes certain actions.
Pursuant to our articles of association, the managing board may consist of one to four members appointed by the supervisory board for a term of up to fi ve years. The managing board currently consists of two members.
| Name | Area of responsibility | Age | Year fi rst appointed |
Year current Term expires |
|---|---|---|---|---|
| Georg Kapsch (CEO) |
Finance and Administration, M&A, IR, Legal, International Subsidiaries, Human Resources, Marketing & Communications, Product Management, Kapsch Telematic Services GmbH und Kapsch Traffi cCom AB (Sweden) |
49 | 2002 | 2011 |
| Erwin Toplak (COO) |
Sales, Engineering R&D, Technical Operations, Project Management, Inter national Relations & Affairs and Special Projects |
47 | 2002 | 2011 |
Georg Kapsch is the CEO and was appointed to the managing board of Kapsch Traffi cCom AG in December 2002. Since October 2000, Georg Kapsch is also the CEO of KAPSCH-Group Beteiligungs GmbH. He has been a member of the managing board of Kapsch AG since July 1989 and was appointed as its CEO in October 2001. Georg Kapsch, who studied business administration at Vienna University of Economics and Business Administration (Wirtschaftsuniversität Wien) and graduated in 1981, is the chairman of the Technikum Wien Academy (Fachhochschule Technikum Wien) (since September 2002), and vice president of the Association of the Austrian Electrical and Electronics Industries (Fachverband der Elektro- und Elektronikindustrie) (since January 2003). Since December 2008, Georg Kapsch is the president of the Federation of Austrian Industries Vienna (Industriellenvereinigung Wien).
Erwin Toplak has been a member of the managing board of Kapsch Traffi cCom AG since June 2002. He has been employed with Kapsch Group since 1991, fi rst as director of the traffi c control systems division of Kapsch AG (1999-2002, senior manager 1994-1999) and marketing and sales manager of the toll collection start-up of Kapsch AG (1991-1994). Erwin Toplak graduated from Polytechnic (Höhere Technische Lehranstalt) in Graz in 1984 with a degree in engineering. Erwin Toplak is vice president of the Austrian Electrotechnical Association (Österreichischer Verband für Elektrotechnik).
In the fi scal year ended 31 March 2009, the total base and variable remuneration for the members of the managing board including the cross-charge from Kapsch AG relating to the services of Georg Kapsch amounted to EUR 1.26 million (fi scal year 2007/08 EUR 1.1 million).
Remuneration of Erwin Toplak is determined based on a compensation system that, in addition to the base compensation, provides for annual variable compensation of 20-40 % of the base compensation. The variable compensation depends on achieving certain fi nancial performance fi gures. In case of termination of the managing board contract at the end of the appointed period, Erwin Toplak is entitled to a severance payment of a ten-fold monthly salary. Erwin Toplak is subject to a non-competition clause for one year following termination of his managing board position (unless he is terminated for cause). Erwin Toplak has an individual defi ned pension scheme for which Kapsch Traffi cCom AG pays an annual amount of EUR 14,238 to an outside pension fund (Pensionskasse). The company was notifi ed on 18 April 2008 that Erwin Toplak holds 152,500 shares of Kapsch Traffi cCom AG.
Georg Kapsch is employed with Kapsch AG. His services are part of the management and consulting services rendered and invoiced by Kapsch AG to the company.
Georg Kapsch, CEO
Erwin Toplak, COO
Remuneration
Pursuant to the articles of association, the supervisory board consists of three to six members appointed by the shareholders' meeting, plus the representatives delegated by the works council (Betriebsrat) according to the Austrian Labor Constitutional Act (Arbeitsverfassungsgesetz). The current members of the supervisory board are:
| Name | Position | Age | Year fi rst appointed |
Year current term expires |
|---|---|---|---|---|
| Franz Semmernegg | Chairman | 40 | 2002 | 2010 |
| Kari Kapsch | Deputy chairman | 45 | 2002 | 2010 |
| William Morton Llewellyn | Member | 44 | 2008 | 2010 |
| Christian Windisch | Member 1 | 45 | n/a | n/a |
| Werner Dreschl | Member 1 | 37 | n/a | n/a |
In addition, Elisabeth Kapsch was a member until 10 July 2008.
1 Delegated by the works council
Franz Semmernegg has been a member of the supervisory board of Kapsch Traffi cCom AG since June 2002. Since September 2005, he has been the chairman of the supervisory board. Franz Semmernegg has been the CFO of KAPSCH-Group Beteiligungs GmbH since April 2005. He also serves as the CFO of Kapsch BusinessCom AG and has been a member of the managing board of Kapsch BusinessCom AG since March 2003. He has also been the CFO of Kapsch AG since October 2001 and was a member of the managing board of Schrack BusinessCom AG from 1999 to September 2001. In 1998, Franz Semmernegg was responsible for the successful management buy-out of Schrack BusinessCom AG from Ericsson Austria AG and had previously been involved in management functions at Ericsson Austria AG (1998) and Schrack Seconet AG (1997). Franz Semmernegg is a member of the supervisory board of the Austrian Regulatory Authority for Broadcasting and Telecommunications (Rundfunk und Telekom Regulierungs-GmbH). Franz Semmernegg graduated with a degree in business administration (1992) and a Ph.D. (1997) from the University of Graz (Karl-Franzens-Universität).
Kari Kapsch has been a member of the supervisory board of Kapsch Traffi cCom AG since June 2002. He served as deputy chairman of the supervisory board from June 2002 to December 2002 and as chairman of the supervisory board from December 2002 to September 2005. Kari Kapsch has also been the COO of KAPSCH-Group Beteiligungs GmbH since December 2005 and CEO of Kapsch BusinessCom AG since December 2002. He is also the COO of Kapsch AG and chairman of the supervisory board of Kapsch CarrierCom AG. Kari Kapsch is involved in several industry-related associations and was the chairman of the management board of Young Industry Vienna (Junge Industrie Wien) and vice chairman of Young Industry Austria (Junge Industrie Österreich) from 1996 to 2002. Kari Kapsch graduated with a degree in physics (1988) and a Ph.D. (1992) from the University of Vienna (Universität Wien). Kari Kapsch is the brother of Georg Kapsch, the CEO of Kapsch Traffi cCom AG.
William Morton Llewellyn was elected as a member of the company's supervisory board in the annual shareholders' meeting on 10 July 2008. Morton Llewellyn started working in the banking industry in 1994 with ING, WestLB and HSBC Groups, where he was responsible for corporate and project fi nance as well as debt capital market activities. Morton Llewellyn qualifi ed as a chartered accountant in 1991 with Robson Rhodes, where he worked in auditing, accounting, and insolvency services. He graduated from London University in 1987 with a BA in Law and Economics.
Christian Windisch has been a member of the supervisory board of Kapsch Traffi cCom AG since November 2002. He joined Kapsch Group in September 1984 and is currently employed in the quality management. Christian Windisch graduated from Polytechnic (Höhere Technische Lehranstalt) in Vienna with a degree in engineering.
Werner Dreschl has been a member of the supervisory of Kapsch Traffi cCom AG since November 2006. He joined Kapsch Group in June 2000 as a participant in the trainee program and is currently employed in product management. Werner Dreschl graduated from Graz University of Technology (Technische Universität Graz) with a degree in engineering (2000).
Members of the supervisory board and its committees receive reimbursement of actual expenses, including reasonable travel expenses. In addition, the shareholders' meeting may provide for annual remuneration of supervisory board members. No compensation was paid to the members of the supervisory board for the past fi scal year. However, Kapsch AG renders consulting services performed in part by Franz Semmernegg and/or Kari Kapsch to Kapsch Traffi cCom AG.
Employee Representatives
Remuneration
The following table sets forth the names of all companies and partnerships of which each of the members of the managing and the supervisory board is a member of the administrative, management or supervisory bodies or a partner, as the case may be (excluding Kapsch Traffi cCom AG and any of its direct and indirect subsidiaries):
| Name | Name of company | Current function |
|---|---|---|
| Management Board | ||
| Georg Kapsch (CEO) | DATAX HandelsgmbH | Managing Director (CEO) |
| KAPSCH-Group Beteiligungs GmbH | Member of managing board (CEO) | |
| Kapsch AG | Member of managing board (CEO) | |
| Kapsch CarrierCom AG | Member of supervisory board | |
| Kapsch BusinessCom AG | Chairman of supervisory board | |
| Teufelberger Holding AG | Member of supervisory board | |
| Erwin Toplak (COO) | n/a | n/a |
| Supervisory Board | ||
| Franz Semmernegg (Chairman) | KAPSCH-Group Beteiligungs GmbH | Member of managing board (CFO) |
| Kapsch AG | Member of managing board (CFO) | |
| Kapsch BusinessCom AG | Member of managing board (CFO) | |
| Kapsch CarrierCom AG | Member of supervisory board | |
| Kapsch Sp. z.o.o., Warsaw | Member of advisory board | |
| Kapsch Telecom Kiev | Member of advisory board | |
| Kapsch Kft., Budapest | Member of advisory board | |
| Kapsch s r.o., Prague | Member of advisory board | |
| Kapsch s.r.o., Bratislava | Member of advisory board | |
| CALPANA business consulting GmbH | Member of managing board | |
| Rundfunk und Telekom Regulierungs-GmbH | Deputy chairman of supervisory board | |
| Kari Kapsch (Deputy chairman) | KAPSCH-Group Beteiligungs GmbH | Member of managing board (COO) |
| Kapsch AG | Member of managing board (COO) | |
| Kapsch BusinessCom AG | Member of managing board (CEO) | |
| Kapsch CarrierCom AG | Chairman of supervisory board | |
| Kapsch Sp. z.o.o., Warsaw | Member of advisory board | |
| Kapsch Telecom Kiev | Member of advisory board | |
| Kapsch Kft., Budapest | Member of advisory board | |
| Kapsch s r.o., Prague | Member of advisory board | |
| Kapsch s.r.o., Bratislava | Member of advisory board | |
| Kapsch Immobilien GmbH | Member of managing board | |
| William Morton Llewellyn | n/a | n/a |
| Christian Windisch | n/a | n/a |
| Werner Dreschl | n/a | n/a |
The supervisory board has established an audit committee (Prüfungsausschuss) and a committee for managing board matters (Ausschuss für Vorstandsangelegenheiten).
The committee for managing board matters is responsible for the relationship between the company and the members of the managing board (including remuneration issues), except for the appointment or dismissal of members of the managing board. It consists of two members of the supervisory board elected by the shareholders' meeting, including the chairman of the supervisory board and two members appointed by the shareholders' meeting. The current members of the committee for managing board matters are Franz Semmernegg (chairman) and Kari Kapsch.
The audit committee has the responsibilities as set out in section 94 para 4a Stock Corporation Act (Aktiengesetz). These responsibilities include the review and preparation of the approval of the fi nancial statements and consolidated fi nancial statements, the review of the audit process and the auditor's independence, the preparation of a proposal for the distribution of profi ts and the preparation of a report to the annual shareholders' meeting. Furthermore, the audit committee prepares the proposal of the supervisory board for the auditor, reviews the accounting process and reviews the effectiveness of the internal control and the risk management system.
One member of the audit committee must be a fi nancial expert (Finanzexperte). Persons who were previously members of the managing board, executives, auditor or auditors of the company or persons having certifi ed the consolidated or unconsolidated fi nancial statements of the company within the last three years do not qualify as fi nancial expert and may not serve as chairman of the audit committee.
In addition to the members of the audit committee, the managing board and a representative of the auditor, if required by the chairman of the audit committee or required by law, attend the audit committee meetings. Other members of the supervisory board can be elected to the audit committee. The audit committee meets at least twice a year. The current members of the audit committee are Franz Semmernegg (chairman/Finanzexperte), Kari Kapsch and Werner Dreschl.
Supervisory board has established two committees
Committee for managing board matters
Audit committee
Franz Semmernegg, Chairman of the Supervisory Board
Vienna, 3 June 2009
Franz Semmernegg Chairman of the Supervisory Board
Commitment to corporate governance since June 2007 Corporate governance plays a key role for Kapsch Traffi cCom because close cooperation between the company's management and supervisory board is essential in order to safeguard shareholder interests. In June 2007, the managing and supervisory board resolved to apply the rules of the Code as far as they are consistent with the specifi c situation of the company. The evaluation of compliance with the Code is made by the compliance offi cer together with the internal audit on an annual basis.
Kapsch Traffi cCom has committed to compliance with the Austrian Code of Corporate Governance. Due to several legal and international changes, the Austrian Working Group on Corporate Governance approved a new version of the Code which is applicable to fi scal years commencing after 31 December 2008. Therefore, in respect of the most recent fi scal year the Code in its version of June 2007 was relevant and Kapsch Traffi cCom AG complied with the L-Rules and C-Rules of the Code in the version of June 2007, except for the following C-Rules: Corporate governance declaration
Rules 4. Due to the intense competition in the industry in which the company is active, it did not publish on its website any documents to be made available to shareholders at the company's registered offi ce or any motions by shareholders with an opportunity to download such documents. Exceptions for C-Rules
Rule 53. The company does not intend to establish criteria of independence different from the general requirement set forth in the Code as it believes that such additional criteria are not required.
Rule 54. The company has a member of the supervisory board elected by the shareholders' meeting who is independent of KAPSCH-Group Beteiligungs GmbH only since 10 July 2008.
Rule 60. The declaration to comply with the Code and annual statements of compliance will not be published on the company's website (but will be published in the annual report) as the company intends to limit information available on its website for the reasons set forth above.
Rule 65. Due to the intense competition in the industry in which the company is active, it will not make available to all shareholders (or publish on its website with an opportunity to download) all information it may make available to fi nancial analysts.
In 2008, stock exchanges were marked by the impact of the fi nancial crisis, which started out in mid-2007 in the U.S. subprime mortgage market and spread to European fi nancial markets in 2008. Numerous banks ran into fi nancial trouble and were in need of support or were kept alive by acquisitions. The resulting loss of confi dence also became noticeable on stock markets. The willingness of both private and institutional investors to take risks was waning, and worries about the future economic development and infl ationary concerns were also adversely impacting stock prices.
Accordingly, the year 2008 saw extremely strong price fl uctuations. It was not uncommon for major share indices such as the Dow Jones or the DAX to rise or fall by 10 percent in a single day. With a view at the full year, no single leading index closed higher at the end of the year, and some indices even lost more than 40 percent. The Austrian Traded Index ATX managed to stand its ground in the fi rst half 2008, still doing much better than the European benchmark Eurostoxx 50 index. However, the ATX dropped by more than 50 percent in the second half, while still recording high turnover. In 2008 the ATX dropped by 61.2 percent. At the end of 2008, the ATX closed at 1,750.83 points, which corresponds to the price level at the start of 2004.
In 2008, the price of the Kapsch Traffi cCom AG share developed in line with the Austrian stock market and international stock markets. The entire year 2008 saw great volatility in price movements and slumps in prices. In comparison with a price of EUR 31.82 as of the end of the fi scal year 2007/08 (31 March 2008), the share price throughout the year dropped by more than half and was at EUR 14.80 as of the end of the fi scal year 2008/09 (31 March 2009), which corresponds to a decline of 53.5 percent. Since the initial public offering on 26 June 2007, the price of the share has declined by 53.8 percent, as of 31 March 2009, whereas the ATX Prime was down by approximately 68.6 percent.
1 Offer price on 26 June 2007 and opening value for ATX Prime on 25 June 2007, each indexed to 100
Economic and political environment
Kapsch Traffi cCom AG share in fi scal year 2008/09
Closing price of EUR 14.80 per share with market capitalization of EUR 180.6 million
Based on a closing price of EUR 14.80 per share as of 31 March 2009 and the number of shares in circulation at 12.2 million, Kapsch Traffi cCom's market capitalization as of the end of the fi scal year 2008/09 was EUR 180.6 million. The average daily turnover of the Kapsch Traffi cCom AG share at the Vienna Stock Exchange was approximately EUR 0.3 million with approximately 12,900 shares (double count).
| Key Data | 2008/09 | 2007/08 | |
|---|---|---|---|
| Weighted average number of shares 1 | in million | 12.20 | 11.70 |
| Earnings per share | in EUR | 1.06 | 2.60 |
| Dividends per share | in EUR | 0.50 | 0.90 |
| Free cashfl ow per share | in EUR | 1.63 | -1.26 |
| Offer price per share 2 | in EUR | 32.00 | 32.00 |
| Share price at fi scal year-end 1 | in EUR | 14.80 | 31.82 |
| P/E ratio at fi scal year-end 1 | in EUR | 13.96 | 12.23 |
| Market capitalization 1 | in million EUR | 180.56 | 388.20 |
| Performance of share | in % | -53.49 | -0.56 |
| Performance of ATX Prime | in % | -68.63 | -26.00 |
| Average trading volume 3 | in million EUR in 1.000 shares |
0.30 12.88 |
1.49 41.39 |
1 as of 31 March
2 on 26 June 2007
3 double counting
Kapsch Traffi cCom AG's policy is to recommend a distribution of dividends in line with that of other companies that the managing board considers being the company's industry benchmark, which would currently be a payout ratio of approximately one third of its profi ts for the year. The timing and amount of such dividends, if any, will depend upon the company's future earnings and prospects, capital requirements resulting from projects and acquisitions and fi nancial condition and such other factors as the managing and supervisory boards of the company consider relevant, as well as the approval of the shareholders' meeting.
The company's ability to pay dividends is determined based on its unconsolidated fi nancial statements prepared in accordance with Austrian GAAP. There can be no assurance that any dividends will be paid or that, if paid, they will correspond to the policy described above.
Managing board will propose a dividend of EUR 0.50 per share The managing board will propose that the shareholders' meeting to be held on 24 June 2009 resolve a dividend of EUR 0.50 per share for fi scal year 2008/09 (2007/08: EUR 0.90 per share), representing a payout ratio of approximately 47 % (2007/08: approximately 35 %).
As of 31 March 2009, approximately 31.6 % of the shares were in free fl oat, whereas the remaining approximately 68.4 % were held by KAPSCH-Group Beteiligungs GmbH. As of 31 March 2009, no other shareholder held shares of Kapsch Traffi cCom conferring voting rights in excess of 5 %.
KAPSCH-Group According to information available to Kapsch Traffi cCom AG, the company has a widely diversifi ed shareholder structure. As part of the free fl oat, a majority of investors are institutional investors from Anglo-Saxon countries, the U.K. and Ireland (39.4 %) as well as North America (21.8 %). Given that KAPSCH-Group Beteiligungs GmbH as principal shareholder holds 68.4 % of the shares, the share of private investors totals 4.7 %, whereas 22.6 % are held by institutional investors (with the top ten in the aggregate holding 83 % of that share).
Institutional investors 22.6% Retail investors Others Professional investor relations have a high priority at Kapsch Traffi cCom. This function reports directly to the Chief Executive Offi cer, but its work is also integrated closely with the head of fi nance and administration. The goal of our investor relations activities is to provide a comprehensive view of the company, thereby facilitating an appropriate valuation of the Kapsch Traffi cCom share.
Kapsch Traffi cCom held several roadshows and participated in investor conferences in Europe and the U.S.A. during the past year. The CEO and the investor relations team met with numerous investors throughout the world and discussed the company as well as its development and strategy. The Kapsch Traffi cCom website represents an important means of communication, and provides a wide range of information on the company and the share.
The coverage of the company by reputable Austrian and international investment banks or research institutions maintains the visibility of the Kapsch Traffi cCom AG share in the fi nancial community. As of 31 March 2009, Kapsch Traffi cCom AG was covered by three analysts (in alphabetical order): Erste Bank (Vienna), GSC Research (Dusseldorf) and Sal. Oppenheim (Frankfurt/Cologne).
| Information on the Kapsch Traffi cCom share | |
|---|---|
| Investor Relations Offi cer | Marcus Handl |
| Shareholders' Telephone | +43 (0)50811 1120 |
| ir.kapschtraffi [email protected] | |
| Website | www.kapschtraffi c.com |
| Stock exchange | Vienna, Prime Market |
| ISIN | AT000KAPSCH9 |
| Trading Symbol | KTCG |
| Reuters | KTCG.VI |
| Bloomberg | KTCG AV |
Coverage by three investment banks or research institutions
Project: Santiago Urban Concessions
Customer: Kapsch Traffi cCom is main supplier of Multi-lane free-fl ow ETC-Systems for fi ve out of six urban concessions in Santiago de Chile. Technology: Multi-lane free-fl ow ETC-System OBUs: 1,330,000 units supplied Multi lanes: 63 MLFF gantries, 190 lanes
The Multi-lane free-fl ow ETC-system on the expressway ring road around Santiago de Chile is giving a powerful boost to the career of DJ Raff: he's standing on stage again, instead of sitting in traffi c.
Increasing traffi c means increasing ecological burdens as well as more traffi c delays and jams. Traffi c telematics solutions from Kapsch Traffi cCom provide fl owing traffi c and therefore work to sustainably counteract traffi c delays and jams. They also help to reduce or prevent economic damage and environmentally harmful emissions. And that delights not only DJ Raff, but also his audience.
| Road traffi c telematics market | Kapsch Traffi cCom currently addresses both the market for tolling systems as well as the intelligent transportation systems (ITS) market within the road traffi c telematics market. |
|---|---|
| Tolling systems | The tolling market is basically segmented according to the methods used for road user charging (RUC), the number of lanes allowed for the collection of tolls and the technology as well as the technology standard applied in the tolling system. |
| Three main methods for road user charging (RUC) currently exist: manual toll collection, automatic toll collection, and electronic toll collection (ETC). |
|
| Single-lane ETC systems or multi-lane free-fl ow (MLFF) ETC systems allow for the collection of tolls from vehicles equipped with an on-board unit (OBU) when driving through specifi cally designated lanes at toll plazas without requiring the vehicle to stop. Tolling data is processed electronically through communication between a transceiver and the transponder (OBU). |
|
| There are three main technologies used for road user charging worldwide: dedicated short range communication (DSRC), vehicle positioning systems (VPS) and automatic number plate recognition (ANPR) technology. |
|
| For DSRC-based systems, both the European CEN (Comité Européen de Normalisation) TC 278 Standard as well as the international ISO standard for electronic toll collection exist among others. |
|
| Intelligent transportation systems (ITS) | ITS – Intelligent Transportation Systems – cover a broad range of technical solutions intended to enhance transportation by improving mobility and increasing safety in road traffi c. Telematics – the combination of telecommunications and informatics – utilizes state of-the-art technologies to address transportation needs. |
| Kapsch Traffi cCom provides a comprehensive portfolio including incident detection systems, traffi c sensors as well as the telematics platform – a modular software system for implementing secondary telematics applications in the fi elds of traffi c planning, traffi c management, safety&security, end-user services as well as various industry solutions on basis of ETC systems. |
|
| ITS and telematic solutions help to improve safety on roads, support effi ciency in the use of the existing infrastructure and contribute toward reducing environmental pollution by controlling traffi c fl ows and managing traffi c volume. |
Kapsch Traffi cCom believes that the main drivers in the road traffi c telematics market primarily include the funding of road infrastructure projects, the reduction of congestion, the reduction of environmental pollution and the reduction of road accidents.
