Annual Report • Jun 18, 2008
Annual Report
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Fiscal year 2007/2008.
The world we are living in is still far from being perfect. Therefore, we see it as part of our responsibility to contribute with our products and solutions to making this world a little more perfect in a sustainable manner. In doing this, we have in mind the safety and quality of life of future generations, because our children will have to live with the effects of how we act today. In order to sharpen our view for their very special needs, we want to see the activities of Kapsch Traffi cCom through the eyes of our children. Only in this way can we really meet the requirements for the principle of sustainability. And thus we are "always one step ahead".
Increasing traffi c means increasing environmental pollution. Kapsch Traffi cCom road traffi c telematics solutions guarantee the free fl ow of traffi c, offering a long-term tool to reduce delays and congestion. A good way to consistently reduce CO2 emissions.
The only next sensible step in the fi ght against increasing traffi c volume in the future is the ecologically acceptable expansion of the existing road infrastructure. With its innovative road traffi c telematics solutions, Kapsch Traffi cCom is providing governments important support in realizing this goal.
The global exchange of knowledge and goods has made our world faster, more transparent and more challenging. Increased mobility and networking increase our wealth but at the same time demand responsible management of sensitive issues with a view to our future: environment, personal freedom, security …
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 development of a mobile and networked world.
Manage traffi c intelligently. Consistently add value. Kapsch Traffi cCom
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. 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.
In the fi scal year 2007/08 ending 31 March 2008, Kapsch Traffi cCom AG, listed on the Vienna Stock Exchange in the prime market segment since 26 June 2007, increased EBITDA by 27 % compared to the previous fi scal year to EUR 39.0 million and EBIT by 30% to EUR 34.9 million, whereas revenues slightly declined by 6 % to EUR 185.7 million (2006/07: EUR 198.6 million). The EBIT margin improved considerably from 14 % in the previous fi scal year to 19 % in 2007/08
The past fi scal year is characterized by considerably different developments in the various segments. Whereas tenders for major projects in Central and Eastern Europe (CEE) have been postponed or are still in a preparation phase, leading to a decline of the Road Solution Projects (RSP) segment's revenues, the segment Services, System Extensions, Components Sales (SEC) recorded a signifi cant increase in revenues thanks to rapidly growing business volumes and in line with our strategy. The successful technical and commercial operation of the nationwide truck tolling system in the Czech Republic and the signifi cant increase in sales of components, particularly on-board units (OBUs) resulted in a signifi cant contribution to the segment's encouraging performance. At approximately 2.5 million, sales of OBUs more than doubled from 1.2 million in the previous fi scal year.
In accordance with the positive development of its profi tability, Kapsch Traffi cCom also recorded signifi cant growth of 27 % in Earnings per share, which increased to EUR 2.60. The managing board will therefore propose that the shareholders' meeting to be held on 10 July 2008 resolve a dividend of EUR 0.90 per share.
Undoubtedly, the highlight of fi scal year 2007/08 was the successful initial public offering The offering of 3.7 million shares (including Greenshoe shares) was approximately 14 times oversubscribed, mainly by Austrian and international institutional investors. The offer price was set at EUR 32, at the upper end of the EUR 29 to EUR 32 price range.
At the operational level, Kapsch Traffi cCom continued its expansion strategy with fi rst-time orders in New Zealand and South Africa and large orders in Chile and Australia. Kapsch Traffi cCom also confi rmed its innovation capabilities and offi cially presented its "Kapsch Area" solution to the markets in June 2007. This hybrid solution combines the advantages of microwave technology (dedicated short-range communication – DSRC) with the advantages of satellite technologies (GPS/GSM). In December 2007, Kapsch Traffi cCom concluded the contract on the extension of the nationwide truck tolling system (phase II) in the Czech Republic. In January 2008, the fi rst tolling project of Kapsch Traffi cCom in India successfully started operation.
With these and other projects, Kapsch Traffi cCom continued strengthening its leading position as an international supplier of innovative road traffi c telematics solutions.
| Earnings Data 1 | 2007/08 | 2006/07 | +/- % | 2005/06 | ||||
|---|---|---|---|---|---|---|---|---|
| Revenues | in million EUR | 185.7 | 198.6 | -6 % | 116.2 | |||
| EBITDA | in million EUR | 39.0 | 30.8 | 27 % | 21.0 | |||
| EBITDA margin | in % | 21 | 16 | 18 | ||||
| EBIT | in million EUR | 34.9 | 26.9 | 30 % | 17.3 | |||
| EBIT margin | in % | 19 | 14 | 15 | ||||
| Profi t before tax | in million EUR | 42.8 | 27.0 | 59 % | 17.8 | |||
| Profi t after tax | in million EUR | 32.1 | 20.3 | 58 % | 12.3 | |||
| Earnings per share 2 | in EUR | 2.60 | 2.04 | 27 % | 1.24 | |||
| Free Cashfl ow 3 | in million EUR | -14.8 | -39.1 | -62 % | 14.4 | |||
| Capital Expenditure 4 | in million EUR | 4.0 | 2.3 | 75 % | 1.3 | |||
| Employees as of 31 March (of each year) | 824 | 774 | 6 % | 569 | ||||
| Revenues by Segment (percentage of Revenues) | 2007/08 | 2006/07 | +/- % | 2005/06 | ||||
| Road Solutions Projects (RSP) | in million EUR | 47.0 | (25 %) | 105.0 | (53 %) | -55 % | 18.7 (16 %) | |
| Services, System Extensions, Components Sales (SEC) in million EUR | 128.8 | (69 %) | 80.6 | (41 %) | 60 % | 76.2 (66 %) | ||
| Others (OTH) | in million EUR | 10.0 | (5 %) | 13.0 | (7 %) | -23 % | 21.3 (18 %) | |
| Revenues by Region (percentage of Revenues) | 2007/08 | 2006/07 | +/- % | 2005/06 | ||||
| Central & Eastern Europe (incl. Austria) | in million EUR | 124.2 | (67 %) | 157.3 | (79 %) | -21 % | 68.4 (59 %) | |
| Western Europe | in million EUR | 17.6 | (9 %) | 12.9 | (6 %) | 36 % | 18.9 (16 %) | |
| Americas | in million EUR | 18.8 | (10 %) | 15.4 | (8 %) | 22 % | 9.4 | (8 %) |
| Rest of World | in million EUR | 25.2 | (14 %) | 13.0 | (7 %) | 94 % | 19.5 (17 %) | |
| Balance Sheet Data | 31 March 2008 | 31 March 2007 | +/- % | 31 March 2006 | ||||
| Total Assets | in million EUR | 298.4 | 227.2 | 31 % | 131.9 | |||
| Total Equity 5 | in million EUR | 133.4 | 45.6 | >100 % | 39.1 | |||
| Equity ratio 5 | in % | 45 | 20 | 30 | ||||
| Net assets (+) /-debt (-) | in million EUR | 28.4 | -12.5 | <-100 % | 37.2 | |||
| Capital Employed | in million EUR | 161.3 | 78.2 | >100 % | 48.6 | |||
| Stock Exchange Data 6 | 2007/08 | |||||||
| Offer price per share on 26 June 2007 | in EUR | 32.0 | ||||||
| Number of shares as of 31 March 2008 | in million | 12.2 | ||||||
| Free fl oat as of 31 March 2008 | in % | 30.3 | ||||||
| Closing price as of 31 March 2008 | in EUR | 31.8 | ||||||
| Market Capitalization as of 31 March 2008 | in million EUR | 388.2 | ||||||
| Share performance in fi scal year 2007/08 | in % | -0.6 | ||||||
| Dividend per share | in EUR | 0.90 |
1 only continuing operations
2 earnings per share in fi scal year 2007/08 relate to a weighted average number of 11.7 million shares, in fi scal year 2006/07 relate to 10.0 million outstanding 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 36
Total Assets and Equity ratio 5
Revenues by Segment
1.3
Capital Expenditure 4
in million EUR
2005/06 2006/07 2007/08
2.3
4.0
EBIT by Segment
| EBIT up 30 % to EUR 34.9m 1 | Successful initial public offering in June 2007 |
|---|---|
| EBIT margin improved from 14 % to 19 % 1 |
Offi cial presentation of "Kapsch Area" |
| Revenues in SEC segment up 60 % and EBIT up 84 % 1 |
Contract for extension of nationwide truck tolling system (phase II) in Czech Republic signed |
| Net assets up from EUR -12.5 m to EUR 28.4m 2 |
First-time orders in New Zealand and South Africa |
| Total equity almost tripled from EUR 45.6m to EUR 133.4m 2 |
Large orders in Chile and Australia |
| Equity ratio up from 20% to 45 % 2 | Start of operation of the fi rst completed tolling project in India |
| Earnings per share up 27 % to EUR 2.60 1 | Participation in tenders for nationwide truck tolling systems in Slovakia and in Hungary |
1 Fiscal year 2007/08 compared to fi scal year 2006/07
2 31 March 2008 compared to 31 March 2007
The extension of existing road networks and effi cient measures to reduce emissions are at the very top of the environmental agenda of each industrialized country. Through its developments and solutions, Kapsch Traffi cCom supports the responsible institutions in chosing the right way.
Georg Kapsch, Chief Executive Offi cer
I am delighted to report in this fi rst annual report after the successful initial public offering in June 2007 that Kapsch Traffi cCom considerably increased all relevant earnings data and thereby considerably enhanced its profi tability in fi scal year 2007/08: at EUR 34.9 million, EBIT was up 30 % compared to the previous fi scal year (EUR 26.9 million). The EBIT margin increased from 14 % in the previous fi scal year to 19 % in 2007/08.
The volatility of the project business and the Road Solution Projects (RSP) segment in particular together with large-scale projects ultimately not awarded or postponed led to a decline in revenues in 2007/08 compared to the previous fi scal year, down 6 % from EUR 198.6m to EUR 185.7m. Revenues in the RSP segment were down from EUR 105.0 million in the previous fi scal year to EUR 47.0 million in 2007/08. Nevertheless, the management board is confi dent that large-scale projects will be successfully implemented in the future.
In line with our strategic objectives, the performance of the SEC (Services, System Extensions, Components Sales) segment was particularly strong, with a 60 % increase in revenues from EUR 80.6 million to EUR 128.8 million and an increase in EBIT from EUR 15.8 million to EUR 29.1 million (up 84 %). This was primarily attributable to recurring revenues from the technical and commercial operation of the nationwide truck tolling system in the Czech Republic and a signifi cant increase in the volume of components sales, particularly on-board units (OBUs). At approximately 2.5 million, sales of OBUs more than doubled from the 1.2 million in the
1 Fiscal year 2007/08 compared to fi scal year 2006/07
2 31 March 2008 compared to 31 March 2007
EBIT up 30 % to EUR 34.9m 1
EBIT margin improved from 14 % to 19 % 1
Revenues in SEC segment up 60 % and EBIT up 84 % 1
previous fi scal year. Moreover, bonus payments from the nationwide truck systems in the Czech Republic and in Austria contributed to this positive development of the segment.
With respect to the consolidated balance sheet, I would like to point out that we improved net assets to EUR 28.4 million as of 31 March 2008 (EUR -12.5 million as of 31 March 2007), although we reduced liabilities and bought securities, and total equity to EUR 133.4 million as of 31 March 2008 (31 March 2007: EUR 45.6 million) with an equity ratio of 45 % (31 March 2007: 20%).
In line with the positive development of our profi tability, Earnings per share also increased by 27 % to EUR 2.60 in fi scal year 2007/08 – and we would like you, our shareholders, to benefi t directly from this development. The managing board will therefore propose that the shareholders' meeting to be held on 10 July 2008 resolve a dividend of EUR 0.90 per share for fi scal year 2007/08.
Undoubtedly the highlight of the fi scal year 2007/08 was the successful initial public offering. The offering of 3.7 million shares (including Greenshoe shares) was approximately 14 times oversubscribed. In response to high demand, the offer price was set at EUR 32, at the upper limit of the EUR 29 to EUR 32 price range. I would like to take this opportunity to very much thank all our investors for the trust they have placed in us.
Besides the successful initial public offering, we scored with several new large orders in the past fi scal year. We are particularly proud of the expansion into two new markets: New Zealand and South Africa. New Zealand has decided for its fi rst electronic toll collection (ETC) system. Kapsch Traffi cCom New Zealand Ltd. has been contracted to implement a multi-lane free-fl ow (MLFF) ETC system worth approximately EUR 10.7 million. For the fi rst time in our history, we also received an order in South Africa. Our subsidiary Kapsch Traffi cCom South Africa (Pty) Ltd. has already won its fi rst contract just a few months after its formation in March 2007: the company has been awarded the implementation of a tolling system worth approximately EUR 1.0 million and will be responsible for the maintenance upon completion. The massive demand for road traffi c telematics solutions in South Africa is not solely driven by the 2010 FIFA World Cup. We have identifi ed considerable potential in the country, which we aim to make the most of. To this end, we strengthen our presence in South Africa and enter into a joint venture with South African company Traffi c Management Technologies (TMT). TMT is a leading supplier of intelligent traffi c management systems.
Besides the expansion into new markets, we continued extending our presence in existing markets. Kapsch Traffi cCom was successful in Chile, winning a contract for the implementation of an ETC system worth approximately EUR 1.4 million. Once the system has been implemented, we will continue to be responsible for its maintenance. In Australia, Kapsch Traffi cCom has been contracted to supply the roadside infrastructure equipment
Net assets up from EUR -12.5 m to EUR 28.4m 2
Equity ratio up from 20% to 45 % 1
Earnings per Share up 27 % to EUR 2.60 1
Managing Board proposes dividend of EUR 0.90 per share
Successful Initial Public Offering in June 2007
First-time orders in New Zealand and South Africa
Large orders in Chile and Australia
as well as the central system for the tolling in the North-South Bypass Tunnel in Brisbane, which will upon its completion be the longest tunnel in Australia, with a project volume of approximately EUR 6.4 million. With this contract, Kapsch Traffi cCom is consolidating its No. 1 position in Australia.
In January 2008, operation of the fi rst tolling project by Kapsch Traffi cCom in India commenced successfully. Kapsch Traffi cCom provided a combined manual and electronic tolling system for one section of the National Highway No. 8 that connects Dehli and Gurgaon, one of the most heavily used roads in the region.
We have made substantial progress with regard to the extension of the nationwide electronic truck tolling system in the Czech Republic. On 28 December 2007, we could successfully close the negotiations with the Czech Ministry of Transport (CZ MoT). The amendment to the original contract formalizes the content of the second phase (phase II) of construction of the nationwide electronic truck tolling system in the Czech Republic in a sense that the system shall be extended to another approximately 1,000 km of future motorways, the construction or extension of which is scheduled to begin by the end of 2017. As of 1 January 2008, the existing truck tolling system was already extended by 37 toll gantries to cover about 180 km of selected 1st class roads.
Pursuant to the CZ MoT's most current plans, distance-related tolls are to be extended to cover all vehicles of 3.5 tonnes or more by 1 January 2009. Kapsch Traffi cCom Construction & Realisation will make the necessary adaptations to the existing system and ensure supply of another 350,000 on-board units (OBUs). For the extended use of the tolling system, an interface for a future satellite-based toll collection system on 1st class, 2nd class and 3rd class roads as well as an interface for telematic applications and the implementation of a traffi c regulation system for the D1 motorway route will be implemented. Further, the service agreement has been extended to 10 years.
With respect to the nationwide truck tolling system in Slovakia, the tender was continued after two claims had been settled. The tender comprises the installation of a multi-lane free-fl ow (MLFF) ETC system including 13 years of operation intended for the toll collection on vehicles above 3.5 tonnes on a road network of approximately 2.400 km with a start of operation as of 1 January 2009. The presentation of the offers and the bid opening were concluded on 13 March 2008. On 2 May 2008 we were informed that we had been excluded from the tender process. In our view, the alleged defi ciencies of our submitted offer are unfounded and withouth merit. Therefore, we have fi led an objection against the exclusion of our offer.
Tender for nationwide truck tolling system in Hungary
Tender for nationwide truck tolling system in Slovakia
On 21 December 2007, we were offi cially informed by the responsible authority that the tender process for the implementation and operation of a nationwide electronic truck tolling system in Hungary was discontinued. At the time of the discontinuation, we and two other bidding consortia
Start of operation of the fi rst completed tolling project in India
had already prequalifi ed. From our current point of view, this decision means a postponement and presumably a modifi cation of the tender in terms of content and not a fi nal cancellation.
In June 2007, we offi cially presented our "Kapsch Area" solution to the market. This hybrid solution combines the advantages of microwave technology (dedicated short-range communication – DSRC) with the advantages of satellite technologies (GPS/GSM).
Assuming that economies worldwide continue to perform satisfactorily, and given the growing interest around the world in road traffi c telematics solutions, we take a thoroughly optimistic view of our future prospects. The fi scal year 2008/09 will be shaped by participation in tenders and by project awards in Hungary, Slovenia, Italy, Portugal, France, the U.K., in the Middle East, in the Asian-pacifi c region, South Africa, Argentina, 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. Our success is due to our hard working employees all over the world, who take ownership of economic success and environmental and social issues at the same time. I would like to extend my thanks to the supervisory board for our productive discussions and their effi cient handling of all issues, and my colleague on the managing board, Erwin Toplak, for our most intense and constructive cooperation. My special thanks go out to our employees and senior managers all over the world, whose commitment again allowed us to record excellent results. 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 in a successful future.
With all best wishes
Georg Kapsch Chief Executive Offi cer
Offi cial presentation of "Kapsch Area"
Looking forward with optimism
Thanks to employees and management, Supervisory Board and shareholders
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.
Kapsch Traffi cCom multi-lane free-fl ow ETC systems make it possible to collect tolls without disrupting the fl ow of traffi c. Vehicle data are collected and processed using fully automated technology. The advantage for the environment is clear: it means that harmful emissions caused by traffi c congestions at toll plazas will become a thing of the past.
Kapsch Group founded in 1892
The Kapsch Group was founded in 1892 by Johann Kapsch in Vienna, Austria. In 1916, the Kapsch Group was converted into a stock corporation (Aktiengesellschaft), at which time the company specialized in the manufacturing of telephones and telegraphs. Since the late 1980s, the Kapsch Group has gradually developed into an international communication solutions group.
Kapsch Group entered the road traffi c telematics business in the early 1990s
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 1 and its subsidiaries now form the road traffi c telematics division of the Kapsch Group.
Kapsch Traffi cCom AG established in 2002
Since 2002, the Kapsch Traffi cCom Group has gradually developed into an international road traffi c telematics group 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 (subsequently renamed Kapsch Traffi cCom Argentina S.A.) and VTI Industrials Pty, South Africa in 2007 and entering into strategic partnerships, including Kapsch Telematic Services GmbH, a joint venture company with Brisa group (Portugal), in 2005.
1 Kapsch Traffi cCom AG was formed in 2002 by means of a demerger (demerger with the purpose of new foundation) from Kapsch Aktiengesellschaft (transferring company) on the basis of the fi nancial statements of the transferring company as of 31 December 2001 in accordance with § 1 (2) 2 SpaltG (Austrian Law on the Demerger of Companies).
Since the initial public offering on 26 June 2007, 30.3 % of the shares of Kapsch Traffi cCom AG are in free fl oat, whereas the remaining 69.7 % are held by KAPSCH-Group Beteiligungs GmbH. As of 31 March 2008, 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:
30.3 % of the shares in free fl oat
Erwin Toplak, Chief Operating Offi cer Georg Kapsch, Chief Executive Offi cer
Two-tier management and oversight structure
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.
| Managing board | Name | Area of responsibility | Age | Year fi rst appointed |
Year current term expires |
|---|---|---|---|---|---|
| Georg Kapsch | CEO, Finance and Administration, Legal, Participations, Human Resources, Marketing, Product Management, Business Development, System Design and Quality |
49 | 2002 | 2011 | |
| Erwin Toplak | COO, Sales, Development, Technical Servicing, Project Management, Business Development, System Design and Quality |
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 chairman of the Austrian Electrotechnical Association (Fachverband der Elektro- und Elektronikindustrie) (since January 2003).
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.
In the fi scal year ended 31 March 2008, the total base and variable remuneration for the members of the managing board amounted to EUR 1.1 million including the cross-charge from Kapsch AG relating to the services of Georg Kapsch.
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.
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 appointed by the works council (Betriebsrat) according to the Austrian Labor Constitutional Act (Arbeitsverfassungsgesetz). The current members of the supervisory board are:
Members of the supervisory board
| Name | Position | Age | Year fi rst appointed | Year current term expires |
|---|---|---|---|---|
| Franz Semmernegg | Chairman | 39 | 2002 | 2010 |
| Kari Kapsch | Vice-Chairman | 44 | 2002 | 2010 |
| Elisabeth Kapsch | Member | 47 | 2002 | 2010 |
| Christian Windisch | Member 1 | 44 | 2002 | 2010 |
| Werner Dreschl | Member 1 | 36 | 2006 | 2010 |
1 Appointed by the words 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 a member of the managing board of KAPSCH-Group Beteiligungs GmbH since December 2005 and CEO of Kapsch BusinessCom AG since December 2002. He is also a member of the managing board 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 "Junge Industrie Wien" (Young Industry Vienna) and vice-chairman of "Junge Industrie Österreich" (Young Industry Austria) 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, and of Elisabeth Kapsch.
Elisabeth Kapsch has been a member of the supervisory board of Kapsch Traffi cCom AG since December 2002. She is also a member of the supervisory board of Kapsch BusinessCom AG and a managing director of Kapsch Immobilien GmbH (since November 2000). Prior to this she was head of internal audit of Kapsch AG. Elisabeth Kapsch graduated with a degree in business administration (1984) from Vienna University of Economics and Business Administration (Wirtschaftsuniversität Wien). Elisabeth Kapsch is the sister of Georg Kapsch, the CEO of Kapsch Traffi cCom AG, and of Kari Kapsch.
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 of the trainee program and is currently employed in the 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. In the event that a member's term of offi ce begins or ends during a fi scal year, remuneration is paid on a pro-rata basis. Except for coverage under the company's D&O liability insurance, no compensation is paid to the members of the supervisory board. However, members of the supervisory board elected by the shareholders' meeting render consulting services that are invoiced by Kapsch AG to Kapsch Traffi cCom AG.
Employee Representatives
Remuneration
The following table sets out 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 | Kapsch AG | Member of managing board (CEO) |
| KAPSCH-Group Beteiligungs GmbH | Member of managing board (CEO) | |
| DATAX HandelsgmbH | 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 | |
| West Square Holding GmbH | Managing director | |
| Erwin Toplak | n/a | n/a |
| Supervisory Board | ||
| Franz Semmernegg | Kapsch AG | Member of managing board (CFO |
| KAPSCH-Group Beteiligungs GmbH | Member of managing board (CFO | |
| Kapsch BusinessCom AG | Member of managing board (CFO | |
| Kapsch Sp. z.o.o. | Member of advisory board | |
| Kapsch Telecom Kiev | Member of advisory board | |
| Kapsch Kft. | 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 | Kapsch AG | Member of managing board |
| KAPSCH-Group Beteiligungs GmbH | Member of managing board | |
| Kapsch CarrierCom AG | Chairman of supervisory board | |
| Kapsch BusinessCom AG | Member of managing board (CEO) | |
| Kapsch Sp. z.o.o. | Member of advisory board | |
| Kapsch Telecom Kiev | Member of advisory board | |
| Kapsch Kft. | 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 | |
| Elisabeth Kapsch | Kapsch BusinessCom AG | Member of supervisory board |
| Kapsch Immobilien GmbH | Member of managing board | |
| 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 as of 31 March 2008 are Franz Semmernegg and Kari Kapsch.
The audit committee is responsible for the audit and preparation of the approval of the fi nancial statements and consolidated fi nancial statements, the preparation of a proposal for the distribution of profi ts and the preparation of a management report. Furthermore, the audit committee proposes an auditor, which proposal must be approved by the shareholders' meeting before the auditor is appointed.
One member of the audit committee must be a person with special knowledge and practical experience in fi nance and accounting and reporting (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 "Finanzexperte" 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 as of 31 March 2008 are Franz Semmernegg, Kari Kapsch and Werner Dreschl.
Supervisory board has established two committees
Committee for managing board matters
Audit committee
Franz Semmernegg, Chairman
Report of the Kapsch Traffi cCom AG supervisory board to the Kapsch Traffi cCom AG ordinary shareholders' meeting on 10 July 2008 relating to the fi scal year from 1 April 2007 to 31 March 2008 of Kapsch Traffi cCom AG (Section 96 of the Austrian Stock Corporation Act (Aktiengesetz)) with regard to the unconsolidated fi nancial statements of Kapsch TrafficCom AG as of 31 March 2008, the proposal for the distribution of profits from the fiscal year from 1 April 2007 to 31 March 2008 made by the Kapsch Traffi cCom AG managing board, the management report, audited consolidated fi nancial statements as of 31 March 2008 and the consolidated management report by the Kapsch Traffi cCom AG managing board.
unqualifi ed audit opinion. The unconsolidated and consolidated fi nancial statements, the managing board's profi t distribution proposal and the auditors' audit reports (including the "management letter") were discussed in detail with the managing board and the independent auditors in the audit committee and presented to the supervisory board. The supervisory board has reviewed these documents in accordance with Section 96 of the Austrian Stock Corporation Act (Aktiengesetz) and approved the unconsolidated fi nancial statements in line with Section 125 Para. 2 of the Austrian Stock Corporation Act (Aktiengesetz). The supervisory board concurs with the managing board's proposal for the distribution of profi ts.
Dr. Franz Semmernegg Chairman
Commitment to corporate governance since June 2007
Corporate governance plays a key role for Kapsch Traffi cCom because, as close cooperation between the company's management and supervisory boards is essential in order to safeguard shareholder interests, to increase transparency, to establish clear responsibilities and to increase confi dence by all stakeholders.
Kapsch Traffi cCom has committed to compliance with the Austrian Code of Corporate Governance and its aim to establish a system of management and control that is accountable and is geared to create sustainable, long-term value. Consequently, transparency is the most important task.
The Austrian Code of Corporate Governance (the "Code") was published by the Austrian Working Group on Corporate Governance, a group of private organizations and individuals. The Code constitutes the equivalent of international standards for responsible management with a view to companies in Austria. This voluntary self-regulatory initiative is designed to reinforce the confi dence of investors by improving reporting transparency, and the quality of cooperation between supervisory board, managing board and shareholders, to provide for accountability and promote sustainable, long-term value. The Austrian Code of Corporate Governance
The Code is based on statutory provisions of Austrian corporate law, securities law and capital markets law ("legal requirements"). In addition, the Code contains rules considered to be a part of ordinary international practice, such as the principles set out in the OECD Principles of Corporate Governance. Non-compliance with these rules must be explained to the shareholders' meeting ("comply or explain"). However, the Code also contains rules that are voluntary and do not require explanation if not followed ("recommendations"). The Code was fi rst presented on 1 October 2002. The Code was amended in February 2005, January 2006 and June 2007.
Kapsch Traffi cCom has intensely examined the requirements of the Austrian Code of Corporate Governance. In June 2007, the managing board 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. Kapsch Traffi cCom will therefore publish, on an annual basis, a statement of compliance as provided in No. 58 of the Code. The evaluation of compliance with the Code is made by the compliance offi cer together with the internal audit on an annual basis. Corporate Governance declaration
As of 31 March 2008, Kapsch Traffi cCom AG has complied with the L-Rules and C-Rules of the Code, except for the following C-Rules:
Exceptions for C-Rules
Rules 4 and 6. Due to the intense competition in the industry in which the company is active, it will not publish on its website any documents to be made available to shareholders at the company's registered offi ce, any motions by shareholders or the results of votes.
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. Due to the current shareholder structure, the company currently has no member of the supervisory board elected by the shareholders' meeting who is independent of KAPSCH-Group Beteiligungs GmbH. It is considered to procure the appointment of an independent member in the next shareholders' meeting.
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) all information it may make available to fi nancial analysts.
Economic and political environment
A favorable business climate supported strong development on most of the major international stock exchanges during the fi rst half of 2007. Corporations reported sound earnings, and the strength of the global economy was underscored by robust indicators.
In contrast, the second half-year was characterized by strong turbulences and market declines in the wake of the crisis in the fi nancial markets. After a roller coaster performance, the English FTSE 100 Index ended the year with +4 %, while the German DAX recorded strong growth of +22 %.
The ATX index of the Vienna Stock Exchange outperformed most of the other European indexes during the fi rst six months – above all due to the prevailing M&A fantasy – and climbed to a historical all-time high of 5,010.93 points at the beginning of July 2007. The ATX was hit by a signifi cant correction in August as a result of the crisis in the fi nancial markets, but recovered briefl y in early November. This short upturn was followed by a downward slide to its 2007 low of 4,088.79 points. The fi nal 2007 level of 4,512.98 exceeded the prior year level only slightly, by +1 %.
Substantial gains were recorded in the key U.S. stock indexes at the beginning of 2007, but were followed by a massive drop in share prices on all U.S. markets during the second halfyear. This trend reversal was a direct consequence of the fi nancial crisis that was triggered by the corrections in the real estate sector. Hesitancy on the part of market participants and uncertainty over the actual impact of the crisis in the fi nancial markets on the real estate sector resulted in heavy losses for the U.S. stock indexes. The Dow Jones Industrial closed at 13,265 points and an annual performance of +6 %. The American S&P 500 ended the year with a modest plus of 4 %.
The Kapsch Traffi cCom AG share ended the fi scal year 2007/08 at EUR 31.82 on 31 March 2008, down 0,56 % compared with the offer price per share of EUR 32.00 on 26 June 2007. Immediately following the initial public offering, the Kapsch Traffi cCom AG share showed an initial upward trend, reaching an intraday high of EUR 43.75 on 4 July 2007. At the end of the fi rst half-year, as of 30 September 2007, the share price was EUR 38.49. With the beginning of the third quarter of 2007/08, the share price experienced a decline due to the overall situation of the stock market and closed on 20 November 2007 for the fi rst time below the offer price per share at the initial public offering. Until 5 December 2007, the price per share recovered to EUR 35.85 (closing price) and closed the third quarter at EUR 34.94 (closing price). With the beginning of the calendar year 2008, the share price declined to EUR 24.55, recovered throughout February and March and closed the fi scal year 2007/08 at a share price of EUR 31.82 as of 31 March 2008.
Since the initial public offering, the price of the share has declined by 0.56 %, as of 31 March 2008, while the ATX Prime was down by approximately 26 %.
Kapsch Traffi cCom AG share in fi scal year 2007/08
1 Offer price on 26 June 2007 and opening value for ATX Prime on 25 June 2007, each indexed to 100
Based on a closing price of EUR 31.82 per share as of 31 March 2008 and the number of outstanding shares in circulation unchanged at 12.2 million, Kapsch Traffi cCom's market capitalization as of the end of the fi scal year 2007/08 was EUR 388.2m.
| Key Data per Share | 2007/08 | |
|---|---|---|
| Earnings | in EUR | 2.60 |
| Dividend | in EUR | 0.90 |
| Free cash fl ow | in EUR | -1.26 |
| Equity | in EUR | 10.93 |
| Offer price per share 1 | in EUR | 32.00 |
| Share price high 2 | in EUR | 43.75 |
| Share price low 2 | in EUR | 24.55 |
| Share price at fi scal year-end 3 | in EUR | 31.82 |
| P/E ratio at fi scal year-end 3 | in EUR | 12.23 |
| Number of shares 3 | in million | 12.20 |
| Weighted average number of shares | in million | 11.68 |
| Free fl oat 3 | in % | 30.30 |
| Market capitalization 3 | in million EUR | 388.20 |
| Performance of share 4 | in % | -0.56 |
| Performance of ATX Prime 4 | in % | -26.00 |
| Average trading volume 4+5 | in million EUR in 1,000 shares |
1.49 41.39 |
Closing price of EUR 31.82 per share with market capitalization of EUR 388.2m
Key Data per Share
1 on 26 June 2007
2 Intraday
3 as of 31 March 2008
4 Since the initial public offering (IPO) of Kapsch Traffi cCom AG on 26 June 2007 until 31 March 2008
5 Double counting
The 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. Dividend policy
The managing board will propose that the shareholders meeting to be held on July 10 approve a dividend of EUR 0.90 per share for fi scal year 2007/08. Managing board recommends dividend of EUR 0.90 per share
Shareholder structure
Since the initial public offering on 26 June 2007, 30.3 % of the shares of Kapsch Traffi cCom AG are in free fl oat, whereas the remaining 69.7 % are held by KAPSCH-Group Beteiligungs GmbH. As of 31 March 2008, no other shareholder held shares of Kapsch Traffi cCom conferring voting rights in excess of 5 %.
Kapsch Traffi cCom AG 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 (39.7 %) as well as North America (13.4 %). Given that KAPSCH-Group Beteiligungs GmbH as principal shareholder holds 69.7 % of the shares, the share of private investors totals 4.9 %, whereas 22.9 % are held by institutional investors (with the top ten in the aggregate holding 79.2 % of that share).
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 road shows 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 our company by reputable Austrian and international investment banks maintains the visibility of the Kapsch Traffi cCom AG share in the fi nancial community. As of 31 March 2008, Kapsch Traffi cCom AG was covered by four analysts (in alphabetical order): Berenberg Bank (Hamburg), Erste Bank (Vienna), Sal. Oppenheim (Frankfurt/Cologne) and UniCredit (Vienna).
| Information on the Kapsch Traffi cCom share | |
|---|---|
| Investor Relations Offi cer | Marcus Handl |
| Shareholders' Telephone | +43 (0)50811 1122 |
| 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 |
Investor Relations
Coverage by four investment banks
Road user charging for entering and parking in inner cities is an effective tool to manage road traffi c. Toll collections from urban traffi c solutions provide proceeds necessary to fund extensions of existing roads and parking space, P&R parking lots and public transportation. Kapsch Traffi cCom is a leading international supplier of road traffi c telematics solutions.
Market Drivers in the road traffi c telematics market.
Kapsch Traffi cCom believes that the main drivers in the road traffi c telematics market and particularly in the road user charging (RUC) systems market segment primarily include the funding of road infrastructure projects, the reduction of congestion, the reduction of environmental pollution and the reduction of road accidents. Road user charging as a means to fund infrastructure projects. The growth in the number of vehicles requires additional financing to construct new and maintain existing roads. Tolling offers a constant source of financing and thus helps governments in providing financing required for infrastructure projects. Efficient, in particular electronic toll collection (ETC) systems, offer a significant, 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. Road user charging 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 would further encourage carpooling or use of public transportation, respectivly to 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, 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 or dynamic parking management systems also reduce the levels of congestion and environmental pollution. Reduction of road accidents. Traffi c management systems, in particular are expected to Four main market drivers in the road traffi c telematics market Road user charging as a means to fund infrastructure projects Reduction of congestion Reduction of environmental pollution Reduction of road accidents
increase the probability to survive accidents and to decrease accident rates.
The following graphic shows the main existing electronic toll collection (ETC) systems worldwide and the technologies primarily used:
Electronic toll collection (ETC) systems worldwide and technologies and standards primarily used
1 DSRC – dedicated short-range communication
2 CEN – Comité Européen de Normalisation – Commitee for Standardization
Among certain countries and regions, there is still a lack of uniform technical standards for DSRC based ETC systems. Whereas in Europe DSRC based ETC systems operating on a 5.8 GHz range prevail, current ETC systems in North America operate on a 915 MHz frequency on several proprietary protocols. Various industry studies expect that the United States will gradually switch to a 5.9 GHz frequency.
In the European Union, the EU Directive 2004/52/EC of April 2004 on the interoperability of ETC systems within the EU aims at the introduction of tolling systems for all types of road networks, urban and interurban, motorways, major and minor roads and various structures (such as tunnels, bridges and ferries), which are interoperable among member states, including the introduction of a single on-board unit (OBU) to be installed in vehicles for Europe-wide toll collection.
Pursuant to this EU Directive, from 1 January 2007, all new electronic toll systems for carrying out electronic toll transactions, shall use one or more of the following technologies: 5.8 GHz microwave technology (DSRC) or satellite positioning or mobile communication using the GSM/GPRS standard (VPS).
Lack of uniform standards for ETC systems worldwide
ETC standards in the European Union
Manual and automatic toll collection systems
Electronic toll collection – ETC systems
Single-lane ETC systems
Three main toll collection methods for road user charging (RUC) currently exist: manual toll collection, automatic toll collection, and electronic toll collection (ETC).
Manual toll collection systems are the oldest method of charging for the use of roads. In manual toll collection systems, toll plazas or booths are installed in various locations of a motorway, highway or the section of the road for which a toll is to be paid. Vehicles passing through the tolling zone stop and the payment is made in cash, by cheque or credit card to the operator or staff in the toll booth.
Automatic toll collection systems have been set up primarily to reduce human interactions at toll plazas. In automatic toll collection systems, coin machines or card readers are installed in toll plazas, so that drivers can insert coins, credit cards or prepaid smart cards to receive toll tickets, thereby reducing the loss of time associated with congested toll plazas. However, vehicles using the road are still required to stop at toll plazas and pay for the toll.
Electronic toll collection (ETC) systems use technologies that allow to pay for the use of a road without requiring vehicles to stop at toll plazas. In ETC systems, transceivers are mounted on overhead gantries or on the roadside. The tolling zone's entry and exit boundaries are defi ned by transceivers and on-board units (OBUs) installed in vehicles communicate with the transceivers to register that a vehicle passed through the tolling zone. Vehicle information is then transmitted to a central computer for billing purposes. ETC systems are in line with the policy on reducing road congestion and delays at toll plazas.
Single-lane 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 mounted on gantries on the respective lane of the toll plaza and the transponder (OBU) in the vehicle. Single-lane ETC systems are infrastructure-based systems using DSRC technology.
Multi-lane free-fl ow (MLFF) ETC systems allow for toll collection without any interference to the traffi c fl ow by gathering and processing tolling data for a vehicle electronically and fully automatically. For MLFF ETC systems, no tolling plazas are necessary and vehicles are not required to reduce speed and may even change lanes while passing through the toll zone. MLFF ETC system can either be infrastructure-based systems using DSRC technology or satellite-based using VPS.
There are three main technologies used for road user charging (RUC): dedicated short-range communication (DSRC), vehicle positioning systems (VPS) and automatic number plate recognition (ANPR) technology.