Funding of infrastructure projects. The growth in the number of vehicles requires additional fi nancing to construct new and maintain existing roads. Tolling offers a constant source of fi nancing and thus helps governments in providing fi nancing required for infrastructure projects. Effi cient tolling systems, in particular electronic toll collection (ETC) systems, offer a signifi cant, constant and sustainable source of additional funds for governments, public authorities and concessionaires, which can be used for the expansion and maintenance of road infrastructures. Such ETC systems may apply either to selected (mostly highways) up to all classes of roads (all-road tolling) as well as to selected (mostly heavy and light commercial vehicles) up to all classes of vehicles (all-vehicle tolling).
Reduction of congestion. Road user charging is largely perceived as an effective solution for reducing high levels of congestion particularly in metropolitan areas, as paying for road usage encourages carpooling or the use of public transportation, or to better allocate traffi c over time.
Reduction of environmental pollution. Efforts to reduce environmental pollution have become a market driver for the introduction of road user charging systems. Such systems encourage reduced or modifi ed vehicle usage and reduce the need to further expand the road network, resulting in reduced emissions and levels of pollution. Increases in tolls further encourage carpooling and the use of public transportation, and better allocate traffi c over time. Increases in traffi c and urban congestion necessarily result in higher levels of pollution of the air and noise. Effi cient tolling systems, in particular electronic toll collection (ETC) systems have a demonstrated ability to reduce environmental pollution and emissions of carbon dioxide by reducing congestion at toll plazas and not interfering with the traffi c fl ow. City charging/tolling systems also reduce the levels of congestion and environmental pollution.
Reduction of road accidents. Traffi c management systems are particularly expected to increase the probability to survive accidents and to decrease accident rates.
Our primary objective is to enhance our position as a leading international supplier of innovative road traffi c telematics solutions and as a provider of commercial operation services by focusing on the principal strategies set forth below:
Four main market drivers in the road traffi c telematics market
Funding of infrastructure projects
Reduction of congestion
Reduction of environment pollution
Reduction of road accidents
Business strategy of Kapsch Traffi cCom
ETC sytems generally consist of three main subsytems
Tolling systems
On-board units (OBU)
Enforcement system
Electronic toll collection (ETC) systems generally consist of three main subsystems: tolling system, enforcement system and central system.
Tolling systems. Kapsch Traffi cCom develops, integrates, implements, services and maintains road user charging systems and focuses on electronic toll collection (ETC) systems, in particular for the multi-lane free-fl ow (MLFF) of the traffi c, but also supplies single-lane ETC systems. In addition, the company supplies video-based automatic number plate recognition (ANPR) technology and manual and automatic toll collection systems.
Such systems can be nationwide truck tolling systems, like in Switzerland, Austria and the Czech Republic, as well as for road sections and for urban environments (city charging/ tolling systems).
As part of ETC systems, Kapsch Traffi cCom develops, integrates, implements, services and maintains enforcement systems and central systems.
Our current systems are based on microwave DSRC technology at a 5.8 GHz frequency. We design and develop the majority of the core technology (hardware and software) specifi cally created for our ETC applications and for electronic access systems as well as for vehicle identifi cation and classifi cation systems. Our roadside equipment (transceivers and other infrastructure equipment) and our OBUs are compliant with the current European CEN TC 278 standard for DSRC as well as with the international ISO standard for electronic toll collection.
In certain projects, we combine our own components with products from third-party suppliers to provide solutions tailored to specifi c project requirements.
In addition to the core microwave DSRC-based ETC systems, we offer "Kapsch Area", a hybrid system combining the advantages of DSRC-based technologies with the advantages of satellite-based technology. In "Kapsch Area", we use an OBU comprising both a DSRC and a GPS/GSM interface. The "Kapsch Area" OBU can be installed easily on the windscreen of the vehicle without any professional help. "Kapsch Area" uses microwave technology on highways and GPS/GSM for the lower level street network thereby facilitating all-road tolling. Components sales. Besides the delivery of systems, we also supply components independently from the entire systems to system integrators and road operators. The component supplies primarily include on-board units (OBUs), roadside infrastructure (such as transceivers), video cameras, and enforcement systems. Components are either manufactured by our subsidiary Kapsch Components KG in Vienna specializing in the production of core technology for ETC systems and electronic access systems or produced for us by third parties.
Operation. In many projects we are also responsible for the technical operation and maintenance of the system. Since 2005, we have also been offering commercial operation (such as the nationwide truck tolling system in the Czech Republic where we provide services in connection with the commercial operation).
Commercial operation services include the entire logistics of distributing OBUs, transaction processing, which deals with maintaining customer accounts, booking toll transactions and customer payments to the accounts, payment processing, handling customer inquiries and manual post-processing.
The commercial operation services utilize the central system, which we develop and implement through our subsidiary Kapsch Traffi cCom Argentina S.A. We offer commercial operation services through our subsidiary Kapsch Telematic Services GmbH (KTS) and through KTS's local subsidiaries.
Urban traffi c solutions. We develop, integrate, implement, service and maintain urban traffi c solutions, such as city charging/tolling systems, on-street parking systems as well as electronic access systems and charging systems for off-street parking areas.
Traffi c surveillance. We develop, design and supply road traffi c management systems, including traffi c safety and traffi c security systems as well as traffi c control systems. Our product portfolio includes vehicle identifi cation and classifi cation systems, hazardous goods management, video surveillance, congestion warning and vehicle, person and object tracking.
Others. Through our subsidiary Kapsch Components KG, we also provide engineering solutions, electronic manufacturing and logistics services to affi liated entities and thirdparty customers.
Urban traffi c solutions
Traffi c surveillance
Road Solution Projects (RSP)
Kapsch Traffi cCom categorizes its business into three segments. Road Solution Projects (RSP), Services, System Extensions, Components Sales (SEC), and Others (OTH).
Road Solution Projects (RSP). This segment shows projects with an aggregate volume in excess of EUR 3 million each including tolling systems and certain larger urban traffi c solution and traffi c surveillance systems. Generally, such systems are or will be awarded in tender processes by public authorities or private sector concessionaires. The tolling systems range from road section to nationwide tolling systems. In our RSP segment, we offer the development, design, integration and implementation of tolling and other road traffi c telematics systems thereby covering the entire value chain. The RSP segment is subject to one-time effects from the realization of new projects.
The RSP segment shows a signifi cant volatility in revenues and operating results from period to period resulting from the preparation for, the commencement and the subsequent installation phase of individual projects. The project nature of this segment results in signifi cant fl uctuations in revenues, cost of materials and other production services, staff costs as well as other operating expense and, in certain projects (such as the nationwide electronic truck tolling system in the Czech Republic), project fi nancing costs.
Services, System Extensions, Components Sales (SEC). Once a system is implemented, we are typically responsible for the technical operation and maintenance of the system. In addition, we supply supplemental equipment and components (such as OBUs and transceivers) for the extension as well as for the upgrade (such as the upgrade of manual to automatic toll collection) of existing systems. Phase II of the nationwide electronic truck tolling system in the Czech Republic has been recorded in the RSP segment. Since 2005, we also offer commercial operation of systems with all such activities resulting in recurring revenues being recorded in the SEC segment.
The SEC segment also includes projects of a smaller scale with an aggregate volume of less than EUR 3 million that are often not awarded pursuant to tender processes.
Our business in this segment is characterized by relatively stable revenue streams over a certain period, since these services are provided mainly based on medium- or long-term service and framework agreements. We expect to generate a continuous stream of revenues in this segment going forward through the services we offer in connection with the services rendered for the commercial operation of the nationwide electronic truck tolling system in the Czech Republic.
Services, System Extensions, Components Sales (SEC)
Others (OTH): The Others segment includes our non-core business activities conducted by our subsidiary Kapsch Components KG. In this segment, we offer engineering solutions, electronic manufacturing and logistics services to affi liated entities and third parties.
2,0 2,5 2.04 Total revenues in the fi scal year 2008/09 were EUR 200.3 million, an increase by 8 % compared to the previous fi scal year (fi scal year 2007/08: EUR 185.7 million, fi scal year 2006/07: EUR 198.6 million).
0,0 0,5 2006/07 2007/08 2008/09 Revenues generated by the Road Solution Projects (RSP) segment in the fi scal year 2008/09 were EUR 56.8 million, an increase of 21 % compared to the previous fi scal year (fi scal year 2007/08: EUR 47.0 million, fi scal year 2006/07: EUR 105.0 million). Top three markets in the RSP segment were the Czech Republic with EUR 40.5 million (or 66.4 %) as well as New Zealand with EUR 5.7 million (or 10.0 %) and Chile with EUR 4.8 million (or 8.5 %).
Others (OTH)
Revenues by Segment
-10 0 10 20 30 2006/07 2007/08 2008/09 0 28.4 in million EUR Revenues generated by the Services, System Extensions, Components Sales (SEC) segment in the fi scal year 2008/09 were EUR 135.6 million, an increase of 5 % compared to the previous fi scal year (fi scal year 2007/08: EUR 128.8 million, fi scal year 2006/07: EUR 80.6 million). Top three markets in SEC segment were the Czech Republic with EUR 53.7 million (or 41.7 %), Austria with EUR 30.7 million (or 22.6 %) and Australia with EUR 12.4 million (or 9.1 %).
Revenues generated by the Others (OTH) segment in the fi scal year 2008/09 were EUR 8.0 million, a decrease by 20 % compared to the previous fi scal year (fi scal year 2007/08: EUR 10.0 million, fi scal year 2006/07: EUR 13.0 million).
By geographic region, in the fi scal year 2008/09 70 % of revenues or EUR 139.3 million was generated in Central & Eastern Europe (incl. Austria), EUR 21.3 million (or 11 %) in Western Europe and EUR 14.0 million (or 7 %) in the Americas. EUR 25.6 million or 12 % of revenues were contributed by the rest of world.
By country, in the fi scal year 2008/09 47.0 % of revenues or EUR 94.2 million was generated in the Czech Republic, EUR 37.8 million (or 18.9 %) in Austria, EUR 16.9 million (or 8.4 %) in Australia, EUR 11.9 million (or 5.9 %) in Chile and EUR 39.5 million (or 19.7 %) were contributed by the rest of world.
Major tolling projects are generally awarded on the basis of tender processes
Major tolling projects (i.e., tolling projects with a volume in excess of EUR 3.0 million) and certain larger urban traffi c and traffi c surveillance projects are generally awarded on the basis of tender processes involving a number of bidders. The tender procedures for tolling projects do not follow one single pattern, but vary signifi cantly depending on type and size of the project, the road concessionaire or public authority issuing the invitation to tender and the geographical region.
The timing of completion of a project is very much dependent on its size and type. For instance, the installation of a nationwide system may take approximately nine to fi fteen months (completion of phase I of the nationwide electronic Czech truck tolling system took approximately nine months whereas the roll-out of the nationwide Austrian truck tolling system took approximately fi fteen months).
Markets and customers
More than 220 references in 36 countries
Nationwide truck tolling system in the Czech Republic
Kapsch Traffi cCom offers road traffi c telematics systems, products and services to customers in all fi ve continents. Our principal customers are public authorities and private sector concessionaires. Certain components, systems and solutions are also offered to system integrators.
In the past years, the company has completed three out of fi ve nationwide tolling projects tendered in Europe, either as general contractor or as supplier of infrastructure. With more than 220 installed tolling systems in 36 countries and with more than 14 million on-board units and nearly 12,000 equipped lanes, Kapsch Traffi cCom has positioned itself among the leading suppliers of ETC systems worldwide.
Nationwide truck tolling system in the Czech Republic. Following a public tender conducted by the Czech Ministry of Transport, in March 2006 a consortium led by Kapsch Traffi cCom AG was contracted as general contractor for the implementation of a nationwide DSRC-based MLFF ETC system for trucks in the Czech Republic and services in connection with the commercial operation of such system.
The completion schedule for the installation of the system is divided into two phases: Phase I comprises an ETC system covering approximately 1,000 km of motorways and freeways and has been in operation since 1 January 2007, the date agreed with the customer. Phase II comprises in particular the extension of the system to another approximately 1,000 km of future motorways, the construction or extension of which is scheduled to begin by the end of 2017. The services in connection with the technical and commercial operation of the system are provided through a Czech subsidiary. Until 31 March 2009, approximately 1,700 lanes were equipped and approximately 700,000 OBUs
were supplied and the project generated revenues of EUR 278.5 million EUR, thereof EUR 94.2 in the fiscal year 2008/09.
Nationwide truck tolling system in Austria. The nationwide MLFF ETC system for trucks in Austria commenced operation on 1 January 2004. In our capacity as general contractor, we were responsible for the design of the overall system concept, development and manufacture of the transponders (OBUs), the roadside infrastructure equipment (transceivers), the development of the system application software, system integration, implementation and commissioning, coordination of sub-suppliers and project roll-out. Until 31 March 2009, more than 3,500 lanes were equipped and approximately 1 million OBUs were supplied and the project generated revenues of EUR 367.5 million EUR, thereof EUR 30.5 million in the fi scal year 2008/09.
Projects in Santiago de Chile (Costanera Norte, Autopista Central and Vespucio Norte Express). Kapsch Traffi cCom implemented a MLFF ETC system in connection with three highway tolling projects in Santiago de Chile so far and delivered the equipment for vehicle detection and classifi cation (VDC) as well as for vehicle registration (VDR). These projects were awarded by the respective road concessionaires. All three ETC systems have already commenced operation. Until 31 March 2009, approximately 260 lanes were equipped and approximately 1.3 million OBUs were supplied. The project generated revenues of EUR 104.8 million EUR, thereof EUR 11.9 million in the fi scal year 2008/09.
Projects in Australia (Melbourne City Link, Western Sydney City Orbital and Eastlink in Melbourne). In 1999, Kapsch Traffi cCom implemented the world's fi rst MLFF ETC system for an urban motorway on Australia's largest municipal highway in Melbourne and delivered the equipment for vehicle detection and classifi cation (VDC) as well as for vehicle registration (VDR). The project was awarded by the road concessionaire. In January 2006, the MLFF ETC system and equipment for vehicle detection and classifi cation (VDC) as well as for vehicle registration (VDR) on the Western Sydney City Orbital commenced commercial operation. The project was awarded by the Transurban Infrastructure Development Pty. Ltd. In July 2005, Kapsch Traffi cCom was awarded the Eastlink project in Melbourne. In connection with this project, the company delivered a MLFF ETC system and the equipment for vehicle detection and classifi cation (VDC) as well as for vehicle registration (VDR). Until 31 March 2009, approximately 350 lanes were equipped and approximately 4.5 million OBUs were supplied. The projects generated revenues of EUR 118.8 million EUR, thereof EUR 16.9 million in the fi scal year 2008/09.
Project in New Zealand. New Zealand has decided to implement its fi rst ETC system in 2008. Kapsch Traffi cCom New Zealand Ltd. has been contracted to implement a MLFF ETC system. Until 31 March 2009, the project generated revenues of EUR 5.7 million EUR.
Nationwide truck tolling system in Austria
Projects in Santiago de Chile
Projects in Australia and New Zealand
Competence centers in Austria, Sweden, Argentina and U.S.A.
Research and development are a high priority
competitive advantage.
Kapsch Traffi c Com employed approximately 210 research and development engineers in the research and development activities, including project management for research projects, quality assurance and testing, documentation and certifi cation. Research and development activities and in particular the knowledge on as well as the application of newest technologies based on national and international standards, are a high priority for Kapsch Traffi cCom in light of its strategic objectives. Successful applied
research and development is the foundation for the constant improvement of existing products and systems and the continuous reduction of production, installation, operations and maintenance costs, all of which are essential for maintaining our technological and
Kapsch Traffi cCom has a network of research and development centers in Vienna (Austria), Jönköping (Sweden), Buenos Aires (Argentina) and Carlsbad (California, U.S.A.). The development centers are organized as competence centers. Research and development activities are being coordinated from the headquarters in Vienna. As of 31 March 2009,
0 5 10 15 20 25 2006/07 2007/08 2008/09 Project-specific development costs Recognized as an expense in million EUR 5.9 5.4 16.4 14.8 10.5 9.4 7.1 21.3 14.2 Development costs
Due to the fact that the competence centers cover all parts of the value chain from components to entire tolling systems and their interoperability, Kapsch Traffi cCom largely focuses its activities on new and innovative applications and applied research and development for all kinds of road telematics.
In the fi scal year 2008/09 approximately 33 % of the research and development activities were customer specifi c; the remaining 67 % were generic.
The research and development activities are supplemented in some areas by joint projects and close collaborations with universities, public and private institutions and research and technology companies.
Research and development costs for the fi scal year 2008/09 amounted to EUR 21.3 million (fi scal year 2008/09: EUR 14.8 million).
46 | Research and Development
We view our mission as consistently creating competitive advantages and benefi ts for our customers and partners while ensuring that we live up to our responsibility with regard to the environment. Our objective is global leadership in quality and innovation for traffi c telematic solutions.
Kapsch Traffi cCom wins over and retains customer confi dence through a keen focus on customer requirements. Kapsch Traffi cCom intends to achieve long-term partnerships with satisfi ed customers through optimized services. Kapsch Traffi cCom is committed to a permanent and integrated innovation process that lives up to its market position as a leading European innovator and secures this position over the long term.
Kapsch Traffi cCom seeks a leading role in the international benchmark of innovative companies. Within the "Best Innovator" award initiated by the consultant fi rm A. T. Kearney, with over 400 leading companies having participated so far, Kapsch Traffi cCom succeeded in the categories "Innovation strategy" as well as "Innovation process" and was awarded overall winner of the "Best Innovator 2008" campaign in Austria.
The quality processes of Kapsch Traffi cCom are based on ISO 9001 and fulfi l the requirements of the V-Model, a project management method for the identifi cation of an improvement requirement originally coming from the IT. The company follows an integrated management system for Health & Safety, Security, Environment and Quality (HSSEQ ), with quality certifi ed according to ISO 9001, environment certifi ed according to ISO 14001 and health & safety certifi ed according to OHSAS 18001. Kapsch Traffi cCom is also certifi ed for IT-Service-Management according to ISO 20000. All processes are documented in line with the norms and frequently audited.
An internal forum has been created within the improvement process for employees to actively contribute improvement suggestions. If feasible, these are implemented and premiums are awarded.
Innovation
Quality
The table below sets forth the allocation of employees within the Kapsch TrafficCom Group, each as of 31 March 2009, 2008 and 2007:
| Number of employees | 31 March 2009 | 31 March 2008 | 31 March 2007 |
|---|---|---|---|
| Breakdown by function | |||
| Road traffi c telematics | 785 | 647 | 553 |
| Manufacturing and logistics (Kapsch Components KG) |
161 | 177 | 221 |
| Total by function | 946 | 824 | 774 |
| Breakdown by region | |||
| Europe: | |||
| Austria | 519 | 497 | 475 |
| Sweden | 110 | 97 | 89 |
| Western Europe | 10 | 1 | 0 |
| Central and Eastern Europe (excluding Austria) | 148 | 128 | 108 |
| Latin America | 112 | 80 | 94 |
| Asia and Africa | 14 | 12 | 2 |
| Australia and New Zealand | 10 | 9 | 6 |
| U.S.A. | 23 | 0 | 0 |
| Total by region | 946 | 824 | 774 |
The average number of employees in the Kapsch TrafficCom Group in the fiscal year 2008/09 was 898, a 13.5 % increase against an average of 791 in the fiscal year 2007/08. As of 31 March 2009, 946 employees (884 salaried and 62 non-salaried) were employed.
Our management believes that the core corporate values – dynamism, respect, responsibility, family, discipline, performance, transparency and freedom – contribute to a good working environment. Corporate culture and values
Certain contributions are paid to an external pension fund for employees of Group entities in Austria under a defined contribution scheme, depending on the individual employee's income and the return on sales of the entity.
Kapsch TrafficCom is aware of the employees' contribution to its success and expresses this through an employee profit participation plan in which its employees participate in the profit of the Kapsch TrafficCom Group as a whole. The Kapsch TrafficCom Group rewards the commitment of its employees with a 5 % share in profit. Country-specific upper limits have been established to ensure that distribution is on par with purchasing power. Employee profi t participation
In a fi rm awareness of its corporate social responsibility, the Kapsch Group – organized through Kapsch AG – supports a wide range of art and cultural organizations and projects, selected educational initiatives and social activities.
Music. A key element of this commitment covers sponsoring activities related to the Vienna Concert Hall (Wiener Konzerthaus). This cultural institution has an excellent reputation far beyond Austria's borders. Kapsch has been the main sponsor of the Vienna Concert Hall since 1992. The "Modern Vienna" 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 less known artists is of particular concern to the Kapsch Group. Young domestic and international artists in particular are supported time and again by sponsorship campaigns. One example is the photo calendar in the "Art, Culture and Communication" series that Kapsch has supported since 1994. The calendar is presented annually in late fall in a private exhibition.
Sports. In the past year, Kapsch supported the sailor Norbert Sedlacek in the Vendée Globe 2008 regatta as partner and sponsor.
Educational institutions. As a company that is driven by technology and innovation, we are constantly interested in establishing contacts with the best talent in engineering at the earliest stage possible. For this reason, Kapsch Traffi cCom decided seven years ago to start an extensive Gold Partnership with the Vienna Technical University (Technikum Wien). Since 2005, the Kapsch Group has also supported "Universitäre Gründerservice Wien GmbH" which aims to support and accompany young entrepreneurs to implement ideas relating to key business concepts.