Dedicated short-range communication (DSRC) uses a bi-directional dedicated shortrange communication frequency between roadside infrastructure (in particular, transceiver) and in-vehicle devices (transponders, also referred to as on-board unit – OBU or "tag").2
Vehicle positioning systems (VPS) use satellite-based instead of terrestrial systems for the calculation of the travelled distance.2
Automatic number plate recognition (ANPR) technology uses a set of fi xed cameras and mobile cameras that are placed on the boundaries of a congestion zone and at selected locations throughout the zone. These cameras are equipped with ANPR software that can accurately recognize and read images on the vehicle's number plate and transmit data to a back offi ce processing centre where the number plates are compared to a database containing vehicle owners' details, and payment data are processed.
For DSRC-based systems, both the CEN (Comité Européen de Normalisation) TC 278 Standard as well as the international ISO standard for electronic toll collection exist.
1 The market segmentation follows the classifi cation in research studies, such as Frost & Sullivan, 2004
2 DSRC and VPS are described in more detail in section Technology on pages 46 to 49
Multi-lane free-fl ow – MLFF ETC systems
Transceiver and transponder (also referred to as on-board units or "tags")
Automatic number plate recognition – ANPR
CEN (Comité Européen de Normalisation) TC 278 Standard
ETC systems generally consist of three main subsystems and components
Tolling system
Electronic toll collection (ETC) systems generally consist of three main subsystems and components: Tolling system, enforcement system and central system.
The tolling system comprises all components required for the collection and processing of the tolling data from vehicles. The tolling systems for single-lane ETC systems are infrastructure-based systems using DSRC technology. However, the tolling system for a MLFF ETC system can either be infrastructure-based systems using DSRC technology or satellite-based using VPS.
The enforcement system is part of single-lane and MLFF ETC systems. Both infrastructurebased DSRC and satellite-based VPS ETC systems require enforcement systems to detect toll violators. Enforcement systems support comprehensive measures to avoid toll violations, to secure revenues to road operators and to preserve the integrity of the system as a whole, thereby maintaining a high degree of fairness vis-à-vis all users. Effective and effi cient enforcement is key for the success of a system.
The enforcement station is mounted on overhead gantries above motorways, or on roadsides. It consists of a video-based registration system and a classifi cation system. The registration system consists of a high speed video camera that automatically reads the licence plates of vehicles. The classifi cation system automatically classifi es the vehicle (i.e., truck with or without trailer, passenger car, motorbike etc.). The classifi cation system is either based on laser-scanning technology or on video technology.
The enforcement system compares the enforcement data with the data derived from the tolling system (i.e., the data transmitted by an OBU) and automatically checks whether a toll violation has occurred. In addition to fi xed enforcement stations, the enforcement system also comprises mobile enforcement vehicles that are used to enforce toll violations by vehicle drivers at any point on the road.
The central system processes the toll transactions. The central system is in particular responsible for the processing of enforcement cases. The technical part of the central system is responsible for monitoring and technical maintenance (technical operation) of the system.
Enforcement system
Central system
DSRC-based ETC systems use a bi-directional dedicated short-range communication frequency between an roadside infrastructure (in particular transceiver) and in-vehicle devices (transponders, also referred to as on-board unit – OBU or tag).
OBUs are in-vehicle devices (transponders or tags) that are mounted on the windshield of a vehicle for identifi cation of the vehicle. The OBUs communicate with the roadside infrastructure that transmits the signals when the vehicle equipped with the OBU passes through a tolling zone. Roadside infrastructure primarily includes transceivers and local computing infrastructure for data storage and transmission. The transceivers establish the entry and exit boundaries for the respective tolling zone and are mounted on overhead gantries above motorways or on roadsides.
The communication between the OBU and the transceiver in most cases is based on DSRC technology. The tolling data is transmitted from the OBU to the transceiver and processed at the roadside computer and transmitted via a wide area network (WAN) through a data center to the central system.
VPS-based ETC systems use satellite-based instead of terrestrial systems for the calculation of the travelled distance.
The information about the position of a vehicle is collected through satellite-based infrastructure (e.g., GPS) and the OBU transmits the tolling data via GSM/GPRS infrastructure to the central system. To achieve suffi cient accuracy for toll transaction, DSRC transceivers are frequently used in satellite-based ETC systems. In satellite-based ETC systems only limited roadside infrastructure (such as transceivers mounted on gantries) is required.
It is not a substitute but a combination. Kapsch Traffi cCom believes that neither of these two technologies in general can be identified as being superior to the other technology. Depending on the specific requirements defined by the customer and the circumstances (in particular, the tolling scheme, number and class of vehicles subject to tolls and the structure of the road network), one technology may provide a better solution than the other. Moreover, Kapsch TrafficCom believes that neither of these two technologies may be entirely substituted by the other technology, but these technologies should, to a certain extent, be combined.
It is not a substitute but a combination
Kapsch Traffi cCom believes that the intended use is essential when evaluating the advantages and disadvantages of DSRC-based and VPS-based ETC systems. In the opinion of Kapsch Traffi cCom, DSRC-based systems enjoy comparative advantages on highways and in urban environments. In particular, DSRC-based systems are more fl exible and less expensive in all cases, in which the tolling system will be extended to other classes of vehicles, e.g., if the system is initially limited to trucks and is extended to passenger cars in a next step.
All-vehicle tolling
Costs
VPS-based ETC systems, however, enjoy competetive advantages of DSRC-based ETC systems in terms of fl exibility whenever tolling systems are intended to cover all types of roads (all-road tolling) or, as the case may be, if the road network subject to tolling is to be expanded, e.g., if the system is initially limited to highways and subsequently expanded to all types of roads (all-road tolling).
For these reasons, a combination of both systems may in certain cases offer the better solution in the opinion of Kapsch Traffi cCom.
Other than the specifi c use, DSRC-based and VPS-based systems differ, in the view of Kapsch Traffi cCom, at least by the following three criteria.
Reliability and accuracy of the ETC system. The toll transaction rate is a measure of the accuracy and reliability of the tolling system. It indicates the number of successful toll charging transactions in relation to all potential toll charging transactions of vehicles equipped with an on-board unit (OBU). A high toll transaction rate ensures maximum toll revenues.
Based on market intelligence, Kapsch Traffi cCom believes that with its existing DSRCbased ETC systems signifi cantly higher toll transaction rates can be achieved than with ETC systems based on VPS only. We believe that with VPS-based ETC systems such high toll transaction rates cannot be achieved due to the following main reasons. Firstly, the quality of positioning data varies (visibility to the satellite, signal quality and general inaccuracy of positioning data) and, secondly, the matching of the positioning data with the digital map depends on the quality of the map and the algorithms used.
The average performance rate for the Austrian truck tolling systems was approximately 99.7 % in 2007.
Costs. The overall costs for ETC systems have to be divided into the costs for the installation of the systems (including tolling system, enforcement system and central system as well as the costs for the OBUs), and the technical and commercial operation.
Reliability and accuracy of the Reliability and accuracy of the ETC system The costs for the installation comprise the costs for the OBUs and the costs for the roadside infrastructure (DSRC-based systems, to a lesser extent for VPS-based systems). Since OBUs for a VPS-based system require signifi cantly more complex technology than for a DSRC-based system, the costs for an OBU for a VPS-based system are signifi cantly higher than the costs for a DSRC-OBU.
The costs for the roadside infrastructure are higher for DSRC-based ETC systems (in particular, if the tolling structure comprises a large road network and also lower class roads), since existing VPS-based ETC systems require less roadside infrastructure than DSRCbased systems (overhead gantries, for the enforcement system and DSRC-based poles).
The costs for enforcement systems and central systems for both technologies are similar.
However, the costs for the transmission of toll transactions via GSM and the higher costs for manual post-processing (due to the lower transaction rates a large portion of manual postprocessing is required) lead to signifi cantly higher operational costs for a VPS-based ETC system than for a DSRC-based ETC system.
Flexibility of tolling structure and expansion. The tolling structure differs in many categories and may change over time (such as size and type of road network subject to tolling, time-dependent tariffs, distance-based or access-based schemes and vehicle classes subject to tolling).
Certain road operators require that tolling systems be fl exible to accommodate extension and adaptation to different tolling schemes, particularly with respect to the number and the classes of vehicles subject to tolling. DSRC-based ETC systems are in general fl exible for extension, but extension requires additional roadside infrastructure and therefore result in additional costs, whereas VPS-based ETC systems may be more fl exible for extension at lower costs.
Kapsch Traffi cCom also believes that in the future in certain tolling projects a combination of microwave DSRC-based technology and VPS-based technology may be required. Therefore, we offer "Kapsch Area", a hybrid solution combining the advantages of DSRCbased systems with the advantages of VPS-based ETC systems.
On-board unit (OBU)
Flexibility of tolling structure and expansion
We intend to capitalize on our leading market positions and increase our market share
We are currently examining the expansion of our business into the North American market
We intend to expand our offerings of urban traffi c solutions
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:
Exploit new and further market opportunities. We intend to participate in the strong expected growth in the global road traffi c telematics market, particularly in the road user charging (RUC) market, and believe that signifi cant opportunities exist across the world for the provision and operation of systems.
We intend to capitalize on our leading market positions and increase our market share in the geopgraphic markets where we already have a strong presence.
In addition, we intend to continue and intensify the regional expansion of our multinational footprint into selected new markets, including markets in certain countries in Central and Eastern Europe. We also plan to target new growth opportunities and plan to participate in selected tender procedures for tolling projects of various scales on all continents.
The company is currently also examining the expansion of its business into the North American market. For that purpose, companies were already established and a CEO was appointed.
In particular, we will participate in the tender procedures for further nationwide road tolling projects. We believe that "Kapsch Area" is a cost effi cient hybrid solution, that combines the advantages of microwave technology (dedicated short-range communication – DSRC) with the advantages of satellite technologies (GPS/GSM), thereby meeting specifi c customer requirements (e.g., all-road and all-vehicle tolling) in larger nationwide ETC systems.
We carefully and permamently consider strategic acquisitions or joint ventures if we determine that growth in selected geographical regions could be undertaken more effi ciently or our technological leadership position be strengthened or expanded.
We also intend to expand our offerings of urban traffi c solutions including city charging/ tolling systems, systems for parking management (e.g., automatic charging of parking fees for vehicles parking on-street) as well as electronic access systems.
In connection with electronic vignette (E-Vignette), which we believe may substitute traditional paper vignettes over time, we intend to provide advanced services, including road traffi c telematics services.
Permanently targeting for technological leadership. We intend to leverage our technological leadership in order to further broaden and enhance our product and service portfolio.
Based on our existing know-how, we also plan to expand our offerings of intelligent videobased event recognition systems and traffi c surveillance solutions including, inter alia, vehicle identifi cation systems, vehicle classifi cation systems (in addition to current application for ETC systems), hazardous goods management, video surveillance, congestion warning, wrong-way driver detection and vehicle, person and object tracking.
In addition, we are preparing to develop systems and products conforming to future technical standards in the North American market.
Expand our position as a commercial operator of road user charging systems. We plan to expand our position as a commercial operator of road user charging systems and intend to build on our experience from the successful commercial operation of the nationwide electronic system in the Czech Republic.
Through new projects where we are also responsible for the commercial operation, the technical operation of systems and the supply of supplemental equipment and components for the extension of installed systems, we plan to constantly increase the volume of recurring revenues.
We intend to expand our offerings of intelligent video-based event recognition systems and traffi c surveillance solutions
We intend to expand our position as a commercial operator of road user charging and traffi c management systems
The following strengths and, in particular, the combinations of these strengths, differentiate us from our competitors and provide the company with a competitive advantage in the markets in which we operate:
Leading market positions in ETC systems and multinational presence. Based on our own market research we believe that we are the world market leader in DSRC-based MLFF ETC systems (by equipped lanes). We believe further that we are the world market leader in CEN-compliant OBUs (based on the number of units sold) and that one of our recently developed OBUs is the world's smallest CEN-compliant OBU.
We believe that our leading market positions and our presence across Europe, Australia, Latin and North America, the Middle-East, the Asian/Pacifi c region and Africa allow us to capitalize on attractive growth opportunities.
Technological leadership and strong project management capabilities. We have established a global reputation for technological leadership in road traffi c telematics solutions over the past more than 15 years. Our technological leadership is based in particular on our highly skilled employees.
Our strong project management skills and our capabilities in designing and implementing large and sophisticated projects are demonstrated by our track record of more than 140 projects and installations.
We believe that our customers associate our systems and components with high quality, reliability, accuracy and strong technical expertise. Our technological leadership is demonstrated by the high performance levels of 140 installed systems. The average performance rate in Austria was approximately 99.7 % in 2007. During the same period, the average performance rate of the nationwide electronic system in the Czech Republic (phase I) was approximately 97.5 %. 1
Diverse and highly customized ETC systems and other traffi c telematics solutions. Based on our portfolio of products and services, we offer end-to-end systems thereby covering the entire value chain from the design and development of an system to its turnkey implementation and its technical and commercial operation.
Through our own technology and know-how and our manufacturing capabilities, we are able to design, develop and supply systems and other road traffi c telematic solutions tailored to project and customer requirements in a cost and time effi cient manner. We believe that
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.
Leading market positions in ETC systems and multinational presence
The world's smallest CEN-compliant OBU
Technological leadership and strong project management capabilities
Diverse and highly customized ETC systems and other traffi c telematics solutions
operating costs for our DSRC-based ETC systems tend to be lower than for certain other tolling systems.
We believe that our diverse product portfolio combined with our ability to effi ciently supply customized systems provides us with a competitive advantage in tender processes for new projects.
Strong and experienced management team. Our management team has a proven track record in the road traffi c telematics business. Most members of our middle management have been with us or with our predecessors for more than 10 years.
Strong and experienced management team
Competence Centers in Austria, Sweden and Argentina
Kapsch Traffi cCom has a network of research and development centers in Vienna (Austria), Jönköping (Sweden) and Buenos Aires (Argentina). Research and development activities are being coordinated from the headquarters in Vienna. As of 31 March 2008, Kapsch Traffi c Com employed approximately 170 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 are a high priority
Research and development activities 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 competitive advantage.
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 with the goal to establish whether newest technologies are applicable for tolling, safety, security and other road traffi c telematics. In the fi scal year 2007/08 approximately 36 % of the research and development activities were customerspecifi c; the remaining 64 % 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.
The additional research and development costs for the fi scal year 2007/08 amounted to EUR 14.8 million.
We view our mission as consistently creating competitive advantages and benefi ts for our customers and partners while ensuring that we always live up to our responsibility with regard to the environment With this goal in mind, we bring together technological innovation, the skills of our employees and a deep sense of dedication to professionalism, quality and profi tability. Our objective is global leadership in quality and innovation for traffi c telematic solutions. In order to meet this objective, we strive towards a synthesis of tradition, profi tability and growth.
Kapsch Traffi cCom has once again confi rmed its innovative strength in June 2007 by introducing to the market "Kapsch Area" – a hybrid solution that combines the advantages of microwave technology (DSRC) with those of satellite-based technology (GPS/GSM).
Kapsch Traffi cCom wins over and retains customer confi dence through the focus on customer requirements. Kapsch Traffi cCom intends to achieve long-lasting partnerships with satisfi ed customers through optimal service.
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 already possesses quality and environmental certifi cates according to ISO 9001 and Environment ISO 14001. In future, Kapsch Traffi cCom will continue to increase its social engagement. In particular, it is important to use environmental resources in an increasingly protective and responsible manner. In addition, no environmental risks exist in connection with Kapsch Traffi cCom.
The quality processes at Kapsch Traffi cCom have been created on the basis of ÖNORM EN ISO 9001:2000 and also meet the requirements of the V-model.
Innovations
Quality
The product and service portfolio
Tolling systems
Our portfolio for road traffi c telematics includes the following systems, products and services that we offer to customers across the world:
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 ETC 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 electronic toll collection (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 VPS-based ETC systems. 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 and therewith facilitates all-road tolling.
Components sales. Besides the delivery of systems, we also develop components and supply these 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 one of our subsidiaries 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), a joint venture company with Portugese Brisa group, a leading motorway operator, in which joint venture we hold a benefi cial interest of 74 %, 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, we also provide engineering solutions, electronic manufacturing and logistics services to affi liated entities and thirdparty customers.
Urban traffi c solutions
Traffi c surveillance
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 commencement of a tender process is generally preceded by a phase during which the principal orders feasibility studies and evaluates the merits of a tolling project. This phase may take several months or even years. The tender process may take between six and 18 months or, in certain cases, even longer. After the submission of bids, the road concessionaire or public authority evaluates the bids and announces the award generally within weeks. Delays in tender processes may be caused when bidders that did not prevail in the tender process engage in administrative or legal proceedings to challenge the validity of the award to competing bidders.
The timing of completion of a project is very much dependent on its size and type. For instance, the installation of a nationwide ETC system may take approximately nine to 15 months (completion of phase I of the nationwide Czech truck tolling system took approximately nine months whereas the roll-out of the nationwide Austrian truck tolling system took approximately 15 months).
Kapsch Traffi cCom offers road traffi c telematics systems, products and services to customers in Europe, Australia, Latin and North America, the Asian/Pacifi c region, the Middle-East, and Africa. Our principal customers are public authorities and private sector concessionaires. Certain components, systems and solutions are also offered to system integrators.
In the past fi ve years, the company has completed three out of four nationwide tolling projects tendered in Europe, either as general contractor or as supplier of infrastructure. Besides the successful implementation of phase I of the nationwide truck tolling system in the Czech Republic and of the fi rst and so far largest nationwide MLFF ETC system in the world in Austria, Kapsch Traffi cCom has implemented ETC installations in 28 countries throughout Europe, Australia, Latin America, Middle East and the Asian/ Pacifi c region as well as South Africa. As an international supplier of innovative road traffi c telematics solutions Kapsch Traffi cCom has subsidiaries and representative offi ces in 20 countries across the world.
With more than 140 installed tolling systems in 30 countries and almost 12 million on-board units and nearly 11,000 equipped lanes, Kapsch Traffi cCom has positioned itself among the leading suppliers of ETC systems worldwide.
Markets and customers
Subsidiaries and representative offi ces in 20 countries
More than 140 installed tolling systems in 30 countries
Nationwide truck tolling system in the Czech Republic. Following a public tender conducted by the Czech Ministry of Transport, in March 2006 a consortium consisting of Kapsch Traffi cCom AG, certain of its subsidiaries and other companies of the Kapsch Group as well as Asseco Czech Republic a.s. 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 ETC system.
The completion schedule for the installation of the ETC system is divided into two phases: Phase I comprises an ETC system covering approximately 1,000 km of motorways and freeways and was completed by 31 December 2006 and has been in operation since 1 January 2007, the agreed date and to the customer's full satisfaction. Phase I of the ETC system comprises 172 toll stations (of which 147 are MLFF toll stations), 12 enforcement stations (both directions), 13 enforcement stations (one direction) as well as mobile enforcement cars, all contact and distribution points. Phase II comprises 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. As of 1 January 2008, the existing truck tolling system was already extended by 37 toll gantries to cover about 180 km of selected 1st class roads that are primarily used by international transit traffi c.
The services in connection with the technical and commercial operation of the system are provided pursuant to a long-term service agreement. These services comprise corrective and preventive maintenance, repairs and spare parts management, print services and call centers, distribution and contact points, clearing and billing, manual validation of enforcement cases, public relation activities and the development and maintenance of tolling applications. Since 1 January 2007, these services are provided through a Czech subsidiary.