Social projects. Kapsch Traffi cCom takes pride in supporting selected social projects at home and abroad. Examples of the numerous projects include CliniClowns, St. Anna Children's Hospital and "wings for handicapped", as projects within Austria, and ICEP – the Institute for Cooperation in Development Projects – as a project abroad.
For employees. Supporting the employees of the Kapsch Traffi cCom Group when it comes to education and training has always been a key element in the corporate philosophy. In addition to technical training measures, Kapsch Traffi cCom also offers programs for the development of personal skills as part of the "Kapsch University".
Environment. Kapsch Traffi cCom already has valid quality and environmental certifi cates in line with ISO 14001. In the future, the Kapsch Traffi cCom Group will continue to increase its social involvement: it is particularly important to use environmental resources in an increasingly sustainable and responsible manner.
Corporate social responsibility
Project: City Access Control-System
Customer: City of Bologna Technology: SIRIO City Access Control-System Advantages: Decrease of traffi c and reduction of air pollution. Automatic Access Points: 23
The City Access Control system in Bologna only allows road users with the necessary licence to drive into the historic city centre. What's great is that Arturo the dog can now enjoy more space and less noise.
City Access Control systems such as the one in Bologna protect urban and historic city centres against excessive traffi c. The charges levied to drive into and park in the respective zone are used to direct traffi c, as well as creating revenue for expanding the public transport network and providing additional parking facilities. The consistent reduction of emissions and road noise results in a better quality of life. Something that Arturo and his owner can be really happy about.
The following chart shows the corporate structure with the major companies of the Kapsch Traffi cCom Group as of 31 March 2009:
| Premid, a.s. Slovakia |
|
|---|---|
| Kapsch Telematic Services Kft. Hungary |
|
| Kapsch Telematic Services SK s.r.o. Slovakia |
|
| Kapsch Telematic Services spol. s r.o. Czech Republic |
|
| Kapsch Telematic Services GmbH Deutschland Germany |
|
| Kapsch Traffi cCom France SAS France |
|
| Kapsch Traffi cCom Ltd. New Zealand |
|
| Kapsch Traffi cCom (M) Sdn Bhd Malaysia |
VTI Industrials Pty South Africa |
| Kapsch Traffi cCom South Africa (Pty) Ltd. South Africa |
|
| Kapsch Traffi cCom Australia Pty Ltd. Australia |
|
| Kapsch Traffi cCom Chile S.A. Chile |
DPS Automation Chile S.A. Chile |
| Kapsch Traffi cCom Inc. U.S.A. |
|
| Kapsch Traffi cCom U.S. Corp. U.S.A. |
|
Our Multi-lane free-fl ow ETC-system on the Öresundbridge linking Sweden and Denmark is already providing smooth toll transactions and is keeping the traffi c fl owing. In the near future, Iryna will also be able to use her on-board unit for the ferry crossing, to pay parking fees or simply to pay when fi lling up.
Project: Interoperable systems in Nordic Region
Locations: Öresund Bridge (Southern Sweden) and the Great Belt Bridge (Denmark)
Technology: ETC-Systems, Toll Bridge with Combitech Vehicle Detection and Classifi cation System
Advantages: Interoperability - one transponder for all operators, which can also be used for parking and for payment of gasoline in the future.
OBUs: 866,500 supplied in whole region
The beginning of the last fi scal year was marked by the ongoing fi nancial crisis. This crisis started in the U.S.A. and was triggered by the end of the real estate boom. Due to the worldwide distribution of securitized real estate loans in many portfolios, numerous banks outside the U.S.A. were also affected by massive depreciations, resulting in a global fi nancial crisis in which the banks subsequently lost confi dence in each other. Massive excesses on the commodity markets – especially in the price of crude oil – exacerbated this crisis. These warnings of scarce commodities and the associated infl ationary tendencies therefore required higher interest rates and tighter controls on the issuing of credit ensued. The crisis therefore gradually impacted the real economy in the second half of 2008 as uncertainty grew and investments declined. This also led to an abrupt decline in the prevailing infl ationary pressure as well as to a clear correction of commodity prices.
The international economy is now experiencing its worst crisis since the Great Depression of the 1930s, even if two events are not comparable. The U.S.A., Western Europe and Japan have since slid into recession and the rapidly growing People's Republic of China and the countries of Eastern Europe have also felt the full force of the crisis. Many producers around the world have thus come under pressure and have had to drastically cut their capacities, which has already had a negative impact on the labor market and is likely to worsen even further. This fall in demand was particularly noticeable early on in the automotive and automotive supplier industries, which led to massive problems around the world for companies in this leading sector.
Alongside the original catalyst – the overheating of the U.S. real estate market – other reasons for the severity of this global economic crisis are macroeconomic imbalances, fl aws in incentive systems, fl aws in risk management systems as well as regulatory and coordination failures.
Although national, regional and international economic policy – in complete contrast to previous crises – has tended to react correctly and has contributed measures to soften the impact of the crisis, the question of how long it will continue cannot be answered with any degree of certainty. In the meantime, a steady stream of reports of improved indicators, especially from the U.S.A., at least allows us to conclude that the pace of the recession is slowing. Nevertheless, both the timing and the speed of recovery in the real economy remain completely unknown. It can be assumed, however, that the crisis will have different durations for the stock market, production and employment and that the recovery will only take place gradually. Discussions on economic dynamism and long-term negative or positive social changes as a result of the crisis also appear speculative, albeit there is hope that necessary steps will be taken and lessons will be learned from the wrongdoings of individual persons.
The U.S.A. is currently in the midst of a crisis of historic size, in which more than 25 banks have already closed, millions of houses have been subject to foreclosure proceedings and the major car manufacturers are in serious risk of bankruptcy. The new U.S. government has therefore passed additional stimulus packages in addition to the unique action taken to rescue the fi nancial industry (banks, investment companies and insurance companies). The aim is to get the crisis under control and further stimulate the economy to avoid the loss of millions of jobs. Experts expect the unemployment rate to rise from 7.2 % (December 2008) to 9 %
in 2009. The battle against the crisis is naturally leading to a massive increase in the indebtedness of the United States' national fi nances. The defi cit for 2009 is expected to be around 13 % of GDP, or USD 1.8 trillion, and forecasts for the next few years also predict additional massive defi cits.
As a further measure to combat the crisis, the U.S. Federal Reserve reduced its prime interest rate to between 0 and 0.25 %; its lowest level ever. The U.S. dollar also refl ects developments in the real economy. In the summer of 2008, the Euro stood at USD 1.60; at the end of the fi scal year it stood at about USD 1.30, which of course was primarily due to the developing economic crisis in the Euro zone.
The People's Republic of China was also affected by the crisis in the second half of 2008, as its exports to the U.S.A. and Europe fell sharply. This prompted China to respond to the threat with an enormous stimulus package. Economic growth is expected to fall to between 5 and 6 % in 2009 – the country is expected to avoid the recession being experienced by Western industrialized nations.
Following the fi nancial crisis, which required the initiation of unprecedented bank rescue measures, Europe was also affected by the crisis in the real economy beginning in the second half of 2008. The economic forecasts have since been continuously adjusted downwards and they all predict a severe recession for 2009 in the meantime that can be traced to the sharp decline in exports, which in turn is causing manufacturing businesses to curb their investment activities. The collapse in growth is expected to be 5.4 % in Germany as the leading nation and as much as 9 % in Ireland. The ECB has since reduced the European prime interest rate to 1.0 %. The unemployment rate in the Euro zone is expected to rise to 9.9 % in 2009 and to as much as 11.5 % in 2010.
The implemented stimulus packages and rising unemployment numbers will in turn have a massive impact on national budgets. The latest forecasts predicted that only Finland, Luxembourg and Cyprus would stay below the defi cit limit of 3 % stipulated in the Maastricht Treaty. The levels for Germany are predicted to be 3.9 % for the current year and as much as 5.9 % for 2010.
In Eastern Europe, the growth rates of recent years (including 2008), which were far above those of Western Europe, are now anticipating a dramatic decline in 2009. Apart from the declines in the relatively large industrial sector (mainly contributed to by the close interrelationship with U.S.A. and Western European banks and companies), the countries of Central and Eastern Europe (CEE) also suffered a double hit due to their signifi cant fi nancing defi cits overseas. Experts assume, however, that GDP forecasts for this region are below potential and that most of the regional currencies are currently undervalued. To this extent, CEE countries, which exhibit only minor external fi nancing gaps in relation to GDP (Poland, Czech Republic, Turkey), can at least be viewed as neutral, while the currencies in countries such as Bulgaria, Ukraine, Hungary and the Baltic states should continue to be viewed with extreme caution.
While Austria posted growth in GDP in the fi rst three quarters of 2008, the economy fell into recession in the last quarter of 2008, resulting in GDP growth for the year of just 1.8 %. The global collapse in economic activity hampered the domestic export economy as well as industry. While export growth in 2007 was still far above 8 %, it was just 2.0 % in 2008 and could fall by 5 % in 2009. Growth in investments will also fall for the fi rst time in many years by 3 to 4 %, from +4.7 % in 2007 and +1.8 % in 2008. Sustained, albeit at a lower level, consumption by private households can currently be described as a small stabilizing factor. Pessimism and current or looming unemployment will probably lead to further tightening of the purse strings. During this phase, tax reform can help to avoid weak growth in private consumption from worsening even further.
Recent forecasts suggest that the stabilization originally expected in the second half of the year seems even less likely, as Austria is now expected to see a drop in growth of 4.0 % in 2009, which corresponds to the average rate of decline for the Euro zone as a whole. The Austrian economy is only expected to recover in 2010, with a slight fall in economic output of 0.1 %. The EU Commission expects the budget defi cit in Austria to rise from 4.2 % this year to as much as 5.3 % in 2010.
The phase of rising employment and falling unemployment also started to come to an end on the labor market in the second half of 2008. According to Eurostat, the unemployment rate in Austria accelerated to 5.0 % this year and is expected to reach as much as 5.8 % next year after 3.8 % in 2008. Infl ation is expected to remain at a low level in 2009 (1.1 %) and in 2010 (1.3 %).
According to analyses of the EU (European Union 2006, "Energy & Transport in Figures"), total freight traffi c increased by 2.8 % p.a. and in the aggregate by 31.3 % between 1995 and 2005. The rise in road freight traffi c amounted to 3.3 % p.a. and in the aggregate by 37.9 %. Despite political pressure, efforts to shift freight traffi c to rail and/or waterways failed.
For the TEN-V (Trans-European road Network), which in 2005 at a total length of 84,700 km accounted for approximately a quarter of the total primary road network, yet carried 40 % of the road freight traffi c, an average extension of 4,800 km p.a. is expected until 2020, 3,500 km of which are made up by existing roads. High investment requirements have been determined in particular for the new member states and the transport corridors to these countries. In its "White Paper: European transport policy for 2010" the European Commission estimated that investment costs until 2020 will amount to EUR 600 billion. The rising number of vehicles requires additional funds in order to maintain the existing infrastructure and expand it accordingly to meet the growing needs. The current economic crisis has also affected the area of infrastructure development and traffi c telematics. While expectations for growth in traffi c remain high in the long term, the recession led to a reduction of traffi c and as a result to a reduction of revenues.
Subject to individual requirements, satellite-based systems are used in addition to DSRC (dedicated short-range communication) based systems, which operates on the CEN 5.8 GHz standard. Considerable growth potential is also expected from the videobased automatic number plate recognition (ANPR) technology for the enforcement and road user charging/tolling of urban environments.
In urban environments, efforts are being made to reduce environmental pollution and traffi c through city charging/tolling systems. In particular, Italy is trying to counter the environmental pollution in the cities with automated access restrictions to the historic city centers.
The volume of traffi c is rising not only in Europe, but as a general trend worldwide. Particularly in Asian countries, increased demand for additional ETC lanes in previously traditional manual tolling systems is expected. With 3.38 million km in 2004, the road network in India ranks among the largest in the world. Only 2 % thereof account for national highways that, however, carry 40 % of the road freight traffi c. In China, 52,000 km of highways were constructed between 1992 and 2002 and an additional 200,000 km are being planned.
The high funding requirements for the maintenance of the road infrastructure in the U.S.A. (Standard & Poor's research estimates that until 2020 USD 92 billion would have to be spent each year for the maintenance of highways and bridges and an additional USD 125.6 billion for their improvement) will lead to changed business models and the emergence of private concession models in the near future. Whereas in Europe DSRC technology prevails, which operates in the 5.8 GHz range, ETC systems in North America currently operate at a frequency of 915 MHz based on proprietary protocols. It is expected that the U.S.A. will gradually switch to a frequency of 5.9 GHz. The communication standard 5.9 GHz WAVE (Wireless Access in the Vehicular Environment), apart from the tolling application, is designed to be used in car-to-car communication to improve traffi c safety, expand traffi c telematics solutions and for infotainment as well as entertainment. These developments will probably allow European manufacturers to increasingly penetrate the North American market.
Revenues were at EUR 200.3 million in fi scal year 2008/09, up 8 % compared to the same period of the previous fi scal year (EUR 185.7 million) even against the background of the currently diffi cult situation on the international fi nancial markets. The increase in revenues in the past fi scal year was driven by both large segments: Road Solution Projects (RSP) as well as Services, System Extensions, Components Sales (SEC) whereas the segment Others (OTH) declined compared to the previous year.
Kapsch Traffi cCom continued its expansion strategy. With the acquisition of all of the assets of the "Mobility Solutions" business unit of California-based TechnoCom Corporation and the incorporation of Kapsch Traffi cCom Holding Corp. as well as Kapsch Traffi cCom U.S. Corp., the company now owns a development and a project realization entity in the U.S.A. In the European market, Kapsch Traffi cCom strengthened its presence through the partnership with Busi Impianti S.p.A. and the establishment of the Kapsch-Busi joint venture in Italy. Kapsch-Busi S.p.A. willl focus on the market for city access control in Italy and achieved a fi rsttime success only a few months after its establishment with orders in Bergamo, Cremona and Torino. In addition, Kapsch Traffi cCom incorporated wholly-owned subsidiaries in Slovenia and Bulgaria for future projects. In Poland, Kapsch Traffi cCom acquired a 25 % stake in the newly established Autostrada Wschodnia Sp. z o.o.
On 16 January 2009, Kapsch Traffi cCom AG acquired 20.47 % of the outstanding shares in Q-Free ASA, a Norwegian company and competitor.
In the Czech Republic, road user charges are currently collected on around 1,000 km of highways and expressways and since 1 January 2008 on additional 200 km of expressways for all vehicles above 12 tons. Distance-related tolling is planned to be extended to all vehicles above 3.5 tons. In total, there are currently 378,000 OBUs in operation. In June 2008, the pilot installation for a satellite-based tolling system started operation and a telematics platform was implemented. Both systems are in pilot operation that is expected to last one year. The implementation of a traffi c management system was concluded in October 2008.
Average performance rates on high levels in the Czech Republic and in Austria resulted in bonus payments in the past fi scal year 2008/09.
Revenues in the RSP segment increased by 21 % to EUR 56.8 million compared to EUR 47.0 million in the same period of the previous fi scal year. The increase primarily resulted from the project realization in New Zealand and in the Czech Republic.
The SEC (Services, System Extensions, Components Sales) segment increased revenues by 5 % from EUR 128.8 million to EUR 135.6 million. This positive development was primarily attributable to recurring revenues from the services in connection with the technical and commercial operation of the nationwide electronic truck tolling system in the Czech Republic and an increase in the volume of components sales, particularly on-board units (OBUs). At more than 2.7 million, the total volume of OBUs delivered in fi scal year 2008/09 increased by more than 7 % compared with nearly 2.5 million units in the previous fi scal year. The increase in OBU sales mainly resulted from Austria, Australia, France and Greece.
| Revenue by segment (share in revenues) | 2008/09 | 2007/08 | +/- % | 2006/07 | ||||
|---|---|---|---|---|---|---|---|---|
| Road Solution Projects (RSP) | ||||||||
| Revenues | in million EUR | 56.8 | (28 %) | 47.0 | (25 %) | 21 % | 105.0 | (53 %) |
| EBIT | in million EUR | -1.7 | 6.3 | <-100 % | 11.6 | |||
| Services, System Extensions, Components Sales (SEC) | ||||||||
| Revenues | in million EUR | 135.6 | (68 %) | 128.8 | (69 %) | 5 % | 80.6 | (41 %) |
| EBIT | in million EUR | 31.7 | 29.1 | 9 % | 15.8 | |||
| Others (OTH) | ||||||||
| Revenues | in million EUR | 8.0 | (4 %) | 10.0 | (5 %) | -20 % | 13.0 | (7 %) |
| EBIT | in million EUR | -1.0 | -0.4 | <-100 % | -0.5 |
The revenue composition at a ratio of 28 % RSP to 68 % SEC in the fi scal year 2008/09 was similar to the previous year (25 % to 69 %).
| Revenue by region (share in revenues) | 2008/09 | 2007/08 | +/- % | 2006/07 | ||||
|---|---|---|---|---|---|---|---|---|
| Central- and Eastern Europe (incl. Austria) | in million EUR | 139.3 | (70 %) | 124.2 | (67 %) | 12 % | 157.3 | (79 %) |
| Western Europe | in million EUR | 21.3 | (11 %) | 17.6 | (9 %) | 21 % | 12.9 | (6 %) |
| Americas | in million EUR | 14.0 | (7 %) | 18.8 | (10 %) | -25 % | 15.4 | (8 %) |
| Rest of World | in million EUR | 25.6 | (12 %) | 25.2 | (14 %) | 2 % | 13.0 | (7 %) |
Revenues in CEE markedly increased compared to the previous fi scal year and represent approximately 70 % of total revenues. The increase in revenues in Western Europe largely results from the SEC segment and specifi cally from orders in France, Spain and Greece and from the joint venture in Italy. The reduction in revenues in Americas results from a project realization in Chile in the previous fi scal year.
In fi scal year 2008/09, EBIT declined by 17 % to EUR 29.0 million (2007/08: EUR 34.9 million). The EBIT margin was reduced from 18.8 % to 14.5 % and reached about the level of fi scal year 2006/07 (13.5 %). At EUR 78.1 million, cost of material and other production services remained nearly unchanged compared to the previous fi scal year although revenues increased. Staff costs increased by EUR 7.6 million and other operating expenses also increased by EUR 6.9 million compared to the previous fi scal year. Both increases are due to the increase of the headcount for the extension of capacity for future large projects, to the acquisitions or establishments of new companies in the U.S.A. and Italy and to the technical and commercial operation services for the nationwide electronic truck tolling system in the Czech Republic.
Due to a fi nancial result of EUR -7.1 million (2007/08: EUR 7.9 million) resulting from currency losses and the impairment of certain short-term fi nancial assets (securities), profi t before tax decreased to EUR 21.9 million (2007/08: EUR 42.8 million) and profi t after tax also decreased to EUR 16.4 million (2007/08: EUR 32.1 million).
In the past fi scal year, the balance sheet total of Kapsch Traffi cCom Group increased by 9 % from EUR 298.4 million to EUR 324.5 million. This increase primarily results from the change in short-term assets due to an increase of the inventories by EUR 8.5 million and an improvement of cash and cash equivalents by EUR 12.8 million. Within the non-current assets, property, plant and equipment increased by EUR 10.7 million due to the investment in production lines and the relocation of the companies in Vienna. The change in intangible assets mainly resulted from the acquisition of all of the assets of the "Mobility Solutions" business unit of TechnoCom Corporation and the newly formed joint venture Kapsch-Busi S.p.A. in Italy. The purchase of 20.47 % of the outstanding shares in Q-Free ASA led to an increase in the shares of associates to EUR 12.3 million. In contrast to this development, other non-current assets decreased by EUR 36.6 million due to the reduction of trade receivables in connection with the nationwide electronic tolling system in the Czech Republic.
On the liabilities side of the balance sheet, the increase of short-term liabilities refl ects the increase of the balance sheet total. Short-term fi nancial liabilities increased by EUR 31.8 million to EUR 49.2 million (31 March 2008: EUR 17.4 million) due to the fi nancing of acquisitions and the long-term agreement on credit lines in connection with the fi nancing in the Czech subsidiary. Kapsch Traffi cCom Group thus showed an equity ratio of 41.4 % as of the balance sheet date 31 March 2009 (31 March 2008: 44.7 %).
In the fi scal year 2008/09, the cashfl ow from operating activities could be improved to EUR 42.1 million (2007/08: EUR -10.5 million) due to a positive change in net current assets from EUR -72.4 million in the previous fi scal year to EUR -7.7 million in the fi scal year 2008/09.
Cashfl ow from investing activities was at EUR -44.8 million (2007/08: EUR -11.6 million) primarily due to acquisitions, to payments in connection with asset deals, to an increase of intangible assets and the purchase of tangible assets in connection with the relocation of the companies in Vienna as well as the expansion of the production.
Cashfl ow from fi nancing activities was at EUR 19.3 million (2007/08: EUR 47.6 million) due to the positive development of current fi nancial assets from EUR -4.3 million in the previous year to EUR 31.8 million in the fi scal year 2008/09. This development could not compensate the one-time effect of the IPO (EUR 65.8 million) in June 2007.
Cash and cash equivalents increased by EUR 12.8 million to EUR 60.2 million, as of 31 March 2009 (31 March 2008: EUR 47.4 million). Such cash and cash equivalents are available for further growth.
The toll transaction rate is a ratio for the accuracy and reliability of a tolling system. It shows the number of successful transactions in relation to all potential toll collection transactions of vehicles equipped with a functioning on-board unit (OBU). A high toll transaction rate translates to maximum toll revenue.
In 2008, the average toll transaction rate of the existing truck tolling system in Austria amounted to approximately 99.7 %, slightly above the year 2007. 1
During the same period, the average performance rate of the nationwide electronic tolling system in the Czech Republic (phase I) was approximately 98.2 %, up 0.7 % from the 97.5 % in 2007. 1
In the fi scal year 2008/09, the average number of personnel in the Kapsch Traffi cCom Group amounted to 898 persons. As of 31 March 2008, 946 persons were employed.