Until 31 March 2008, approximately 1.206 lanes had been equipped and 680.000 OBUs supplied. Until 31 March 2008, the project generated revenues of EUR 184.3 million EUR, thereof EUR 78.1 million in the fi scal year 2007/08.
Nationwide truck tolling system in the Czech Republic
Nationwide truck tolling system in Austria
Nationwide truck tolling system in Austria. Kapsch Traffi cCom successfully implemented the nationwide MLFF ETC system for trucks in Austria by 31 December 2003, and toll collection commenced 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. So far, the Austrian toll system is the largest full-coverage DSRC-based MLFF ETC system in the world, consisting of 430 MLFF stations (more than 2,700 lanes), of which 106 are enforcement sections.
Until 31 March 2008, approximately 2.700 lanes were equipped and approximately 775.000 OBUs were supplied and the project generated revenues of EUR 337.0 million EUR, thereof EUR 27.7 million in the fi scal year 2007/08.
Heavy vehicle toll collection system in Switzerland
Heavy vehicle toll collection system in Switzerland. Kapsch Traffi cCom implemented the technical infrastructure part of electronic tolling stations at 86 border crossings and the enforcement system as well as the respective back-offi ce infrastructure for the processing of enforcement cases for the nationwide distance-related heavy vehicle MLFF ETC system on Swiss motorways. The project was awarded by the Swiss Customs Authority (Eidgenössische Zollverwaltung) and the ETC system commenced operation in 2001.
Until 31 March 2008, approximately 380 lanes were equipped and the project generated revenues of EUR 33.4 million EUR, thereof EUR 3.5 million in the fi scal year 2007/08.
Express. Kapsch Traffi cCom successfully 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 operations (Autopista Central in December 2004, Costanera Norte in April 2005 and Vespucio Norte Express in January 2006).
Until 31 March 2008, approximately 190 lanes were equipped and approximately 1.2 million OBUs were supplied and the projects generated revenues of EUR 92.9 million EUR, thereof EUR 18.0 million in the fi scal year 2007/08.
Projects in Australia: Melbourne City Link. 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 2004, Kapsch Traffi cCom realized the WM7 (former Western Sydney City Orbital) project in Sydney with the implementation of a MLFF ETC system and the supply of equipment for vehicle detection and classifi cation (VDC) as well as for vehicle registration (VDR). The project was awarded by the Transurban Infrastructure Development Pty. Ltd. The MLFF ETC system commenced commercial operation in January 2006 (eight months prior to the contractual project completion date). In July 2005, Kapsch Traffi cCom was awarded the Eastlink project in Melbourne. In connection with this project, the company delivered an MLFF ETC system and the equipment for vehicle detection and classifi cation (VDC) as well as for vehicle registration (VDR). The project was awarded by the system integrator.
Projects in Australia
Until 31 March 2008, approximately 250 lanes were equipped and approximately 3 million OBUs were supplied and the projects generated revenues of EUR 101.9 million EUR, thereof EUR 21.9 million in the fi scal year 2007/08.
Project in New Zealand. New Zealand has decided to implement its fi rst ETC system. Kapsch Traffi cCom New Zealand Ltd. has been contracted to implement a multi-lane freefl ow (MLFF) ETC system worth approximately EUR 10.7 million.
Kapsch Traffi cCom is continuously evaluating new projects worldwide. The results of such research is included in a special database, which includes information on numerous upcoming tolling projects. The database is administered and updated on a continuous basis. Based on this database, the company reviews and evaluates new projects and decides whether it should participate in a tender process or in the award of contract for new projects.
Number and allocation of employees
2005/06 2006/07 2007/08
0
The table below sets forth the allocation of employees within the Kapsch TrafficCom Group by function and by geographic regions, in which it operates, each as of 31 March 2008, 2007 and 2006:
| Number of employees | 2007/08 | 2006/07 | 2005/06 |
|---|---|---|---|
| Breakdown by function | |||
| Road traffi c telematics | 647 | 553 | 285 |
| Manufacturing and logistics (Kapsch Components) |
177 | 221 | 259 |
| Rail | 0 | 0 | 25 |
| Total by function | 824 | 774 | 569 |
| Breakdown by region | |||
| Europe: | |||
| Austria | 497 | 475 | 461 |
| Sweden | 97 | 89 | 84 |
| Western Europe | 1 | 0 | 0 |
| Central and Eastern Europe (excluding Austria) |
128 1 | 108 1 | 0 |
| Latin America | 80 | 94 | 15 |
| Asia and Africa | 12 | 2 | 2 |
| Australia and New Zealand | 9 | 6 | 7 |
| Total by region | 824 | 774 | 569 |
1 The increase is mainly a result of the services Kapsch Traffi cCom provides in connection with the commercial operation of the nationwide truck tolling system in the Czech Republic.
The average number of employees in the Kapsch TrafficCom Group in the 2007/08 fiscal year was 791, an 8.8 % increase against an average of 727 in the fiscal year 2006/07. The reason for this increase in the number of employees was mainly the expansion of Kapsch TrafficCom AG (61 additional employees on average) and of the Prague subsidiary (62 additional employees on average). As of 31 March 2008, 824 employees (753 salaried and 71 non-salaried) were employed, which corresponds to a 6 % increase.
Collective bargaining or similar agreements
Corporate culture and values
The management believes that the core corporate values – dynamism, respect, responsibility, family, discipline, performance, transparency and freedom – contribute to a good working environment.
The majority of employees in Austria and Sweden is covered by collective bargaining or
similar agreements (e.g., shop agreements).
Kapsch Traffi cCom provides various post-employment benefi ts and other long-term services. In addition, small contributions are paid to an external pension fund for employees of Group entities in Austria under a defi ned contribution scheme, depending on the individual employee's income and the return on sales of the entity.
Kapsch Traffi cCom is aware of the employees' contribution to its success and expresses this through an employee profi t participation plan in which its employees participate in the profi t of the Kapsch Traffi cCom Group as a whole. The Kapsch Traffi cCom Group rewards the commitment of its employees with a 5 % share in profi t. Country-specifi c upper limits are set up to ensure that distribution is on par with purchasing power. The remainder from this calculation is used for internal social purposes, such as in cases of illness or social problems.
In order to promote multinational employee exchanges, a job rotation program is in place that operates at the Austrian, Swedish and Argentinean locations.
Kapsch Traffi cCom AG is certifi ed to OHSAS 18001 for occupational health and safety and has anchored the necessary measures within its internal processes.
Staff costs mainly include wages, salaries, bonuses and other remunerations, social security contributions, pension benefi ts and severance payments. Staff costs are allocated to the three segments by cost accounting on a project basis. Staff costs which can not be allocated this way are differentiated by revenues in the three segments. The service and employment agreements with members of senior management and salesforce provide for certain veriable remuneration.
Total staff costs in the fi nancial year ended 31 March 2008 were EUR 47.0 million, an increase of EUR 7.1 million or 17.9 % compared to the previous year (fi scal year 2006/07: EUR 39.8 million, fi scal year 2007/08: EUR 31.3 million).
Post-employment benefi ts and other long-term services
In a fi rm awareness of its corporate social responsibility, the Kapsch Group – organized through Kapsch AG – supports a wide range of contemporary art and cultural organizations and projects, selected educational initiatives and extensive social activities. At Kapsch, this attitude is in no way limited only to activities that enhance the company's public image. The employees of Kapsch Taffi cCom also value the company's corporate social responsibility as a result of numerous programs and activities.
A key element of the Kapsch social and cultural commitment covers sponsoring activities related to the Vienna Concert Hall (Wiener Konzerthaus). This cultural institution has an excellent reputation far beyond Austria's borders and is characterised by its exciting and bold program – both for lovers of traditional sounds and fans of modern interpretations. 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 enthusiastically supported by Kapsch since its launch in 1989.
Both involvements also receive great appreciation from employees, who enjoy discounts for the extensive range of cultural events.
Promoting less known artists is of particular concern to the Kapsch Group. If one takes the position that all forms of art are defi ned by the production of new things that have not been seen to date, there is a clear parallel to the Kapsch Group corporate culture. 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. Those involved are exclusively young, talented but less well-known artists. The calendar aims to help them achieve a greater public presence. The calendar is presented annually in late fall in a private exhibition.
As a company that is led by technology and innovation, it is constantly interested in establishing contacts with the best talent in engineering at the earliest stage possible. For this reason, Kapsch Traffi cCom decided six 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 – INiTS for short – a company set up by the City of Vienna Centre for Innovation and Technology, Vienna University and Vienna University of Technology. Established three years ago, INiTS aims to support and accompany young entrepreneurs to implement ideas relating to key business concepts.
In addition to art and cultural funding, Kapsch Traffi cCom takes pride in supporting selected social issues at home and abroad. This corresponds to our social self-image and partnership philosophy. 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.
Supporting the employees of the Kapsch TrafficCom 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", employees are offered focused training programs. Selected participants are also prepared for future roles in the young managers' program.
A forum was created within the improvement process for employees to actively contribute improvement suggestions. If feasible, these are implemented and premiums are awarded.
In addition, Kapsch TrafficCom has focused for many years on various remuneration and working time models, prizes for special effort, food subsidies and payments to the pension fund as well as such additional services as an internal doctor.
Kapsch TrafficCom already has valid quality and environmental certifi cates in line with ISO 9001 and ISO 14001. In the future, the Kapsch TrafficCom Group will continue to increase its social involvement: it is particularly important to use environmental resources in an increasingly sustainable and responsible manner.
Ensuring acceptable living conditions for those in urban areas should be one of politicians' and policy-makers' most pressing objectives. Kapsch Traffi cCom with its urban traffi c solutions is one of the driving forces worldwide in the minimization of environmental and noise pollution in the world's major cities.
Kapsch Traffi cCom categorizes its business into three segments
Road Solution Projects (RSP)
Services, System Extensions, Components Sales (SEC)
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 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 therefore is subject to one-time effects from the realization of new projects.
The Road Solution Projects 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 ETC 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 truck tolling system in the Czech Republic), project fi nancing costs.
Services, System Extensions, Components Sales (SEC). Once an ETC 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, transceivers and equipment for enforcement systems) 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 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. Until its disposition effective as of 8 March 2007, our railway communication business was also part of this segment.
Our business in this segment is characterized by relatively stable revenues streams over a certain period, since these services are provided mainly based on medium or longterm 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 commercial operation of the nationwide truck tolling system in the Czech Republic that commenced operation on 1 January 2007.
Others (OTH): The Others segment includes our non-core business activities conducted by our subsidary Kapsch Components. In this segment, we offer engineering solutions, electronic manufacturing and logistics services to affi liated entities and third parties.
Total revenues in the fi scal year 2007/08 were EUR 185.7 million, a decline by 6 % compared to the previous year (fi scal year 2006/07: EUR 198.6 million, fi scal year 2005/06: EUR 116.2 million).
Revenues generated by the Road Solution Projects (RSP) segment in the fi scal year 2007/08 were EUR 47.0 million, a decrease of 55 % compared to the previous year (fi scal year 2006/07: EUR 105.0 million, fi scal year 2005/06: EUR 18.7 million). Top three markets in the RSP segment were the Czech Republic with EUR 20.2 million (or 43 %) as well as Australia and Chile, each with approximately EUR 12 million (or each 26 %).
Revenues generated by the Services, System Extensions, Components Sales (SEC) segment in the fi scal year 2007/08 were EUR 128.8 million, an increase of 60% compared to the previous year (fi scal year 2006/07: EUR 80.6 million, fi scal year 2005/06: EUR 76.2 million). Top three markets in SEC segment were the Czech Republic with EUR 57.9 million (or 45 %), Austria with EUR 27.7 million (or 21 %) and Australia with approximately EUR 10 million (or 8 %).
Revenues generated by the Others (OTH) segment in the fi scal year 2007/08 were EUR 10.0 million, a decrease by 23 % compared to the previous year (fi scal year 2006/07: EUR 13.0 million, fi scal year 2005/06: EUR 21.3 million).
By geographic region, in the fi scal year 2007/08 67 % of revenues or EUR 124.2 million was generated in Central & Eastern Europe (incl. Austria), EUR 17.6 million (or 9 %) in Western Europe and EUR 18.8 million (or 10 %) in the Americas. EUR 25.2 million or 14 % of revenues were contributed by the rest of world.
By country, in the fi scal year 2007/08 42 % of revenues or EUR 78.1 million was generated in the Czech Republic, EUR 27.7 million (or 15 %) in Austria, EUR 21.9 million (or 12 %) in Australia, EUR 18.0 million (or 10 %) in Chile and EUR 40 million (or 21.5 %) were contributed by the rest of world.
Others (OTH)
The following chart shows the corporate structure with the major companies of the Kapsch Traffi cCom Group as of 31 March 2008:
| Kapsch Traffi cCom AG1 Austria |
Kapsch Telematic Services GmbH Austria |
|---|---|
| Kapsch Components GmbH 2 Austria |
|
| Kapsch Components KG 2 Austria |
|
| ArtiBrain Software Entwicklungsgesellschaft mbH Austria |
|
| Kapsch Traffi cCom Ltd. United Kingdom |
|
| Kapsch Traffi cCom AB Sweden |
|
| Kapsch Traffi cCom S.r.l. Italy |
|
| Kapsch Traffi cCom SK Construction & Realization s r.o. Slovakia |
|
| Kapsch Traffi cCom Construction & Realization spol. s r.o. Czech Republic |
|
| Kapsch Traffi cCom Russia ooo Russia |
|
| Kapsch Traffi cCom Argentina S.A. Argentinia |
|
| Kapsch Traffi cCom Inc. U.S.A. |
1 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, and Kapsch Telematic Services GmbH, Berlin, directly or indirectly holds 100 % of the shares in the fully consolidated subsidiaries. The company also has representative offi ces in São Paolo, Brazil, and Beijing and Guangzhou, China.
2 Kapsch Components GmbH is the sole general partner (Komplementär) of Kapsch Components KG.
The increasing volume of traffi c all over the wold is making traffi c safety a pressing issue. Traffi c surveillance systems made by Kapsch Traffi cCom enable road operator to constantly monitor traffi c and infl uence it at any time in the interest of safety and the environment. This way, Kapsch Traffi cCom is making an important contribution towards consistently improving the level of safety on our roads.
After the global economy had been growing by an average of 5 % p.a. in real terms within the past fi ve years, economic growth began to slow down in 2007 with +4.7 %. This slowdown was caused by the economic crisis in the U.S. The real estate bubble burst, and stock market prices fell sharply. The fi nancial system of the U.S. and other countries are in deep crisis, which as a result of the close interdependency of international capital markets has repercussions also on other economic regions. Nevertheless, a global economic crisis is currently not likely.
In 2007, the U.S. economic data with a GDP growth of 2.2 % remained well below the prior year fi gure. For 2008, a further slowdown of U.S. growth to around 1 % is expected. In the past months, U.S. key interest rates were lowered signifi cantly from 5.25 % to 2.00 %. The U.S. unemployment rate rose to around 5 % by the end of 2007. In 2007, the U.S. dollar continued to be under strong pressure from the Euro. The EUR/USD ratio had already reached 1.60, and was around 1.54 at the balance sheet date as of 31 March 2008.
The economic growth in the emerging countries will also slow down due to the direct and indirect close interdependency with demand in the U.S., however, domestic demand in these countries and trade relations between them have grown signifi cantly stronger in the recent past. This rising consumer demand and investments in infrastructure mitigate the decrease in foreign demand. In China, after another record growth of +11.4 % in 2007, growth for 2008 is still expected to be high at +9.5 %.
In 2007, the economy in the Euro zone (EU-15) grew by 2.6 % in terms of real GDP – a positive development, yet still below the prior year level. Despite a relatively positive start into the year, a slowdown of economic growth to around 1.6 % is expected for 2008. Consumer demand in 2007 lagged well behind expectations due to the fact that the increase in income remained far below the rise in prices. Despite decreasing unemployment and after the effects from the increase in German VAT have eased, consumer demand is not expected to recover in 2008, since, on the one hand, individual countries might be affected by the slump in the real estate market and consumer confi dence in general fell sharply. In 2007, the unemployment rate in the Euro zone could again be reduced signifi cantly from 7.5 % to 7.1 %. In the current year 2008, a further reduction is expected. Beginning in 2009, however, unemployment is again expected to increase.
In 2007, the infl ation rate rose primarily as a result of rising prices for food and energy to around 3.2 % – however it is expected to ease in the second half of 2008. The new EU member states are less affected by crisis in the international fi nancial markets and the slowdown of the global economy and reported growth of 6 % also in 2007, which was supported primarily by strong consumer and investment demand. Even though considerable risks arise with regard to the high indebtedness of private households and sharp price increases, GDP is expected to grow by more than 5 % in 2008 and 2009. Key interest rates of the ECB have been raised gradually until June 2007 to 4.0 %, where they remained until the balance sheet date as of 31 March 2008 despite the ongoing reductions in the U.S. prime interest rate.
In Austria the economic growth rate of 3.4 % was again well above the level of Euro zone countries in 2007. In addition to the mainstay for many years – the growth in exports –, industrial investments also increased signifi cantly in 2007. Only the growth of private consumption slowed down once again over the prior year – primarily as a result of the signifi cantly higher infl ation. In Austria, a slowdown of economic growth of 2.1 % in real terms is expected for 2008. This has to be regarded as a consequence of the fi nancial market crisis originating from the U.S. real estate markets. The duration and scope of the crisis can currently not be estimated in full, which makes forecasting more diffi cult.
The growth in exports, which is additionally affected by the weak U.S. dollar as well as industrial production and investments, is slowing down considerably. Consumer demand, primarily as a result of signifi cantly higher prices, could not increase, either. In 2007, the labour market again improved signifi cantly. Thus, in 2007 the unemployment rate in Austria decreased from 4.7 % to 4.4 % (Eurostat) or from 6.8 % to 6.2 % (national), respectively. This trend is expected to continue in 2008. Infl ation rose to 2.2 % in 2007 and will continue to rise in 2008 (forecast 2.9 %).
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. Analysts, such as Frost & Sullivan, June 2004, assume that in the foreseeable future each country in Western Europe will have tolling systems in place. In Eastern European countries, in addition to electronic toll collection, paper vignette solutions will also be used. In addition to DSRC-(dedicated short-range communication) based systems, which operates on the CEN 5.8 GHz standard, satellite-based systems based on GNSS/GSM are expected. Considerable growth potential is also expected from the video-based 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 2003, London introduced a toll for the London City area and, by own accounts, traffi c could as a result be reduced by 15 %. A tender for the upgrade of the system is currently underway. Other major cities in the U.K. also consider introducing 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 planned.
The high funding requirements for the maintenance of the road infrastructure in the U.S. (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. 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.
In the fi scal year 2007/08, Kapsch Traffi cCom Group, with revenues slightly down, was able to increase the operating result (EBIT) from EUR 26.9 million by 30 % to EUR 34.9 million.
In the Road Solution Projects (RSP) segment, revenues at EUR 47.0 million were signifi cantly below the prior year fi gure of EUR 105.0 million. Kapsch Traffi cCom Group sees the reasons for this mainly being due to the volatility affecting the project business in general and the Road Solution Projects (RSP) business segment in particular, as well as due to major projects not being awarded or delayed, as a consequence of which in the past fi scal year no major project comparable to the nationwide electronic truck tolling system in the Czech Republic could be acquired or realized.