The Group places great importance on the continued training and education of its employees. In this context, not only is professional education and training promoted, but also seminars and training sessions for the development of one's own personality or ability to work in a team are offered. Within the framework of the Kapsch Academy, training sessions tailored to the particular needs of employees are offered. Selected employees are prepared for their future tasks by a management trainee program.
The Group has a job rotation program in place to promote the international exchange of staff between the various locations.
Depending on the years of service and profi ts, the company pays contributions for its employees to an external pension fund.
Furthermore, Kapsch Traffi cCom Group currently has a profi t participation program in place, by which the company provides its staff with the opportunity to share in the profi t of the Kapsch Traffi c Com Group.
Kapsch Traffi cCom AG is certifi ed pursuant to OHSAS 18001 for occupational health and safety and has implemented the necessary measures in its internal processes.
1 Calculation of the average performance rate is based on methodologies agreed with the respective; customer comparisons of average performance rates in different projects are therefore limited.
Valid certifi cates for quality pursuant to ISO 9001 and environment pursuant to ISO 14001 are in place. For the future, it is planned to meet the social responsibility to an even higher degree, in particular to use natural resources even more economically and responsibly.
Living up to its socio-political responsibility, the entire Kapsch Group supports – organized by Kapsch AG – a number of contemporary art and cultural institutions or projects and selected training initiatives, as well as extensive social measures. The company shows this attitude not only to the outside. Employees of Kapsch Traffi cCom Group also appreciate this sustained social responsibility of the company which is manifested in the form of many programs and measures.
As a technology company, Kapsch Traffi cCom Group operates in an ever changing environment. Risks are therefore part of its dayto-day business. Risk for the company means the possibility of divergence from company objectives; thus, the defi nition of risk includes positive (chances) as well as negative (risks) divergences from planned objectives.
Risk management has been positioned as a separate function within the fi nance department of Kapsch Traffi cCom AG. Under the responsibility of a central risk manager, risk management in institutionalized processes collects and analyses all relevant chances and risks of the Group's projects and provides the basis for the timely planning and implementation of control measures. It is planned to gradually develop risk management into a company-wide chance and risk management. 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 of the Group and the respective risk management measures are briefl y explained below:
A major portion of the revenues of Kapsch Traffi cCom Group is generated in the Road Solution Projects (RSP) segment. In this segment, the Group regularly participates in tenders for the implementation and operation of large electronic toll collection (ETC) systems. On the one hand, there is the risk that tenders in which the Group participates or plans to participate are delayed or withdrawn, e.g., as a result of political changes or appeals or legal actions by unsuccessful bidders. On the other hand, there is the risk that Kapsch Traffi cCom Group does not succeed with offers for new projects for technological, fi nancial, formal or other reasons. Follow-up revenues from maintenance agreements and from the technical operation also depend on the successful participation in tenders for systems.
The strategy of Kapsch Traffi cCom Group is aimed at reducing the volatility of sales/revenues through increased geographic diversifi cation and increased diversifi cation of the product portfolio as well as the sustained growth of the share of maintenance and operations.
In connection with the implementation of systems, Kapsch Traffi cCom Group most of the times is obliged by contract to issue performance guarantees. Since ETC systems are frequently sophisticated and technologically complex systems and have to be implemented within a short time frame, system and product defects can occur due to the limited time available for tests. In case the guaranteed performance levels are not achieved or deadlines exceeded, penalties usually have to be paid. A signifi cant delay in a project or failure to achieve guaranteed performance levels in a project would also reduce the chances of success in future tenders for systems.
Kapsch Traffi cCom Group applies risk management methods and risk management procedures in order to guard against risks associated with projects.
In numerous systems, the awarding authorities are public authorities. Framework and service contracts in connection with tolling projects may include terms and conditions which are not negotiable in a tender process and which may be disadvantageous for the Kapsch Traffi cCom Group. Moreover, in the case of long-term contracts, the margins earned can also differ from the original calculations due to changes in costs. Liabilities arising from contracts of the Group may include liabilities regarding customers' loss of profi t, product liabilities and other liabilities.
While Kapsch Traffi cCom Group aims to include appropriate limitations to its liability in contracts, there can, however, be no guarantee that suffi cient limitations to its liability are contained in all contracts or that they can be enforced under applicable law.
The leading market position of the Kapsch Traffi cCom Group is, to a large extent, based on its ability to develop state-of-the-art, effi cient and reliable systems, components and products. In order to maintain its technological leadership, the Kapsch Traffi cCom 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 the competitive position of the Kapsch Traffi cCom Group. Since its innovation leadership is, to a large degree, based on technology, the company's 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 default in protecting these technologies may have a negative impact on the competitive position of the Group. On the other hand, systems, components, products or services could infringe on intellectual property rights of third parties.
The Kapsch Traffi cCom Group places great importance on the protection of technologies and the company's internal know-how, e.g., by means of patents and non-disclosure agreements with other parties. In order to avoid legal action and court proceedings, the Kapsch Traffi cCom Group permanently monitors potential intellectual property rights infringements.
One of the strategic objectives of the Kapsch Traffi cCom Group is to grow internationally both organically and through selected acquisitions and joint ventures. In the implementation of this strategy, the Group acquired several companies worldwide and integrated them into the Group. However, a number of challenges remain in connection with this growth strategy and it cannot be guaranteed that the objectives and synergies will be fully reached in all future acquisitions and joint ventures.
The Group maintains branches, offi ces and subsidiaries in several countries outside the Euro zone. A considerable part of revenues and costs is not denominated in Euro, but in the currencies of the respective foreign companies. Although the Group, if required, aims to hedge the net currency position of the individual contract, currency fl uctuations may result in losses from changes in exchange rates in the consolidated fi nancial statements (transaction risk). In addition, risks arise from the translation of foreign separate fi nancial statements into the group currency, the euro (translation risk). Changes in exchange rates may also result in a change in the competitive position of Kapsch Traffi cCom Group.
Under project fi nancing, variable interest rates are also regularly entered into, which are tied to market interest rates (Euribor, Pribor etc.). In this context, the Kapsch Traffi cCom Group is exposed to interest rate risks. The Kapsch Traffi cCom Group hedges against interest rate risks, if material, through appropriate fi nancial instruments.
The success of the Kapsch Traffi cCom Group depends heavily on key personnel with long years of experience in the traffi c telematics industry. Moreover, in the current strong growth phase of the Group, its ability to recruit qualifi ed staff and, to integrate them into the company and retain them in the long term is crucial. The loss of key personnel, any problems with personnel and diffi culties in the recruitment of personnel may adversely affect the success of the Group.
Kapsch Traffi cCom Group has implemented a number of measures to deal with personnel risks, such as incentive schemes, training opportunities, etc. In addition, employees were offered shares at a preferential price in the initial public offering under an employee participation program. A considerable number of employees made use of this opportunity.
The market for ETC systems is infl uenced by numerous statutory provisions at the EU level and at the level of national legislation.
As a technology group, the Kapsch Traffi cCom Group is exposed to typical IT risks relating to security, confi dentiality and availability of data. For this reason, Kapsch Traffi cCom AG has implemented an IT risk management system set according to the corporate risk and IT security application method (CRISAM) and has been certifi ed pursuant to ISO 27001 (Information Security Management).
From a current perspective, no risks have been identifi ed that could endanger the going concern of the Kapsch Traffi cCom Group. Increasing geographic diversifi cation, the diversifi cation of its product portfolio, together with a rising portion of recurring revenues (further growth of the Services, System Extensions, Components Sales segment) are planned to further reduce risk concentrations in the future.
Kapsch Traffi cCom has a network of research and development centers in Vienna (Austria), Jönköping (Sweden), Buenos Aires (Argentina) and Carlsbad (California, U.S.A.). The research and development centers are organized as competence centers. Research and development activities are being coordinated from the headquarters in Vienna. As of 31 March 2009, Kapsch Traffi c Com employed approximately 210 research and development engineers in its research and development activities, including project management for research projects, quality assurance and testing, documentation and certifi cation (as of 31 March 2008: approximately 170).
Research and development activities and in particular the knowledge on as well as the application of newest technologies based on national and international standards, are a high priority for Kapsch Traffi cCom in light of its business development and support to enter new markets. The current focus is on countries, such as the U.S.A., South Africa and India. In order to meet the high expectation of the market, especially to address the rising demand of time-to-market, research and development activities are often accompanied by acquisitions. The acquisition of the assets of the "Mobility Solutions" business unit of TechnoCom Corporation, resulted in an extension of the research and development centers.
Kapsch Traffi cCom focuses its activities primarily on new, innovative applications and applied research and development for all kinds of telematics solutions. The research and development activities in some areas are complemented by joint projects and close cooperation with universities, public and private institutes and technology and research companies.
Successful research and development is the foundation for the sustained improvement of existing products and systems and the continuous reduction of production, installation, operations and maintenance costs, all of which are essential for maintaining our technological and competitive advantage.
Research costs are recognized as expense. The same applies to development costs, unless IFRS criteria for the recognition as intangible assets are satisfi ed. As the income statement is presented by nature of expense, research and development costs are recognized in various items of the income statement, in particular under cost of material and other production services, staff costs and other operating expenses.
With the fi scal year 2009/10 in mind, the company takes an optimistic long-term view on its markets even in a changed economic environment. The fi scal year 2009/10 will be shaped by participation in tenders and by project awards in Hungary, Slovenia, France, Portugal, South Africa, and in the U.S.A.
On 9 April 2009, Kapsch Traffi cCom AG acquired 19 % of the shares of Brisa Internacional, SGPS, S.A., Sao Domingos da Rana, in Kapsch Telematic Services GmbH for a purchase price of EUR 2.3 million. In addition, another 7 % of the shares in Kapsch Telematic Services GmbH were acquired indirectly through acquisition of BRISA ACCESS Europe GmbH, Vienna, for a purchase price of EUR 1.9 million.
On 7 April 2009, Kapsch Traffi cCom Kazakhstan LLC, Astana, was incorporated as a wholly-owned subsidiary of Kapsch Traffi cCom AG in Kazakhstan.
Vienna, 15 May 2009
Georg Kapsch Erwin Toplak
Chief Executive Offi cer Chief Operating Offi cer
Statement of all Members of the Management Board pursuant to Section 82 Para. 4 No. 3 BörseG (Austrian Stock Exchange Act)
As members of the Board we hereby declare to the best of our knowledge that the consolidated fi nancial statements give a true and fair view of the assets, liabilities, fi nancial position and profi t 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 the group faces.
Vienna, 15 May 2009
Georg Kapsch Erwin Toplak
Chief Executive Offi cer Chief Operating Offi cer
| all amounts in EUR Note |
2008/09 | 2007/08 |
|---|---|---|
| Continuing Operations | ||
| Revenue (1) |
200,281,637 | 185,734,678 |
| Other operating income (2) |
2,612,709 | 5,194,394 |
| Changes in fi nished and unfi nished goods and work in progress (3) |
4,656,943 | 6,667,081 |
| Other own work capitalized | 145,729 | 0 |
| Cost of materials and other production services (4) |
-78,143,939 | -78,647,198 |
| Staff costs (5) |
-54,637,097 | -46,969,222 |
| Amortization of intangible assets and depreciation of property, plant and equipment (6) |
-6,031,349 | -4,092,312 |
| Other operating expenses (7) |
-39,882,867 | -32,967,747 |
| Operating result | 29,001,766 | 34,919,674 |
| Finance income (8) |
12,076,245 | 13,898,949 |
| Finance costs (8) |
-19,211,633 | -6,009,417 |
| Financial result (8) |
-7,135,388 | 7,889,532 |
| Result from associates (13) |
0 | -51,152 |
| Profi t before income taxes | 21,866,378 | 42,758,054 |
| Income taxes (9) |
-5,498,770 | -10,698,610 |
| Profi t for the year | 16,367,608 | 32,059,444 |
| Attributable to: | ||
| Equity holders of the company | 12,976,941 | 30,412,759 |
| Minority interests | 3,390,667 | 1,646,685 |
| 16,367,608 | 32,059,444 | |
| Earnings per share from the profi t for the year attributable to the equity holders of the company (in EUR per share) (31) |
1.06 | 2.60 |
| all amounts in EUR Note |
2008/09 | 2007/08 |
|---|---|---|
| ASSETS | ||
| Non-current assets | ||
| Property, plant and equipment (11) |
16,886,895 | 6,191,728 |
| Intangible assets (12) |
26,089,490 | 8,593,152 |
| Shares in associates (13) |
12,302,472 | 0 |
| Other non-current fi nancial assets and investments (14) |
3,784,450 | 3,405,449 |
| Other non-current assets (15) |
18,423,234 | 55,005,342 |
| Deferred tax assets – due from tax group leader (22) |
1,300,938 | 2,399,361 |
| Deferred tax assets – non-tax group (22) |
6,940,884 | 4,880,464 |
| 85,728,363 | 80,475,496 | |
| Current assets | ||
| Inventories (16) |
34,219,784 | 25,734,379 |
| Trade receivables and other current assets (17) |
140,408,909 | 135,837,086 |
| Other current fi nancial assets (14) |
3,945,728 | 8,895,252 |
| Cash and cash equivalents (18) |
60,229,653 | 47,428,544 |
| 238,804,074 | 217,895,261 | |
| Total assets | 324,532,437 | 298,370,757 |
| EQUITY | ||
| Capital and reserves attributable to equity holders of the company | ||
| Share capital (19) |
12,200,000 | 12,200,000 |
| Capital reserve | 70,077,111 | 70,077,111 |
| Currency translation differences | -3,809,749 | 220,011 |
| Fair value valuation reserve (20) |
-145,873 | -971,375 |
| Consolidated retained earnings and other reserves | 51,724,779 | 49,727,838 |
| 130,046,268 | 131,253,585 | |
| Minority interests | 4,193,524 | 2,123,011 |
| Total equity | 134,239,792 | 133,376,596 |
| LIABILITIES | ||
| Non-current liabilities | ||
| Non-current fi nancial liabilities (21) |
10,060,250 | 10,581,243 |
| Liabilities from post-employment benefi ts to employees (23) |
14,214,016 | 14,088,937 |
| Non-current provisions (26) |
524,042 | 1,693,548 |
| Other non-current liabilities (24) |
14,773,324 | 26,149,682 |
| Deferred income tax liabilities – due to tax group leader (22) |
1,653,383 | 1,607,668 |
| Deferred income tax liabilities – non-tax group (22) |
217,025 | 447,171 |
| 41,442,040 | 54,568,249 | |
| Current liabilities | ||
| Trade and other current payables | 56,253,018 | 39,049,926 |
| Other liabilities and deferred income (25) |
25,316,061 | 29,485,680 |
| Current tax payables | 7,449,143 | 6,258,677 |
| Current fi nancial liabilities (21) |
49,209,541 | 17,381,784 |
| Current provisions (26) |
10,622,842 | 18,249,845 |
| 148,850,605 | 110,425,912 | |
| Total liabilities | 190,292,645 | 164,994,161 |
| Total equity and liabilities | 324,532,437 | 298,370,757 |
| all amounts in EUR | |||||||
|---|---|---|---|---|---|---|---|
| Attributable to equity holders of the company | Minority interests | Total equity | |||||
| Share capital | Capital reserve | Currency translation differences |
Fair value reserve |
Consolidated retained earnings and other reserves |
|||
| Carrying amount as of 31 March 2007 |
10,000,000 | 5,325,259 | 914,309 | -114,371 | 29,130,494 | 339,556 | 45,595,247 |
| Currency translation differences | 0 | 0 | -694,298 | 0 | 0 | 136,770 | -557,528 |
| Fair value gains/losses realized | 0 | 0 | 0 | -51,817 | 0 | 0 | -51,817 |
| Fair value gains/losses (net of tax) | 0 | 0 | 0 | -805,187 | 0 | 0 | -805,187 |
| Net income/expense recognized directly in equity |
0 | 0 | -694,298 | -857,004 | 0 | 136,770 | -1,414,532 |
| Capital increase from initial public offering |
2,200,000 | 0 | 0 | 0 | 0 | 0 | 2,200,000 |
| Premium from initial public offering less expenses relating to the initial public offering |
0 | 64,751,852 | 0 | 0 | 0 | 0 | 64,751,852 |
| Effects of business combinations | 0 | 0 | 0 | 0 | 184,585 | 0 | 184,585 |
| Dividend for 2006/07 | 0 | 0 | 0 | 0 | -10,000,000 | 0 | -10,000,000 |
| Profi t for the year | 0 | 0 | 0 | 0 | 30,412,759 | 1,646,685 | 32,059,444 |
| Carrying amount as of 31 March 2008 |
12,200,000 | 70,077,111 | 220,011 | -971,375 | 49,727,838 | 2,123,011 | 133,376,596 |
| Currency translation differences | 0 | 0 | -4,029,760 | 0 | 0 | -262,136 | -4,291,896 |
| Fair value gains/losses realized | 0 | 0 | 0 | 1,003,795 | 0 | 0 | 1,003,795 |
| Fair value gains/losses (net of tax) | 0 | 0 | 0 | -178,292 | 0 | 0 | -178,292 |
| Net income/expense recognized directly in equity |
0 | 0 | -4,029,760 | 825,503 | 0 | -262,136 | -3,466,393 |
| Dividend for 2007/08 | 0 | 0 | 0 | 0 | -10,980,000 | -1,058,019 | -12,038,019 |
| Profi t for the year | 0 | 0 | 0 | 0 | 12,976,941 | 3,390,667 | 16,367,608 |
| Carrying amount as of 31 March 2009 |
12,200,000 | 70,077,111 | -3,809,749 | -145,872 | 51,724,779 | 4,193,523 | 134,239,792 |
| all amounts in EUR Note |
2008/09 | 2007/08 |
|---|---|---|
| Cash fl ow from operating activities | ||
| Operating result | 29,001,765 | 34,919,674 |
| Adjustments for non-cash items and other reconciliations: | ||
| Depreciation and amortization (6) |
6,031,349 | 4,092,312 |
| Increase/decrease in obligations for post-employment benefi ts (23) |
125,079 | -463,451 |
| Change in other non-current liabilities and provisions (24) |
-39,109 | 9,141 |
| Increase in trade receivables (non-current) (15) |
36,613,599 | 26,679,092 |
| Increase in trade payables (non-current) (24) |
-11,376,358 | -663,820 |
| Other (net) | -3,479,570 | 6,364,155 |
| 56,876,755 | 70,937,103 | |
| Changes in net current assets: | ||
| Increase/decrease in trade receivables and other assets (17) |
-4,571,823 | -59,810,410 |
| Increase/decrease in inventories (16) |
-8,485,405 | -5,834,616 |
| Increase/decrease in trade payables and other current payables | 13,033,471 | -10,615,016 |
| Increase/decrease in current provisions (26) |
-7,627,003 | 3,848,830 |
| -7,650,760 | -72,411,212 | |
| Cash fl ow from operations | 49,225,995 | -1,474,109 |
| Interest received (8) |
2,025,158 | 2,082,913 |
| Interest payments (8) |
-3,698,830 | -3,940,442 |
| Net payments of income taxes | -5,454,731 | -7,445,292 |
| Net cash fl ow from operating activities – continuing operations | 42,097,592 | -10,776,930 |
| Net cash fl ow from operating activities – discontinued operations (30) |
0 | 257,992 |
| Net cash fl ow from operating activities – total | 42,097,592 | -10,518,938 |
| all amounts in EUR | Note | 31 March 2009 | 31 March 2008 |
|---|---|---|---|
| Cash fl ow from investing activities | |||
| Purchase of property, plant and equipment | (11) | -17,542,971 | -3,441,286 |
| Purchase of non-current intangible assets | (12) | -4,687,266 | -582,231 |
| Purchase of securities and investments | (14) | -383,060 | -30,548,455 |
| Payments for acquisition of companies (net of cash acquired) | (28) | -11,570,796 | -74,790 |
| Payments for the acquisition of shares in companies consolidated at equity | (13) | -12,302,472 | 0 |
| Proceeds from the sale of shares in subsidiaries | 0 | 1,090,909 | |
| Proceeds from the disposal of property, plant and equipment and intangible assets | 1,703,650 | 1,156,499 | |
| Proceeds from the sale of securities | 13,358 | 20,800,756 | |
| Net cash fl ow from investing activities – continuing operations | -44,769,557 | -11,598,598 | |
| Net cash fl ow from investing activities – discontinued operations | (30) | 0 | 0 |
| Net cash fl ow from investing activities – total | -44,769,557 | -11,598,598 | |
| Cash fl ow from fi nancing activities | |||
| Contributions from shareholders | 0 | 65,802,469 | |
| Dividends paid to company shareholders | (8) | -12,038,019 | -13,500,000 |
| Increase/decrease in other non-current fi nancial liabilities | (8) | -520,993 | 758,684 |
| Increase/decrease in current fi nancial liabilities | (21) | 31,827,758 | -4,275,183 |
| Net cash fl ow from fi nancing activities – continuing operations | 19,268,746 | 48,785,970 | |
| Net cash fl ow from fi nancing activities – discontinued operations | (30) | 0 | -1,166,666 |
| Net cash fl ow from fi nancing activities – total | 19,268,746 | 47,619,304 | |
| Net decrease/increase in cash and cash equivalents | 16,596,781 | 25,501,768 | |
| Change in cash and cash equivalents | |||
| Cash and cash equivalents at beginning of year | (18) | 47,428,544 | 20,183,189 |
| Net decrease/increase in cash and cash equivalents | 16,596,781 | 25,501,768 | |
| Exchange gains/losses on cash and cash equivalents | -3,795,672 | 1,743,507 | |
| Cash and cash equivalents at end of year | (18) | 60,229,653 | 47,428,544 |
Kapsch Traffi cCom Group is an international supplier of innovative road traffi c telematics solutions.
The business activities of the Kapsch Traffi cCom Group are subdivided into the following three segments:
The Road Solution Projects segment relates to the installation of road traffi c telematics solutions.
The Services, System Extensions, Components Sales segment relates to the sale of services (maintenance and operation) and components in the area of road traffi c telematics solutions.
The Others segment relates to non-core business activities conducted by Kapsch Components KG. In this segment, Kapsch Traffi cCom Group offers engineering solutions, electronic manufacturing and logistics services to affi liated entities and third parties.
Effective as of March 8, 2007, the Group disposed of signifi cantly all of its railway communication business that was previously included in the Services, System Extensions, Components Sales segment. In accordance with IFRS 5, the result (all revenues and costs) attributable to the disposed railway communication business in the periods under review is shown as "discontinued operations".