In the Services, System Extensions, Components Sales (SEC) segment, revenue could be increased from EUR 80.6 million by 60 % to EUR 128.80 million. This increase is particularly due to recurring revenues from the technical and commercial operation of the nationwide electronic truck tolling system in the Czech Republic, as well as a high volume of components sales, most notably onboard units (OBUs). At approximately 2.5 million, sales of OBUs more than doubled from the 1.2 million in the previous fi scal year.
The fi scal year 2007/08 was characterized by the successful initial public offering in June 2007. Considerable interest in the company and the 3.7 million shares offered (including greenshoe shares) resulted in the offering being 14-times oversubscibed. At an offer price of EUR 32 per share, the shares could be sold at the upper end of the price range.
In the past fi scal year, Kapsch Traffi cCom Group could continue its international expansion with fi rst-time orders in New Zealand and South Africa, as well as major projects in Chile and Australia and the completion of the fi rst project in India:
One of the largest contracts for Kapsch TrafficCom Group is for the expansion of the nationwide electronic truck tolling system in the Czech Republic. The negotiations between the Czech Ministry of Transport (CZ MoT) and the consortium led by Kapsch TrafficCom AG were concluded on 28 December 2007. According to an amendment to the contract, it is intended to expand the system in phase II to around 1,000 km of highways and expressways, the expansion of which will be started by the end of 2017 at the latest. As of 1 January 2008, the Kapsch consortium has already put into operation 37 toll gantries on approximately 180 km of first-class roads. According to the current planning of the CZ MoT, distance-related tolling is planned to be extended to vehicles with more than 3.5 tons as early as 1 January 2009. Kapsch TrafficCom will adjust the existing tolling system. The number of on-board units (OBUs) necessary for this implementation has already been supplied in the past fiscal year. In connection with the expanded use of the existing tolling system, the Kapsch consortium was assigned to implement the technological interface for a future satellite-based toll collection on first-, second- and third-class roads as well as to supply the interface for telematics applications and to implement the application of lane traffic control on highway D1. Furthermore, the contract for the provision of services was extended to 10 years.
In the fi scal year 2007/08, the operating result (EBIT) rose by 30 % from EUR 26.9 million to EUR 34.9 million. With revenues slightly down (EUR 185.7 million compared to EUR 198.6 million), the EBIT margin increased from 14 % to 19 %.
The marked decline in cost of material and other production services (EUR 78.7 million compared to EUR 93.8 million in the prior year) mainly refl ects the decrease in revenues in the material-intensive RSP segment. The increase in staff costs primarily results from the higher number of staff due to the maintenance and operation of the Czech truck tolling system as well as the provision of capacities for major projects that were still at the proposal stage as of the balance sheet date.
The fi nancial result increased from EUR 0.2 million to EUR 7.9 million and refl ects the fi nancial situation changed by the successful initial public offering. In addition, it also includes income from currency translation differences amounting to EUR 7.4 million.
The result before taxes amounted to EUR 42.8 million (2006/07: EUR 27 million), the result after taxes amounted to EUR 32 million (2006/07: EUR 20.3 million).
From a segment perspective, the past fi scal year showed markedly different developments. Upcoming major projects in Central and Eastern Europe, which due to delays were still in the tender process or subject to preparation of a new tender, resulted in a decline in revenues and EBIT in the Segment Road Solution Projects (RSP) segment.
At the same time, revenues and the result in the Services, System Extensions, Components Sales (SEC) segment could be increased signifi cantly. The technical and commercial operation of the nationwide electronic truck tolling system in the Czech Republic and signifi cantly higher sales of components, most notably of on-board units (OBUs), contributed heavily to this development.
| Revenue by segment (share in revenues) | 2007/08 | 2006/07 | +/- % | 2005/06 | ||||
|---|---|---|---|---|---|---|---|---|
| Road Solution Projects (RSP) | ||||||||
| Revenues | in million EUR | 47.0 | 25 % | 105.0 | 53 % | -55 % | 18.7 | 16 % |
| EBIT | in million EUR | 6.3 | 11.6 | -46 % | 2.7 | |||
| Services, System Extentions, Component Sales (SEC) | ||||||||
| Revenues | in million EUR | 128.8 | 69 % | 80.6 | 41 % | 60 % | 76.2 | 66 % |
| EBIT | in million EUR | 29.1 | 15.8 | 84 % | 13.5 | |||
| Others (OTH) | ||||||||
| Revenues | in million EUR | 10.0 | 5 % | 13.0 | 7 % | -23 % | 21.3 | 18 % |
| EBIT | in million EUR | -0.4 | -0.5 | -12 % | 1.1 |
Whereas the RSP segment at a share of 53 % in total revenues was the mainstay of revenues in the past fi scal year, this distribution markedly shifted towards the SEC segment (69 % share in revenue) in the fi scal year 2007/08.
| Revenue by region (share in revenues) | 2007/08 | 2006/07 | +/- % | 2005/06 | ||||
|---|---|---|---|---|---|---|---|---|
| Central and Eastern Europe (incl. Austria) | in million EUR | 124.2 | 67 % | 157.3 | 79 % | -21 % | 68.4 | 59 % |
| Western Europe | in million EUR | 17.6 | 9 % | 12.9 | 6 % | 36 % | 18.9 | 16 % |
| Americas | in million EUR | 18.8 | 10 % | 15.4 | 8 % | 22 % | 9.4 | 8 % |
| Rest of World | in million EUR | 25.2 | 14 % | 13.0 | 7 % | 94 % | 19.5 | 17 % |
The analysis of revenues by region illustrates the international expansion of Kapsch Traffi cCom Group. In the fi scal year 2007/08 the share in revenues of the regions Americas and Rest of World could be raised signifi cantly.
In the past fi scal year, the balance sheet total of Kapsch Traffi cCom Group increaded by 31 % from EUR 227.2 million to EUR 298.4 million. Apart from a signifi cant increase in trade receivables (EUR +58.4 million), this was primarily due to the signifi cant increase in cash and cash equivalents (EUR +27.2 million). Due to this increase, the net debt in the amount of EUR -12.5 million as of 31 March 2007 could be transformed into net assets in the amount of EUR 28.4 million as of 31 March 2008.
On the liabilities side, the extension of the balance sheet is primarily refl ected in equity. In the past fi scal year equity grew by EUR 87.8 million to EUR 133.4 million (31 March 2007: EUR 45.6 million). Apart from the profi t for the year, this was particularly due to the successful initial public offering, in the course of which the share capital was raised by EUR 2.2 million and the capital reserve by EUR 64.8 million. Kapsch Traffi cCom Group thus showed an equity ratio of 45 % as of the balance sheet date 31 March 2008 (31 March 2007: 20 %).
In the fi scal year 2007/08, the cash fl ow from operating activities could be improved to EUR -10.5 million (2006/07: EUR -38.8 million). However, due to the strong increase in trade receivables and the reduction of trade payables, most notably in connection with the project in the Czech Republic, it was still negative.
With investments in property, plant and equipment and intangible assets of EUR 4.0 million (2006/07: EUR 2.3 million), the company had an overall free cash fl ow of EUR -14.8 million (2006/07: EUR -39.1 million).
Due to purchases of securities, the cash fl ow from investing activities was also negative. Due to the high cash fl ow from fi nancing activities as a result of the initial public offering, the total amount of cash and cash equivalents increased by EUR 27.2 million to EUR 47.4 million, which is available to the company for further expansion.
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 2007, the average toll transaction rate of the existing truck tolling system in Austria amounted to 99.7 %.1
During the same period, the average performance rate of the nationwide electronic system in the Czech Republic (phase I) was approximately 97.5 %.1
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.
In the fi scal year 2007/08, the average number of personnel in the Kapsch Traffi cCom Group amounted to 791 persons. As of 31 March 2008, 824 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 locations in Austria, Sweden and Argentina.
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.
There are valid certifi cates for quality pursuant to ISO 9001 and environment pursuant to ISO 14001. For the future, it is planned to meet the social responsibility, 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 day-to-day business. Risk for the company means the possibility of divergence from company objectives; thus, the risk concept includes positive (chances) as well as negative (risks) divergences from planned objectives.
In the fi scal year 2007/08, risk management was positioned as a separate function within fi nances 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 in 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 Solutions 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 for technological, fi nancial, formal or other reasons with offers for new projects. Follow-up revenues from maintenance agreements and from the technical operation also depend on the successful participation in tenders for ETC 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.
In connection with the implementation of ETC systems, Kapsch Traffi cCom Group is most of the times 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 achive guarantees performance levels in a project would also reduce the chances of success in future tenders for ETC systems.
Kapsch Traffi cCom Group applies risk management methods and risk management procedures in order to guard against risks associated with projects.
In numerous ETC 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 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 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, 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 Kapsch Traffi cCom Group. Since its innovation leadership is, to a large extent, 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, ETC systems, components, products or services could infringe on intellectual property rights of third parties.
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, Kapsch Traffi cCom Group permanently monitors potential intellectual property rights infringements.
One of the strategic objectives of 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, Kapsch Traffi cCom Group is exposed to interest rate risks. Kapsch Traffi cCom Group hedges against interest rate risks, if material, through appropriate fi nancial instruments.
The success of 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 as well as of the level of national legislation. There is the risk that certain provisions, such as data protection laws or environmental and safety requirements will have a negative impact on Kapsch Traffi cCom Group.
As a technology group, 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 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 Segments Services, System Extensions, Components Sales segment) are planned to further reduce risk concentrations in the future.
Kapsch Traffi cCom Group has a network of research and development centers in Vienna (Austria), Jönköping (Sweden) and Buenos Aires (Argentina). The research and development activities are coordinated by the headquarters in Vienna. As of 31 March 2008, Kapsch Traffi cCom Group, including project management for development projects, quality assurance and tests, documentation and certifi cation, employed more than 170 engineers.
Research and development activities are crucial for the Group with regard to achieving its strategic objectives. Successful research is the basis for the ongoing enhancement of existing products and systems and the continuous reduction of production, installation, operation and maintenance costs – signifi cant factors for maintaining the technological and competitive edge.
Kapsch Traffi cCom Group 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.
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.
Assuming that economies worldwide continue to perform satisfactorily, and given the growing interest around the world in road traffi c telematics solutions, we take a thoroughly optimistic view of our future prospects. The fi scal year 2008/09 will be shaped by participation in tenders and by project awards in Hungary, Slovenia, Italy, Portugal, France, the U.K., in the Middle East, in the Asian-pacifi c region, South Africa, Argentina, and in the U.S.A.
In Slovakia, the tender of a nationwide electronic tolling system was continued in February 2008 after two claims had been settled. The tender comprises the installation of a multi-lane free fl ow (MLFF) ETC system including its operation for a period of 13 years. The planned system extends to include vehicles of more than 3.5 tons and a road network of approximately 2,400 kilometres. Operation is planned to commence on 1 January 2009. The submission of the offers and the opening of the offers took place on 13 March
On 2 April 2008, Kapsch Traffi cCom Holding Corp., Delaware, and Kapsch Traffi cCom U.S., Delaware, were incorporated in the U.S.
On 15 May 2008, Kapsch Traffi cCom AG and the Italian Busi Impianti Group announced their cooperation. These two companies, as part of a joint venture, establish the company Kapsch-Busi S.p.A., domiciled in Bologna. The new company will focus on the market for urban traffi c solutions in Italy. Busi Impianti is spinning of the business unit, including an aggregate of 10 employees; Kapsch Traffi cCom Group complements the team through its own personnel. Kapsch Traffi cCom AG will hold a share of 67 % in the joint venture.
Vienna, 16 May 2008
Mag. Georg Kapsch Ing. Erwin Toplak
Chief Executive Offi cer Member of the Management Board
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.
Mag. Georg Kapsch Ing. Erwin Toplak
Chief Executive Offi cer Member of the Management Board
| all amounts in EUR | Note | 2007/08 | 2006/07 |
|---|---|---|---|
| Continuing Operations | |||
| Revenue | (1) | 185,734,678 | 198,600,787 |
| Other operating income | (2) | 5,194,394 | 1,061,182 |
| Changes in fi nished and unfi nished goods and work in progress | (3) | 6,667,081 | -2,156,353 |
| Cost of material and other production services | (4) | -78,647,198 | -93,842,865 |
| Staff costs | (5) | -46,969,222 | -39,825,015 |
| Amortization of intangible assets and depreciation of property, plant and equipment | (6) | -4,092,312 | -3,883,015 |
| Other operating expenses | (7) | -32,967,747 | -33,051,839 |
| Operating result | 34,919,674 | 26,902,882 | |
| Finance income | (8) | 13,898,949 | 3,196,028 |
| Finance costs | (8) | -6,009,417 | -3,002,111 |
| Financial result | (8) | 7,889,532 | 193,917 |
| Result from associates | (13) | -51,152 | -133,434 |
| Profi t before income taxes | 42,758,054 | 26,963,365 | |
| Income taxes | (9) | -10,698,610 | -6,693,949 |
| Profi t for the year from continuing operations after taxes | 32,059,444 | 20,269,416 | |
| Discontinued Operations | |||
| Loss for the year from discontinued operations | (30) | 0 | -2,311,032 |
| Profi t for the year | 32,059,444 | 17,958,384 | |
| Attributable to: | |||
| Equity holders of the Company | 30,412,759 | 18,127,839 | |
| Minority interests | 1,646,685 | -169,455 | |
| 32,059,444 | 17,958,384 | ||
| Earnings per share from the profi t for the year of continuing operations attributable to the equity holders of the Company (in EUR per share) |
(31) | 2.60 | 2.04 |
| all amounts in EUR Note |
31 March 2008 | 31 March 2007 |
|---|---|---|
| ASSETS | ||
| Non-current assets | ||
| Property, plant and equipment (11) |
6,191,728 | 6,147,502 |
| Intangible assets (12) |
8,593,152 | 9,269,453 |
| Shares in associates (13) |
0 | 254,065 |
| Other non-current fi nancial assets and investments (14) |
3,405,449 | 3,619,452 |
| Other non-current assets (15) |
55,005,342 | 81,693,693 |
| Deferred tax assets – due from tax group leader (22) |
2,399,361 | 1,280,535 |
| Deferred tax assets – non-tax group (22) |
4,880,464 | 7,379,024 |
| 80,475,496 | 109,643,724 | |
| Current assets | ||
| Inventories (16) |
25,734,379 | 19,899,763 |
| Trade receivables and other current assets (17) |
135,837,086 | 77,460,457 |
| Other current fi nancial assets (14) |
8,895,252 | 0 |
| Cash and cash equivalents (18) |
47,428,544 | 20,183,189 |
| 217,895,261 | 117,543,409 | |
| Total assets | 298,370,757 | 227,187,133 |
| EQUITY | ||
| Capital and reserves attributable to equity holders of the Company | ||
| Share capital (19) |
12,200,000 | 10,000,000 |
| Capital reserve | 70,077,111 | 5,325,259 |
| Currency translation differences | 220,011 | 914,309 |
| Fair value valuation reserve (20) |
-971,375 | -114,371 |
| Consolidated retained earnings and other reserves | 49,727,838 | 29,130,494 |
| 131,253,585 | 45,255,691 | |
| Minority interests | 2,123,011 | 339,556 |
| Total equity | 133,376,596 | 45,595,247 |
| LIABILITIES | ||
| Non-current liabilities | ||
| Non-current fi nancial liabilities (21) |
10,581,243 | 10,522,559 |
| Liabilities from post-employment benefi ts to employees (23) |
14,088,937 | 14,552,388 |
| Non-current provisions (26) |
1,693,548 | 1,684,408 |
| Other non-current liabilities (24) |
26,149,682 | 26,885,607 |
| Deferred income tax liabilities – due to tax group leader (22) |
1,607,668 | 1,150,153 |
| Deferred income tax liabilities- non-tax group (22) |
447,171 | 1,315,542 |
| 54,568,249 | 56,110,657 | |
| Current liabilities | ||
| Trade and other current payables | 39,049,926 | 40,524,113 |
| Other liabilities and deferred income (25) |
29,485,680 | 42,248,566 |
| Current tax payables | 6,258,677 | 5,123,170 |
| Current fi nancial liabilities (21) |
17,381,784 | 22,123,633 |
| Current provisions (26) |
18,249,845 | 15,461,747 |
| Total liabilities | 110,425,912 | 125,481,229 |
| 164,994,161 | 181,591,886 | |
| Total equity and liabilities | 298,370,757 | 227,187,133 |
| all amounts in EUR | |||||||
|---|---|---|---|---|---|---|---|
| Attributable to equity holders of the Company | Minority interests | Total equity |
|||||
| Share capital |
Capital reserve |
Currency transla tion differences |
Fair value reserve |
Consolidated retained earnings and other re serves |
|||
| Carrying amount at 31 March 2006 | 10,000,000 | 5,325,259 | 1,272,251 | -57,258 | 21,722,141 | 788,868 | 39,051,261 |
| Currency translation differences | 0 | 0 | -357,942 | 0 | 0 | -3,305 | -361,247 |
| Fair value gains/losses realized | 0 | 0 | 0 | 1,250 | 0 | 0 | 1,250 |
| Fair value gains/losses (net of tax) | 0 | 0 | 0 | -58,363 | 0 | 0 | -58,363 |
| Net income/expense recognized directly in equity |
-357,942 | -57,113 | -3,305 | -418,360 | |||
| Acquisition of minority interest | 0 | 0 | 0 | 0 | -719,486 | -276,552 | -996,038 |
| Dividend for 2005/06 | 0 | 0 | 0 | 0 | -10,000,000 | -10,000,000 | |
| Profi t for the year | 0 | 0 | 0 | 0 | 18,127,839 | -169,455 | 17,958,384 |
| Carrying amount at 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 | -51,817 | |
| Fair value gains/losses (net of tax) | 0 | 0 | 0 | -805,187 | 0 | -805,187 | |
| Net income/expense recognized directly in equity |
-694,298 | -857,004 | 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 at 31 March 2008 | 12,200,000 | 70,077,111 | 220,011 | -971,375 | 49,727,838 | 2,123,011 | 133,376,596 |
| all amounts in EUR Note |
31 March 2008 | 31 March 2007 |
|---|---|---|
| Cash fl ows from operating activities | ||
| Operating result | 34,919,674 | 26,902,882 |
| Adjustments for non-cash items and other reconciliations: | ||
| Depreciation and amortization (6) |
4,092,312 | 3,883,015 |
| Increase/decrease in obligations for post-employment benefi ts (23) |
-463,451 | -663,647 |
| Change in other non-current liabilities and provisions (24) |
9,141 | 111,733 |
| Increase in trade receivables (non-current) (15) |
26,679,092 | -81,684,434 |
| Increase in trade payables (non-current) (24) |
-663,820 | 26,813,502 |
| Other (net) 1 | 6,364,155 | 394,230 |
| 70,937,103 | -24,242,719 | |
| Changes in net current assets: | ||
| Increase/decrease in trade receivables and other assets (17) |
-59,810,410 | -45,653,414 |
| Increase/decrease in inventories (16) |
-5,834,616 | 3,012,764 |
| Increase/decrease in trade payables and other current payables | -10,615,016 | 26,595,995 |
| Increase/decrease in current provisions (26) |
3,848,830 | 8,804,927 |
| -72,411,212 | -7,239,728 | |
| Cash fl ow from operations | -1,474,109 | -31,482,447 |
| Interest received (8) |
2,082,913 | 1,262,033 |
| Interest payments (8) |
-3,940,442 | -2,537,592 |
| Net payments of income taxes | -7,445,292 | -4,018,557 |
| Net cash fl ow from operating activities – continuing operations | -10,776,930 | -36,776,563 |
| Net cash fl ow from operating activities – discontinued operations (30) |
257,992 | -1,991,409 |
| Net cash fl ow from operating activities – total | -10,518,938 | -38,767,972 |
1 In the fi scal year 2007/08 this item mainly relates to currency translation differences (CZK/EUR).
| all amounts in EUR | Note | 31 March 2008 | 31 March 2007 |
|---|---|---|---|
| Cash fl ows from investing activities | |||
| Purchase of property, plant and equipment | (11) | -3,441,286 | -1,994,756 |
| Purchase of non-current intangible assets | (12) | -582,231 | -305,934 |
| Purchase of securities and investments | (14) | -30,548,455 | -4,375 |
| Payments for acquisition of companies (net of cash acquired) | (28) | -74,790 | -1,880,438 |
| Payments for acquisition of a minority interest | 0 | -996,038 | |
| Payments for the acquisition of shares in companies consolidated at equity | (13) | 0 | -387,500 |
| Proceeds from the sale of shares in subsidiaries | 1,090,909 | 5,013 | |
| Proceeds from the disposal of property, plant and equipment and intangible assets | 1,156,499 | 170,131 | |
| Proceeds from the sale of securities | 20,800,756 | 125,251 | |
| Net cash fl ow from investing activities – continuing operations | -11,598,598 | -5,268,646 | |
| Net cash fl ow from investing activities – discontinued operations | (30) | 0 | 1,444,923 |
| Net cash fl ow from investing activities – total | -11,598,598 | -3,823,723 | |
| Cash fl ows from fi nancing activities | |||
| Contributions from shareholders | 65,802,469 | 0 | |
| Dividends paid to company shareholders | -13,500,000 | -6,500,000 | |
| Increase/decrease in other non-current fi nancial liabilities | (21) | 758,684 | 9,785,559 |
| Increase/decrease in current fi nancial liabilities | (21) | -4,275,183 | 13,591,002 |
| Net cash fl ow from fi nancing activities – continuing operations | 48,785,970 | 16,876,561 | |
| Net cash fl ow from fi nancing activities – discontinued operations | (30) | -1,166,666 | -233,334 |
| Net cash fl ow from fi nancing activities – total | 47,619,304 | 16,643,227 | |
| Net decrease/increase in cash and cash equivalents | 25,501,768 | -25,948,468 | |
| Change in cash and cash equivalents | |||
| Cash and cash equivalents at beginning of year | (18) | 20,183,189 | 46,725,330 |
| Net decrease/increase in cash and cash equivalents | 25,501,768 | -25,948,468 | |
| Exchange gains/losses on cash and cash equivalents | 1,743,507 | -593,673 | |
| Cash and cash equivalents at end of year | (18) | 47,428,544 | 20,183,189 |
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 operations) and components in the area of road traffi c telematics solutions.