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 Traffi cCom AG. Under an initial public offering in June 2007 KAPSCH-Group Beteiligungs GmbH reduced its share in Kapsch Traffi cCom AG to 69.67 %. In the fi scal year ending 31 March 2009 this share was further reduced to 68.42 % as a result of changes in share ownership.
The parent company, Kapsch Traffi cCom AG, is a joint stock corporation incorporated and domiciled in Vienna, Austria. The address of its registered offi ce is A-1120 Vienna, Am Europlatz 2. Since 26 June 2007 the shares of the parent company have been listed in the Prime Market segment of the Vienna Stock Exchange.
The following subsidiaries are part of the consolidated group:
Kapsch Telematic Services GmbH, Vienna
Kapsch Telematic Services GmbH, Germany
The principal accounting policies applied in the preparation of these consolidated fi nancial statements are set out below:
Pursuant to § 245a UGB the consolidated fi nancial statements as of 31 March 2009 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU). Presentation currency is the Euro (EUR). The consolidated fi nancial statements as of 31 March 2009 are prepared under the historical cost convention, with the exception of available-for-sale securities and derivative fi nancial instruments, which are measured at fair value at the balance sheet date.
The preparation of the consolidated fi nancial statements in conformity with IFRS requires the use of estimates and assumptions which infl uence 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 Management Board to the best of their knowledge and are based on current transactions, actual fi gures may differ from these estimates. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are material to the consolidated fi nancial statements are disclosed in Note 21.
IAS 39 (Amendment), "Financial instruments: Recognition and measurement" and IFRS 7 "Financial instruments: Disclosures" – Reclassifi cation of fi nancial assets (effective from 1 July 2008). The application of this amendment does not have an impact on the consolidated fi nancial statements, since the company did not apply the reclassifi cation option.
IFRS 8 "Operating segments" (mandatory for accounting periods beginning on or after 1 January 2009). IFRS 8 replaces IAS 14 and results from the comparison of IAS 14 "Segment reporting" and the requirements of the U.S.A. Standard SFAS 131, "Disclosures about segments of an enterprise and related information". The new standard requires a "management approach", under which segment information is presented on the same basis as that used for internal reporting purposes of management. The company will adopt IFRS 8 "Operating segments" for accounting periods beginning on or after 1 April 2009. The Group's management assumes that the current primary segments will become the reporting segments according to IFRS.
IFRIC 11 "IFRS 2 – Group and treasury share transactions" was adopted by the European Union in June 2007 and is mandatory for accounting periods beginning on or after 1 March 2008. IFRIC 11 provides guidance on whether share-based transactions involving treasury shares or involving group entities should be accounted for as equity-settled or cash-settled share-based payment transactions in the stand-alone accounts of the parent and group companies. This interpretation will not have an impact on the company's consolidated fi nancial statements.
IFRIC 13 "Customer loyalty programmes" (mandatory for accounting periods beginning on or after 1 January 2009). IFRIC 13 is not applied by the company, since the business processes of the company do not include any customer loyalty programmes.
IFRIC 14 "IAS 19 – The limit on a defi ned benefi t asset, minimum funding requirements and their interaction" (mandatory for accounting periods beginning on or after 1 January 2009). This interpretation is not expected to have an impact on the company's consolidated fi nancial statements.
IFRS 1 (Revised), "First-time adoption of IFRS" and IAS 27 (Amendments) "Consolidated and separate fi nancial statements" – Cost of an investment in a subsidiary in the separate fi nancial statements of a parent on fi rst-time adoption of IFRS (mandatory for accounting periods beginning on or after 1 January 2009). The amendment does not have an impact on the consolidated fi nancial statements of the company.
IAS 1 (Amendment), "Presentation of fi nancial statements" replaces the existing IAS 1 (mandatory for accounting periods beginning on or after 1 January 2009). The company will apply IAS 1 (Amendment) for the accounting period beginning on 1 April 2009.
IFRS 2 (Amendment), "Share-based payment" (mandatory for accounting periods beginning on or after 1 January 2009). This amendment does not have an impact on the consolidated fi nancial statements of the company.
IAS 23 (Amendment), "Borrowing costs" (mandatory for accounting periods beginning on or after 1 January 2009). The company currently does not have any qualifying assets requiring the capitalization of borrowing costs.
IAS 32 (Amendment), "Financial instruments: Presentation" and IAS 1 (Amendment) "Presentation of fi nancial statements" – "Puttable fi nancial instruments and obligations arising on liquidation" (the "Amendment"). The company will adopt these amendments in the accounting period beginning on 1 April 2009.
IFRIC 12 "Service concession arrangements" (mandatory for accounting periods beginning on or after 1 January 2008). IFRIC 12 is not relevant to the company's operations, since it does not operate in the public sector.
Under the annual improvements project of the IASB a total of 20 standards were amended in May 2008. The amendments included the following:
IFRS 5 (Amendment), "Non-current assets held for sale and discontinued operations" and consequential amendment to IFRS 1 "First-time adoption of International Financial Reporting Standards" – Plan to dispose of shares in a subsidiary, which results in the loss of control (mandatory for accounting periods beginning on or after 1 July 2009). The company will apply these amendments for accounting periods beginning on or after 1 April 2009.
IAS 23 (Amendment), "Borrowing costs" (mandatory for accounting periods beginning on or after 1 January 2009) – Components of borrowing costs. The company currently does not have any qualifying assets requiring the capitalization of borrowing costs.
IAS 16 (Amendment), "Property, plant and equipment" (mandatory for accounting periods beginning on or after 1 January 2009).
The company will apply the amendments in the accounting period beginning on 1 April 2009.
IAS 19 (Amendment), "Employee benefi ts" (mandatory for accounting periods beginning on or after 1 January 2009).
The company will apply these amendments in the accounting period beginning on 1 April 2009.
IAS 20 (Amendment), "Accounting for government grants and disclosure of government assistance" (mandatory for accounting periods beginning on or after 1 January 2009) – Accounting for below-market rate government loans. The company will apply these amendments prospectively in the accounting period beginning on 1 April 2009.
IAS 27 (Amendment), "Consolidated and separate fi nancial statements" – Measurement of subsidiaries held for sale in the separate fi nancial statements of the parent company (mandatory for accounting periods beginning on or after 1 January 2009). The amendment does not have an impact on the consolidated fi nancial statements.
IAS 28 (Amendment), "Investments in associates" (mandatory for accounting periods beginning on or after 1 January 2009).
The company will apply these amendments in the accounting period beginning on 1 April 2009.
IAS 29 (Amendment), "Financial reporting in hyperinfl ationary economies" (mandatory for accounting periods beginning on or after 1 January 2009) – Description of the measurement basis in fi nancial statements. The amendment does not have an impact on the consolidated fi nancial statements.
IAS 36 (Amendment), "Impairment of assets" (mandatory for accounting periods beginning on or after 1 January 2009) – Disclosures in the notes on the determination of the recoverable amount based on the FVLCTS. The company will apply these amendments in the accounting period beginning on 1 April 2009.
IAS 38 (Amendment), "Intangible assets" (mandatory for accounting periods beginning on or after 1 January 2009).
The amendment does not have an impact on the consolidated fi nancial statements.
IAS 39 (Amendment), "Financial instruments: Recognition and Measurement" (mandatory for accounting periods beginning on or after 1 January 2009).
The company will apply these amendments in the accounting period beginning on 1 April 2009.
IAS 40 (Amendment), "Investment property" (mandatory for accounting periods beginning on or after 1 January 2009).
The amendment does not have an impact on the consolidated fi nancial statements.
IAS 41 (Amendments) "Agriculture" (mandatory for accounting periods beginning on or after 1 January 2009).
The amendments do not have an impact on the consolidated fi nancial statements.
The following amendments to standards (mandatory for accounting periods beginning on or after 1 January 2009) under the IASB's improvements project of May 2008 relate to changes in wording or editing, which have no or only insignifi cant effects on accounting:
The amendments do not have an impact on the consolidated fi nancial statements.
c) Standards, interpretationen and amendments to published standards not yet adopted by the European Union The following standards, interpretations and amendments have already been published, but not yet adopted by the European Union:
IFRS 3 (Revised) "Business combinations" and IAS 27 (Amendments) "Consolidated and separate fi nancial statements" (mandatory for accounting periods beginning on or after 1 July 2009). In case of future business combinations that fall under the scope of this standard, the company will apply the amended standards for accounting periods beginning on or after 1 July 2009.
IFRS 1 (Amendment) "First-time adoption of International Financial Reporting Standards" (mandatory for accounting periods beginning on or after 1 January 2009). The adoption of this amendment does not have an impact on the consolidated fi nancial statements of the company.
IAS 39 (Amendment) "Financial instruments: Recognition and measurement" – permissible underlying transactions under hedging relationships (revised July 2008 – mandatory for accounting periods beginning on or after 1 July 2009). The adoption of this amendment to the standard will not have an impact on the consolidated fi nancial statements of the company.
IFRIC 15 "Agreements for construction of real estates" (mandatory for accounting periods beginning on or after 1 January 2009). The adoption of this interpretation does not have an impact on the consolidated fi nancial statements of the company.
IFRIC 16 "Hedges of a net investment in a foreign operation" (mandatory for accounting periods beginning on or after 1 October, 2008). The adoption of this interpretation will not have an impact on the consolidated fi nancial statements of the company.
IFRIC 17 "Distributions of non-cash assets to owners" (mandatory for accounting periods beginning on or after 1 July 2009). The adoption of this interpretation does not have an impact on the consolidated fi nancial statements of the company.
IFRIC 18 "Transfers of assets from customers" (mandatory for accounting periods beginning on or after 1 July 2009). The adoption of this interpretation does not have an impact on the consolidated fi nancial statements of the company.
Amendments to IFRIC 9 "Reassessment of embedded derivatives" and IAS 39 "Financial instruments: Recognition and measurement" – Embedded derivatives (mandatory for accounting periods beginning on or after 1 July 2009). The adoption of this interpretation does not have an impact on the consolidated fi nancial statements of the company.
IFRS 7 (Amendment) "Financial instruments: Disclosures" – Improvement of the presentation of disclosures on fi nancial instruments (mandatory for accounting periods beginning on or after 1 January 2009). The amendments provide for additional disclosures on the measurement of fi nancial instruments at fair value and on the liquidity risks. The impact expected from this amendment cannot yet be assessed reliably.
IAS 39 (Amendment) "Financial instruments: Recognition and measurement" – Reclassifi cation of fi nancial assets: Effective date and transitional provisions (mandatory for accounting periods beginning on or after 1 January 2009). The amendment clarifi es the effective date, the previous application and the transition. The amendment does not have an impact on the consolidated fi nancial statements.
The consolidated fi nancial statements of Kapsch Traffi cCom AG as of 31 March 2009 prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU and with section 245a (1) of the Austrian Commercial Code (UGB) have been translated into English. In case of different interpretations the German original is valid.
The adoption of these amendments is not expected to have a material impact on the consolidated fi nancial statements of the company.
The consolidated fi nancial statements were prepared by the management board on the undersigned date and released for publication. The entity fi nancial statements of the parent company, which have been included in the consolidated fi nancial statements after transition to the applicable accounting standards, have not yet been approved by the supervisory board. The supervisory board and, in the event of presentation to the general meeting of shareholders, the general meeting of shareholders could amend the entity fi nancial statements in a way that might affect the presentation of the consolidated fi nancial stataments.
Subsidiaries are entities in which the Group has a direct or indirect shareholding of more than one half of the voting rights or over which it otherwise has the power to govern the fi nancial and operating policies. Such subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. All intra-group balances and transactions are eliminated. Accounting policies of subsidiaries are changed where necessary to ensure consistency with the policies adopted by the Group.
The Group applies a policy of treating transactions with minority interests as transactions with equity owners of the Group. For purchases from minority interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is deducted from equity. Gains or losses on disposals to minority interests are also recorded in equity. For disposals to minority interests, differences between any proceeds received and the relevant share of minority interests are also recorded in equity.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus the costs directly attributable to the acquisition. Identifi able assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group's share of the identifi able net assets acquired is recorded as goodwill and disclosed under intangible assets. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the income statement.
Goodwill is tested annually for impairment, as well as when there are indications of impairment. If an impairment requirement is identifi ed, goodwill will be 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 benefi t from the business combination in which the goodwill arose.
Associates are accounted for by the equity method. Associates are companies in which the group has signifi cant infl uence, but not control, generally accompanied by shareholding of between 20 % and 50 % of the voting rights The Group's share of its associates' post-acquisition profi ts or losses is recognized in the income statement 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.
Signifi cant 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.
Intra-group receivables and payables, income, expenses and intercompany results, if any, are eliminated unless they are deemed immaterial for the presentation of the Group's net assets, fi nancial situation and profi tability.
In accordance with IAS 21, fi nancial statements of foreign subsidiaries which are included in the consolidated fi nancial statements are translated as follows:
Income statements of foreign subsidiaries 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 income statement as part of the gain or loss on disposal of shares in foreign entities.
Goodwill and fair value write-ups arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at 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 income statement. Non-cash items in the balance sheet are translated at historical exchange rates, non-cash items which were recognized at their lower net realizable value are translated at the exchange rate prevailing at the time of measurement.
Material fi nancial instruments presented in the balance sheet include "cash and cash equivalents", "securities", "fi nancial 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 fi nancial risks, particularly foreign exchange risk, interest rate risk and credit risk. The Group's risk management focuses on the unpredictability of fi nancial markets and seeks to minimize potential adverse effects on the Group's fi nancial performance. The Group does not employ hedge accounting as envisaged by IAS 39.
Foreign exchange risk is the risk arising from fl uctuations in the value of fi nancial instruments, other balance sheet items (e. g. receivables and payables) and/or cash fl ows due to exchange rate fl uctuations. 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. Customer orders are invoiced mainly in the respective local currencies of the group companies. Only in case the Group expects to be exposed to signifi cant foreign exchange risk, major orders denominated in foreign currencies are hedged by forward foreign exchange contracts.
If the exchange rate of the stated currencies as of 31 March 2009 (31 March 2008) had changed by the percentage rate ("volatility") stated below, the profi ts before tax, provided all other variables had remained unchanged, would have been higher or lower, respectively, by the following amounts.
| Currency | Volatility | Hypothetical impact on result in TEUR | ||||
|---|---|---|---|---|---|---|
| 2008/09 | 2007/08 | |||||
| CZK | 10 % | 1,895 | 8,022 | |||
| SEK | 10 % | 102 | 38 | |||
| USD | 10 % | 201 | 0 |
Interest rate risk is the risk arising from fl uctuations in the value of fi nancial instruments, other balance sheet items (e. g. receivables and payables) and/or cash fl ows due to fl uctuations in the market interest rates.
For fi xed-interest balance sheet items, the risk comprises the present value risk. In case the market rate for the fi nancial instrument fl uctuates, either a profi t or a loss may result if the fi nancial instrument is sold prior to maturity.
For variable-interest balance sheet items, the risk relates to the cash fl ow. With variable-interest fi nancial 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) fi nancial liabilities account for the major part of fi nancial interest balance sheet items. If the market interest rate had been 100 basis points higher (lower) as of 31 March 2009, 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 fi nancial derivatives were used.
As part of the Group's risk management policy, the Group only deals with recognized creditworthy third parties, 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 fi nancial institution, depending on the rating of the institution.
Prudent liquidity risk management shall involve securing the availability of suffi cient cash and cash equivalents as well as the possibility of funding through the availability of adequate credit lines. Providing for adequate liquidity is statutory 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, on the one hand, include 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) includes non-current and current fi nancial liabilities less cash and cash equivalents, bank balances and current securities.
| in TEUR | 2008/09 | 2007/08 |
|---|---|---|
| Non-current fi nancial liabilities | 10,060 | 10,581 |
| Current fi nancial liabilities | 49,210 | 17,382 |
| Total fi nancial liabilities | 59,270 | 27,963 |
| Cash on hand and at banks | 60,230 | 47,429 |
| Current securities | 3,946 | 8,895 |
| Net assets | 5,042 | 28,361 |
| Equity | 134,240 | 133,377 |
| Net gearing | n/a | n/a |
At the balance sheet date 31 March 2009, mainly due to the initial public offering carried out in 2007, the company had net assets (excess of cash and cash equivalents, bank balances and current securities over fi nancial liabilities) so that the net gearing cannot be calculated. The net assets are retained with regard to planned acquisitions and the fi nancing of future projects.
Research expenditure is recognized as an expense as 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 fulfi lled:
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.
Development assets 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. The carrying amount of each intangible asset is tested for impairment when a triggering event occurs.
Financial assets recognized under non-current assets and other short-term fi nancial assets include available-for-sale securities only. Available-for-sale securities are carried at fair value. Unrealized gains and losses arising from the changes in fair value are recognized in equity under a separate item.
The difference arising on the sale of fi nancial assets between the proceeds and the carrying amounts is taken through profi t or loss. Additionally, the amount recognized in equity is taken through profi t or loss. All acquisitions and sales are recognized at the respective date of the transaction; transaction costs are included in acquisition costs.
At each balance sheet date the group assesses whether there is objective evidence of impairment of each signifi cant individual fi nancial asset or group of fi nancial 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 profi t 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 fl ows.
If in subsequent periods the fair value of the impaired fi nancial instruments increases and that increase can be directly related to an event occurring after the impairment was recognized in profi t or loss, the group reverses the impairment loss. In case of debt instruments the reversal is recognized in profi t or loss, in 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 fi nancial asset or a group of fi nancial assets is impaired.
Derivative instruments do not qualify for hedge accounting and are accounted for at fair value through profi t or loss. Changes in the fair value of these derivative fi nancial instruments are recognized immediately in the income statement within other gains/ (losses) – net.
Property, plant and equipment is 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 offi ce 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 where separate cash fl ows are identifi able.
The difference between the proceeds from the sale of property, plant and equipment and their carrying amount is taken through profi t 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 fi nance 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 or shorter lease term, if applicable. 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 signifi cant portion of the risks and rewards of ownership are retained by the lessor are classifi ed as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement 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 profi t 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 profi t 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 fi nished goods and work in progress comprises design costs, raw materials, direct labor, other direct costs and related production overheads (based on normal operating capacity). It 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 profi table, 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 profi t 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 provision for impairment. A provision for impairment of trade receivables 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 provision is the difference between the asset's carrying amount and the present value of estimated future cash fl ows, discounted at the effective interest rate. The amount of the provision is recognized in the income statement.
For the presentation of the cash fl ow 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 fi nancial liabilities.
Provisions are set up when the Group has a present legal or constructive obligation to third parties as a result of past events, it is probable that an outfl ow 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 fl aws, serial and systems 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, replacement deliveries or rebates. A provision is recognized for the best estimate of the costs of defects to be rectifi ed under the warranty for products sold before the balance sheet date.
The Group provides various post-employment benefi ts to employees and other long-term benefi ts either based on individual agreements or in accordance with local labor law provisions.
For the calculation of liabilities arising from pension obligations and severance payments in accordance with IAS 19 the projected unit credit method is used. According to this method, post-employment costs for employee benefi ts are recognized in the income statement in such a way that scheduled costs are spread over the employees' years of service on the basis of an expert opinion by a qualifi ed actuary, who completely remeasures the schemes annually. The obligation for pension payments and severance payments is calculated as the present value of future benefi ts using an interest rate based on the average yield on industrial bonds of the same maturity. Actuarial gains and losses exceeding the corridor (= up to 10 % of benefi t obligation or 10 % of plan assets, if any, at beginning of period) are charged to the income statement over the average remaining service of the active staff.
Contributions paid by the Group under a defi ned contribution pension scheme are charged to the income statement 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 similarly to the calculation for liabilities arising of severance payments, however without taking the corridor method into consideration.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated fi nancial statements. However, if the deferred income tax 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 profi t or loss, it is not accounted for. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially 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 profi t 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 benefi ts, other post-employment benefi ts, differences regarding the measurement of receivables and payables and tax loss carry-forwards.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, 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.
In March 2005, the major Austrian group companies of the entire Kapsch Group formed a tax group according to Sec. 9 of the Austrian Corporate Income Tax Act. The group taxation regime applies for the respective entities effective from the tax year 2005 (i.e. fi scal year 2004/2005). Tax group leader is KAPSCH-Group Beteiligungs GmbH, the parent of this group. Principally, this entity is the only entity which has tax receivables or tax liabilities. Tax group members, such as the Austrian companies in the Kapsch Traffi cCom Group, merely refl ect receivables or liabilities with the tax group leader and not with tax authorities. Any tax loss incurred by a member of the tax group prior to the effective date of the tax group is not available for utilization by the leader of the tax group. Such tax losses are only available for utilization against future taxable income by the entity in which they initially arose.
Accordingly, deferred taxes arising in entities which are members of the tax group and where the right of set-off of taxable income and losses exists are shown as "deferred tax assets – due from group leader" or "deferred tax liabilities – due to group leader". Those deferred tax effects arising in periods prior to the formation of the tax group or representing tax losses from periods prior to the formation of the tax group are shown as deferred tax assets or deferred tax liabilities.
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. Borrowings are subsequently stated at amortized cost using the effective interest rate method; borrowing costs are charged to the income statement 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 confi rmed 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 suffi cient reliability or an outfl ow of resources to settle the obligations is not deemed probable).
The Group discloses contingent liabilities unless the possibility of an outfl ow of resources embodying economic benefi ts is remote, but – in accordance with IFRS – fails to recognize them.
In accordance with IAS 18 revenue is recognized in the income statement upon delivery when the signifi cant 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, by reference to completion of the specifi c transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided.
Revenue for construction contracts 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 defi nition, rarely equal the related actual results.
In particular estimates and assumptions regarding revenue recognition have a signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fi scal 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 profi t 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 fi nal results should deviate by 10 % from estimates. The analysis of assumptions made in the past as well as of actual profi t mark-ups showed that the estimates had been reliable up to now.
Further areas where assumptions and estimates are signifi cant to the consolidated fi nancial statements include capitalized goodwill, inventories, deferred taxes 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 fi nal outcomes were to differ by 10 % from the estimates made.
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns which are different from those of other business segments.
A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns which are different from those of segments operating in other economic environments.
Figures in the disclosure notes are presented in euro thousands (TEUR) unless otherwise stated.
The Group reports three main business segments (see section "General Information"):
The segment results for the fi scal year ended 31 March 2009 are as follows (in EUR million):
| Road Solution Projects |
Services, System Extensions, Components Sales |
Others | Consolidated Group | |
|---|---|---|---|---|
| Revenue | 56.8 | 135.6 | 8.0 | 200.3 |
| Operating result | -1.7 | 31.7 | -1.0 | 29.0 |
| Results from associates | 0.0 | |||
| Financial result | -7.1 | |||
| Profi t before income taxes | 21.9 | |||
| Income taxes | -5.5 | |||
| Profi t for the year | 16.4 | |||
| Profi t attributable to minority interests | 3.4 | |||
| Consolidated profi t | 13.0 |
The segment results for the fi scal year ended 31 March 2008 are as follows (in EUR million):
| Road Solution Projects |
Services, System Extensions, Components Sales |
Others | Consolidated Group | |
|---|---|---|---|---|
| Revenue | 47.0 | 128.8 | 10.0 | 185.7 |
| Operating result | 6.3 | 29.1 | -0.4 | 34.9 |
| Results from associates | -0.1 | |||
| Financial result | 7.9 | |||
| Profi t before income taxes | 42.8 | |||
| Income taxes | -10.7 | |||
| Profi t for the year | 32.1 | |||
| Profi t attributable to minority interests | 1.6 | |||
| Consolidated profi t | 30.4 |
Inter-segment transfers or transactions are entered into under normal commercial terms and conditions that would also be available to unrelated third parties.
The segment assets and liabilities as of 31 March 2009 and capital expenditure, depreciation and amortization and other non-casheffective expenses from continuing operations for the period then ended are as follows (in EUR million):
| Road Solution Projects |
Services, System Extensions, Components Sales |
Others | Consolidated Group | |
|---|---|---|---|---|
| Assets | 133.7 | 94.7 | 8.0 | 236.4 |
| Investments in associates | 12.3 | 12.3 | ||
| Unallocated assets | 75.9 | |||
| Total assets | 133.7 | 107.3 | 8.0 | 324.5 |
| Liabilities | 67.2 | 44.3 | 16.7 | 128.2 |
| Unallocated liabilities | 62.0 | |||
| Total liabilities | 190.3 | |||
| Capital expenditure | 1.6 | 17.1 | 1.1 | 19.8 |
| Depreciation and amortization | 1.7 | 3.9 | 0.4 | 6.0 |
| Other non-cash-effective expenses | 0.0 | 0.1 | 0.0 | 0.2 |
The segment assets and liabilities as of 31 March 2008 and capital expenditure, depreciation and amortization and other non-casheffective expenses from continuing operations for the period then ended are as follows (in EUR million):
| Road Solution Projects |
Services, System Extensions, Components Sales |
Others | Consolidated Group | |
|---|---|---|---|---|
| Assets | 144.2 | 79.3 | 7.9 | 231.4 |
| Unallocated assets | 67.0 | |||
| Total assets | 298.4 | |||
| Liabilities | 54.5 | 63.4 | 17.1 | 135.0 |
| Unallocated liabilities | 30.0 | |||
| Total liabilities | 165.0 | |||
| Capital expenditure | 0.2 | 4.3 | 0.5 | 4.9 |
| Depreciation and amortization | 0.4 | 3.1 | 0.6 | 4.1 |
| Other non-cash-effective expenses | 0.1 | 0.3 | 0.0 | 0.4 |
Secondary segment reporting is based on geographical regions. Revenues are segmented by customer location and asset-related fi gures by the company's own location:
The fi gures for the fi scal year ended 31 March 2009 are as follows (in EUR million):
| Western Europe | Central and Eastern Europe |
Americas | Rest of World | Consolidated Group | |
|---|---|---|---|---|---|
| Revenues | 21.3 | 139.3 | 14.0 | 25.6 | 200.3 |
| Assets | 46.7 | 257.0 | 18.2 | 2.6 | 324.5 |
| Capital expenditure | 0.7 | 17.2 | 1.9 | 0.1 | 19.8 |
The fi gures for the fi scal year ended 31 March 2008 are as follows (in EUR million):
| Western Europe | Central and Eastern Europe |
Americas | Rest of World | Consolidated Group | |
|---|---|---|---|---|---|
| Revenues | 17.6 | 124.2 | 18.8 | 25.2 | 185.7 |
| Assets | 43.2 | 247.5 | 4.5 | 3.2 | 298.4 |
| Capital expenditure | 0.6 | 3.4 | 0.1 | 0.8 | 4.9 |
Austria is included in the region "Central and Eastern Europe". The region "Americas" includes North- and South-America, the region "Rest of World" includes Asia, Australia and Africa.
| 2008/09 | 2007/08 | |
|---|---|---|
| Income from the sale of non-current assets | 5 | 25 |
| Income from costs recharged | 0 | 2,741 |
| Income from subsidies and government grants | 2,368 | 2,197 |
| Other | 239 | 231 |
| 2,613 | 5,194 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Change in unfi nished goods and work in progress | -7,534 | 8,320 |
| Change in fi nished goods | 12,191 | -1,653 |
| 4,657 | 6,667 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Cost of materials | 25,972 | 32,939 |
| Cost of purchased services | 52,172 | 45,708 |
| 78,144 | 78,647 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Wages | 2,483 | 2,258 |
| Salaries and other remunerations | 38,431 | 33,060 |
| Expenses for social security and payroll-related taxes and contributions | 11,842 | 9,995 |
| Expenses for termination benefi ts (see Note 23) | 641 | 498 |
| Expenses for pensions (see Note 23) | 485 | 474 |
| Contributions to pension funds and other external funds (see Note 23) | 164 | 116 |
| Fringe benefi ts | 592 | 569 |
| 54,637 | 46,969 |
As of 31 March 2009 the number of staff amounted to 946 persons (31 March 2008: 824 persons) and averaged 898 persons in the fi scal year 2008/09 (2007/08: 791).
| 2008/09 | 2007/08 | |
|---|---|---|
| Depreciation of property, plant and equipment | 3,587 | 2,286 |
| Amortization of other intangible assets | 1,789 | 1,437 |
| Expenses from low-value assets written-off | 665 | 369 |
| 6,031 | 4,092 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Rental expenses | 5,391 | 3,671 |
| Legal and consulting fees | 10,319 | 9,222 |
| Impairment of receivables | 103 | 307 |
| Marketing and advertising expenses | 7,629 | 3,595 |
| Travel expenses | 4,251 | 2,859 |
| Maintenance | 1,860 | 1,409 |
| Communication and IT expenses | 3,176 | 2,343 |
| Training costs | 638 | 575 |
| Losses on disposal of non-current assets | 56 | 93 |
| Insurance costs | 835 | 694 |
| Licence and patent expenses | 1,241 | 1,156 |
| Offi ce expenses | 818 | 394 |
| Taxes and charges | 461 | 404 |
| Adjustment provision for warranties | -1,646 | -28 |
| Commissions and other fees | 1,528 | 3,751 |
| Transport costs | 981 | 625 |
| Automobile expenses | 1,495 | 1,113 |
| Other | 748 | 785 |
| 39,883 | 32,968 |
The item "Other" includes membership dues and bank charges as well as other administrative and selling expenses.
| 2008/09 | 2007/08 | |
|---|---|---|
| Interest and similar income: | ||
| Interest income from bank deposits and loans granted | 1,757 | 1,697 |
| Income from securities | 269 | 386 |
| Income from interest accretion of long-term receivables | 3,790 | 3,278 |
| Gains from the disposal of fi nancial assets | 13 | 1,113 |
| Income from currency hedging | 611 | 0 |
| Currency translation differences | 5,637 | 7,425 |
| 12,076 | 13,899 | |
| Interest and similar expenses: | ||
| Interest expense | -3,699 | -3,917 |
| Expense from interest accretion of long-term payables | -1,277 | -999 |
| Losses on disposals and write-down of fi nancial assets, investments and securities | -84 | -23 |
| Impairment of available-for-sale securities | -4,950 | 0 |
| Expenses from currency hedging | -2,121 | 0 |
| Currency translation differences | -7,081 | -1,070 |
| -19,212 | -6,009 | |
| -7,135 | 7,890 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Current tax expense | -6,748 | -7,942 |
| Deferred tax expense from offsetting the costs of the initial public offering against capital reserves | 0 | -1,149 |
| Deferred tax assets/liabilities (see Note 22) | 1,249 | -1,608 |
| Total | -5,499 | -10,699 |
| Thereof income/(expense) from group taxation | 1,309 | -27 |
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:
| 2008/09 | 2007/08 | |
|---|---|---|
| Profi t before income taxes – continuing and discontinued operations | 21,866 | 42,758 |
| Arithmetic tax income/(expense) based on a tax rate of 25 % (2007/08: 25 %) | -5,467 | -10,689 |
| Unrecognized deferred tax assets on current losses | -773 | 0 |
| Different foreign tax rates | 625 | -558 |
| Tax allowances claimed and other permanent tax differences | -23 | 748 |
| Expenses not subject to tax and other differences | 93 | -200 |
| Recognized tax income/(expense) | -5,499 | -10,699 |
For further information on deferred tax assets and liabilities see Note 22.
| 2008/09 | 2007/08 | |
|---|---|---|
| Available-for-sale fi nancial assets | ||
| Other non-current fi nancial assets and investments | 3,784 | 3,405 |
| Other current fi nancial assets | 3,946 | 8,895 |
| 7,730 | 12,300 | |
| Loans and receivables | ||
| Other non-current assets | 18,423 | 55,005 |
| Trade receivables and other current assets | 140,634 | 135,837 |
| Cash and cash equivalents | 60,230 | 47,429 |
| 219,287 | 238,271 | |
| Financial liabilities at (amortized) cost | ||
| Non-current fi nancial liabilities | 10,060 | 10,581 |
| Other non-current liabilities | 14,773 | 26,150 |
| Trade payables and other current liabilities | 56,253 | 39,049 |
| Other liabilities and deferred income | 25,316 | 29,486 |
| Current fi nancial liabilities | 49,210 | 17,382 |
| 155,612 | 122,648 |
Financial instruments are recognized in the income statement with the following net results:
| 2008/09 | 2007/08 | |
|---|---|---|
| Available-for-sale fi nancial assets | -4,141 | 1,476 |
| Loans and receivables | 4,102 | 11,330 |
| Financial liabilities at (amortized) cost | -7,097 | -4,916 |
| -7,135 | 7,890 |
| Land and buildings | Technical equipment and machinery |
Construction in progress |
Other equipment, factory and offi cequip ment |
Total | |
|---|---|---|---|---|---|
| Carrying amount as of 31 March 2007 | 1,442 | 2,455 | 97 | 2,153 | 6,148 |
| Currency translation differences | 19 | -6 | 3 | 54 | 71 |
| Change in consolidated entities | 0 | 0 | 0 | 18 | 18 |
| Additions | 284 | 1,027 | 881 | 1,250 | 3,441 |
| Disposals | -198 | -36 | -825 | -140 | -1,199 |
| Scheduled depreciation | -346 | -888 | 0 | -1,052 | -2,286 |
| Carrying amount as of 31 March 2008 | 1,201 | 2,551 | 157 | 2,283 | 6,192 |
| Acquisition/production cost | 5,481 | 21,695 | 157 | 13,182 | 40,515 |
| Accumulated depreciation | -4,279 | -19,144 | 0 | -10,900 | -34,323 |
| Carrying amount as of 31 March 2008 | 1,201 | 2,551 | 157 | 2,283 | 6,192 |
| Currency translation differences | -16 | -142 | -2 | -222 | -381 |
| Change in consolidated entities | 3 | 26 | 0 | 27 | 55 |
| Additions | 4,444 | 5,629 | 1,509 | 5,905 | 17,488 |
| Disposals | -912 | -27 | -1,639 | -300 | -2,879 |
| Scheduled depreciation | -305 | -1,291 | 0 | -1,992 | -3,587 |
| Carrying amount as of 31 March 2009 | 4,416 | 6,745 | 25 | 5,701 | 16,887 |
| Acquisition/production cost | 4,966 | 24,080 | 25 | 11,810 | 40,882 |
| Accumulated depreciation | -551 | -17,335 | 0 | -6,109 | -23,995 |
| Carrying amount as of 31 March 2009 | 4,416 | 6,745 | 25 | 5,701 | 16,887 |
| Capitalised development costs |
Concessions and rights | Goodwill | Total | |
|---|---|---|---|---|
| Carrying amount as of 31 March 2007 | 260 | 2,836 | 6,173 | 9,269 |
| Currency translation differences | -28 | -272 | 0 | -300 |
| Change in consolidated entities | 0 | 503 | 0 | 503 |
| Additions | 210 | 372 | 0 | 582 |
| Disposals | 0 | -25 | 0 | -25 |
| Scheduled amortization | -332 | -1,106 | 0 | -1,437 |
| Carrying amount as of 31 March 2008 | 111 | 2,309 | 6,173 | 8,593 |
| Acquisition/production cost | 7,918 | 7,245 | 6,173 | 21,337 |
| Accumulated amortization | -7,807 | -4,936 | 0 | -12,744 |
| Carrying amount as of 31 March 2008 | 111 | 2,309 | 6,173 | 8,593 |
| Currency translation differences | -12 | 56 | 0 | 44 |
| Change in consolidated entities | 536 | 2,107 | 41 | 2,685 |
| Additions | 12 | 2,031 | 14,519 | 16,563 |
| Disposals | 0 | -6 | 0 | -6 |
| Scheduled amortization | -352 | -1,437 | 0 | -1,789 |
| Carrying amount as of 31 March 2009 | 296 | 5,059 | 20,734 | 26,089 |
| Acquisition/production cost | 7,125 | 11,427 | 20,734 | 39,285 |
| Accumulated amortization | -6,829 | -6,368 | 0 | -13,196 |
| Carrying amount as of 31 March 2009 | 296 | 5,059 | 20,734 | 26,089 |
The goodwill results from the acquisition of Kapsch Traffi cCom AB, Jönköping, Sweden, the acquisition of the "Mobility Solutions" business of TechnoCom Corporation, Encino, U.S.A., and the foundation of Kapsch-Busi, S.p.A, Bologna, Italy.
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 unit | TEUR 15,345 | TEUR 5,389 |
| The carrying amount of intangible assets with indefi nite useful lives allocated to the unit |
TEUR 0 | TEUR 0 |
| Determination of recoverable amount of CGU | Value in use | Value in use |
• 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.
• 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.
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 fi scal year 2008/09 amounted to EUR 21.3 million (2007/08: EUR 14.8 million). In the fi scal year 2008/09 EUR 7.1 million thereof (2007/08: EUR 5.4 million) was projectspecifi c development costs and charged to the customer. The remaining amount of EUR 14.2 million (2007/08: EUR 9.4 million) was recognized as an expense.
Other non-current intangible assets are amortized systematically over their useful lives (concessions and rights 5-30 years, rights to computer software 4-10 years).
Shares in associates developed as follows:
| 2008/09 | 2007/08 | |
|---|---|---|
| Carrying amount as of 31 March of prior year | 0 | 254 |
| Addition | 12,302 | 0 |
| Disposal | 0 | -203 |
| Share of profi t/loss (after tax) | 0 | -51 |
| Carrying amount as of 31 March of fi scal year | 12,302 | 0 |
In January 2009 the Group acquired a share of 20.47 % in Q-Free ASA, Norway. Total assets of Q-Free ASA, Norway, amounted to TEUR 57,151 and liabilities to TEUR 17,513 as of 31 December 2008. For the fi nancial year ending 31 December 2008 revenues amounted to TEUR 57,283 and the profi t for the year to TEUR 3,639. The purchase price of TEUR 12,302 includes goodwill in the amount of TEUR 4,905.
| 2008/09 | 2007/08 | |
|---|---|---|
| Other non-current fi nancial assets and investments | 3,784 | 3,405 |
| Other current fi nancial assets | 3,946 | 8,895 |
| 7,730 | 12,300 |
| Short term fi nancial assets | Available-for-sale securities |
Available-for-sale investments |
Total |
|---|---|---|---|
| Carrying amount as of 31 March 2007 | 3,615 | 4 | 3,619 |
| Additions | 549 | 0 | 549 |
| Disposals | -724 | 0 | -724 |
| Change in fair value | -38 | 0 | -38 |
| Carrying amount as of 31 March 2008 | 3,401 | 4 | 3,405 |
| Additions | 40 | 343 | 383 |
| Disposals | 0 | 0 | 0 |
| Change in fair value | -4 | 0 | -4 |
| Carrying amount as of 31 March 2009 | 3,437 | 347 | 3,784 |
| Short term fi nancial assets | Available-for-sale securities |
Available-for-sale investments |
Total |
|---|---|---|---|
| Carrying amount as of 31 March 2007 | 0 | 0 | 0 |
| Additions | 30,000 | 0 | 30,000 |
| Disposals | -20,074 | 0 | -20,074 |
| Change in fair value | -1,031 | 0 | -1,031 |
| Carrying amount as of 31 March 2008 | 8,895 | 0 | 8,895 |
| Additions | 0 | 0 | 0 |
| Disposals | 0 | 0 | 0 |
| Change in fair value (impairment) | -4,950 | 0 | -4,950 |
| Carrying amount as of 31 March 2009 | 3,946 | 0 | 3,946 |
As of 31 March 2009 available-for-sale securities relate to government and bank bonds as well as shares in investment funds. Available-for-sale securities are measured at prevailing market rates, unrealized gains and losses from price fl uctuations are recognized in equity as a separate position (see Note 20).
As of 31 March 2009 other investments classifi ed as available-for-sale relate to a 12.5 % investment in ATC Austrian Technology Corporation GmbH, Vienna, and to a 25 % investment in Autostrada Wschodnia Spolka z o.o., Poland.
| 2008/09 | 2007/08 | |
|---|---|---|
| Truck tolling system Czech Republic | 18,392 | 55,005 |
| Other | 31 | 0 |
| 18,423 | 55,005 |
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 tolling system. As in the prior year, they fall due between 1 and 5 years as of the balance sheet date.
Long-term receivables were discounted on the basis of cash fl ows using an interest rate of 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 fl ows of the Group). Thus, the fair values approximate the carrying amounts.
Gross cash fl ows of other non-current assets are as follows:
| 2008/09 | 2007/08 | |
|---|---|---|
| Up to 2 years | 16,659 | 50,733 |
| Between 2 and 3 years | 2,745 | 7,476 |
| More than 3 years | 0 | 0 |
| 19,404 | 58,209 |
Long-term receivables in the amount of TEUR 18,392 (2007/08: TEUR 55,005) were pledged as collateral to banks (see Note 21).
| 2008/09 | 2007/08 | |
|---|---|---|
| Purchased parts and merchandise, at acquisition cost | 10,852 | 7,023 |
| Unfi nished goods and work in progress, at production cost | 6,080 | 13,614 |
| Finished goods, at production cost | 17,288 | 5,097 |
| 34,220 | 25,734 |
Individual inventory items were written down, where necessary, to their net realizable values. The write-downs of inventories amounts to TEUR 5,890 (2007/08: TEUR 5,652).
| 2008/09 | 2007/08 | |
|---|---|---|
| Trade receivables, less allowance for bad debt | 129,993 | 118,721 |
| Gross amount due from customers for contract work | 653 | 5,561 |
| Prepayments made | 1,325 | 2,074 |
| Receivables from tax authorities (other than income tax) | 3,415 | 4,361 |
| Other receivables and prepaid expenses | 5,023 | 5,120 |
| 140,409 | 135,837 |
Valuation allowances relating to trade receivables developed as follows:
| 2008/09 | 2007/08 | |
|---|---|---|
| Balance as of 31 March of the prior year | 1,235 | 280 |
| Addition | 182 | 1,147 |
| Utilization | -302 | 0 |
| Disposal | -838 | -192 |
| Balance as of 31 March of the reporting year | 278 | 1,235 |
Maturity structure of trade receivables and other current assets:
| 2008/09 | 2007/08 | |
|---|---|---|
| Not yet due | 133,371 | 124,524 |
| Overdue, but not impaired | ||
| Less than 60 days | 2,594 | 996 |
| More than 60 days | 4,444 | 10,317 |
| 140,687 | 137,072 |
The fair values as well as gross cash fl ows in the next fi scal year approximate the carrying amounts. There is no concentration of credit risk with respect to trade receivables, as the Group generally has a large number of customers worldwide. Trade receivables (current) relating to the installation of the Czech truck tolling system in the amount of TEUR 49,745 (2007/08: TEUR 64,244) and to the operation and maintenance of the system in the amount of TEUR 15,272 (2007/08: TEUR 16,911) are due from Ředitelstvím silnic a dálnic ČR (RSD), a company of the Czech Republic.
Based on the Group's experience, risks of loss in connection with trade receivables are low.
Trade receivables in an amount of TEUR 49,745 (2007/08: TEUR 64,244) were pledged as collateral to banks (see Note 21).
Amounts due from customers for contract work detail as follows:
| 2008/09 | 2007/08 | |
|---|---|---|
| Construction costs incurred plus recognized gains | 653 | 5,561 |
| Less amounts billed and prepayments received | 0 | 0 |
| 653 | 5,561 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Cash on hand | 25 | 9 |
| Deposits held with banks | 60,205 | 47,419 |
| 60,230 | 47,429 |
The carrying amounts of this item also represent cash and cash equivalents at the end of the reporting period as presented in the cash fl ow statement.
| 2008/09 | 2007/08 | |
|---|---|---|
| Carrying amount as of 31 March of fi scal year | 12,200 | 12,200 |
The registered share capital of the company amounts to EUR 12,200,000. The share capital is fully paid in. The total authorized number of ordinary shares is 12,200,000. The shares are ordinary bearer shares and have no par value.
| 2008/09 | 2007/08 | |
|---|---|---|
| Carrying amount as of 31 March of prior year | -971 | -114 |
| Gains (losses) taken through profi t or loss | 1,004 | -52 |
| Unrealized gains (losses) in current period | -223 | -1,091 |
| Profi t taxes on unrealized gains/losses (Note 22) | 45 | 286 |
| Carrying amount as of 31 March of fi scal year | -146 | -971 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Current | ||
| Loans for project fi nancing | 27,430 | 6,144 |
| Other current loans | 21,780 | 11,238 |
| 49,210 | 17,382 | |
| Non-current | ||
| Loans for project fi nancing | 0 | 9,830 |
| Loans for acquisitions | 10,000 | 0 |
| Other | 60 | 751 |
| 10,060 | 10,581 | |
| Total | 59,270 | 27,963 |
The non-current liabilities mature in 1 to 5 years.