The Others segment relates to non-core business activities conducted by Kapsch Components. 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.
In June 2007 KAPSCH-Group Beteiligungs GmbH reduced its share in Kapsch Traffi cCom AG to 69.67 % through an initial public offering.
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, Wagenseilgasse 1. 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:
1 newly established in the fi scal year 2007/08
The majority interests in VTI Industrials (Pty) Ltd., Germiston, South Africa, and ArtiBrain Software Entwicklungsgesellschaft mbH, Vienna, were acquired in the fiscal year 2007/08 (see Note 28).
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 2008 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 2008 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.
The IASB (International Accounting Standards Board) published a number of changes to existing standards as well as new standards and interpretations which are mandatory for the fi nancial year ended 31 March 2008. These standards also have to be applied in the EU and relate to the following issues:
The IASB and IFRIC adopted further standards or amendments to standards and interpretations which are not yet mandatory for the fi scal year ended 31 March 2008 and which have not yet been adopted by the Company. The following regulations had been adopted by the EU by the time these consolidated fi nancial statements were prepared and published in the offi cial journal:
• IFRS 8 Operating Segments (mandatory for accounting periods beginning on or after 1 January 2009). The effect of these regulations cannot yet be estimated reliably.
The following standards or amendments to standards and interpretations were adopted by the IASB or IFRIC, however, by the time these consolidated fi nancial statements were prepared, they had not yet been adopted by the EU:
• IAS 32Financial Instruments Disclosures and IAS1 Presentation of Financial Statements (revised; mandatory for accounting periods beginning on or after 1 January 2009).
The effect of these regulations cannot yet be estimated reliably.
The consolidated fi nancial statements were prepared by the management board on the undersigned date and released for issue. 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 at the general meeting of shareholders, the general meeting of shareholders could amend the entity fi nancial statements in a way that may affect the presentation of the consolidated fi nancial statements.
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 intermediary results, if any, are eliminated unless they are deemed immaterial for the presentation of the Group's net worth, 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 2008 (31 March 2007) 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 | ||
|---|---|---|---|---|
| 2007/08 | 2006/07 | |||
| CZK | 10 % | 8,022 | 4,895 |
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. Variable-interest (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) at 31 March 2008, 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 credit) to equity. Net debt (net credit) includes non-current and current fi nancial liabilities less cash and cash equivalents, bank balances and current securities.
| in TEUR | 2007/08 | 2006/07 |
|---|---|---|
| Non-current fi nancial liabilities | 10,581 | 10,523 |
| Current fi nancial liabilities | 17,382 | 22,124 |
| Total fi nancial liabilities | 27,963 | 32,646 |
| Cash on hand and at banks | 47,429 | 20,183 |
| Current securities | 8,895 | 0 |
| Net debt (net credit) | -28,361 | 12,463 |
| Equity | 133,377 | 45,595 |
| Net gearing | n/a | 27 % |
At the balance sheet date 31 March 2008, mainly due to the initial public offering carried out in 2007, the Company had a net credit (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 credit is retained with regard to planned acquisitions.
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 as incurred. 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 in case a triggering event occurs.
Financial assets recognized under non-current 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 profit or loss. Changes in the fair value of these derivative financial 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 long-term 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 labour, 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 labour 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 labour 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 similar 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 carryforwards.
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 nancial 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, are 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 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 |
The segment results for the fi scal year ended 31 March 2007 are as follows (in EUR million):
| Road Solution Projects |
Services, System Extensions, Components Sales |
Others | Consolidated Group | |
|---|---|---|---|---|
| Revenue | 105.0 | 80.6 | 13.0 | 198.6 |
| Operating result | 11.6 | 15.8 | -0.5 | 26.9 |
| Results from associates | -0.1 | |||
| Financial result | 0.2 | |||
| Profi t before income taxes | 27.0 | |||
| Income taxes | -6.7 | |||
| Profi t from continuing operations: | 20.3 | |||
| Loss from discontinued operations: | -2.3 | -2.3 | ||
| Profi t for the year | 18.0 | |||
| Loss attributable to minority shareholder | -0.2 | |||
| Consolidated profi t | 18.1 |
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 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 |
The segment assets and liabilities as of 31 March 2007 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 | 125.4 | 60.7 | 8.7 | 194.7 |
| Unallocated assets | 32.5 | |||
| Total assets | 227.2 | |||
| Liabilities | 79.5 | 47.7 | 19.2 | 146.4 |
| Unallocated liabilities | 35.2 | |||
| Total liabilities | 181.6 | |||
| Capital expenditure | 0.1 | 2.1 | 0.1 | 2.3 |
| Depreciation and amortization | 0.5 | 2.7 | 0.7 | 3.9 |
| Other non-cash-effective expenses | 0.0 | 0.4 | 0.1 | 0.5 |
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 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 |
The fi gures for the fi scal year ended 31 March 2007 are as follows (in EUR million):
| Western Europe | Central and Eastern Europe |
Americas | Rest of World | Consolidated Group |
|
|---|---|---|---|---|---|
| Revenues | 12.9 | 157.3 | 15.4 | 13.0 | 198.6 |
| Assets | 35.5 | 185.6 | 5.2 | 0.9 | 227.2 |
| Capital expenditure | 0.3 | 1.7 | 0.3 | 0.0 | 2.3 |
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.
| 2007/08 | 2006/07 | |
|---|---|---|
| Income from the sale of non-current assets | 25 | 1 |
| Income from costs recharged | 2,741 | 0 |
| Income from subsidies and government grants | 2,197 | 855 |
| Other | 231 | 205 |
| 5,194 | 1,061 |
| 2007/08 | 2006/07 | |
|---|---|---|
| Change in unfi nished goods and work in progress | 8,320 | -1,855 |
| Change in fi nished goods | -1,653 | -301 |
| 6,667 | -2,156 |
In the fi scal year 2007/08 change in fi nished and unfi nished goods and work in progress attributable to discontinued operations amounted to TEUR 0 (2006/07: TEUR -167).
| 2007/08 | 2006/07 | |
|---|---|---|
| Cost of material | 32,939 | 30,765 |
| Cost of production services | 45,708 | 63,078 |
| 78,647 | 93,843 |
| 2007/08 | 2006/07 | |
|---|---|---|
| Wages | 2,258 | 2,781 |
| Salaries and other remunerations | 33,060 | 26,985 |
| Expenses for social security and payroll-related taxes and contributions | 9,995 | 8,484 |
| Expenses for termination benefi ts (see Note 23) | 498 | 525 |
| Expenses for pensions (see Note 23) | 474 | 631 |
| Contributions to pension funds and other external funds (see Note 23) | 116 | 108 |
| Fringe benefi ts | 569 | 311 |
| 46,969 | 39,825 |
At 31 March 2008 the number of staff amounted to 824 persons (31 March 2007: 774 persons) and averaged 791 persons in the fi scal year 2007/08 (2006/07: 727).
| 2007/08 | 2006/07 | |
|---|---|---|
| Depreciation of property, plant and equipment | 2,286 | 1,761 |
| Amortization of other intangible assets | 1,437 | 1,775 |
| Expenses from low-value assets written-off | 369 | 347 |
| 4,092 | 3,883 |
In the fi scal year 2007/08 depreciation and amortization expense attributable to discontinued operations amounted to TEUR 0 (2006/07: TEUR 707).
| 2007/08 | 2006/07 | |
|---|---|---|
| Rental expenses | 3,671 | 2,612 |
| Legal and consulting fees | 9,222 | 8,926 |
| Impairment of receivables | 307 | 416 |
| Marketing and advertising expenses | 3,595 | 3,234 |
| Travel expenses | 2,859 | 2,342 |
| Maintenance | 1,409 | 1,324 |
| Communication and IT expenses | 2,343 | 1,837 |
| Training costs | 575 | 335 |
| Losses on disposal of non-current assets | 93 | 48 |
| Insurance costs | 694 | 911 |
| Licence and patent expenses | 1,156 | 1,117 |
| Offi ce expenses | 394 | 335 |
| Taxes and charges | 404 | 1,126 |
| Adjustment provision for warranties | -28 | 389 |
| Commissions and other fees | 3,751 | 3,845 |
| Transport costs | 625 | 713 |
| Automobile expenses | 1,113 | 814 |
| Other | 785 | 2,728 |
| 32,968 | 33,052 |
The item "Other" includes membership dues, bank charges, warranties and guarantees as well as other administrative and selling expenses.
| 2007/08 | 2006/07 | |
|---|---|---|
| Interest and similar income: | ||
| Interest income from bank deposits and loans granted | 1,697 | 1,120 |
| Income from securities | 386 | 144 |
| Income from interest accretion of long-term receivables | 3,278 | 795 |
| Gains from the disposal of fi nancial assets | 1,113 | 0 |
| Currency translation differences | 7,425 | 1,137 |
| 13,899 | 3,196 | |
| Interest and similar expenses: | ||
| Interest expense | -3,917 | -2,537 |
| Expense from interest accretion of long-term payables | -999 | -210 |
| Losses on disposals and write-down of fi nancial assets,investments and securities | -23 | 0 |
| Currency translation differences | -1,070 | -255 |
| -6,009 | -3,002 | |
| 7,890 | 194 |
| 2007/08 | 2006/07 | |
|---|---|---|
| Current tax expense | -7,942 | -5,989 |
| Deferred tax expense from offsetting the costs of the initial public offering against capital reserves | -1,149 | 0 |
| Deferred tax assets/liabilities (see Note 22) | -1,608 | -705 |
| Total | -10,699 | -6,694 |
| Thereof income/(expense) from group taxation | -27 | -307 |
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:
| 2007/08 | 2006/07 | |
|---|---|---|
| Profi t before income taxes – continuing and discontinued operations | 42,758 | 24,652 |
| Arithmetic tax income/(expense) based on a tax rate of 25 % (2006/07: 25 %) | -10,689 | -6,163 |
| Different foreign tax rates | -558 | -361 |
| Tax allowances claimed and other permanent tax differences | 748 | 241 |
| Expenses not subject to tax and other differences | -200 | -410 |
| Recognized tax income/(expense) | -10,699 | -6,694 |
For further information on deferred tax assets and liabilities see Note 22.
| 2007/08 | 2006/07 | |
|---|---|---|
| Available-for-sale fi nancial assets | ||
| Other non-current fi nancial assets and investments | 3,405 | 3,619 |
| Other current fi nancial assets | 8,895 | 0 |
| 12,300 | 3,619 | |
| Loans and receivables | ||
| Other non-current assets | 55,005 | 81,694 |
| Trade receivables and other current assets | 135,837 | 77,460 |
| Cash and cash equivalents | 47,429 | 20,183 |
| 238,271 | 179,337 | |
| Financial liabilities at (amortized) cost | ||
| Non-current fi nancial liabilities | 10,581 | 10,522 |
| Other non-current liabilities | 26,150 | 26,885 |
| Trade payables and other current liabilities | 39,049 | 40,524 |
| Other liabilities and deferred income | 29,486 | 42,249 |
| Current fi nancial liabilities | 17,382 | 22,124 |
| 122,648 | 142,304 |
Financial instruments are recognized in the income statement with the following net results:
| 2007/08 | 2006/07 | |
|---|---|---|
| Available-for-sale fi nancial assets | 1,476 | 144 |
| Loans and receivables | 11,330 | 2,797 |
| Financial liabilities at (amortized) cost | -4,916 | -2,747 |
| 7,890 | 194 |
| Real estate, land and buildings |
Technical equipment and machinery |
Other equipment, factory and offi ce equipment |
Total | |
|---|---|---|---|---|
| Carrying amount at 31 March 2006 | 1,495 | 2,851 | 2,010 | 6,356 |
| Currency translation differences | 1 | 8 | -49 | -40 |
| Change in consolidated entities | 0 | 15 | 93 | 108 |
| Additions | 325 | 497 | 1,237 | 2,060 |
| Disposals | -5 | -46 | -199 | -251 |
| Scheduled depreciation | -374 | -870 | -842 | -2,086 |
| Carrying amount at 31 March 2007 | 1,442 | 2,455 | 2,250 | 6,148 |
| Acquisition/production cost | 5,394 | 23,862 | 14,435 | 43,691 |
| Accumulated depreciation | -3,951 | -21,407 | -12,185 | -37,544 |
| Carrying amount at 31 March 2007 | 1,442 | 2,455 | 2,250 | 6,148 |
| Currency translation differences | 19 | -6 | 58 | 71 |
| Change in consolidated entities | 0 | 0 | 18 | 18 |
| Additions | 284 | 1,027 | 2,130 | 3,441 |
| Disposals | -198 | -36 | -965 | -1,199 |
| Scheduled depreciation | -346 | -888 | -1,052 | -2,286 |
| Carrying amount at 31 March 2008 | 1,201 | 2,551 | 2,439 | 6,192 |
| Acquisition/production cost | 5,481 | 21,695 | 13,339 | 40,515 |
| Accumulated depreciation | -4,279 | -19,144 | -10,900 | -34,323 |
| Carrying amount at 31 March 2008 | 1,201 | 2,551 | 2,439 | 6,192 |
| Capitalized develop ment costs |
Concessions and rights |
Goodwill | Total | |
|---|---|---|---|---|
| Carrying amount at 31 March 2006 | 856 | 2,041 | 6,173 | 9,071 |
| Currency translation differences | 16 | 14 | 0 | 30 |
| Change in consolidated entities | 0 | 2,543 | 0 | 2,543 |
| Additions | 0 | 306 | 0 | 306 |
| Disposals | 0 | -583 | 0 | -583 |
| Scheduled amortization | -613 | -1,485 | 0 | -2,098 |
| Carrying amount at 31 March 2007 | 260 | 2,836 | 6,173 | 9,269 |
| Acquisition/production cost | 7,794 | 7,433 | 6,173 | 21,400 |
| Accumulated amortization | -7,534 | -4,597 | 0 | -12,130 |
| Carrying amount at 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 at 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 at 31 March 2008 | 111 | 2,309 | 6,173 | 8,593 |
The goodwill results from the acquisition of the respective shares of Kapsch Traffi cCom AB, Jönköping, Sweden (formerly: Saab Combitech AB).
For the purpose of impairment testing, goodwill was allocated to two cash-generating units (CGU) ("Road Solution Projects – Swedish entity" and "Services, System Extensions, Components Sales – Swedish entity"). The following assumptions were made:
| Road Solution Projects – Swedish entity |
Services, System Extensions, Components Sales – Swedish entity |
|
|---|---|---|
| The carrying amount of goodwill allocated to the unit | TEUR 2,469 | TEUR 3,704 |
| 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 in the area of traffi c-control systems, 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 2007/08 amounted to EUR 14.8 million (2006/07: EUR 16.4 million). In the fi scal year 2007/08 EUR 5.4 million thereof (2006/07: EUR 5.9 million) was project-specifi c development costs and charged to the customer. The remaining amount of EUR 9.4 million (2006/07: EUR 10.5 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:
| 2007/08 | 2006/07 | |
|---|---|---|
| Carrying amount at 31 March – prior year | 254 | 0 |
| Acquisition | 387 | |
| Disposal | -203 | 0 |
| Share of profi t/loss (after tax) | -51 | -133 |
| Carrying amount at 31 March – reporting year | 0 | 254 |
Shares in associates refer to an investment in ArtiBrain Software Entwicklungsgesellschaft mbH, Vienna. The Group held 50% of the shares until December 2007. In December 2007 the Group took over the remaining 50% of the shares in the company (see Note 28).
| 2007/08 | 2006/07 | |
|---|---|---|
| Other non-current fi nancial assets and investments | 3,405 | 3,619 |
| Other current fi nancial assets | 8,895 | 0 |
| 12,300 | 3,619 |
| Short term fi nancial assets | Available-for-sale securities |
Available-for-sale investments |
Total |
|---|---|---|---|
| Carrying amount at 31 March 2006 | 3,817 | 0 | 3,817 |
| Additions | 0 | 4 | 4 |
| Disposals | -126 | 0 | -126 |
| Change in fair value | -76 | 0 | -76 |
| Carrying amount at 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 at 31 March 2008 | 3,401 | 4 | 3,405 |
| Other current fi nancial assets | Available-for-sale securities |
Available-for-sale investments |
Total |
|---|---|---|---|
| Carrying amount at 31 March 2006 | 0 | 0 | 0 |
| Additions | 0 | 0 | 0 |
| Disposals | 0 | 0 | 0 |
| Change in fair value | 0 | 0 | 0 |
| Carrying amount at 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 at 31 March 2008 | 8,895 | 0 | 8,895 |
At 31 March 2008 available-for-sale securities relate to government and bank bonds as well as shares in investments 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).
At 31 March 2008 other investments classifi ed as available-for-sale relate to a 12.5 % investment in ATC Austrian Technology Corporation GmbH, Vienna.
| 2007/08 | 2006/07 | |
|---|---|---|
| Truck tolling system Czech Republic (phase I) | 37,462 | 81,693 |
| Truck tolling system Czech Republic (phase II) | 17,543 | 0 |
| 55,005 | 81,693 |
Other non-current assets relate to trade receivables (long-term) that are due from the Czech Ministry of Transport for the installation of phase I and phase II 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:
| 2007/08 | 2006/07 | |
|---|---|---|
| Up to 1 year | 0 | 0 |
| Between 1 and 2 years | 50,733 | 51,987 |
| Between 2 and 3 years | 7,476 | 34,658 |
| 58,209 | 86,645 |
Long-term receivables in the amount of TEUR 55,005 (2006/07: TEUR 81,684) were pledged as collateral to banks (see Note 21).
| 2007/08 | 2006/07 | |
|---|---|---|
| Purchased parts and merchandise, at acquisition cost | 7,023 | 7,856 |
| Unfi nished goods and work in progress, at production cost | 13,614 | 5,294 |
| Finished goods, at production cost | 5,097 | 6,750 |
| 25,734 | 19,900 |
Individual inventory items were impaired, when necessary, to their net realizable values. The valuation adjustment included in inventories amounts to TEUR 5,652 (2006/07: TEUR 3,851).
| 2007/08 | 2006/07 | |
|---|---|---|
| Trade receivables, less allowance for bad debt | 118,721 | 63,964 |
| Gross amount due from customers for contract work | 5,561 | 6,405 |
| Prepayments made | 2,074 | 513 |
| Receivables from tax authorities (other than income tax) | 4,361 | 2,109 |
| Other receivables and prepaid expenses | 5,120 | 4,469 |
| 135,837 | 77,460 |
Valuation allowances relating to trade receivables developed as follows:
| 2007/08 | 2006/07 | |
|---|---|---|
| Balance at 31 March of the prior year | 280 | 1,586 |
| Addition | 1,147 | 53 |
| Utilization | 0 | -949 |
| Disposal | -192 | -410 |
| Balance at 31 March of the reporting year | 1,235 | 280 |
Maturity structure of trade receivables:
| 2007/08 | 2006/07 | |
|---|---|---|
| Not yet due | 107,408 | 55,678 |
| Overdue, but not impaired | ||
| less than 60 days | 996 | 2,364 |
| more than 60 days | 10,317 | 5,922 |
| 118,721 | 63,964 |
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 (short-term) relating to the installation of phase I and phase II of the Czech truck tolling system in the amount of TEUR 64,244 (2006/07: TEUR 28,448) and to the operation and maintenance of the system in the amount of TEUR 16,911 (2006/07: TEUR 10,773) are due from the Czech Ministry of Transport.
Trade receivables in an amount of TEUR 64,244 (2006/07: TEUR 54,760) were pledged as collateral to banks (see Note 21).
Amounts due from customers for contract work detail as follows:
| 2007/08 | 2006/07 | |
|---|---|---|
| Construction costs incurred plus recognized gains | 5,561 | 6,405 |
| Less amounts billed and prepayments received | 0 | 0 |
| 5,561 | 6,405 |
| 2007/08 | 2006/07 | |
|---|---|---|
| Cash on hand | 9 | 38 |
| Deposits held with banks | 47,419 | 20,145 |
| 47,429 | 20,183 |
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.
| 2007/08 | 2006/07 | |
|---|---|---|
| Carrying amount at 31 March of fi scal year | 12,200 | 10,000 |
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.
The Company in the initial public offering in June 2007 issued 2,200,000 new shares at an issue price of EUR 32 per share.
| 2007/08 | 2006/07 | |
|---|---|---|
| Carrying amount at 31 March of prior year | -114 | -57 |
| Gains (losses) taken through profi t or loss | -52 | 1 |
| Unrealized gains (losses) in current period | -1,091 | -77 |
| Profi t taxes on unrealized gains/losses (Note 22) | 286 | 20 |
| Carrying amount at 31 March of fi scal year | -971 | -114 |
| 2007/08 | 2006/07 | |
|---|---|---|
| Current | ||
| Short-term loans | 11,238 | 17,368 |
| Loans for project fi nancing | 6,144 | 3,060 |
| Other | 0 | 1,696 |
| 17,382 | 22,124 | |
| Non-current | ||
| Loans for project fi nancing | 9,830 | 9,179 |
| Other | 751 | 1,343 |
| 10,581 | 10,522 | |
| Total | 27,963 | 32,646 |
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:
| 2007/08 | 2006/07 | |
|---|---|---|
| Carrying amount | 10,581 | 10,522 |
| Fair value | 9,787 | 10,269 |
| Gross cash fl ows | ||
| Up to 1 year | 0 | 0 |
| Between 1 and 2 years | 10,852 | 6,412 |
| Between 2 and 3 years | 0 | 5,249 |
| 10,852 | 11,661 |
The fair values and the gross cash fl ows of current fi nancial liabilities approximate the carrying amounts. Interest rates on current and non-current fi nancial liabilities are as follows:
| 2007/08 | 2006/07 | |
|---|---|---|
| Total fi nancial liabilities: | ||
| carrying fi xed interest rates | 557 | 420 |
| carrying variable interest rates | 27,406 | 32,226 |
| 27,963 | 32,646 | |
| Average interest rates: | ||
| Short-term loans | 4,95 – 5,64 % | 3,75 – 5,25 % |
| Loans for project fi nancing | 5,38 – 6,25 % | 4,80 % |
| Other | 2,00 – 8,75 % | 1,62 – 3,85 % |
Other non-current assets amounting to TEUR 55,005 (2006/07: TEUR 81,684), trade receivables (short-term) amounting to TEUR 64,244 (2006/07: TEUR 54,760) and securities amounting to TEUR 3,401 (2006/07: TEUR 3,615) were pledged as collateral for guarantees issued by banks and for loans granted. A bill of exchange amounting to TEUR 1,425 (2006/07: TEUR 1,425) was issued for an export promotion credit.
| 2007/08 | 2006/07 | |
|---|---|---|
| Deferred tax assets – due from tax group leader | 2,399 | 1,281 |
| Deferred tax assets – non-tax group | 4,881 | 7,379 |
| 7,280 | 8,660 | |
| Deferred tax liabilities – due to tax group leader | 1,608 | 1,150 |
| Deferred tax liabilities – non-tax group | 447 | 1,316 |
| 2,055 | 2,466 | |
| Total | 5,226 | 6,194 |
Deferred taxes due to tax loss carryforwards 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 carryforwards amounting to EUR 0.1 million (2006/07: EUR 0.1 million) 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/liabilities are attributable to the following positions:
| 31 March 2006 | Change in consolidated enti ties |
Taken through profi t or loss |
Taken through equity |
Currency translation differences |
31 March 2007 | |
|---|---|---|---|---|---|---|
| Deferred tax assets | ||||||
| Tax loss carryforwards | 6,855 | 0 | -2,741 | 0 | 0 | 4,114 |
| Provisions disallowed for tax purposes | 1,091 | 0 | -83 | 0 | -1 | 1,007 |
| Depreciation disallowed for tax purposes | 0 | 0 | 0 | 0 | 0 | 0 |
| Other | 661 | 0 | 2,864 | 20 | -6 | 3,539 |
| 8,608 | 0 | 40 | 20 | -7 | 8,660 | |
| Deferred tax liabilities | ||||||
| Special depreciation/amortization of | ||||||
| non-current assets | 0 | 0 | 0 | 0 | 0 | 0 |
| Other | 839 | 889 | 745 | 0 | -7 | 2,466 |
| 839 | 889 | 745 | 0 | -7 | 2,466 | |
| Total change | 7,769 | -889 | -705 | 20 | 0 | 6,194 |
| 31 March 2007 | Change in consolidated enti ties |
Taken through profi t or loss |
Taken through equity |
Currency translation differences |
31 March 2008 | |
|---|---|---|---|---|---|---|
| Deferred tax assets | ||||||
| Tax loss carryforwards | 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 | 0 | -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 |
Amounts recognized in the balance sheet:
| 2007/08 | 2006/07 | |
|---|---|---|
| Severance payments | 5,001 | 5,305 |
| Pension benefi ts | 9,088 | 9,247 |
| 14,089 | 14,552 |
The obligation to set up a provision for termination benefi ts is based on the respective labour 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 % (2006/07: 5.0%), was used and for compensation increases a rate of 3 % (2006/07: 2.5 %). In addition, the calculation was based on the earliest possible statutory retirement age including transition provisions and using the mortality tables of Pagler & Pagler 1999. Pension increases were estimated at 2–3 % (2006/07: 2–3 %).
The following amounts are recognized in the income statement as expenses for termination benefi ts:
| 2007/08 | 2006/07 | |
|---|---|---|
| Current service cost | 177 | 208 |
| Interest expense | 280 | 291 |
| Actuarial losses | 41 | 26 |
| Total, included in staff costs (Note 5) | 498 | 525 |
| Change in liabilities recognized in the balance sheet: | ||
| Carrying amount at 31 March of prior year | 5,305 | 5,979 |
| Total expense according to the table above | 498 | 525 |
| Payments | -802 | -1,199 |
| Carrying amount at 31 March of fi scal year | 5,001 | 5,305 |
| Actuarial present value of obligations (defi ned benefi t obligation) | 5,949 | 6,072 |
| Unrecognized actuarial gains/losses | -948 | -767 |
| Amount recognized in the balance sheet | 5,001 | 5,305 |
The following amounts are recognized in the income statement as expenses for retirement benefi ts:
| 2007/08 | 2006/07 | |
|---|---|---|
| Current service cost | 0 | 0 |
| Interest expense | 474 | 631 |
| Total, included in staff costs (Note 5) | 474 | 631 |
| Change in liabilities recognized in the balance sheet: | ||
| Carrying amount at 31 March of prior year | 9,247 | 9,236 |
| Total expense according to the table above | 474 | 631 |
| Payments | -633 | -620 |
| Carrying amount at 31 March of fi scal year | 9,088 | 9,247 |
| Actuarial present value of obligations (defi ned benefi t obligation) | 9,558 | 9,792 |
| Unrecognized actuarial gains/losses | -470 | -545 |
| Amount recognized in the balance sheet | 9,088 | 9,247 |
| 2007/08 | 2006/07 | |
|---|---|---|
| Truck tolling system Czech Republic (phase I) | 17,796 | 26,550 |
| Truck tolling system Czech Republic (phase II) | 8,274 | 0 |
| Other | 80 | 335 |
| 26,150 | 26,885 |
Other non-current liabilities in the amount of TEUR 26,070 relate to trade payables (long-term) 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.
The gross cash fl ows of other non-current liabilities are as follows:
| 2007/08 | 2006/07 | |
|---|---|---|
| Less than 1 year | 0 | 0 |
| Between 1 and 2 years | 22,532 | 13,050 |
| Between 2 and 3 years | 4,647 | 14,914 |
| 27,179 | 27,964 |
| 2007/08 | 2006/07 | |
|---|---|---|
| Amounts due to customers for contract work | 4,625 | 16,294 |
| Prepayments received | 2,368 | 1,536 |
| Non-current employee liabilities | 8,606 | 8,168 |
| Liabilities to tax authorities (other than income tax) | 5,459 | 4,068 |
| Other liabilities and deferred income | 8,428 | 12,182 |
| 29,486 | 42,248 |
Amounts due to customers for contract work detail as follows:
| 2007/08 | 2006/07 | |
|---|---|---|
| Construction costs incurred plus recognized gains | -3,392 | -2,555 |
| Less amounts billed and prepayments received | 8,017 | 18,849 |
| 4,625 | 16,294 |
| 2007/08 | 2006/07 | |
|---|---|---|
| Non-current | 1,694 | 1,684 |
| Current | 18,250 | 15,462 |
| 19,944 | 17,146 |
| 31 March 2006 |
Change in consolidated entities |
Utilization/ disposal |
Addition | Currency translation differences |
31 March 2007 | |
|---|---|---|---|---|---|---|
| Obligations from anniversary bonuses | 620 | 0 | -173 | 10 | 0 | 457 |
| Costs of dismantling and removing assets | 1,176 | 0 | -46 | 0 | 0 | 1,130 |
| Other | 0 | 97 | 0 | 0 | 0 | 97 |
| Non-current provisions, total | 1,796 | 97 | -219 | 10 | 0 | 1,684 |
| Warranties | 3,711 | 0 | -331 | 762 | 23 | 4,165 |
| Losses from pending transactions and rework | 793 | 0 | -793 | 881 | 0 | 881 |
| Legal fees, costs of litigation and contract risks | 5 | 0 | 0 | 2,856 | 20 | 2,881 |
| Other | 2,714 | 0 | -1,417 | 6,236 | 2 | 7,535 |
| Current provisions, total | 7,223 | 0 | -2,541 | 10,735 | 45 | 15,462 |
| Total | 9,019 | 97 | -2,760 | 10,745 | 45 | 17,146 |
| 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 |
The provision for anniversary bonuses relates to non-current entitlements by employees based on collective labour agreement provisions. The valuation was based on an interest rate of 5.25 % (2006/07: 5.0%), the earliest possible statutory retirement age including transition provisions and using the mortality tables of 1999, increases in salary were considered at 3 % (2006/07: 2.5 %).
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 major projects in the area of traffi c control. 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:
| 2007/08 | 2006/07 | |
|---|---|---|
| Contract, warranty, performance and bid bonds | ||
| City Highway Santiago | 860 | 15,358 |
| City Highway Sydney and Melbourne | 2,377 | 7,901 |
| Truck Tolling System Austria | 12,500 | 12,500 |
| Truck Trolling System Czech Republic | 48,899 | 89,424 |
| Tolling project New Zealand | 2,101 | 0 |
| Other | 4,306 | 4,658 |
| 71,043 | 129,841 | |
| Bank guarantees | 3,290 | 12,179 |
| Sureties | 25 | 30 |
| 74,359 | 142,050 |
In the fi scal year 2006/07 the Group acquired 100% of the shares in DPS Automation S.A., Buenos Aires, Argentina (subsequently renamed to Kapsch Traffi cCom Argentina S.A.). The share purchase agreement includes an additional variable element for the purchase price (earn-out model) based on future sales of software licences owned by the acquired entity within 5 years upon closing. This contingent consideration can not yet be estimated reliably, as the sales of the respective licences are completely dependent upon how successful group companies are at winning further contracts for road tolling systems.
Financial obligations from lease contracts:
The future payments from non-cancellable obligations from rental and operating lease contracts are presented below:
| 2007/08 | 2006/07 | |
|---|---|---|
| Up to 1 year | 4.471 | 3.836 |
| Between 1 and 5 years | 5.370 | 3.416 |
| Over 5 years | 2 | 0 |
| 9.843 | 7.252 |
By share purchase agreement dated 26 April 2007 the Group acquired 100% of the shares in VTI Industrial (Pty) Ltd, Germiston, South Africa.
| Cash paid | 209 |
|---|---|
| Fair value of net assets acquired | 209 |
| Goodwill | 0 |
The assets and liabilities arising from the acquisition are as follows:
| Fair value | Acquiree's carrying amount | |
|---|---|---|
| Intangible assets | 145 | 0 |
| Property, plant and equipment | 2 | 2 |
| Receivables and other assets | 70 | 70 |
| Cash and cash equivalents | 46 | 46 |
| Payables, other liabilities and accruals | -54 | -54 |
| Net assets acquired | 209 | 64 |
The acquired company in South Africa contributed revenues of TEUR 52 and a net income of TEUR 21 to the Group for the period from 1 May 2007 to 31 March 2008. If the acquisition had occurred on 1 April 2007, there would not have been a signifi cant change in revenue or profi t of the Group.
By assignment agreement dated 5 December 2007 the Group acquired an additional 50% of the shares in ArtiBrain Software EntwicklungsgesellschaftmbH, Vienna, which up to then had been an associate (see Note 13). The Group now holds 100% of the shares.
| Goodwill | 0 |
|---|---|
| Fair value of net assets acquired | 488 |
| Cash paid (including historical start-up costs of TEUR 388) | 488 |
The assets and liabilities arising from the acquisition are as follows:
| Fair value | Acquiree's carrying amount | |
|---|---|---|
| Intangible assets | 453 | 371 |
| Property, plant and equipment | 18 | 18 |
| Receivables and other assets | 294 | 294 |
| Cash and cash equivalents | 65 | 65 |
| Payables, other liabilities and accruals | -343 | -343 |
| Net assets acquired | 488 | 406 |
The acquired company contributed revenues of TEUR 118 and a net loss of TEUR -467 to the Group for the period from 1 January 2008 to 31 March 2008. If the acquisition had occurred on 1 April 2007, there would not have been a signifi cant change in revenue or profi t of the Group.
The following transactions were performed with related companies or persons:
From January 2005 onwards, the company provides services to the Group in the area of group consolidation and legal advice. Expenses incurred by the Group in the fi scal year 2007/08 amounted to TEUR 599 (2006/07: TEUR 157), TEUR 318 thereof was a oneoff charge for additional services in connection with the preparation and implementation of the initial public offering of Kapsch Traffi cCom AG. Furthermore, the company invoices insurance costs (directors & offi cers liability insurance) to the Group in the amount of TEUR 11 (2006/07: TEUR 10).
In August 2003 the company issued a parental guarantee to the group company Kapsch Traffi cCom AB, Jönköping, Sweden, in the amount of EUR 11.1 million. The company was released from the guarantee obligation in April 2006. In December 2005 the company issued a parental guarantee to FöreningsSparbanken AB, Stockholm, Sweden, in favor of the group company Kapsch Traffi cCom 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 2007/08 amounted to TEUR 96 (2006/07: 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, Bank Austria Creditanstalt 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 actual guaranteed amount. Expenses incurred by the Group in the fi scal year 2007/08 amounted to TEUR 209 (2006/07: TEUR 0).
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).
The company provides services to the Group in the area of legal advice. Expenses incurred by the Group in the fi scal year 2007/08 amounted to TEUR 0 (2006/07: TEUR 10).
In connection with the use of the KAPSCH trademark and logo the company invoices licence fees to the Group. The licence 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 2007/08 amounted to TEUR 750 (2006/07: TEUR 924).
Activities in the area of corporate development, public relations, sponsoring and other marketing activities are carried out centrally by Kapsch Aktiengesellschaft for all group companies. Cost allocated to the Group in the fi scal year 2007/08 amounted to TEUR 447 (2006/07: TEUR 541).
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 2007/08 amounted to TEUR 1,257 (2006/07: TEUR 874), TEUR 382 thereof was a one-off charge for additional services in connection with the preparation and implementation of the initial public offering of Kapsch Traffi cCom AG.
Kapsch Aktiengesellschaft has entered into various insurance contracts covering all group companies. The cost allocated to the Group in the fi scal year 2007/08 amounted to TEUR 253 (2006/07: TEUR 175).
The company provides human resources services (payroll services, administration, recruiting, advice on labour law and human resources development) to the Group. Expenses incurred by the Group in the fi scal year 2007/08 amounted to TEUR 786 (2006/07: TEUR 606).
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 2007/08 amounted to TEUR 1,643 (2006/07: TEUR 1,487).