The fair values and the gross cash fl ows of non-current fi nancial liabilities are as follows:
| 2008/09 | 2007/08 | |
|---|---|---|
| Carrying amount | 59,270 | 27,963 |
| Fair value | 58,467 | 27,169 |
| Gross cash fl ows | ||
| Up to 1 year | 49,210 | 17,382 |
| Between 1 and 2 years | 10,642 | 10,852 |
| Between 2 and 3 years | 61 | 0 |
| 59,913 | 28,234 |
Interest rates on current and non-current fi nancial liabilities are as follows:
| 2008/09 | 2007/08 | |
|---|---|---|
| Total fi nancial liabilities: | ||
| Carrying fi xed interest rates | 15,104 | 557 |
| Carrying variable interest rates | 44,165 | 27,406 |
| 59,270 | 27,963 | |
| Average interest rates: | ||
| Short-term loans | 2.00 – 6.40 % | 4.95 – 5.64 % |
| Loans for project fi nancing | 4.69 % | 5.38 – 6.25 % |
| Loans for acquisitions | 3.82 – 4.35% | |
| Other | 2.50 – 3.64 % | 2.00 – 8.75 % |
Other non-current assets amounting to TEUR 18,392 (2007/08: TEUR 55,005), trade receivables (current) amounting to TEUR 49,745 (2007/08: TEUR 64,244) and securities amounting to TEUR 3,437 (2007/08: TEUR 3,401) as well as 9.9 million shares in Q-Free ASA were pledged as collateral for guarantees issued by banks and for loans granted. A bill of exchange amounting to TEUR 1,425 (2007/08: TEUR 1,425) was issued for an export promotion credit.
| 2008/09 | 2007/08 | |
|---|---|---|
| Deferred tax assets – due from tax group leader | 1,301 | 2,399 |
| Deferred tax assets – non-tax group | 6,941 | 4,881 |
| 8,242 | 7,280 | |
| Deferred tax liabilities – due to tax group leader | 1,654 | 1,608 |
| Deferred tax liabilities – non-tax group | 217 | 447 |
| 1,871 | 2,055 | |
| Balance | 6,373 | 5,226 |
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 fi nancial statements tax loss carry-forwards in the amount of TEUR 1,938 (2007/08: TEUR 0) have not been recognized, because it was uncertain whether there would be suffi cient taxable profi ts available against which to offset them. All other deferred tax assets have been recognized in the respective group companies as future deductible items. Deferred tax assets are normally realized after more than 12 months.
Deferred tax assets/liabilities are attributable to the following positions:
| 31 March 2007 | Change in consolidated entities |
Taken through profi t or loss |
Taken through equity |
Currency translation differences |
31 March 2008 | |
|---|---|---|---|---|---|---|
| Deferred tax assets | ||||||
| Tax loss carry-forwards | 4,114 | 0 | -1,901 | 0 | 0 | 2,213 |
| Provisions disallowed for tax purposes | 1,007 | 0 | -33 | 0 | 6 | 980 |
| Depreciation disallowed for tax purposes | 0 | 0 | 13 | 0 | 1 | 14 |
| Other | 3,539 | 1 | -4 | 286 | 253 | 4,074 |
| 8,660 | 1 | -1,925 | 286 | 260 | 7,280 | |
| Deferred tax liabilities | ||||||
| Special depreciation/amortization of non-current assets |
0 | 0 | 0 | 0 | 0 | 0 |
| Other | 2,466 | 0 | -317 | 0 | -94 | 2,055 |
| 2,466 | 0 | -317 | 0 | -94 | 2,055 | |
| Total change | 6,194 | 1 | -1,608 | 286 | 354 | 5,226 |
| 31 March 2008 | Change in consolidated entities |
Taken through profi t or loss |
Taken through equity |
Currency translation differences |
31 March 2009 | |
|---|---|---|---|---|---|---|
| Deferred tax assets | ||||||
| Tax loss carry-forwards | 2,213 | 0 | 565 | 0 | 26 | 2,804 |
| Provisions disallowed for tax purposes | 980 | 0 | 172 | 0 | -12 | 1,140 |
| Depreciation disallowed for tax purposes | 14 | 0 | 30 | 0 | -4 | 40 |
| Other | 4,074 | 0 | 286 | 45 | -147 | 4,258 |
| 7,280 | 0 | 1,053 | 45 | -138 | 8,242 | |
| Deferred tax liabilities | ||||||
| Special depreciation/amortization of non-current assets |
0 | 0 | 0 | 0 | 0 | 0 |
| Other | 2,055 | 0 | -196 | 0 | 12 | 1,871 |
| 2,055 | 0 | -196 | 0 | 12 | 1,871 | |
| Total change | 5,226 | 0 | 1,249 | 45 | -147 | 6,373 |
Amounts recognized in the balance sheet:
| 2008/09 | 2007/08 | |
|---|---|---|
| Severance payments | 5,294 | 5,001 |
| Pension benefi ts | 8,920 | 9,088 |
| 14,214 | 14,089 |
The obligation to set up a provision for termination benefi ts is based on the respective labor law.
Liabilities for retirement benefi ts recognized at the balance sheet date relate to retirees only. All pension agreements are based on past service cost and are 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).
For the valuation of severance payments and pension benefi t obligations an interest rate of 5.25 % (2007/08: 5.25 %), was used and for compensation increases a rate of 3 % (2007/08: 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 (2007/08: AVÖ 1999-P) by Pagler & Pagler. Pension increases were estimated at 2-3 % (2007/08: 2-3 %).
The following amounts are recognized in the income statement as expenses for termination benefi ts:
| 2008/09 | 2007/08 | |
|---|---|---|
| Current service cost | 184 | 177 |
| Interest expense | 378 | 280 |
| Actuarial losses | 78 | 41 |
| Total, included in staff costs (Note 5) | 641 | 498 |
| Change in liabilities recognized in the balance sheet: | ||
| Carrying amount as of 31 March of prior year | 5,001 | 5,305 |
| Total expense according to the table above | 641 | 498 |
| Payments | -347 | -802 |
| Carrying amount as of 31 March of fi scal year | 5,294 | 5,001 |
| Actuarial present value of obligations (defi ned benefi t obligation) | 6,152 | 5,949 |
| Unrecognized actuarial gains/losses | -857 | -948 |
| Amount recognized in the balance sheet | 5,294 | 5,001 |
The following amounts are recognized in the income statement as expenses for retirement benefi ts:
| 2008/09 | 2007/08 | |
|---|---|---|
| Current service cost | 0 | 0 |
| Interest expense | 485 | 474 |
| Total, included in staff costs (Note 5) | 485 | 474 |
| Change in liabilities recognized in the balance sheet: | ||
| Carrying amount as of 31 March of prior year | 9,088 | 9,247 |
| Total expense according to the table above | 485 | 474 |
| Payments | -653 | -633 |
| Carrying amount as of 31 March of fi scal year | 8,920 | 9,088 |
| Actuarial present value of obligations (defi ned benefi t obligation) | 9,891 | 9,558 |
| Unrecognized actuarial gains/losses | -971 | -470 |
| Amount recognized in the balance sheet | 8,920 | 9,088 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Truck tolling system Czech Republic | 9,954 | 26,070 |
| Other | 4,820 | 80 |
| 14,773 | 26,150 |
Other non-current liabilities relate to trade payables (non-current) in the amount of TEUR 9,954 (2007/08: TEUR 26,070) due to subcontractors for the installation of the Czech truck tolling system. As in the prior year, these liabilities are due in more than 1 year and less than 5 years as of the balance sheet date. These non-current liabilities were discounted on the basis of cash fl ows using discount rates that correspond to those rates applied in discounting non-current receivables from the Czech truck tolling system (see Note 15). Thus, the fair values approximate the carrying amounts.
Other non-current liabilities relate to a liability in the amount of TEUR 3,333 from a put option for shares in Kapsch-Busi S.p.A, Bologna, Italy (after interest compounding to the balance sheet date 31 March 2009) and to the non-current portion of a contingent payment obligation in the amount of TEUR 1,484 from the acquisition of the "Mobility Solutions" business of TechnoCom Corporation, Encino, U.S.A. (see Note 28).
The gross cash fl ows of other non-current liabilities are as follows:
| 2008/09 | 2007/08 | |
|---|---|---|
| Less than 2 year | 11,361 | 22,532 |
| Between 2 and 3 years | 3,522 | 4,647 |
| More than 3 years | 424 | 0 |
| 15,306 | 27,179 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Amounts due to customers for contract work | 4,723 | 4,625 |
| Prepayments received | 896 | 2,368 |
| Non-current employee liabilities | 9,205 | 8,606 |
| Liabilities to tax authorities (other than income tax) | 917 | 5,459 |
| Other liabilities and deferred income | 9,576 | 8,428 |
| 25,316 | 29,486 |
Amounts due to customers for contract work detail as follows:
| 2008/09 | 2007/08 | |
|---|---|---|
| Construction costs incurred plus recognized gains | -9,162 | -3,392 |
| Less amounts billed and prepayments received | 13,885 | 8,017 |
| 4,723 | 4,625 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Non-current | 524 | 1,694 |
| Current | 10,623 | 18,250 |
| 11,147 | 19,944 |
The provisions changed as follows:
| 31 March 2007 | Change in consolidated entities |
Utilization/ disposal |
Addition | Currency translation differences |
31 March 2008 | |
|---|---|---|---|---|---|---|
| Obligations from anniversary bonuses | 457 | 20 | -40 | 27 | 0 | 464 |
| Costs of dismantling and removing assets | 1,130 | 0 | 0 | 0 | 0 | 1,130 |
| Other | 97 | 0 | 0 | 0 | 2 | 99 |
| Non-current provisions, total | 1,684 | 20 | -40 | 27 | 2 | 1,694 |
| Warranties | 4,165 | 0 | -941 | 913 | -8 | 4,128 |
| Losses from pending transactions and rework | 881 | 0 | -273 | 302 | 0 | 910 |
| Legal fees, costs of litigation and contract risks | 2,881 | 0 | -2,881 | 6,415 | 473 | 6,888 |
| Other | 7,535 | 10 | -5,021 | 3,696 | 104 | 6,324 |
| Current provisions, total | 15,462 | 10 | -9,117 | 11,326 | 568 | 18,250 |
| Total | 17,146 | 30 | -9,157 | 11,353 | 570 | 19,944 |
| 31 March 2008 | Change in consolidated entities |
Utilization/ disposal |
Addition | Currency translation differences |
31 March 2009 | |
|---|---|---|---|---|---|---|
| Obligations from anniversary bonuses | 464 | 5 | -24 | 78 | 0 | 524 |
| Costs of dismantling and removing assets | 1,130 | 0 | -1,130 | 0 | 0 | 0 |
| Other | 99 | 0 | -88 | 0 | -10 | 0 |
| Non-current provisions, total | 1,694 | 5 | -1,242 | 78 | -10 | 524 |
| Warranties | 4,128 | 0 | -2,380 | 259 | -187 | 1,820 |
| Losses from pending transactions and rework | 910 | 0 | -364 | 389 | 0 | 934 |
| Legal fees, costs of litigation and contract risks | 6,888 | 0 | -6,620 | 3,129 | -169 | 3,228 |
| Other | 6,324 | 0 | -6,757 | 5,186 | -114 | 4,640 |
| Current provisions, total | 18,250 | 0 | -16,121 | 8,963 | -469 | 10,623 |
| Total | 19,944 | 5 | -17,363 | 9,041 | -479 | 11,147 |
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 5.25 % (2007/08: 5.25 %), the earliest possible statutory retirement age including transition provisions and using the mortality tables AVÖ 2008-P (2007/08: AVÖ 1999-P) by Pagler & Pagler, increases in salary were considered at 3 % (2007/08: 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.
In case the Group expects warranty claims on products sold or services rendered during the period under guarantee, a corresponding provision will be set up in the fi nancial 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 amount of the provision. According to past experience, it is probable that there will be claims under the warranties.
The provision for losses from pending transactions and re-work was set up on the basis of expected losses from construction contracts recognized 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 und bid bonds, sureties and acceptance of guarantees for subsidiaries vis-à-vis third parties.
Details of contingent liabilities and other commitments are as follows:
| 2008/09 | 2007/08 | |
|---|---|---|
| Contract, warranty, performance and bid bonds | ||
| City Highway Santiago | 846 | 860 |
| City Highway Sydney and Melbourne | 1,593 | 2,377 |
| Truck Tolling System Austria | 12,500 | 12,500 |
| Truck Trolling System Czech Republic | 19,938 | 48,899 |
| Tolling project New Zealand | 2,025 | 2,101 |
| Expressway Toll Collection System, Maryland, U.S.A. | 3,317 | 0 |
| Other | 5,338 | 4,306 |
| 45,557 | 71,043 | |
| Bank guarantees | 3,486 | 3,290 |
| Sureties | 30 | 25 |
| 49,073 | 74,359 |
Financial obligations from lease contracts:
The future payments from non-cancellable obligations from rental and operating lease contracts are presented below:
| 2008/09 | 2007/08 | |
|---|---|---|
| Up to 1 year | 5,509 | 4,471 |
| Between 1 and 5 years | 14,341 | 5,370 |
| Over 5 years | 14,045 | 2 |
| 33,895 | 9,843 |
On 15 May 2008 Kapsch Traffi cCom AG and the Italian Busi Impianti Group announced their cooperation. Under a joint venture, the two companies founded Kapsch-Busi S.p.A., domiciled in Bologna, in order to offer traffi c telematics solutions for the urban area on the Italian market. Busi Impianti outsourced the related business unit, including a group of 10 employees, Kapsch Traffi cCom complemented the team with own staff.
| Purchase price: | |
|---|---|
| Paid | 80 |
| Present value of liability from put option | 3,214 |
| 3,294 | |
| Fair value of net assets acquired | 415 |
| Goodwill | 2,879 |
The assets and liabilities arising from the acquisition are as follows:
| Fair value | Acquiree's carrying amount |
|
|---|---|---|
| Intangible assets | 622 | 327 |
| Property, plant and equipment | 4 | 4 |
| Receivables and other assets | 459 | 459 |
| Cash and cash equivalents | 90 | 90 |
| Payables, other liabilities and accruals | -760 | -760 |
| Net assets acquired | 415 | 120 |
The acquired company contributed revenues of TEUR 1,896 and a net income of TEUR 61 to the Group's result for the period from 1 June 2008 to 31 March 2009. If the acquisition had occurred on 1 April 2008, there would not have been a signifi cant change in revenue or profi t of the Group.
Effective as of 4 July 2008, Kapsch Traffi cCom AG, through its subsidiary Kapsch Traffi cCom Inc., acquired all assets of the "Mobility Solutions" business of TechnoCom Corporation, a company incorporated under the laws of the State of Delaware and domiciled in Encino, California.
| Purchase price: | |
|---|---|
| Already paid | 11,581 |
| Incidental acquisition costs | 334 |
| Contingent purchase price component | 2,281 |
| 14,196 | |
| Fair value of net assets acquired | 2,555 |
| Goodwill | 11,641 |
The assets and liabilities arising from the acquisition are as follows:
| Fair value | Acquiree's carrying amount |
|
|---|---|---|
| Intangible assets | 2,021 | 109 |
| Property, plant and equipment | 51 | 51 |
| Receivables and other assets | 583 | 583 |
| Cash and cash equivalents | 0 | 0 |
| Payables, other liabilities and accruals | -101 | -101 |
| Net assets acquired | 2,555 | 642 |
The purchase price consists of a fi xed component in the amount of EUR 11.6 million and contingent purchase price components in the amount of EUR 2.3 million, which in turn consist of payments contingent on the successful completion of project phases and of payments contingent on future revenues. Both components were recognized as a liability at their fair value (present value). The third conditional adjustment of the acquisition costs was not accounted for in the purchase price, since it consists of payments based on tax depreciation benefi ts, which were regarded as not reliably determinable.
The following transactions were performed with related parties:
From 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 fi scal year 2008/09 amounted to TEUR 373 (2007/08: TEUR 599). Furthermore, the company invoices insurance costs (directors & offi cers liability insurance) to the Group in the amount of TEUR 22 (2007/08: TEUR 11).
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, in the amount of EUR 19.1 million. The annual fee for the assumption of the liability is 0.5 % of the guaranteed amount. Expenses incurred by the Group in the fi scal year 2008/09 amounted to TEUR 83 (2007/08: TEUR 96).
In January 2007 KAPSCH-Group Beteiligungs GmbH issued an unconditional and irrevocable fi rst demand payment guarantee up to EUR 40 million with respect to the payment obligations of Kapsch Traffi cCom Construction & Realization spol. s r.o., Prague, resulting from the credit and guarantee facilities agreement granted by Ceskoslovenska Obchodni Banka A.S., Prague, UniCredit Bank Austria AG, Vienna, und Raiffeisen Zentralbank Österreich AG, Vienna, for the delivery and operation of the Czech truck tolling system. The annual fee for the assumption of the liability is 0.5 % of the guaranteed amount. Expenses incurred by the Group in the fi scal year 2008/09 amounted to TEUR 220 (2007/08: TEUR 209).
KAPSCH-Group Beteiligungs GmbH acts as the tax group leader in a tax group formed in March 2005, of which Austrian subsidiaries of this Group are members. Accordingly, all post-formation tax effects of the group companies which are tax group members are considered to be related party transactions (see Note 9 and 22).
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, whereby the annual minimum fee is TEUR 250. Expenses incurred by the Group in the fi scal year 2008/09 amounted to TEUR 733 (2007/08: TEUR 750).
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. Cost allocated to the Group in the fi scal year 2008/09 amounted to TEUR 925 (2007/08: TEUR 447).
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 fi scal year 2008/09 amounted to TEUR 959 (2007/08: TEUR 1,257).
Kapsch Aktiengesellschaft has entered into various insurance contracts covering all group companies. The cost allocated to the Group in the fi scal year 2008/09 amounted to TEUR 249 (2007/08: TEUR 253).
The company provides human resources services (payroll services, administration, recruiting, advice on labor law and human resources development) to the Group. Expenses incurred by the Group in the fi scal year 2008/09 amounted to TEUR 691 (2007/08: TEUR 786).
The company leases telephone and IT equipment (hardware and software) to the Group and provides call centre services and IT support. Expenses incurred by the Group in the fi scal year 2008/09 amounted to TEUR 2,070 (2007/08: TEUR 1,643).
The company delivers hardware (IT equipment) on behalf of Kapsch Traffi cCom AG, Vienna, and provides maintenance and other services for various customer projects, the two largest of which by far are the "Truck Tolling System Austria" and the "Truck Tolling System Czech Republic". The deliveries and services performed amounted to TEUR 4,575 in the fi scal year 2008/09 (2007/08: TEUR 2,554).
The company provides IT, EDP and telephone services to the Group in the amount of TEUR 252 (2007/08: TEUR 192), as well as other services in the amount of TEUR 507 (2007/08: TEUR 180), among other things for the IT technical restructuring of the new location of Kapsch Components KG and for the integration of the Swedish, Argentinean and U.S.A. American subsidiaries.
The Group invoices consulting services, in particular for public relations, to the company. Income of the Group resulting from these services in the fi scal year 2008/09 totaled TEUR 0 (2007/08: TEUR 60).
Kapsch Components KG provides logistic services to the company. Income of the Group resulting from these services in the fi scal year 2008/09 totaled TEUR 128 (2007/08: TEUR 100).
The Group provides services in the area of public relations to the company. Income of the Group resulting from this service in the fi scal year 2008/09 amounted to TEUR 0 (2007/08: TEUR 83).
Kapsch Components KG provides logistic services to the company. Income of the Group resulting from these services in the fi scal year 2008/09 totaled TEUR 826 (2007/08: TEUR 1,102).
Kapsch Components KG produces various components for the company. Income of the Group resulting from the sale of these components in the fi scal year 2008/09 totaled TEUR 0 (2007/08: TEUR 711).
In January 2007 Kapsch CarrierCom AG issued an unconditional and irrevocable fi rst demand payment guarantee up to EUR 9 million with respect to the payment obligations of Kapsch Traffi cCom Construction & Realization spol.s.r.o., Prague, resulting from the credit and guarantee facilities agreement granted by Ceskoslovenska Obchodni Banka A.S., Prague, UniCredit Bank Austria AG, Vienna, and Raiffeisen Zentralbank Österreich AG, Vienna, for the delivery and operation of the Czech truck tolling system. The annual fee for the assumption of the liability is 1.5 % of the guaranteed amount. The assumption of liability expired as of 31 March 2008 and thus no expenses were incurred in the fi scal year 2008/09 (2007/08: TEUR 135).
The company provides technical maintenance services for the Czech truck-tolling system and is responsible for the current IT support for the Czech subsidiaries. Expenses incurred for this in the fi scal year 2008/09 totaled TEUR 386 (2007/08: TEUR 0). Furthermore, the company provided public relations services amounting to TEUR 98 in the fi scal year 2008/09 (2007/08: TEUR 0).
In the fi scal year 2008/09 there were no business relations with the company. In the fi scal year 2007/08 an agreement could be reached with the company on waiving a potential success fee for the procurement of a tolling project in Argentina in the form of a one-off payment amounting to TEUR 400.
One managing director of Kapsch Immobilien GmbH was a member of the supervisory board of Kapsch Traffi cCom AG until 10 July 2008.
In 1997, Kapsch Components KG, as lessee, has entered into a frame lease agreement with Kapsch Immobilien GmbH, as lessor, regarding the premise in Wagenseilgasse 1, Vienna, Austria, assuming the frame lease agreement from Kapsch Aktiengesellschaft, the original lessee. The frame lease agreement has neither been signed by Kapsch Components KG nor Kapsch Immobilien GmbH, but nonetheless the parties regarded the very basic provisions contained in the frame lease agreement to be binding upon them. The frame lease agreement was terminated and ended on 31 December 2008. The various parts of these premises were sub-leased by Kapsch Components KG within the consolidated group as well as to related companies.
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 respectively Investments in the amount of TEUR 1,767 (2007/08: TEUR 0) were made for the adaptation of the leased property. Lease expenses incurred by the Group amounted to TEUR 1,980 in the fi scal year 2008/09 (2007/08: TEUR 1,181).
Lease income of the Group resulting from the sub-lease to related parties in the fi scal year 2008/09 totaled TEUR 226 (2007/08: TEUR 379). The services rendered for relocations in the course of vacating the location Wagenseilgasse 1 amounted to TEUR 142 (2007/08: TEUR 0).
Services are usually negotiated with related parties on a cost-plus basis. Goods are bought and sold at arm's length.
Liabilities for pension benefi ts include pension obligations (pensions in payment) to the widow of Dr. Karl Kapsch, a former board member of Kapsch Aktiengesellschaft.
The following table provides an overview of receivables from and payables due to related parties at the respective balance sheet dates:
| 31 March 2009 | 31 March 2008 | |
|---|---|---|
| Parent company | ||
| Trade receivables and other assets | 489 | 379 |
| Trade payables and other payables | 284 | 522 |
| Affi liated companies | ||
| Trade receivables and other assets | 439 | 444 |
| Trade payables and other payables | 1,771 | 466 |
| Other related parties | ||
| Trade receivables and other assets | 0 | 0 |
| Trade payables and other payables | 908 | 12 |
Effective as of 8 March 2007, the Group disposed of its railway communication business that primarily included mobile train cab radios and related applications based on GSM-R technology (sale to Funkwerk Systems Austria GmbH, Vienna, by means of an asset deal). Activities in this business formed part of the Services, System Extensions, Components Sales segment.
As a result of the sale, the Group applied IFRS 5.
a) Analysis of the result of discontinued operations
| 2008/09 | 2007/08 | |
|---|---|---|
| Revenues | 0 | 0 |
| Expenses | 0 | 0 |
| Profi t from discontinued operations – before and after tax | 0 | 0 |
| 2008/09 | 2007/08 | |
|---|---|---|
| Operating result | 0 | 0 |
| Adjustments for non-cash items and other reconciliations | 0 | 0 |
| Changes in current assets: | ||
| Increase/decrease in trade receivables and other assets | 0 | 1,441 |
| Increase/decrease in inventories | 0 | 0 |
| Increase/decrease in trade payables and other current payables | 0 | -122 |
| Increase/decrease in current provisions | 0 | -1,061 |
| 0 | 258 | |
| Interest received | 0 | 0 |
| Interest payments | 0 | 0 |
| Net cash fl ow from operating activities – discontinued operations | 0 | 258 |
| Cash fl ow used in investing activities | ||
| Purchases of property, plant and equipment | 0 | 0 |
| Proceeds from disposal of assets | 0 | 0 |
| Net cash fl ow from investing activities – discontinued operations | 0 | 0 |
| Cash fl ow from fi nancing activities | ||
| Increase/decrease in other non-current fi nancial liabilities | 0 | -700 |
| Increase/decrease in current fi nancial liabilities | 0 | -467 |
| Net cash fl ow from fi nancing activities – discontinued operations | 0 | -1,167 |
| Net cash fl ow from discontinued operations | 0 | -909 |
Earnings per share (basic earnings) is calculated by dividing the profi t 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 2009, as in the prior year, no treasury shares were held by the company.
| 2008/09 | 2007/08 | |
|---|---|---|
| Profi t attributable to equity holders of the company (in EUR) | 12,976,941 | 30,412,759 |
| Weighted average number of ordinary shares | 12,200,000 | 11,683,060 |
| Basic earnings per share (in EUR per share) | 1.06 | 2.60 |
On 9 April 2009, Kapsch Traffi cCom AG acquired 19 % of the shares of Brisa Internacional, SGPS, S.A., Sao Domingos da Rana, in Kapsch Telematic Services GmbH for a purchase price of EUR 2.3 million. In addition, another 7 % of the shares in Kapsch Telematic Services GmbH were acquired indirectly through acquisition of BRISA ACCESS Europe GmbH, Vienna, for a purchase price of EUR 1.9 million.
On 7 April 2009, Kapsch Traffi cCom Kazakhstan LLC, Astana, was incorporated as a wholly owned subsidiary of Kapsch Traffi cCom AG in Kazakhstan.
The consolidated group companies are listed in the notes to the consolidated fi nancial statements under the item "consolidated group". The parent company Kapsch Traffi cCom AG, Vienna, with the exception of Kapsch Telematic Services GmbH, Vienna, Kapsch Telematic Services Kft., Budapest, Kapsch Telematic Services spol. s r.o., Prague, Kapsch Traffi cCom Construction & Realization spol. s r.o., Prague, Kapsch Telematic Services SK s.r.o., Bratislava, Kapsch Telematik Technologies Bulgaria AD, Sofi a, PREMID, a.s., Bratislava, Kapsch-Busi S.p.A, Bologna, and Kapsch Telematic Services GmbH, Berlin, directly or indirectly holds 100 % of the shares in the fully consolidated subsidiaries. With regard to additional disclosures in accordance with § 265 (2) 1 UGB for Kapsch Telematic Services GmbH, Vienna, Kapsch Telematic Services Kft., Budapest, Kapsch Telematic Services spol. s r.o., Prague, and Kapsch Traffi cCom Construction & Realization spol. s r.o., Prague, Kapsch Telematic Services SK s.r.o., Bratislava, Kapsch Telematik Technologies Bulgaria AD, Sofi a, PREMID, a.s., Bratislava, Kapsch-Busi S.p.A, Bologna, and Kapsch Telematic Services GmbH, Berlin, the protection-of-interest clause pursuant to § 265 (3) UGB was applied.
The average number of staff in the fi scal year 2008/09 was 831 salaried employees and 67 waged workers (2007/08: 716 salaried employees and 75 waged workers).
Costs for the chairman of the board are, among others, included in the cross-charge of management and consulting services from Kapsch Aktiengesellschaft (see Note 29). Regarding the total emoluments of the other member of the management board, the protection-of-interest clause of § 266 No. 7 UGB is applied.
No remunerations were paid to supervisory board members.
As in the previous years, no advances or loans were granted to members of the management and supervisory board, nor any guaranties issued in their favor.
In the fi scal year 2008/09 the following persons served as management board members: Georg Kapsch (Chief Executive Offi cer) Erwin Toplak (Chief Operating Offi cer)
In the fi scal year 2008/09 the following persons served on the supervisory board: Franz Semmernegg (Chairman) Kari Kapsch (Deputy-Chairman) Elisabeth Kapsch (until 10 July 2008) William Morton Llewellyn (since 10 July 2008)
Delegated by the works council: Christian Windisch Werner Dreschl
Authorized for issue:
Vienna, 15 May 2009
Georg Kapsch Erwin Toplak Chief Executive Offi cer Chief Operating Offi cer
We have audited the accompanying consolidated fi nancial statements of Kapsch Traffi cCom AG, Vienna, for the fi scal year from 1 April 2008 to 31 March 2009. These consolidated fi nancial statements comprise the consolidated balance sheet as of 31 March 2009, the income statement, consolidated cash fl ow statement and consolidated statement of changes in equity for the year ended 31 March 2009, and a summary of signifi cant accounting policies and other explanatory notes.
Management is responsible for group accounting and the preparation and fair presentation of consolidated fi nancial statements that give a true and fair view of the group's fi nancial position, its fi nancial performance and cash fl ows in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of fi nancial 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 under the circumstances.
Our responsibility is to express an opinion on these consolidated fi nancial statements based on our audit. We conducted our audit in accordance with laws and regulations applicable in Austria and in accordance with International Standards on Auditing (ISAs), issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the fi nancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated fi nancial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated fi nancial statements in order to design audit procedures that are appropriate under the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity'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 fi nancial statements.
We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.
Our audit did not give rise to any objections. Based on the results of our audit, in our opinion the consolidated fi nancial statements present fairly, in all material respects, the fi nancial position of the group as of 31 March 2009 and its fi nancial performance and cash fl ows for the fi scal year from 1 April 2008 to 31 March 2009 in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU.
Laws and regulations applicable in Austria require us to perform audit procedures whether the consolidated management report is consistent with the consolidated fi nancial statements and whether the other disclosures made in the consolidated management report do not give rise to misconception of the position of the group. The auditor's report also has to contain a statement as to whether the consolidated management report is consistent with the consolidated fi nancial statements.
In our opinion, the consolidated management report for the group is consistent with the consolidated fi nancial statements.
Vienna, 15 May 2009
PwC INTER-TREUHAND GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft
signed:
Felix Wirth Austrian Certifi ed Public Accountant
Project: EXAT Bangkok
Customer: Expressway & Rapid Transit Authority of Thailand (EXAT) Technology: Toll Road-System OBUs: 100,000 supplied Automatic single lanes: 76
Pat from Bangkok is doing very well: Since we installed a tolling system in his home town, his business is doing much better.
Using existing traffi c infrastructure more effi ciently or expanding it in an environmentally defensible way is a sensible step towards overcoming future increases in traffi c loads. Our new tolling system in Bangkok provides better use of the existing road infrastructure, allowing road users to make their way through the traffi c more quickly. Something that Pat's passengers also appreciate.
Kapsch Traffi cCom AG (Headquarter) Am Europlatz 2 1120 Vienna Phone: +43 (0) 50 811 2101 Fax: +43 (0) 50 811 2109 E-mail: ktc.offi [email protected]
Kapsch Components KG Gutheil-Schoder-Gasse 17 1230 Vienna Phone: +43 (0)50 811 4195 Fax: +43 (0)50 811 4190 E-mail: kcomp.offi [email protected]
Kapsch Traffi cCom Argentina S.A. Juana Azurduy 2440 1º piso C1429BZJ Buenos Aires Phone: +54 11 4703 5500 Fax: +54 11 4703 4777 E-mail: [email protected]
Kapsch Traffi cCom Australia Pty Ltd. Level 10 636 St Kilda Road Melbourne VIC 3004 Phone: +61 3 8656 7900 Fax: +61 3 8656 7901
E-mail: [email protected]
Kapsch Telematik Technologies Bulgaria AD Hristo Botev Boulevard 79 1303 Sofi a
Chile Kapsch Traffi cCom Chile S.A. Avenida del Parque 4161
Ofi cina 202 Ciudad Empresarial 8580675 Huechuraba Santiago de Chile Phone: +56 2 795 1200 Fax: +56 2 465 9742 E-Mail: [email protected]
Kapsch Traffi cCom AG Beijing Representative Offi ce Room 1501 Canway Building No. 66 Nan Li Shi Road 100045 Beijing Phone: +86 10 6808 0050 Fax: +86 10 6808 0052 E-Mail: [email protected]
Room 3504 35/F, Peace World Plaza 362-366 Huan Shi Dong Road 510060 Guangzhou, Guangdong Province Phone: +86 20 8375 2827 Customers Service Hotline (in China): 800 830 6155 Fax: +86 20 8375 2823 E-Mail: [email protected]
Croatia
Kapsch Traffi cCom – Podruznica Zagreb Heinzelova 33 A 10 000 Zagreb Phone: +385 1 272 0640 E-Mail: offi [email protected]
Kapsch Traffi cCom Construction & Realization spol. s r.o. Ke Štvanici 656/3 186 00 Praha 8 Phone: +420 225 026 140 Fax: +420 225 026 222 E-Mail: [email protected]
Ke Štvanici 656/3 186 00 Praha 8 Phone: +420 225 026 140 Fax: +420 225 026 222 E-Mail: [email protected]
Kapsch Traffi cCom France SAS Parc d'Affaires Silic Immeuble Panama 45, rue de Villeneuve 94 573 Rungis Cedex Phone: +33 6 03 48 27 59 Fax: +33 1 44 54 52 34 E-mail: [email protected]
Kapsch Telematic Services GmbH Deutschland Friedrichstraße 171 10117 Berlin Phone: +49 30 46999 3476 Fax: +49 30 46999 3477
1113 Budapest Phone: +36 1 372 6400 Fax: +36 1 372 6444
Via Conca del Naviglio, 18 20123 Milan (MI) Phone: +39 (02) 89827 365 Fax: +39 (02) 89827 300 E-Mail: offi [email protected]
Via C. Bonazzi, 2 40013 Castel Maggiore (BO) Phone: +39 (051) 6324011 Fax: +39 (051) 6324022 E-Mail: offi [email protected]
Kapsch Traffi cCom (M) Sdn Bhd 4th Floor, Tower Block Syed Kechik Foundation Building Jalan Kapas, Bangasar 59100 Kuala Lumpur Phone: +60 3 252 1161 Fax: +60 3 252 1167 E-Mail: [email protected]
Kapsch Traffi cCom Ltd. PO Box 24440, Manners Street Visiting address: Apt. 1302 156 Willis Street Wellington Phone: +64 21 822 469 E-Mail: [email protected]
Kapsch Traffi cCom Russia OOO 105064, Zemlyanoj Val, 9, offi ce 4031-4033 Moscow Phone: +7 495 967 93 27 Fax: +7 495 967 93 27 E-Mail: [email protected]
E-Mail: [email protected] Kapsch Telematic Services SK s.r.o.
Karadžičova 8 CBC I 821 09 Bratislava Phone: +421 2 3366 6800 Fax: +421 2 3366 6801 E-Mail: [email protected]
Slovenia Kapsch Traffi cCom d.o.o. Ribičičeva ulica 33 1000 Ljubljana
Kapsch Traffi cCom AB Bataljonsgatan 10, Box 1063 551 10 Jönköping Phone: +46 36 290 1500 Fax: +46 36 290 1501 E-Mail: [email protected]
Kapsch Traffi cCom Ltd. Unit 2 espace 26 St. Thomas Place
Ely CAMBS CB7 4EX
Phone: +44 0 1353 644 012 Fax: +44 0 1353 611 001 E-Mail: [email protected]
U.S.A. Kapsch Traffi cCom Holding Corp.
21515 Ridgetop Circle, Suite 290 Sterling, VA 20166 Kapsch Traffi cCom U.S. Corp.
21515 Ridgetop Circle, Suite 290 Sterling, VA 20166
TechnoCom Mobility Solutions 2035 Corte del Nogal, Suite 105 Carlsbad, CA 92011
| ANPR | Automatic number plate recognition |
|---|---|
| CEN | Comité Européen de Normalisation (European Committee for Standardization) – responsible for defi ning common legislative procedures for contractual obligations among toll operators to achieve interoperability in toll systems in Europe (CEN Standards). |
| DSRC | Dedicated short-range communication |
| ETC | Electronic toll collection |
| GHz | Gigaherz |
| GNSS | Global navigation satellite system |
| GPS | Global positioning system |
| GPRS | General packet radio service |
| GSM | Global system for mobile communication |
| ISO | International organization for standardization |
| LAN | Local area network |
| VPS | Vehicle positioning systems |
| MHz | Megaherz |
| MLFF | Multi-lane free-fl ow |
| OBU | On-board unit (also called tag) |
| RUC | Road user charging |
| Tag | See OBU |
| Transceiver | Device that has both a transmitter and a receiver. |
| Transponder | Automatic device that receives, amplifi es and transmits a signal on a different frequency. |
| VDC | Vehicle detection and classifi cation |
| VR-2 | Vehicle registration system |
| VDR | Vehicle detection and registration |
| WAN | Wide area network |
| Financial Calendar | |
|---|---|
| 24 June 2009 | Ordinary Shareholders' Meeting |
| 1 July 2009 | Deduction of dividends for fi scal year 2008/09 (ex-day) |
| 8 July 2009 | First day of payment for fi scal year 2008/09 dividends |
| 26 August 2009 | Interim fi nancial report fi scal year 2009/10-Q1 |
| 25 November 2009 | Interim fi nancial report fi scal year 2009/10-Q2 |
| 24 February 2010 | Interim fi nancial report fi scal year 2009/10-Q3 |
| 16 June 2010 | Results fi scal year 2009/10 |
| 7 July 2010 | Ordinary Shareholders' Meeting |
| 14 July 2010 | Deduction of dividends for fi scal year 2009/10 (ex-day) |
| 21 July 2010 | First day of payment for fi scal year 2009/10 dividends |
| Informationen on the Kapsch Traffi cCom share | ||||||
|---|---|---|---|---|---|---|
| Investor Relations Offi cer | Marcus Handl | |||||
| Shareholders' Telephone | +43 (0)50811 1120 | |||||
| ir.kapschtraffi [email protected] | ||||||
| Website | www.kapschtraffi c.com | |||||
| Stock exchange | Vienna, Prime Market | |||||
| ISIN | AT000KAPSCH9 | |||||
| Trading Symbol | KTCG | |||||
| Reuters | KTCG.VI | |||||
| Bloomberg | KTCG AV |
| Earnings Data 1 | 2008/09 | 2007/08 | 2006/07 | 2005/06 | 2004/05 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | in million EUR | 200.3 | 185.7 | 198.6 | 116.2 | 121.9 | ||||||
| EBITDA | in million EUR | 35.0 | 39.0 | 30.8 | 21.0 | 18.7 | ||||||
| EBITDA margin | in % | 17.5 | 21.0 | 15.5 | 18.1 | 15.4 | ||||||
| EBIT | in million EUR | 29.0 | 34.9 | 26.9 | 17.3 | 13.0 | ||||||
| EBIT margin | in % | 14.5 | 18.8 | 13.5 | 14.9 | 10.7 | ||||||
| Profi t before tax | in million EUR | 21.9 | 42.8 | 27.0 | 17.8 | 13.5 | ||||||
| Profi t after tax | in million EUR | 16.4 | 32.1 | 20.3 | 12.3 | 14.2 | ||||||
| Earnings per share 2 | in EUR | 1.06 | 2.60 | 2.04 | 1.24 | 1.43 | ||||||
| Free Cashfl ow 3 | in million EUR | 19.9 | -14.8 | -39.1 | 14.4 | 18.6 | ||||||
| Capital Expenditure 4 | in million EUR | 22.2 | 4.0 | 2.3 | 1.3 | 3.0 | ||||||
| Employees as of 31 March (of each year) |
946 | 824 | 774 | 569 | 572 | |||||||
| Revenues by Segment (percentage of Revenues) |
2008/09 | 2007/08 | 2006/07 | 2005/06 | 2004/05 | |||||||
| Road Solution Projects (RSP) | in million EUR | 56.8 | (28%) | 47.0 | (25 %) | 105.0 | (53 %) | 18.7 | (16 %) | 30.0 | (25 %) | |
| Services, System Extensions, Components Sales (SEC) |
in million EUR | 135.6 | (68%) | 128.8 | (69 %) | 80.6 | (41 %) | 76.2 | (66 %) | 78.0 | (64 %) | |
| Others (OTH) | in million EUR | 8.0 | (4%) | 10.0 | (5 %) | 13.0 | (7 %) | 21.3 | (18 %) | 13.9 | (11 %) | |
| Revenues by Region (percentage of Revenues) |
2008/09 | 2007/08 | 2006/07 | 2005/06 | 2004/05 | |||||||
| Central & Eastern Europe (incl. Austria) |
in million EUR | 139.3 | (70%) | 124.2 | (67 %) | 157.3 | (79 %) | 68.4 | (59 %) | 57.5 | (47 %) | |
| Western Europe | in million EUR | 21.3 | (11%) | 17.6 | (9 %) | 12.9 | (6 %) | 18.9 | (16 %) | 21.2 | (17 %) | |
| Americas | in million EUR | 14.0 | (7%) | 18.8 | (10 %) | 15.4 | (8 %) | 9.4 | (8 %) | 23.8 | (20 %) | |
| Rest of World | in million EUR | 25.6 | (12%) | 25.2 | (14 %) | 13.0 | (7 %) | 19.5 | (17 %) | 19.4 | (16 %) | |
| Balance Sheet Data | 31 March 2009 | 31 March 2008 | 31 March 2007 | 31 March 2006 | 31 March 2005 | |||||||
| Total Assets | in million EUR | 324.5 | 298.4 | 227.2 | 131.9 | 133.5 | ||||||
| Total Equity 5 | in million EUR | 134.2 | 133.4 | 45.6 | 39.1 | 37.4 | ||||||
| Equity ratio 5 | in % | 41.4 | 44.7 | 20.1 | 29.6 | 28.0 | ||||||
| Net assets (+) /-debt (-) | in million EUR | 5.0 | 28.4 | -12.5 | 37.2 | 29.4 | ||||||
| Capital Employed | in million EUR | 193.4 | 161.3 | 78.2 | 48.6 | 47.8 | ||||||
| Net Working Capital | in million EUR | 122.3 | 131.4 | 56.8 | 43.2 | 42.5 |
1 only continuing operations
2 earnings per share in fi scal year 2008/09 relate to 12.2 million shares, in fi scal year 2007/08 relate to a weighted average number of 11.7 million outstanding shares and in the fi scal years 2006/07 and 2005/06 relate to 10.0 million shares
3 operating cashfl ow minus capital expenditure from operations (excl. acquisitions and securities)
4 capital expenditure from operations (excl. acquisitions and securities)
5 incl. minority interests
Kapsch Traffi cCom is an international supplier of innovative road traffi c telematics solutions. Its principle business is the development and supply of electronic toll collection (ETC) systems, in particular for the multi-lane free-fl ow (MLFF) of the traffi c, and the technical and commercial operation of such systems. Kapsch Traffi cCom also supplies traffi c management systems, with a focus on road safety and traffi c control, and electronic access systems and parking management. With more than 220 references in 36 countries in all 5 continents, and with more than 14 million on-board units (OBUs) and nearly 12,000 equipped lanes, Kapsch Traffi cCom has positioned itself among the leading suppliers of ETC systems worldwide. Kapsch Traffi cCom is headquartered in Vienna, Austria, and has subsidiaries and representative offi ces in 22 countries.
Kapsch Traffi cCom AG I Am Europlatz 2 I A-1120 Vienna, Austria I www.kapschtraffi c.com
Investor Relations I Marcus Handl I Phone: +43 (0)50811 1120 I Fax: +43 (0)50811 99 1120 I E-Mail: ir.kapschtraffi [email protected] Public Relations I Brigitte Herdlicka I Phone: +43 (0)50811 1710 I Fax: +43 (0)50811 99 1710 I E-Mail: [email protected]
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.