The company provides maintenance services on behalf of Kapsch Traffi cCom AG, Vienna, for the project "Truck Tolling System Austria". Expenses incurred by the Group in the fi scal year 2007/08 TEUR 1,999 (2006/07: TEUR 1,622).
The company delivered hardware (in particular IT equipment) and provided other services for the project "Truck Tolling System Czech Republic". Expenses incurred by the Group in the fi scal year 2007/08 amounted to TEUR 496 (2006/07: TEUR 3,741).
Furthermore, the company renders maintenance services to the Austrian National Railways on behalf of Kapsch Traffi cCom AG, Vienna. Expenses incurred by the Group in the fi scal year 2007/08 amounted to TEUR 59 (2006/07: TEUR 412).
The company provides IT, EDP and telephone services to the Group in the amount of TEUR 192 (2006/07: TEUR 0), as well as other services in the amount of TEUR 180 (2006/07: TEUR 0).
The Group invoices consulting services, in particular on public relations, to the company. Income of the Group resulting from these services in the fi scal year 2007/08 totalled TEUR 60 (2006/07: TEUR 56).
In the fi scal year 2007/08 the Group assigned the NMC project to the company. Income of the Group resulting from this totalled TEUR 216.
Kapsch Components KG provides logistic services to the company. Income of the Group resulting from these services in the fi scal year 2007/08 totalled TEUR 100 (2006/07: TEUR 107).
The company provided installation and other services in connection with the "Truck Tolling System Austria". Expenses incurred by the Group in the fi scal year 2007/08 amounted to TEUR 0 (2006/07: TEUR 379).
Furthermore the company rendered services in connection with the "Truck tolling system Czech Republic". Expenses incurred by the Group in the fi scal year 2007/08 amounted to TEUR 0 (2006/07: TEUR 176).
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 2007/08 amounted to TEUR 83 (2006/07: TEUR 77).
The company provides support services regarding the accounting system "Navision" to the Group. Expenses incurred by the Group in the fi scal year 2007/08 amounted to TEUR 0 (2006/07: TEUR 53).
Kapsch Components KG provides logistic services to the company. Income of the Group resulting from these services in the fi scal year 2007/08 totalled TEUR 1,102 (2006/07: TEUR 1,254).
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 2007/08 totalled TEUR 711 (2006/07: TEUR 3,555).
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, Bank Austria Creditanstalt 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 1.5 % of the actual guaranteed amount. The fi rst portion of the respective credit and guarantee facilities was drawn end of March 2007. Expenses incurred by the Group in the fi scal year 2007/08 amounted to TEUR 135. (2006/07: TEUR 6).
The company assisted the Group in the tender process for the truck-tolling system in the Czech Republic (in particular regarding advertising activities and consulting services). Expenses incurred by the Group in the fi scal year 2007/08 totalled TEUR 0 (2006/07: TEUR 103).
The company provided further consulting services to the Group. Expenses incurred by the Group in the fi scal year 2007/08 amounted to TEUR 0 (2006/07: TEUR 5).
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 (2006/07: TEUR 0).
The managing directors of Kapsch Immobilien GmbH are members of the supervisory board of Kapsch Traffi cCom AG.
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 regard the very basic provisions contained in the frame lease agreement to be binding upon them. The frame lease agreement was terminated and ends on 31 December 2008. The various parts of these premises are sub-leased by Kapsch Components KG within the consolidated group as well as to related companies.
Lease expenses incurred by the Group from this contract amounted to TEUR 1,181 in the fi scal year 2007/08 (2006/07: TEUR 1,129).
Lease income of the Group resulting from the sub-lease to related parties in the fiscal year 2007/08 totalled TEUR 379 (2006/07: TEUR 505).
Services are usually negotiated with related parties on a cost-plus basis. Goods are bought and sold on the basis of the price lists in force with non-related parties.
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 2008 | 31 March 2007 | |
|---|---|---|
| Parent company | ||
| Trade receivables and other assets | 379 | 406 |
| Trade payables and other payables | 522 | 3,635 |
| Affi liated companies | ||
| Trade receivables and other assets | 444 | 586 |
| Trade payables and other payables | 466 | 4,710 |
| Other related parties | ||
| Trade receivables and other assets | 0 | 0 |
| Trade payables and other payables | 12 | 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.
| 2007/08 | 2006/07 | |
|---|---|---|
| Revenues | 0 | 7,071 |
| Expenses | 0 | -9,381 |
| Profi t from discontinued operations – before and after tax | 0 | -2,311 |
| 2007/08 | 2006/07 | |
|---|---|---|
| Operating result | 0 | -2,318 |
| Adjustments for non-cash items and other reconciliations | 0 | 197 |
| Changes in current assets: | ||
| Increase/decrease in trade receivables and other assets | 1,441 | 1,294 |
| Increase/decrease in inventories | 0 | 485 |
| Increase/decrease in trade payables and other current payables | -122 | -1,613 |
| Increase/decrease in current provisions | -1,061 | -12 |
| 258 | 154 | |
| Interest received | 0 | 66 |
| Interest payments | 0 | -90 |
| Net cash fl ow from operating activities – discontinued operations | 252 | -1,991 |
| Cash fl ow used in investing activities | ||
| Purchases of property, plant and equipment | 0 | -65 |
| Proceeds from disposal of assets | 0 | 1,510 |
| Net cash fl ow used in investing activities – discontinued operations | 0 | 1,445 |
| Cash fl ow used in fi nancing activities | ||
| Increase/decrease in other non-current fi nancial liabilities | -700 | -467 |
| Increase/decrease in current fi nancial liabilities | -467 | 233 |
| Net cash fl ow used in fi nancing activities discontinued operations | -1,167 | -233 |
| Net cash fl ow from discontinued operations | -909 | -779 |
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.
At 31 March 2008, as in the prior year, no treasury shares were held by the Company.
| 2007/08 | 2006/07 | |
|---|---|---|
| Continuing Operations: | ||
| Profi t attributable to equity holders of the Company (in EUR) 1 | 30,412,759 | 20,438,871 |
| Weighted average number of ordinary shares | 11,683,060 | 10,000,000 |
| Basic earnings per share (expressed in EUR per share) | 2.60 | 2.04 |
| Discontinued Operations: | ||
| Loss attributable to equity holders of the Company (in EUR) | 0 | -2,311,032 |
| Weighted average number of ordinary shares | 11,683,060 | 10,000,000 |
| Basic earnings per share (expressed in EUR per share) | 0 | -0.23 |
1 Losses attributable to minority shareholders in the periods under review refer to continuing operations only.
Kapsch Traffi cCom AG and the Italian Busi Impianti Group announced their cooperation on 15 May 2008. The two companies will establish Kapsch-Busi S.p.A., domiciled in Bologna, under a joint venture. The new company will focus on the Italian traffi c telematics market in the urban area. Busi Impianti will outsource the respective business unit, including a group of about 10 employees, Kapsch Traffi cCom will complement the team by own personnel. Kapsch Traffi cCom will hold a share of 67 % in the joint venture.
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, 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, 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 2007/08 was 716 salaried employees and 75 waged workers (2006/07: 606 salaried employees and 121 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 2007/08 the following persons served as management board members:
Mag. Georg Kapsch (Chief Executive Offi cer) Ing. Erwin Toplak
In the fi scal year 2007/08 the following persons served on the supervisory board:
Dr. Franz Semmernegg (Chairman) Dr. Kari Kapsch (Deputy-Chairman) Mag. Elisabeth Kapsch
Delegated by the works council: Ing. Christian Windisch Dipl.-Ing. Werner Dreschl
Authorized for issue:
Vienna, 16 May 2008
Mag. Georg Kapsch Ing. Erwin Toplak
Chief Executive Offi cer Member of the Management Board
We have audited the accompanying consolidated fi nancial statements of Kapsch Traffi cCom AG, Vienna, for the fi nancial year from 1 April 2007 to 31 March 2008. These consolidated fi nancial statements comprise the balance sheet as of 31 March 2008, and the income statement, statement of changes in equity and cash fl ow statement for the year ended 31 March 2008, and a summary of signifi cant accounting policies and other explanatory notes.
Management is responsible for the preparation and fair presentation of these consolidated fi nancial statements in accordance with International Financial Reporting Standards 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 in 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, 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 in 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 2008, and of its fi nancial performance and its cash fl ows for the fi nancial year from 1 April 2007 to 31 March 2008 in accordance with International Financial Reporting Standards 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.
In our opinion, the consolidated management report for the group is consistent with the consolidated fi nancial statements.
Vienna, 16 May 2008
PwC INTER-TREUHAND GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft
signed:
Dr. Aslan Milla Certifi ed Public Accountant
Signifi cantly reducing traffi c in inner cities and residential areas should be a key political aim. Kapsch Traffi cCom supports local authorities in achieving this target, offering appropriate measures to help expand park & ride areas and public transport services.
Kapsch Traffi cCom AG (Headquaters) Wagenseilgasse 1 1120 Vienna Phone: +43 (0)50 811 0 Fax: +43 (0)50 811 2109 E-Mail: ktc.offi [email protected] www.kapsch.net
Kapsch Telematic Services GmbH Wagenseilgasse 1 1120 Vienna Phone: +43 (0)50 811 2951 Fax: +43 (0)50 811 2959 E-Mail: ktc.offi [email protected] www.kapsch.net
Kapsch Components KG Wagenseilgasse 1 1120 Vienna Phone: +43 (0)50 811 4195 Fax: +43 (0)50 811 4190 E-Mail: kcomp.offi [email protected] www.kapsch.net
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 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 Construction & Realization spol. s r.o. Ke Štvanici 656/3 186 00 Prague 8 Phone: +420 225 026 140 Fax: +420 225 026 222 E-Mail: [email protected]
Kapsch Telematic Services spol. s r.o. Ke Štvanici 656/3 186 00 Prague 8 Phone: +420 225 026 111 Fax: +420 225 026 222 E-Mail: [email protected]
Kapsch Traffi cCom France SAS 30-32 Boulevard de Sébastopol 75004 Paris Phone: +33 6 03 48 27 59 Fax : +33 1 44 54 52 34 E-Mail: [email protected] www.kapsch.fr
Kapsch Telematic Services GmbH Deutschland Friedrichstraße 171 10117 Berlin Phone: +49 30 46999 3476 Fax: +49 30 46999 3477 www.kapsch.net
Kapsch Telematic Services Kft. Bocskai út 77-79 H-1113 Budapest [email protected]
Kapsch Traffi cCom S.r.l. Via Conca del Naviglio,18 20123 Milan Phone: +39 (02) 8982 7365 Fax: +39 (02) 9544 1448 E-Mail: offi [email protected] www.kapsch.it
Kapsch Traffi cCom (M) Sdn Bhd 4th Floor, Tower Block Syed Kechik Foundation Building Jalan Kapas, Bangasar 59100 Kuala Lumpur Phone: +60 3 2092 1161 Fax: +60 3 2092 1163 E-Mail: [email protected]
Kapsch Traffi cCom Limited 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 29 E-Mail: [email protected]
Construction & Realization s.r.o. Karadžičova 8 City Business Center 1 821 08 Bratislava Phone: +421 2 3366 6800 Fax: +421 2 3366 6801 E-Mail: [email protected]
Kapsch Telematic Services SK s.r.o. Karadžičova 8 City Business Center 1 821 08 Bratislava Phone: +421 2 3366 6100 E-Mail: [email protected]
Kapsch Traffi cCom SA (Pty) LTD Helvetia House Greenvale Road Wilbart, Germiston 1610 Phone: +27 11 455 2280 Fax: ++27 11 455 2276 E-Mail: [email protected]
Kapsch Traffi cCom AB Bataljonsgatan 10, Box 1063 551 10 Jönköping Tel +46 36 290 1500 Fax: +46 36 290 1501 E-Mail: [email protected] www.kapsch.se
United Kingdom
Kapsch Traffi cCom Ltd. Brookmount House 62-65 Chandos Place Covent Garden WC2N 4LP London Phone: +44 0 207 812 6049 Fax: +44 0 207 812 6001 E-Mail: [email protected]
Kapsch Traffi cCom Inc. 11682 El Camino Real Suite 200 San Diego, CA 92130
As of 31 March 2008
| 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 | |
|---|---|
| 18 June 2008 | Results fi scal year 2007/08 |
| 10 July 2008 | Ordinary Shareholders' Meeting |
| 17 July 2008 | Deduction of dividends for fi scal year 2007/08 (ex-day) |
| 24 July 2008 | First day of payment for fi scal year 2007/08 dividends |
| 27 August 2008 | Interim fi nancial report fi scal year 2008/09-Q1 (IAS34) |
| 26 November 2008 | Interim fi nancial report fi scal year 2008/09-Q2 (IAS34) |
| 25 February 2009 | Interim fi nancial report fi scal year 2008/09-Q3 (IAS34) |
| 18 June 2009 | Results fi scal year 2008/09 |
| 10 July 2009 | Ordinary Shareholders' Meeting |
| 17 July 2009 | Deduction of dividends for fi scal year 2008/09 (ex-day) |
| 24 July 2009 | First day of payment for fi scal year 2008/09 dividends |
| Informationen on the Kapsch Traffi cCom share | |
|---|---|
| Investor Relations Offi cer | Marcus Handl |
| Shareholders' Telephone | +43 (0)50811 1122 |
| 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 | 2007/08 | 2006/07 | 2005/06 | 2004/05 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | in million EUR | 185.7 | 198.6 | 116.2 | 121,9 | |||||||
| EBITDA | in million EUR | 39.0 | 30.8 | 21.0 | 18,7 | |||||||
| EBITDA margin | in % | 21 | 16 | 18 | 15 | |||||||
| EBIT | in million EUR | 34.9 | 26.9 | 17.3 | 13,0 | |||||||
| EBIT margin | in % | 19 | 14 | 15 | 11 | |||||||
| Profi t before tax | in million EUR | 42.8 | 27.0 | 17.8 | 13,5 | |||||||
| Profi t after tax | in million EUR | 32.1 | 20.3 | 12.3 | 14,2 | |||||||
| Earnings per share 2 | in EUR | 2.60 | 2.04 | 1.24 | 1,43 | |||||||
| Free Cashfl ow 3 | in million EUR | -14.8 | -39.1 | 14.4 | 18,6 | |||||||
| Capital Expenditure 4 | in million EUR | 4.0 | 2.3 | 1.3 | 3,0 | |||||||
| Employees as of 31 March (of each year) | 824 | 774 | 569 | 572 | ||||||||
| Revenues by Segment (percentage of Revenues) | 2007/08 | 2006/07 | 2005/06 | 2004/05 | ||||||||
| Road Solutions Projects (RSP) | in million EUR | 47.0 | (25 %) | 105.0 | (53 %) | 18.7 | (16 %) | 30,0 (25 %) | ||||
| Services, System Extensions, Components Sales (SEC) in million EUR | 128.8 | (69 %) | 80.6 | (41 %) | 76.2 | (66 %) | 78,0 | (64 %) | ||||
| Others (OTH) | in million EUR | 10.0 | (5 %) | 13.0 | (7 %) | 21.3 | (18 %) | 13,9 | (11 %) | |||
| Revenues by Region (percentage of Revenues) | 2007/08 | 2006/07 | 2005/06 | 2004/05 | ||||||||
| Central & Eastern Europe (incl. Austria) | in million EUR | 124.2 | (67 %) | 157.3 | (79 %) | 68.4 (59 %) | 57.5 (47 %) | |||||
| Western Europe | in million EUR | 17.6 | (9 %) | 12.9 | (6 %) | 18.9 (16 %) | 21.2 (17 %) | |||||
| Americas | in million EUR | 18.8 | (10 %) | 15.4 | (8 %) | 9.4 (8 %) | 23.8 (20 %) | |||||
| Rest of World | in million EUR | 25.2 | (14 %) | 13.0 | (7 %) | 19.5 (17 %) | 19.4 (16 %) | |||||
| Balance Sheet Data | 31 March 2008 | 31 March 2007 | 31 March 2006 | 31 March 2005 | ||||||||
| Total Assets | in million EUR | 298.4 | 227.2 | 131.9 | 133,5 | |||||||
| Total Equity 5 | in million EUR | 133.4 | 45.6 | 39.1 | 37,4 | |||||||
| Equity ratio 5 | in % | 45 | 20 | 30 | 28 | |||||||
| Net assets (+) /-debt (-) | in million EUR | 28.4 | -12.5 | 37.2 | 29,4 | |||||||
| Capital Employed | in million EUR | 161.3 | 78.2 | 48.6 | 47,8 |
1 only continuing operations
2 earnings per share in fi scal year 2007/08 relate to a weighted average number of 11.7 million shares, in fi scal year 2006/07 relate to 10.0 million outstanding 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
1
Letter from the Chief Executive Offi cer 18
| Corporate History | 24 2 |
|---|---|
| Shareholders | 25 2 |
| Managing Board | 26 2 |
| Supervisory Board | 28 2 |
| Additional Information Relating to Board Members | 30 3 |
| Committees of the Supervisory Board | 31 3 |
| Report of the Supervisory Board | 32 3 |
| Corporate Governance Report | 34 3 |
| The Kapsch Traffi cCom Share | 36 3 |
| Industry Overview | 42 4 |
|---|---|
| Technology | 46 4 |
| Business Strategy | 50 5 |
| Competitive Strengths | 52 5 |
| Research and Development | 54 5 |
| Quality and Innovations | 55 5 |
| Product and service portfolio | 56 5 |
| Projects and Customers | 58 5 |
| Employees | 62 6 |
| Social and cultural commitment | 64 6 |
| Business Segments | 68 6 |
|---|---|
| Kapsch Traffi cCom AG and its subsidiaries | 70 7 |
| Management Report | 74 7 |
|
|---|---|---|
| 6 | Statement of all Members of the Management Board | |
| Statement of all Members of the Management Board | 87 8 |
|
| 7 | Consolidated Financial Statements | |
| Consolidated Financial Statements as of 31 March 2008 Notes to the consolidated fi nancial statements Notes on individual items in the income statement and balance sheet |
88 8 93 106 |
|
| 8 | Auditor's Report | |
| Auditor's Report | 136 13 |
|
| 9 | Services | |
| Addresses of Major Companies Glossary |
140 14 141 14 |
|
| Financial Calendar | 142 14 |
|
| Four-Year Review | 143 14 |
|
| Contents | 144 |
Imprint: Media proprietor and publisher: Kapsch Traffi cCom AG Design and production: Westend United Werbeagentur GmbH
Photos: Joachim Haslinger Picture editing: Rotfi lter Druck: Stiepan Druck
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 140 installed tolling systems in 30 countries in Europe, Australia, Latin America, in the Middle-East, in the Asian/Pacifi c region and in South Africa, and with almost 12 million on-board units (OBUs) and nearly 11,000 equipped lanes, Kapsch Traffi cCom has positioned itself among the leading suppliers of ETC systems worldwide. Kapsch TrafficCom is headquartered in Vienna, Austria, and has subsidiaries and representative offi ces in 20 countries.
Kapsch Traffi cCom AG I Wagenseilgasse 1 I A-1120 Vienna, Austria I www.kapschtraffi c.com Investor Relations I Marcus Handl I Phone: +43 (0)50811 1122 I Fax: +43 (0)50811 99 1120 I E-Mail: ir.kapschtraffi [email protected] Public Relations I Brigitte Herdlicka I Phone: +43 (0)50811 2705 I Fax: +43 (0)50811 99 2705 I E-Mail: [email protected]
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